The Long Emergency

What's going to happen as we start running out of cheap gas to guzzle?
By JAMES HOWARD KUNSTLER

A few weeks ago, the price of oil ratcheted above fifty-five dollars a barrel, which is about twenty dollars a barrel more than a year ago. The next day, the oil story was buried on page six of the New York Times business section. Apparently, the price of oil is not considered significant news, even when it goes up five bucks a barrel in the span of ten days. That same day, the stock market shot up more than a hundred points because, CNN said, government data showed no signs of inflation. Note to clueless nation: Call planet Earth.

Carl Jung, one of the fathers of psychology, famously remarked that "people cannot stand too much reality." What you're about to read may challenge your assumptions about the kind of world we live in, and especially the kind of world into which events are propelling us. We are in for a rough ride through uncharted territory.
It has been very hard for Americans -- lost in dark raptures of nonstop infotainment, recreational shopping and compulsive motoring -- to make sense of the gathering forces that will fundamentally alter the terms of everyday life in our technological society. Even after the terrorist attacks of 9/11, America is still sleepwalking into the future. I call this coming time the Long Emergency.

Most immediately we face the end of the cheap-fossil-fuel era. It is no exaggeration to state that reliable supplies of cheap oil and natural gas underlie everything we identify as the necessities of modern life -- not to mention all of its comforts and luxuries: central heating, air conditioning, cars, airplanes, electric lights, inexpensive clothing, recorded music, movies, hip-replacement surgery, national defense -- you name it.

The few Americans who are even aware that there is a gathering global-energy predicament usually misunderstand the core of the argument. That argument states that we don't have to run out of oil to start having severe problems with industrial civilization and its dependent systems. We only have to slip over the all-time production peak and begin a slide down the arc of steady depletion.

The term "global oil-production peak" means that a turning point will come when the world produces the most oil it will ever produce in a given year and, after that, yearly production will inexorably decline. It is usually represented graphically in a bell curve. The peak is the top of the curve, the halfway point of the world's all-time total endowment, meaning half the world's oil will be left. That seems like a lot of oil, and it is, but there's a big catch: It's the half that is much more difficult to extract, far more costly to get, of much poorer quality and located mostly in places where the people hate us. A substantial amount of it will never be extracted.

The United States passed its own oil peak -- about 11 million barrels a day -- in 1970, and since then production has dropped steadily. In 2004 it ran just above 5 million barrels a day (we get a tad more from natural-gas condensates). Yet we consume roughly 20 million barrels a day now. That means we have to import about two-thirds of our oil, and the ratio will continue to worsen.

The U.S. peak in 1970 brought on a portentous change in geoeconomic power. Within a few years, foreign producers, chiefly OPEC, were setting the price of oil, and this in turn led to the oil crises of the 1970s. In response, frantic development of non-OPEC oil, especially the North Sea fields of England and Norway, essentially saved the West's ass for about two decades. Since 1999, these fields have entered depletion. Meanwhile, worldwide discovery of new oil has steadily declined to insignificant levels in 2003 and 2004.

Some "cornucopians" claim that the Earth has something like a creamy nougat center of "abiotic" oil that will naturally replenish the great oil fields of the world. The facts speak differently. There has been no replacement whatsoever of oil already extracted from the fields of America or any other place.

Now we are faced with the global oil-production peak. The best estimates of when this will actually happen have been somewhere between now and 2010. In 2004, however, after demand from burgeoning China and India shot up, and revelations that Shell Oil wildly misstated its reserves, and Saudi Arabia proved incapable of goosing up its production despite promises to do so, the most knowledgeable experts revised their predictions and now concur that 2005 is apt to be the year of all-time global peak production.

It will change everything about how we live.
To aggravate matters, American natural-gas production is also declining, at five percent a year, despite frenetic new drilling, and with the potential of much steeper declines ahead. Because of the oil crises of the 1970s, the nuclear-plant disasters at Three Mile Island and Chernobyl and the acid-rain problem, the U.S. chose to make gas its first choice for electric-power generation. The result was that just about every power plant built after 1980 has to run on gas. Half the homes in America are heated with gas. To further complicate matters, gas isn't easy to import.

Here in North America, it is distributed through a vast pipeline network. Gas imported from overseas would have to be compressed at minus-260 degrees Fahrenheit in pressurized tanker ships and unloaded (re-gasified) at special terminals, of which few exist in America. Moreover, the first attempts to site new terminals have met furious opposition because they are such ripe targets for terrorism.

Some other things about the global energy predicament are poorly understood by the public and even our leaders. This is going to be a permanent energy crisis, and these energy problems will synergize with the disruptions of climate change, epidemic disease and population overshoot to produce higher orders of trouble.

We will have to accommodate ourselves to fundamentally changed conditions.
No combination of alternative fuels will allow us to run American life the way we have been used to running it, or even a substantial fraction of it. The wonders of steady technological progress achieved through the reign of cheap oil have lulled us into a kind of Jiminy Cricket syndrome, leading many Americans to believe that anything we wish for hard enough will come true. These days, even people who ought to know better are wishing ardently for a seamless transition from fossil fuels to their putative replacements.

The widely touted "hydrogen economy" is a particularly cruel hoax. We are not going to replace the U.S. automobile and truck fleet with vehicles run on fuel cells. For one thing, the current generation of fuel cells is largely designed to run on hydrogen obtained from natural gas. The other way to get hydrogen in the quantities wished for would be electrolysis of water using power from hundreds of nuclear plants. Apart from the dim prospect of our building that many nuclear plants soon enough, there are also numerous severe problems with hydrogen's nature as an element that present forbidding obstacles to its use as a replacement for oil and gas, especially in storage and transport.

Wishful notions about rescuing our way of life with "renewables" are also unrealistic. Solar-electric systems and wind turbines face not only the enormous problem of scale but the fact that the components require substantial amounts of energy to manufacture and the probability that they can't be manufactured at all without the underlying support platform of a fossil-fuel economy. We will surely use solar and wind technology to generate some electricity for a period ahead but probably at a very local and small scale.
Virtually all "biomass" schemes for using plants to create liquid fuels cannot be scaled up to even a fraction of the level at which things are currently run. What's more, these schemes are predicated on using oil and gas "inputs" (fertilizers, weed-killers) to grow the biomass crops that would be converted into ethanol or bio-diesel fuels. This is a net energy loser -- you might as well just burn the inputs and not bother with the biomass products. Proposals to distill trash and waste into oil by means of thermal depolymerization depend on the huge waste stream produced by a cheap oil and gas economy in the first place.
Coal is far less versatile than oil and gas, extant in less abundant supplies than many people assume and fraught with huge ecological drawbacks -- as a contributor to greenhouse "global warming" gases and many health and toxicity issues ranging from widespread mercury poisoning to acid rain. You can make synthetic oil from coal, but the only time this was tried on a large scale was by the Nazis under wartime conditions, using impressive amounts of slave labor.
If we wish to keep the lights on in America after 2020, we may indeed have to resort to nuclear power, with all its practical problems and eco-conundrums. Under optimal conditions, it could take ten years to get a new generation of nuclear power plants into operation, and the price may be beyond our means. Uranium is also a resource in finite supply. We are no closer to the more difficult project of atomic fusion, by the way, than we were in the 1970s.
The upshot of all this is that we are entering a historical period of potentially great instability, turbulence and hardship. Obviously, geopolitical maneuvering around the world's richest energy regions has already led to war and promises more international military conflict. Since the Middle East contains two-thirds of the world's remaining oil supplies, the U.S. has attempted desperately to stabilize the region by, in effect, opening a big police station in Iraq. The intent was not just to secure Iraq's oil but to modify and influence the behavior of neighboring states around the Persian Gulf, especially Iran and Saudi Arabia. The results have been far from entirely positive, and our future prospects in that part of the world are not something we can feel altogether confident about.

And then there is the issue of China, which, in 2004, became the world's second-greatest consumer of oil, surpassing Japan. China's surging industrial growth has made it increasingly dependent on the imports we are counting on. If China wanted to, it could easily walk into some of these places -- the Middle East, former Soviet republics in central Asia -- and extend its hegemony by force. Is America prepared to contest for this oil in an Asian land war with the Chinese army? I doubt it. Nor can the U.S. military occupy regions of the Eastern Hemisphere indefinitely, or hope to secure either the terrain or the oil infrastructure of one distant, unfriendly country after another.

A likely scenario is that the U.S. could exhaust and bankrupt itself trying to do this, and be forced to withdraw back into our own hemisphere, having lost access to most of the world's remaining oil in the process.

We know that our national leaders are hardly uninformed about this predicament. President George W. Bush has been briefed on the dangers of the oil-peak situation as long ago as before the 2000 election and repeatedly since then. In March, the Department of Energy released a report that officially acknowledges for the first time that peak oil is for real and states plainly that "the world has never faced a problem like this. Without massive mitigation more than a decade before the fact, the problem will be pervasive and will not be temporary."

Most of all, the Long Emergency will require us to make other arrangements for the way we live in the United States. America is in a special predicament due to a set of unfortunate choices we made as a society in the twentieth century. Perhaps the worst was to let our towns and cities rot away and to replace them with suburbia, which had the additional side effect of trashing a lot of the best farmland in America.

