Thursday, December 27, 2012

Sorry, Class. Peak Oil has not gone away.

EA Oil Forecast Unrealistically High; Misses Diminishing Returns

...One reason the WEO 2012 estimates are unreasonable is because the oil prices shown are unrealistically low relative to the production amounts forecast in the report. This seems to occur because the IEA misses the problem of diminishing returns. As the easy-to-produce oil becomes more depleted, and we need to move to more difficult reservoirs, the cost of extraction increases.
In fact, there is evidence that the “tight” oil referenced in Exhibit 1 is already starting to reach production limits, at current prices. The only way these production limits might be reasonably overcome is with higher oil prices–much higher than the IEA is assuming in any of its forecasts.
...Higher oil prices cause a huge problem because of their impact on the world economy. The IEA in fact mentions that current high oil prices are already acting as a brake on the global economy in its first slide for the press. Higher oil prices also mean that investment costs required to reach target production levels will be even higher than forecast by the IEA, adding another impediment to reaching its forecast production levels.

If higher prices put the economies of oil importing nations into recession, then oil prices will drop lower, reducing the incentive to invest in new oil production infrastructure. In fact, we could find ourselves reaching “peak oil” because of an economic dilemma: while there seems to be plenty of oil available, the cost of extracting it may be reaching a point where it is more expensive than consumers can afford. As a result, some oil that we know about, and have been counting as reserves, will have to be left in the ground.
...The Problem of Diminishing Returns
One issue that the IEA has not properly modeled is the issue of declining resource quality, leading to diminishing returns and a rising “real” (inflation adjusted) cost of production. This situation is often described as reflecting declining Energy Return on Energy Invested (EROEI).

The reason diminishing returns are a problem is because when a producer decides to extract oil, or gas or coal, the producer looks for the cheapest, easiest to extract, resource first. It is only when this resource is mostly depleted that the producer will seek locations where more expensive, harder to extract resource is available. Thus, over time, the inflation adjusted cost of extracting a resource tends to increase.

Companies always go for the low-hanging fruit first, because it is the most profitable.  If they can't extract enough profit, they will eventually close up shop.

...producers tend to start at the top, with the “best” of the resource, and work their way toward the bottom. One result of this approach is that the cost per unit of production tends to rise, even as there are technology advances and efficiency gains, because the quality of the resource is declining.

Reserves tend to increase over time with this approach, because as producers work their way down...they always see an increasing quantity of lower quality resources. The new reserves are increasingly expensive to extract, in inflation adjusted terms. There is no flashing light that says, “Above this price, customers won’t be able to afford to purchase this resource any more,” though. As a result, the increasingly low quality reserves get added to reported amounts, even though in some cases, the cost of products made with these reserves (say gasoline or diesel) will send economies into recession.

Of course, we're already in pretty bad shape, and there are already entire neighborhoods of my community that are priced out of being able to drive a private automobile.  That will only get worse and the problem will again start creeping up the economic ladder to more and more people who once considered themselves to be middle class.  It's hard for a relatively affluent Jewish area to understand how we will be impacted by this, but it hasn't gone away and it isn't going to.

...It should be noted that the issue of diminishing returns exists for almost any kind of resource. It exists for uranium extraction, since there is always more available, just harder to reach, or in lower concentration. Diminishing returns exists for gold, copper, and for nearly any other kind of metal. This means we often need more oil for metal extraction and processing, as we dig deeper or find ore that is mixed with a higher proportion of waste product.

The problem of diminishing returns also seems to hold for renewables. The first biofuel developed was ethanol from corn, since the process of making alcohol from corn has been known for ages. Newer approaches, such as ethanol from biomass and biofuel from algae, tend to be much more expensive. As a result, when we add new biofuel production, it is likely to be more expensive, and thus harder for the customer to afford. If we want it, we will need increasingly high subsidies.

Wind energy is also subject to diminishing returns. Onshore wind was developed first, and it is far less expensive than offshore wind, which was developed later. Early units of wind added to an electric grid do not disturb the electric grid to too great an extent. Later units of wind energy add increasingly large costs: long distance transmission lines, electrical storage, and other balancing–something that is generally overlooked in making early cost analyses.
...Tight oil, also referred to as “shale oil,” is supposed to be the United States’ oil savior, if we believe the IEA. The Bakken and Eagle Ford plays are the best known examples.

