Tuesday, 1 July 2008
Oil to be $500 A Barrel
The black beast of Peak Oil slouches ever closer, its womb squirming with a myriad monsters about to be born.
Drunk on its delusions and decadence, the West sleeps as the shadow of the monster already begins to darken the day.
Consumerism, the offspring of the Oil Era is facing the abyss.
Globalism, and the liberal consensus based on the theory of universal human rights, will fall with the Oil Era.
The Natural Order will replace the New World Order, and an age red in tooth and claw will erupt as nations struggle to secure the last remaining oil reserves in the last few remaining oil wells.
This will be an era of Eco-Conflict, Resource Wars, Oil Wars such as the Iraq War and Neo-Darwinian Politics.
Here is a video of the energy expert Dr. Robert Hirsch explaining how oil will be $500 a bareel by 2012.
With the collapse of the dollar as a result of the collapse of the Petro-Dollar Recycling System, energy inflation costs, growing political, terrorist and social instability in the last remaining oil producing nations and rising oil prices globally mean that this projection of $500 is a likely scenario.
The Great Depression ended because economic growth was still possible due to the vast amounts of oil still available.
We are now in The Second Great Depression with the oil almost half gone. Therefore the possibility of cheap oil subsidising future economic growth is gone, and all the remaining oil can do is satisfy existing demand at an ever diminishing rate and ever rising cost.
The Second Great Depression was prefigured by the Credit Crunch, which was itself an aspect of the collapse of the Oil Age.
Credit expansion and rising incomes in the 20th century were aspects of an economic expansion generated by cheap oil, but with the collapse of the Oil Age which began with the Iraq War (which was undertaken to secure the last remaining globaly significant oil deposits) then future economic expansion was not possible, and therefore the expansion of the credit based system was impossible. This caused the credit based system to collapse.
Previously easy credit has been available to everyone, simply because as long as the cheap oil remained then an increase in the growth of the economy was guaranteed. Credit could be repaid. The credit crunch caused by losses caused by the Sub Prime Crisis and the linked withdrawal of credit by loaners of private liquidity, who are now holding onto their capital, has caused the credit supply system to crash.
Governments cannot pump vast amounts of liquidity into the economic system in order to boost economic growth as Public Debt is escalating due to the Iraq and Afghanistan Wars.
So Public Liquidity and Private Liquidity are both restricted at the same time as the ability of those already in debt to pay back existing credit loans is diminished due to economic reccession as a result of the oil price rise.
This is a triple whammy.
With oil supplies diminishing then the end of the Capitalist system is in sight.
Both Marx and Smith misuderstood the fundamental dynamic of all modern economic systems, which is energy supply.
Capital is an aspect of the energy capture and supply process.
Agricultural production in early human societies allowed man to grow crops containing calories, energy, to feed himself and his family.
Previous to this development of agriculture then human calorific intake had been based on nomadic hunter gatherer lifestyles based on subsistence living.
Then as agricultural techniques improved, the excess calories produced by the farmers allowed the creation of a warrior elite whose sole roles in early agricultural societies was to protect the farmers and to hunt down, capture, keep and feed slaves.
The slaves were the first machines dependent on mans ability to unlock energy from the environment.
Then the slaves became workers in the Feudal System. They worked the land and produced the food and goods that formed the basis of feudal trade.
Then the development of new technologies during the Industrial Revolution using wood, coal and charcoal allowed massive economic growth.
The Feudal Workers became the Working Class who worked in the mines, fields and factories and who supplied the machines with energy, who worked the machines or who sold the products of the machine or who protected the capital hoarded by the owners of the machines.
The demand for workers to work the machines drove up incomes and with disposable incomes this drove up the demand for commodities produced by the machines.
The discovery of oil, and the creation of technologies that used oil, caused massive economic and population growth.
Growing populations in growing economies with rising incomes are all aspects of the energy supply process.
The Oil Age replaced the coal age, but the Nuclear Age has not, and cannot, replace the Oil Age.
Therefore the end of the Oil Age is the end of modern human civilisation.
The Olduvai theory posits a return to the population levels by a devastating collapse in human opulation numbers.
The Time of Malthus will have begun, for it had only been delayed by the age of oil and the fertilisers and pesticides created from oil.
Both Communism and Nazism were aspects of the energy capture process. Both represented the return to Slave Economies, and both Communism and Nazism were destroyed by oil.
The Nazis invaded the Soviet Union to get at the oil owned by Russia (leading to the defeat of Germany due to its war on two fronts ) and the Soviet Union collapsed because of Oil.
The Soviet Union experienced peak oil first hand—a 43% decline in domestic oil production between 1987 and 1996. This crisis caused Soviet society to fall into devastating economic impoverishment. The oil decline in the Soviet Union preceded the GDP decline.
Thatcherism was simply the expansion of credit and the British economy due to the oil boom of North Sea Oil.
There are NO economic miracles - there is simply lots of oil or expensive oil.
The need to ensure energy supplies to maintain existing social complexity and to fuel future economic growth is the basis of all economic and social systems.
When the energy source that any civilisation depends upon no longer provides enough energy to sustain its existing social complexity and future economic growth, then that society will collapse.
The only option for any nation or civilisation in such an energy crisis is to either collapse or embark upon wars to secure energy supplies.
THAT IS THE FUNDAMENTAL BASIS OF ALL HUMAN SOCIETIES.
It is the one true law of the Natural Order to come.