SACP & Min. of Finance: Pravin Gordhan on Post Peak Oil NNR End of Economic Growth Economic Collapse..

From: Jus Sanguinis
Sent: Tuesday, June 28, 2011 3:54 PM
To: Blade Nzimande; Jeremy Cronin; SACP
Subject: Mr. Nzimande & Cronin, SACP; RE: Pres. J. Zuma, T. Manuel & P. Gordhan: RE: Economic Growth Tips: Peak Oil & NNR's = END OF ECONOMIC GROWTH

Mr. Blade Nzimande
Mr. Jeremy Cronin
SACP Members

Mr. Nzimande,

I read your article -- 'New tendency' the most immediate threat to NDR - Nzimande.

I know some communists; honourable people. Their word is their honour. If they make an agreement, they keep the agreement. I know such capitalists too.

Then I know of people who call themselves communists who live like monarchists, regarding their choice of transport and accommodation. Not only do they live like monarchists, like slaveowners they hand out welfare breeding bribes, instead of welfare education bribes or welfare avoid breeding until you are self-sufficient in committed relationship. They prefer to hand out welfare poverty pimping bribery to the most vulnerable, for the same reason former slave-owners wanted their slaves to breed: more vote-farm poverty stricken cannon fodder slaves on their 'national democratic revolution' slavery plantations!

I know some media journalists who are 'non-racialists' who believe all whites and all blacks should become non-whites and non-blacks, and economic slaves to 'non-racialism' consumers. They also -- like Mr. Max du Preez -- believe that blacks are too retarded to hear honest constructive criticism about their poverty pimping breeding behaviours.

I also know of capitalists who are not capitalists, but simply corporate fascists.

I also know black honourable persons. I married one. One of the most brutally honest honourable men I know.

I also know white and black schmuck liars. Their word means sweet fuck all. It is impossible to make an agreement with them, cause they have no honour. They are simply liars and thieves. They will say whatever the fuck they think they can get away with to lie to you.

In my culture -- Radical Honesty -- we refuse to bullshit anyone. We tell the truth, honourable to another; our brutal honest criticism. It is the foundation of our social contract. Our culture has no murderers, no rapists, no crime amongst each other, because if we want something, we ask. If we need help, we ask. If we are the source of our problem (breeding children we cannot afford, then our culture confronts us about our behaviour). We have no poverty, and no unwanted children.

My point is that you can call yourself whatever you want; if you don't practice what you preach, your words mean sweet fuck all.

If you practice what you preach, and your word is your honour, and you confront the root causes of problems, then you will find that you can solve any problem; just like a mechanic can solve any problem in your car, by identifying the root cause of it.

Your national democratic revolution has sweet fuck all interest in identifying root causes of problems; and all interest in bullshitting your ignorant slaves on your welfare vote breeding plantation farms, that you are going to give them an economic utiopia, as long as they keep on breeding more poverty stricken voters for your next election, where you can then get yourself a new quadruple zero salary and all the perks that go with it.

Of course when your national democratic revolution does not solve the problems you identify (since you refuse to confront the root causes), then you can just blame 'right wing whitey' again. And one day, when there are no right wing whiteys left, and your ignorant slaves are still not economically liberated (they will never be while you keep them breeding more poverty, but of course you aint about to tell your cannon fodder the truth, are you?), then they shall also find out that the earth is not flat, and resources are not infinite.

Re: The National Democratic Revolution. It is my understanding that if white South Africans had known we were going to be forced to live in a national democratic revolution (coerced communist state, the benefits of liberation on the rotting corpses of the settlers, frantz fanon black liberation theology 'forgiveness' (not defined of course)), we would never have handed South Africa to the ANC and Communist party on a platter. If you recall we had nuclear weapons.

So, it appears that the SACP and ANC lied about yet another thing. The TRC FRAUD lies accumulate and accumulate. The ANC and SACP's word is not their word. Honour means sweet fuck all to them. You cannot trust a member of the SACP or ANC to honour their word?

Could you please let me know whether there is any member of the SACP who honours their word? Who makes an agreement and keeps such agreement? Is there any honourable member of the SACP?

If not, you are going to shove your national democratic revolution down our throats like good 'democratic fascists'? Charming.

About that 'growth path' of yours. May I suggest you consider the attached documentation submitted to Pres. Zuma, Min. Gordhan and Min. Manuel: (I) Peak Oil & Peak Non-Renewable Resources = End of Economic Growth (II) Sustainable Economic Growth is an Oxymoron; (III) Ecological Sustainability = (A) Urgent Population & Consumption Reduction, (B) Political Secession & Economic Relocalisation

Respectfully,

Radical Honesty SA
Jus Sanguinis Petition Organizer

___________________________
Sent: Sunday, June 26, 2011 11:37 PM
To: Presidency, National Planning Commission & Treasury: Nonhlanhla Majake - Priv Sec Asst; Lakela Kaunda - Dep. Dir. Gen ; Milka Bosoga - Priv Sec; Delsey Sithole - Priv. Sec; Ellen Mabunda - Pers. Asst; Patti Smith - PA ; Dumisa Jele - Ch. Of Staff; ANC: Presidency; Lindani Mbunyuza; Kershia Singh; Thembekile Plaatjie
Subject: Pres. J. Zuma, T. Manuel & P. Gordhan: RE: Economic Growth Tips: Peak Oil & NNR's = END OF ECONOMIC GROWTH

President Jacob Zuma, Minister of Finance: Mr. Pravin Gordhan; National Strategic Planning Commission: Mr. Trevor Manuel; CC: Bus & Civil Soc.

(I) Peak Oil & Peak Non-Renewable Resources = End of Economic Growth (II) Sustainable Economic Growth is an Oxymoron; (III) Ecological Sustainability = (A) Urgent Population & Consumption Reduction, (B) Political Secession & Economic Relocalisation

Pres. Zuma, Mr. Gordhan and Mr. Manuel,

I am responding to Business Report: Gordhan invites tips on economic growth.

I submit that your assumption that future economic growth is a possibility which could be accomplished with tips from citizens, or even from God, is an illusion, and an extremely dangerous illusion. Your economic advisors who believe that they can pitch up at the cashiers desk with billions in fiat currency, and God will put more cheap oil in the ground are smoking Earth is Flat, Resources are Infinite, Economic Theory crack pipes.

Peak Oil and Peak Non-Renewable Resources determine Humanity’s Future: Economic Growth is History. Not everyone has confronted this reality yet, but reality is reality, whether cornucopian economists want to admit it, or not. The world economy has collided with Peak Oil and is colliding with Peak Non-Renewable Resources, not to mention various ecological limits.

Since all industrial economies are built upon a foundation of cheap energy, such industrial economies shall experience cataclysmic economic impacts.
The Hirsch US Dept. of Energy study completed in 2005 (as detailed in the PeakOil_RSA briefing paper submitted to the SA Government on 18 July 2006) investigated the relationship between oil/energy and GDP. It concluded that there was a 1-to-1 relationship: for every 1% of oil production decline, the world GDP shall decline by 1%.

The only future for the entire planet is Economic Contraction, at a rate of 2-5% per year: Hirsch Report: “Best Case Scenario: Maximum world oil production is followed by a period of relatively flat production (a plateau) before the onset of a decline rate of 2–5% per year.”

The Peak Oil plateau was reached in 2005, when global oil production peaked. The world economy has been on a plateau ever since, and the financial markets crisis is but the tip of the iceberg. This graph (see PDF) depicts oil production, and the world economy.

In the absence of Humanity Choosing to Commit to Immediate Urgent Voluntary Population and Consumption Reduction; Peak Oil and Peak Non-Renewable Resources shall violently force Humanity to Extremely Painful Non-Voluntary Population and Consumption Reduction, by means of a Scarcity induced Apocalyptic Malthusian Resource War DieOff.

Please find attached an Overview of Peak Oil, Peak Non-Renewable Resources, Voluntary Population and Consumption Reduction Ideas Evidentiary Information for your investigation.

• Energy: Foundation of Economic Growth
  
• Peak Oil: End of Economic Growth
  
• Peak Oil & Collapse of Fiat Currency Debt Based Economic Growth Paradigm
  
• Peak Oil: Resource Wars & Collapse of Democracy
  
• Peak Oil: Time for Biophysical Based Economics Paradigm
  
• Energy, Industrial Agriculture and Population Growth
  
• Scarcity: Humanity's Last Chapter: Peak Non-Renewable Resources:
  
• Humanity's Sustainability Choice: Voluntary Population & Consumption Reduction
  
• Humanity’s Sustainability Choice: Political Secession & Economic Relocalisation

Respectfully,

Lara Johnstone
Radical Honesty SA
Jus Sanguinis Petition Organizer


_____________________________________
From: Ministry Registry
Sent: Tuesday, June 28, 2011 9:16 AM
To: Jus Sanguinis
Subject: FW: Min. of Fin.: P. Gordhan (CC: DA, FF+, HNP, VVK); RE: Peak Oil, End of Economic Growth & Pol. Secession

Dear Ms Johnstone

On behalf of Mr PJ Gordhan, Minister of Finance I hereby acknowledge receipt of your letter below.

The content of your letter has been noted and will be forwarded to the Minister for his attention.

Thank you for taking the time to write to us.

Kind regards
Joanne Scott
Ministry of Finance
40 Church Square, Old Reserve Building, PRETORIA
Private Bag X115, PRETORIA, 0001
E-mail for official correspondence: minreg@treasury.gov.za

(I) Peak Oil & Peak Non-Renewable Resources = End of Economic Growth (II) Sustainable Economic Growth is an Oxymoron; (III) Ecological Sustainability = (A) Urgent Population & Consumption Reduction, (B) Political Secession & Economic Relocalisation

ENERGY: FOUNDATION OF ECONOMIC GROWTH

Energy Production & Gross Domestic Product (GDP)



Energy and Economic Growth, by David I. Stern, Department of Economics, Rensselaer Polytechnic Institute:

This article surveys the relation between energy and economic growth and more generally the role of energy in economic production. While business and financial economists pay significant attention to the impact of oil and other energy prices on economic activity, the mainstream theory of economic growth pays little or no attention to the role of energy or other natural resources in promoting or enabling economic growth. Resource and ecological economists have criticised this theory on a number of grounds, especially the implications of thermodynamics for economic production and the long-term prospects of the economy. While a fully worked out alternative model of the growth process does not seem to exist, extensive empirical work has examined the role of energy in the growth process. The principal finding is that energy used per unit of economic output has declined, but that this is to a large extent due to a shift in energy use from direct use of fossil fuels such as coal to the use of higher quality fuels, and especially electricity. When this shift in the composition of final energy use is taken into account energy use and the level of economic activity are found to be tightly coupled. When these and other trends are taken into account the prospects for further large reductions in the energy intensity of economic activity seem limited. The implications for environmental quality and economic sustainability are discussed.