Rune Likvern of The Oil Drum has shown that drilling wells in the Bakken already seems to be reaching diminishing returns. The choicest locations appear to have been drilled first, and the locations being drilled now give poorer yields. He has also shown that the average well in the Bakken now requires a price of $80 to $90 barrel, which is close to the recent selling price. If increased production is desired, the price of oil will need to start increasing (and keep increasing) to provide the incentive needed to drill wells in less-choice location.

There are other issues as well. If there is a need to drill an increasing number of wells just to stay even, or an even larger number, to increase the amount of oil produced, we start to reach limits on many kinds: number of rigs available, number of workers available, miles driven for water to be used for fracking. Perhaps the issue that will limit production first, though, is limits on debt available to producers. Rune Likvern has also shown that cash flows from tight oil extraction tend to run “in the red,” so an increasing amount of debt financing is needed as operations ramp up. At some point, companies hit their credit limit and have to stop adding new wells until cash flow catches up.

The inability of the usury system to correct itself without banking collapses is well-documented by history and the US is no exception.  Banks have already tightened credit to a point that is strangling people's ability to buy homes and conduct business, and that situation cannot improve in a low-growth (i.e. recession prone) system.   The banks, like the oil companies themselves, are for-profit enterprises and will not loan money to people who cannot pay them back with interest in sufficient quantity to satisfy shareholders.  A business plan of diminishing returns and huge technological expenses is not going to impress loan officers.

...Evidence Regarding Rate of Growth of Oil Extraction Costs 

Bernstein Research recently published information showing that the marginal cost of oil production was $92 barrel in 2011 for non-OPEC, non Former Soviet Union oil producers at the 90th percentile of production. This cost is increasing at 14% per year (or about 12% a year in inflation adjusted terms). Even at the median marginal cost level, costs appear to be increasing at a compound annual growth rate of 9% (or about 7% in inflation adjusted terms). See also this FTAlphaville post.

If we take the $92 barrel cost in 2011 at the 90th percentile of production and increase it by 7% a year (arguably we should be using 12% per year), the real cost will be $169 barrel in 2020, and $467 a barrel in 2035. These are far in excess of the IEA oil price estimates shown on Figure 2. There is no reason to believe that Bakken and other tight oil production costs would be substantially cheaper.

And there's the ugly truth.  Yes, there is plenty of oil. No, middle class families won't be able to afford it.

...My View of What is Happening Now
As noted above, world crude oil production seems to have hit a plateau, starting about 2005. This is working its way through the economy with varying effects over time. The major effect at this point of time seems to be on the finances of governments that import oil, although it started earlier, with different aspects more apparent.

In general, what happens as we reach a situation of diminishing returns, and thus rising real oil prices, seems to be as follows:

As the price of oil rises, the price of food and commuting tend to rise. Both of these are considered essential by most consumers, so consumers cut back in discretionary spending, to have sufficient funds for the essentials. This leads to layoffs in discretionary industries, such as vacation travel and restaurant eating. The rise in laid off workers leads to an increase in debt defaults, and problems for banks. Housing and commercial real estate prices tend to fall, because of reduced demand, further adding to debt default problems.

Governments of oil importers get drawn into this in many ways: (1) Their revenues are reduced, because they receive less tax revenue from people who are laid off from work and from businesses with fewer sales. (2) They are asked to prop up failing banks, and to stimulate the economy. (3) They are also asked to pay workers who have been laid off from work. The net of all of this is that the governments of many oil importers find themselves with huge budget deficits, and declining ability to fix these deficits. This pattern is precisely what we are seeing today in many of Eurozone countries, the United States, Japan.

The statements about rising oil production in the US are just a distraction. Diminishing returns mean that US oil production will never increase very much. Oil costs will remain high, and this will be the real issue disturbing economies around the world.

Readers of this blog are not unfamiliar with these facts.  The question is, how can our communities deal with them in a constructive manner?

