The Crash Course - Chris Martenson [75]
Why? Simply because if Peak Oil is only 5 or even 10 years from the writing of this book, any technology that has less than a 1 percent market share already, no matter how promising, is exceedingly unlikely to allow our economy to continue along uninterrupted.
And that’s the main point of this book: To illustrate why the next 20 years are going to be completely unlike the last 20 years.
Yes, I will be quite excited by and will closely follow the developments of new energy technologies. But no, I will not be staking a significant portion of my future strategy on the mere hope that these will arrive in time. Hope alone is a terrible strategy.
This book is meant to inject a dose of numerical reality back into the discussion, and that’s what I am driving at here. In order to be considered as a potential solution, the technologies and/or processes in question have to have a solid chance of affecting the outcome.
CHAPTER 16
Peak Oil
If you glance up from this book and scan your surroundings, you’ll be challenged to spy a single object that did not somehow, in some way, get there because of oil. In our economic model, petroleum fuels are involved in every step of the economy. Most things that are manufactured involve oil somewhere along the way, and quite a few are made directly from oil. Remember, you yourself are powered by food that is produced and delivered by oil! So even if you’re looking at an object created by nature that you personally collected and placed on a shelf in your home, we can still claim that it got there because of oil. Even intangible services are fueled by petroleum, as the people offering them are fed, clothed, transported, and kept comfortable by oil.
If you haven’t yet heard of Peak Oil, this chapter is going to be a real eye-opener. My purpose here is not to recreate a complete treatise on Peak Oil—that would take an entire set of books, and they’ve already been written by others1—but to establish just enough logical facts that we can tie the three Es together and arrive at the conclusion that prudent adults should seriously consider the implications and take specific steps in order to mitigate risks.
As we discussed in Chapter 15 (Energy and the Economy), energy is the lifeblood of any economy (or any complex system, for that matter). Without energy constantly flowing through that system, order and complexity will shrink as the system inexorably winds down and becomes disordered. (“Entropy” is the name given to this process by scientists). When an economic system has been built around exponentially driven debt-based money, the energy that fuels the exponential expansion of both debt and the economy deserves your very highest attention. Why? Because there’s a very high risk that a system that expands exponentially will also contract exponentially. As the old saying goes, what goes up must come down. The worry is that once its energy supports are knocked out, the economy will collapse at the same speed it expanded—fast.
Nothing is more important to the continuation of our current way of life than our ability to extract and deploy ever-larger amounts of energy. Our entire economic system is predicated upon the implicit assumption that the future will not only be larger than the past, but exponentially larger. This is a feature of our debt-based monetary system, where principal balances on nonproductive loans grow each year, leaving interest payments to provide the “exponential kicker.” Tomorrow’s economic growth is the collateral for today’s debts. If that growth does not occur, what then happens to the value of today’s debt?
Petro-Realities
In order to understand what “Peak Oil” means, we need to share a basic understanding about how oil fields work and how oil is extracted. A common misperception is that an oil rig is plunked down over an oil field, a hole is drilled, a pipe is inserted, and then oil gushes from a big underground lake or pool that eventually loses pressure and gets sucked dry. Let’s call this the “straw in a firmly gripped juice-box