Suburbia will come to be regarded as the greatest misallocation of resources in the history of the world. It has a tragic destiny. The psychology of previous investment suggests that we will defend our drive-in utopia long after it has become a terrible liability.

Before long, the suburbs will fail us in practical terms. We made the ongoing development of housing subdivisions, highway strips, fried-food shacks and shopping malls the basis of our economy, and when we have to stop making more of those things, the bottom will fall out.

The circumstances of the Long Emergency will require us to downscale and re-scale virtually everything we do and how we do it, from the kind of communities we physically inhabit to the way we grow our food to the way we work and trade the products of our work. Our lives will become profoundly and intensely local. Daily life will be far less about mobility and much more about staying where you are.

Anything organized on the large scale, whether it is government or a corporate business enterprise such as Wal-Mart, will wither as the cheap energy props that support bigness fall away. The turbulence of the Long Emergency will produce a lot of economic losers, and many of these will be members of an angry and aggrieved former middle class.

Food production is going to be an enormous problem in the Long Emergency. As industrial agriculture fails due to a scarcity of oil- and gas-based inputs, we will certainly have to grow more of our food closer to where we live, and do it on a smaller scale. The American economy of the mid-twenty-first century may actually center on agriculture, not information, not high tech, not "services" like real estate sales or hawking cheeseburgers to tourists. Farming. This is no doubt a startling, radical idea, and it raises extremely difficult questions about the reallocation of land and the nature of work.

The relentless subdividing of land in the late twentieth century has destroyed the contiguity and integrity of the rural landscape in most places. The process of readjustment is apt to be disorderly and improvisational. Food production will necessarily be much more labor-intensive than it has been for decades. We can anticipate the re-formation of a native-born American farm-laboring class. It will be composed largely of the aforementioned economic losers who had to relinquish their grip on the American dream. These masses of disentitled people may enter into quasi-feudal social relations with those who own land in exchange for food and physical security. But their sense of grievance will remain fresh, and if mistreated they may simply seize that land.

The way that commerce is currently organized in America will not survive far into the Long Emergency. Wal-Mart's "warehouse on wheels" won't be such a bargain in a non-cheap-oil economy. The national chain stores' 12,000-mile manufacturing supply lines could easily be interrupted by military contests over oil and by internal conflict in the nations that have been supplying us with ultra-cheap manufactured goods, because they, too, will be struggling with similar issues of energy famine and all the disorders that go with it.

As these things occur, America will have to make other arrangements for the manufacture, distribution and sale of ordinary goods. They will probably be made on a "cottage industry" basis rather than the factory system we once had, since the scale of available energy will be much lower -- and we are not going to replay the twentieth century. Tens of thousands of the common products we enjoy today, from paints to pharmaceuticals, are made out of oil. They will become increasingly scarce or unavailable.

The selling of things will have to be reorganized at the local scale. It will have to be based on moving merchandise shorter distances. It is almost certain to result in higher costs for the things we buy and far fewer choices.

The automobile will be a diminished presence in our lives, to say the least. With gasoline in short supply, not to mention tax revenue, our roads will surely suffer. The interstate highway system is more delicate than the public realizes. If the "level of service" (as traffic engineers call it) is not maintained to the highest degree, problems multiply and escalate quickly. The system does not tolerate partial failure. The interstates are either in excellent condition, or they quickly fall apart.

America today has a railroad system that the Bulgarians would be ashamed of. Neither of the two major presidential candidates in 2004 mentioned railroads, but if we don't refurbish our rail system, then there may be no long-range travel or transport of goods at all a few decades from now. The commercial aviation industry, already on its knees financially, is likely to vanish. The sheer cost of maintaining gigantic airports may not justify the operation of a much-reduced air-travel fleet. Railroads are far more energy efficient than cars, trucks or airplanes, and they can be run on anything from wood to electricity. The rail-bed infrastructure is also far more economical to maintain than our highway network.

The successful regions in the twenty-first century will be the ones surrounded by viable farming hinterlands that can reconstitute locally sustainable economies on an armature of civic cohesion. Small towns and smaller cities have better prospects than the big cities, which will probably have to contract substantially. The process will be painful and tumultuous.
In many American cities, such as Cleveland, Detroit and St. Louis, that process is already well advanced. Others have further to fall. New York and Chicago face extraordinary difficulties, being oversupplied with gigantic buildings out of scale with the reality of declining energy supplies. Their former agricultural hinterlands have long been paved over. They will be encysted in a surrounding fabric of necrotic suburbia that will only amplify and reinforce the cities' problems.
Still, our cities occupy important sites. Some kind of urban entities will exist where they are in the future, but probably not the colossi of twentieth-century industrialism.

Some regions of the country will do better than others in the Long Emergency. The Southwest will suffer in proportion to the degree that it prospered during the cheap-oil blowout of the late twentieth century. I predict that Sunbelt states like Arizona and Nevada will become significantly depopulated, since the region will be short of water as well as gasoline and natural gas. Imagine Phoenix without cheap air conditioning.

I'm not optimistic about the Southeast, either, for different reasons. I think it will be subject to substantial levels of violence as the grievances of the formerly middle class boil over and collide with the delusions of Pentecostal Christian extremism. The latent encoded behavior of Southern culture includes an outsized notion of individualism and the belief that firearms ought to be used in the defense of it. This is a poor recipe for civic cohesion.

The Mountain States and Great Plains will face an array of problems, from poor farming potential to water shortages to population loss. The Pacific Northwest, New England and the Upper Midwest have somewhat better prospects. I regard them as less likely to fall into lawlessness, anarchy or despotism and more likely to salvage the bits and pieces of our best social traditions and keep them in operation at some level.

These are daunting and even dreadful prospects. The Long Emergency is going to be a tremendous trauma for the human race. We will not believe that this is happening to us, that 200 years of modernity can be brought to its knees by a world-wide power shortage. The survivors will have to cultivate a religion of hope -- that is, a deep and comprehensive belief that humanity is worth carrying on. If there is any positive side to stark changes coming our way, it may be in the benefits of close communal relations, of having to really work intimately (and physically) with our neighbors, to be part of an enterprise that really matters and to be fully engaged in meaningful social enactments instead of being merely entertained to avoid boredom. Years from now, when we hear singing at all, we will hear ourselves, and we will sing with our whole hearts.

Adapted from The Long Emergency, 2005, by James Howard Kunstler, and reprinted with permission of the publisher, Grove/Atlantic, Inc.

Don't Panic

Julian Darley: More news came in today, that I believe, all the anhydrous ammonia production plants in Minnesota I read today have been shut down for lack of natural gas and natural gas is 80% of the price of fertilizer, which we know is very closely related to ammonia. And that leads me to mention, do you think the natural gas problems, or the natural gas crunch, do you think that will wake Americans up to a greater hydrocarbon problem?

James Howard Kunstler: Well, you know, something is capable of waking Americans up. We may be sleepwalking into the future, we may have gone into a kind of a coma, but we’re not dead. I think it will take what I call a bitch slap upside our nappy heads to wake us up. And I think we’re going to get it, and it’s going to come in one form or another. We could have an oil crisis tomorrow if some chap walks into Prince Abdullah’s bedchamber with a bomb strapped to his belt. That could be the end of our Saudi Arabian imports, indeed that could be the end of the Sauds and their family and their regime and the beginning of something else in Arabia. And that would change everything.

As I said earlier, I lived through the 1973 oil embargo and that made quite an impression on me because, you know, you saw people’s behavior change overnight. You saw people being severely impressed with the power of extrinsic events to change your life. And I remember driving down to New York City to see a girl when I was 25 years old from 150 miles away in Albany, N.Y. And I was a newspaper reporter at the time; I had planned this trip to see this girl very, very carefully so that I knew where I might be able to get some gas, you know, on the way back from there. And I was the only person on the New York State Thruway between Albany and the Tappan Zee Bridge. And it was like that science fiction movie The Day The Earth Stood Still. There were like five cars on, going down Second Avenue in Manhattan that night. It was very, very spooky.

And I’ve never seen anything like it since. Certainly nothing that we’ve experienced since, except the World Trade Center disaster matched that for sheer shock value. But the difference was that the World Trade Center disaster, although it was seen by everybody, it only happened, really, in one small place.
The oil embargo actually happened all over and people from California to Boston sat on those lines and experienced the trauma and thought very hard about how they were going to make some maybe different decisions about commuting. I, for one, when the oil embargo happened, I had been living in a kind of rural village about 20 miles away from my job. Two weeks later I went in and rented an apartment in downtown Albany, NY, I was working for the newspaper there. So I obviously made a very concrete decision to move, and was basically glad I did.

But, yeah, I think that it’s conceivable that that could wake up Americans and so could a natural gas crisis, many things could. But, the trouble now is of course is that our investments in suburbia are orders of magnitude greater than they were even 25 years ago in 1973. And it’s going to be much, much harder for Americans to find the pathway out of this. You know, I think the real key to all this is that Americans kind of, in the strange complacency that overtook us in the last 20 years, ever since the North Sea and the Alaskan Slope kind of came on line and made it possible for us to postpone this reckoning.

