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The Future Shortage of Energy   (May 22, 2007)

This Week's Theme: Why The Truth Can't Be Told

Longtime contributor Riley T. checked in recently with a cogent summary of Peak Oil and its consquences:

I would like to start with my observations about how humans process information. When something enters the mind the first thing we do is compare it to similar things from our past, then we compare the new thing to the similar things and look for differences. We compare and discriminate to process new information. If we treated all new information as unique we would over load and brain freeze ( technical term ). This works most of the time.

I don't have anything to support what I am going to say next other then a life time of reading, observing, too much education and 30 years in accounting and finance.

Here it is: Things are different now. What an over-used phrase.

Humans will not accept bad news.
Their time horizon is 1-3 years max.
The price of oil has gone from $10-13 to $50-75 a barrel in 8-10 years.
We clearly are past peak oil or so close it doesn't matter.
If we are past peak this means NO MORE GROWTH.

The bad news in the U.S. has been covered up by the expansion of credit. Never in the history of the world has there been such a huge expansion of credit, the worldwide asset bubble has never been bigger.

This is not rocket science once you accept the past peak oil idea. Think of the ramifications of no growth; this is going to be a pants crapping horror (Kunstler). Editor's note: this references The Long Emergency: Surviving the End of Oil, Climate Change, and Other Converging Catastrophes of the Twenty-First Century by James Howard Kunstler)

We have been in a recession/depression since 1990, this has been covered up by the asset and credit bubbles.

Think of what "no growth" means. No jobs for our young men leaves them only anarchy. Look around the world and see how young men cope with no jobs.

Frequent contributor U. Doran just happened to send in a link describing the decline of Saudi Arabia's largest oil field: Depletion Levels in Ghawar, Saudi Arabia (Updated)

He also recommended a wide-ranging essay which ties Peak Oil into a larger context of human folly: Busy Bee Bugaboo and another Unsuspected Agent of Doom.

And this coverage of looming resource wars over oil: China and USA in New Cold War over Africaís Oil Riches Darfur? Itís the Oil, Stupid...

Correspondent Michael Goodfellow recommended a fascinating piece on energy and politics: Media Ignore European Energy Politics to Advance Global Warming Alarmism. Michael selected the following passage as being worthy of note:

Swiss experts expect first shortfalls in electric power supply to occur within the next five years. And the energy department in Bern is already busy working on a so-called cut-off plan. Electricity suppliers are already counting on periodic power cuts to entire towns and industrial zones within the next years. Today we cannot begin to imagine twelve hour power cuts in entire cities like Zurich or Frankfurt.
Michael also sent along this story on the decline of the U.S. oil industry, A Wildcatter Pounces .

And now, connect the above dots to this story:

High gas cost won't drive away buyers of big SUVs After 2-year slump, demand rebounds.

And that is Why The Truth Can't Be Told-- at least not by the mainstream press or broadcasting empires.

For more on this subject and a wide array of other topics, please visit my weblog.


copyright © 2007 Charles Hugh Smith. All rights reserved in all media.

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