Living on Stolen Time

Extracting the Stone of Stupidity

Consider a flame; a jet of methane, for example, injected into an oxygen-rich atmosphere and set alight. Now try to describe the shape and structure of the flame mathematically, in a way that will allow you to accurately predict how its shape and structure respond to changes in various conditions—oxygen concentration, gas pressure and so on. You will quickly discover that the mathematics of the problem can be derived from basic physical principles but is intractable: there are equations that accurately describe the situation, but they are too difficult to solve. Often the easiest solution, one that is practical in the case of a simple gas jet, is to build a physical model or a prototype, test it, and make some observations and measurements that characterize the system. But what if that's not possible? Then the usual recourse is to build a computational model that simplifies the physics in various ways and brute-forces the solution by crunching through lots of numbers.

A flame

Now consider that same flame again from a slightly different perspective: what's actually going on? Yes, the character and behavior of the flame are difficult to characterize and predict with great accuracy, but suppose you already know what a gas flame looks like, and just want to know what it is. Here, the equations are simple. First, methane oxidizes to carbon monoxide, hydrogen and water vapor, giving off energy (heat and light) in the process:

CH₄ + O₂ → CO + H₂ + H₂O

Next, the hydrogen oxidizes, giving off more water vapor and energy:

2 H₂ + O₂ → 2 H₂O

Finally, the carbon monoxide oxidizes as well, producing carbon dioxide and more energy:

2 CO + O₂ → 2 CO₂

This is quite typical of how we go about explaining just about everything we encounter. To understand the flow of traffic, we think about individual vehicles and the interactions between them. To understand epidemics, we think about the course of the disease in individual patients and the spread of infection from patient to patient. To understand how an industrial chemical affects an ecosystem we look at its effect on individual cells in individual organisms. We take a specimen, study its behavior, and extrapolate it to the population as a whole. This approach gives at least the illusion of explanatory depth; more importantly, it often allows us to establish cause and effect relationships and, based on them, make constructive changes that decisively influence the outcome: impose speed limits, quarantines and environmental regulations, respectively.

Let us try to apply this same approach to a truly complex system: the economies of US and Europe, in the state in which we currently find them: raging government deficits, staggering levels of bad debt, continuous government bailouts and infusions of free money by central banks, record levels of poverty and long-term unemployment and underemployment, and a lack of any meaningful economic growth. Specifically, let us try to characterize the effect of the continuous monetary infusions, bailouts, and stimulus spending. The economics profession has failed to do this and so amateurs are forced to step into the breach. The economists' usual excuse is that it's all very complicated; sure it is, so is a gas flame.

All money is debt. It is created when someone takes out a loan, promising to repay it (with or without interest) with proceeds from his or her future labor. If that promise is broken, the money ceases to exist. In the normal course of affairs, the lender then “loses” the money. If the lender loses more money than he happens to have, then the lender is bankrupted and, economically speaking, ceases to exist as well. What happened during the financial collapse of 2008 is that the real estate bubble burst and many loans went bad at the same time. The response was not to liquidate the lenders who lost more than they had, but to prop them up by issuing further loans that were not supported by any specific mechanism or realistic chance of repayment—just the compulsive thought that big financial organizations must not be allowed to fail because that would irreparably damage the system. Propping up bankrupt institutions by issuing fake money (or, more precisely, fake debt) has been assumed to be less damaging to the system than doing nothing.

This assumption would perhaps have been justified if the financial difficulties were, as was once thought, temporary in nature, that the economy would roar back to life and growth would resume. Now, three years later, we find ourselves back where we started, and this assumption no longer seems tenable. It is not clear why growth should resume, as many factors, persistently high energy prices among them, continue to weigh it down. We shouldn't bet on any more economic expansion, at least not in the developed world. As Richard Heinberg argues persuasively in his latest book, The End of Growth, growth has reached its limits, which are both numerous and insurmountable.

There is a plain and simple distinction between the two kinds of money: real money, which was lent into existence with a specific and realistic promise of repayment by a specific party, and fake money, which was dreamt into existence by a central banker without anyone specifically promising to repay it. Suppose a person walks into a grocery with fake money in his wallet, and buys something. This is no different from paying with counterfeit money: the grocer is getting robbed. But there is also a difference: the officially issued fake money is indistinguishable from real money. But just because you can't spot a fake doesn't mean that you aren't getting robbed. And so the fake money mixes with the real money and sloshes about the economy, robbing each person who touches it, until everybody is poor. Since poor people can't pay back big loans, the central banker's conceit that the fake money is debt seems rather unjustified. It is owed by the central banker to the central banker, and it would be foolish of us to expect him to ever work it off.

I am using the word “robbery” here not to indicate moral indignation or feigned umbrage, of the “I am shocked! Shocked to find that gambling is going on in here!” variety. I might even say that sometimes robbery is justified (“expropriation” or “commandeering” are its more polite, civilized variants). I am using it because the trick—paying with a fake—is an obvious one, and the result—the robbed party becomes poorer—is obvious as well. And so whether it is a retiree spending his deficit-financed social security check at the dollar store or a banker spending his bailout-financed bonus on lavish gifts for his trophy girlfriend, or a construction worker drinking his economic stimulus-financed paycheck at the bar, somebody somewhere is getting robbed—and becoming poorer.