This strange complacency that overtook us kind of gave us the idea that there’s a guaranteed happy ending to every terrible predicament that you find yourself in. That life is sort of like a TV show or a Bruce Willis movie – that there is a happy ending. But in my opinion, the great shock to Americans is going to be to find out that there is no smooth transition between the end of the cheap oil era and whatever follows.
In fact it’s going to be very disorderly, and very turbulent, and it’s going to involve a lot of stress, and woe, and ruin, and whatever emerges from it is going to emerge from really a great kind of fire of the soul that may even match what we went through in the Civil War. And I hope we’re able to come out the other end. I’m just young enough, or put another way, just not old enough, so that it’s conceivable that I could see coming out the other end. And I’m as curious as anybody to see how it turns out.

Oil Concerns Revisited

Is there any hidden blessing in the 'oil peak'?

Julian Darley: There are many possible reactions to an understanding that oil peak is going to happen or indeed is happening. Some people can see in it a certain blessing in disguise. Other people think it's going to be just a universal horror and they can't face it. And then there are some people who are the opposite of cornucopians--the absolute 'die-off doomsdayers' -- and for them, this is 'it', this is what they've been predicting all along. I wondered where you were--a bit of blessing in disguise, a bit of die off, neither?

James Kunstler: I think that's accurate. You know, the die-off gang has put out a pretty compelling set of arguments, and one of things we didn’t talk about today was where microbiology fits in because you can make some persuasive arguments that the world is revving up for a combination of events that are going to considerably thin out the population, and I mean specifically a serious mega-influenza pandemic, or the thing that is already underway, the AIDS pandemic, which has prospects for becoming much worse over the next 20 years and very problematically.

But, that said, I do find myself not very firmly in the die-off camp. I do think the human race does have some resilience, and I do think that we have some prospects of going forward and remaining civilized. It occurs to me that we may face a period of darkness. That has happened before, and it's not something I particularly welcome but it’s a plausible outcome for a while. History happens to occur in cycles.

I don’t think the human race is ready to throw in the towel. We have the means to do it, but it ain't necessarily going to happen. It's certainly an interesting period of time to live in. Those of us who were born in the hippie period, like myself, may even enjoy the prospect of returning in another incarnation, to see things going on a little further.
Who knows? I'm really not that much of a New Ager, but I'm very curious about what’s going to happen, and I wish us the best.

from: http://www.globalpublicmedia.com/interviews/141

"I Know What You're Thinking..."

This was my favorite TV program as a kid. I still don't understand why Tom Selleck never really made it big in the movies. I think his first forays as cutsie ladies' man types (3 Men and a Baby) didn't fit his tough guy-with-charisma role.

Who else misses Rick, TC and Higgins? My favorite thing was how he would swim laps in the pool when he was trying to work stuff out.

Shaved my noggin today, and ordered some cotton beanies off a hat website. (www.e4hat.com)

A chilly day - ate some pizza and watched an Adam Sandler comedy on video called Flirting With Disaster.

I meant to get out today and get some exercise, but woke up with a sore throat again.
And soon, to work...

Dancing With Daffodils

A friend of mine is in hospital after mistaking affodilbolle (daffodile roots)for onions. I'd like to hear how that happened. Anyway, fingers crossed that she'll be out of hospital soon. Google reports its effects can be quite serious:

An example of a poisonous plant and its effects is the daffodil. The daffodils poisonous part is the bulb. Some symptoms are nausea, vomiting, diarrhea and it could be fatal if eaten.

Daffodils
by William Wordsworth

I wandered lonely as a cloud
That floats on high o'er vales and hills,
When all at once I saw a crowd,
A host, of golden daffodils;
Beside the lake, beneath the trees,
Fluttering and dancing in the breeze.

Continuous as the stars that shine
And twinkle on the milky way,
They stretched in never-ending line
Along the margin of a bay:
Ten thousand saw I at a glance,
Tossing their heads in sprightly dance.

The waves beside them danced, but they
Out-did the sparkling leaves in glee;
A poet could not be but gay,
In such a jocund company!
I gazed—and gazed—but little thought
What wealth the show to me had brought:

For oft, when on my couch I lie
In vacant or in pensive mood,
They flash upon that inward eye
Which is the bliss of solitude;
And then my heart with pleasure fills,
And dances with the daffodils.

Amsterdam

I've been to London, Paris, Edinburgh, Seoul, Munich, Singapore - but never made it to Amsterdam. I recently watched a Discovery Channel documentary and am really keen to go. Beyond the open-mindedness, what interests me is that it is largely my cultural heritage. It's a centre of art in Europe, and some of that magic definitely runs through my veins, along with other Dutch traits.

I'm interested to visit Amsterdam in summer, sample the...er...highlights...and cycle the countryside. Spain and Iceland also interest me, and if I was really flush, maybe Italy. Except that Europe is a notoriously expensive place to travel, and my favorite way to travel tends to favor places off the beaten track, not really museums and coffee shops.

I'm day dreaming of course. Europe is possibly further away than South Africa is.

Play Time Almost Over

Went for a walk through the park today. Did 10 pullups. That's a good sign that I am still not too fat to be able to lift my own body weight a few times.

I'm feeling healthy, so will try to get into a training pattern as from tomorrow. Also want to discipline my diet.

Had a nice chat to Ane on Yahoo messenger. Amazing that she is married now and living in Bahrain. Just a few months ago we were swimming in a dam next to the N1 on the way to Cape Town.

Today was quite chilly, but the air was clear.
I've started reading a Michael Cunningham book called A Home At The End Of The World. He's the same guy who wrote The Hours.

I've been writing something, until Corneli read some of it and said it was too complicated. Now I don't feel like writing another word. A good writer is able to communicate clearly and simply. Can I?

I also bought some clothes. A Superman shirt, for those days when I feel exuberant and energetic, and below-the-knee khakis.

One more day before 52 weeks of work.

Girls and Boys

I signed my contract today, 1 year, from 2005/05/09-2006/05/09. I also got to know some of my students and the material. I'm looking forward to getting on with it.

Tomorrow I will go and hunt for an apartment around here, and get settled in.
I'd like to run a bit, and shake my body up. It's raining though and my throat, believe it or not, is still quite tender.

I had a big dinner at Bennigans after signing my contract. Corneli and I had fish and prawns and salad and finished it off with with chocolate Brownies.

It's cold and rainy outside so we'll probably watch some Star Wars and go and read at Starbucks over the weekend. Not much socialising as quite a few people we know are sick.

Oil price today: $51.66

I'd like to go into Yongsan (big electronics store) and buy a memory card tomorrow. Must call Brian or Cory, see if they want to join me.

Will try to have some fun this weekend, in terms of playing games. Will play Counterstrike or something. From Monday onwards I'd like to be pretty tight with time and money, and invest in reading and writing, and training.

It's nice that it's getting green. Green trees between all the buildings makes a difference. What is nice is that the cinema, a lot of different restaurants, the local supermarket, gyms etc are all walking distance from where we live. So it has a nice village sort of atmosphere.

The school I've signed up with is called GnB which I think is short for Girls and Boys. I've heard mostly positive things about this company.

house prices in South Africa are growing the fastest in the world

Johannesburg - In the competitive global residential property market, house prices in South Africa are growing the fastest in the world.
An increase of more than 30% in residential property prices over the past year has ensured South Africa hit top spot on the authoritative house price index of The Economist.

With growth of 35.1% on a year basis between the third quarter last year and the third quarter this year, the country surpassed Hong Kong where property prices grew by 31.2% over the corresponding period.

Third on the list was Spain with growth of 17.2%, followed by New Zealand with 16.4%.
The Economist described the global residential boom as exceptional. Never before have so many countries experienced growth in their residential property markets at the same time.

This trend is largely driven by low interest rates.
The growing impact of residential markets on economies encouraged the world's leading business publication to introduce its global residential property index in 2002.
The index includes more than 20 countries and uses information from loan institutions, estate agents and national statistics.
The latest figures show that in the last year house prices in 11 countries increased by about 10%.

Christopher Hart, senior treasury economist with Absa, ascribed the growth in South African property prices to the positive growth in the economy and low interest rates. The shortage of formal housing in the country is also a contributing factor.

Statistics South Africa's adapted figures of the gross domestic product (GDP) that was released earlier this month, showed that the local economy was growing at a rate of 3% on an annual basis. The GDP growth rate for the third quarter was 5.6%.

Erwin Rode, property valuator and economist at Rode & Associates, said on Tuesday that he was concerned over the sharp increase in house prices in South Africa.
He called it a double-edged sword and cautioned that people should be worried, as this trend could not continue in this vein.

The latest World Economic Outlook of the International Monetary Fund warned that the upswing in residential property prices, which is currently a global phenomenon, could be followed by a global slide. Should this happen, it could have a negative effect on the world economy.

The total value of residential property in developing economies increased by $20 trillion to more than $60 trillion over the past three years.

Money Road

It's been raining a lot here (and it's predicted to continue for the next three days at least), which is a sign that the air quality will be on the mend. The rain here is different to rain elsewhere. It's exactly as Forrest Gump says: It's like they turn on the shower, or turn on the tap, and it just rains and rains, day and night, a steady downpour. Not drizzle, and not an outright cloudburst.

