Richard Duncan is chief author of the Olduvai theory, a prediction of rapidly declining world energy production. He has an MS in Electrical Engineering (1969) and a PhD in Systems Engineering (1973) from the University of Washington. He has taught engineering, worked for Lear Jet and Boeing, and worked in power system engineering. In 1992 he founded the Institute on Energy and Man.
The Olduvai theory holds that the ratio of world energy production per capita, which he denotes by the metric e, would begin to decline around 2007 as the extraction rates of fossil fuels fall increasingly behind demand, causing catastrophic social and economic collapse, starting with massive electrical blackouts worldwide. He suggests that humans would eventually revert to a stone-age style of living after the majority of the world's population dies off over the coming century.
He bases his theory on the fact that a steep rise in global population and petroleum use almost parallel each other but population increases at a slightly faster rate than does energy use.
Duncan's research data, compiled in partnership with geologist Dr. Walter Youngquist, have become widely used resources for those studying past and current trends in oil production and depletion.
AND THE ROAD TO THE OLDUVAI GORGE
Richard C. Duncan, Ph.D.1
Pardee Keynote Symposia
Geological Society of America
November 13, 2000
The Olduvai theory has been called unthinkable, preposterous, absurd, dangerous, self-fulfilling, and self-defeating. I offer it, however, as an inductive theory based on world energy and population data and on what I’ve seen during the past 30 years in some 50 nations on all continents except Antarctica. It is also based on my experience in electrical engineering and energy management systems, my hobbies of anthropology and archaeology, and a lifetime of reading in various fields.
The theory is defined by the ratio of world energy production (use) and world population. The details are worked out. The theory is easy. It states that the life expectancy of Industrial Civilization is less than or equal to 100 years: 1930-2030.
World energy production per capita from 1945 to 1973 grew at a breakneck speed of 3.45 %/year. Next from 1973 to the all-time peak in 1979, it slowed to a sluggish 0.64 %/year. Then suddenly —and for the first time in history — energy production per capita took a long-term decline of 0.33 %/year from 1979 to 1999. The Olduvai theory explains the 1979 peak and the subsequent decline. More to the point, it says that energy production per capita will fall to its 1930 value by 2030, thus giving Industrial Civilization a lifetime of less than or equal to 100 years.
Should this occur, any number of factors could be cited as the 'causes' of collapse. I believe, however, that the collapse will be strongly correlated with an 'epidemic' of permanent blackouts of high-voltage electric power networks — worldwide. Briefly explained: "When the electricity goes out, you are back in the Dark Age. And the Stone Age is just around the corner."
The Olduvai theory, of course, may be proved wrong. But, as of now, it cannot be rejected by the historic world energy production and population data.
1Institute on Energy and Man
5307 Ravenna Place NE, #1
Seattle, WA 98105
THE PEAK OF WORLD OIL PRODUCTION
AND THE ROAD TO THE OLDUVAI GORGE
Richard C. Duncan, Ph.D.
Pardee Keynote Symposia
Geological Society of America
November 13, 2000
Collapse, if and when it comes again, will this time be global. No longer can any individual nation collapse. World civilization will disintegrate as a whole. Competitors who evolve as peers collapse in like manner.
The Olduvai theory is a data-based schema that states that the life expectancy of Industrial Civilization is less than or equal 100 years. We shall develop the theory from its early roots in Greek philosophy down to respected scientists in the 20th century. This approach is useful because, although the theory is easy to understand, it is difficult (i.e. distressing) for most people to accept — just as it was for me.
The Olduvai theory deals neither with the geology or the paleontology of the Olduvai Gorge. Nor is it prescriptive. Rather, the theory simply attempts to explain the historic world energy production (and use) and population data in terms of overshoot and collapse. I chose the name "Olduvai" because (1) it is justly famous, (2) I've been there, (3) its long hollow sound is eerie and ominous, and (4) it is a good metaphor for the 'Stone Age way of life'. In fact, the Olduvai way of life was (and still is) a sustainable way of life — local, tribal, and solar — and, for better or worse, our ancestors practiced it for millions of years.
No doubt that the peak and decline of Industrial Civilization, should it occur, will be due to a complex matrix of causes, such as overpopulation, the depletion of nonrenewable resources, environmental damage, pollution, soil erosion, global warming, newly emerging viruses, and resource wars. That said, the Olduvai theory uses a single metric only, as defined by "White's Law." But now it comes with a new twist — (((a will-o'-the-wisp))) — electricity.
Most of my industrial experience is in electric power networks and the energy management systems (EMS) that control them. Electricity is not a primary energy source, but rather an "energy carrier": zero mass, travels near the speed of light, and, for all practical purposes, it can't be stored. Moreover, electric power systems are costly, complex, voracious of fuel, polluting, and require 24h-7d-52w maintenance and operations. Another problem is that electricity is taken for granted. Just flip the switch and things happen. In short: Electricity is the quintessence of the 'modern way of life', but the electric power systems themselves are demanding, dangerous, and delicate. All this suggests that permanent blackouts will be strongly correlated with the collapse of Industrial Civilization — the so-named "Olduvai cliff," discussed later.
This paper is the backup for the accompanying slide show titled "The Olduvai Theory: An Illustrated Guide" (see Duncan, 2000c).
Definitions: ‘Oil’ (O) means crude oil and natural gas liquids. 'Energy' (E) means the primary sources of energy — specifically oil, gas, coal, and nuclear & hydropower. 'Pop' means world population. 'ô' means oil production per capita. 'ê' means energy production per capita. ‘G’ means billion (10^9). ‘b’ means barrels of oil. 'boe' means barrels of oil equivalent (energy content, not quality). 'J' means joule. 'Industrial Civilization' and 'Electrical Civilization', as we shall see, mean the same thing.
Industrial Civilization is shown as a pulse-shaped curve of world average energy-use per capita (ê). The 'life expectancy' (i.e. 'duration') of Industrial Civilization is defined as the time (in years) between the upside point when ê reaches 30% of its peak value and the corresponding downside point when ê falls to the same value (Figure 4). The new twist is that the Olduvai theory now focuses on the mounting problems with the high-voltage electric power networks — worldwide.
Civilization and Ready Kilowatt: Although the fossil fuels are still very important, electricity is the indispensable end-use energy for Industrial Civilization. To determine its importance, it is essential to distinguish between the primary energy consumed to generate electricity versus the primary energy consumed for all other (i.e. non-electric) end-uses, such as work and heat. Consider the following. We estimate that 42% of the world's primary energy in 1999 was consumed to generate electricity. This compares to oil's contribution to all non-electric end-uses of 39%; gas' contribution of 18%; and coal's contribution of a mere 1%. Moreover: When energy quality is accounted for, then the importance of electricity becomes very, VERY clear. For example, if you want to heat your room, then 1 joule (J) of coal is 'equal' to 1 J of electricity. However, if you want to power up your TV, then 1 J of electricity is 'equal' to 3 J of coal! So if you're going to worry about energy, then don't loose sleep over oil, gas, and coal. Worry about the electric switch on the wall!
2. ENERGY AND CIVILIZATION
Other factors remaining constant, culture evolves as the amount of energy harnessed per capita per year is increased, or as the efficiency of the instrumental means of putting the energy to work is increased. … We may now sketch the history of cultural development from this standpoint.
Oil is liquid, power packed, and portable. It is the major primary source of energy for Industrial Civilization. (But not the major end-use source!) We have developed a new method of modeling and simulation and then used it to make a series of five forecasts of world oil production — one new forecast every year. Figure 1 shows the main results of our most recent forecast, i.e. Forecast #5. (Duncan, 2000b)
Notes: (1) World oil production is forecast to peak in 2006. (2) The OPEC/non-OPEC crossover event occurs in 2008. (3) The OPEC nations' rate of oil production from 1985 to 1999 increased by 9.33 times that of the non-OPEC nations.
Figure 1 shows the historic world oil production data from 1960 to 1999 and our forecasts from 2000 to 2040. Note that the overall growth rate of oil production slowed from 1960 to 1999 (curve 1). In detail: The average rate of growth from 1960 to 1973 was a whopping 6.65 %/year. Next, from 1973 to 1979 growth slowed to 1.49 %/year. Then, from 1979 to 1999, it slowed yet further to a glacial 0.75 %/year. Moving beyond the historic period, Forecast #5 predicts that world oil production will reach its all-time peak in 2006. Then from its peak in 2006 to year 2040 world oil production will fall by 58.8 % — an average decline of 2.45 %/year during these 34 years.
The OPEC/non-OPEC crossover event is predicted to occur in 2008 (Figure 1, curves 2 &3). This event will divide the world into two camps: one with surplus oil, the other with none. Forecast #5 presents the following scenario. (1) Beginning in 2008 the 11 OPEC nations will produce more than 50% of the world's oil. (2) Thereafter OPEC will control nearly 100% of the world’s oil exports. (3) BP Amoco (2000) puts OPEC's "proved reserves" at 77.6% of the world total. (4) OPEC production from 1985 to 1999 grew at a strong average rate of 3.46 %/year. In contrast, non-OPEC production grew at sluggish 0.37 %/year during this same 14-year period.
The oil forecasting models, the application program to run them, and a User's Guide are all available free at www.halcyon.com/duncanrc/. (Duncan, 2000a)
The peak of world oil production (2006) and the OPEC/non-OPEC crossover event (2008) are important to the 'Olduvai schema', discussed later. But first let's have a look at the ratio of world oil production and world population. Figure 2 shows the historic data.
