Back on the road

You gassed her up

Behind the wheel

With your arm around your sweet one

In your Oldsmobile

      -Tom Waits  (The Heart of Saturday Night)

Everybody had to pay and pay

     -Lou Reed (Take a Walk on the Wilds Side)

Greetings

         Well gas prices are back to "normal" - below $3!   Looks like things are finally going our way!   And Americans are taking it to the road!  SUV sales are up.   So are trucks.     So, why should we be at all concerned about peak cheap oil?

      Here's a nice piece on the recent drop in the price of oil, by John Michael Greer..  Many of us have heard various narratives explaining this phenomenon.  The most fun are the ones involving  the conspiracy between the US and Saudi Arabia, working together to harm Russia and Iran.     Which is an appealing story given thee emnity between the US and Russia.   Another story is the main stream view -  that  thanks to American ingenuity and technology,  we created a fracking boom, and energy independence. !!  USA  !!  USA !!  

       Greer points out that there is a far simpler explanation; the inevitable"demand destruction" that comes high rpices, caused by peak cheap oil.  Economies everywhere are slowing.    Such a slow down affects more than the price of oil.   Look at the price of other commodities;  here Coal (down 20-25%);  Aluminum down 17%; Iron ore down 46%; rubber down 34%. .  Given that type of slow down in economic activity, its no big surprise that oil is down 25%.  ( see also Prof James Hamilton's analysis.  - global economic weakness responsible for 45% of drop) 

      The fracking boom was a product of  high price of oil plus the low price of money.  The Fed's low interest rate policy has left investors in a tough spot.    . Folks like like pension funds, insurance companies, and as Greer points out - college endowments - .these folks need income, and ordinary bonds couldn't deliver..  So, they moved to riskier investments     173 billion dollars went into the junk that supported that boom.    Of course they aren't called junk bonds for no reason.  They were risky.   And , now they are really risky.    No one knows what the break even price for the fracked oil is.  Some say $75, some say $60.  Today's price for oil is $59.  

 ( It's been ten years since the  famous prediction by Danial Yergin , the oil price "guru" the networks always turn to.  In . 2004, he called for a long term price of $38.  .     Who knows, we may hit it yet. )

    Of course the price will bounce around some more.   There will be booms and panics.    But rust never sleeps.  And neither does decline..    

      One helpful way to look at the situation is through this chart.    The amount of cheap oil production - the oil that fueled the boom we've experienced since the WWII.  -   will continue to decline.   During the next boom, we will be able to afford some of the more expensive oil.   Eventually we'll spend too much on oil and the economy will tank  again.  Rinse and repeat.

     

 

____     

Bonus feature:  How much longer will fracking boom last?   :   Kunsler talks with Art Berman.  Martensson talks with David Hughes.  

  

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Déjà Vu All Over Again

by John Michael Greer, originally published by The Archdruid Report  | TODAY

Over the last few weeks, a number of regular readers of  The Archdruid Reporthave asked me what I think about the recent plunge in the price of oil and the apparent end of the fracking bubble. That interest seems to be fairly widespread, and has attracted many of the usual narratives; the  blogosphere is full of claims that the Saudis crashed the price of oil to break the US fracking industry, or that Obama got the Saudis to crash the price of oil to punish the Russians, or what have you.

I suspect, for my part, that what’s going on is considerably more important. To start with, oil isn’t the only thing that’s in steep decline. Many other major commodities—coal, iron ore, and copper among them—have registered comparable declines over the course of the last few months. I have no doubt that the Saudi government has its own reasons for keeping their own oil production at full tilt even though the price is crashing, but they don’t control the price of those other commodities, or the pace of commercial shipping—another thing that has dropped steeply in recent months.

What’s going on, rather, is something that a number of us in the peak oil scene have been warning about for a while now. Since most of the world’s economies run on petroleum products, the steep oil prices of the last few years have taken a hefty bite out of all economic activities.  The consequences of that were papered over for a while by frantic central bank activities, but they’ve finally begun to come home to roost in what’s politely called “demand destruction”—in less opaque terms, the process by which those who can no longer afford goods or services stop buying them.

That, in turn, reminded me of the last time prolonged demand destruction collided with a boom in high-priced oil production, and sent me chasing after a book I read almost three decades ago. A few days ago, accordingly,  the excellent interlibrary loan service we have here in Maryland brought me a hefty 1985 hardback by financial journalist Philip Zweig, with the engaging title Belly Up: The Collapse of the Penn Square Bank. Some of my readers may never have heard of the Penn Square Bank; others may be scratching their heads, trying to figure out why the name sounds vaguely familiar. Those of my readers who belong to either category may want to listen up, because the same story seems to be repeating itself right now on an even larger scale.

The tale begins in the middle years of the 1970s, when oil prices shot up to unprecedented levels, and reserves of oil and natural gas that hadn’t been profitable before suddenly looked like winning bets. The deep strata of Oklahoma’s Anadarko basin were ground zero for what many people thought was a new era in natural gas production, especially when a handful of deep wells started bringing in impressive volumes of gas. The only missing ingredient was cash, and plenty of it, to pay for the drilling and hardware. That’s where the Penn Square Bank came into the picture.

The Penn Square Bank was founded in 1960. At that time, as a consequence of hard-earned suspicions about big banks dating back to the Populist era, Oklahoma state banking laws prohibited banks from owning more than one branch, and so there were hundreds of little one-branch banks scattered across the state, making a modest return from home mortgages, auto loans, and the like. That’s what Penn Square was; it had been organized by the developer of the Penn Square shopping mall, in the northern suburbs of Oklahoma City, to provide an additional draw to retailers and customers. There it sat, in between a tobacconist and Shelley’s Tall Girl’s Shop, doing ordinary retail banking, until 1975.

In that year it was bought by a group of investors headed by B.P. “Beep” Jennings, an Oklahoma City banker who had been passed over for promotion at one of the big banks in town. Jennings pretty clearly wanted to prove that he could run with the big dogs; he was an excellent salesman, but not particularly talented at the number-crunching details that make for long-term success in banking, and he proceeded to demonstrate his strengths and weaknesses in an unforgettable manner. He took the little shopping mall bank and transformed it into a big player in the Oklahoma oil and gas market, which was poised—or so a chorus of industry voices insisted—on the brink of one of history’s great energy booms.

Now of course this involved certain difficulties, which had to be overcome. A small shopping center bank doesn’t necessarily have the financial resources to become a big player in a major oil and gas market, for example. Fortunately for Beep Jenkins, one of the grand innovations that has made modern banking what it is today had already occurred; by his time, loans were no longer seen as money that was collected from depositors and loaned out to qualified borrowers, in the expectation that it would be repaid with interest. Rather, loans were (and are) assets, which could (and can) be sold, for cash, to other banks. This is what Penn Square did, and since their loans charged a competitive interest rate and thus promised competitive profits, they were eagerly snapped up by Chase Manhattan, Continental Illinois, Seattle First, and a great many other large and allegedly sophisticated banks. So Penn Square Bank started issuing loans to Oklahoma oil and gas entrepreneurs, a flotilla of other banks around the country proceeded to fund those loans, and to all intents and purposes, the energy boom began.