I woke up this morning, after going out last night, feeling as though I had a tobacco flavored cactus in my throat. Feels a bit better now.

Been getting a few comments that my blog is depressing. Sorry if it is. Good news is I will be pretty distracted by work (yay!) as from next week, so there will be less time and energy for theoretical obsessing.

The book I'm about to finish now is The Tipping Point. I highly recommend it.

I also watched a movie this evening called Kingdom of Heaven. It's an elaborate movie which makes one point quite clearly. God lives in your heart and your head, not in a city, or a church, or a country. Those who believe otherwise are easily swayed. That's possibly why we are so easily convinced to go to war, when the only war worth fighting is in our own hearts, and our own heads.

A warning for the fans of Star Wars. From what I have seen of the movie, Darth Vader only makes his appearance pretty close to the end. On the other hand, it is action packed and this last film does go out with a bang. Lots of carnage, even Yoda doesn't make it out without getting electrocuted.

And for those prone to depression, skip the part below.

Brent Oil: $50.59
Gold: $429.80




Johannesburg - A sharp increase in oil prices could have a devastating effect on the residential property market, the Absa group warned on Wednesday.

Jacques du Toit, a senior economist with Absa, said a sharp increase in the oil price is currently not a significant possibility, but "oil remains an unpredictable factor".

Crude oil prices spurted above $50 a barrel in Asian trading on Thursday despite a positive US inventory report and after the contract dipped to $48.38 a barrel on Wednesday.

Du Toit said an increase to $80 or more a barrel would cause a worldwide recession, which would set local inflation and interest rates soaring.

Absa said on Wednesday in its economic perspective for the second quarter of 2005 that it does not see the residential property market as a bubble market in general.
"But it is important to note that a collapse is always possible, whether there is a bubble or not, in the case of a huge economic shock.

"We believe the worst possible economic shock for the residential property market would be a sharp increase in the oil price."

Experts in the residential sector are expecting a soft landing for this market - which has been experiencing a slow-down in growth since November last year - should no serious external shock occur.

Between 1984 and 1986, prices of houses dropped significantly in nominal and real terms because of a sharp increase in interest rates, a poor economic outlook and political uncertainty.

Too expensive
The most important element in the slowing down of house prices is the affordability of housing, "which is already under pressure because of the sharp increase in house prices compared with a moderate increase in salaries".

Du Toit said buyers are therefore becoming resistant against high asking prices and there are indications that the gap between asking and selling prices is increasing with properties remaining on the market for longer before they are sold.

Du Toit said houses in Johannesburg were on the market for an average of 47 days in the period January to June last year before they were sold.
From July to December it took an average of 55 days to sell a house.

The average difference between asking and selling price in the first six months was R29 000, but in the second half of the year, this gap increased to R38 000.
However, Du Toit was still expecting positive real growth in prices in the residential property market for the sixth year in a row.

Lew Geffen, chairperson of Sotheby's International Realty in South Africa, said the madness of the property market last year reminded him of a stock exchange out of control, but it has settled down now.

"The residential property market is now in a state of perfect balance with an equal number of sellers and buyers."
He said the market was currently very healthy, where it had to stop and catch its breath.

Should prices have continued to grow at the rate of last year, the risk of an adjustment would have been much greater, he said.

Anthony is going to Shanghai for the weekend tomorrow, with 10 other friends.

Jamie

Julie

Nick...advised me to ask Mika out.

Ave...thinking about the end of the world?

Beware of beer...or...just drink it and don't worry.

Hi Ho Hi Ho

At least traffic jams when we're off to work will soon be a thing of the past.

The end of oil is closer than you think

Oil production could peak next year, reports John Vidal. Just kiss your lifestyle goodbye

Thursday April 21, 2005
The Guardian

The one thing that international bankers don't want to hear is that the second Great Depression may be round the corner. But last week, a group of ultra-conservative Swiss financiers asked a retired English petroleum geologist living in Ireland to tell them about the beginning of the end of the oil age.

They called Colin Campbell, who helped to found the London-based Oil Depletion Analysis Centre because he is an industry man through and through, has no financial agenda and has spent most of a lifetime on the front line of oil exploration on three continents. He was chief geologist for Amoco, a vice-president of Fina, and has worked for BP, Texaco, Shell, ChevronTexaco and Exxon in a dozen different countries.

"Don't worry about oil running out; it won't for very many years," the Oxford PhD told the bankers in a message that he will repeat to businessmen, academics and investment analysts at a conference in Edinburgh next week. "The issue is the long downward slope that opens on the other side of peak production. Oil and gas dominate our lives, and their decline will change the world in radical and unpredictable ways," he says.

Campbell reckons global peak production of conventional oil - the kind associated with gushing oil wells - is approaching fast, perhaps even next year. His calculations are based on historical and present production data, published reserves and discoveries of companies and governments, estimates of reserves lodged with the US Securities and Exchange Commission, speeches by oil chiefs and a deep knowledge of how the industry works.

"About 944bn barrels of oil has so far been extracted, some 764bn remains extractable in known fields, or reserves, and a further 142bn of reserves are classed as 'yet-to-find', meaning what oil is expected to be discovered. If this is so, then the overall oil peak arrives next year," he says.

If he is correct, then global oil production can be expected to decline steadily at about 2-3% a year, the cost of everything from travel, heating, agriculture, trade, and anything made of plastic rises. And the scramble to control oil resources intensifies. As one US analyst said this week: "Just kiss your lifestyle goodbye."
But the Campbell analysis is way off the much more optimistic official figures. The US Geological Survey (USGS) states that reserves in 2000 (its latest figures) of recoverable oil were about three trillion barrels and that peak production will not come for about 30 years.

The International Energy Agency (IEA) believes that oil will peak between "2013 and 2037" and Saudi Arabia, Kuwait, Iraq and Iran, four countries with much of the world's known reserves, report little if any depletion of reserves. Meanwhile, the oil companies - which do not make public estimates of their own "peak oil" - say there is no shortage of oil and gas for the long term. "The world holds enough proved reserves for 40 years of supply and at least 60 years of gas supply at current consumption rates," said BP this week.

Indeed, almost every year for 150 years, the oil industry has produced more than it did the year before, and predictions of oil running out or peaking have always been proved wrong. Today, the industry is producing about 83m barrels a day, with big new fields in Azerbaijan, Angola, Algeria, the deep waters of the Gulf of Mexico and elsewhere soon expected on stream.

But the business of estimating oil reserves is contentious and political. According to Campbell, companies seldom report their true findings for commercial reasons, and governments - which own 90% of the reserves - often lie. Most official figures, he says, are grossly unreliable: "Estimating reserves is a scientific business. There is a range of uncertainty but it is not impossible to get a good idea of what a field contains. Reporting [reserves], however, is a political act."

According to Campbell and other oil industry sources, the two most widely used estimates of world oil reserves, drawn up by the Oil and Gas Journal and the BP Statistical Review, both rely on reserve estimates provided to them by governments and industry and do not question their accuracy.
Companies, says Campbell, "under-report their new discoveries to comply with strict US stock exchange rules, but then revise them upwards over time", partly to boost their share prices with "good news" results. "I do not think that I ever told the truth about the size of a prospect. That was not the game we were in," he says. "As we were competing for funds with other subsidiaries around the world, we had to exaggerate."

Most serious of all, he and other oil depletion analysts and petroleum geologists, most of whom have been in the industry for years, accuse the US of using questionable statistical probability models to calculate global reserves and Opec countries of drastically revising upwards their reserves in the 1980s.

"The estimates for the Opec countries were systematically exaggerated in the late 1980s to win a greater slice of the allocation cake. Middle East official reserves jumped 43% in just three years despite no new major finds," he says.
The study of "peak oil" - the point at which half the total oil known to have existed in a field or a country has been consumed, beyond which extraction goes into irreversible decline - used to be back-of-the envelope guesswork. It was not taken seriously by business or governments, mainly because oil has always been cheap and plentiful.

In the wake of the Iraq war, the rapid economic rise of China, global warming and recent record oil prices, the debate has shifted from "if" there is a global peak to "when".

The US government knows that conventional oil is running out fast. According to a report on oil shales and unconventional oil supplies prepared by the US office of petroleum reserves last year, "world oil reserves are being depleted three times as fast as they are being discovered. Oil is being produced from past discoveries, but the re­serves are not being fully replaced. Remaining oil reserves of individual oil companies must continue to shrink. The disparity between increasing production and declining discoveries can only have one outcome: a practical supply limit will be reached and future supply to meet conventional oil demand will not be available."

It continues: "Although there is no agreement about the date that world oil production will peak, forecasts presented by USGS geologist Les Magoon, the Oil and Gas Journal, and others expect the peak will occur between 2003 and 2020. What is notable ... is that none extend beyond the year 2020, suggesting that the world may be facing shortfalls much sooner than expected."

According to Bill Powers, editor of the Canadian Energy Viewpoint investment journal, there is a growing belief among geologists who study world oil supply that production "is soon headed into an irreversible decline ... The US government does not want to admit the reality of the situation. Dr Campbell's thesis, and those of others like him, are becoming the mainstream."

