Pivot Point

I like the concept of a pivot. To me it is the pin on which something rotates, but the implication is that the pin itself does not more, but rather is a fixed point, a reference. When we think of history, we tend to think of pivot points, of 'pivotal' junctures in history where the entire structure of human events shifted...

As I'm interested in the history of oil, I tend to view much of history through the lens of energy, as a quest to acquire the best, most secure supply of energy. The United States in the 20th century was remarkably gifted with a vast supply of oil, and ever since its production hit peak in the early 1970s, it has done well not only to control but to assure a steadily increasing supply of oil.

I can't say with certainty what events will be important to historians in 200 years, or even in 5 years. Personally I believe the decade of the 1970's was the critical pivot point in the history of oil, which more than centuries and more than political or philosophical movements will bracket modernity. Modernity has always been about speed, and speed, in the modern world, was delivered by fossil fuels.

In the 1970's it became evident that the US was no longer the swing producer for the world...in other words the US no longer controlled the world price of oil, as it no longer controlled the excess supply. The 1970's showed the world the price of relying on fossil fuel and the oil shocks in the early 70's led the drive towards conservation and prudence.

The 1970's also gave us the Carter Doctrine, which stated that the US would use military force to defend its 'interests' in the Persian Gulf. I'm sure such policy has always been in effect, but to state it with such rawness and boldness signaled a new era in elite and public consciousness about oil.

Much of the ramifications of the 1970's were obscured by the Saudis, who stepped in to fulfill the role of swing producer, and by the deregulation of the financial markets in the 1980's.

Before the 1970's, oil had mostly been a regional issue, and where the world had been concerned there was always plenty of oil. Instead of dealing with the obvious problems of an oil addicted world, the US choose to pursue more oil resources, to drill more, to find other sources of this valuable energy.

And yet the problems of basing an economy and a society on oil -- those never went away. They were simply deferred by 30 or so years. And now, once again, we are waking up to the grim reality that the reality has NOT changed, that oil dependence has gotten worse instead of better AND the fundamental problem of an addiction to a depleting resource was still in play.

The world pivoted in the 1970s. The momentum of the Saudis, of the North Sea oil, of Prudhoe Bay in Alaska -- those discoveries carried further into the age of oil. But the truth is that we're dealing with a shift that took place almost 40 years ago and once again the world is on the cusp of a great pivot. I can't say what that is, but I doubt very much that it will be easy, and I doubt very much that the world has ever seen anything like what is coming in the next 30 or so years.

We live in a fascinating time.

Great Quote

"I suggest that this is a good time to think soberly about our responsibilities to our descendants – those who will ring out the Fossil Fuel Age," said Adm. Hyman G. Rickover, father of the nuclear Navy.

I found this in an article by Rod Dreher, who wrote a great piece in the
Dallas Morning News about why America is psychologically unprepared for the ramifications of peak oil - mainly the belief that we can do whatever want without incurring unintended or negative side effects. I still believe in the future of this country, its just hard to see so many people living so foolishly, and so selfishly, and to believe that they will make moral and ethical choices in a time of scarcity, when all we've been raised on is the philosophy of unending abundance.

I believe in the fundamental goodness of people. I also believe in their capacity to do evil. The wildcard is usually the choice between the two.

Georgia-Russian war: Energy Conflict?

I watched an amazing segment on Democracy Now about the Russian - Georgian conflict. I was honestly surprised to learn that it was pretty much exclusively about oil, I guess because the mainstream media really seems to focus on democracy blah blah blah. Network news is junk food for the mind.

Michael Clare, author of Rising Powers, Shrinking Planet, talked with Amy Goodman (The anchor for Democracy Now). He mentioned the pipeline built with the urging of the US during the Clinton administration -- and how that pipeline was an attempt to undercut Russian political and economic power over Europe. The strange thing of course is why Georgia would have risked provoking its much more powerful neighbor, and Klare speculates (though I should add without conclusive evidence) that the Neo-conservative faction in the US government led the Georgians to believe that the US would lend more significantly more military aid then was actually politically feasible.



And now because of the conflicting foreign policies coming out of the US (the neo-con faction and the State department) Russia is now within easy striking distance of the pipeline, giving Russia significant economic and political leverage against Europe, NATO and to a certain extent the United States. At least for now.