At least that’s what it looked like. There was a great deal of drilling going on, certainly; the economists insisted that the price of oil and gas would just keep on rising; the local and national media promptly started featuring giddily enthusiastic stories about the stunning upside opportunities in the booming Oklahoma oil and gas business. What’s more, Oklahoma oil and gas entrepreneurs were spending money like nobody’s business, and not just on drilling leases, steel pipe, and the other hardware of the trade. Lear jets, vacation condos in fashionable resorts, and such lower-priced symbols of nouveau richesse as overpriced alligator-hide cowboy boots were much in evidence; so was the kind of high-rolling crassness that only the Sunbelt seems to inspire. Habitués of the Oklahoma oilie scene used to reminisce about one party where one of the attendees stood at the door with a stack of crisp $100 bills in his hand and asked every woman who entered how much she wanted for her clothes: every stitch, then and there, piled up in the entry. Prices varied, but apparently none of them turned down the offer.

It’s only fair to admit that there were a few small clouds marring the otherwise sunny vistas of the late 1970s Oklahoma oil scene. One of them was the difficulty the banks buying loans from Penn Square—the so-called “upstream” banks—had in getting Penn Square to forward all the necessary documents on those loans. Since their banks were making loads of money off the transactions, the people in charge at the upstream banks were unwilling to make a fuss about it, and so their processing staff just had to put up with such minor little paperwork problems as missing or contradictory statements concerning collateral, payments of interest and principal, and so on. 

Mind you, some of the people in charge at those upstream banks seem to have had distinctly personal reasons for not wanting to make a fuss about those minor little paperwork problems. They were getting very large loans from Penn Square on very good terms, entering into partnerships with Penn Square’s favorite oilmen, and in at least some cases attending the clothing-optional parties just mentioned. No one else in the upstream banks seems to have been rude enough to ask too many questions about these activities; those who wondered aloud about them were told, hey, that’s just the way Oklahoma oilmen do business, and after all, the banks were making loads of money off the boom.

All in all, the future looked golden just then. In 1979, the Iranian revolution drove the price of oil up even further; in 1980, Jimmy Carter’s troubled presidency—with its indecisive but significant support for alternative energy and, God help us all, conservation—was steamrollered by Reagan’s massively funded and media-backed candidacy. As the new president took office in January of 1981, promising “morning in America,” the Penn Square bankers, their upstream counterparts, their clients in the Oklahoma oil and gas industry, and everyone else associated with the boom felt confident that happy days were there to stay. After all, the economists insisted that the price of oil and gas would just keep rising for decades to come; the most business-friendly and environment-hostile administration in living memory was comfortably ensconced in the White House; and investors were literally begging to be allowed to get a foot in the door in the Oklahoma boom. What could possibly go wrong?

Then, in 1981, without any fuss at all, the price of oil and natural gas peaked and began to decline.

In retrospect, it’s not difficult to see what happened, though a lot of people since then have put a lot of effort into leaving the lessons of those years unlearnt.  Energy is so central to a modern economy that when the price of energy goes up, every other sector of the economy ends up taking a hit. The rising price of energy functions, in effect, as a hidden tax on all economic activity outside the energy sector, and sends imbalances cascading through every part of the economy. As a result, other economic sectors cut their expenditures on energy as far as they can, either by conservation measures or by such tried and true processes as shedding jobs, cutting production, or going out of business. All this had predictable effects on the price of oil and gas, even though very few people predicted them.

As oil and gas prices slumped, investors started backing away from fossil fuel investments, including the Oklahoma boom. Upstream banks, in turn, started to have second thoughts about the spectacular sums of money they’d poured into Penn Square Bank loans. For the first time since the boom began, hard questions—the sort of questions that, in theory, investors and bankers are supposed to ask as a matter of course when people ask them for money—finally got asked. That’s when the problems began in earnest, because a great many of those problems didn’t have any good answers.

It took until July 5, 1982 for the boom to turn definitively into a bust. That’s the day that  federal bank regulators, after several years of inconclusive fumbling and a month or so of increasing panic, finally shut down the Penn Square Bank. What they discovered, as they dug through the mass of fragmentary, inaccurate, and nonexistent paperwork, was that Penn Square had basically been lending money to anybody in the oil and gas industry who wanted some, without taking the trouble to find out if the borrowers would ever be able to repay it. When payments became a problem, Penn Square obligingly loaned out the money to make their payments, and dealt with loans that went bad by loaning deadbeat borrowers even more money, so they could clear their debts and maintain their lifestyles.

The oil and gas boom had in fact been nothing of the kind, as a good many of the firms that had been out there producing oil and gas had been losing money all along.  Rather, it was a Ponzi scheme facilitated by delusional lending practices.  All those Lear jets, vacation condos, alligator-skin cowboy boots, heaps of slightly used women’s clothing, and the rest of it? They were paid for by money from investors and upstream banks, some of it via the Penn Square Bank, the rest from other banks and investors. The vast majority of the money was long gone; the resulting crash brought half a dozen major banks to their knees, and plunged Oklahoma and the rest of the US oil belt into a savage recession that gripped the region for most of a decade.

That was the story chronicled in Zweig’s book, which I reread  over a few quiet evenings last week. Do any of the details seem familiar to you? If not, dear reader, you need to get out more.

As far as I know, the fracking bubble that’s now well into its denouement didn’t have a single ineptly run bank at its center, as the Oklahoma oil and gas bubble did. Most of the other details of that earlier fiasco, though, were present and accounted for. Sky-high fuel prices, check; reserves unprofitable at earlier prices that suddenly looked like a winning deal, check; a media frenzy that oversold the upside and completely ignored the possibility of a downside, check; vast torrents of money and credit from banks and investors too dazzled by the thought of easy riches to ask the obvious questions, check; a flurry of drilling companies that lost money every single quarter but managed to stay in business by heaping up mountains of unpayable debt, check. Pretty much every square on the bingo card marked “economic debacle” has been filled in with a pen dipped in fracking fluid.

Now of course a debacle of the Penn Square variety requires at least one other thing, which is a banking industry so fixated on this quarter’s profits that it can lose track of the minor little fact that lending money to people who can’t pay it back isn’t a business strategy with a long shelf life. I hope none of my readers are under the illusion that this is lacking just now. With interest rates stuck around zero and people and institutions that live off their investments frantically hunting for what used to count as a normal rate of return, the same culture of short-term thinking and financial idiocy that ran the global economy into the ground in the 2008 real estate crash remains firmly in place, glued there by the refusal of the Obama administration and its equivalents elsewhere to prosecute even the most egregious cases of fraud and malfeasance.

Now that the downturn in oil prices is under way, and panic selling of energy-related junk bonds and lower grades of unconventional crude oil has begun in earnest, it seems likely that we’ll learn just how profitable the fracking fad of the last few years actually was. My working guess, which is admittedly an outsider’s view based on limited data and historical parallels, is that it was a money-losing operation from the beginning, and looked prosperous—as the Oklahoma boom did—only because it attracted a flood of investment money from people and institutions who were swept up in the craze. If  I’m right, the spike in domestic US oil production due to fracking was never more than an artifact of fiscal irresponsibility in the first place, and could not have been sustained no matter what. Still, we’ll see.