Energy and Economic Growth, by David I Stern, Dept. of Economics, Rensselaer Polytechnic Institute

Physical theory shows that energy is necessary for economic production and therefore growth but the mainstream theory of economic growth, except for specialized resource economics models, pays no attention to the role of energy. This paper reviews the relevant biophysical theory, mainstream and resource economics models of growth, the critiques of mainstream models, and the various mechanisms that can weaken the links between energy and growth. Finally we review the empirical literature that finds that energy used per unit of economic output has declined, but that this is to a large extent due to a shift from poorer quality fuels such as coal to the use of higher quality fuels, and especially electricity. Furthermore, time series analysis shows that energy and GDP cointegrate and energy use Granger causes GDP when additional variables such as energy prices or other production inputs are included. As a result, prospects for further large reductions in energy intensity seem limited.

Energy Consumption and GDP, Second Law of Life:

This time I would like to dwell a little bit on energy ”consumption” and its relation to Gross Domestic Product (GDP) creation. (In fact, the term “energy consumption” is misleading, as energy cannot be destroyed nor created, according to the First Law of Thermodynamics. For this discussion, I’m using data from the 2006 Report of the International Energy Agency (2010 Key World Energy Statistics). There are several ways to look at the raw data, three of which are described below.

First, one feels intuitively that the amount of energy that a nation uses is related to its productivity, as expressed in its GDP and its population, which of course drives GDP. Therefore, in order to compare nations with different outputs and populations, it seems wise to divide both consumed energy and GDP by population. This is expressed in Figure 1 below.

What we notice is the huge range in power levels (in KW/capita) between the lowest consumer (India) and the highest (USA). In the USA, each citizen needs an average power level of more than 10KW every second to keep the society going (this includes everything: transportation, work, food, housing, leisure, etc.). But when we look to productivity levels (expressed as GDP/capita), we see that the productivity of the USA (ca. $36,000/capita) is more than 70 times than that of India (ca $500 /capita).

BP Report shows economic growth still depends on oil , Mail & Globe: “The relationship between energy and global economic growth has never been clearer than in BP’s World Energy Statistical Review for 2010..[..] The good news about the pending global economic slowdown is we may soon be burning less oil again in the second half of the year. But the bad news contained in BP’s recent energy review is global economic growth remains as oil dependent as ever.”

Energy and Economic Growth, Jakarta Post: “The rapid economic growth of the currently developed nations during the last half of the 20th century was attributed notably to the availability of cheap energy, contributed mainly by fossil fuels, especially petroleum. The challenge for developing countries nowadays is that the luxury of having plenty of cheap oil is no longer the case. Energy economic literature defines two important indicators: Energy intensity as the ratio between energy consumption to GDP, and energy elasticity as the rate of growth of energy consumption over the rate of growth of GDP.


PEAK OIL: END OF ECONOMIC GROWTH:

Life After the End of Economic Growth, Daily Kos:

We're at the end of economic growth as we know it. Not everyone has realized this yet, but it has arrived nevertheless. In past weeks I discussed why this is the case - a combination of hitting a variety of hard geological and ecological limits. Particularly, we have reached or are near (depending on how you calculate it) the peak of oil production and alternative energy cannot substitute for oil in an effective or timely fashion.

The consequences of hitting these limits are huge. As I remember someone saying - this is one of those rare topics where the more you learn about it, the worse the news gets.

How does oil impact our economy?

As the foundation of oil upon which we've built our industrial system crumbles, we will face direct economic impacts. Hirsch, whose 2005 study for the Department of Energy on the peaking of world oil production is still the gold standard, conducted further studies to try to understand how oil connects to GDP. He concluded that there's a 1-to-1 relationship: for every 1% oil production declines, world GDP declines 1%.

How much does he expect world oil production to decline? Here's what he says: “Best Case Scenario: Maximum world oil production is followed by a period of relatively flat production (a plateau) before the onset of a decline rate of 2–5% per year.”

The trend break happened in 2005, when global oil production stopped increasing.
We've been on a plateau of sorts since then. While the graph above is technically about oil, it maps directly to the economy.

This indicates that in the best case scenario we should expect a yearly 2-5% decline in world GDP. As a point of reference, the Great Recession that we just experienced caused a US GDP drop of 4.1%. That is, we'll be having the Great Recession nearly yearly.

18 July 2006 PeakOil RSA Briefing Paper (PDF):

On 18 July 2006, PeakOil_RSA filed a 136 page Peak Oil Briefing Paper (PDF) to dozens of South African Government, Media and Civic Society organisations, c/o and via the then Minister of Intelligence: Mr. Ronnie Kasrils, which asked: “Is Gross Mismanagement of the nation’s energy policy and impeachable offense?” The political secession and economic relocalisation suggestions for mitigating a Post Peak Oil world, included: (i) Limit Population, (ii) Develop Alternative Energies; (iii) Reinvent the Way Money Works, i.e. implement local currencies; (iv) Save Energy; (v) Foster local communities, (vi) Get Out of Debt and (vii) Educate and Raise Awareness. The Briefing Paper was ignored by SA political, media and corporate elite.

Civilization as we know it is coming to an end soon. This is not the wacky proclamation of a doomsday cult, apocalypse bible prophecy sect, or conspiracy theory society. Rather, it is the scientific conclusion of the best paid, most widely-respected geologists, physicists, bankers , and investors in the world. These are rational, professional, conservative individuals who are absolutely terrified by a phenomenon known as global “Peak Oil.”

Oil will not just “run out” because all oil production follows a bell curve. This is true whether we're talking about an individual field, a country, or on the planet as a whole.

Oil is increasingly plentiful on the upslope of the bell curve, increasingly scarce and expensive on the down slope. The peak of the curve coincides with the point at which the endowment of oil has been 50 percent depleted. Once the peak is passed, oil production begins to go down while cost begins to go up.

In practical and considerably oversimplified terms, this means that if 2005 was the year of global Peak Oil, worldwide oil production in the year 2030 will be the same as it was in 1980. However, the world’s population in 2030 will be both much larger (approximately twice) and much more industrialized (oil-dependent) than it was in 1980. Consequently, worldwide demand for oil will outpace worldwide production of oil by a significant margin. As a result, the price will skyrocket, oil dependant economies will crumble, and resource wars will explode.

PEAK OIL & COLLAPSE OF DEBT-BASED ECONOMIC GROWTH PARADIGM:

The relationship between the supply of oil and natural gas and the workings of the global financial system is arguably the key issue to dealing with Peak Oil as robost and smoothly function global capital markets must exist in order to power an orderly (or semi-orderly) transition process. In fact this relationship is far more important than alternative sources of energy, energy conservation, or the development of new energy technologies. In short, the global financial system is entirely dependent on a constantly increasing supply of oil and natural gas.

To illustrate, if home and business loans are issued with interest rates in the 7% range, the assumption underlying the loans is that the monetary supply will increase (on average) by 7% per year. But if that 7% yearly increase in the monetary supply is not matched by a 7% yearly increase in the amount of economic activity (goods and services), the result is hyper-inflation. The key is this: in order for there to be an increase in the amount of economic activity taking place, there must be an increase in the amount of net-energy (i.e. the net-number of BTUs) available to fuel those activities. As no alternative source or combination of sources comes even remotely close to the energy density of oil (125,000 BTUs per gallon, the equivalent of 150-500 hours of human labor), a decline or even plateau in the supply of oil carries such overwhelming consequences for the financial system. Dr. Colin Campbell presents an understandable model of this complete relationship as follows:

It is becoming evident that the financial community begins to accept the reality of Peak Oil. They accept that banks created capital during this epoch by lending more than they had on deposit, being confident that tomorrow’s expansion, fuelled by cheap oil-based energy, was adequate collateral for today’s debt. The decline of oil, the principal driver of economic growth, undermines the validity of that collateral which in turn erodes the valuation of most entities quoted on Stock Exchanges.

Commentator Robert Wise explains the connection between energy and money as follows:

It's not physics, but it's true: money equals energy. Real, liquid wealth represents usable energy. It can be exchanged for fuel, for work, or for something built by the work of humans or fuel-powered machines. Real cost reflects the energy cost of doing something; real value reflects the energy expended to build something.

Nearly all the work done in the world economy, all the manufacturing, construction, and transportation, is done with energy derived from fuel. The actual work done by human muscle power is miniscule by comparison. And, the lion's share of that fuel comes from oil and natural gas, the primary sources of the world's wealth.

Author Dmitry Orlov offers the following explanation of how the debt-based financial currency used in a modern economy is actually dependent on an increasing supply of energy. Emphasis added:

Although it is often thought that a [modern] economy produces value, as an empirical matter it can be observed that what it produces is debt. One borrows money in order to provide and to receive goods and services. Loans are extended based on the expectation that, in the future, demand for these services will be even higher, driving further economic growth. However, this economy is not a closed system: the delivery of these goods and services is linked to external energy flows. Greater flows of energy, in the form of increased oil and natural gas imports, increased coal production and so forth are failing to occur, for a variety of geological and geopolitical reasons. There is every reason to expect that the ability to deliver goods and services will suffer as a result of energy shortages, collapsing the debt pyramid.

In October 2005, the normally conservative London Times acknowledged that the world's wealth may soon evaporate as we enter a technological and economic "Dark Age." In an article entitled "Waiting for the Lights to Go Out" Times columnist Bryan Appleyard reported:

Oil is running out; the climate is changing at a potentially catastrophic rate; wars over scarce resources are brewing; finally, most shocking of all, we don't seem to be having enough ideas about how to fix any of these things.

Almost daily, new evidence is emerging that progress can no longer be taken for granted, that a new Dark Age is lying in wait for ourselves and our children . . . growth may be coming to an end. Since our entire financial order from interest rates, pension funds, insurance, to stock markets is predicated on growth, the social and economic consequences may be cataclysmic.