Leaders of Jewish communities need to look at the situation realistically and plan ahead.  Where does everybody live?   How walkable is the community?  How will people get to work?  To groceries? To school?  To a doctor?  To activities?  Who will help the elderly and sick get where they need to go? 

Everybody cannot switch to electric cars because the cost is prohibitive and electricity costs themselves will go up - could the community invest in a few?  Set up a taxi service?  Buy a bus?  Can the community order things in bulk from Israel and various companies and have them delivered so they can be distributed locally?  Can you partner with other communities?  Can you become more self-sufficient? 

Each community has a unique mix of needs, skills and resources - but one thing is certain.  Relying on the government to help you is surely a waste of time.    Make 2013 the year your community gets serious about putting its house in order.

Friday, September 14, 2012

The Plantation Mentality returns with a vengeance.

It's fun, sometimes, to troll.

I received a letter today from the Andy Barr campaign asking "which agenda I choose" for this "future of America ballot." The choices were:

___ Andy Barr

* Lower Taxes
* Less spending/fiscal responsibility
* Pro-Business/Employment Policies
* Independent, common-sense
conservative solutions
* Repeal Obamacare

_____ Ben Chander

* Ballooning Deficits, Reckless Spending
* Job-Killing Taxation/Regulation
* Special Interest Favoritism
* A willing tool of Nancy Pelosi and Barack Obama
* Works hand-in-glove with Obama
to kill the coal industry

I decided to respond to this fair and well-balanced assessment of the respective party platforms with some written comments that I put in the mail in the envelope Barr sent with his survey. It goes like this:

Dear Mr. Barr,
I have received your recent mailing entitled “ballot for America's future” and noticed several errors. I would like to submit, for your reference, a corrected version of the mailing:

____ Andy Barr for Congress:

* Lower taxes on the wealthy, shifting of the tax burden onto the poor

* Less Spending on American citizen's actual needs, more spending on the military industrial complex instead of guaranteed retirement, free education and non-profit single-payer healthcare enjoyed by people in real first world nations.

* Pro-Robber Baron policies that enable employers to continue to deny their employees living wages and benefits, policies that return American working conditions to the days of sweatshops (as American employers are doing to their developing nations employees already), and of course the gutting of all worker safety and environmental regulations so we can all enjoy acid rain once again, along with poisoned well water, air and soil like the third-world backwaters American employers enjoy trashing to this day – and let's not forget the leveling of American wages with serfs in developing nations who are paid pennies on the dollar for their day's work.

* Solutions that represent only the minority white evangelical Christian view while simultaneously violating every principle ever taught in the Bible, such as public support (via mandatory tithing) for the poor, elderly, widowed, sick and fatherless, as well as violating the Biblical prohibition against profiteering off the poor by charging fellow citizens interest and usury, to name just two. (Since the primary backers of the Republican party are those self-same usurers and CEOs profiteering off the poor and sick I can see how this might cause you some cognitive dissonance.)

* Enabling for-profit insurers to once again deny treatment to people, especially children, with chronic illnesses by capping their lifetime benefits, excluding people with pre-existing conditions, excluding college kids from their parents policies, and excluding co-pay free contraception so that poor people who can't afford prescriptions continue to produce more kids than they can support.

You might want to add a few more points that you missed in your mailing, probably due to lack of space. For instance, you might include this graphic that shows where the Republican party as led this country by perpetually minding other people's business, warmongering and pushing American Imperialism:



Sincerely...

I didn't address the coal issue, in part because it is too baffling for me to understand why energy independence and new jobs galore in various new factories and domestic energy production facilities would be something Republicans oppose in the first place. That makes no sense.

The rest of it is exactly what I blogged about last time - the Republican party has no interest whatsoever in meeting the needs of the American citizens the government is theoretically supposed to serve. Instead, it wants to turn citizens into surfs.

I have come to the conclusion that Southern Republicans, in particular, still suffer from a plantation mentality. On the plantations, the old white guy was in charge, and everybody else were lesser beings who neither received nor deserved (in his opinion) decent wages, housing, working conditions, or education. Now this mentality has spread to the whole party.