The more immediate question is just how much damage the turmoil now under way will do to a US and global economy that have never recovered from the body blow inflicted on them by the real estate bubble that burst in 2008. Much depends on exactly who sunk how much money into fracking-related investments, and just how catastrophically those investments come unraveled.  It’s possible that the result could be just a common or garden variety recession; it’s possible that it could be quite a bit more. When the tide goes out, as Warren Buffet has commented, you find out who’s been swimming naked, and just how far the resulting lack of coverage will extend is a question of no small importance.

At least three economic sectors outside the fossil fuel industry, as I see it, stand to suffer even if all we get is an ordinary downturn. The first, of course, is the financial sector. A vast amount of money was loaned to the fracking industry; another vast amount—I don’t propose to guess how it compares to the first one—was accounted for by issuing junk bonds, and there was also plenty of ingenious financial architecture of the sort common in the housing boom. Those are going to lose most or all of their value in the months and years ahead. No doubt the US government will bail out its pals in the really big banks again, but there’s likely to be a great deal of turmoil anyway, and midsized and smaller players may crash and burn in a big way. One way or another, it promises to be entertaining.

The second sector I expect to take a hit is the renewable energy sector.  In the 1980s, as prices of oil and natural gas plunged, they took most of the then-burgeoning solar and wind industries with them. There were major cultural shifts at the same time that helped feed the abandonment of renewable energy, but the sheer impact of cheap oil and natural gas needs to be taken into account. If, as seems likely, we can expect several years of lowerr energy prices, and several years of the kind of economic downdraft that makes access to credit for renewable-energy projects a real challenge, a great many firms in the green sector will struggle for survival, and some won’t make it.

Those renewable-energy firms that pull through will find a substantial demand for their services further down the road, once the recent talk about Saudi America finds its proper home in the museum of popular delusions next to perpetual motion machines and Piltdown Man, and the US has to face a future without the imaginary hundred-year reserve of fracked natural gas politicians were gabbling about not that long ago. Still, it’s going to take some nimble footwork to get there; my guess is that those firms that get ready to do without government subsidies and tax credits, and look for ways to sell low-cost homescale systems in an era of disintegrating energy infrastructure, will do much better than those that cling to the hope of government subsidies and big corporate contracts.

The third sector I expect to land hard this time around is the academic sector. Yes, I know, it’s not fashionable to talk of the nation’s colleges and universities as an economic sector, but let’s please be real; in today’s economy, the academic industry functions mostly as a sales office for predatory loans, which are pushed on unwary consumers using deceptive marketing practices. The vast majority of people who are attending US universities these days, after all, will not prosper as a result; in fact, they will never recover financially from the burden of their student loans, since the modest average increase in income that will come to those graduates who actually manage to find jobs will be dwarfed by the monthly debt service they’ll have to pay for decades after graduation.

One of the core reasons why the academic industry has become so vulnerable to a crash is that most colleges and universities rely on income from their investments to pay their operating expenses, and income from investments has taken a double hit in the last decade. First, the collapse of interest rates to near-zero (and in some cases, below-zero) levels has hammered returns across the spectrum of investment vehicles. As a result, colleges and universities have increasingly put their money into risky investments that promise what used to be ordinary returns, and this drove the second half of the equation; in the wake of the 2008 real estate crash, many colleges and universities suffered massive losses of endowment funds, and most of these losses have never been made good.

Did the nation’s colleges and universities stay clear of the fracking bubble?  That would have required, I think, far more prudence and independent thinking than the academic industry has shown of late. Those institutions that had the common sense to get out of fossil fuels for ecological reasons may end up reaping a surprising benefit; the rest, well, here again we’ll have to wait and see. My working guess, which is once again an outsider’s guess based on limited data and historical parallels, is that a great many institutions tried to bail themselves out from the impact of the real estate bust by doubling down on fracking. If that’s what happened, the looming crisis in American higher education—a crisis driven partly by the predatory loan practices mentioned earlier, partly by the jawdropping inflation in the price of a college education in recent decades, and partly by rampant overbuilding of academic programs—will be hitting shortly, and some very big names in the academic industry may not survive the impact.

As Yogi Berra liked to point out, it’s hard to make predictions, especially about the future. Still, it looks as though we may be in the opening stages of a really ugly fiscal crisis, and I’d encourage my readers to take that possibility seriously and act accordingly.

http://www.resilience.org/stories/2014-12-18/deja-vu-all-over-again

Eat, eat!

It goes to show 

you never can tell

     -Chuck Berry

Something is happening

But you don't know what it is

Do you Mr Jones?

     -Bob Dylan

Greetings

           Here in the US , we don't worry too much about food.  For most of us , spending on food represents a very small portion of of expenses, we tend to forget it's overall importance.    Historically, of course, and still around the world, of course worrying about food is major preoccupation.    Now, instead of worrying about food, we get to have other preoccupations.   Like whether or not Johnny Depp was drunk at the film awards.   Or will the Ducks go all the way?

             But.... back to food.  We recently went to a "Green Grange" meeting in Beaverton.   In  Beaverton, the 100 year old Grange hall, which used to be in prime ag land, is now in the middle of a shopping mall!   There we're a lot of interesting speakers,   The Extension folks reported that more and more people are interested in back yard gardens, and  community gardening is on the rise.  The food bank folks had new strategies for localizing.

           There was even someone from Transition Town, speaking about resilience - the ability of the food system to deal with shocks.  Whether the shock is a from a temporary event like the landslides closing highway 101, and cutting off coastal  communities,  or a longer term shock,like the Big One, which is overdue according to DOGAMI, .  

       Or how about this one?  ISIS decides to attack Saudi Arabia?

       Over the longer term, food issues are bound to arise.   As noted below, our food system, uses about 15 units of energy to deliver 1 unit to the consumer.  As energy issues arise, there are bound to be disruptions.    The World Bank is now warning of disruptions in the world food distribution system, in this decade.    Or how about this?  UN: Drought in Central America  creates humanitarian crisis        or here

        Which brings me to a book recommendation.  The Resilient Gardener, written by Carol Deppe, a Corvallis gardener.   It offers lots of tips on growing in Oregon.  But more important, it deals with what to do after your bountiful harvest -  storage.   Disasters don't only happen in the summer, when the garden is overflowing.   What about the rest of the year?    She has lost of good ides about canning , drying, or just putting stuff in a cool place.  

     

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Energy, Diminishing Returns and the Future of Food

by Eric Garza, originally published by HowEricLives.com  | OCT 14, 2014

It was another warm summer morning as I set off on a lightly used trail, venturing east through the forest and then through a wetland left dry by sparse rain over the previous few weeks. After passing through a bottomland forest I find, off to the trail’s right, the elm I’d met the previous year. The tree’s seen better days. While a few of its branches were dead the previous year, as I looked up only a few branches had green leaves, while most were bare. An American elm with a diameter of perhaps six inches at breast height, the tree was showing signs of Dutch elm’s disease and given its downward spiral I doubted it would make it through this next winter.