PEAK OIL: RESOURCE WARS & COLLAPSE OF DEMOCRACY:

Mitigation of maximum world oil production: Shortage scenarios, by Robert L. Hirsch:

A framework is developed for planning the mitigation of the oil shortages that will be caused by world oil production reaching a maximum and going into decline. To estimate potential economic impacts, a reasonable relationship between percent decline in world oil supply and percent decline in world GDP was determined to be roughly 1:1. As a limiting case for decline rates, giant fields were examined. Actual oil production from Europe and North America indicated significant periods of relatively flat oil production (plateaus). However, before entering its plateau period, North American oil production went through a sharp peak and steep decline. Examination of a number of future world oil production forecasts showed multi-year rollover/roll-down periods, which represent pseudoplateaus. Consideration of resource nationalism posits an Oil Exporter Withholding Scenario, which could potentially overwhelm all other considerations. Three scenarios for mitigation planning resulted from this analysis: (1) A Best Case, where maximum world oil production is followed by a multi-year plateau before the onset of a monatomic decline rate of 2–5% per year; (2) A Middling Case, where world oil production reaches a maximum, after which it drops into a long-term, 2–5% monotonic annual decline; and finally (3) A Worst Case, where the sharp peak of the Middling Case is degraded by oil exporter withholding, leading to world oil shortages growing potentially more rapidly than 2–5% per year, creating the most dire world economic impacts.

The socio-political and economic consequences of Peak Oil will be severe, as detailed in [German] Military Study Warns of Potentially Drastic Oil Crisis, by Stefan Schultz, Der Spiegel , 01 September 2010:

A study by a German military think tank has analyzed how "peak oil" might change the global economy. The internal draft document -- leaked on the Internet -- shows for the first time how carefully the German government has considered a potential energy crisis.

The term "peak oil" is used by energy experts to refer to a point in time when global oil reserves pass their zenith and production gradually begins to decline. This would result in a permanent supply crisis -- and fear of it can trigger turbulence in commodity markets and on stock exchanges.

The issue is so politically explosive that it's remarkable when an institution like the Bundeswehr, the German military, uses the term "peak oil" at all. But a military study currently circulating on the German blogosphere goes even further.

The study is a product of the Future Analysis department of the Bundeswehr Transformation Center, a think tank tasked with fixing a direction for the German military. The team of authors, led by Lieutenant Colonel Thomas Will, uses sometimes-dramatic language to depict the consequences of an irreversible depletion of raw materials. It warns of shifts in the global balance of power, of the formation of new relationships based on interdependency, of a decline in importance of the western industrial nations, of the "total collapse of the markets" and of serious political and economic crises.

In US Military warns oil output may dip causing massive shortages by 2015, Terry MacAlister warns that the military report states that the “shortfall could reach 10 m barrels a day, and that the cost of crude oil is predicted to top $100 per barrel, which would have significant economic and political impacts.

In the third military Peak Oil report of 2010 Fueling the Future Force: Preparing the Department of Defense for a Post-Petroleum Environment was published on 27 September by the Washington, DC “national security and defence” think tank, Center for a New American Security (CNAS). It warns that the US Department of Defense’s “massive energy needs” are met by petroleum – and “given projected supply and demand, we cannot assume that oil will remain affordable or that supplies will be available to the United States reliably three decades hence.” To remain as an effective fighting force, the entire US military must transition from oil over the coming 30 years. Of the three, the German one is the most blunt, as detailed in German Military Report: Peak Oil Could Lead to Collapse of Democracy.

Peak oil has happened or will happen some time around this year, and its consequences could threaten the continued survival of democratic governments, says a secret Germany military report that was leaked online.

According to Der Spiegel, the report from a think-tank inside the German military warns that shrinking global oil supplies will threaten the world's economic foundations and possibly lead to mass-scale upheaval within the next 15 to 30 years.

International trade would suffer as the cost of transporting goods across oceans would soar, resulting in "shortages in the supply of vital goods," the report states, as translated by Der Spiegel.

The result would be the collapse of the industrial supply chain. "In the medium term the global economic system and every market-oriented national economy would collapse," the report states.

According to Joint Operating Environment – 2010, issued by United States Joint Forces Command, issued on 18 February 2010:

“The implications for future conflict are ominous, if energy supplies cannot keep up with demand and should states see the need to militarily secure dwindling energy resources. (p.26)…. By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD”

Mathew Simmons: Peak Oil and End of Economic Growth: Mathew Simmons, CEO of the world's largest Energy Investment Bank, Simmons & Company International (http://www.simmonsco-intl.com/). Its clients include Halliburton; Baker, Botts, LLP; Dynegy; Kerr-McGee; and the World Bank. Since 1993, it has underwritten or financed 18 transactions valued at more than $350 million. Of those, six were valued at more than $1 billion. Simmons is a member of the Council on Foreign Relations and serves on the National Petroleum Council's Natural Gas Task Force.


PEAK OIL: TIME FOR BIOPHYSICAL BASED ECONOMICS PARADIGM:

EROI/EROEI: Energy Return on Energy Invested

Peak Oil: The End of Economic Growth?, by Professor Charles A. Hall, of the State University of New York College of Environmental Science and Forestry, Syracuse.

Dr. Hall is a systems ecologist who began his career studying life in freshwater systems. He is best known for developing the concept of EROI, or energy return on investment, which examines how organisms, including humans, invest energy in obtaining additional energy to improve their biotic or social fitness. He has applied this approach to fish migrations, the carbon balance, tropical land use change and petroleum extraction, in both natural and human-dominated ecosystems. His lecture will deal with the probable implications of peak oil on the economic activity of OECD and developing countries. It will focus on the past, present and future energy cost of energy itself, and how that is likely to effect investments, economic growth and discretionary spending. He recently published a paper calling for a new economic paradigm: The Need for a New, Biophysical-based Paradigm in Economics for the Second Half of the Age of Oil.

An introduction to EROI by Charles Hall

EROI stands for energy return on investment, and refers most explicitly to the ratio of energy delivered to society from one unit invested in getting that particular energy. The units can be KJoules per KJoule or barrels per barrel etc, and there can be modifications, for example the quality of the energy input or output. It is a physical concept, but one that can have enormous economic implications, and one that must eventually be a large component — or even determinant — of many energy and economic assessments.

The idea and its implications for society has been around since the mid part of the past century in the writings of Fred Cottrell, Kenneth Boulding and Howard Odum but to my knowledge EROI was not derived explicitly until the 1980s in work by Cleveland, Kaufmann and myself. Although EROI (or its cousins net energy analysis and life cycle analysis) is a term that is rarely heard today we believe that this issue is likely to become a dominant one in the U.S. and the world in coming decades because of the apparent substantial and continuing decline for the most important fuels, and because alternatives (i.e. substitutes) tend to have a much lower ratio.

The situation can be seen clearly for the finding and production of domestic oil in the United States. The EROI has evolved from the situation in 1930 when we found roughly one hundred barrels of oil for every barrel (or its equivalent as natural gas) invested to roughly 25 barrels per barrel in the 1970s to from 11 to 18 barrels per barrel in the 1990s. The numbers reflect current production from existing fields, and the EROI for finding new oil is almost certainly much lower. The very large difference between the investment and the return–that is, the energy surplus–of the oil industry allowed Texas and the United States to generate enormous wealth over the twentieth century. Over time the quantity of U.S. oil produced increased dramatically until its peak in 1970, but the EROI declined more or less routinely for both extraction and especially for new discoveries.

We believe that if the EROI for our principal fuels continues to decline the implications will be enormous as more and more of our total energy output, and hence our total economic activity, is diverted to get the same quantity of fuels. The normal response by many to this issue is that substitutes will occur and that technological processes will continue to improve so that there should be little or no concern. In fact there is a continuing race between technological progress and depletion. If the declining EROI of, for example, U.S. oil is used as a yardstick it would appear that depletion is winning the race. While substitutes to replace U.S petroleum since its peak in 1970 have in fact occurred, the majority of this has been imported oil, now possibly facing its own peak, and U.S. natural gas, which is subject to the same peaking and depletion issues, perhaps soon. Our own research indicates that the EROI for global oil and gas is in the vicinity of 30 to 1 but declining fairly rapidly.

The use of EROI for potential policy assessments has created a large controversy between scientists and economists who want the market to make all decisions and even analyses. For example, some scientists have argued that net energy analysis has several advantages over standard economic analysis. First, net energy analysis assesses the change in the physical scarcity of energy resources, and therefore is immune to the effects of market imperfections that distort monetary data. Second, because goods and services are produced from the conversion of energy into useful work, net energy is a measure of the potential to do useful work in economic systems. Third, EROI can be used to rank alternative energy supply technologies according to their potential abilities to do useful work in the economy.

In clear contrast most neoclassical economists reject methods of economic analysis that are not based on human preferences, arguing that net energy analysis does not generate useful information beyond that produced in a thorough economic analysis. This is a perspective that I do not share, particularly because we believe that markets are poor predictors of what we perceive to be almost inevitable impacts of a coming serious decline in energy availability and in EROI for our most important fuels.

In any case neither system has yet adequately addressed the cost of environmental impact or contribution to depletion. Thus a critically important issue is what should the boundaries of the analyses be i.e. how far should we go in the costs of the energy to make (or use) a fuel? There are also important methodological problems that are nicely seen in the letters and responses found about EROI for biomass-derived alcohol that were in Science magazine June 23, 2006.

There are several groups working on determining the EROI of various alternatives to oil although it is apparent that there are no clear alternatives to oil with high EROI and a large resource base. Windmills have, apparently, a high EROI, but an enormous expansion would be required before it gives even 1 percent of US energy use.

ENERGY, INDUSTRIAL AGRICULTURE AND POPULATION GROWTH:

In Threats of Peak Oil to the Global Food Supply, Richard Heinberg begins with:--

Food is energy. And it takes energy to get food. These two facts, taken together, have always established the biological limits to the human population and always will.

The same is true for every other species: food must yield more energy to the eater than is needed in order to acquire the food. Woe to the fox who expends more energy chasing rabbits than he can get from eating the rabbits he catches. If this energy balance remains negative for too long, death results; for an entire species, the outcome is a die-off event, perhaps leading even to extinction.

…. Over all - including energy costs for farm machinery, transportation, and processing, and oil and natural gas used as feedstocks for agricultural chemicals - the modern food system consumes roughly ten calories of fossil fuel energy for every calorie of food energy produced.4

But the single most telling gauge of our dependency is the size of the global population. Without fossil fuels, the stupendous growth in human numbers that has occurred over the past century would have been impossible. Can we continue to support so many people as the availability of cheap oil declines?