In the absence of reliable official figures, geologists and analysts are turning to the grandfather of oil depletion analysis, M King Hubbert, a Shell geologist who in 1956 showed mathematically that exploitation of any oilfield follows a predictable "bell curve" trend, which is slow to take off, rises steeply, flattens and then descends again steeply. The biggest and easiest exploited oilfields were always found early in the history of exploration, while smaller ones were developed as production from the big fields declined. He accurately predicted that US domestic oil production would peak around 1970, 40 years after the period of peak discovery around 1930.

Many oil analysts now take the "Hubbert peak" model seriously, and the USGS, national and oil company figures with a large dose of salt. Similar patterns of peak discovery and production have been found throughout all the world's main oilfields. The first North Sea discovery was in 1969, discoveries peaked in 1973 and the UK passed its production peak in 1999. The British portion of the basin is now in serious decline and the Norwegian sector has levelled off.

Other analysts are also questioning afresh the oil companies' data. US Wall street energy group Herold last month compared the stated reserves of the world's leading oil companies with their quoted discoveries, and production levels. Herold predicts that the seven largest will all begin seeing production declines within four years. Deutsche Bank analysts report that global oil production will peak in 2014.

According to Chris Skrebowski, editor of Petroleum Review, a monthly magazine published by the Energy Institute in London, conventional oil reserves are now declining about 4-6% a year worldwide. He says 18 large oil-producing countries, including Britain, and 32 smaller ones, have declining production; and he expects Denmark, Malaysia, Brunei, China, Mexico and India all to reach their peak in the next few years.

"We should be worried. Time is short and we are not even at the point where we admit we have a problem," Skrebowski says. "Governments are always excessively optimistic. The problem is that the peak, which I think is 2008, is tomorrow in planning terms."
On the other hand, Equatorial Guinea, Sao Tome, Chad and Angola are are all expected to grow strongly.

What is agreed is that world oil demand is surging. The International Energy Agency, which collates national figures and predicts demand, says developing countries could push demand up 47% to 121m barrels a day by 2030, and that oil companies and oil-producing nations must spend about $100bn a year to develop new supplies to keep pace.
According to the IEA, demand rose faster in 2004 than in any year since 1976. China's oil consumption, which accounted for a third of extra global demand last year, grew 17% and is expected to double over 15 years to more than 10m barrels a day - half the US's present demand. India's consumption is expected to rise by nearly 30% in the next five years. If world demand continues to grow at 2% a year, then almost 160m barrels a day will need to be extracted in 2035, twice as much as today.

That, say most geologists is almost inconceivable. According to industry consultants IHS Energy, 90% of all known reserves are now in production, suggesting that few major discoveries remain to be made. Shell says its reserves fell last year because it only found enough oil to replace 15-25 % of what the company produced. BP told the US stock exchange that it replaced only 89% of its production in 2004.

Moreover, oil supply is increasingly limited to a few giant fields, with 10% of all production coming from just four fields and 80% from fields discovered before 1970. Even finding a field the size of Ghawar in Saudi Arabia, by far the world's largest and said to have another 125bn barrels, would only meet world demand for about 10 years.

"All the major discoveries were in the 1960s, since when they have been declining gradually over time, give or take the occasional spike and trough," says Campbell. "The whole world has now been seismically searched and picked over. Geological knowledge has improved enormously in the past 30 years and it is almost inconceivable now that major fields remain to be found."

He accepts there may be a big field or two left in Russia, and more in Africa, but these would have little bearing on world supplies. Unconventional deposits like tar sands and shale may only slow the production decline.

"The first half of the oil age now closes," says Campbell. "It lasted 150 years and saw the rapid expansion of industry, transport, trade, agriculture and financial capital, allowing the population to expand six-fold. The second half now dawns, and will be marked by the decline of oil and all that depends on it, including financial capital."

So did the Swiss bankers comprehend the seriousness of the situation when he talked to them? "There is no company on the stock exchange that doesn't make a tacit assumption about the availability of energy," says Campbell. "It is almost impossible for bankers to accept it. It is so out of their mindset."

A huge drop in human population is anticipated early this century due to massive reliance on dwindling, strategic petroleum resources that power the teetering, wasteful economy. Sustainable living has been demonstrated as superior to overconsuming and burning the planet to a cinder, but can only triumph when we are all forced by economic conditions to return to deriving our sustenance from our own local ecosystem. The need to do this now is obscured by the illusion of freedom to buy anything anytime and keep it up forever.

Syria's Oil Production Already Down

On Par For Finding A Job

I have .2 months left to get job. I think I'm going to make it in just as much time as every other white collar worker.

The opposite of New Urbansim is sprawl. Single story, separate and unrelated carton box type houses, often identical, when repeated, creating a consumption of land, and an ever long road to commute.

New Urbanism Defined

"The New Urbanism is a reaction to sprawl. A growing movement of architects, planners, and developers, the New Urbanism is based on principles of planning and architecture that work together to create human-scale, walkable communities."

(Robert Steuteville, New Urban News)

New Urbanism, also known as neo-traditional or traditional neighborhood design, represents a growing awareness that architects have a responsibility to society that goes beyond simply designing buildings that won't fall down. This awareness, in turn, has given rise to a new architectural paradigm: the "architect as community builder."

Central to New Urbanist thought is the belief that community of place, the neighborhood, is a vital component of urban ecology in which human, natural, and built environments interact.

In earlier times, civic interaction was instinctive. Town planners shaped the built landscape to best promote the livelihood and well-being of a region's inhabitants. Many early American settlements, for example, began with a central green or park that could be used for grazing sheep or community gatherings. Ringing the green were shops, markets, churches, schools, and other public buildings. Residential streets radiated outward. The density and design allowed residents to walk almost anywhere in town, socialize, conduct business, and establish support networks.

But the arrival of the automobile and the mortgage in the earlier part of this century encouraged the replacement of this urban model. Suddenly, suburban living offered an attractive option: new housing, large yards, clean streets, and quiet neighborhoods. But with school, work, and play no longer within walking distance, civic interaction declined. Builders compounded the problem by turning the suburban-living focus inward. Walls were placed around subdivisions, cul-de-sacs replaced through streets, and garage doors replaced windows facing the street. Television (and now, the Internet) have turned homes into virtual cocoons, further discouraging social interaction in neighborhoods.
Then, in the 1970s, the principles of New Urbanism emerged, when disenchanted architects proposed an alternative model for suburban development. Their ideas drew heavily from early town design: sidewalks, back alleys, detached garages, front porches, and even white picket fences.

In time, New Urbanism advocates realized that their goals could not be accomplished through housing design alone. Diminished civic interaction was also a result of zoning laws and public policy. For example, laws that prevent home owners from renting out garage apartments or other spaces restrict the integration of socioeconomic groups. And laws that restrict markets and shops adjacent to residential zones further encourage dependence on the automobile. New Urbanism, in its fullest sense, is now an interdisciplinary approach to tackling design and planning challenges.

THE PRINCIPLES OF NEW URBANISM

New Urbanism can be applied increasingly to projects at the full range of scales from a single building to an entire community. Freequenty a community is consulted in order to best serve the community with the new urban development.

1. Walkability -Most things within a 10-minute walk of home and work -Pedestrian friendly street design (buildings close to street; porches, windows & doors; tree-lined streets; on street parking; hidden parking lots; garages in rear lane; narrow, slow speed streets) -Pedestrian streets free of cars in special cases

2. Connectivity -Interconnected street grid network disperses traffic & eases walking -A hierarchy of narrow streets, boulevards, and alleys -High quality pedestrian network and public realm makes walking pleasurable

3. Mixed-Use & Diversity -A mix of shops, offices, apartments, and homes on site. Mixed-use within neighborhoods, within blocks, and within buildings -Diversity of people - of ages, classes, cultures, and races

4. Mixed Housing A range of types, sizes and prices in closer proximity

5. Quality Architecture & Urban Design Emphasis on beauty, aesthetics, human comfort, and creating a sense of place; Special placement of civic uses and sites within community. Human scale architecture & beautiful surroundings nourish the human spirit

6. Traditional Neighborhood Structure -Discernable center and edge -Public space at center -Importance of quality public realm; public open space designed as civic art -Contains a range of uses and densities within 10-minute walk -Transect planning: Highest densities at town center; progressively less dense towards the edge. The transect is an analytical system that conceptualizes mutually reinforcing elements, creating a series of specific natural habitats and/or urban lifestyle settings. The Transect integrates environmental methodology for habitat assessment with zoning methodology for community design. The professional boundary between the natural and man-made disappears, enabling environmentalists to asses the design of the human habitat and the urbanists to support the viability of nature. This urban-to-rural transect hierarchy has appropriate building and street types for each area along the continuum.