Rather than watch the once beautiful elm rot over the coming years, I cut it down to put it to a higher purpose, at least from my perspective. After spending a few minutes felling the dying tree, I split its six-inch trunk in half using an assortment of steel wedges, a small sledgehammer and a hatchet. The halves will eventually become wooden hunting bows after they dry for a year or two, and the bows, whether used by me or someone else, will hopefully fill a few deer tags, or at least nab some squirrels or rabbits.

As I sweated against the elm’s tough, interlocking grain, I reflected on how much effort I was expending, and how much energy I would invest in the bows the log would eventually yield. Owing to my attention to detail and stubborn refusal to use power tools, I commonly invest 40 hours of labor into each wooden hunting bow I make by the time they’re ready to shoot. When I carry a finished bow from this particular elm back into the forest a couple years from now it will carry a substantial energy debt associated with it, a debt measured as the food calories I burned while crafting it. To be a worthwhile investment, the bow needs to pay that energy debt back by making meat.

This game of investing energy towards the procurement of food is one that Homo sapiens – and all living organisms – have played for millennia. From our days as hunter-gatherers to today’s dependence on a global, industrialized food system, we’ve always invested energy in the process of food production. The goal of this essay is to explore the energetics of food systems in greater detail, but perhaps more importantly to point out that, due to the emergence of diminishing returns, the future of food production might not follow the same process of intensification and industrialization that we’ve grown accustomed to. These diminishing returns will define our experience throughout the 21^st century, and hopefully this essay will bring them to light in a way that prompts broader discussion.

* * *

Energy is the capacity to do work. Energy mediates all physical transformations, including those involved in the production and processing of food. All organisms sustain themselves by capturing metabolically valuable energy flows from their surroundings, and because organisms must expend energy to capture energy it’s possible to gauge the efficacy of an organism’s food procurement efforts by calculating its energy return [1]. Energy return is calculated as the food energy consumed by an organism divided by the metabolic energyexpended to acquire that food. If this ratio is less than one – the denominator is larger than the numerator – it means the organism invests more energy finding food than it gets back as food energy, yielding a negative return on investment that, over the longer term, means starvation. If, on the other hand, the organism acquires more food energy than it invests, its food procurement strategy yields a return greater than one – a positive energy return – and creates the energy surplus needed for growth and reproduction.

Positive returns are good. Negative returns, not so much. A species’ ability to generate a positive energy return with its food procurement strategies influences its ability to persist in a landscape and defines its geographic range. While individuals might be found occasionally over a larger region, they can only live, grow and successfully reproduce over a smaller area where their foraging behavior consistently yields at least a modest energy surplus.

Homo sapiens, as a species, is subject to these same constraints. Anthropologists have for decades acknowledged this, with many studying isolated groups with the goal of furthering our understanding of how people’s pursuit of food energy influences their relationships with their surroundings [2]. While controversial – if for no other reason than because it acknowledges we’re subject to the same constraints that act on other animals, and other living organisms more generally – this line of research has helped shape a view of our species that accentuates the important role of energy capture in human biological, social and cultural development.

Several million years ago our distant ancestors were bipedal apes. They used nothing but their two hands and the sweat of their brow to procure food, and no more than the fur on their back and their metabolism to maintain their body temperature within a tolerable range [3]. Their geographic range, like that of other species, was limited to areas where their food acquisition strategies yielded a positive energy return, which for these bipedal apes meant wandering through the forests and savannahs of Africa foraging for fruit, edible vegetation, insects and perhaps the occasional scavenged animal carcass [4].

A few million years ago our ancestors began using tools [5]. The earliest tools were likely unmodified sticks and stones, but these were eventually supplemented by shaped stone tools with cutting edges used to assist in processing foods, even splitting animal bones and skulls to afford access to their rich marrow and brains. These tools allowed early humans access to calorie dense foods that greatly increased the returns generated by their food procurement strategies, both at the individual and population level. Use of stone tools multiplied the value of human labor, compensating for our lack of sharp claws and teeth and bone-crushingly strong jaws and allowing our geographic range to expand beyond earlier boundaries because our tool-enhanced life ways generated a positive energy return over a broader area. Stone would eventually give way to metal, affording tools not only greater durability but also greater design flexibility [6].

Not long after we learned to use stone tools we also began using fire, sometimes for warmth but also as an aid in food processing [7]. Use of fire opened still more food procurement opportunities, not only because it allowed us to detoxify and disinfect foods that might not be safe to eat in their raw forms but also by protecting our ancestors and their food from predators and scavengers. Fire afforded early humans the ability to subsidize their muscle power with energy stored in surrounding combustible biomass, wood, grass and perhaps dried animal dung, energy that originated from the sun. As our mastery of combustion expanded we turned from biomass fuels to those derived from ancient sunlight such as coal, oil and natural gas, and eventually to the energy stored in the nucleus of the atom [8].

* * *

Food systems of our ancient past were quite simple, and consisted of people migrating over the landscape in small to modest groups hunting for wild game and gathering various plant foods. These subsistence strategies delivered a modestly positive energy return with respect to human labor. Anthropologists studying African bushmen estimated they acquired 5-10 calories of food energy for every calorie of metabolic energy expended, a stunningly high return given the harsh desert environment in which they lived [9]. Among hunter-gatherer societies this appears to be the norm rather than the exception, with most groups that persisted to the present day showing similar energy returns [10]. These groups owe their success partly to the use of tools and fire, but also to their intimate knowledge of their natural landscape.

Modern industrial food systems deliver far higher energy returns than those of hunter-gatherers when calculated based solely on human labor. Based on data from the US Bureau of Economic Analysis and US Department of Agriculture, the US food system delivers roughly 90 calories of food energy for each metabolic calorie of invested labor. These extraordinary energy returns derive from the fact so few people have to work in the food sector anymore; machinery does work that humans had done in decades past, and non-motorized tools magnify the value of the comparatively little human labor that remains.

Obviously, there’s more energy being invested in food production in the United States than what’s invested as human labor. In the same way that our ancient ancestors began subsidizing their food procurement strategies with the chemical energy stored in biomass, we do so today by using the chemical energy stored in fossil fuels, uranium and, to a lesser degree, other energy sources. Data from the US Department of Agriculture suggests that the US food system required at least 14 calories of energy to deliver a single calorie of food in 2007 once losses due to waste and spoilage were accounted for [11]. Whereas the US food system delivers a mightysurplus when only labor energy is counted, it operates at an energy loss when all energy is counted, illustrating the difference made by counting the industrial energy inputs we use to subsidize our labor. Prior to 1900 the US food system likely delivered more food calories than it required as labor and non-labor energy inputs, but this changed as the US industrialized and as its systems for producing, processing and distributing food were mechanized [12]. While the US food system’s energy intensity may represent a global extreme, other countries’ food systems are also quite energy intensive.

