Posted by & filed under Consumerism, Economics, Food Shortages, Global Warming/Climate Change, Peak Oil, Society.

As the new year turned over, I noticed a few websites running article series where correspondents made their predictions about what they anticipate being hot news topics over 2011. Although a few deteriorated into meaningless waffle over who’ll be top of the pops, or who’s going to light up the silver screen this year, there was a general overriding focus on the likelihood of increasing economic gloom. It seems 2011 is starting off with a decent touch of realism, even if they’re still, mostly, ignoring the central cause of that economic gloom — that being the cost of the energy that keeps our modern world ticking over.

Yet, largely separate from these projections, articles here and there evidenced a decent degree of lucidity, even if not acknowledged by site editors sufficiently enough to keep them on their main page longer than a few hours. Here’s one I could mention:

The current high price of oil will threaten economic recovery in 2011, according to the International Energy Agency (IEA). — BBC

The article just quoted talks about the tightrope we’re currently negotiating. As the cost of mining their increasingly hard-to-get remaining reserves goes up, OPEC nations are more inclined to put prices up to maintain reasonable profit levels. Yet, by doing so, they’re biting the hand that feeds them — high oil prices stop struggling economies from getting back onto their feet after the last few years of recession, and if economies like those of the U.S. and Europe continue to falter, then it cycles back to the oil-producing nations by way of diminished demand, resulting in a downward spiral without end — something I’ve forecasted long before 2011 (here, here and here, for example).

While higher oil prices bring in more money to oil exporting countries, making life too difficult for its customers can backfire.

Mr Birol told the Financial Times newspaper: "Oil exporters need clients with healthy economies but these high prices will sooner or later make the economies sick, which would mean the need for importing oil will be less." — BBC

And, what’s the inevitable result of increasing fuel prices and its resulting collapsing economic infrastructure, if we don’t find a workable, low-carbon detour around all this? C’mon guys, you should know — it’s unaffordable food.

Global food prices rose to a fresh high in December, according to the UN’s Food and Agricultural Organisation (FAO).

Its Food Price Index went above the previous record of 2008 that saw prices spark riots in several countries.

Soaring sugar, cereal and oil prices had driven the rise, the report said. — BBC

A cacophony of crises are behind the current price rise of global staples — climate-related disasters such as the fires of Russia and the all-too-frequent droughts and floods occurring globally — and while the increasing cost of fuel is a significant proponent of this, including its drive towards turning food into fuel in the form of biofuels, if in 2011 oil prices rise a little more, as I anticipate, we could be seeing merely the beginning of sorrows, as it were.

Economically, the U.S. is printing money like there is no tomorrow — and by doing so may well be ensuring there won’t be — and the Eurozone is in crisis. Rumours (I cannot substantiate at this point, so don’t quote me on this) tell me some European nations have already begun printing their former national currencies at their mints, holding them in readiness, ‘just in case’. Given observable sentiments, I would not be surprised if this were indeed so. Even if not, I don’t hold out that much hope in the survival of the Euro — at least not past two or three years from now.

So, I’m curious what your predictions are for the coming year? Feel free to let us know via comments below. Here are a few of mine, for what they’re worth:

  • Despite faltering economies, the combined balance of developed and developing world economies will bring a net increase in demand for oil. Russia — who just connected the world’s largest oil producer (itself) to the world’s second largest oil consumer (China) — will become one country many others will be seeking to get on side with, and nuzzle up to. The U.S., despite having the largest military complex, will be seen to have fewer and fewer cards to play with, and will be treated accordingly. Stopping their oil-fed military-industrial complex, if they start beating their chest too much, could be as easy as cutting off supplies in oil. I start this list of drop-notes on 2011 by featuring Russia and China for good reason.
  • If oil prices do not go over $100 a barrel again this year (they’re currently not far short), it’ll only be due to ever-more-impossible attempts — either by oil exporting nations trying to nurse consuming economies or by government price subsidies within importing nations, or both — to keep the world’s economies afloat a little longer. I strongly suspect efforts to keep prices down will fail however, possibly miserably. Either way, economic strain due to a disproportionate cost in oil will be acute.
  • The increasing realisation that we’re on a likely plateau in supply capacity, with a high potential for sudden declines, will give moments of pause for oil exporters considering how best to navigate their own transitions. Internal deliberations over whether to appease the demands of ‘other’ countries, or their own citizens, will move to front and centre. This may translate to sudden, potentially permanent, drops (or even cessations?) in supplies to some regions. These deliberations will be more difficult for oil exporting countries like Saudi Arabia who are highly dependent on imports of their own — i.e. food — than it will be for countries like Russia who still have decent swathes of arable land to exploit.
  • Food prices will continue to rise, and as this begins to take increasing precedence in household budgets, industries based on non-crucial products and services will also begin to go under.
  • Interest in mitigating climate change and reducing environmental destruction in general will move to the periphery for the majority — the ‘common folk’ — as survival becomes priority, and all while the climate becomes ever-more erratic and destructive, causing economic feedback loops born of its associated destruction in crops, life, and infrastructure. The ‘Green Consumer Economy’ will struggle to emerge, and never will.
  • Civil unrest and disobedience will become more frequent occurrences, and our political environment will be more conducive to extremism. ‘Underground markets’ will develop to replace overwhelming discontent with out-of-touch centralised governments, and in those countries where organised mafia type networks are already embedded, these parallel transactions will become more commonplace, as will general petty, or not-so-petty, thievery and thuggery.
  • We will see a continuation of the trend for corporate mergers, as the biggest players in the market mop up those who, teetering on the edge of survival, finalise their exit strategies. The present, disparate rich/poor gap will continue to widen.
  • The word ‘revolution’ will become more popular amongst the masses — potentially giving new life to slogan t-shirt cottage industries.
  • For many countries, there will be observable reductions in quality of social services and infrastructure maintenance — eg. potholes in roads won’t get fixed, and regular power outages will further exacerbate economic declines. Queues will be longer.
  • People will seek to relocate to increase their economic viability — with many rediscovering ‘home’ and their extended, or immediate, families again.
  • Scattered communities will be seen to develop along one or another line — towards more centralisation of resources and power and increased oppression of the ‘revolting peasants‘, or, with good leadership and community involvement, towards cooperation, driven by a consensus desire to build a protective buffer against the future.
  • Interest in permaculture will heighten to new levels not imagined just five years ago. There will be frustrations in bottlenecks of practical permaculture knowledge outflow. People will wish society in general had embraced permaculture design concepts much earlier. Oh, and if the plug on the internet doesn’t get pulled, I think the Worldwide Permaculture Network might just hit the spot with many people who’re trying to give and receive this knowledge as quickly as possible.