Rest assured, I am not advocating letting people starve or forgo beer or anything of the sort. A warm bed and three squares a day is, to me, a human right. I am not interested in policy (nor are policymakers interested in me). But I am interested in making a specific prediction: that government and central bank efforts to stabilize the financial system and restart economic growth will do the exact opposite: they will destroy that which they are trying to save more completely although a little bit later. They are living on stolen time.

The alternative (in case policymakers suddenly decided to pay attention and were capable of taking on board such a radical notion) is a jubilee: full repudiation of all debts public and private and a ban on all repayments, repossessions and collection activities. This would force a full shutdown and cold restart of the financial system. But it will probably have to happen anyway. In the meantime, do your best to avoid getting robbed.

Peak Oil: Laherrère responds to Yergin

Daniel Yergin

By Matthieu Auzanneau, Le Monde
Translated from French by Natasha

Jean Laherrère, co-founder of the Association for the Study of Peak Oil is a retired expert from Total. He picks apart the latest analysis from the champion of optimists, the American Daniel Yergin.

Daniel Yergin is back. The author of The Prize, an oft-cited history of oil which glorified the industry, last week has published an editorial in The Wall Street Journal, in advance of the release of his latest work, The Quest.

Daniel Yergin is the vice-president of IHS, a powerful economic intelligence agency considered to be very close to the major American oil companies. The arguments this first-rank analyst develops in the Wall Street Journal is a long-awaited counterattack on the proliferation of alarming forecasts for the future of global oil production.

Daniel Yergin admits that success in satisfying future demand for petroleum constitutes a “challenge”. But he says that he has severe doubts about the credibility of the members of ASPO, the Association for the Study of Peak Oil, who claim that this battle has already been lost, due to lack of sufficient oil reserves that remain to be exploited.

In his portrayal of the current situation, the vice-president of IHS omits a key fact: conventional oil production (the classical liquid oil which comprises 80% of the current crude oil supply) reached its absolute peak in 2006. The date of 2006 was predicted back in 1998 by Colin Campbell and Jean Laherrère, two petroleum geologists who founded ASPO.

And so I have asked Jean Laherrère, former chief of exploration technology at Total, to react to the key statements contained in the optimistic analysis provied by Daniel Yergin. 

Daniel Yergin: “Just in the years 2007 to 2009, for every barrel of oil produced in the world, 1.6 barrels of new reserves were added.” 

Jean Laherrère: Daniel Yergin cites official, political estimates published in the Oil & Gas Journal and by BP. According to these figures, global reserves were at 1253 billion barrels (Gb) in 2007 and at 1333 Gb in 2009, after the addition of 72 Gb of extra-heavy Orinoco oil discovered in Venezuela... in the late 1930s. What is, let us say, astounding about this, is that Mr. Yergin ignores confidential the figures from his own agency, IHS.

These figures, here they are. Note that they do not incude the extra-heavy oil

	Discoveries (Gb)	Production (Gb)
2007	10.0	26.0
2008	13.0	26.3
2009	12.4	25.8
Total	35.4	78.1

The reality is that for each barrel produced less than 0.5 barrels have been discovered, and not 1.6! Oil continues to be consumed faster than it is discovered. This situation has lasted for a quarter of a century now. 

Daniel Yergin: "One example [of revolutionary technology] is the "digital oil field," which uses sensors throughout the field to improve the data and communication between the field and a company's technology centers. If widely adopted, it could help to recover an enormous amount of additional oil worldwide—by one estimate, an extra 125 billion barrels, almost equivalent to the current estimate reserves of Iraq."

Jean Laherrère: It is at present quite fashionable to talk of the “digital oil field” to impress investors. But to this day I have not come across any mature field that has significantly increased its reserves by the use of this technology. To pretend to be able to grow reserves by 125 Gb thanks to this technology amounts to nothing more than wishful thinking, and does not stand up to any serious study. 

How does one increase the size of recoverable reserves of oil fields? Well, first of all, there are secondary recovery techniques: the use of water or gas injection to maintain field pressure. This is a practice that is in actual use from the very begginning on all new oil fields.

Tertiary recovery (or EOR, for “enhanced oil recovery”) is used to modify the properties of the liquids: thermal methods (by using steam), chemical, or injection of oil-soluble gases such as CO₂. It's in the United States that EOR is most developed. And yet the number of EOR projects has gone down from about 500 in 1986 to only 200 in 2010. They yielded 600000 barrels per day (bpd) in 1986. From 1992 to 2000, they have remained level at around 750000 bpd. In 2010, they produced no more than 650000 bpd, and this despite high oil prices and the generous easing of environmental regulations of the Bush era.

Technology can do nothing to modify the geology of an oil reservoir! It just allows it to be produced faster, thereby accelerating the decline of mature fields... Here's an example: the very pronounced production declines at the giant Mexican Cantarell field, which made use of massive nitrogen injections.