Notes: (1) World average oil production per capita (ô) grew exponentially from 1920 to 1973. (2) Next, the average growth rate was near zero from 1973 to the all-time peak in 1979. (3) Then from its peak in 1979 to 1999, ô decreased strongly by an average of 1.20 %/year. (4) Typical response: "I didn't know that!" (5) The little cartoons emphasize that oil is by far the major primary source of energy for transportation (i.e. about 95% of the oil produced in 1999 was used for transportation).
Figure 2 shows the world average oil production per capita from 1920 to 1999. The curve represents the ratio of world oil production (O) and world population (Pop): i.e. ô = O/(Pop) in barrels per capita per year (i.e. b/c/year). Note well that ô grew exponentially from 1920 to 1973. Next, growth was negligible from 1973 to the all-time peak in 1979. Finally, from its peak in 1979 to 1999, ô decreased at an average rate of 1.20 %/year (i.e. from 5.50 b/c in 1979 to 4.32 b/c in 1999). "You've gotta be kidding!"
The 1979 peak and decline of world oil production per capita are shown on page 11 of BP Amoco (2000), http://www.bp.com/centres/energy/ . Not to be missed.
Bottom Line: Although world oil production (O) from 1979 to 1999 increased at an average rate of 0.75 %/year (Figure 1), world population (Pop) grew even faster. Thus world oil production per capita (ô) declined at an average rate of 1.20 %/year during the 20 years from 1979 to 1999 (Figure 2).
The main goals in this study, as was mentioned, are to describe, discuss, and test the Olduvai theory of Industrial Civilization against historic data. Applying White's Law, our metric (i.e. indicator) is the ratio of world total energy production (E) and world population (Pop): i.e. ê = E/(Pop). Figure 3 shows ê during the historic period.
Notes: (1) World average energy production per capita (ê) grew significantly from 1920 to its all-time peak in 1979. (2) Then from its peak in 1979 to 1999, ê declined at an average rate of 0.33 %/year. This downward trend is the "Olduvai slope", discussed later. (3) The tiny cartoons emphasize that the delivery of electricity to end-users is the sin quo non of the 'modern way of life'. Not hydrocarbons.
Observe the variability of ê in Figure 3. In detail: From 1920 to 1945 ê grew moderately at an average of 0.69 %/year. Then from 1945 to 1973 it grew at the torrid pace of 3.45 %/year. Next, from 1973 to the all-time peak in 1979, growth slowed to 0.64 %/year. But then suddenly — and for the first time in history — ê began a long-term decline extending from 1979 to 1999. This 20-year period is named the "Olduvai slope," the first of the three downside intervals in the "Olduvai schema."
Bottom Line: Although world energy production (E) from 1979 to 1999 increased at an average rate of 1.34 %/year, world population (Pop) grew even faster. Thus world energy production per capita (ê) declined at an average rate of 0.33 %/year during these same 20 years (Figure 3). See White's Law, top of this section.
Acknowledgments: As far as I know, credit goes to Robert Romer (1985) for being first to publish the peak-period data for world energy production per capita (ê) from 1900 to 1983. He put the peak (correctly!) in 1979, followed by a sharp decline through 1983, the last year of his data. Credit is also due to John Gibbons, et al. (1989) for publishing a graph of ê from 1950 to 1985. Gibbons, et al. put the peak in 1973. But curiously, neither of the above studies made any mention whatever about the importance of the peak and decline of world energy production per capita.
The 1979 peak and decline of world energy production per capita (ê) is shown at http://www.bp.com/centres/energy/ . Have a look.
3. EVOLUTION OF AN IDEA
And what a glorious society we would have if men and women would regulate their affairs, as do the millions of cells in the developing embryo.
The seeds of the Olduvai Theory were planted long ago. For example, the Greek lyric poet Pindar (c. 522-438 BCE) wrote, "What course after nightfall? Has destiny written that we must run to the end?" (Eiseley, 1970)
Arabic scholar Ibn Khaldun (1332-1406) regarded "group solidarity" as the primary requisite for civilization. "Civilization needs the tribal values to survive, but these very same values are destroyed by civilization. Specifically, urban civilization destroys tribal values with the luxuries that weaken kinship and community ties and with the artificial wants for new types of cuisine, new fashions in clothing, larger homes, and other novelties of urban life." (Weatherford, 1994)
Joseph Granvill in 1665 observed that, although energy-using machines made life easier, they also made it more dependent. "For example, if artificial demands are stimulated, than resources must be consumed at an ever-increasing pace." (Eiseley, 1970)
But, as far as I know, it was the American adventurer and writer Washington Irving (1783-1859) who was first to realize that civilization could quickly collapse.
Nations are fast losing their nationality. The great and increasing intercourse, the exchange of fashions and uniformity of opinions by the diffusion of literature are fast destroying those peculiarities that formerly prevailed. We shall in time grow to be very much one people, unless a return to barbarism throws us again into chaos. (Irving, 1822)
The first statement that I've found that Industrial Civilization is likely to collapse into a primitive mode came from the mathematical biologist Alfred Lotka.
The human species, considered in broad perspective, as a unit including its economic and industrial accessories, has swiftly and radically changed its character during the epoch in which our life has been laid. In this sense we are far removed from equilibrium — a fact that is of the highest practical significance, since it implies that a period of adjustment to equilibrium conditions lies before us, and he would be an extreme optimist who should expect that such adjustment can be reached without labor and travail. … While such sudden decline might, from a detached standpoint, appear as in accord with the eternal equities, since previous gains would in cold terms balance the losses, yet it would be felt as a superlative catastrophe. Our descendants, if such as this should be their fate, will see poor compensation for their ills and in fact that we did live in abundance and luxury. (Lotka, 1925)
Polymath Norbert Wiener (1894-1964) wrote in 1950 that the best we can hope for the role of progress is that "our attempts to progress in the face of overwhelming necessity may have the purging terror of Greek tragedy."
[America's] resources seemed inexhaustible [in 1500] … However, the existence of the new lands encouraged an attitude not unlike that of Alice's Mad Tea party. When the tea and cakes were exhausted at one seat, the natural thing … was to move on and occupy the next seat. … As time passed, the tea table of the Americas had proved not to be inexhaustible … What many of us fail to realize is that the last four hundred years are a highly special period in the history of the world. … This is partly the result of increased communication, but also of an increased mastery of nature which, on a limited planet like the earth, may prove in the long run to be an increased slavery to nature. (Wiener, 1950)
Sir Charles Galton Darwin wrote in 1953:
The fifth revolution will come when we have spent the stores of coal and oil that have been accumulating in the earth during hundreds of millions of years. … It is to be hoped that before then other sources of energy will have been developed, … but without considering the detail [here] it is obvious that there will be a very great difference in ways of life. … Whether a convenient substitute for the present fuels is found or not, there can be no doubt that there will have to be a great change in ways of life. This change may justly be called a revolution, but it differs from all the preceding ones in that there is no likelihood of its leading to increases of population, but even perhaps to the reverse. (Darwin, 1953)
Sir Fred Hoyle in 1964 put it bluntly.
It has often been said that, if the human species fails to make a go of it here on the Earth, some other species will take over the running. In the sense of developing intelligence this is not correct. We have or soon will have, exhausted the necessary physical prerequisites so far as this planet is concerned. With coal gone, oil gone, high-grade metallic ores gone, no species however competent can make the long climb from primitive conditions to high-level technology. This is a one-shot affair. If we fail, this planetary system fails so far as intelligence is concerned. The same will be true of other planetary systems. On each of them there will be one chance, and one chance only. (Hoyle, 1964)
4. WORLD MODELS, ETC.
Perhaps the most widespread evil is the Western view of man and nature. Among us, it is widely believed that man is apart from nature, superior to it; indeed, evolution is a process to create man and seat him on the apex of the cosmic pinnacle. He views the earth as a treasury that he can plunder at will. And, indeed, the behavior of Western people, notably since the advent of the Industrial Revolution, gives incontrovertible evidence to support this assertion.
Jay Forrester of MIT in 1970 built a world model "to understand the options available to mankind as societies enter the transition from growth to equilibrium."
What happens when growth approaches fixed limits and is forced to give way to some form of equilibrium? Are there choices before us that lead to alternative world futures? … Exponential growth does not continue forever. Growth of population and industrialization will stop. If man does not take conscious action to limit population and capital investment, the forces inherent in the natural and social system will rise high enough to limit growth. The question is only a matter of when and how growth will cease, not whether it will cease. (Forrester, 1971)
The basic behavior of Forrester's world model was overshoot and collapse. It projected that the material standard of living (MSL) would peak in 1990 and then decline through the year 2100. Moreover, measured by the MSL (i.e. the leading and lagging 30% points), the life expectancy of Industrial Civilization was about 210 years. (Forrester, 1971, Figure 4-2). He used the world model to search for social (i.e. cultural, "conscious action") policies for making the transition to sustainability.
In our social systems, there are no utopias. No sustainable modes of behavior are free of pressures and stresses. … But to develop the more promising modes will require restraint and dedication to a long-range future that man may not be capable of sustaining. Our greatest challenge now is how to handle the transition from growth into equilibrium. The industrial societies have behind them long traditions that have encouraged and rewarded growth. The folklore and the success stories praise growth and expansion. But that is not the path of the future. (ibid., 1971)
He found that sustainability could be achieved in the modeled world system when the following five social policies were applied together in 1970:
· Natural-resource-usage-rate reduced 75%
· Pollution generation reduced 50%
· Capital-investment generation reduced 40%
· Food production reduced 20%
· Birth rate reduced 30% (ibid., 1971)
Critics (mostly economists) argued that such policies were e.g. "blue sky" and "unrealistic". Fortunately, the project team was just then completing a two-year study using the more comprehensive 'World3' model. They too searched for social policies that might achieve sustainability in the world system. However, the World3 'reference run' (like Forrester's in 1971) also projected overshoot and collapse of the world system.