Some facts:

In the US, agriculture is directly responsible for well over 10 percent of all national energy consumption. Over 400 gallons of oil equivalent are expended to feed each American each year. About a third of that amount goes toward fertilizer production, 20 percent to operate machinery, 16 percent for transportation, 13 percent for irrigation, 8 percent for livestock raising, (not including the feed), and 5 percent for pesticide production. This does not include energy costs for packaging, refrigeration, transportation to retailers, or cooking.

Trucks move most of the world's food, even though trucking is ten times more energy-intensive than moving food by train or barge. Refrigerated jets move a small but growing proportion of food, almost entirely to wealthy industrial nations, at 60 times the energy cost of sea transport.

Processed foods make up three-quarters of global food sales by price (though not by quantity). This adds dramatically to energy costs: for example, a one-pound box of breakfast cereal may require over 7,000 kilocalories of energy for processing, while the cereal itself provides only 1,100 kilocalories of food energy.

In a Harpers Magazine Feature, The Oil We Eat, on July 23, 2004, Richard Manning provides the following ‘food production based on oil’ related to population issues ‘food for thought’:

The journalist’s rule says: follow the money. This rule, however, is not really axiomatic but derivative, in that money, as even our vice president will tell you, is really a way of tracking energy. We’ll follow the energy.

We learn as children that there is no free lunch, that you don’t get something from nothing, that what goes up must come down, and so on. The scientific version of these verities is only slightly more complex. As James Prescott Joule discovered in the nineteenth century, there is only so much energy. You can change it from motion to heat, from heat to light, but there will never be more of it and there will never be less of it. The conservation of energy is not an option, it is a fact. This is the first law of thermodynamics.

Special as we humans are, we get no exemptions from the rules. All animals eat plants or eat animals that eat plants. This is the food chain, and pulling it is the unique ability of plants to turn sunlight into stored energy in the form of carbohydrates, the basic fuel of all animals. Solar-powered photosynthesis is the only way to make this fuel. There is no alternative to plant energy, just as there is no alternative to oxygen. The results of taking away our plant energy may not be as sudden as cutting off oxygen, but they are as sure.

Energy cannot be created or canceled, but it can be concentrated. This is the larger and profoundly explanatory context of a national-security memo George Kennan wrote in 1948 as the head of a State Department planning committee, ostensibly about Asian policy but really about how the United States was to deal with its newfound role as the dominant force on Earth. “We have about 50 percent of the world’s wealth but only 6.3 percent of its population,” Kennan wrote. “In this situation, we cannot fail to be the object of envy and resentment. Our real task in the coming period is to devise a pattern of relationships which will permit us to maintain this position of disparity without positive detriment to our national security. To do so, we will have to dispense with all sentimentality and day-dreaming; and our attention will have to be concentrated everywhere on our immediate national objectives. We need not deceive ourselves that we can afford today the luxury of altruism and world-benefaction.”“The day is not far off,” Kennan concluded, “when we are going to have to deal in straight power concepts.”

… On average, it takes 5.5 gallons of fossil energy to restore a year’s worth of lost fertility to an acre of eroded land—in 1997 we burned through more than 400 years’ worth of ancient fossilized productivity, most of it from someplace else. Even as the earth beneath Iowa shrinks, it is being globalized.

...The experience in population control in the developing world is by now clear: It is not that people make more people so much as it is that they make more poor people. In the forty-year period beginning about 1960, the world’s population doubled, adding virtually the entire increase of 3 billion to the world’s poorest classes, the most fecund classes. The way in which the green revolution raised that grain contributed hugely to the population boom, and it is the weight of the population that leaves humanity in its present untenable position.

Discussion of these, the most poor, however, is largely irrelevant to the American situation. We say we have poor people here, but almost no one in this country lives on less than one dollar a day, the global benchmark for poverty. It marks off a class of about 1.3 billion people, the hard core of the larger group of 2 billion chronically malnourished people—that is, one third of humanity. We may forget about them, as most Americans do.

The common assumption these days is that we muster our weapons to secure oil, not food. There’s a little joke in this. Ever since we ran out of arable land, food is oil. Every single calorie we eat is backed by at least a calorie of oil, more like ten. In 1940 the average farm in the United States produced 2.3 calories of food energy for every calorie of fossil energy it used. By 1974 (the last year in which anyone looked closely at this issue), that ratio was 1:1. And this understates the problem, because at the same time that there is more oil in our food there is less oil in our oil. A couple of generations ago we spent a lot less energy drilling, pumping, and distributing than we do now. In the 1940s we got about 100 barrels of oil back for every barrel of oil we spent getting it. Today each barrel invested in the process returns only ten, a calculation that no doubt fails to include the fuel burned by the Hummers and Blackhawks we use to maintain access to the oil in Iraq.

...There is another energy matter to consider here, though. The grinding, milling, wetting, drying, and baking of a breakfast cereal requires about four calories of energy for every calorie of food energy it produces. A two-pound bag of breakfast cereal burns the energy of a half-gallon of gasoline in its making. All together the food-processing industry in the United States uses about ten calories of fossil-fuel energy for every calorie of food energy it produces. That number does not include the fuel used in transporting the food from the factory to a store near you, or the fuel used by millions of people driving to thousands of super discount stores on the edge of town, where the land is cheap.

...Green eaters, especially vegetarians, advocate eating low on the food chain, a simple matter of energy flow. Eating a carrot gives the diner all that carrot’s energy, but feeding carrots to a chicken, then eating the chicken, reduces the energy by a factor of ten. The chicken wastes some energy, stores some as feathers, bones, and other inedibles, and uses most of it just to live long enough to be eaten. As a rough rule of thumb, that factor of ten applies to each level up the food chain, which is why some fish, such as tuna, can be a horror in all of this. Tuna is a secondary predator, meaning it not only doesn’t eat plants but eats other fish that themselves eat other fish, adding a zero to the multiplier each notch up, easily a hundred times, more like a thousand times less efficient than eating a plant.

Animal rights aside, vegetarians can lose the edge in the energy argument by eating processed food, with its ten calories of fossil energy for every calorie of food energy produced. The question, then, is: Does eating processed food such as soy burger or soy milk cancel the energy benefits of vegetarianism, which is to say, can I eat my lamb chops in peace? Maybe. If I’ve done my due diligence, I will have found out that the particular lamb I am eating was both local and grass-fed, two factors that of course greatly reduce the embedded energy in a meal. I know of ranches here in Montana, for instance, where sheep eat native grass under closely controlled circumstances—no farming, no plows, no corn, no nitrogen. Assets have not been stripped. I can’t eat the grass directly. This can go on. There are little niches like this in the system. Each person’s individual charge is to find such niches.

...Eighty percent of the grain the United States produces goes to livestock. Seventy-eight percent of all of our beef comes from feed lots, where the cattle eat grain, mostly corn and wheat. So do most of our hogs and chickens. The cattle spend their adult lives packed shoulder to shoulder in a space not much bigger than their bodies, up to their knees in shit, being stuffed with grain and a constant stream of antibiotics to prevent the disease this sort of confinement invariably engenders.

The manure is rich in nitrogen and once provided a farm’s fertilizer. The feedlots, however, are now far removed from farm fields, so it is simply not “efficient” to haul it to cornfields. It is waste. It exhales methane, a global-warming gas. It pollutes streams. It takes thirty-five calories of fossil fuel to make a calorie of beef this way; sixty-eight to make one calorie of pork.

Still, these livestock do something we can’t. They convert grain’s carbohydrates to high-quality protein. All well and good, except that per capita protein production in the United States is about double what an average adult needs per day. Excess cannot be stored as protein in the human body but is simply converted to fat. This is the end result of a factory-farm system that appears as a living, continental-scale monument to Rube Goldberg, a black-mass remake of the loaves-and-fishes miracle. Prairie’s productivity is lost for grain, grain’s productivity is lost in livestock, livestock’s protein is lost to human fat—all federally subsidized for about $15 billion a year, two thirds of which goes directly to only two crops, corn and wheat.

This explains why the energy expert David Pimentel is so worried that the rest of the world will adopt America’s methods. He should be, because the rest of the world is. Mexico now feeds 45 percent of its grain to livestock, up from 5 percent in 1960. Egypt went from 3 percent to 31 percent in the same period, and China, with a sixth of the world’s population, has gone from 8 percent to 26 percent. All of these places have poor people who could use the grain, but they can’t afford it.

So, from that you’ll realise that petrochemicals are key components to much more than just the petrol in your car. Jay Tomczak points out in Implications of Fossil Fuel Dependence for the Food System:

The current food system is dependent on non-renewable fossil fuel resources, which will soon become increasingly scarce and expensive. This dependence is a threat to food security and future food supply.

The availability of decades of cheap fossil fuel energy has allowed the food system to become dependent on finite resources that are rapidly being depleted. Due to the constraints of the first and second laws of thermodynamics this system cannot be maintained in its current form. Essential components of the current system such as synthetic nitrogen fertilizers, which require natural gas as a feedstock and oil dependent distribution, exemplify the fragile nature of the food system. A wide scale conversion to low energy, ecologically sustainable agriculture must be implemented to avoid food system collapse and future food supply shortages.

…… If action to change these aspects of the food system is not taken, convening resource depletion and degradation will cause the food system to collapse.

The city of Brighton’s Direct Action Collective reports:

The implications [of Peak Oil] in terms of food are pretty terrifying. Since the 1960s it has been true to say that food equals oil. In 1944 the average US farm produced 2.3 thousand calories of food for every calorie of fossil fuel inputs. In 1974 the ratio became 1:1…. As Heinberg says, “in terms of energy return on energy invested, industrial agriculture is the least efficient food distribution system the world has ever known.”

Geologist Dale Allen Pfeiffer points out in his article entitled, “Eating Fossil Fuels,” that approximately 10 calories of fossil fuels are required to produce every 1 calorie of food eaten in the US. The size of this ratio stems from the fact that every step of modern food production is fossil fuel and petrochemical powered:

• Pesticides are made from oil; Commercial fertilizers are made from ammonia, which is made from natural gas, which will peak about 10 years after oil peaks;
  
• With the exception of a few experimental prototypes , all farming implements such as tractors and trailers are constructed and powered using oil.
  