The rate of recovery of a feld depends above all on the properties of the field and the liquid it contains. This rate can be as high as 80% for sandstone or very porous limestone, and might not exceed 1% for a tight reservoir with isolated pockets. 

Daniel Yergin: "A study by the U.S. Geological Survey found that 86 percent of oil reserves in the U.S. were the result not of what was estimated at the time of discovery but of revisions and additions from further development. "

Jean Laherrère: Evidence that the proven reserves of the United States do not increase: over the last decade, according to the US Department of Energy, the amount of upward revisions of U.S. reserves is roughly equal to the amount of downward revisions [pdf, see column 2: "net revisions"]. 

What allows Mr. Yergin to believe anything different? In the United States, reserves are reported according to the rules imposed by the SEC, the policeman of Wall Street. From 1977 to 2010, these rules required oil companies to report as "proved" only those reserves that were directly accessible by the wells already in production. The SEC prohibited the reporting of reserves called "probable" and found in the vicinity of these wells, even if the probability was very high.

This misleading rule was designed to protect the bankers who, if a producer went bankrupt, could decide to seize only the producing wells. This very narrow definition was anything but reliable, because it led to an underestimation of the actual reserves of American oil fields at the beginning of production, and their subsequent systematic upward re-evaluation.

Take, for example, the Kern River field, located in California. Since 2000, production from this old field has declined steadily. However, the amount of reserves reported for Kern River rose from 318 million barrels in 2000 to 542 million barrels in 2010. This amazing growth is due to the fact that between 2000 and 2010, 560 new wells were put into production (but failed to halt the decline of Kern River)!

Only the addition of both proven and probable reserves allows a field to be evaluated correctly. This method, called EPS, is now used everywhere the world—I actually participated in its development in 1997. Everywhere ... except in the United States. The growth of U.S. reserves which Mr. Yergin celebrates owes nothing to the advancement of technology: its cause is the incorrect method advocated by the SEC until 2010.

Moreover, since 2010, the SEC has lurched from one extreme to another. It now allows estimates of proved reserves not only from producing wells, but according to an evaluation model of the entire field that companies can keep secret! This new method supports all kinds of excesses and abuses, which have been denounced in the New York Times in particular.

This new SEC rule bore fruit in the form of the considerable growth of U.S. reserves of shale gas. Again, this has nothing to do with the implementation of technologies that are supposedly “new”, but which in reality have been there for thirty years, such as horizontal drilling and hydraulic fracturing of rocks. [Editor's note: land speculation fueled by questionable claims for reserves of shale gas is going to feed a large bubble in the U.S., according to an investigation by Ian Urbina New York Times, who is also the author of the article cited above.]

Daniel Yergin lies on reserves, just as Greece has lied about its deficits. Warning: in the world of energy, there are no rules—except to make money, and there are no referees and umpires! 

Finally, a little background. In 2005, Daniel Yergin published an editorial in the Washington Post in which he was already mocking the pessimists, and in which he predicted that by 2010 global oil production capacity could increase by 16 million barrels per day (Mb/d) from from 85 to 101 Mb/d. Since then, global production capacity remained on a plateau of about 86 Mb/d... You ought to go back and re-read yourself, Mr. Yergin.

[Daniel Yergin's editorial has elicited other strong reactions among those who support the hypothesis of an imminent decline in the global production of liquid fuels. These include, notably, an on-line article by Professor Kjell Aleklett, president of ASPO International.

In 2008, Glenn Morton, a an American geophysicist and investor, published what he presented as an inventory of the optimistic but incorrect predictions about the state of the oil market provided over the years by Daniel Yergin and IHS.]

Peak Moment TV: Collapse of the Titans

ASPO Conference

I'll be speaking at the ASPO in Washington, DC on November 2-5 on why gradual energy descent is a science-fiction scenario that includes friendly oil-exporting space aliens and why the end of the fossil fuel age is likely to be a step-function. I will also talk about investing for post-collapse. I believe that there might still be time to engineer a soft landing at the end of the upcoming economic cliff-diving exercise. This can be done if groups of individuals decide to sell off financial instruments that will have little or no survival value post-collapse (stocks, bonds, gold, etc.) and invest in something that is not useful now but will be: complete construction kits for businesses to deliver products and services that are certain to be in high demand, for lack of better alternatives. To make this scenario possible, it is necessary to design plans, recruit people and stockpile and pre-position materials while finance, industry and transportation systems are still functioning. I hope to see some of you there.

The 2011 ASPO-USA Conference, Peak Oil, Energy & the Economy, will provide eye-opening information and hard-nosed analysis to help you navigate an increasingly uncertain future. Featuring experts from a cross-cutting array of disciplines and perspectives, the Conference will empower you with the tools and connections to make critical decisions for your business, your family, and public policy.

Under the theme of "Truth in Energy," the conference will stress the essential need for reliable, transparent, fact-based information, and a full understanding of growing energy and economic challenges.