Up through 1980 in the United States, analysts’ estimates showed a consistent upward trend, with Poincelot’s figure pushing 20 calories of input energy for each calorie of consumed food. Canning et al’s lower estimates beginning in 1997 are at least partly due to more conservative boundaries around what the researchers counted against the US food system; they left out a range of food system energy inputs including those associated with water provision, waste disposal and food system governance, among others. If Canning et al’s analysis had been more inclusive, it’s possible data from their report would have estimated food energy inputs in excess of 20 calories for each calorie of food produced. Energy efficiency practices adopted within food systems as a result of the Oil Shocks of the 1970s may have reduced the energy intensity of food production too though.

Fuels derived from biomass and particularly fossil energy resources drove the industrial revolution, and transformed how Homo sapiens produced our food. Rather than using human and later animal labor as the primary source of power for food production, people developed machines as lower cost substitutes. Machines generate far more power – energy per unit time – than human or animal labor ever could, paving the way for an unprecedented increase in the scale of food production, processing, storage and distribution enterprises. These not only reduced the cost of food in monetary terms, but also allowed for the geographic expansion of food systems over regional, national and eventually global scales.

The global food system that exists today is the end result of a long line of innovations in how humans use energy to acquire their food. Prior to the use of tools our ancient ancestors were constrained to a very narrow geographic range due to their limited capacity to generate a positive energy return from their food procurement efforts. Through the development of tools, the taming of fire, and eventually the mechanization of food production and the subsidization of human labor power with that derived from industrial fuels, we’ve learned to generate the enormous metabolic energy surpluses needed to expand not only our range but also our population [13]. As I write this there are over 7 billion people on earth living on every large continent for at least part of the year, and our total weight exceeds that of any other species except that of our favorite domestic animal, the humble cow.

* * *

All organisms are consistently faced with a need to acquire enough food, to gain access to enough metabolically accessible calories to allow them to live, grow and reproduce. Acquiring adequate food is one of the preeminent problems faced by all living organisms, including Homo sapiens. Those of us living in developed nations have chosen to solve the problem of food procurement by tossing huge amounts of non-metabolic energy at it, mostly from fossil fuels like crude oil, natural gas and coal. By heavily subsidizing food systems with industrial fuels, we’ve reduced the amount of labor needed to produce, process and distribute food while increasing food production overall.

This strategy has two dark sides associated with it. The first is path dependence. Path dependence refers to three emergent properties of a particular problem solving strategy: increasing returns, self-reinforcement, and lock-in [14]. Increasing returns refers to an instance when problem solvers invest in a novel strategy and find that it yields returns on investment that increase faster than increases in the rate of investment. Seeing this, the problem solvers make the perfectly rational decision to reduce investments in other strategies and increasingly put their investments in this novel approach to maximize returns. This can lead to self-reinforcement, a situation where one problem solving strategy attracts an overwhelming share of available resources, effectively starving alternatives of the investments they need to remain viable competitors in the marketplace of ideas. Once a particular strategy becomes adequately self-reinforced, society is locked-in to that strategy because others, due to lack of investment, seem antiquated by comparison.

Increasing returns never continue indefinitely. Eventually a threshold is reached where increasing returns give way to diminishing returns, an inflection point beyond which the return on a given investment increases at a diminishing rate and eventually turns negative [15]. If diminishing returns emerge once a particular problem solving strategy has become locked-in, the society that made the initial investments will face the terrifying proposition of either continuing on their failing problem solving path while hoping for a miracle, or writing off their substantial investments in the failing strategy and turning to alternatives that, due to a history of neglect, are poorly developed and inspire little confidence.

Path dependence and diminishing returns have been studied throughout economic and social systems, but within food systems the best-researched example is the use of chemical pesticides [16]. Here it must first be recognized that to grow crops at a commercial scale without the use of chemical pesticides requires maintaining a substantial knowledge base on companion planting, crop rotation and other non-chemical pest control strategies. This knowledge based costly to maintain, and when chemical pest control methods first emerged on the market they were a relatively easy sell; little was understood about their long-term implications, they made growing unblemished food easier and farmers who adopted them could replace the constant necessity of innovation with simple application instructions supplied by the chemical manufacturers.

Due to the substantial savings of time and effort afforded farmers by chemical pesticides, they initially yielded increasing returns to their use. Over time pests developed resistance to chemical pesticides however, instigating an agricultural arms race characteristic of the transition from increasing to diminishing returns. In the 1960s Rachel Carson’s book Silent Spring ushered in a new era where scientists, activists and policy makers increasingly realized that chemical pesticides weren’t as harmless as previously thought, often exhibiting broad-spectrum toxicity that led to a range of short- and long-term consequences. Even today it seems we’re still trying to grasp the true implications of decades of synthetic pesticide use [17].

Today it’s increasingly acknowledged that the negative impacts associated with chemical pesticide use outweigh the overall benefits [18]. Yet so little investment has been made to maintain the knowledge base needed to grow crops on a commercial scale without chemicals that adopting less impactful pest control strategies isn’t perceived as a viable option. To abandon our use of chemical pesticides will require a pervasive re-education and re-skilling campaign for farmers, gardeners and horticulturalists, one that might be worthwhile over the long-term but seems an insurmountable challenge over the short run. In effect, the use of chemical pesticides has followed a path dependent trajectory, offering first increasing returns that resulted in self-reinforcement and lock-in, but now yielding diminishing or perhaps even negative returns and a growing sense of regret.

While chemical pesticides represent one particularly well-studied case of path dependence within food systems, it is by no means the only one. The transition from increasing returns to diminishing returns has shown up in several aspects of food production, among them the use of synthetic fertilizer, tillage practices, and the nutrient content of commercial crops [19]. The yield of corn and wheat have progressed from the stage of increasing returns on investments in fertilizer and pesticide application prior to the 1970s into the stage of diminishing returns after about 1980. Yields of these two commodity crops are still increasing of course, just at a diminishing rate. At some point in the future, regardless of how much fertilizer, pesticides and genetic modifications we might throw at them, yields will reach the natural upper limit for these species and level off. Maintaining yields on this plateau in the face of continued pest adaptation, new pest emergence and declining soil quality may well require still more investments, forcing yields into the stage of negative returns.

While none of the above examples might seem to explicitly relate to energy, in fact they all do. All inputs into food systems, be they chemical pesticides, synthetic fertilizers, machinery used for tillage and even the research infrastructure used to study and implement genetic modification, all require energy in their manufacture, use, or both. Glyphosate, the active ingredient in Roundup®, is estimated to require 49,000 kilocalories of energy per pound of active ingredient during its manufacture, while diammonium phosphate fertilizer requires 1,200 kilocalories of energy per pound [20]. If we use the embodied energy in automobiles as a proxy for that in farm machinery, tractors and other farm implements require over 10,000 kilocalories of energy in their manufacture per pound of total weight [21]. All food system resource inputs require energy in their manufacture and distribution, from the fertilizers and compost applied to farm fields to food packaging and finally to the garbage trucks that pick up our food waste once it’s been discarded. All processes within food systems that currently or might soon exhibit diminishing or negative returns on investment require energy as a key input, which means that to continue producing the types and quantities of foods we’re accustomed to will demand, over time, larger investments of energy per unit of food produced unless we make radical changes in our food system. This is precisely the trend illustrated the previous figure plotting the energy intensity of the US food system over time, one of increasing energy investment per calorie of consumed food.