Sometimes I get nostalgic for the chessmasters of yester-year. It occurs to me that Henry Kissinger was an evil bastard, but at least he could recognize the 'game'. The Neo-Cons seem to be evil and totally clueless. That doesn't make them any less dangerous of course, but instead of worrying about the relative strength of the US, they seem to concerned only with their own exceedingly narrow goals. They seem to myopic and totally inflexible. I'm surprised they haven't been shoved out of power yet.

Overbuilt market...

"Overbuilt Market creating modern ghost towns"
-View the MSNBC Article here.

Peak oil is a strange phenomenon. One year ago oil at $100 a barrel would have been inconceivable for all but a few commentators. And yet here we are, oil is hovering around $115 a barrel and people are actually celebrating! And so the cycle has begun, with a run up of prices (it was only a month ago that oil hit a high of $147 a barrel), demand destruction, followed by a drop in price...then the inevitable run up of demand as people adjust to the new price regime and the following run up of price. And so on and so forth. IT DOESN'T HAVE TO BE THIS WAY. If we let the market dictate price then it will be this way, and probably much worse. If government were to put a floor on gas prices, then people could actually begin to act like rational consumers instead of following the completely irrational marketplace for global crude.

Back to the headline: The 'Overbuilt' Market of homes. Home builders are going out of business because of increasing costs and decreasing demand for houses built on the periphery of cities.
There's even a website devoted to this: The Home Builder Implode-O-Meter, monitoring the decline and fall of the home building industry.

It makes me wonder what kind of cycles we will start seeing with the fluctuation in the price of oil and gasoline. As gas gets cheaper, will ex-urban houses enjoy a brief renaissance before being crushed once again by the run-up in price? Or will buyers wise up after the second or third boom and bust cycle?

I think what we're probably witnessing is the extreme boom and bust cycle returning to America. Where during the 1980s and 1990s the US enjoyed a relatively stable economy untroubled by massive oil shocks, the economy of the new millennium will not be so lucky. We don't have the global surplus of crude oil to stabilize the world (or local) economies, not like we did in the 1970s.

Video Archives

CrudeAwakening.org now is presenting videos! I'll be updating them on the homepage as well as on our video archive page. It's new and expect it grow rapidly, especially as Matt Simmons, Richard Heinberg et al. are appearing with increasing frequency on the cable news shows, and as Peak Oil is increasingly visible throughout the mainstream media.

If you have any embed codes, interesting videos or audio samples, please email them to jon@crudeawakening.org

The latest is Richard Heinberg talking shop on Al-Jaazera TV, see above

Get out of Debt -- NOW!

That's all. This isn't an admonishment for spending too much on a credit card, or for possessing large levels of debt. It doesn't matter where you are, but rather to recognize your current level of debt -- and prepare for peak oil by GETTING OUT OF DEBT.
As much as possible do this, especially on credit cards and smaller loans that are easier to pay back. Many people who come to meetings have a bit of a panicked look about them, and are wondering how they can best prepare for peak oil. Decreasing the amount you owe is a great way to start, and smaller interest payments will leave more money in the pocket to save, or to continue paying down debt.
As individuals and as a nation we've taken on an incredible amount of debt. One thing that is for certain is that the standard "business as usual" model of infinite growth will not continue. And that means rates for borrowers (and lenders) will increase rather than decrease. All this means is that individuals will make less money each year and face increasing credit rates.
Reduce your vulnerability to this trend by paying down debt now, when you have the spare assets to allow you to do that.

Call for bloggers

Crude Awakening has undergone quite a few changes in the past few months. We've totally revamped the website, going from a static site to blogs, calendars and updating content. We changed the look, and hopefully made information easier to access. We have also give the site a new look, and we're currently working on a complete re-branding package, complete with business cards, letterhead and of course a matching website.

The next step in the evolution of crudeawakening.org is to get a variety of voices from different walks of life to comment on peak oil, on an energy-aware life, on psychology and whatever else comes up.

Please contact us at info@crudeawakening.org if you are interested

Thanks!

CrudeAwakening.org Staff