The ASPO-USA Peak Oil, Energy & the Economy Conference, November 2-5, 2011 in Washington, DC, is the world's premier event focused on peak oil challenges and solutions. It is produced by the nonprofit Association For The Study Of Peak Oil & Gas - USA (ASPO-USA). The format includes keynotes, plenary sessions, concurrent educational tracks, networking receptions, and exhibits. The conference is supported by more than 35 publications, websites and partnering associations. You can receive a $50 discount off the prevailing fees for Peak Aware Package registration option by inserting the code mediapartner when prompted on the eRegistration page linked from http://www.aspousa.org/conference/2011/Agenda.cfm

How I Survived Hurricane Irene

Quite a few well-meaning people have written to ask me how I survived the recent hurricane. Some have even suggested that I should give up living aboard and flee to higher ground.

We spent the entire event at the dock, bobbing up and down slightly and leaning over a bit in the wind gusts. By the time she hit Boston Harbor, Irene was downgraded to a tropical storm, with the eye well to the west of us. Still, we got buckets of rain and several hours of gale winds.

The worst of it was the preparation. I had to clear lots of things off the docks and the deck, rig additional dock lines, lace up the sail cover so it wouldn't flog in the wind, take down the awning, secure the dink so that it wouldn't get bashed around, tie down various items on deck so that they wouldn't blow away, fill the water tanks for additional ballast and in case we lost shore water, and so forth. That seemed like a lot of work.

During the hurricane itself we stayed on board, where it was warm and dry. We rocked a bit, and we spent a few hours leaning at about a 15º angle in the stiff breeze. My wife and the cat pretty much slept through the entire event. I would venture out periodically, mill around on the docks with the neighbors, adjust a few dock lines, and go back inside.

A few worst case scenarios were being contemplated, without much conviction, because several people have seen much worse. In one scenario the docks themselves start breaking up and boats start bashing into each other. As it turned out, just one dock cleat pulled out and some boards popped out of the finger piers from the twisting. Another potential problem would be if wind gusts got so stiff that sailboat masts would get tangled up in each others' rigging, possibly leading to a few dismastings. They didn't even get close. The ultimate nightmare scenario involved a storm surge so huge that the entire structure would float off the pilings and crash into the seawall. We were well short of that, in spite of a couple of extra high tides due to the full moon that coincided with the storm surge. We never even lost shore electricity, shore water or internet access, but with a wind generator, 1000 liters of water and plenty of books this wouldn't have affected us too much either.

During the worst of it

It seems like our "house" was designed to take it better than your average house. In a hurricane, there is a high risk of flooding, so it is helpful if your house can float. Also, there is a high risk of very high winds, so the house should be streamlined in shape and able to withstand hurricane force winds, even while floating. The combination of water and wind is known to cause waves, so it is helpful if the house can take the ocean swell and the odd breaking wave without capsizing or swamping. There is a good chance of power cuts and water main and gas line breaks, so the house should have its own internal electricity generation system, and its own supplies of water and propane. Lastly, a hurricane might make a certain area uninhabitable for a period of time, prompting you to want to move, but hurricanes also tend to wash away roads and bridges, so it would be better if your house could make its escape via the waterways. There might also be fuel supply disruptions, so it's better if your house can move without the use of fossil fuels by, say, hoisting a sail or two. In short, if you want to survive a hurricane, you want to be on a sailboat.

Now, granted, you could also be perfectly safe in a house that's built to withstand a hurricane, in an area that's full of such houses. But where is that? Most people I know can't afford the house they are living in now, never mind making it hurricane-proof.

Aside from hurricanes, there are forest fires, tsunamis and earthquakes. Forest fires aren't much of a problem out on the water. Tsunamis are uniquely survivable aboard a boat, given a bit of warning; when you see the water going out, head for deep water. Then, once it's all over, come back to survey the damage. During the recent East Coast earthquake, which damaged the National Cathedral in Washington, everyone in Boston felt it. My wife didn't; she was on the boat at the time.

It was a wet and windy weekend, and I didn't get a lot done. But compared to the scenes of devastation we see among the East Coast communities from Hatteras all the way up the coast and inland through Western Massachusetts to Vermont, for those of us living afloat in the harbor Hurricane Irene was pretty much a non-event.

Reinventing Collapse in the US and Canada

by Justin Ritchie, The Tyee

It's all too easy to make jokes about our neighbors to the south for their dramatic weight problems, generally poor understanding of geography and that stretch of coastline now famously known as the Jersey Shore.

Yet we're seriously reliant on the economic health our southern neighbours. In British Columbia, 45.9 per cent of our total exports went to the U.S. last year. The Canadian economy exports over 70 per cent of its products to the States, forming the world's largest trading relationship between two nations. The case could be made that no other sovereign economy is tied to the U.S. more than Canada's.

So when someone deeply familiar with the collapse of the Soviet Union writes about how the States is headed in the same direction, we might wish to pay attention. Even greater cause for concern is that he has been doing so since 2005, and his predictions have been proving true at alarming accuracy. That, combined with a crushing national debt hovering over Washington D.C., means there is a prescient need for people to hear from those experienced with "superpower collapse."