Just to end on a cheerful realistic note, I thought I’d close these ponderings with a recent introductory video for a coming new video series produced by The Nation, as it features a lot of well-recognised names, all giving their own wake-up calls on the above topics to the world at large.

Bill McKibben, Noam Chomsky, Nicole Foss, Richard Heinberg and the other scientists, researchers and writers interviewed throughout “Peak Oil and a Changing Climate” describe the diminishing returns our world can expect as it deals with the consequences of peak oil even as it continues to pretend it doesn’t exist. These experts predict substantially increased transportation costs, decreased industrial production, unemployment, hunger and social chaos as the supplies of the fuels on which we rely dwindle and eventually disappear.

Chomsky urges us to anticipate the official response to peak oil based on how corporations, news organizations and other institutions have responded to global warming: obfuscation, spin and denial. James Howard Kunstler says that we cannot survive peak oil unless we “come up with a consensus about reality that is consistent with the way things really are.”

14 Responses to “Glancing at the Crystal Ball – What Do You See?”

  1. JBob

    I’d say central banks will continue to cause more havoc on a global scale than fuel supply could even dream of causing.

    Reply
  2. Craig Mackintosh PRI Editor

    Central banks are and will cause a great deal of havoc, although I think it important to understand why they’re doing what they’re doing, or what it is they’re trying to fix. I think the root causes are, directly or indirectly, due to the 2008 price spikes in energy.

    Jeff Rubin explains.

    Money is, well, just money. Policy changes, or perceptual shifts can change the meaning and value of money overnight. But energy is a very tangible thing, and without lots of cheap energy, our modern civilisation as we know it cannot function. Indeed, if exporting nations were to begin to stop supplies to different countries, we’ll see those countries immediately fall into chaos.

    The money system may collapse, but another would immediately arise to take its place (think parallel, or mafia-type economies, as mentioned in the post above). But there is no replacement for oil. Too many people do not understand how deeply dependent on cheap energy we are, and what it will mean when the energy component in our personal and national budgets increases to 20% or 30% or more. What you’ll have is a completely disfunctional economy – where the central banks will try all kinds of market voodoo to resuscitate it. It can be tempting to blame the market voodoo – the symptoms of a more foundational disease. Money markets can be redesigned or bypassed. We can also design our way out of dependency on oil, but it takes far longer.

    Reply
  3. Chief Cloudpiler

    What slays me is that the present economic/ecologic/cultural crisis is nothing new to History. Cultures age, and this one is no exception. Throughout history there has been a pattern of from three to six or so hundred years, wherein the society and all its institutions rise and fall in a parabolic curve. There have been NO exceptions to this rule.

    Some “experts” say that this time the rise and the fall have been steeper and the curve shorter in duration – but that’s subjective. How to get through to the next curve, and then have effect on the course that curve will take might just require an honest look at history as well.

    Reply
  4. Abrahim Champion

    Craig Mackintosh’s graph above shows all the areas of permafrost as stable soils which will not be the case a few decades from now as with the inevitable global warming these soils will thaw out and become highly unstable soils also many areas adjoining existing deserts will also dry out and become unstable too !!!!!!!!!!!

    Reply
  5. Øyvind Holmstad

    Yes Abrahim, this is serious as 50 % of all the world’s carbon is to be found in the permafrost, at an area of just 20 % of the world’s landmass. If all this is released in the atmosphere in the form of methane and laughing gas, I guess we could grow bananas here in Norway.

    Fortunately they have now discovered a new bacterium in the Arctic (Svalbard) that eats methane, Methylobakter tundripaludum, which transforms methane to energy and carbon dioxide: http://www.forskning.no/artikler/2011/januar/275048

    The problem is that if the permafrost thaws much of it will be covered with water, and this bacterium is aerobe and cannot live in water.

    Reply
  6. Øyvind Holmstad

    ” …We cannot have global capitalism and embrace localization… Our only alternative is to constrict the economy. We cannot have economic growth and ecological sanity… Maybe the easiest way to think about contracting the economy is getting your hands dirty and growing some food. There’s not much ambiguity there. It’s simple and cheap and convivial. But more than that it represents exactly how we need to be de-commodifying our relationship with the natural world and reconfiguring our cities as common ground.”

    – Book: Common Ground in a Liquid City: Essays in Defense of an Urban Future: http://www.biourbanism.org/book-common-ground-in-a-liquid-city-essays-in-defense-of-an-urban-future/

    Reply

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