• Food storage systems such as refrigerators are manufactured in oil-powered plants, distributed across oil-powered transportation networks and usually run on electricity, which most often comes from natural gas or coal;
  
• In today’s globalized economy the average piece of food is transported hundreds to thousands of miles from where it is produced to where it is consumed (US almost 1,500 miles, in Canada 5,000 miles ). In short, people gobble oil like two-legged SUVs.

To briefly conclude Mr. Pfeiffers investigation into the totality of food production in the US, which has major global implications since the US and Canada feed much of the world:

• The motives of most of the wars in recorded history were the need to expand agricultural production, as an essential portion of the energy base.
  
• With every increase in food production, the human population grew apace.
  
• Modern agriculture is highly energy intensive: egs, to produce one kilogram of nitrogen for fertilizer requires the energy equivalent of 1.4 to 1.8 litres of diesel fuel (excluding the natural gas feedstock).
  
• We are literally eating fossil fuels, but due to the laws of thermodynamics, between energy input and agricultural output, along the way there is a marked energy loss. Removing fossil fuels from the equation, the current US daily diet would require nearly three weeks of labour per capita to produce.
  
• Modern intensive agriculture is (a) unsustainable, (b) damaging the land, (c) draining water supplies, (d) polluting the environment, all of which requires more fossil fuels input to pump irrigation water, replace nutrients, provide pest protection, and maintain crop production constant.
  
• This necessary fossil fuel input is going to crash headlong into declining fossil fuel production!

Giampietro & Pimental concluded that a sustainable food system would be possible under the following four conditions:

• Environmentally sound agricultural technologies must be implemented.
  
• Renewable energy technologies must be put into place.
  
• Major increases in energy efficiency must reduce exosomatic energy consumption per capita.
  
• Population size and consumption must be compatible with maintaining the stability of environmental processes.

Given the aforementioned four conditions they concluded that to achieve a sustainable economy and avert disaster, the then current US population of 292 million would require a 92 million 1/3rd) reduction.

NOTE: None of their aforementioned research, including it’s conclusions and population reduction recommendations, to attain a sustainable economy and avert disaster, considered the impact of declining fossil fuel production (Peak Oil)!

In other words, the current peaking of global oil production is not only a crisis in and of itself but shall conceivably precipitate the aforementioned agricultural crisis sooner than expected, due to decreased production of the required fossil fuels for intensive agriculture to simply maintain crop production constant.

Therefore:--

• a population reduction of one-third will not be effective for sustainability.
  
• the necessary reduction might be in excess of one-half

In light of Peak Oil/declining fossil fuel production’s input into agriculture, and the additional impending agricultural crisis: For global sustainability to be achieved, global population will have to be reduced by 2/3rds to 2 billion (a reduction of 68%).

He concludes we are confronted with three choices: (a) Immediate and drastic conscious responsible voluntary population reduction, probably our best although also least likely choice; (b) Alternatively immediate and drastic Government intervention by mandated population reduction, via sterilisation and quota’s; which will no doubt result in screams of eugenics from Peak Oil denialists; and (c) Failure to confront our overpopulation crisis, will simply result in spiralling food costs, and unprecedented starvation, i.e. the eventual die-off Darwinian Malthusian consequences.

SCARCITY: HUMANITY’S LAST CHAPTER: PEAK NON-RENEWABLE RESOURCES:

Scarcity: Humanity’s Last Chapter : A Comprehensive Analysis of Nonrenewable Natural Resource (NNR) Scarcity’s Consequences, by Chris Clugston:

Natural Resources and Human Evolution:

During the past 2+ million years, humanity—Homo sapiens and our hominid predecessors—evolved through three major lifestyle paradigms: hunter-gatherer, agrarian, and industrial.

Each of the three paradigms is readily distinguishable from the other two in terms of its worldview, natural resource utilization behavior, and resulting level of societal wellbeing—i.e., attainable population levels and material living standards.

The Hunter-Gatherer Lifestyle Paradigm

The hunter-gatherer (HG) lifestyle paradigm spanned over 2 million years, from the time that our hominid ancestors first stood erect on the continent of Africa to approximately 8,000 BC. HG societies consisted of small nomadic clans, typically numbering between 50 and 100 individuals, who subsisted primarily on naturally occurring vegetation and wildlife.

The HG lifestyle can best be described as subsistence living for a relatively constant population that probably never exceeded 5 million globally. Hunter-gatherers produced few manmade goods beyond the necessities required for their immediate survival, and they generated no appreciable wealth surplus.

The HG worldview revered Nature as the provider of life and subsistence, a perspective that fostered a passive lifestyle orientation through which hunter-gatherers sought to live—albeit somewhat exploitatively—within the environmental context defined by Nature. The HG resource mix consisted almost entirely of renewable natural resources such as water and naturally occurring edible plant life and wildlife.

The Agrarian Lifestyle Paradigm

The agrarian lifestyle paradigm commenced in approximately 8,000 BC and lasted until approximately 1700 AD, when England initiated what was to become the industrial revolution.

Agrarian societies existed primarily by raising cultivated crops and domesticated livestock.

The agrarian worldview perceived Nature as something to be augmented through human effort, by domesticating naturally occurring plant and animal species. The agrarian lifestyle orientation was proactive in the sense that it sought to improve upon what Nature provided.

While modest wealth surpluses were sometimes generated by agrarian populations, agrarian existence typically offered little more in the way of material living standards for the vast majority of agrarian populations than did the HG lifestyle—although the global agrarian population did increase significantly, reaching nearly 800 million by 1750 AD.

The agrarian resource mix consisted primarily of RNRs, which were increasingly overexploited by ever-expanding, permanently-settled agrarian populations. As agrarian cultivation and grazing practices became increasingly intensive, renewable natural resource reserves were increasingly depleted and natural habitats were increasingly degraded as well.

The Industrial Lifestyle Paradigm

The inception of the industrial lifestyle paradigm occurred with England’s industrial revolution in the early 18th century, less than 300 years ago.

Today, over 1.5 billion people—approximately 22% of the world’s 6.9 billion total population—is considered “industrialized”; and nearly three times that many people actively aspire to an industrialized way of life.

Our industrialized world is characterized by an incomprehensibly complex mosaic of interdependent yet independently operating human and non-human entities and infrastructure.

These entities must function continuously, efficiently, and collectively at the local, regional, national, and global levels in order to convert natural resource inputs into the myriad goods and services that enable our modern industrial way of life.

[Note that failures within the industrial mosaic can disrupt, temporarily or permanently, the flow of societal essentials—water, food, energy, shelter, and clothing—to broad segments of our global population.]

Tremendous wealth surpluses are typically generated by industrialized societies; such wealth surpluses are actually required to enable the historically unprecedented material living standards enjoyed by increasingly large segments of ever-expanding industrialized populations.

The industrialized worldview perceives Nature as something to be harnessed through industrial processes and infrastructure, in order to enhance the human condition. It is an exploitive worldview that seeks to use natural resources and habitats as the means to continuously improve human societal wellbeing—that is, to provide continuously improving material living standards for ever-increasing numbers of ever-expanding human populations.

The resource mix associated with today’s industrialized societies is heavily skewed toward nonrenewable natural resources, which, in addition to renewable natural resources and natural habitats, have been increasingly overexploited since the dawn of the industrial revolution.

It is precisely this persistent overexploitation of natural resources and natural habitats—especially NNRs—that has enabled the “success” associated with the industrial lifestyle paradigm—success being defined here as continuous increases in both human population levels and human material living standards.

Nonrenewable Natural Resources—the Enablers of Industrialization

Our industrial lifestyle paradigm is enabled by nonrenewable natural resources (NNRs)—energy resources, metals, and minerals. Both the support infrastructure within industrialized nations and the raw material inputs into industrialized economies consist almost entirely of NNRs; NNRs are the primary sources of the tremendous wealth surpluses required to perpetuate industrialized societies.

As a case in point, the percentage of NNR inputs into the US economy increased from less than 10% in the year 1800, which corresponds roughly with the inception of the American industrial revolution, to approximately 95% today. Between 1800 and today, America’s total annual NNR utilization level increased from approximately 4 million tons to nearly 7 billion tons—an increase of over 1700 times!

In the absence of enormous and ever-increasing NNR supplies, the 1.2 billion people who currently enjoy an industrialized way of life will cease to do so; and the billions of people aspiring to an industrialized way of life will fail to realize their goal.

NNR Scarcity

As their name implies, NNRs are finite—they are not replenished by Nature; and they are scarce—economically viable NNR deposits are rare. Persistent extraction (production) will therefore deplete recoverable NNR reserves to exhaustion. [Note: the terms NNR “production” and NNR “extraction” are used interchangeably throughout the paper. Although “extraction” is the proper term—humans do not produce NNRs—the term “production” has gained wide acceptance within the NNR extraction industries.]

The typical NNR depletion cycle is characterized by: a period of “continuously more and more”, as the easily accessible, high quality, low cost resources are extracted; followed by a “supply peak”,8 or maximum attainable extraction level; followed by a period of “continuously less and less”, as the less accessible, lower quality, higher cost resources are extracted.

Since the inception of our industrial revolution, humanity has been the beneficiary of “continuously more and more” with respect to available NNR supplies.

Unfortunately, in the process of reaping the benefits associated with “continuously more and more”, we have been eliminating—persistently and systematically—the very natural resources upon which our industrialized way of life depends.

Increasingly, global NNR supplies are transitioning from “continuously more and more” to “continuously less and less”, as they peak and go into terminal decline. As a result, NNRs are becoming increasingly scarce—ever-tightening global NNR supplies are struggling to keep pace with ever-increasing global demand.

The Analyses

The following Global Nonrenewable Natural Resource Scarcity Assessment quantifies the magnitude associated with increasing global NNR scarcity and the probabilities associated with imminent and permanent global NNR supply shortfalls. The assessment consists of two analyses, both of which are based on US Geological Survey (USGS) and US Energy Information Administration (EIA) data.

• The Global NNR Scarcity Analysis assesses the incidence of global scarcity associated with each of 57 NNRs during the period of global economic growth (2000-2008) prior to the Great Recession.
  
• The Global NNR Supply Shortfall Analysis assesses the probability of a permanent global supply shortfall associated with each of 26 NNRs between now and the year 2030.

Global NNR Shortfall Analysis

The Global NNR Supply Shortfall Analysis is based on US Geological Survey (USGS) and US Energy Information Administration (EIA) global NNR extraction data and (Verhulst) logistics curve fitting analyses associated with 26 NNRs.