This is the World3 reference run, …. Both population POP and industrial output per capita IOPC grow beyond sustainable levels and subsequently decline. The cause of their decline is traceable to the depletion of nonrenewable resources. (Meadows, et al, 1972, Figure 35)
The World3 'reference run' (1972, above) projected that the industrial output per capita (IOPC) would reach its all-time peak in 2013 and then would steeply decline through 2100. Moreover, the duration of Industrial Civilization (as measured by the leading and lagging IOPC 30% points) came out to be about 105 years.
I first presented the Olduvai theory to the public in 1989.
· The broad sweep of human history can be divided into three phases.
· The first, or pre-industrial phase was a very long period of equilibrium when simple tools and weak machines limited economic growth.
· The second, or industrial phase was a very short period of non-equilibrium that ignited with explosive force when powerful new machines temporarily lifted all limits to growth.
· The third, or de-industrial phase lies immediately ahead during which time the industrial economies will decline toward a new period of equilibrium, limited by the exhaustion of nonrenewable resources and continuing deterioration of the natural environment. (Duncan, 1989)
In 1992, twenty years after the first World3 study, the team members re-calibrated the model with the latest data and used it to help "envision a sustainable future." But —
All that World3 has told us so far is that the model system, and by implication the "real world" system, has a strong tendency to overshoot and collapse. In fact, in the thousands of model runs we have tried over the years, overshoot and collapse has been by far the most frequent outcome. (Meadows, et al., 1992)
The updated World3 'reference run', in fact, gave almost exactly the same results as it did in the first study in 1972! For example: Industrial output per capita (IOPC) reached its all-time peak in 2014 (v. 2013 previously) and the duration of Industrial Civilization came out to be 102 years (v. 104 years previously).
Australian writer Reg Morrison likewise foresees that overshoot and collapse is where humanity is headed. In his scenario (i.e. no formal model), the world population rises to about 7.0 billion in the 2036. Thence it plunges to 3.2 billion in 2090 — an average loss of 71.4 million people per year (i.e. deaths minus births) during 54 years.
Given the current shape of the human population graph, those indicators also spell out a much larger and, from our point of view, more ominous message: the human plague cycle is right on track for a demographically normal climax and collapse. Not only have our genes managed to conceal from us that we are entirely typical mammals and therefore vulnerable to all of evolution's customary checks and balances, but also they have contrived to lock us so securely into the plague cycle that they seem almost to have been crafted for that purpose. Gaia is running like a Swiss watch. (Morrison, 1999)
The foregoing discussions show that many respected professionals have reached conclusions that are consistent with the Olduvai theory, to which we now turn.
5. THE OLDUVAI THEORY: 1930-2030
The earth's immune system, so to speak, has recognized the presence of the human species and is starting to kick in. The earth is attempting to rid itself of an infection by the human parasite.
The Olduvai theory, to review, states that the life expectancy of Industrial Civilization is less than or equal to one hundred years, as measured by the world average energy production person per year: ê = E/(Pop). Industrial Civilization, defined herein, began in 1930 and is predicted to end on or before the year 2030. Our main goals for this section are threefold: (1) to discuss the Olduvai theory from 1930 to 2030, (2) to identify the important energy events during this time, and (3) to stress that Industrial Civilization = Electrical Civilization = the 'modern way of life.' Figure 4 depicts the Olduvai theory.
Figure 4. The Olduvai Theory: 1930-2030
Notes: (1) 1930 => Industrial Civilization began when (ê) reached 30% of its peak value. (2) 1979 => ê reached its peak value of 11.15 boe/c. (3) 1999 => The end of cheap oil. (4) 2000 => Start of the "Jerusalem Jihad". (5) 2006 => Predicted peak of world oil production (Figure 1, this paper). (6) 2008 => The OPEC crossover event (Figure 1). (7) 2012 => Permanent blackouts occur worldwide. (8) 2030 => Industrial Civilization ends when ê falls to its 1930 value. (9) Observe that there are three intervals of decline in the Olduvai schema: slope, slide and cliff — each steeper than the previous. (10) The small cartoons stress that electricity is the essential end-use energy for Industrial Civilization.
Figure 4 shows the complete Olduvai curve from 1930 to 2030. Historic data appears from 1930 to 1999 and hypothetical values from 2000 to 2030. These 100 years are labeled "Industrial Civilization." The curve and the events together constitute the "Olduvai schema." Observe that the overall curve has a pulse-like waveform — namely overshoot and collapse. Eight key energy events define the Olduvai schema.
Eight Events: The 1st event in 1930 (see Note 1, Figure 4) marks the beginning of Industrial Civilization when ê reached 3.32 boe/c. This is the "leading 30% point", a standard way to define the duration of a pulse. The 2nd event in 1979 (Note 2) marks the all-time peak of world energy production per capita when ê reached 11.15 boe/c. The 3rd event in 1999 (Note 3) marks the end of cheap oil. The 4th event on September 28, 2000 (Note 4) marks the eruption of violence in the Middle East — i.e. the "Jerusalem Jihad". Moreover, the "JJ" marks the end of the Olduvai "slope" wherein ê declined at 0.33 %/year from 1979 to 1999.
Next in Figure 4 we come the future intervals in the Olduvai schema. The Olduvai "slide", the first of the future intervals, begins in 2000 with the escalating warfare in the Middle East. The 5th event in 2006 (Note 5) marks the all-time peak of world oil production (Figure 1, this paper). The 6th event in 2008 (Note 6) marks the OPEC crossover event when the 11 OPEC nations produce 51% of the world's oil and control nearly 100% of the world's oil exports. The year 2011 marks the end of the Olduvai slide, wherein ê declines at 0.67 %/year from 2000 to 2011.
The "cliff" is the final interval in the Olduvai schema. It begins with the 7th event in 2012 (Note 7) when an epidemic of permanent blackouts spreads worldwide, i.e. first there are waves of brownouts and temporary blackouts, then finally the electric power networks themselves expire. The 8th event in 2030 (Note 8) marks the fall of world energy production (use) per capita to the 1930 level (Figure 4). This is the lagging 30% point when Industrial Civilization has become history. The average rate of decline of ê is 5.44 %/year from 2012 to 2030.
"The hand writes, then moves on." Decreasing electric reliability is now.
The power shortages in California and elsewhere are the product of the nation's long economic boom, the increasing use of energy-guzzling computer devices, population growth and a slowdown in new power-plant construction amid the deregulation of the utility market. As the shortages threaten to spread eastward over the next few years, more Americans may face a tradeoff they would rather not make in the long-running conflict between energy and the environment: whether to build more power plants or to contend with the economic headaches and inconveniences of inadequate power supplies. (Carlton, 2000)
The electricity business has also run out of almost all-existing generating capacity, whether this capacity is a coal-fired plant, a nuclear plant or a dam. The electricity business has already responded to this shortage. Orders for a massive number of natural gas-fired plants have already been placed. But these new gas plants require an unbelievable amount of natural gas. This immediate need for so much incremental supply is simply not there. (Simmons, 2000)
As we have emphasized, Industrial Civilization is beholden to electricity. Namely: In 1999, electricity supplied 42% (and counting) of the world's end-use energy versus 39% for oil (the leading fossil fuel). Yet the small difference of 3% obscures the real magnitude of the problem because it omits the quality of the different forms of end-use energy. With apologies to George Orwell and the 2nd Law of Thermodynamics — "All joules (J) of energy are equal. But some joules are more equal than others." Thus, if you just want to heat your coffee, then 1 J of oil energy works just as well as 1 J of electrical energy. However, if you want to power up your computer, then 1 J of electricity is worth 3 J of oil. Therefore, the ratio of the importance of electricity versus oil to Industrial Civilization is not 42:39, but more like 99:1. Similar ratios apply to electricity versus gas and electricity versus coal.
Au Courant King Kilowatt!
Question: Where will the Olduvai die-off occur? Response: Everywhere. But large cities, of course, will be the most dangerous places to reside when the electric grids die. There you have millions of people densely packed in high-rise buildings, surrounded by acres-and-acres of blacktop and concrete: no electricity, no work, and no food. Thus the urban areas will rapidly depopulate when the electric grids die. In fact we have already mapped out the danger zones. (e.g. See Living Earth, 1996.) Specifically: The big cities stand out brightly as yellow-orange dots on NASA's satellite mosaics (i.e. pictures) of the earth at night. These planetary lights blare out "Beware", "Warning", and "Danger". The likes of Los Angeles and New York, London and Paris, Bombay and Hong Kong are all unsustainable hot spots.
6. SUMMARY AND CONCLUSIONS
The theory of civilization is traced from Greek philosophy in about 500 BCE to a host of respected scientists in the 20th century. For example: The 'reference runs' of two world simulation models in the 1970s put the life expectancy of civilization between about 100 and 200 years. The Olduvai theory is specifically defined as the ratio of world energy production and world population. It states that the life expectancy of Industrial Civilization is less than or equal to 100 years: from 1930 to 2030. The theory is tested against historic data from 1920 to 1999.