7. Increased Density -More buildings, residences, shops, and services closer together for ease of walking, to enable a more efficient use of services and resources, and to create a more convenient, enjoyable place to live. -New Urbanism design principles are applied at the full range of densities from small towns, to large cities

8. Smart Transportation -A network of high-quality trains connecting cities, towns, and neighborhoods together -Pedestrian-friendly design that encourages a greater use of bicycles, rollerblades, scooters, and walking as daily transportation

9. Sustainability -Minimal environmental impact of development and its operations -Eco-friendly technologies, respect for ecology and value of natural systems -Energy efficiency -Less use of finite fuels -More local production -More walking, less driving

10. Quality of Life Taken together these add up to a high quality of life well worth living, and create places that enrich, uplift, and inspire the human spirit. ------------------------------------------------------------------------------------------------------------------------------------------- "The sum of human happiness increases because of New Urbanism" -Andres Duany

The Potential For Darkness

Did anything stand out in the previous post. If not, read the post below again and see if anything makes a dent into your consciousness. No? Well, first of all, there is a need to change our lifestyles now. Number 5 should have made an impression, but also number 10. Should we care who Fabio is? I'll explain why in a minute. But first, humor me.

America and the Developed World will need to cultivate longer attention spans, and start to listen and focus on what is important. Something that Cheney has described as the Infinite War is a bit more relevant than many of us going about our daily lives might think. We are already feeling the signs of this ourselves. We are already spending more to get around town.
The media are silent on this subject of depletion because it is in almost no one's best interest. Maybe a handful of niche companies that specialise in Wind Turbine power, or Solar Panels.

Fantasy may be good for business, it may be part of a cultural myopia, of our consensus, but it is about to end. The NFL, Jennifer Lopez, computer games, recreational trips to the mall, movies, all this sort of meaningless consumption will soon become too expensive, a luxury beyond our means. This is because globalisation is about to make a radical reversal, outsourcing (getting our Nikes from Korea, our watches and toys from China)is going to become extinct (and supermarkets too), and soon, transatlantic air travel, possibly any kind of air travel will be completely obsolete. Did I say the word soon? Do you think that's true? What is your definition of soon? My definition is within the next 2-5 years. That's soon isn't it?

Trains will make a comeback, and farmers, and villages. Suburbs will stagnate, and empty. We will see a period of tremendous pressure for conflict and violence, as some try to hold onto their SUV's, keep their jobs, have barbeques in their suburban McMansions; they will try to maintain this life, this delusion. It's the ultimate struggle for resources, and that resources underpins all economic growth. But it already too late, Change is already to be foisted upon us. The question is are we ready, and how fast and effectively will we adapt and cope with the chaos.

Hydrogen cannot substitute it (hydrogen only stores energy, energy is required to use hydrogen as a fuel source), and all our best technologies require more than 50 years for us to prepare to replace what energy resources we have left. We have a fraction of that amount of time.

America has already begun to lose power. I mean its capacity to find energy resources, fuel to generate electricity. It gets 15% of its energy from Canada, and Canada can't keep up with America's demands. That's some background from me. James Howard Kunstler is the author of The Geography of Nowhere and Home from Nowhere and The City in Mind: Notes on the Urban Condition.

His insights become useful when one is considering embarking on The Road To A Home. It is possible that in just a few years, property prices, that is suburban property prices will deflate, suburbia will evacuate, and even owning a car may be superfluous. Improbable? This is what Kunstler says:

My last three books were concerned with the physical arrangement of life in our nation, in particular suburban sprawl, the most destructive development pattern the world has ever seen, and perhaps the greatest misallocation of resources the world has ever known.
The world - and of course the US - now faces an epochal predicament: the global oil production peak and the arc of depletion that follows. We are unprepared for this crisis of industrial civilization. We are sleepwalking into the future.

The global peak oil production event will change everything about how we live. It will challenge all of our assumptions. It will compel us to do things differently - whether we like it or not.

Nobody knows for sure when the absolute peak year of global oil production will occur. You can only tell for sure in the "rear-view mirror," seeing the data after the fact. The US oil production peak in 1970 was not really recognized until the numbers came in over the next couple of years. By 1973 it was pretty clear that US oil production was in decline - the numbers were there for anyone to see, because the US oil industry was fairly transparent. They had to report their production to regulatory agencies. And low and behold American production was going down - despite the fact that we were selling more cars and more suburban houses. Of course we had been making up for falling production by increasing our oil imports.

1973 was the yea r of the Yom Kippur War. With encouragement from the old Soviet Union, Syria and Egypt ganged up on Israel and after a rough start, Israel kicked their asses. The Islamic world was very ticked off - especially at the assistance that the US had given Israel in airlifted military equipment. So a lot of pressure was brought to bear on the leaders of the Arab oil states to punish the US and we got the famous OPEC embargo of 1973.

But it was more than that. The OPEC embargo was effective precisely because it was now recognized by everybody that the US had passed its all time oil production peak. We no longer had surplus capacity. We weren't the swing producer anymore, OPEC was. We were pumping flat-out just to stay in place, and depending on imports to make up for the rest.

That was a tectonic shift in world economics.

That's exactly when OPEC seized pricing control of the oil markets. We had a very rough decade. 20 percent interest rates. "Stagflation." High unemployment. Stock market in the toilet.

We had a second oil crisis in 1979 when the shah of Iran was overthrown. The 1970s closed on a note of desperation. Everything we did in America was tied to oil and foreigners were jerking our economy around, and it led the worst recession since the 1930s.

But we got over it and a lot of Americans drew the false conclusion that the these oil crises were a shuck and jive on the part of business and Arab oil sheiks.

How did we get over it? The oil crises of the 70s prompted a frantic era of drilling, and the last great oil discoveries came on line in the 1980s - chiefly the North Sea fields of England and Norway, and the Alaska fields of the North Slope and Prudhoe Bay. They literally saved the west's ass for 20 years. In fact, so much oil flowed out of them that the markets were glutted, and by the era of Bill Clinton, oil prices were headed down to as low as $10 a barrel.

It was all an illusion. The North Sea and Alaska are now well into depletion - they were drilled with the newest technology and - guess what - we depleted them more efficiently! England is now becoming a new oil importer again after a 20 year fiesta. The implications are very grim.

Now, some of the most knowledgeable geologists in the world believe we have reached the global oil production peak. Unlike the US oil industry, the foreign producers do not give out their production data so transparently. We may never actually see any reliable figures. The global production peak may only show up in the strange behavior of the markets.

The global peak is liable to manifest as a "bumpy plateau." Prices will wobble. Markets will wobble - as the oil markets have been doing the past year. International friction will increase, especially around the places where the oil is - and two-thirds of the world's remaining oil is in the states around the Persian Gulf where, every week, a half dozen US soldiers and many more Iraqis are getting blown up, beheaded, or shot.

The "bumpy plateau" is where all kind of market signals and political signals are telling you that "something is happening, Mr. Jones, but you don't know what it is." We'll only know in the rear-view mirror.

As of the past 12 months, Saudi Arabia seems to have lost the ability to function as 'swing producer.' The swing producer is the one with a lot of excess supply, who can just open the valves and let more oil out on the world markets, which inevitably drives the price down. Saudi Arabia has kept saying they would produce a million more barrels a day, but there's no evidence that they really have.

Well, the good news is that Saudi Arabia and OPEC can no longer set the price of oil. The bad news is that nobody can. When there is no production surplus in the world, that's a pretty good sign that the world is at peak.

Princeton Geologist Kenneth Deffeyes says that peak production will occur in 2005. We're there. Others, like Colin Campbell, former chief geologist for Shell Oil, put it more conservatively as between now and 2007. But by any measure of rational planning or policy-making, these differences are insignificant.

The meaning of the oil peak and its enormous implications are generally misunderstood even by those who have heard about it - and this includes the mainstream corporate media and the Americans who make plans or policy.

The world does not have to run out of oil or natural gas for severe instabilities, network breakdowns, and systems failures to occur. All that is necessary is for world production capacity to reach its absolute limit - a point at which no increased production is possible and the long arc of depletion commences, with oil production then falling by a few percentages steadily every year thereafter. That's the global oil peak: the end of absolute increased production and beginning of absolute declining production.

And, of course, as global oil production begins to steadily decline, year after year, the world population is only going to keep growing - at least for a while - and demand for oil will remain very robust. The demand line of the graph will pass the production line, and in doing so will set in motion all kinds of problems in the systems we rely on for daily life.

One huge implication of the oil peak is that industrial societies will never again enjoy the 2 to 7 percent annual economic growth that has been considered healthy for over 100 years. This amounts to the industrialized nations of the world finding themselves in a permanent depression.

Long before the oil actually depletes we will endure world-shaking political disturbances and economic disruptions. We will see globalism-in-reverse. Globalism was never an 'ism,' by the way. It was not a belief system. It was a manifestation of the 20-year-final-blowout of cheap oil. Like all economic distortions, it produced economic perversions. It allowed gigantic, predatory organisms like WalMart to spawn and reproduce at the expense of more cellular fine-grained economic communities.

The end of globalism will be hastened by international competition over the world's richest oil-producing regions.

We are already seeing the first military adventures over oil as the US attempts to pacify the Middle East in order to assure future supplies. This is by no means a project we can feel confident about. The Iraq war has only been the overture to more desperate contests ahead. Bear in mind that the most rapidly industrializing nation in the world, China, is geographically closer to Caspian Region and the Middle East than we are. The Chinese can walk into these regions, and someday they just might.