Global NNR Supply Shortfalls

An NNR supply shortfall occurs when the available NNR supply level is less than the supply level required to enable a society’s prevailing economic activity level and growth rate. An NNR supply shortfall can be temporary, permanent, or fatal.

A temporary NNR supply shortfall occurs when the available NNR supply level falls below the “required” supply level for a finite period of time. Since the available NNR supply level ultimately recovers to the required level, the society’s pre-shortfall economic activity level and growth rate are restored.

A permanent NNR supply shortfall occurs when the available NNR supply level falls below the “required” supply level forever. Since the available NNR supply level never recovers to the required level, the society’s pre-shortfall economic activity level and growth rate are not restored.

A fatal NNR supply shortfall occurs when the available NNR supply level falls below the “critical” supply level forever. At this point, available NNR supply can no longer enable the production and provisioning of one or more societal essentials—clean water, food, energy, shelter, clothing, and infrastructure—at levels sufficient to support the society’s existing population.

Global NNR Supply Shortfall Analysis Overview

The Global NNR Supply Shortfall Analysis assesses the probability of permanent global supply shortfalls associated with 26 NNRs between now and the year 2030.

Specifically, the analysis compares historic and projected annual global NNR extraction levels associated with each NNR through the year 2030, with the actual or projected peak extraction level associated with the NNR. An imminent and permanent global NNR shortfall is considered probable if the annual global NNR extraction level has already reached its global peak extraction level, or if the projected annual global NNR extraction level is expected to reach its projected global peak extraction level by the year 2030.

The probabilities that an NNR will experience a permanent global supply shortfall by the year 2030 are defined as follows:

Nearly Certain Probability: it is very likely that the actual annual global NNR extraction level reached its geological global peak extraction level prior to the year 2010.

Very High Probability: the actual annual global NNR extraction level exceeded its projected (Verhulst) global peak extraction level prior to the year 2010.

High Probability: it is very likely that the projected annual global NNR extraction level will exceed its projected (Verhulst) global peak extraction level between the years 2010 and 2030.

Low Probability: it is very unlikely that the projected annual global NNR extraction level will exceed its projected (Verhulst) global peak extraction level prior to the year 2030.

Global NNR Supply Shortfall Assessment

The following table contains current (2007/2008) annual global NNR extraction level data, year 2030 global NNR extraction level estimates, and global peak NNR extraction level estimates for each of the 26 analyzed NNRs. The table also notes the probability that each of the 26 NNRs will experience a permanent global supply shortfall by the year 2030.

Twenty three (23) of the 26 analyzed NNRs (88%) will likely experience permanent global NNR supply shortfalls by the year 2030—available global supplies associated with these NNRs will fail permanently to meet global NNR demand by that time.

Specifically:

Actual annual global extraction levels associated with cadmium, gold, mercury, tellurium, and tungsten have likely reached their geological global peak extraction levels, and are in terminal decline worldwide.

The probability that these NNRs will experience permanent global supply shortfalls by the year 2030 is nearly certain, assuming near term recoveries to pre-recession NNR extraction levels and growth rates, and the continued inability of recycled NNRs to more than offset ever-tightening newly extracted supplies.

Actual annual global extraction levels associated with cobalt, lead, molybdenum, PGM, phosphate rock, silver, titanium, and zinc exceeded their projected Verhulst global peak extraction levels prior to the year 2010. Current annual global extraction levels associated with these NNRs are likely near or at their geological global peak extraction levels.

The probability that these NNRs will experience permanent global supply shortfalls by the year 2030 is high, assuming near term recoveries to pre-recession NNR extraction levels and growth rates, and the continued inability of recycled NNRs to more than offset ever-tightening newly extracted supplies.

Global NNR Supply Shortfall Analysis Findings

Fifty (50) of the 57 NNRs (88%) analyzed in the Global NNR Scarcity Analysis experienced global scarcity—and therefore experienced temporary (at least) global supply shortfalls—during the 2000-2008 period. Twenty three (23) of the 26 NNRs (88%) analyzed in the Global NNR Supply Shortfall Analysis are likely to experience permanent global supply shortfalls by the year 2030.

Each permanent NNR supply shortfall represents another crack in the foundation of our globalizing industrial lifestyle paradigm; at issue is which crack or combination of cracks will cause the structure to collapse?

Permanent global supply shortfalls associated with a single critical NNR or with a very few secondary NNRs can be sufficient to cause significant lifestyle disruptions—population level reductions and/or material living standard degradation.

A permanent shortfall in the global supply of oil, for example, would be sufficient to cause significant local, national, and/or global lifestyle disruptions, or outright global societal collapse; as would permanent global supply shortfalls associated with 2-3 critical NNRs such as potassium, phosphate rock, and (fixed) nitrogen; as would concurrent permanent global supply shortfalls associated with 4-5 secondary NNRs such as the alloys, catalysts, and reagents that enable the effective use of critical NNRs.

Given our vulnerability to an ever-increasing number of imminent and permanent global NNR supply shortfalls, the likelihood that the mix and volume of shortfalls will reach their “critical mass” is a question of “when”, not “if”.

Implications of Increasing Global NNR Scarcity

Increasing NNR Scarcity

Available supplies associated with an overwhelming majority of NNRs—including bauxite, copper, iron ore, magnesium, manganese, nickel, phosphate rock, potash, rare earth metals, tin, and zinc—have reached their domestic US peak extraction levels, and are in terminal decline.16 Based on the evidence presented above, available supplies associated with a vast majority of NNRs are becoming increasingly scarce globally as well.

Because global NNR supplies are transitioning from “continuously more and more” to “continuously less and less”, our global societal wellbeing levels— our economic activity levels, population levels, and material living standards—are transitioning from “continuously more and more” to “continuously less and less” as well.

Sustainability is Inevitable

“Business as usual” (industrialism), “stasis” (no growth), “downscaling” (reducing NNR utilization), and “moving toward sustainability” (feel good initiatives) are not options; we will be sustainable…

Unintended Consequences

It is difficult to argue that our incessant quest for global industrialization and the natural resource utilization behavior that enables our quest are inherently evil. We have simply applied our everexpanding knowledge and technology over the past several centuries toward dramatically improving our level of societal wellbeing, through our ever-increasing utilization of NNRs.

However, despite our possibly justifiable naïveté during our meteoric rise to “exceptionalism”, and despite the fact that our predicament was undoubtedly an unintended consequence of our efforts to continuously improve the material living standards enjoyed by our ever-expanding global population; globally available, economically viable supplies associated with the NNRs required to perpetuate our industrial lifestyle paradigm will not be sufficient going forward.

Our Transition to Sustainability

Humanity’s transition to a sustainable lifestyle paradigm, within which a drastically reduced human population will rely exclusively on renewable natural resources (RNRs)—water, soil (farmland), forests, and other naturally occurring biota—is therefore inevitable. Our choice is not whether we “wish to be sustainable”; our choice involves the process by which we “will become sustainable”.

We can choose to alter fundamentally our existing unsustainable natural resource utilization behavior and transition voluntarily to a sustainable lifestyle paradigm over the next several decades. In the process, we would cooperate globally in utilizing remaining accessible NNRs to orchestrate a relatively gradual—but horrifically painful nonetheless—transition, thereby optimizing our population level and material living standards both during our transition and at sustainability.

Or, we can refrain from taking preemptive action and allow Nature to orchestrate our transition to sustainability through societal collapse, thereby experiencing catastrophic reductions in our population level and material living standards.

The Squeeze is On

It would be convenient if our unraveling were to occur in 1,000 years, or 500 years, or even 50 years. We could then dismiss it as a concern for future generations and go busily about improving our national and global societal wellbeing levels in the meantime.

Unfortunately, this is not the case. The Great Recession was a tangible manifestation of our predicament—NNR scarcity was epidemic in 2008, both domestically (US) and globally. Our unraveling is in process.

At present, however, only an extremely small minority of the global populace understands that NNR scarcity is the fundamental cause underlying our predicament and its derivative economic and political problems. When the general public becomes aware of this fact and of the fact that NNR scarcity is a permanent, ever-increasing, and unsolvable phenomenon, collapse will ensue in short order.

Public Ignorance

Historically, globally available, economically viable supplies associated with most NNRs were generally sufficient; NNR scarcity, when it occurred, was a temporary phenomenon. Incremental economically viable NNR supplies were available to be brought online, thereby restoring economic output (GDP) and growth to “expected” levels.

Because episodes of NNR scarcity have occurred periodically since the dawn of our industrial revolution, they are considered temporary “inconveniences” associated with the boom phases of “normal” commodity boom/bust cycles.

Today, despite the fact that NNR scarcity is becoming increasingly prevalent—as clearly demonstrated by the NNR Scarcity Analysis—and despite the fact that the impact associated with NNR scarcity has certainly been felt—as an underlying cause of the Great Recession—the general public remains almost completely unaware. This is understandable, as it is obviously in nobody’s interest to see humanity fail.

Our opinion leaders—i.e., the political, economic, and other societal elites who have the greatest vested interest in preserving the status quo—continue to preach that historically robust levels of economic growth can be sustained forever. Some of our opinion leaders may still believe this to be true, although it is difficult to believe that many or most do.

[There currently exists considerable speculation regarding the extent to which our opinion leaders actually understand our predicament and its consequences, and are merely conducting a charade in order to perpetuate “business as usual”, from which most of them benefit disproportionately, for as long as possible. At the end of the day, the awareness levels and motives associated with our opinion leaders are irrelevant; the outcome—societal collapse—remains unchanged.]

The general public—given their cornucopian worldview and their almost complete lack of understanding regarding the enablers of their industrialized lifestyles—adheres steadfastly to the notion that “every generation will have it better than the last”. The vast majority of the general public undoubtedly still believes this to be true, despite stagnant or declining material living standards in much of the industrialized world.

So long as myth supersedes reality and the general public remains ignorant regarding the nature of our predicament and of the fact that our predicament cannot be solved, complete societal collapse is unlikely. It is likely, however, that as our situation devolves, the general public will become increasingly frustrated, angry, and scared.

“We” will blame “them”—the government, corporations, foreigners, capitalists, communists, Christians, Muslims, the rich, the poor, anybody who is not “us”—for our continuously deteriorating circumstances. And we will become increasingly susceptible to the empty rhetoric of Hitleresque demagogues who promise—and fail—to restore “normalcy”, at the expense of our remaining freedoms.