Although all primary sources of energy are important, the Olduvai theory postulates that electricity is the quintessence of Industrial Civilization. World energy production per capita increased strongly from 1945 to its all-time peak in 1979. Then from 1979 to 1999 — for the first time in history — it decreased from 1979 to 1999 at a rate of 0.33 %/year (the Olduvai 'slope', Figure 4). Next from 2000 to 2011, according to the Olduvai schema, world energy production per capita will decrease by about 0.70 %/year (the 'slide'). Then around year 2012 there will be a rash of permanent electrical blackouts — worldwide. These blackouts, along with other factors, will cause energy production per capita by 2030 to fall to 3.32 b/year, the same value it had in 1930. The rate of decline from 2012 to 2030 is 5.44 %/year (the Olduvai 'cliff'). Thus, by definition, the duration of Industrial Civilization is less than or equal to 100 years.
The Olduvai 'slide' from 2001 to 2011 (Figure 4) may resemble the "Great Depression" of 1929 to 1939: unemployment, breadlines, and homelessness. As for the Olduvai 'cliff' from 2012 to 2030 — I know of no precedent in human history.
Governments have lost respect. World organizations are ineffective. Neo-tribalism is rampant. The population is over six billion and counting. Global warming and emerging viruses are headlines. The reliability of electric power networks is falling. And the instant the power goes out, you are back in the Dark Age.
1. Pre-Industrial Phase [c. 3,000,000 BC to 1765]
2. Industrial Phase [1930 to 2025, estimated]
3. Post-Industrial Phase [c. 2100 and beyond]
1. Pre-Industrial Phase [c. 3,000,000 BC to 1765]
2. Industrial Phase [1930 to 2025, estimated]
3. Post-Industrial Phase [c. 2100 and beyond]
There is debate over what the effects of the 2000s energy crisis will be over the long term. Some speculate that an oil-price spike could create a recession comparable to those that followed the 1973 and 1979 energy crises or a potentially worse situation such as a global oil crash. Increased petroleum prices are however reflected in a vast number of products derived from petroleum, as well as those transported using petroleum fuels.
Political scientist George Friedman has postulated that if high prices for oil and food persist, they will define the fourth distinct geopolitical regime since the end of World War II, the previous three being the Cold War, the 1989-2001 period in which economic globalization was primary, and the post-9/11 war on terror.
The perceived increase in oil price differs internationally according to currency market fluctuations and purchasing power of currencies. For example, excluding changes in relative purchasing power of various currencies, from 2002-01-01 to 2008-01-01:
On average, oil price has increased approximately 400% for these areas. As a result of the dramatic price increase there have been global protests.
Rising transport costs may start to reverse globalization, due to the fact that distance will cost more and more money. As oil prices keep rising, transport costs could cancel out lower wage advantages, such as in East Asia.
It is easiest to gauge the effects of oil prices in the United States, where comparison of oil prices to average income are simplified. One of the most closely watched measures is the price of gas, but the average United States consumer's basket of goods contains many other petroleum products as well.
Despite the rapid increase in the price of oil, neither the stock markets nor the growth of the global economy were noticeably affected until supply declined rapidly starting in November 2007. Arguably, inflation has increased; in the United States, inflation averaged 3.3% in 2005–2006, as compared to an average of 2.5% in the preceding 10-year period. As a result, during this period the Federal Reserve has consistently increased interest rates to curb inflation.
Exactly how much trade, soaring transport costs divert from China (or for that matter anywhere else) depend ultimately on how important those costs are in total costs. Goods that have a high value to freight ratio carry implicitly small transport costs, while goods with low value to freight ratios typically carry significant moving costs. A high percentage of Chinese exports to the U.S. fall in the latter category. Furniture, apparel, footwear, metal manufacturing, and industrial machinery—all typical Chinese exports, incur relatively high transport costs.
Soaring costs are squeezing gas station owners too.
In 2008, a report by Cambridge Energy Research Associates stated that 2007 had been the year of peak gasoline usage in the United States, and that record energy levels would cause an "enduring shift" in energy consumption practices. According to the report, in April gas consumption had been lower than a year before for the sixth straight month, suggesting 2008 would be the first year U.S. gasoline usage declined in 17 years. The total miles driven in the U.S. began declining in 2006.
In the United States, for instance, each 1000 dollars in GDP required 2.4 barrels of oil in 1973 when adjusted for inflation, while this number had fallen to 1.15 by 2001. For calendar 1981, United States oil consumption was 5,861,058,000 bbl (0.9318338 km3) and GDP was $5,291.7 billion (chain-volume 2000 dollars), a ratio of $902.86/bbl.
In 2005, consumption was 7,592,789,000 bbl (1.2071570 km3) and GDP was $10,989.5 billion, a ratio of $1,447.36/bbl.
In 2006, consumption was 7,550,908,000 bbl (1.2004984 km3) and GDP was $11,294.8 billion, a ratio of $1495.82/bbl.
In 2007, consumption was 7,548,338,000 bbl (1.2000898 km3) and GDP was $11,523.9 billion, a ratio of $1526.68/bbl.
Many of the energy intensive industrial and manufacturing activities present in the 1970s U.S. moved out of the country during a period of outsourcing. Manufacturing as a portion of U.S. GDP has declined considerably since 1973. While the United States no longer makes as many goods and therefore does not expend as much energy to do so higher energy prices are still impacting the cost to manufacture these goods overseas. The increased cost impacts the U.S. GDP via the trade deficit. The size of this impact is difficult to estimate though the total energy/GDP effect should be commensurate with the 1970s value compensated by any efficiency gains from the outsourcing itself and the increased transportation costs.
The increase in oil prices over two years was mirrored by an increase in stock values in the energy sector. Energy ETFs like XLE (an overall energy sector fund) and OIH (an oil service industry fund) did well during the period, with XLE's price increasing from $26 (2004-01-01) to $54 (2006-03-02), and OIH's price increasing from $60 (2004-01-01) to $143 (2006-03-02).
The value of the stock in companies such as Apache and Conoco-Phillips rose sharply during this period. These prices increased more rapidly toward the end of August, particularly after Hurricane Katrina.
Wal-Mart shares continued their decrease in value that began with the increase in the oil prices. Over two years, stock in Wal-Mart dropped in value by 25% from $60 per share to under $45 per share. Earlier in August, Wal-Mart announced that higher than expected oil prices cut into the corporation's profits for the 2nd quarter of 2005. Since oil prices after the end of the 2nd quarter continued to rise, 3rd quarter profits from Wal-Mart are expected to be small. Because Wal-Mart's distribution system relies on the customer to drive to a large discount big-box store, increases in the price of fuel might discourage some customers from making the trip as often. Wal-Mart, like all retailers, will also face higher shipping costs to get goods from the factory to the stores. This will likely cause inflationary pressures. Nevertheless, Wal-Mart's sales actually increased as a result as disposable income decreased due to the increased price of gasoline because of its economic role as an inferior good.
In the European Union, the prices of transport fuels are made up of the price of the refined product, plus a substantial tax element, which can vary between roughly 2/3 and 3/4 of the total price ; in the UK, nearly 70% of petrol is made up of fuel duty and VAT, a doubling of the oil price would add perhaps 30% to the cost of fuel at the pump. Populations have lifestyles that are already well adapted to fuel prices that would appear very high to consumers in the USA (where the tax fraction is less than 20%). This long lasting tax system makes European demand largely independent of the crude oil price, at least over short periods of a few years.
The escalating price of oil in USD has been softer in Euro terms, as the US dollar lost approximately 30% of its value during the 2007-2009 period.
As a consequence, there is no 2000s energy crisis in Europe. The table below shows the absence of impact of the price extremum over consumption.
The Pacific rim had been experiencing oil shortages on an ongoing basis prior to Hurricane Katrina. Some countries are increasing production of biofuels to offset the higher costs of oil.
In July 2008, Malaysia experienced protests against high fuel prices.
In Indonesia, fuel subsidies grew to encompass "almost one third of the state budget".
On July 15 2008, Japanese fishermen for the first time began a protest strike over the high cost of boat fuel (which had tripled over a three year period). The high fuel costs have been compounded by higher domestic meat consumption, lower priced foreign competitors, and the cumulative effects of overfishing. During the strike around virtually the entire Japanese fishing fleet of 200,000 boats sat idle. This follows strikes by truck and taxi drivers, as well as other fishermen, in Asia, Europe and the U.S. Between 2006 and 2008, the number of fishermen in Japan dropped by as much as 20% and the Japanese Ministry of Agriculture, Forestry and Fisheries projects this percentage to grow.
High oil prices are likely to first affect less affluent countries, particularly the developing world, with less discretionary income. There are fewer vehicles per capita, and oil is often used for electricity generation, as well as private transport. The World Bank has looked more deeply at the effect of oil prices in the developing countries. An analysis finds that in South Africa a 125 percent increase in the price of crude oil and refined petroleum reduces employment and GDP by approximately 2 percent, and reduces household consumption by approximately 7 percent, affecting mainly the poor.
High oil prices are hurting many countries in Africa, including Zimbabwe, Eritrea and Tanzania. High oil prices have created an oil supply instability, per barrel price instability or both. There are reports that this has led to fuel rationing being enacted in some cases. Many countries in Sub-Saharan Africa lack the foreign exchange reserves to purchase enough oil products at increasingly higher prices. These nations have little choice but to limit imports and/or ration their existing supplies.
Venezuela's president, Hugo Chávez, came under increasing scrutiny as he began selling heating oil at lower-than-market prices to poor U.S. consumers and to island nations in the Caribbean such as Cuba.[dead link] Chavez came up with a programme known as PetroCaribe to sell oil and gas cheaply to states in the region.