In any case, and apart from the likelihood of military mischief, as the world passes the petroleum peak the global oil markets will destabilize and the industrial nations will have enormous problems with both price and supply. The effect on currencies and international finance will, of course, be equally severe.

Some of you may be aware that the US faces an imminent crisis with natural gas, at least as threatening as the problems we face over oil. By natural gas I mean methane, the stuff we run our furnaces and kitchen stoves on.
Over the past two decades - in response to the OPEC embargoes of the 70s and the Chernobyl and Three Mile Island emergencies of the 80s -- we have so excessively shifted our electric power generation to dependence on natural gas that no amount of drilling can keep up with current demand. The situation is very ominous now.
The United States, indeed North America, including Canada and Mexico, is technically way past peak production in natural gas and there is a special problem with gas that you don't have with oil: you tend to get your gas from the continent you are on. It comes out of the ground and is distributed around the continent in a pipeline network.
If you have to get your natural gas from another continent, it has to be compressed at low temperature, transported in special ships with pressurized tanks, and delivered to special terminals where it is re-gasified. All this is tremendously more expensive than what we do now. Moreover, there are very few natural gas port terminals in the US and nobody wants them built anywhere near them because they are dangerous. They can blow up.
We have been making up for our shortfall in gas in recent years by buying a lot of gas from Canada. The NAFTA treaty compels them to sell us their gas, and they are technically in depletion too. They're not happy about this.
About half the houses in America are heated with natural gas. Nobody know what we are going to do when the depletion arc gets steeper.
Oh, another problem with gas. The wells run dry just like this (snap!). Unlike oil wells, which go from gusher to steady stream to declining stream, gas wells either put out gas or they stop. And there's no warning when they are close to running out. Because, the gas is coming out of the ground under its own pressure. As the gas wells of North America continue to deplete, we will have little warning

Right here I am compelled to inform you that the prospects for alternative fuels are poor. We suffer from a kind of Jiminy Cricket syndrome in this country. We believe that if you wish for something, it will come true. Right now a lot of people - including people who ought to know better - are wishing for some miracle technology to save our collective ass.

There is not going to be a hydrogen economy. The hydrogen economy is a fantasy. It is not going to happen. We may be able to run a very few things on hydrogen - but we are not going to replace the entire US automobile fleet with hydrogen fuel cell cars.

" Getting hydrogen
" Transport

Nor will we replace the current car fleet with electric cars or natural gas cars. We're just going to use cars a lot less. Fewer trips. Cars will be a diminished presence in our lives.
Not to mention the political problem that kicks in when car ownership and driving becomes incrementally a more elite activity. The mass motoring society worked because it was so profoundly democratic. Practically anybody in America could participate, from the lowliest shlub mopping the floor at Pizza Hut to Bill Gates. What happens when it is no longer so democratic? And what is the tipping point at which it becomes a matter of political resentment: 12 percent? 23 percent? 38 percent?

Wind power and solar electric will not produce significant amounts of power within the context of the way we live now.

Ethanol and bio-deisel are a joke. They require more energy to produce than they give back. You know how you get ethanol: you produce massive amounts of corn using huge oil and gas 'inputs' of fertilizer and pesticide and then you use a lot more energy to turn the corn into ethanol. It's a joke.

No combination of alternative fuel systems currently known will allow us to run what we are running, the way we're running it, or even a substantial fraction of it.

The future is therefore telling us very loudly that we will have to change the way we live in this country. The implications are clear: we will have to downscale and re-scale virtually everything we do.

The downscaling of America is a tremendous and inescapable project. It is the master ecological project of our time. We will have to do it whether we like it or not. We are not prepared.

Downscaling America doesn't mean we become a lesser people. It means that the scale at which we conduct the work of American daily life will have to be adjusted to fit the requirements of a post-globalist, post-cheap-oil age.

We are going to have to live a lot more locally and a lot more intensively on that local level. Industrial agriculture, as represented by the Archer Daniels Midland / soda pop and cheez doodle model of doing things, will not survive the end of the cheap oil economy.
The implication of this is enormous. Successful human ecologies in the near future will have to be supported by intensively farmed agricultural hinterlands. Places that can't do this will fail. Say goodbye to Phoenix and Las Vegas.

I'm not optimistic about most of our big cities. They are going to have to contract severely. They achieved their current scale during the most exuberant years of the cheap oil fiesta, and they will have enormous problems remaining viable afterward.
Any mega-structure, whether it is a skyscraper or a landscraper - buildings that depend on huge amounts of natural gas and electricity - may not be usable a decade or two in the future.

What goes for the scale of places will be equally true for the scale of social organization. All large-scale enterprises, including many types of corporations and governments will function very poorly in the post-cheap oil world. Do not make assumptions based on things like national chain retail continuing to exist as it has.

Wal Mart is finished. [More below]

Many of my friends and colleagues live in fear of the federal government turning into Big Brother tyranny. I'm skeptical Once the permanent global energy crisis really gets underway, the federal government will be lucky if it can answer the phones. Same thing for Microsoft or even the Hannaford supermarket chain.

All indications are that American life will have to be reconstituted along the lines of traditional towns, villages, and cities much reduced in their current scale. These will be the most successful places once we are gripped by the profound challenge of a permanent reduced energy supply.

The land development industry as we have known it is going to vanish in the years ahead. The production home-builders, as they like to call themselves. The strip mall developers. The fried food shack developers. Say goodbye to all that.

We are entering a period of economic hardship and declining incomes. The increment of new development will be very small, probably the individual building lot.
The suburbs as are going to tank spectacularly. We are going to see an unprecedented loss of equity value and, of course, basic usefulness. We are going to see an amazing distress sale of properties, with few buyers. We're going to see a fight over the table scraps of the 20th century. We'll be lucky if the immense failure of suburbia doesn't result in an extreme political orgy of grievance and scapegoating.

The action in the years ahead will be in renovating existing towns and villages, and connecting them with regions of productive agriculture. Where the big cities are concerned, there is simply no historical precedent for the downscaling they will require. The possibilities for social and political distress ought to be obvious, though. The process is liable to be painful and disorderly.

The post cheap oil future will be much more about staying where you are than about being mobile. And, unless we rebuild a US passenger railroad network,a lot of people will not be going anywhere. Today, we have a passenger railroad system that the Bulgarians would be ashamed of.

Don't make too many plans to design parking structures. The post cheap oil world is not going to be about parking, either.

But it will be about the design and assembly and reconstituting of places that are worth caring about and worth being in. When you have to stay where you are and live locally, you will pay a lot more attention to the quality of your surroundings, especially if you are not moving through the landscape at 50 miles-per-hour.

Some regions of the country will do better than others. The sunbelt will suffer in exact proportion to the degree that it prospered artificially during the cheap oil blowout of the late 20th century. I predict that the Southwest will become substantially depopulated, since they will be short of water as well as gasoline and natural gas. I'm not optimistic about the Southeast either, for different reasons. I think it will be subject to substantial levels of violence as the grievances of the formerly middle class boil over and combine with the delusions of Pentecostal Christian extremism.

All regions of the nation will be affected by the vicissitudes of this Long Emergency, but I think New England and the Upper Midwest have somewhat better prospects. I regard them as less likely to fall into lawlessness, anarchy, or despotism, and more likely to salvage the bits and pieces of our best social traditions and keep them in operation at some level.

There is a fair chance that the nation will disaggregate into autonomous regions before the 21st century is over, as a practical matter if not officially. Life will be very local.

These challenges are immense. We will have to rebuild local networks of economic and social relations that we allowed to be systematically dismantled over the past fifty years. In the process, our communities may be able to reconstitute themselves.

The economy of the mid 21st century may center on agriculture. Not information. Not the digital manipulation of pictures, not services like selling cheeseburgers and entertaining tourists. Farming. Food production. The transition to this will be traumatic, given the destructive land-use practices of our time, and the staggering loss of knowledge. We will be lucky if we can feed ourselves.

The age of the 3000-mile-caesar salad will soon be over. Food production based on massive petroleum inputs, on intensive irrigation, on gigantic factory farms in just a few parts of the nation, and dependent on cheap trucking will not continue. We will have to produce at least some of our food closer to home. We will have to do it with fewer fossil-fuel-based fertilizers and pesticides on smaller-scaled farms. Farming will have to be much more labor-intensive than it is now. We will see the return of an entire vanished social class - the homegrown American farm laboring class.

N

We are going to have to reorganize everyday commerce in this nation from the ground up. The whole system of continental-scale big box discount and chain store shopping is headed for extinction, and sooner than you might think. It will go down fast and hard. Americans will be astonished when it happens.

Operations like WalMart have enjoyed economies of scale that were attained because of very special and anomalous historical circumstances: a half century of relative peace between great powers. And cheap oil - absolutely reliable supplies of it, since the OPEC disruptions of the 1970s.

WalMart and its imitators will not survive the oil market disruptions to come. Not even for a little while. WalMart will not survive when its merchandise supply chains to Asia are interrupted by military contests over oil or internal conflict in the nations that have been supplying us with ultra-cheap manufactured goods. WalMart's "warehouse on wheels" will not be able to operate in a non-cheap oil economy

It will only take mild-to-moderate disruptions in the supply and price of gas to put WalMart and all operations like it out of business. And it will happen. As that occurs, America will have to make other arrangements for the distribution and sale of ordinary products.