If path dependence and diminishing returns represent the first dark side of our current food production path, the second is the obvious reality that those who depend on energy subsidies to fuel their food systems must find ways to continue accessing those energy resources at a reasonable cost. Emerging constraints in crude oil, natural gas, coal and even uranium markets suggest these energy sources may not grow to meet continued increases in demand, at least not at the low prices common to much of the previous century.

High-grade energy resource deposits are becoming scarce, and access to them increasingly limited by a range of environmental, technical, economic and political constraints. Despite the emergence of hydraulic fracturing as a novel oil production technology, it appears global oil supply is nearing a point where producers are struggling to increase supplies in response to rising prices [22]. This reality is made plainly evident by price and supply data. When producers are readily able to respond to price increases with increases in supply, plots of price versus quantity form a nearly linear curve. When constraints prevent producers from responding to rising prices by increasing supply, the curve slopes upwards as producers approach their upper supply limits. The supply curve for global oil production illustrates a constrained pattern, sloping sharply upwards after 2005 despite high oil prices. Hydraulic fracturing is seen by some as the new frontier in oil and gas development, but analysts are already questioning the longevity of the supply boom this technology promised in North America due to overstated reserves, rising costs of production and rapid field depletion rates [23]. Rising prices in coal and uranium markets suggest that these resources may not serve as the foundation of cheap industrial energy either [24].

Our use of industrial energy resources seems to be following its own path dependent trajectory, and the emergence of diminishing returns in this arena will have far reaching consequences. Since energy is such an important input in industrial food systems, it should come as no surprise that changes in energy prices matter when it comes time for food producers to figure their costs of production and determine their selling price. Commodity price data from the International Monetary Fund shows the strong correlation between fuel and food price indices, and as long as food production remains so energy intensive rising and more volatile energy prices will likely translate into rising and more volatile food prices. Given the tendency of food price volatility to contribute to food insecurity and political unrest, this does not bode well [25].

* * *

Archeologists and anthropologists recognize how important it is for a society to maintain adequate food production. Historical analyses have demonstrated that the inability to maintain adequate energy throughputs contributed to the demise of many past societies, among them the Roman, Egyptian and Mayan Empires [26]. Part of this energy throughput, indeed the most biologically relevant segment of it, comes as food. Societies that fail to maintain adequate food supplies will suffer from famine and starvation, and if political institutions cannot overcome these challenges through effective problem solving those political institutions will lose their legitimacy in the eyes of the citizens they govern and either be dismantled or abandoned.

Looking far back through human history, the development of stone tools and the harnessing of fire were problem solving strategies that either enhanced the value of human labor or expanded the range of foods available for consumption, or both. They were strategies developed, at least in part, to solve problems of food supply. More recently, the mechanization of food production also attempted to solve problems related to food supply, as did the development of chemical pesticides, fertilizers, plant breeding, and more recently genetically modification. None of these technological developments are inherently bad or good, but like all problem solving strategies their initial phased of increasing returns didn’t, or won’t, last indefinitely.

While each of these strategies solved certain problems, at least temporarily, they created others that themselves demand solutions. Pesticide use created a toxic landscape that we must now clean up, or adapt to. Mechanization created a need for ubiquitous, inexpensive fuel, which we must now search out even as easily accessible energy resources dwindle. Soil tillage causes soil erosion, which we must somehow counteract even as we’ve come to depend on crop varieties that lack the vigor to grow without the practice. The issue of diminishing returns to fertilizer application is particularly vexing; cereal yields per unit of fertilizer input are declining globally, and rock phosphorus, a key ingredient in many fertilizer mixes, is a non-renewable resource that may face shortfalls in the coming decades [27]. And, of course, all food system problems will demand solutions with the risks and uncertainties of climate change as a backdrop.

We persist in our reliance on a food system that requires substantial energy subsidies from non-renewable energy resources because we can. At present, fuels derived from crude oil, natural gas, coal and uranium are relatively abundant, and inexpensive. The same is true with mineral inputs needed for food production, among them bioavailable nitrogen and phosphorus. Many historical societies passed through comparable periods of abundance, but those periods were temporary and those societies now remembered only through their written records or artifacts [28].

Modern food systems suffer from path dependence. Institutions throughout food systems have invested overwhelmingly in input-intensive technologies and practices, leaving those that are less input-intensive to flounder in the dustbins of history. These decisions seemed reasonable when they were made, as problem solvers gravitated towards strategies that yielded increasing returns and the possibility that diminishing returns were inevitable was far from their minds. Today the realities of diminishing returns are staring us squarely in the face. While it’s impossible to discern when diminishing returns will lead our food system into a crisis state, this will occur and unless we radically reduce the inputs – particularly energy – required to produce, process and distribute food our global society may find itself struggling desperately against social and political upheaval. The challenge of the 21^st century will be to acknowledge the consequences of diminishing returns, and of path dependence more generally, and find constructive ways to adapt to them.

* * *

What, then, is the future of food? When the time comes, will we write off past investments in failed food procurement strategies and invest in alternative practices that are less resource intensive? Or will such a ghastly idea end up relegated to isolated locales while most people are drawn deeper into the fight against diminishing returns by government and business enterprises too invested in the mistakes of the past to let them go? If localized, adaptive responses are the best we can muster, what happens to those who live outside of these proverbial lifeboats when food crises hit? Do they riot in the streets, destroy the infrastructure that supports them, and starve? Do they descend on the lifeboats, their sole focus leveled at short-term survival? Pundits heap praise on our modern global food system for delivering food from the four corners of the Earth to anyone with the ability to pay, but what happens when the day arrives that the only commodity this global system can deliver is scarcity?

Believe it or not, I’m not into doom and gloom. I do enjoy a healthy dose of realism though, and my motivation for writing this essay stems from the realization that the next century of food production and consumption, both in the United States as well as around the globe, will necessarily be very different than that of the previous century. I expect changes in both what we eat and how we produce it, as well as shifts in the numbers of people directly involved in the act of food production. Perhaps more people will become farmers or farm laborers, or perhaps that food production strategy, known for degrading and eroding soil while producing progressively less nutrient dense foods, will fall out of favor [29].

I don’t pretend to know when elements within our food system will reach their respective breaking points. These systems are complex enough that the only thing we can be sure of is that the future holds plenty of surprises, and given the emergence of diminishing returns in many areas of food production, processing and distribution some of those surprises will likely show up sooner rather than later. While no one can wave a magic wand and change food systems today, we all have the power to change our positioning within them. We can choose to depend entirely on the global model with all of its emerging challenges, or we can invest our time and effort building a more community centered one where we live. We can hold desperately onto the individualistic models of food engagement that have ruled the development of food systems for hundreds of years, or we can experiment with more community minded alternatives that involve sharing the work of food production and, of course, consumption. We each have the power to shape our local food system by abandoning old problem solving strategies in favor of new ones.