That's the only explanation I can think of for the Republican policies that favor the 1% and literally leave the poor on the street to die if they have no housing or insurance. This is not what a moral country should look like, and it isn't what any real first world country looks like. Only "conservative" Republicans want to throw away every bit of progress made for ordinary citizens in the last 200 years and replace it with a corrupt and oppressive reign of Robber Barons that is Mitch "let them eat cake" McConnell's wet dream.

So if a de-facto return to slavery and indentured servitude isn't your idea of fun, then don't vote Republican, class. It's that simple.

Shabbat Shalom and Chag Sameach Rosh Chodesh. Way we all live in a fair, peaceful and just new year.

Sunday, July 08, 2012

The Election: Short, Concise and to the Point

With the elections this November permeating every news story (whether it's about the election or not) I wanted to make a point that I think has been lost in the shuffle. The two main parties in this country are, at the core, promoting diametrically opposed ideas of what this nation should be doing with its tax dollars. The voters need to decide how they want their money to be spent, and the choices are extremely clear.

If you vote Democrat (or any similarly inclined third party) you are voting to put American Citizens first. You are voting to strengthen the social safety net, to recognize a basic human right to healthcare, and to protect social security. You are voting to stop pretending that the US has any right to butt into other country's political and religious beliefs, to stop using warfare as a means of securing other nation's resources and as a means of imposing economic imperialism on other peoples. You are voting to make sure people have the right to a real free market that not manipulated by corporations who refuse to label their products and continue to sell you unsafe garbage. You are voting to ensure that there is not a separate special rarified elite who are entitled to benefits and privileges unavailable to average citizens. You are voting to put education and our people's future wellbeing above militancy and strongarming.

If you vote Republican (or any similarly inclined third party), you are voting to put American Citizens last on the priority list. You are voting to gut the social safety net, to let people die on the street due to lack of healthcare and housing, and to force old people to be a burden to their children and grandchildren. You are voting to continue making enemies around the world, to endanger US citizens everywhere, and to use gunpoint as a legitimate means of "diplomacy." You are voting to oppress and enslave citizens of less developed countries, pay pennies on the dollar for their resources and keep their economies unable to support themselves due to our exploitation. You are voting to continue to allow Congress to vote national single-payer non-profit insurance for themselves while denying it to everyone else. You are voting to continue to allow corporation to hide the ingredients of their products and grease the palms of FDA and USDA officials who are supposed to be regulating them (ha!). You are voting to create a super-wealthy above-the-law class of people that is answerable to no one because they're "too big to fail" and "too big to prosecute" (because not shaking their lobbyist money revenue stream is far more important to Republicans than justice of any kind).

This man is the representative of my state, and I am so ashamed of him that every time he is shown on TV I cringe at what sort of unethical and immoral let-them-eat-cake sentiment is going to be spewing from his mouth this time.


This party of wealthy elitist hypocrites used to be my party. I am truly horrified that I used to be affiliated with these narcissistic people. Even worse, many of them actually claim a religious basis for their refusal to help the poor, widows & orphans, sick and elderly, and their willingness to use military force to steal their unfair share of the world's resources. It's such a perversion of either part of the Judeo-Christian heritage that I don't see how ANY reasonably educated person can believe such garbage.


Yet they do. It makes me want to puke.

Why is it that Americans can't understand what these policies are really about? If it was about "spreading democracy" and "protecting ethnic minorities" they'd be gung-ho about Tibet, and Darfur, and countless other places where cultural and ethnic genocide is taking place daily - and they'd be falling all over themselves to return lands and funds to Native American tribes, the first victims of American's "Manifest Destiny" delusion. But those other places don't have natural resources, so America doesn't care. And the Native American tribes don't have anything of value, either, since any such things were taken from them by force long ago.

Or...the world's other victims are being occupied by bigger bullies, such as China. Funny republicans are willing to antagonize poor, relatively undeveloped countries but suddenly their "values" melt when it comes to China, the largest holder of US debt. China's officials force women to have late-term abortions against their will and even resort to infanticide to punish poor couples who can't pay the exorbitant "fines" for having a child (if they can, no problem!). So where is the republican "pro-life" stance now? China is positioning its military to seize lands belonging to other nations in the Pacific Rim. Do the Republicans openly challenge that? Do they have an official unambiguous position on defending Taiwan? So much for "America's moral leadership" McCain was blathering about this morning on Face the Nation.