Dmitry Orlov writes not for fame or fortune, but to provide a book with which you can smack your friends across the head when they state, "No one could have seen this coming." He moved with his family from the USSR to the U.S. as a kid, but his career allowed many opportunities to travel back home and catch glimpses of growing collapse. Though the USSR had been falling apart slowly, it wasn't until Yeltsin uttered the words "Former Soviet Union" that it seemed to happen all at once. The world's first superpower collapsed because its founding myths of technological progress and "bread for all" had failed to match reality.

Moving past the 'iron triangle'

In the newly revised version of Reinventing Collapse, first published in 2008 before the financial crisis began later that year, Orlov expands on his attempt to convince you that the U.S. is much less prepared for collapse than the Soviet Union ever was. Though headlines declaring the end of America won't appear anytime soon, Orlov forecasts that collapse will happen for each person individually, as they are rudely awakened from the American Dream. And while his propositions can be frightening at times, he understands that forecasts of superpower collapse will either frustrate or alienate most people, or end up largely ignored -- until it's too late.

Many of Orlov's forecasts from the previous edition have proven accurate. Orlov's America is a system barely able to sustain itself, ruined by a population bent on a hardened mythology: an iron triangle of home, car and job that is out of touch with the reality of rapidly depleting cheap energy, which made vehicle ownership and suburban home life a gateway to the goal of being middle class. Orlov predicted that as the steady stream of money from employment dried up, the country's depleted social infrastructure would be exposed and the American standard of living would plummet. His forecasts are lived out by the people who have their home in the underground corridors of Las Vegas and in cars across the nation.

Orlov argues that there is a clear recipe for social unrest in the U.S., with approximately 350 million guns, a consumption rate of two-thirds of the world's anti-depressant drugs and a national homicide rate that could be equaled by a 9-11-sized event every month. The can-do American spirit and career-oriented mindset may have served its residents well in the past, but it will be particularly vulnerable in the transition to a post-growth economy. Contrasted to the Russian work ethic during the latter stage of Soviet decline, Orlov says that someone who worked hard and played hard was considered a fool. American career ethics and economic dynamics have lead to patterns of migration that uproot people from communities, something we're witnessing in Canada now -- though this can be a positive in times of collapse, as it makes us more open to strangers and varied living situations than the tightly knit Russian communities Orlov witnessed. Vancouverites know how difficult affordable housing can be, and openness is an asset as living affordability becomes more precarious.

Orlov contrasts the U.S. and the USSR in areas as diverse as housing policies, health care, food production and core societal myths. His explanation of the difference between Soviet and American expectations for education particularly resonated with me. While Soviet schools had far fewer resources, they produced children that knew much more general information and had better conceptual understanding, rather than a focus on exams. At my university in North Carolina, I experienced that exact dynamic. When a professor made a point to avoid specific outlines of what to study, students squirmed with discomfort. In classes with Russian professors, students complained that exams didn't follow homework problems, testing concepts instead. Orlov concludes this is because schools in the U.S. aren't about learning, they are about institutionalization; merely biding the time while kids enter the institution of the workforce, government, a corporation or prison.

Age of opportunity?

While the updated Reinventing Collapse retains many of its first edition's ideas, it reads smoother and makes the case stronger for the collapse of the U.S. But it's not all doom and gloom. Orlov presents very clear and surprisingly optimistic recommendations, revealing an age of opportunity for those willing to adjust their expectations. Orlov thinks black market economies in scavenged material will become the norm in the near future -- and evidence of that is booming, as witnessed by the rapid growth industry of copper and air conditioner theft in the U.S. Orlov explains that expensive health care will become out of reach for the majority, and alternative medicine will grow in popularity as the complex networks that enable pharmaceuticals wither away. He says that instead of building an electric car no one can afford, products and services can be designed to serve the huge and untapped market segment of the permanently unemployed. There will be a need, he says, for low-cost housing opportunities like dormitories, GPS devices for retrieving and locating stashes of gear, or campgrounds that provide garden plots.

The American economy is deeply tied to oil consumption at incredible levels, made possible by the world's reserve currency. Orlov explains that as oil prices increase, the economy will decline, leading to shortages of serviceable equipment and an inability for citizens to consume -- hurting economic activity further, weakening the U.S. dollar and making more oil even further out of reach. Once shortages appear, much of the spare gasoline is wasted idling at the few gas stations still open and hoarded by those with ambition and foresight. Reinventing Collapse explains how even a relatively minor temporary disruption in gasoline could lead to a dramatic shift to a black market economy for fueling vehicles. Another advantage lies herein for Canada as the value of the loonie has been closely tied to oil prices for over a decade.

So where does that leave Canada? While our debt-to-GDP ratio is among the healthiest of the G20, economic ties to the U.S. means we should pay attention. By understanding where the U.S. is headed, perhaps the argument for greater resilience and sustainability here in Canada can be made anew.

Justin Ritchie counts himself among the first refugees from the U.S. to Canada. He covers sustainability and sociological issues as co-host of the Extraenvironmentalist podcast at http://extraenvironmentalist.com. He is the sustainability coordinator for the UBC Alma Mater Society and is working on energy materials as a Master's of Materials Engineering student at the University of British Columbia.