My hope is that, over the coming years, we’ll use our influence more mindfully than we have in the past. Diminishing returns has driven many past societies to extinction. It’s a phenomenon that, even today, most researchers, professionals and laborers within food systems don’t have a word for. Without a label it goes unnoticed, remains invisible. As this changes – and hopefully this essay contributes to just such a shift – I expect people to wake up to the tensions emerging in today’s food production strategies, and find creative ways to relieve them. The future of food will be what we make it.

Notes

1. The distribution and abundance of organisms as a consequence of energy balances along multiple environmental gradients. C. Hall et al, 1992, Oikos, 65: 377-390.
2. Anthropological applications of optimal foraging theory: a critical review. E. Smith, 1983, Current Anthropology, 24: 625-651.
3. The hominin fossil record: taxa, grades and clades. B. Wood & N. Lonergan, 2008, Journal of Anatomy, 212: 354-376.
4. Early hominid fossils from Africa. M. Leakey & A. Walker, 1997, Scientific American, June, Pgs. 74-79; In search of the first hominids. A. Gibbons, 2002,Science, 295: 1214-1219.
5. Older than the Oldowan? Rethinking the emergence of hominin tool use. M. Panger et al, 2002, Evolutionary Anthropology, 11: 235-245.
6. Creating traditions and shaping technologies: understanding the earliest metal objects and metal production in Western Europe. B. Roberts, 2008, World Archeology, 40: 354-372.
7. On the earliest evidence for habitual use of fire in Europe. W. Roebroeks & P. Villa, 2011, Proceedings of the National Academy of Sciences, 108: 5209-5214;Catching Fire: How Cooking Made Us Human, R. Wrangham, 2002.
8. Energy in Nature and Society, V. Smil, 2008.
9. The hunters: scarce resources in the Kalihari. R. Lee, 1968, In Man the Hunter, Edited by R. Lee & I. DeVore, Aldine De Gruyter Publishers, 415 Pgs.
10. Stone Age Economics, M. Sahlins, 1974.
11. Data from Energy Use in the U.S. Food System, P. Canning et al, 2010, United States Department of Agriculture, and from the United States Department of Agriculture’s Food Availability (Per Capita) Data System.
12. Data from Energy Use in the U.S. Food System, P. Canning et al, 2010, United States Department of Agriculture; Energy use in the U.S. food system. J. Steinhart & C. Steinhart, 1974, Science, 184: 307-316; Food related energy requirements. E. Hirst, 1974, Science, 184: 134-138; Energy and Food. A. Pierotti et al, 1977, Center for Science in the Public Interest, 76 Pgs; Energy Policies: Price Impacts on the U.S. Food System. R. van Arsdall & P. Devlin, 1978, United States Department of Agriculture, 44 Pgs; Agricultural Energetics. R. Fluck & C. Baird, 1980, AVI Publishing, 192 Pgs; Energetics of an industrialized food system. R. Singh, 1986 InEnergy in World Agriculture, Vol. 1, Edited by R. Singh, Elsevier Science Publishers, 376 Pgs; Toward a More Sustainable Agriculture. R. Poincelot, 1986, Springer Publishing, 240 Pgs; and population estimates from the United States Census Bureau.
13. Harvesting the Biosphere, V. Smil, 2012.
14. Path dependence. S. Page, 2006, Quarterly Journal of Political Science, 1: 87-115.
15. The law of diminishing returns, R. Shephard & R. Färe, 1974, Zeitschrift für Nationalökonomie, 34: 69-90; Social complexity and sustainability. J. Tainter, 2006, Ecological Complexity, 3: 91-103.
16. Sprayed to death: path-dependence, lock-in and pest control strategies. R. Cowan & P. Gunby, 1996, The Economic Journal, 106: 521-542; Path dependence and implementation strategies for integrated pest management. H. Wolff & G. Recke, 2000, Quarterly Journal of International Agriculture, 39: 149-171; Organic vs. conventional agriculture: knowledge, power and innovation in the food chain. K. Morgan & J. Murdock, 2000, Geoforum, 31: 159-173.
17. Pesticides and health risks. R. Gilden et al, 2010, Journal of Obstetric, Gynecologic and Neonatal Nursing, 39: 103-110; Epigenetics and pesticides. M. Collotta et al, 2013, Toxicology, 307: 35-41.
18. Environmental and economic costs of the application of pesticides primarily in the United States. D. Pimentel, 2005, Environment, Development and Sustainability, 7: 229-252; Why farmers continue to use pesticides despite environmental, health and sustainability costs. C. Wilson & C. Tisdell, 2001,Ecological Economics, 39: 449-462.
19. Agricultural sustainability and intensive production practices. D. Tilman et al, 2002, Nature, 418: 671-677; Natural systems agriculture: a truly radical alternative. W. Jackson, 2002, Agriculture, Ecosystems and Environment, 88: 111-117; Still No Free Lunch: Nutrient Levels in the U.S. Food Supply Eroded By Pursuit of High Yields, B. Halweil, 2007, The Organic Center, 48 Pgs.
20. Energy in Synthetic Fertilizers and Pesticides: Revisited, M. Bhat et al, 1994, Report published by Oak Ridge National Laboratory, 61 Pgs.
21. Hybrid life-cycle inventory for road construction and use. G. Treolar et al,Journal of Constriction Engineering and Management, 2004, Vol. 130, Pgs. 43-49.
22. Oil’s tipping point has passed, J. Murray & D. King, 2012, Nature, 481: 433-435.
23. A reality check on the shale revolution, J. Hughes, 2013, Nature, 2013, 494: 307-308.
24. The end of cheap coal. R. Heinberg & D. Fridley, 2010, Nature, 468: 367-369; The end of cheap uranium, M. Dittmar, 2013, Science of the Total Environment, 461-462: 792-798.
25. Anatomy of a crisis: the causes and consequences of surging food prices. D. Headey & S. Fan, 2008, Agricultural Economics, 39: 375-391.
26. Collapse of Complex Societies. J. Tainter, 1988, 264 Pgs; Cannibals and Kings. M. Harris, 1977, 368 Pgs; Problem solving: complexity, history, sustainability. J. Tainter, 2000, Population and Environment, 22: 3-41.
27. The story of phosphorus: global food security and food for thought. D. Cordellet al, 2009, Global Environmental Change, 19: 292-305.
28. Energy, complexity and sustainability: a historical perspective. J. Tainter, 2011, Environmental Innovation and Societal Transitions, 1: 89-95; Archeology of overshoot and collapse. J. Tainter, 2006, Annual Reviews in Antropology, 35: 59-74.
29. Natural systems agriculture: a truly radical alternative. W. Jackson, 2002,Agriculture, Ecosystems and Environment, 88: 111-117; Still No Free Lunch: Nutrient Levels in U.S. Food Supply Eroded by Pursuit of High Yields. B. Halweil, 2007, The Organic Center, 48 Pgs

Last Plane out of Lima

Lies lies

I can't believe a word you say

 - The Knickerbockers

How come you say you do

when you don't?