It will have to be reorganized at the regional and the local scale. It will have to be based on moving merchandise shorter distances at multiple increments and probably by multiple modes of transport. It is almost certain to result in higher costs for the things we buy, and fewer choices of things. We are not going to rebuild the cheap oil manufacturing facilities of the 20th century.

We will have to recreate the lost infrastructures of local and regional commerce, and it will have to be multi-layered. These were the people that WalMart systematically put out of business over the last thirty years. The wholesalers, the jobbers, the small-retailers. They were economic participants in their communities; they made decisions that had to take the needs of their communities into account. they were employers who employed their neighbors. They were a substantial part of the middle-class of every community in America and all of them together played civic roles in our communities as the caretakers of institutions - the people who sat on the library boards, and the hospital boards, and bought the balls and bats and uniforms for the little league teams.
We got rid of them in order to save nine bucks on a hair dryer. We threw away uncountable millions of dollars worth of civic amenity in order to shop at the Big Box discount stores. That was some bargain.
This will all change. The future is telling us to prepare to do business locally again. It will not be a hyper-turbo-consumer economy. That will be over with. But we will still make things, and buy and sell things.

A lot of the knowledge needed to do local retail has been lost, because in the past the ownership of local retail businesses was often done by families. The knowledge and skills for doing it was transmitted from one generation to the next. It will not be so easy to get that back. But we have to do it.

Education is another system that will probably have to change. Our centralized schools are too big and too dependent on fleets of buses. Children will have to live closer to the schools they attend. School will have to be reorganized on a neighborhood basis, at a much smaller scale, in smaller buildings -- and they will not look like medium security prisons.

The psychology of previous investment is a huge obstacle to the reform of education. We poured fifty years of our national wealth into gigantic sprawling centralized schools - but that investment itself does not guarantee that these schools will be able to function in a future that works very differently.
In the years ahead college will no longer be just another "consumer product." Fewer people will go to them. They will probably revert to their former status as elite institutions, whether we like it or not. Many of them will close altogether.

Change is coming whether we like it or not; whether we are prepared for it or not. If we don't begin right away to make better choices then we will face political, social, and economic disorders that will shake this nation to its foundation.

I hope you will go back to your offices and classrooms and workplaces with these ideas in mind and think about what your roles will be in this challenging future. Good luck. Prepare for a different America, perhaps a better America. And prepare to be good neighbors.

End


With this in mind it makes the seriousness with which I, you, all of us, find our Road To A Home all the more urgent. It also asks us to think what we will do, who we will be, in as little as 5-10 years from now, in a Radical New World.

Dark Truths

Here are some relevant and irrelevant dark truths:

1) I have now not worked for 4 months
2) I am not returning to South Africa this week
3) I know exactly what happens in the next Star Wars movie...
4) The book, The Da Vinci Code is not based on fact, but plausibility, but for all intents and purposes, is largely a deception (as much as some of us wish it weren't)
5) The end of suburbia is nigh...why because the price of oil will soon make commuting (possibly even owning a car) prohibitively expensive
6) Saw an ajuma (old Korean woman) walking backwards towards the park today
7) Freshwater fish (like Koi) don't eat fruit, not even pieces of apple
8) I watch Oprah
9) I ate a Haagen Das Belgium Chocolate Icecream today, chips, chocolate, soda, and homemade hotdogs
10) I don't know who Fabio is...

You're Loving Me Now, Aren't You?

Spring Cleaning today - mostly of my computer. Just deleted a lot of useless and overlapping files. Separated a lot of my software into three Briefcases: Work, Sport, and Play. Want to be digging around in the Work Briefcase a bit more now. Focus on that.

In Starbucks today I sat thinking, eyes drifting above the book (insightful reading nevertheless) about an idea for a new book, a new angle. I won't say more. I've said a lot and done little these past few days, going to be a bit mum in that department. Let actions do some of the talking now.

Just been in a more mature frame of mind today, and one of my epiphanies has been a bit of a renunciation of 'beauty'. Well, conventional or worldly beauty.
I think I have gravitated towards that, also felt increasingly disatisfied with my own appearance, and now my interests are focussed elsewhere. This does not mean I am going to binge on icecream and beer. No, I still am very dedicated to a healthy and active lifestyle, to fitness and wellness. I don't think the end goal of all that should be how we look, but our state of being. Elevating our state of being, yes.

I don't like the idea of someone who is wasting time seeking constant validation/aka being immature and testing his or her appearance constantly on this or that boy or girl that they find attractive.
Some people need their ego's inflated, and I got a strong sense today of how wasteful and useless and pointless this behaviour is. Grow Up! - as Al Pacino would growl.

Although I embarked on this line of thinking earlier today, just a few hours ago I was watching Average Joe. I know these reality shows are quite contrived, but it was fascinating to see the princess falling for Prince Handsome, but then finding (away from the romantic holiday setting, when in his small and ordinary home, in sight of a smelly dog and a blow up doll) behind all the charm and beautific smiles, just...GAWP...nothing. Beyond the beautiful shell, just air. At one point she asked him, "What's the best book you ever read?" Hesitation. A stilted response:"Can't remember." "What's the last book you ever read?" "You know, I never read books."

She'd said earlier that when I'm with him, it's like being in a Calvin Klein commercial. But that's not enough.
When you focus on how things look, you pass up the real value of yourself, the other person, and the whole process of our lives. You invalidate your life! This is High School stuff!

The new project I have outlined touches on this, the myth, the ridiculous ideas we have about beauty.

Felt better but still lightheaded today. It's getting warmer though, and the sky, bluer.

The Grass Is Singing

I'm feeling good - a contrast to this morning.

I've been in all day. The sky has looked murky and dirty so I have stayed indoors.

I watched A Life Aquatic (Bill Murray) and Hotel Rwanda. I also slept a lot, which I think is a good way for the body to heal.

I have been considering flying back to South Africa some time this week. I'm going to think about it some more. I think it is important to stay and do one more year, but not if I am really miserable. I think my unhappiness has been tied to my illness, and some other significant things, people I miss in South Africa etc.

I'm feeling quite humbled by this experience - being sick. At least I have learnt more about myself and what I appreciate and who is important to me.

The Tipping Point

The interview at GmB in Hwajong was done by about 11:00. Unexpectedly, the Director needed the whole contract translated, which means another delay of a week, before I start working. Perversely, I am thrilled.

Corneli said to me, and of course it seems quite obvious now that she said it: It's natural that you're a bit anxious about work. You haven't been working for 4 months.
I think it is reluctance to give up my independence, my freedom, my last chance to go home.

I didn't feel strong today, but the weather was warm, fairly hazy sky, some smears of blue....I slept almost the whole way during the 50 minute bus trip there...we met Cory and Karlee only a few hundred metres from where I had, only 2 weeks earlier, made several bus trips on the way to CDI. Who knew?

We left for a ridiculously overpriced restaurant, Kuzmos (or something). My bacon and chicken sandwich cost W15 000 (roughly R75.00 for a sandwich). It was filling and delicious.
Had an illuminating chat with Cory. He asked a vital question: if you were in South Africa what would you do?
And provided another useful comment: if you're thinking about starting a business, you might aswell spend a year or so doing research and planning.
Makes sense.

Cory and I later went back to their apartment (a nice officetel, with a good view too) and played some Star Wars Battleground Games. I think we started around 4 or 5pm and I left at about 8:30pm. I suggested a bunch of us crazed Star Wars movie buffs (well none of us are into Star wars the way we once were, but hey, it's the last of a 6 part trilogy) get together and all watch it together on the 26th, when Revenge Of The Sith opens in Korea. I slept almost the whole way back on the bus. I have been sleeping such a lot lately.

I arrived home feeling a bit gloomy, although I had quite an enjoyable, and unusual day. Corneli has gone out with a big group of friends, and I don't even wish I was with them! What's wrong with me?
I'm just happy to read - I mean I wish I could be in the outdoors, or exercising, but since I'm feeling quite PAP, reading is interesting. I raced through Into The Wild in about 24 hours. Now I'm keen on ordering Eiger Dreams from Amazon - probably the last Krakauer book I'll read.

Tipping Point is interesting. It's about how a small action leads to epidemic, disproportionate reactions.
I'd like to know what tiny bacterium I inhaled which seemed to unleash a swarm of lethargy that hasn't left me for two weeks.

I'm not feeling anti-social. I just feel like being comfortable, being myself, with the kind of people that allow that. I don't want to have to generate conversation or be artificial.
I wonder if the Seoul Motor Show is still on tomorrow? If so, I must definitely go and see it.
I'm glad I have another week to get rejuvenated and healthy. Perhaps I can really turn around my experience, and get into a very different frame of mind by the end of the week. Just have fun, go rollerblading, go for a hike, if I am well enough, go for a swim.

I'd like to make one or two calls to South Africa tomorrow; just connect with the people there that I am close to.

Paul's In Town...

I considered going to this tonight...