No shirt, no shoes, no problem

By Lindsay Curren

Though we’ve had Transition Voice for almost a year now, last month was the first time I talked to Russian-American peak oil and economic analyst Dmitry Orlov, whose popular website, Club Orlov, offers both his own thoughts, and a vigorous community of like-minded readers.
Because Orlov takes a more skeptical, less forgiving look at collapse, I think I might have been tuning him out to a degree, considering myself not doomer enough for his club. Or maybe I had Panglossia when it came to him.

But my prejudices were upended when I took the time to read his book Reinventing Collapse: The Soviet Experience and American Prospects. Erik Curren just reviewed the book for us, but I have my own take, too, in fewer words; it’s awesome.

If you can call reading about peak oil and collapse “awesome.”

Infinitely readable — a page turner even — Orlov’s direct experience with Soviet collapse translates into an excellent historical perspective supported by research and a clear context. Yes, he’s pretty blunt, and doesn’t candy-coat things, but at the same time he’s efficient and even somewhat elegant in his writing. It’s a quick yet informative read and I highly recommend it.

Soon after I spoke with him and, still nervous about my perception of his intensity, I went into the interview not knowing what this guy would be like.

But like most tough guys, he turned out to be a big pussycat. Very nice, very approachable, funny, insightful, easy to talk to. Rather than finding a stodgy analyst of intellectual information — though he is quite sharp — I’d describe his approach as “moving with, rather than against, collapse.” That was one reason for the title for this article, “No shirt, no shoes, no problem.” Orlov’s is a view seasoned by experience, not just theoretical predictions. So there’s an insightful depth there that takes things seriously, while also operating from a deep sense that it’s “just life.”

Oh, and it was my first shirtless interview. Orlov, that is. He was shirtless. It was a very hot day and I interviewed him via Skype. He was on his boat. It was hot here, too. The heat wave of ’11. My shirt stayed on.


Read more...

Le pic pétrolier, c'est de l'histoire

[Merci, Tancrède! Le texte originel est ici.]

Le baratin mercatique sur la quatrième de couverture de la première édition de mon premier livre, Réinventer l'effondrement, me décrivait comme un théoricien majeur du pic pétrolier. Quand je l'ai vu la première fois, ma mâchoire est tombée — et elle est restée pendante. Vous voyez, si vous parcourez une authentique liste de théoriciens majeurs du pic pétrolier — les Hubbert, Campell, Laherrère, Heinberg, Simmons et quelques autres valant d'être mentionnés, vous ne trouverez pas un seul Orlov parmi eux. En vain chercheriez vous dans les annales et les comptes-rendus de l'Association pour l'étude du pic pétrolier la moindre trace de votre humble auteur. Mais à présent que cette bourde est imprimée et en circulation sur tant de copies, je suppose que je n'ai pas d'autre choix que d'essayer d'être à la hauteur des attentes qu'elle crée.

Mes déqualifications mises à part, le moment semble propice à discourir avec un nouveau bout de théorie du pic pétrolier, car c'est l'année où, pour la première fois, presque tout le monde est prêt à admettre que le pic pétrolier est réel, par essence, bien que certains ne soient pas encore tout à fait prêts à l'appeler par ce nom. Il y a seulement cinq ans tout le monde, depuis les officiels du gouvernement jusqu'aux cadres des compagnies pétrolières, traitait la théorie du pic pétrolier comme l'œuvre d'une frange de lunatiques, mais à présent que la production conventionnelle mondiale de pétrole à atteint son pic (en 2005), et que la production mondiale de tous les liquides à atteint son pic (en 2008), tout le monde est prêt à concéder qu'il y a de sérieuses difficultés à accroître l'approvisionnement mondial en pétrole. Et bien que certaines personnes craignent encore d'utiliser le terme pic pétrolier (et que quelques experts insistent encore sur ce que le pic doit être désigné comme un plateau ondulé, ce qui, au moins, est une gracieuse tournure de phrase), les différences d'opinion proviennent d'un refus d'accepter la terminologie du pic pétrolier plutôt que la substance d'une production mondiale de pétrole atteignant son pic. Ceci est, bien sûr, tout à fait compréhensible : il est embarrassant de sauter soudainement de le pic pétrolier est une ânerie ! à le pic pétrolier, c'est de l'histoire ! d'un seul bond. De telles acrobaties ne sont sans danger que si vous vous trouvez être un politicien ou un économiste.

-> Orbite.info

De val van Amerika: Een vergelijking met de Sovjetunie

[RC is now available in Dutch.] Wat overkomt de Verenigde Staten bij de aanstaande ineenstorting? Wat zijn de overeenkomsten en verschillen met de val van de Sovjet-Unie? En wat kun je zelf het beste doen als het komt tot een brandstofloos bestaan zonder gezag?

‘Wat betekent een maatschappelijke ineenstorting voor de gemiddelde Amerikaan?’ Die vraag stelt Dmitry Orlov zich in zijn boek De val van Amerika. Niet de vraag wat precies de val van Amerika in gang zal zetten, wanneer deze exact zal plaatsvinden, of diep hij zal zijn.