Some stock markets in the GCC, notably in Saudi Arabia and Dubai, experienced a boom, roughly 100% index increase in the Saudi stock market. However, this boom was followed by a market crash. A number of planned projects to stir development, such as King Abdullah Economic City, have been proposed due to $29.3 billion surplus. On May 1, 2006 Saudi Arabia lowered prices on all hydrocarbon fuels for local consumption; 95 octane gasoline costs .606 USD/gallon (fixed price).
An EIA report stated that OPEC member nations were projected to earn a net amount of $1.251 trillion in 2008 from their oil exports, due to the record crude prices.
Prior to the runup in fuel prices, many motorists opted for larger, less fuel-efficient sport utility vehicles and full-size vehicles in the United States, Canada and other countries where fuel taxes have historically been low. This trend began reversing in 2008 due to rising prices of fuel along with an increasing perception that future fuel prices will be at least as high. At the same time, appraisal and depreciation rates for SUVs, trucks, and vans have increased 30% and current SUV, truck, and van owners who cannot liquidate their gas-guzzlers because of low resale values are donating their vehicles for tax credits; this trend occurred during the 1973 oil crisis where musclecars and luxury cars faced the same predicament.
The September 2005 sales data for all the vehicle vendors indicated SUV sales dropped while small cars sales increased compared with 2004 sales. There is also an ever increasing market for hybrid vehicles (e.g., Toyota Prius and Honda Civic Hybrid) and diesel engine vehicles (e.g., Volkswagen TDI and Mercedes-Benz E320 CDI) since they are more fuel efficient; since the 1973 energy crisis, the front-wheel drive passenger car has replaced rear-wheel drive as the preferred layout for energy efficient cars. There is increasing demand of "crossover SUVs" (i.e., SUVs based on unibody platforms) which are marginally lighter and therefore more fuel efficient than SUVs built on body-on-frame chassis.
The Union Pacific Railroad has had to address with its rising fuel bill, which has reached the point of becoming its single biggest operating expense. Airlines and oveseas shipping companies are also struggling to contain costs as their energy expense soar.
Anecdotal evidence suggested that in mid-2008, rising fuel prices motivated an increasing number of drivers to adopt fuel economy maximizing behaviors.
In July 2008, millions of Indian truck drivers joined a series of protests in Asia and Europe after crude oil's record run forced governments and fuel retailers to cut subsidies and raise prices.
Although Peak oil theorists such as David Goodstein, Richard Heinberg, and others, had for years predicted sharp declines in air travel following the peaking of world oil production and its subsequent decline, air travel enjoyed robust growth around much of the world spurred by low jet fuel costs starting in the mid-1980s. For example, air travel in the United States grew five times faster than population in the decades after 1978, with 769 million passengers boarding U.S. airline flights in 2007. However, the run-up in oil prices after 2003 began eroding airline profits, and the further doubling of oil prices from May 2007 to May 2008 began to have a substantial impact on airline operations, forcing airlines to reduce flight schedules, and pushing weaker carriers into merger or bankruptcy. During the first half of 2008, at least twenty-five airlines world-wide entered bankruptcy or were forced to cease operations.
April 2008 began with four small airlines (Aloha Airlines, Champion Air, ATA Airlines and Skybus Airlines) ceasing operations in a period of a week. A fifth airline, Oasis Hong Kong Airlines ceased operations on April 9, 2008 . A sixth airline, Frontier Airlines filed for bankruptcy on April 11, 2008 to protect itself from its credit card processing company which was withholding airline ticket revenues. Frontier continues to operate under Chapter 11 and is working to get a new agreement with said company. Eos Airlines, a small specialty carrier with high costs, ceased operations on April 27, 2008. An eighth airline Nationwide Airlines ceased operations on April 29, 2008, due to the "impossibility" of profitably operating the Boeing 737-200 with oil prices of over $133 a barrel. The 737-200 is a 30 year old aircraft that is 30% less fuel efficient than new production 737's. On May 9, 2008, a ninth airline, EuroManx announced that it was ceasing all operations, citing rising fuel prices and reduced passenger numbers as the reasons.
A 5% U.S. domestic capacity cut (since raised to around 15%) may be expanded to all airlines to save on fuel by eliminating older aircraft from their fleets similar to the exchange that took place in the late 1970s and early 1980s.[clarification needed] Although a slightly larger cut happened in the aftermath of 9/11 (20%), this is the first time since the 1970s that airline service has been cut to save on fuel for the United States. Other airlines such as Ryanair and Scandinavian Airlines System have also cut capacity.
Increasing fuel prices also caused "deep downturns" in air travel within China and India, in favor of a return to ground travel.
Recent changes in transportation have led to increased sensitivity to higher energy prices. Most notable of these changes is the massive trend towards containerization that effectively makes shipping costs more vulnerable to swings in fuel costs. Container ships can be unloaded much faster than break cargos so they spend much more time at sea than in ports.
Another factor is speed. The shift to container ships has increased the importance of ship speed. Over the past two decades, container ships were built to go faster than bulk ships and since container ships were steadily gaining share, the world’s fleet speed picked up. But greater speed requires greater energy, as it does in all other modes of transport. In global shipping, the increase in ship speed over the last fifteen years has doubled fuel consumption per unit of freight. Accordingly, in 2008 some shipping companies responded to higher fuel costs by slowing down their ships, while companies such as SkySails began prototyping large towing kites to harness wind power, partly offsetting some engine power for propulsion.
The cost of shipping a standard 40-foot (12 m) container from East Asia to the U.S. Eastern Seaboard has already tripled since 2000 and will double again as oil prices head towards $200 per barrel. At 2008 oil prices, every 10% increase in trip distance translates into a 4.5% increase in transport costs.
Including inland costs, shipping a standard 40-foot (12 m) container from Shanghai to the U.S. Eastern Seaboard now costs $8,000. In 2000, when oil prices were $20 per barrel, it cost only $3,000 to ship the same container. Trans-oceanic transport costs also exploded during the two historic OPEC oil price shock. The cost of shipping a standard cargo load overseas almost tripled, just as it did over the past few years.
Since the 1940s, agriculture has dramatically increased its productivity, due largely to the use of petrochemical derived pesticides, fertilizers, and increased mechanization (the so-called Green Revolution). During this time, the world population has more than doubled. Between 1950 and 1984, as the Green Revolution transformed agriculture around the globe, world grain production increased by 250%.
By late 2007, increased farming for use in biofuels, world oil prices at nearly $100 a barrel and growing consumer demand in China and India pushed up the price of grain. Food riots occurred in many countries across the world in 2007 and 2008. In December 2007, 37 countries faced food crises, and 20 had imposed some sort of food-price controls. Geologist Dale Allen Pfeiffer claims that the coming decades could see spiraling food prices and massive starvation on a global level such as never experienced before.
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Localization (or localisation) describes a range of behaviors and processes that reflect the natural human tendency to come together and self-organize in the face of difficult conditions, such as the interruption or collapse of centralized services. In a contemporary context the term describes the intentional or reactive movement of individuals, communities, institutions, and societies toward ways of living or operating based on resilience, relationships, personal responsibility and environmental stewardship, as opposed to complete dependence on energy-intensive complex systems. These behavioral processes are a form of group action sufficiently organized to be described as a social movement.
The term is sometimes used to refer specifically to the transition of communities to environmentally sustainable modes of production, distribution, and consumption of goods and services, and to socially sustainable structures of ownership and governance. A key feature of localized communities is their emphasis upon resilience and adaptive capacity, namely increasing their capability to maintain social stability, material quality of life and environmental health in the face of economic shocks that arise from declining energy and resource availability.
Efforts to undertake localization, such as those of local food, buy local and Transition Towns, are often based on philosophies such as sustainable living, greening, downshifting and voluntary simplicity that prioritize social justice, environmental justice and ecological stewardship over economic growth. Localization efforts tend to reduce negative environmental consequences focus on reduction of the demand for consumer goods (eco-sufficiency) over improvement of net return on investment of material, energy and land use (eco-efficiency).
A number of schools of social and economic thought that tend to support localization, such as degrowth, steady state economics and anti consumerism, are actively critical of economic growth. Similarly, a number of religious belief systems and practices, such as Amish Mennonite church tradition of the anabaptist denomination of Christianity, ascetic sects of Bhuddism and Hinduism, and Jainism prescribe production and consumption behaviors that align with localization and discourage wealth maximization as a normative principle. It should be noted, however, that localization is not itself based on any single philosophy, religion or school of social, economic or political thought. Moreover, localization should not be construed as the opposite of globalization. Indeed, many of the achievements of globalization, such as the integration of national economies through trade, capital flows, migration and the spread of technology are deliberately preserved and developed by localization. While localization centers upon local communities, these communities are both self-reliant and mutually supportive, giving localization regional, national and international dimensions.
Localization is a process of social change that aims to build just, equitable and resilient communities that thrive within ecological limits. While many cultures, both past and present, prioritize resilience within ecological limits, localization as a social movement was developed in response to the specific threats of peak oil and climate change. Key among the movement's goals is to show how people may improve their quality of life while also consuming substantially less energy.
Localization is a process of socioeconomic adaptation pointing toward localities. The details of that process, and to what it is adapting, are the subject of significant academic debate. The possibility of a significant decrease in available energy and material in the coming decades means that such debate is prudent, given the importance of identifying the implications of such a drop and planning for transition. As a process of adaptation, localization encompasses a range of possible trajectories of economic downshift. These trajectories are predicated upon a set of premises, and predict a range of probable outcomes.