-Carl Perkins

Greetings

       The Lima talks are grinding  along, without much hope of any movement forward.  see US defends moving backward from Copenhagen pledge.   Perhaps its a good time to look at the realistic best and worst case, without any action.  This requires a close look at the basics, how much fossil fuel will we burn?

        Of all the thousands of papers in the climate change literature, remarkably few deal with the central issue - the amount of carbon we are likely to emit, in light of resource limits - i.e. peak fossil fuels.  

      This is a bit strange, given the key role such fuels play in the modeling.     The IPCC appears to think that that we have an infinite amount of fossil fuels to burn,or at least enough to burn more and more, out past 2100   .   So, naturally CO2  and temperature rise, and  various catastrophes occur. -  cities under water, deserts sprouting up,  and even (potential)  human extinction!

       Meanwhile , geologists seem fairly confident that resource production peaks do occur, and have occurred, and are likely to occur world wide in the not to distant future.   

      Is this a case of GIGO?  (garbage in garbage out).    Or should we ignore the geologists, and assume the worst?  

      I recently came a cross a paper which addresses this issue in some detail.  It's called "Depletion of fossil fuels and anthropogenic climate change—A review". Energy Policy 52, 797–809.  by  Höök, M., & Tang, X., 2013  ( Full paper  here   . http://bit.ly/1s0c7hm   (PDF 22 pages)

        The authors go into some detail about the IPCC,  scenarios and how they are developed.  (Special Report of Emission Scenarios or SRES).  .  Apparently the idea of peak resources was considered and rejected, concluding that   “...the sheer size of the fossil resource base makes fossil sources an energy supply option for many centuries to come.”      As a result  "...energy production from fossil fuels in the SRES outlooks range from a mere 50%, increase from year 2010 in the B1 family to over 400% in the A1 family."

       Needless to say, such assumptions are likely to be pretty far off the mark.  I leave it to the reader to explore,the authors discussion of  the many optimistic ideas which underlie these assumptions. They include, optimistic assumptions about the size of  resources themselves, ,  as well as assumptions about:  the ease of turning these stocks into flows,  the idea that these fuels are substitutes for each other,  the economic consequences of peak oil, and the decline in EROI of resources.

         However, recognizing that we may not "burn ourselves off the planet", doesn't mean that we can't do ourselves harm by burning what is left.  The authors review a number of papers which use more  "realistic" assumptions about resources, and they generally show a concentration peaking at between 400-500 ppm.  Depending on your assumptions about "climate sensitivity"  this could result in temperature increase of .9 to 2.0 , relative to year 2000.

              Typical of these studies was that of Hanson (2008)

"Kharecha and Hansen (2008) used a Bern carbon cycle model and a set of peak oil and gascompatible emission scenarios to explore the implications of peak oil for climate change. It should be noted that they considered coal to be abundant and capable of increasing production up to 2100 in a business-as-usual outlook, resulting in 550 ppm CO2 in the atmosphere. Four other scenarios had more constrained coal production profiles, somewhat more compatible with published peak coal projections (Mohr and Evans, 2009; Höök et al., 2010b; Patzek and Croft, 2010: Rutledge, 2011). The CO2 concentration ended up around 450 ppm for these scenarios and they were found to be largely consistent with current assessments of the cumulative 21st century emissions needed to stabilize atmospheric CO2 at 450 ppm even after factoring in carbon cycle feedbacks".

  

           There is one aspect that gives me pause about these studies -  they assume that economic growth will continue after  "peak cheap oil".  However, this view is not universal see Energy return on Investment, Peak Oil, and the end of economic growth  (2011)  Murphy and Hall .  They argue that economic growth requires low oil prices, and an increasing oil supply.  These conditions are unlikely to occur.   A lack of economic growth, could make it uneconomical to remove and burn some of the remaining expensive fossil fuels.  While this is no cure for human caused climate change, it could at least make it less disastrous.

       So the bottom line is - if you accept that fossil fuels will peak - the worst case is probably around 450, which may be 2 degrees.  However, assuming peak cheap oil creates a new "Greater Recession", that number could be lower.

      Peak cheap oil could achieve more than Kyoto, Copenhagen or Lima, and could put us on a glide path to "degrowth".  Of course this type of involuntary de-growth, or Greater Recession", creates its own problems !!

        I recently heard a talk by Nate Hagens at a degrowth conference held in Vancouver. see here.    Towards the end he said something like "Most of the presenters at this conference are recommending degrowth as a good policy option.  I am saying something different.  De growth is not optional. It is inevitable, And it will start soon."

        Along the same lines, here is an except from an interview with Tom Murphy , UC physics professor, and blogger at Do The Math                    

      " What are your views on climate change?

TM: I see climate change as a serious threat to natural services and species survival, perhaps ultimately having a very negative impact on humanity. But resource depletion trumps climate change for me, because I think this has the potential to effect far more people on a far shorter timescale with far greater certainty. Our economic model is based on growth, setting us on a collision course with nature. When it becomes clear that growth cannot continue, the ramifications can be sudden and severe. So my focus is more on averting the chaos of economic/resource/agriculture/distribution collapse, which stands to wipe out much of what we have accomplished in the fossil fuel age. To the extent that climate change and resource limits are both served by a deliberate and aggressive transition away from fossil fuels, I see a natural alliance. Will it be enough to avert disaster (in climate or human welfare)? Who can know -- but I vote that we try real hard.

        

       

 --------   

see also Ugo Bardi's piece on the oildrum (2009)

http://www.theoildrum.com/node/5084

At this point, there is no consensus among the authors in terms of policy recommendations relating to these results. Some of the authors cited here conclude that peaking of fossil fuel production will be sufficient to maintain CO2 at a level below that considered dangerous by many climate experts. But this conclusion is not shared by other authors who maintain, instead, that even if we could be sure that CO2 concentrations would remain in the 450-550 ppm range, we would still face dangerous levels of global warming. Clearly, this is a difficult issue to solve, given the uncertainty in the scenarios and in the calculations of CO2 concentration in the atmosphere and the temperature effects. Furthermore, there are several phenomena that the climate models don't consider and that could make warming much more serious than currently believed. Among these, the saturation of the CO2 sinks, the positive feedback of the methane hydrates and those of the ice/albedo system. We just don't know enough to be able to say whether depletion is enough to "save" us from global warming.

However, it may not matter which threat one considers the most immediate: there exist measures that will mitigate both global warming and depletion. These are energy efficiency and replacing fossil fuels with nuclear energy or renewables. There is only one mitigation measure that doesn't cut both ways: CO2 geological sequestration. If depletion is a more immediate problem than global warming, clearly it would make no sense to waste precious resources in removing CO2 from the atmosphere. On the other hand, if oil and gas depletion leads us to rely more on coal, then sequestration might be necessary.

In my opinion, the studies I have discussed show that there are serious threats looming ahead. I believe that whether the threat be depletion or warming, we should move away from fossil fuels as fast as possible. Still, it is not at all certain that what we can do will be enough and we might well suffer for both effects: lack of fuels and global warming. It wouldn't be "fire or ice", but fire and ice.