Orlov gaat er eenvoudig van uit dat er ergens een afgrond gaapt. De ingrediënten voor de ineenstorting zijn hem duidelijk: ernstige en chronische tekorten bij de productie van aardolie, een ernstig en groeiend tekort op de handelsbalans, op hol geslagen militaire uitgaven en een snel aanzwellende buitenlandse schuld. In combinatie met een militaire nederlaag en wijdverspreide angst voor een dreigende catastrofe moet dat leiden tot een val van Amerika. Wanneer en hoe interesseert Orlov minder. “Probeer gewoon dit beeld voor ogen te houden: het is een supermacht, hij is reusachtig, machtig en staat op het punt in elkaar te donderen. Jij noch ik kunnen daar iets aan doen. Het zou zijn alsof je met wriemelende tenen een tsunami probeert tegenhouden.”

Lees verder...

Maar je kunt je ogen er niet voor sluiten. Dus: hoe maak ik dit tastbaar, vroeg Orlov zich af. Als geëmigreerde Rus had hij het juiste middel bij de hand: een vergelijking met de val van de Sovjet-Unie.
“Ik probeer de muur in het voorstellingsvermogen te doorbreken door een vergelijkende analyse waarin ik de daadwerkelijke omstandigheden van voor en na de ineenstorting van de Sovjet-Unie vergelijk met de hypothetische omstandigheden van voor en na de ineenstorting van de Verenigde Staten. Ik richt mij daarbij op categorieën die cruciaal zijn voor overleving: voedsel, huisvesting, transport, onderwijs, financiën, veiligheid en nog een paar andere.”

“Het zijn de overeenkomsten op microniveau die ons praktische lessen kunnen leren over hoe kleine groepen met succes het hoofd kunnen bieden aan een economische en sociale ineenstorting. En dat is waar de Russische ervaring van het post-Sovjettijdperk ons heel wat nuttigs te bieden heeft.”

Dmitry Orlov wil ons helpen, wat er verder ook te gebeuren staat, een gelukkig en voldaan leven te kunnen leiden. Hij doet dat door de zaak vanuit allerlei invalshoeken te bekijken, ook door de mogelijkheid van een ‘zachte landing’ te bespreken, en door uitgebreid de manieren de revue te laten passeren waarop je je kunt aanpassen aan het nieuwe normaal en welke carrièremogelijkheden deze toekomst met volkomen nieuwe spelregels in petto heeft.

Het boek wordt nooit zwartgallig. Je schiet bij het lezen geregeld bij in de lach, al is het onderwerp nog zo ernstig.

Downloads

• Persbericht De Val van Amerika, Dmitry Orlov
• Inhoudsopgave 'De Val van Amerika'
• Achterpagina van De Val van Amerika

Twaalf beschouwingen over De Val van Amerika:

• 1. Ineenstorting voorspellen
• 2. Ingrediënten voor de ineenstorting
• 3. De ineenstorting onder ogen zien
• 4. Is Amerika voorbereid?
• 5. Kenmerken van de val
• 6. Ruilgoederen ipv bankbiljetten
• 7. Nieuwe machtstructuren
• 8. Gestage uitholling van het bestaan
• 9. De partij van de ineenstorting
• 10. Trauma voor geslaagde mannen
• 11. Zelfkennis als voorbereiding
• 12. Ontbering leren verdragen

Presentatie
Dageraad der Tegenvoeters

The Sledge-O-Matic

Photo: gallaghersmash.com.

[A generally pleasant and helpful book report by Erik Curren. I took the liberty of taking out a paragraph where he sounds too much like a defensive American. There is no room for national inferiority complexes here. Sorry to admit, I haven't read de Toqueville. He talked about democracy in America; what's that? Nor have I heard of Gallagher.]

Dmitry Orlov scares the crap out of me.

The relentlessly doomerish boss of ClubOrlov.com has become famous in peak oil circles for presiding over a kind of comedy club from hell where a rabid fan base celebrates the coming fall of the American Empire under the load of peak debt while devouring posts on such subjects as the future of sailing ships and ways for dead people to send text messages. The site’s sidebar lists topic tags including cannibalism, ruins and Siberia.

Even Orlov’s name is scary, suggesting to the Anglo-Saxon ear a marriage of Orwell and Karlov — evoking George and Boris respectively, each in his own way a master of horror.

But while his online homies clearly relish Orlov’s hard edge, it would be a shame if his intimidating reputation put off a wider audience from reading his brilliant book, recently re-released.

Here, I’d like to propose a different, hopefully more accessible way of seeing Orlov: as a foreign-born observer of American culture in the mold of Alexis de Tocqueville. But with a little bit of Gallagher thrown in — yes, that Gallagher, the prop comic with the goofy hair and suspenders, popular in the 1980s for smashing watermelons on stage.

Hypocrisy in America
I’ll start by admitting I think that Orlov’s Reinventing Collapse: The Soviet Experience and American Prospects is just as perceptive a read on the American mind and the American system as was de Tocqueville’s Democracy in America.