Through their ignorance, the general public will exacerbate our already deteriorating situation.

Public Awareness

Within the next few years, however, NNR scarcity will become:

• “Noticeable”—NNR supplies will become increasingly constrained and prices will rise continuously; then
  
• “Inconvenient”—periodic and temporary shortages and rationing associated with NNRs and derived goods and services will occur with increasing frequency; then
  
• “Disruptive”—shortages and rationing associated with ever-increasing numbers of NNRs and derived goods and services will become permanent; and finally,
  
• “Debilitating”—supplies associated with ever-increasing numbers of NNRs and derived goods and services will become permanently unavailable.

As this scenario unfolds, increasingly large segments of humanity will become aware of the fact that NNRs enable our industrialized way of life, and that ever-increasing NNR scarcity is the fundamental cause underlying our continuously declining economic output (GDP) and societal wellbeing levels, both domestically (US) and, by that time, globally as well.

Historically prevalent public attitudes of generosity and forbearance, which were made possible by abundant and cheap NNRs during our epoch of “continuously more and more”, will be displaced by public intolerance:

• Childbirth will be condemned rather than celebrated;
  
• All immigration will be outlawed;
  
• Traditionally unquestioned resource uses—from “social entitlements” and universally accessible healthcare, to professional sports and cosmetics—will be considered “unfair” or “wasteful”, and ultimately eliminated; and
  
• “Excessive wealth” will be appropriated for “the public good”.

Ultimately, the general public will become aware of the fact that our predicament has no solution; and the following “trigger” conditions for societal collapse will be met:

NNR scarcity will become “disruptive”—the available mix and levels associated with economically viable NNRs and derived goods and services will become insufficient to enable “tolerable” day-to-day existence; and sufficiently large segments of society will:

• Become aware of the fact that ever-increasing NNR scarcity is a permanent phenomenon; &
  
• Acknowledge the fact that our predicament cannot be “fixed”; “continuously less and less”—continuously declining societal wellbeing—is our new reality.

Previously sporadic social unrest and resource wars will degenerate—seemingly instantaneously—into full fledged conflicts among nations, classes, and ultimately individuals for remaining natural resources and real wealth.

It will become universally understood that the only way to “stay even” within a continuously contracting operating environment—much less to improve one’s lot—is to take from somebody else. Life will become a “negative sum game” within the “shrinking pie” of “continuously less and less”.

Social institutions will dissolve; law and order will cease to exist; and chaos will fill the void— nations will collapse.

Given that half of the 89 analyzed NNRs are either likely or almost certain to remain scarce permanently at the global level; that no extraterrestrial source NNR imports exists for the world as a whole, and that the global industrialized / industrializing population has increased nearly 5 fold since 1975… …it is highly likely that the interval between global societal wellbeing “divergence” in 2008 and global societal collapse will be 35 years or less.

Humanity’s Predicament

During the course of our unrelenting pursuit of global industrialization, and our consequent ever-increasing utilization of the earth’s increasingly scarce NNRs, we have been eliminating— persistently and systematically—the very natural resources upon which our industrialized way of life and our very existence depend.

Ironically, the natural resource utilization behavior that has enabled our historically unprecedented “success”—our industrial lifestyle paradigm—and that is essential to our continued success, is also pushing us toward our imminent demise. This is humanity’s predicament.

Humanity’s Limited Perspective

To date, our distorted cornucopian worldview and limited anthropocentric perspective have rendered us incapable of understanding our predicament and its fundamental cause, which is ecological—ever-increasing NNR scarcity—not economic or political. The economic and political problems with which we concern ourselves are merely manifestations of our predicament—they are symptoms, not the disease.

Because none of the economic and political expedients that we employ to solve these problems can create additional NNRs, our attempted economic and political “solutions” are irrelevant.

Metaphorically, the well is running dry, yet we insist on tinkering with the pump.

SUSTAINABILITY CHOICE: VOLUNTARY POPULATION & CONSUMPTION REDUCTION:

As Dale Allan Pfeiffer concludes in: Eating Fossil Fuels, which does not consider the issue of the Peak of Non-Renewable Resources:

We are confronted with three choices: (a) Immediate and drastic conscious responsible voluntary population reduction, probably our best although also least likely choice; (b) Alternatively immediate and drastic Government intervention by mandated population reduction, via sterilisation and quota’s; which will no doubt result in screams of eugenics from Peak Oil denialists; and (c) Failure to confront our overpopulation crisis, will simply result in spiralling food costs, and unprecedented starvation, i.e. the eventual die-off Darwinian Malthusian consequences.

Humanity: An Endangered Species, by Judge Jason G. Brent:

There cannot be procreative ‘rights’ in an overpopulated world

The question should be, “What harm will all of humankind suffer and what harm will individuals suffer if all of humankind were divided into two groups—the reproducers and the non-reproducers-- and if that determination were done in a moral and just manner, or at least as close to a moral and just manner as humanly possible”? Though it must be conceded that such a determination could never be entirely perfect or morally unblemished, refusing to make it will not prevent its being made according to the arbitrary criteria of nature. In pursuit of this point, let us assume that the only action taken to reduce population is to limit who can reproduce. Assume further that no other action is taken—no one is killed, raped, murdered, deprived of a job, deprived of any benefit of society, ostracized, placed in a concentration camp, limited to whom they can or cannot marry, or limited where they can live, and no one is harmed in any way so long as that person does not reproduce or attempt to have more children than he or she is allowed.

Relative to the harm inflicted by continuing population growth, the harm inflicted by the reasoned and deliberate designation of reproducers and non-reproducers would surely be minimal.

Assume that 20% of the population that should be permitted to reproduce is prevented from reproducing, what is the harm to the individuals and what is the harm to society? Another assumption--assume 15% of the population that should not have reproduced is allowed to produce, what is the harm to the individuals and what is the harm to society? In both cases, in the next few generations the errors will correct themselves as the determination as to who can and who cannot reproduce is made anew each generation, under the method of determining who can procreate which I will propose.

A Shocking Proposal

The action I am initially proposing is value neutral and does not favor or harm any individual or group. The action I am proposing will be applied to every person or group without favoring anyone. The action is very simple---limit the right of any male to father only one live child and limit the right of every woman to one live birth. In simple terms a couple is limited to one and only one child—not one child for the male and one child for the female.

These limitations would be applied to every single human being without regard to race, religion, national origin or anything else and it would be absolute, no exceptions. It would be applied without regard for wealth, or the lack of wealth, and it would be applied without regard for the country of birth or residence of either the male or female. It would be applied without regard to intelligence, or the lack thereof, and without regard of the ability of the male or female to function in society. (At a later date when a method was agreed upon relating to dividing human beings into two groups, the ability to function in society would be considered in relation to who could or could not reproduce.) The right to either father a child or for a female to give birth could not be sold or transferred; it would be personal to the individual. If a live child were born with a birth defect or with some other disability it would not permit either the father or mother to produce another child. Each couple would have the right to have all appropriate pre-natal tests to determine if the child in the womb would be born with a birth or genetic defect and if the chance existed that the child would be born with such a defect to have an abortion.

Since survival of our species depends on the one child rule, under my proposal any attempt to evade the rule would result in death of the evader and of any second child. The rule to be fair must be absolute, without a single exception. If the female cannot or refuses to provide the name of the father she and the child shall be immediately executed. All of the ideas set forth in this paragraph may be considered horrible and inhumane. However, since they will be applied equally, no individual or group is harmed except to the extent that an individual cannot either father or give birth to a second child. The harm caused to the individual and the harm caused to all of humanity by enforcing the one child rule set forth above is miniscule compared to the harm which all of humanity would suffer if population were not reduced.

Since the birth of a child is very hard to hide, there must be communal responsibility and accountability for any attempt to do so. Those who knowingly failed to report the birth of a second or any higher number of children would themselves be subject to the very same severe punishment that would be meted out to the parents of the second or higher numbered child—no religious, cultural or ethnic exemptions would obtain. Humanity cannot consider the evasion of the single child rule a game to be played with a minor penalty, if caught. No group or individual could be permitted any evasion of the one child rule a that would lead to a disparity among groups and among individuals causing irreparable harm to the entire system established to reduce population. Should this sanction seem barbaric or draconian, it is surely less draconian in its effects than the merciless verdict of nature upon a species that refuses to contain its expansion.

In order for this proposal to be fair, equitable and workable, society and governments would be required to take action today to provide the means for every human being to control his or her fertility, to give everyone on the face of the earth the ability to limit birth to a single child. Governments would be required to devote a whatever portion of their Gross Domestic Product is necessary to the provision of artificial birth control devices of any and all types including sterilization, at low or no cost as appropriate, to their citizens, no matter the age of the citizens once a citizen reaches the age he/she can physically reproduce. This would also include instruction as how to use the devices. This would also include education of both males and females that the birth of a second child would result in the execution of the father and mother as well as the child. Governments would be required to provide safe, as much as any medical procedure can be safe, and low cost or free access to abortion. If any person, either male or female, had more than two failures of birth control devices, it would be conclusively presumed that the person was unable to use birth control devices and the person would be physically and permanently sterilized.

If poor nations were unable to devote the necessary funds to accomplish the one child rule in five years, the rich nations of the world would be required to assist the poor nations, after an evaluation that the poor nations were doing the best they could under some reasonable standard. Since survival of our species depends on reducing population below the current 6.7 billion humans now alive, the necessary funds to establish the system to control population must be made available. It should be emphasized that a “One-Child-Per-Family” (OCPF) law that is almost completely effective will not suffice. It must be totally and universally effective. After a five year preparation period, the rule must be enforced. The reduction in population would continue under the one child rule until all of humanity agreed upon the method and criteria necessary to implement the two group solution described herein. Population would continue to be reduced pursuant to the method and criteria of the two group solution until it reached 300 million or some other lower number agreed upon by humanity. The number finally agreed upon would be based on the ability of the earth to provide resources for humanity to maintain an acceptable standard of living for a minimum of 25,000 years. And 25,000 years is infinitely small when compared to the 160 million years the dinosaurs ruled the earth.

No doubt any proposal that would recommend capital punishment for transgressors of the One-Child-Per-Family law presently evokes immediate revulsion and rejection. Outside the context of an imminent die-off, given our heritage of moral, religious and cultural programming, I would be surprised if it didn’t. An example which shows that morality changes when circumstances change follows. Any Londoner who proposed in August 1938 that the Royal Air Force should one day bomb German cities with women and children in them would be summarily dismissed as a callous barbarian. But just two years later Londoners were clamouring for that action. Reality has a way of effecting abrupt ethical changes.