Republicans can hardly blame China for doing what they themselves are doing - special privileges for the wealthy elite, colonizing other nations to exploit their land and resources (in China's case, Africa), and leaving the African nationals with no recourse, and buying oil futures like there's no tomorrow. The pot would be calling the kettle black, so they can't say anything. And truthfully, Republicans only have a problem with this because THEY want all the world's resources for themselves. They don't have any problem at all with the methods. I've even heard republicans talk about sterilizing the poor in return for public assistance, and punishing people who have children when they aren't in a "traditional" conservative style marriage relationship. This kind of junk slips out of their mouths on a regular basis. Rush Limbaugh recently even said, out loud on the air, that this country went to pot as soon as women got the vote. And do you ever hear Republicans saying how Saudi Arabia forbids people to have any religion other than Islam? Or do you hear them ever say how Islamic nations oppress women's rights? No. In short, everything oppressive Islamic and communist governments are doing, Republicans would like to do, too - just without the complications from China, Russia, and OPEC.

If you vote Republican, this is what you are voting for: a failed theory of "trickle-down" economics that doesn't have a SHRED of proof that anyone other than the 1% actually benefits, and an even worse theory of "perpetual growth" which ignores ecological limits in a short-sighted tragedy of the commons, endangers future generations, and asserts that Americans are somehow "entitled" to 40% of the world's resources every year when we have only 5% of the world's population. Worse, American parades this lifestyle of excessive consumption, dangling it in front of their poor exploited trading partners, as if EVERY 5% of the world could be the same! (Math obviously not being Republicans strong point - they're too busy praying and fighting against science in school to actually be educated, apparently. But I digress.)

Why would anybody agree with this bizarre agenda? I don't understand how any of this could even be debatable! It's all pretty clear to me. America's government should serve America's people, period. It's NOT our job to provide free policing for the rest of the world. Foreign military bases should be closed and wars stopped immediately. It's NOT our job to ram globalism and economic imperialism down other nations' throats. No more "free trade" that promotes outsourcing and rewards third world despots who refuse to grant their own people wage and labour, safety and environmental laws that the American people insist on for ourselves. It's NOT a fair and free democracy if Congress and the wealthy elite enjoy privileges the rest of us don't have, and are above the law. Congress's special healthcare and retirement plans should be disbanded immediately, and they should have to use the same social security the rest of us get and buy the same private for-profit insurance that they insist the rest of us buy. And they shouldn't get ANY retirement plan other than their own private savings. Congress was never intended to be a person's primary employment - even the founding fathers agree to that. But Republicans are fighting to the death to deny you non-profit single-payer healthcare and defined benefit retirement while they themselves enjoy both.

That's what you're voting for when you vote Republican. If that's not what you want, then don't do it. Walk away. I did it, and so can you. It's time to say "NO!" to their insanity and vote to use our tax dollars for our own benefit for a change - to provide for our own people, to secure our own borders, and to invest in self-sufficiency at every level: homegrown food, home generated power, mass transportation for everyone, high-tech k-college education for our own kids future, high quality research at colleges to propel innovation, and a strong social safety net that recognizes the basic human right to life via healthcare and decent housing, and so on. If this is what you want our tax dollars to do, then don't vote Republican. It's that simple.

If you think enriching the 1% further will actually benefit you, that pouring money into overseas wars and military occupation of other nations will actually benefit you, if you think continuing to use resources as if they will last forever and destroying the environment in the process is a good idea, if you think gutting the social safety net will actually benefit you and your family, if you think being dependent on foreign nations that hate us for our fuel and food and technology is a good idea, and if you think there's nothing wrong with social darwinism (i.e. the survival of the richest), if you think you and your kids and their family can survive on mc-wally-wort wage jobs with no benefits, then you need to ask yourself where you got these ideas, because they are not based on any sort of factual reality. And if you vote for these myths, you will get what you asked for. And they'll be laughing all the way to the bank - with your money - just like McConnell.

