Post Carbon Cities Blog
With oil $60 cheaper today than it was in July, you might think economic recovery and increased global oil production are right around the corner. Not so, says peak oil author Richard Heinberg, who argues that cheaper oil is actually part of the problem -- and that it's all downhill from here for oil and the global economy
With oil $60 cheaper today than it was in July, you might think economic recovery and increased global oil production are right around the corner. Not so, says peak oil author Richard Heinberg, who argues that cheaper oil is actually part of the problem -- and that it's all downhill from here for oil and the global economy
I'm traveling in New York and New Jersey this week, so in lieu of an original article I'd like to point readers to two excellent new posts by my colleague Richard Heinberg that discuss what the global economic crisis means for peak oil, and vice versa.
Richard, author of The Party's Over, Peak Everything and other essential books on our energy predicament, is one of those rare commentators who understands both the complexities of global oil production and how it relates to the complexities of the global economy and geopolitics. Where other writers focus on new oil producing technologies and total global oil reserves, Richard focuses on the one thing that actually matters to keeping our modern industrial world running day in and day out: the flow of oil to markets.
Flow is the key point in my first recommendation, his blog post of October 8th: Say goodbye to peak oil. I'd started thinking some weeks ago that peak might be pushed out a few years thanks to a global recession pushing down oil demand. Not so, says Richard:
With demand for oil declining (because of global recession), OPEC will want to constrain production. With investment capital disappearing in a deflationary bonfire, oil companies will have difficulty financing new projects... Thus even though the peak might have been delayed for another year or five if the credit crunch hadn't intervened, that time cushion is now effectively gone.
My second recommendation, Richard's The End of Growth post on October 9th, extends his ideas about oil decline to the global economy. His three arguments:
- The economic globalization of the last twenty years was driven by the ability to manufacture goods cheaply in low-cost nations... and the end of cheap oil is slowing (and indeed, starting to reverse) that trend.
- "Growth" is badly mis-defined (by the U.S. government) anyway. Per Richard: "Just look at how the US government has altered its way of defining 'inflation' over the years by largely excluding energy and food prices: if the old rules were still in place, the country would be seeing double-digit inflation."
- China and the oil exporting nations, who some point to as reliable sources for continued global economic growth, are themselves too linked in to the global economy to keep things humming along on their own.
If it's all downhill from here, as it were, what does that mean for planning and decision-making at the local level? I'll see what folks think after my presentations this week at the New York Metropolitan Transportation Council and Rutgers University, and report back here on the blog on Friday.