What is not presently comprehended by almost all of humanity is that we are now in an emergency. Our species is on the brink of an unparalleled catastrophe—our destruction and the destruction of our civilization. It is a matter of complete indifference to me that many, if not all, readers will find the execution of anyone having a second child to be horrible and against every moral precept they learned or understood was applicable to humanity. The problem is not that my prescriptions are immoral or horrible. Rather the problem is that the situation humanity finds itself in is horrible.

I will now remind the readers that under the law I propose every individual would be well aware of the consequences of flouting the law. Which of the two evils is worse--- a) executing anyone who knowingly violates the one child rule; or b) not reducing population such that the vast majority or probably all of humanity is destroyed? Under this system fertility drugs would not be permitted or if they were permitted and used, only one child would be permitted to be born alive or the rest would be destroyed at birth, if more than one were born alive. If a women gave birth to more than one child and fertility drugs or any other actions to increase fertility or the number of children born were not the cause, those children would be permitted to live. Each individual will have a very clear choice—execution or birth control or sterilization or abortion or abstinence.

SUSTAINABILITY CHOICE: POLITICAL SECESSION & ECONOMIC RELOCALISATION:

“[T]o highlight the current historical contradiction: an alleged one-world government is diametrically opposed to hundreds of small, autonomous nations, although both global constructs require and envision the dissolution of the large industrial nation-state in order to succeed. This contradiction cannot be stated emphatically enough. The pending crisis entails a showdown of worldviews with the large industrial nation-state caught in the middle and cast in the role of historical albatross for both competing tendencies.” -- Ethno Nationalist Secession-by-Default: Post-Peak Oil Devolution of the Industrial Nation-State, Sebastian Ronin, the Chairman of Renaissance Party (Canada)

“We all have to prepare for life without much money, where imported goods are scarce, and where people have to provide for their own needs, and those of their immediate neighbours. I will take as my point of departure the unfolding collapse of the global economy, and discuss what might come next. It started with the collapse of the financial markets last year, and is now resulting in unprecedented decreases in the volumes of international trade. These developments are also starting to affect the political stability of various countries around the world. A few governments have already collapsed, others may be on their way, and before too long we may find our maps redrawn in dramatic ways.” – Dmitry Orlov, Definancialisation, Deglobalisation, Relocalisation

In The Secession Solution, Kirkpatrick Sale examines the principle of Aristotle’s wisdom on the importance of limiting the size of political units:

“Experience shows that a very populous city can rarely, if ever, be well governed; since all cities which have a reputation for good government have a limit of population. We may argue on grounds of reason, and the same result will follow: for law is order, and good law is good order; but a very great multitude cannot be orderly.”

He proceeds to contemplate “what in today’s world would constitute the ideal, or optimum, size of a political state.”

Let us start by looking at modern nations to give us some clue as to population sizes that actually work.

Among the nations that are recognized models of statecraft, eight are below 500,000: Luxembourg, Malta, Iceland, Barbados, Andorra, Liechtenstein, Monaco, and San Marino.

Of the 14 states generally reckoned freest in the world, 9 have populations below Switzerland’s, at 7.7 million, and 11 below Sweden’s, at 9.3 million; the only sizable states are Canada, the United Kingdom, and Germany (the largest, at 81 million).There are other national rankings. Literacy: Of the 46 countries that claim a literacy rate of 99 or better, 25 are below 7.5 million. Health: Measured by the World Health Organization, 9 of the top 20 are under 7 million. In 2009 rankings of happiness and standard of living, the top countries were Norway, Iceland, Sweden, Netherlands, Australia, Luxembourg, Switzerland, Canada, Ireland, Denmark, Austria, and Finland; all but Canada and Australia have small populations.

Enough of that. The point, I trust, is well and simply made. The figures seem to suggest that there is an optimum size of a successful state, somewhere in the range of 3 million to 5 million people.

[..] And if we measure economic strength by per capita GDP, small countries prove to be decidedly advantageous. Seventy-seven percent of the most prosperous countries are small. And most of them are quite small indeed: under 10,000 square miles.

Administrative, distribution, transportation, and similar transaction costs obviously rise, perhaps exponentially, as geographic size increases. Control and communication also become more difficult to manage over long distances, often to the point where central authority and governance become nearly impossible.

I propose that, out of these figures and even more so out of the history of the world, results a Law of Government Size, and it goes like this: Economic and social misery increase in direct proportion to the size and power of the central government of a nation.

The consolidation of nations into power­ful empires leads not to shining periods of peace and prosperity and the advance of human betterment, but to increasing restriction, warfare, autocracy, crowding, immiseration, inequality, poverty, and starvation.

[..] The argument for secession need not focus exclusively on population or geographic size—one might factor in cultural cohesion, developed infrastructure, historical identity—but that seems to be the sensible place to start in considering viable states. And since the experience of the world has shown that populations ranging from 3 mil­lion to 5 million are optimal for governance and efficiency, that is as good a measure as any to use to begin assessing secessionist potential and chances of success as independent states.

In When Zombies Attack, Thomas E. Woods Jr, responds to the knee-jerk hysterical reactions to his book Nullification: How to Resist Federal Tyranny in the 21st Century, endorsed in principle by Martha Dean, a candidate for governor general in Connecticut, who repeated the argument that the States have a duty to act on behalf of their citizens, and nullify any clearly unconstitutional federal law. Among others he asks under “what conditions liberty is more likely to flourish: with a multiplicity of competing jurisdictions, or one giant jurisdiction?” He supports his argument with that made by Ralph Raico in The Theory of Economic Development and the 'European Miracle' that it was the decentralisation of power, which contributed to the European Miracle of the Renaissance’s development of liberty:

Within this [decentralized power] system, it was highly imprudent for any prince to attempt to infringe property rights in the manner customary elsewhere in the world. In constant rivalry with one another, princes found that outright expropriations, confiscatory taxation, and the blocking of trade did not go unpunished. The punishment was to be compelled to witness the relative economic progress of one's rivals, often through the movement of capital, and capitalists, to neighboring realms. The possibility of "exit," facilitated by geographical compactness and, especially, by cultural affinity, acted to transform the state into a "constrained predator" (Anderson 1991, 58).

Decentralization of power also came to mark the domestic arrangements of the various European polities. Here feudalism — which produced a nobility rooted in feudal right rather than in state-service — is thought by a number of scholars to have played an essential role (see, e.g., Baechler 1975, 78). Through the struggle for power within the realms, representative bodies came into being, and princes often found their hands tied by the charters of rights (Magna Carta, for instance) which they were forced to grant their subjects. In the end, even within the relatively small states of Europe, power was dispersed among estates, orders, chartered towns, religious communities, corps, universities, etc., each with its own guaranteed liberties. The rule of law came to be established throughout much of the Continent.

In Economic Relocalization: A Strategic Response to Peak Oil and Climate Change, Jason Bradford provide a brief overview of the System’s Theory of Ecological Economics, when Ecological Overshoot occurs. In order to avoid or mitigate Mother Nature’s harsh consequences of Ecological Overshoot, he argues that Relocalisation is the strategic response to Ecological Overshoot:

Relocalization starts from the premise that the world is a finite place and that humanity is in a state of overshoot. Perpetual growth of the economy and the population is neither possible nor desirable. It is wise to start planning now for a world with less available energy, not more.

[..] Economic and population growth was made possible by the synergies permitted by cheap energy. The limits of productivity in one locality (i.e., Liebigs Law) could be overcome by importing something in excess elsewhere. A global economy advocating that each place seek its comparative advantage and specialize in what it produced for the market place required that money, governance, and even customs be more homogenized worldwide. As free trade agreements became the norm and social barriers to trade were reduced, the power of resource synergies permitting more economic growth became apparent to more and more people in the world. Most only saw its benefits and few worried about the long-term liabilities it imposed.

There are a few flawed assumptions behind globalization, but one in particular is glaring: the assumption that transportation costs will always be low, both in terms of fuel availability and the environmental externalities associated with their use.

If that assumption is false—and certainly peak oil and climate change makes it appear false—then localities should not be specializing to trade globally. For example, I live on the edge of premium wine country. There are far more grapes here than the local population can eat, but we lack just about every other kind of food production in sufficient quantity. As long as we can sell our wine to a global market and buy the other stuff we need this situation seems reasonable. But a peak oil perspective makes us feel vulnerable, and a climate change perspective calls this irresponsible.

Because all localities that have bought into the global market place have specialized to some extent, all could face shortages of some set of basic goods. In the past, global trade was for luxury items, like silk or spices, or key resources that permitted basic items to be made at home more efficiently, like organic fertilizer and metals. The loss of a trade partner would be problematic, but probably not catastrophic.

Relocalization advocates rebuilding more balanced local economies that emphasize securing basic needs. Local food, energy and water systems are perhaps the most critical to build. In the absence of reliable trade partners, whether from peak oil, natural disaster or political instability, a local economy that at least produces its essential goods will have a true comparative advantage.

[..] Responding appropriately to the problems of climate change and peak oil and gas requires an understanding based on a systems perspective. From this angle, clear limits exist for the ability of our society to maintain growth in both resource consumption and pollution. However, most of our economic and social norms do not recognize these limits, and therefore find it difficult to respond to current threats.

Relocalization recognizes the liabilities of fossil fuel dependency and promotes greater security through redevelopment of local and regional economies more or less self-reliant in terms of energy, food and water systems. Many social benefits might accrue to a relocalized society, including greater job stability, employment diversity, community cohesion, and public health.

So, given the reality of economic collapse, as a result of Peak Oil; it imperative for communities to relocalize their economies. Whether relocalisation becomes a widespread adaptation strategy to Peak Oil out of choice, or whether it is forced upon communities out of necessity, the local community and region will become of increasing importance – “not only because the availability of basic resources needed for human survival differs from place to place, but also because retrograde notions of human rights, governance and education are likely to be reinstituted..”

It is consequently obvious that relocalizing economic activity shall result in the decentralisation of national governmental and political power, towards regional and local. Consequently Peak Oil secessionist movements, consider political decentralisation as a close cousin of economic relocalisation -- the increasingly urgent need many of us to feel to create our own local currencies, grow more of our own food, harvest our own energy, and the like.