Tuesday, May 01, 2012

Not sure if I should be happy or sad.

A while back our state representative sent us, and the rest of her constituency I presume, a note asking for comments regarding our state budget, which was under review. I'm sure she expected, and received, a great many brief notes from people who had a problem with this or that line item, and wanted it increased or decreased accordingly.

But you know me - I couldn't help myself. I wrote up a several pages long analysis of current and future economic trends, included many of my favorite charts and graphs, related them to various industries and policies of our state and how our budget priorities need to be changed to deal with changing economic conditions. My husband added in a few observations of his own, as someone with several decades of experience in the city's long range planning division. And so we sent it off, being fairly certain some aide would glance at it and then its final resting place would be "file 13." (If you're not familiar with that term, you're way younger than I am, LOL.) A short while later, we received a customary "thank you for your input" reply, as I recall. Oh, well. We did our civic duty - even if nobody listened.

Or did they?

Imagine my surprise when I returned home after a long and crazy day (including a very lively job interview), and found this note on my desk with the mail pile:


Wow. She actually read it - herself! And agreed with it, no less. Woo-hoo! Yea! My paper was well received and proved accurate!

But alas, it was to no avail, apparently. Darn (or insert expletive of your choice here), it didn't make a bit of difference.

Should I be happy? Sad? Or simply resigned to the inevitable? I'm not sure.

Back in February of 2007 I made a similar type of presentation (but with somewhat different content and focus) to our local city-county planning commission, which does our local area development plan revision every 5 years (as is required by our state law). I prepared a mere 10 minute speech and gave copies of it to all the commission members. I was one of several presenters. I decided not to mince words, but to explain very clearly and directly what the problems were going to be over the projected 20 year range of the plan and what actions needed to take place to address those problems. After all, a few minutes is not a lot of time. So it's not like they didn't understand the problems or their future severity, because I made sure I wasn't beating around the bush at all. My sources were from the US Govt and international agencies, top economists and highly regarded analysts - not crackpot fringe elements.

But not a single one of those recommendations was adopted into the development plan, nor any acknowledgement of the actual problems and issues I presented to them, even if they didn't like my solutions and preferred to come up with their own.

Not one.

Oh, well. I did my civic duty, even if nobody listened.

And I will continue to do it, however a long shot it may be. As I recently replied to a comment from a good friend on my facebook page, "if we just keep hitting the flint, surely some spark will eventually catch."

And if nothing else, I have passed my love of the community on to my son, who has just been accepted to the University this fall with a major in political science.

I was surprised at his choice of major, since he has taken so many architectural and engineering courses and done well with them as part of his high school studies. I said, jokingly, "Didn't I disabuse you of all that silly youthful idealism?"

He replied, "Apparently not."

Hope springs eternal. For that, we should be happy. The quest for a fair and economically sound future will go forward, however slowly - and that is a good thing.

Tuesday, January 24, 2012

The Death of the American Empire.

I have often stated in the past that the US, which currently appropriates around 40% of the worlds natural resources every year (including oil), can't keep expecting to use that much.  We only have 5% of the world's population.  We are therefore only entitled to 5% of the world's natural resources.

Republicans, in particular, are having a great deal of difficulty grasping this concept, calling American lifestyle of excessive consumption "non-negotiable."  As this chart shows, however, not only is it negotiable, we are increasingly less able to outbid our competitors in developing nations from buying those resources.



The people in the exploited part of the world are starting to demand their fair share - and get it.  We, on the other hand, don't "get it."  The myth of progress is the founding philosophy of America - the future must always be better than the past.   It's a myth we need to get over, quickly, because now that we make nothing of significant value, have 50 million uninsured and 40+ million un-or-under-employed, we just don't have the assets or the money to bid against rapidly developing nations for oil or anything else for that matter.  And even if we did, the nations we have exploited in the past do not have to sell us their resources.  They can sell to whomever they please, and the countries harboring the transnational corporations that have been exploiting them may just not be on that list, regardless of how many devalued dollars they can bring to the table.  In the American idea of a "free market," an item always goes to the person with the most money.  Out here in real life land, people can and do refuse to sell or buy for reasons that are purely ideological, religious, or political.  Americans think money can buy anything.  American dollars, increasingly, cannot.