"As one digs deeper into the national character of the Americans, one sees that they have sought the value of everything in this world only in the answer to this single question: how much money will it bring in?” said de Tocqueville. Compare Orlov on the American’s “primitive idolization of money”: 

The only thing that makes an American good is the goodly quantity of dollars lining his pockets. This is what makes the ritualistic acts of humiliation heaped on the poor and the unfortunate so politically popular even with the very slightly well-to-do; just utter the fashionable term of abuse — “welfare queen” or “illegal immigrant” — and citizens line up in an orderly gamut, ready to dispense corporal punishment.

It may seem that Orlov is more provocative than de Tocqueville, but historians say that in its time, readers in both the US and the author’s native France thought Democracy in America was pretty edgy too. It’s easy to see why two centuries of scholars and pundits haven’t stopped quoting a guy who says stuff like this: “I know of no country in which there is so little independence of mind and real freedom of discussion as in America.”

And though Orlov doesn’t mention de Tocqueville, the two should be good friends. Presciently, in 1835 De Tocqueville predicted the superpower rivalry between the US and Russia that would become the backstory to Orlov’s analysis.

The Frenchman also foresaw key threats to American democracy that ultimately led to the debased nation that Orlov finds today: the rise of a plutocracy, the dominance of mass culture over thinking for oneself, a preoccupation with material goods and the isolation and alienation of the individual.

The hammer and the sickle, and the hammer again
Orlov, who was born in Leningrad, emigrated to the US in the seventies and then made repeated trips back home, which enabled him to witness the collapse of the USSR and its aftermath from a perspective both Russian and American. No surprise that he’s built a career out of making unflattering comparisons of the US to his home country.

Orlov has earned a fearsome reputation as a doomer who not only predicts, but even seems to relish, the collapse of American society, while he disdains political activism, celebrates apathy as a healthy coping strategy and warns that there’s nothing anybody can do to fix things. Yet, in his book Orlov projects genuine goodwill, showing evident compassion for the “big, rowdy party that was this country, with its lavish, garish, oversized, dominating ways.”

As the party winds down, Orlov reminds us that “people like to party together but they like to nurse their hangovers alone.” So, he offers no one-size-fits-all plan for surviving the coming turmoil. But in classic American fashion, he urges each of us to come up with our own plan.

“You should figure out what it is you absolutely need to lead a healthy, happy, fulfilling existence. Then, figure out a way to continue getting it once the US economy collapses, taking a lot of society with it. (This is easier said than done; good luck!)”

For example, Orlov himself lives on a sailboat and says that today’s economic downturn is probably a good time for readers to seek their own boat at a fire-sale price. At the same time, living on a boat is not for everybody, and Orlov gives lots of other ideas to prepare for a future economy that’s basically beyond employment and beyond money.

On the way down
Of course, in his place in the cycle of American imperial rise and fall, Orlov differs from de Tocqueville. That could help explain the difference in tone between the two writers. Despite all his criticism of America’s money-grubbing, crowd-worshipping character, the Frenchman often flattered our sensibilities and saw a bright future for our nascent democracy. By contrast, the Russian has little good to say about our character and even less good to say about our prospects.

Measure after measure, Americans are less prepared to deal with a Soviet-style collapse than his people were. In Russia, for example, when the economy collapsed few people lost their homes, because the buildings were owned by the state and more-or-less permanently assigned to their occupants. By contrast, in the US, private landlords and mortgage-holders are unlikely to tolerate deadbeat tenants or defaulting homeowners for very long. In an economic collapse, evictions could dwarf the foreclosure crisis of the last few years.

The collapse party
At the same time, despite a few good qualities (our friendliness to strangers makes us excellent roommates, for example, which could come in handy during a housing crisis), Orlov thinks that Americans are pampered fools who are much less prepared to fend for ourselves than the wily Russians were.

Take food for instance. Many urban Russians had dachas outside of town where they could grow food for their own use and for barter. But in the US, not only do few besides the relatively wealthy own a second home — even fewer of us bother to plant a kitchen garden. When grocery store shelves start to empty out, the dependent American food eater will be like a baby who’s lost his bottle. And a nation raised on cheap eats and easy livin’ could soon face the unimaginable: widespread hunger.

So, what Orlov is really doing is trying to show that the American system is hard and unforgiving but that the American people are ripe and soft, like a big watermelon.

And for me, that’s where Orlov meets that other analyst of the American character, Gallagher. And I don’t mean the racist clown that the un-funny old man has become today, “a hate-filled, right-wing loon,” according to Salon. I mean classic Gallagher, the guy we cared about in the 1980s for only one reason: the Sledge-O-Matic.

This routine with the mallet and an unlucky piece of summer fruit, computer keyboard or other highly smashable item of everyday life clearly spoke to something deep in the American psyche. It wasn’t just the adolescent fun of busting things up. Gallagher also connected to a pervasive if quiet discomfort among the public with our culture of material abundance and wastefulness at the period of its very height.

I don’t think Orlov takes a Sledge-O-Matic to America’s national pride just as a Russian’s revenge. Instead, I believe him when he says he wants to help Americans wake up from their own debilitating national myths in time to save themselves from disaster.

“Sledge-O-Matic removes unwanted fingerprints from walls,” says Gallagher as pitchman. “Sledge-O-Matic also removes unwanted walls from fingerprints.”