In 1751 Benjamin Franklin wrote Observations Concerning the Increase of Mankind, Peopling of Countries, etc., in which he observed:
|“||There is ... no Bound to the prolific Nature of Plants or Animals, but what is made by their crowding and interfering with each other's Means of Subsistence.||”|
This work influenced Reverend Thomas Robert Malthus, who went on to write An Essay on the Principle of Population in 1798, in which he observed:
|“||The power of population is indefinitely greater than the power in the earth to produce subsistence for man."||”|
Although Malthus is commonly credited with first raising doubts about the long run prospects for continuous growth in the industrial age, although his essay was just one among a number of 18th and 19th Century writings that were together early harbingers of thinking that would later become codified within the fields of systems dynamics, complex systems science, and ecological economics.
The Limits To Growth, a book by Donella H. Meadows, Dennis L. Meadows, Jørgen Randers, and William W. Behrens III commissioned by the Club of Rome first brought widespread attention to the ecological limits that the Earth's biophysical systems place upon economic growth in 1972. An updated version entitled Limits to Growth: The 30-Year Update was published in 2004. Contemporary researchers published other important works on the theme of biophysical limits to economic growth, including M. King Hubbert who first articulated the concept of peak oil with what is now known as Hubbert Peak Theory in 1974, and Herman Daly who pioneered steady state economics with his book of the same name in 1977.
The Limits to Growth points out that if the rate of resource use is increasing, the amount of reserves cannot be calculated by simply taking the current known reserves and dividing by the current yearly usage, as is typically done to obtain a static index. The authors use the example of chromium, whose reserves in 1972 were 775 million metric tons and of which 1.85 million metric tons were mined annually. The static index is 775 / 1.85 = 418 years, but the rate of chromium consumption was growing at 2.6% annually. If instead of assuming a constant rate of usage, the assumption of a constant rate of growth of 2.6% annually is made, the resource will instead last
In general, the formula for calculating the amount of time left for a resource with constant consumption growth is :
The authors list a number of similar exponential indices comparing current reserves to current reserves multiplied by a factor of five:
|Resource||Consumption growth rate, annual||Static index||Exponential index||5 times reserves exponential index|
Static reserve estimates generally assume that the usage is constant, while exponential reserve estimates generally assume that the rate of exponential growth is constant. It should be noted that extraction rates vary among different resources. Oil reserves, for example, becomes more difficult and more expensive to extract as supplies diminish; the difficulty and cost of extracting timber, by contrast, may remain constant up until the moment the last tree is felled. Despite these differences among resources, the exponential index has often been interpreted as a prediction of the number of years until the world would "run out" of various resources, both by environmentalist groups calling for greater conservation and restrictions on use, and by skeptics criticizing the index when supplies failed to run out. For example, The Skeptical Environmentalist states: "The Limits to Growth showed us that we would have run out of oil before 1992." What The Limits to Growth actually has is the above table, which has the current reserves (that is no new sources of oil are found) for oil running out in 1992 assuming constant exponential growth.
Steady state economics, sometimes also called full-world economics, is predicated on the assertion that economic growth has limits. Biophysical components of an economy such as natural resources, human populations, and stocks of human-built capital, are constrained by the laws of physics and cannot be uncoupled from ecological systems. It should be noted, however, that some non-physical components of an economy such as knowledge may have the potential grow indefinitely. An economy could reach a steady state after a period of growth or after a period of downsizing or degrowth. Most normative steady state ecnomics theory aims to establish human social structure and economy at a sustainable scale that does not exceed ecological limits. Economists typically use gross domestic product or GDP to measure the size of an economy in US dollars or some other monetary unit. Real GDP – that is, GDP adjusted for inflation – in a steady state economy remains reasonably stable, neither growing nor contracting from year to year. Herman Daly, one of the founders of the field of ecological economics defines a steady state economy as:
...an economy with constant stocks of people and artifacts, maintained at some desired, sufficient levels by low rates of maintenance "throughput", that is, by the lowest feasible flows of matter and energy from the first stage of production to the last stage of consumption."
The idea of economic throughput is explored in detail in the management philosophy known as Theory of Constraints, which draws heavily upon systems dynamics. In the context of ecological economics and steady state economics, throughput applies to flows of natural capital. A key principle of ecological sustainability is that these flows cannot exceed natural capital's rate of regeneration. This is an application of the investment concept of leaving the principal sum intact in perpetuity, more commonly understood as living off of the interest that a stock of capital stock yields. In the case of natural capital, the interest is the ecological yield that can be extracted without reducing the base of natural capital itself. This is known as the sustainable yield, and is the surplus required to maintain the ecosystem services provided by natural resources at the same or increasing level over time.
Herman Daly has suggested three broad criteria for ecological sustainability:
The work of Herman Daly and others, including Kenneth E. Boulding, Nicholas Georgescu-Roegen, Robert Costanza, founded the field of ecological economics, a transdisciplinary field of academic research that aims to address the interdependence and coevolution of human economies and natural ecosystems over time and space. It is distinguished from environmental economics, which is the mainstream economic analysis of the environment, by its treatment of the economy as a subsystem of the ecosystem and its emphasis upon preserving natural capital.
According to ecological economist Malte Faber, ecological economics is defined by its focus on nature, justice, and time. Issues of intergenerational equity, irreversibility of environmental change, uncertainty of long-term outcomes, and sustainable development guide ecological economic analysis and valuation. Ecological economists have questioned fundamental mainstream economic approaches such as cost-benefit analysis, and the separability of economic values from scientific research, contending that economics is unavoidably normative rather than positive (empirical). Positional analysis, which attempts to incorporate time and justice issues, is proposed as an alternative.
Ecological economics includes the study of the metabolism of society, that is, the study of the flows of energy and materials that enter and exit the economic system. This subfield is also called biophysical economics, sometimes referred to also as bioeconomics, and is based on a conceptual model of the economy connected to, and sustained by, a flow of energy, materials, and ecosystem services.
Metrics such as ecological footprint, carbon footprint and water footprint are measures (typically using global hectares as units) of how much natural capital a human population requires to produce and consume its goods and services, as well as to absorb its wastes, using prevailing technology. The Global Footprint Network calculates the world's ecological footprint to be the equivalent of 1.3 planets meaning that human economies are consuming 30% more resources than the Earth can regenerate each year.
Localization is premised on the findings of ecological accounting which suggest that economic growth is depleting resources at a rate that cannot be maintained in perpetuity, and that such growth must therefore be constrained by ecological limits.
Since fossil fuels are a non-renewable resource, increasing demand against a finite supply must eventually result in a peak in production and consequent reduction in available supply. According to supply and demand dynamics, the price of fossil fuels will rise as they become scarcer. Fossil fuels inlclude crude oil, coal, natural gas, tar sands, oil shale and methane clathrates. Of these, the peaking of petroleum derived from crude oil, known as peak oil has been the subject of significant study.
Peak oil is the point in time when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline. The concept is based on the observed production rates of individual oil wells, and the combined production rate of a field of related oil wells. The aggregate production rate from an oil field over time usually grows exponentially until the rate peaks and then declines—sometimes rapidly—until the field is depleted. The concept of peak oil is derived from the Hubbert curve, and has been shown to be applicable to the sum of a nation’s domestic production rate, and is similarly applied to the global rate of petroleum production.
Peak oil is often confused with oil depletion; peak oil is the point of maximum production, while depletion refers to a period of falling reserves and supply. M. King Hubbert created and first used the models behind peak oil in 1956 to accurately predict that United States oil production would peak between 1965 and 1970. His logistic model, now called Hubbert peak theory, and its variants have described with reasonable accuracy the peak and decline of production from oil wells, fields, regions, and countries,
Decreasing supply is not the only factor that will affect the price of fossil fuels and therefore energy. The production cost of fossil fuels will continue to rise as cheap, easily accessible deposits are consumed and producers turn to less economical sources. The energy used in fossil fuel production is itself a key production cost, and as this positive feedback loop is likely to cause prices to rise exponentially over time.
The cost of energy in the production of fossil fuels and other energy sources is described as Energy Returned on Energy Invested (EROEI) or as net energy gain. Analogous to financial return on investment (ROI), where money must be expended in order to make a financial profit, EROEI describes how much energy must be expended in order to realize an energy "profit”.
The available energy "profit" described by EROEI in energy economics reflects the underlying thermodynamic reality. In a thermodynamic system, the energy that is available to be used is known as exergy, or available energy. Exergy is defined as the maximum useful work possible during a process that brings the system into equilibrium with its surroundings.
Modern industrial societies and the global economy that connects them are based not only on inexpensive energy derrived from fossil fuels, but on energy sources with an EROEI ratio of 10:1 or higher.
Efficiency gains from technological advances are unlikely to halt the depletion of non-renewable resources. The Khazzoom–Brookes postulate states that "energy efficiency improvements that, on the broadest considerations, are economically justified at the microlevel, lead to higher levels of energy consumption at the macrolevel." This idea is a more modern analysis of a phenomenon known as the Jevons Paradox. In 1865, William Stanley Jevons observed that England's consumption of coal increased considerably after James Watt introduced his improvements to the steam engine. Jevons argued that increased efficiency in the use of coal would tend to increase the demand for coal, and would not reduce the rate at which England's deposits of coal were running out.