Going from using 40% of the world's resources to using only 5% or so represents an 80% reduction in our usage of resources.  Some might say that's an 80% reduction in our standard of living.  It's hard to argue with that logic, since American wages and benefits are being ground down slowly but surely to match those of our exploited "trade partners."  However, the chart above shows their wages and benefits are rising slightly as they begin to demand sufficient income to live in a "western" style.  So maybe we'll get lucky and only have to lower our standard of living 50% or so.

That means having 50% less gasoline, for starters.  When it was recently reported that the US became a net exporter of petroleum products, dumb Republicans acted as if this was a good thing.


As you can see, we have in fact increased our exports. Yeah?  Ummm, no.  Refining capacity has remained essentially unchanged since the 1960s and production of US crude oil went into terminal decline in the 1970s. Our population has increased by some 30 million annually, mostly due to immigration.  So we have more people but the same refining capacity.  In other words, our use of petroleum products should have gone up.  But it hasn't. 



Improvements in technology have barely increased production since the mid-2000s, as you can see.  Worse, increasing production from existing wells simply depletes them faster.  It doesn't make more oil actually appear.  But I digress.  As we saw above, use of oil in the US, Europe and Japan is declining.  In Europe and Japan it is declining due to development of high-speed rail and other advanced public transportation systems, integrated from individual neighborhoods all the way to cross-continent, in Europe's case, and a similar available-to-nearly-all approach has been taken in Japan.  But we KNOW that hasn't happened here in the US.

The ugly truth is that Americans are slowly but surely being priced out of the gasoline market.  The US increased exports not because we had more production capacity than ever but because we had fewer people than ever able to financially afford buy the petroleum products produced in our refineries, despite having increased population. 

Republicans also keep saying we need to return to "growth" - in fact, even some Democrats say that.  No one is saying the obvious.  There isn't going to be any growth in a country of diminishing ability to compete on the world market for natural resources (except for those we are taking by force at gunpoint).  There isn't going to be any growth in a country whose business is increasingly unwelcome in the nations we have been exploiting.  And there isn't going to be any growth in a country that can't outbid other nations for the resources we need to maintain our excessive consumption.  China has secured petroleum contracts for decades worth of future oil production.  Our current suppliers eye us with mistrust and a very public wish to rid themselves of us and our influence.  And as our standard of living continues to fall toward our third world competitors, there is simply no way ordinary families can keep up the excessive consumption that would be required for "growth" in our economy.  It just ain't gonna happen.

But we keep pretending things will go back to "normal" - refusing to understand that "normal" was anything but.  The old "normal" was predicated on us being able to exploit other nations and take far more than our fair share of everything.  That "normal" is never coming back, class.  Never.  Oh, sure, the US will no doubt embark on further resource wars, but it will be to no avail.  The only thing that will accomplish is to bankrupt our government and make US dollars more worthless faster.

The smart thing to do would be to start acknowledging that the whole myth of progress paradigm no longer functions in a world of resource depletion and start living within our means, personally and as a nation.  But that isn't going to happen, either.  It's clear from all the idiocy coming from our current crop of political candidates that no one is willing to face the truth, no matter how many charts and graphs, books and articles, blogs and coffee-table conversations are out here.  The people in the US are simply not interested in a 50% reduction in their excessive consumption way of life, and they'd rather collapse the economy than do it.  It's that simple.

This path only has one end - the death of the American empire, with possibly the death of the republic itself as an unavoidable side effect.  Greed and selfishness has killed America.  We're a dead man walking.  The only question now is when we will finally fall down.  The sad part is that this will be a good thing for the rest of the world.  With us no longer greedily sucking the life out of their exploited peoples, they will do much better.  And if we were a moral people, we would be ok with everyone having their fair share.  But we're not - even as more and more Americans fall into a lower and lower standard of living, Republicans are striving to make sure they stay there, with more lies about "progress" and "growth" and a return to "normal" right around the corner.  After all, the 1% has theirs, they vote Republican, and that's all that matters to them.  As for the rest of us, "let them eat cake."

Unfortunately, the cake is a lie.