Like Jevons Paradox, the Khazzoom-Brookes Postulate is a deduction that is largely counter-intuitive as an efficiency paradox. When individuals change behavior and begin to use methods and devices that are more energy efficient, there are cases where, on a macro-economic level, energy usage actually increases. This result is known as the rebound effect (or take-back effect) and refers to the behavioral or other systemic responses to the introduction of new technologies, or other measures taken to reduce resource use. These responses tend to offset the beneficial effects of the new technology or other measures taken. Energy efficiency gains, for example, can increase energy consumption in several ways:
Cars that use less fuel, for example, are likely to cause increases travel activities rather than a decrease in energy demand because they make travel itself cheaper.
The rebound effect is generally expressed as a ratio of the lost benefit compared to the expected environmental benefit when holding consumption constant. For example, a 5% improvement in vehicle fuel efficiency results in only a 2% drop in fuel use, there is a 60% rebound effect. The 'missing' 3% might have been consumed by driving faster or further than before. The existence of the rebound effect is uncontroversial. However, debate continues as to the size and importance of the effect in real world situations. Suburban development limited by water use, for example, can be increased if the houses adopt water efficiency measures that cut their water demand in half, but this will not result in a direct doubling of development.
Localization efforts generally attempt to avoid Jevons Paradox and the Rebound Effect by focusing on reduction of demand for consumer goods (eco-sufficiency) instead of improvement of net return on investment of material, energy and land use (eco-efficiency).
Cheap, easily accessible oil is only one example of a limited resource whose production rate will peak. According to the Hubbert model, the production rate of most non-renewable resources will follow a roughly symmetrical bell-shaped curve based on the limits of exploitability and market pressures. Various modified versions of his original logistic model are used, using more complex functions to allow for real world factors. While each version is applied to a specific domain, the central features of the Hubbert curve (that production stops rising and then declines) remain unchanged, albeit with different profiles. Examples of non-renewable resources subject to production peaks include natural gas, coal, uranium, copper, lithium, helium, phosphorus, precious metals, rare earth elements and water.
According to David L. Goodstein, the worldwide rate of discovery peaked around 1960 and has been declining ever since. Exxon Mobil Vice President, Harry J. Longwell places the peak of global gas discovery around 1970 and has observed a sharp decline in natural gas discovery rates since then. The rate of discovery has fallen below the rate of consumption in 1980. The gap has been widening ever since. Declining gas discovery rates foreshadow future production decline rates because gas production can only follow gas discoveries.
Dr. Anthony Hayward CCMI, chief executive of BP stated in October 2009 that proven natural gas reserves around the world have risen to 1.2 trillion barrels of oil equivalent, enough for 60 years' supply and that gas reserves are trending upward. This is the same situation as with oil reserves, we have higher oil reserves than ever, but worldwide discoveries are declining and consumption is going up. Even if new techniques such as coalbed methane extraction yield additional discoveries of natural gas, the EROEI is likely to be lower than traditional gas sources.
Peak coal is significantly further out than peak oil, but we can observe the example of anthracite in the USA, a high grade coal whose production peaked in the 1920s. Anthracite was studied by Hubbert, and matches a curve closely. Pennsylvania's coal production also matches Hubbert's curve closely, but this does not mean that coal in Pennsylvania is exhausted—far from it. If production in Pennsylvania returned at its all time high, there are reserves for 190 years.
Recent estimates suggest an peak in coal during this century: Coal: Resources and Future Production, published on April 5, 2007 by the Energy Watch Group (EWG) found that global coal production could peak in as few as 15 years. Reporting on this Richard Heinberg also notes that the date of peak annual energetic extraction from coal will likely come earlier than the date of peak in quantity of coal (tons per year) extracted as the most energy-dense types of coal have been mined most extensively. A second study, The Future of Coal by B. Kavalov and S. D. Peteves of the Institute for Energy (IFE), prepared for European Commission Joint Research Centre, reaches similar conclusions, stating that, "coal might not be so abundant, widely available and reliable as an energy source in the future."
Work by David Rutledge of Caltech predicts that the total of world coal production will amount to only about 450 gigatonnes. This implies that coal is running out faster than usually assumed. Moreover, as we approach and pass global peak oil and peak gas, any increase in coal production per annum to compensate for declines in oil or natural gas production are likely to drive the arrival date of peak coal forward.
In a paper in 1956, after a review of US fissionable reserves, Hubbert notes of nuclear power:
|“||There is promise, however, provided mankind can solve its international problems and not destroy itself with nuclear weapons, and provided world population (which is now expanding at such a rate as to double in less than a century) can somehow be brought under control, that we may at last have found an energy supply adequate for our needs for at least the next few centuries of the "foreseeable future."||”|
Technologies such as the thorium fuel cycle, reprocessing and fast breeders can, in theory, considerably extend the life of uranium reserves. Roscoe Bartlett claims:
|“||Our current throwaway nuclear cycle uses up the world reserve of low-cost uranium in about 20 years.||”|
According to Caltech physics professor David Goodstein:
|“||... you would have to build 10,000 of the largest power plants that are feasible by engineering standards in order to replace the 10 terawatts of fossil fuel we're burning today ... that's a staggering amount and if you did that, the known reserves of uranium would last for 10 to 20 years at that burn rate. So, it's at best a bridging technology ... You can use the rest of the uranium to breed plutonium 239 then we'd have at least 100 times as much fuel to use. But that means you're making plutonium, which is an extremely dangerous thing to do in the dangerous world that we live in.||”|
Almost all helium on Earth is a result of radioactive decay of uranium and thorium. Helium is extracted by fractional distillation from natural gas, which contains up to 7% helium. The world's largest helium-rich natural gas fields are found in the United States, especially in the Hugoton and nearby gas fields in Kansas, Oklahoma, and Texas. The extracted helium is stored underground in the National Helium Reserve near Amarillo, Texas, the self-proclaimed "Helium Capital of the World". Helium production is expected to decline along with natural gas production in these areas. According to Lee Sobotka, Ph.D., professor of chemistry and physics in Arts & Sciences at Washington University in St. Louis:
|“||When we use what has been made over the approximate 4.5 billion of years the Earth has been around, we will run out. We cannot get too significant quantities of helium from the sun — which can be viewed as a helium factory 93 million miles away — nor will we ever produce helium in anywhere near the quantities we need from Earth-bound factories. Helium could eventually be produced directly in nuclear fusion reactors and is produced indirectly in nuclear fission reactors, but the quantities produced by such sources are dwarfed by our needs.||”|
Helium is the second-lightest chemical element in the Universe, causing it to rise to the upper layers of Earth's atmosphere. Helium atoms are so light that the Earth's gravity field is simply not strong enough to trap helium in the atmosphere and it dissipates slowly into space and is lost forever.
Hubbert applied his theory to "rock containing an abnormally high concentration of a given metal" and reasoned that the peak production for metals such as copper, tin, lead, zinc and others would occur in the time frame of decades and iron in the time frame of two centuries like coal. The price of copper rose 500% between 2003 and 2007 was by some attributed to peak copper. Copper prices later fell, along with many other commodities and stock prices, as demand shrank from fear of a global recession. Globally, economic copper resources are being depleted with the equivalent production of three world-class copper mines being consumed annually. Environmental analyst Lester Brown has suggested copper might run out within 25 years based on what he considered a reasonable extrapolation of 2% growth per year.Lithium availability is a concern for a fleet of Li-ion battery using cars but a paper published in 1996 estimated that world reserves are adequate for at least 50 years. A similar prediction for platinum use in fuel cells notes that the metal could be easily recycled.
The possibility of peak gold has emerged recently . Aaron Regent, President of the Canadian gold giant Barrak said that global output has been falling by roughly 1m ounces a year since the start of the decade.
The total global mine supply has dropped by 10pc as ore quality erodes, implying that the roaring bull market of the last eight years may have further to run. "There is a strong case to be made that we are already at 'peak gold'," he told The Daily Telegraph at the RBC's annual gold conference in London. "Production peaked around 2000 and it has been in decline ever since, and we forecast that decline to continue. It is increasingly difficult to find ore," he said.
Ore grades have fallen from around 12 grams per tonne in 1950 to nearer 3 grams in the US, Canada, and Australia. South Africa's output has halved since peaking in 1970. Output fell a further 14pc in South Africa in 2008 as companies were forced to dig ever deeper - at greater cost - to replace depleted reserves.
Phosphorus supplies are essential to farming and depletion of reserves is estimated at somewhere from 60 to 130 years. According to a recent study, the total reserves of phosphorus is estimated to approximately 3,200 MT, with a peak production at 28 MT/year in 2034. Individual countries' supplies vary widely; without a recycling initiative America's supply is estimated around 30 years. Phosphorus supplies affect total agricultural output which in turn limits alternative fuels such as biodiesel and corn ethanol. Its increasing price and scarcety (global price of rock phosphate rose 8-fold in the 2 years to mid 2008) should change global agricultural patterns. Lands, perceived as marginal because of remoteness, but with very high P content, like in the Gran Chaco may get more into focus of agriculturists, while other marginal farming areas, where nutrients are a constraint, may drop below the line of profitability.
Hubbert's original analysis did not apply to renewable resources. However, over-exploitation often results in a Hubbert peak nonetheless. A modified Hubbert curve applies to any resource that can be harvested faster than it can be replaced.
For example, a reserve such as the Ogallala Aquifer can be mined at a rate that far exceeds replenishment. This turns much of the world's underground water and lakes into finite resources with peak usage debates similar to oil. These debates usually center around agriculture and suburban water usage but generation of electricity from nuclear energy or coal and tar sands mining mentioned above is also water resource intensive. The term fossil water is sometimes used to describe aquifers whose water is not being recharged.
Humankind benefits from a multitude of resources and processes that are supplied by natural ecosystems. Collectively, these benefits are known as ecosystem services and include products like clean drinking water and processes such as the decomposition of wastes. Recognition of how ecosystems could provide more complex services to mankind date back to at least Plato (c. 400 BC) who understood that deforestation could lead to soil erosion and the drying of springs  And while modern scientists and environmentalists have discussed ecosystem services for decades, these services were popularized and their definitions formalized by the United Nations 2004 Millennium Ecosystem Assessment, a four-year study involving more than 1,300 scientists worldwide. This grouped ecosystem services into four broad categories: provisioning, such as the production of food and water; regulating, such as the control of climate and disease; supporting, such as nutrient cycles and crop pollination; and cultural, such as spiritual and recreational benefits.
As human populations grow, so do the resource demands imposed on ecosystems and the impacts of our global footprint. Natural resources are not invulnerable and infinitely available. The environmental impacts of anthropogenic actions, which are processes or materials derived from human activities, are becoming more apparent – air and water quality are increasingly compromised, oceans are being over-fished, pests and diseases are extending beyond their historical boundaries, deforestation is eliminating flood control around human settlements. It has been reported that approximately 40-50% of Earth’s ice-free land surface has been heavily transformed or degraded by anthropogenic activities, 66% of marine fisheries are either overexploited or at their limit, atmospheric CO2 has increased more than 30% since the advent of industrialization, and nearly 25% of Earth’s bird species have gone extinct in the last two thousand years . Consequently, society is coming to realize that ecosystem services are not only threatened and limited, but that the pressure to evaluate trade-offs between immediate and long-term human needs is urgent.
Not all non-renewable resources exhibit a slow decline after peaking. As in the aforemention example of timber, or as in the case of Atlantic Cod fisheries, exponential growth of resource extraction may be transition abruptly to Collapse_(structural) of ecosystem services.
Cod of the North Sea are similarly subject to production peaks and possibly abrupt collapses. At least one researcher has attempted to perform Hubbert linearization on the whaling industry, as well as charting the price of caviar with sturgeon depletion.
Despite their immense size, the atmosphere and oceans of the Earth do not have a limitless capacity to absorb human wastes. Carbon emissions from fossil fuel use and deforestation have resulted in global warming and ocean acidification as carbon has been absorbed by the atmosphere and oceans respectively. Our solid waste has contaminated the water resources and ecosystems upon which we depend, both at local levels in the case of water pollution and at a global scale in the case of the gigantic Pacific Trash Vortex. Population and economic growth will only accelerate the depletion of Earth's finite waste sinks.
The cost of pollution, once virtually negligible, will contibute to rise as atmospheric, oceanic, land and groundwater waste sinks are depleted or contaminated.
Based on the premises outlined above, it is probable that the future will involve highly localized social organization, constrained mobility, and a decentralized settlement pattern.
With the decline of inexpensive energy, the cost of most forms of transportation will rise. This will in turn contrain the mobility of goods and people. Contrained mobility is in turn likely to lead to decentralization as the cost of institutional functions such as production, governance and trade rises along with the cost of transportation.
However, while everyday life may be less affluent than that of the present, well-being may be greater.
The Danish island of Samsø, home to a North Sea community of 43,000, has made a shift from fossil fuels to renewable sources in a span of less than 10 years. Samsø was previously dependent upon energy imported from the Denmark mainland, but it's energy resilience program has been so successful that renewable energy sources not only generated enough power for entire island but produce a ten percent surplus that is exported to the mainland. Samsø's primary renewable energy resource is offshore wind. Solar power, solar collectors for heating hot water, and biofuels are secondary sources. Wind turbines are purchased and owned collectively and yield annual dividends from the surplus energy they produce. Samsø's renewable energy initiatives began with an individual engineer winning a government contest and has become an well-known sustainable living success story.
The term embedded liberalism refers to the economic system which dominated worldwide from the end of World War II to the 1970s. David Harvey argues that at the end of World War II, the primary objective was to develop an economic plan that would not lead to a repeat of the Great Depression during the 1930s. Harvey notes that under this new system free trade was regulated "under a system of fixed exchange rates anchored by the US dollar's convertibility into gold at a fixed price. Fixed exchange rates were incompatible with free flows of capital." Harvey argues that embedded liberalism led to the surge of economic prosperity which came to define the 1950s and 1960s.
Across much of the world, the work of John Maynard Keynes, which sought to formulate the means by which governments could stabilize and fine-tune free markets, became a highly influential approach. Within the developing world, several developments – among them decolonization, a desire for national independence and the destruction of the pre-war global economy, and the view that countries could not effectively industrialize under free market systems (e.g., the Prebisch-Singer hypothesis) – encouraged economic policies that were influenced by communist, socialist and import substitution precepts.
The period of government interventionism in the 1950s and 1960s was characterized by exceptional economic prosperity, as economic growth was generally high, was contained, and economic distribution was comparatively equalized. This era is known as les Trente Glorieuses ("The Glorious Thirty [years]") or "Golden Age", a reference to many countries having experienced particularly high levels of prosperity between (roughly) World War II and 1973.
David Harvey notes that the system of embedded liberalism began to crack[neutrality is disputed] beginning towards the end of the 1960s. The 1970s were defined by an increased accumulation of capital, unemployment, inflation (or stagflation as it was dubbed), and a variety of fiscal crises. He notes that "the embedded liberalism that had delivered high rates of growth to at least the advanced capitalist countries after 1945 was clearly exhausted and no longer working." A number of theories concerning new systems began to develop, which led to extensive debate between those who advocated "social democracy and central planning on the one hand" and those "concerned with liberating corporate and business power and re-establishing market freedoms on the other. Harvey notes that by 1980, the latter group had emerged as the leader, advocating and creating a global economic system that would become known as neoliberalism.
Some argue that the strains which
occurred were located in the international
and culminated in the dissolution of the Bretton Woods system, which some
argue had set the stage for the Stagflation
crisis that would, to some extent, discredit Keynesianism
in the English-speaking world. In addition, some argue that the postwar
economic system was premised on a society that excluded women and
minorities from economic opportunities, and the political and economic
integration given to these groups strained the postwar system.
||This article is missing citations or needs footnotes. Please help add inline citations to guard against copyright violations and factual inaccuracies. (November 2007)|
A cornucopian is a futurist who believes that continued progress and provision of material items for mankind can be met by similarly continued advances in technology. Fundamentally they believe that there is enough matter and energy on the Earth to provide for the estimated peak population of about 9.5 billion in 2050. However, this would imply there is already enough for the current world population, but as starvation and fuel poverty have not yet been eradicated, the argument therefore is that the problem is not a lack of resources but rather inadequate distribution through the current economic and political systems. Looking further into the future they posit that the abundance of matter and energy in space would appear to give humanity almost unlimited room for growth.
The term comes from the cornucopia, the "horn of plenty" of Greek mythology, which magically supplied its owners with endless food and drink. The cornucopians are sometimes known as "Boomsters", and their philosophic opponents—Malthus and his school—are called "Doomsters" or "Doomers."
Cornucopian theory, as formulated by Julian L. Simon in the 1981 The Ultimate Resource, acknowledges that greater consumption is due to an increase in population, which heightens scarcity and induces price increases, at least in the short run. Higher prices create an opportunity, however, which leads inventors and businesses to seek new ways to satisfy the shortages. A few inventors and businesses eventually succeed, and finally society ends up better off than if the original shortage problems had never arisen. As population grows, the stock of useful knowledge grows as well. Cornucopians assert that the basic forces influencing the state of humanity and its progress are not due to inherent limitations caused by the finite amount of natural resources, but by (a) the number of people who are alive to consume and produce goods and knowledge and (b) the level of wealth. Under this economic philosophy, wealth is more than the amount of tangible assets. The extent of wealth depends upon the level of technology and the ability to create new knowledge. As a society becomes more wealthy, it creates a well-developed set of legal rules to produce the conditions of freedom and security that progress requires.
Stereotypically, a cornucopian is someone who posits that there are few intractable natural limits to growth and believes the world can provide a practically limitless abundance of natural resources. The label 'cornucopian' is rarely self-applied, and is most commonly used derogatorily by those who believe that the target is overly optimistic about the resources that will be available in the future.
One common example of this labeling is by those who are skeptical of the view that technology can solve, or overcome, the problem of an exponentially-increasing human population living off a finite base of natural resources. So-called cornucopians might counter that human population growth has slowed dramatically, and not only is currently growing at a linear rate, but is projected to peak and start declining later this century.
In practice, the cornucopian view relies upon the economic law of supply and demand, which has the following implication: as long as the price of a good is free to adjust, all consumers who wish to purchase the good at the going price are able to do so. Resources do not run out, they simply become more expensive. Although another viewpoint is the post scarcity model which moves beyond conventional economics - and indeed cannot be adequately described by usual economic models which are based on the notion of scarcity.
In the "peak oil" debate, the views of those labeled as cornucopian are very diverse, ranging from the simplistic "we will never run out of oil" to pessimistic views such as "we might transition to alternatives fast enough to barely avoid the collapse of civilization". The spectrum is broad enough that some who are characterized as cornucopians by doomers might be characterized as peakniks or even doomers by other cornucopians. A typical cornucopian view might be characterized as "there exist viable solutions to the problem of peak oil" or "there is oil for at least 800 years".