'THIS SYMPOSIUM WILL PROVIDE A VALUABLE ANALYSIS OF WHY THE CURRENT ECONOMIC MODEL IS UNSUSTAINABLE - BY 2050 THERE WILL BE MORE PLASTIC IN THE OCEANS THAN FISH - 15 JAN 2018'
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THIS SYMPOSIUM WILL PROVIDE A VALUABLE ANALYSIS OF WHY THE CURRENT ECONOMIC MODEL IS UNSUSTAINABLE
for the oil, food and financial crash of 2018
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scientific research suggests that the world faces an imminent oil crunch,
which will trigger another financial crisis.
The upshot? Welcome to a new age of permanent economic recession driven by ongoing dependence on dirty, expensive, difficult oil... unless we choose a fundamentally different path.
September, a few outlets were reporting the counterintuitive findings
of a new HSBC research report on global oil supply. Unfortunately, the
true implications of the HSBC report were largely misunderstood.
the full, striking import of the report, concerning the worlds
permanent entry into a new age of global oil decline, was never really
explained. The report didnt just go against the grain that the
most urgent concern is peak demand: it vindicated what is
routinely lambasted by oil majors as a myth: peak oil the concurrent
peak and decline of global oil production.
in London, UK, HSBC is the worlds sixth largest bank, holding
assets of $2.67 trillion. So when they produce a research report for
their clients, it would be wise to pay attention, and see what we can
heightens the risk of a major global oil supply shock around 2018 which
could significantly affect oil prices.
Even in a world of slower oil demand growth, we think the biggest long-term challenge is to offset declines in production from mature fields. The scale of this issue is such that in our view rather there could well be a global supply squeeze some time before we are realistically looking at global demand peaking.
the current supply glut driven by rising unconventional production,
falling oil prices have damaged industry profitability and led to dramatic
cut backs in new investments in production. This, HSBC says, will exacerbate
the likelihood of a global oil supply crunch from 2018 onwards.
latter, it should be noted, has consistently advocated a global peak
oil scenario for many years the HSBC report confirms the accuracy
of this scenario, and shows that the IEAs data supports it.
Insider, the Telegraph and other outlets which covered the report last
year acknowledged the supply gap, but failed to properly clarify that
HSBCs devastating findings basically forecast the longterm scarcity
of cheap oil due to global peak oil, from 2018 to 2040.
Using a more restrictive definition puts the quantity of global oil that has peaked at 64%. But either way, well over half the worlds global oil supply consists of mature and declining fields whose production is inexorably and irreversibly decreasing:
If we assumed a decline rate of 5%pa [per year] on global post-peak supply of 74mbd which is by no means aggressive in our view it would imply a fall in post-peak supply of c.38mbd by 2030 and c.52mbd out to 2040. In other words, the world would need to find over four times the size of Saudi Arabia just to keep supply flat, before demand growth is taken into account.
worse is that when demand growth is taken into account and the
report notes that even the most conservative projections forecast a
rise in global oil demand by 2040 of more than 8mbd above that of 2015
then even more oil would be needed to fill the coming supply
innovation exacerbates the problem
does not mean that peak demand should be dismissed as a serious concern.
As Michael Bradshaw, Professor of Global Energy at Warwick Universitys
Sloan Business School, told me for my previous VICE article, any return
to higher oil prices will have major economic consequences.
another possibility, which could mean that prices dont rise as
HSBC forecasts. In this scenario, the economy remains too weak to afford
an oil price hike. Demand for oil stays low because economic activity
remains tepid, while consumers and investors continue to seek out alternative
energy sources to fossil fuels. In that case, the very inertia of a
weakening economy would pre-empt the HSBC scenario, and the industry
would continue to slowly crush itself out of the market due to declining
oil price spikes would have an immediate recessionary effect on the
global economy, by amplifying inflation and leading to higher costs
for social activity at all levels, driven by the higher underlying energy
demise of fossil fuels
paper currently under review with an academic journal
was authored by Francesco Meneguzzo, Rosaria Ciriminna, Lorenzo Albanese,
Mario Pagliaro, who collectively conduct research on climate change,
energy, physics and materials science at the Italian National Research
Council (CNR) Italys premier government agency for scientific
Italian study offers a new model combining the competing dynamics
of population and economic growth with oil supply and price, with
a view to evaluate the near-term consequences for global economic growth.
broadly, the scientists show that there is a direct correlation between
global population growth, economic growth and total energy consumption.
As the latter has steadily increased, it has literally fueled the growth
of global wealth.
declining average EROIs [Energy Return on Investment] for all fossil fuels; with the EROI of oil having likely halved in the short course of the first 15 years of the 21st century.
is the total value of energy a resource can generate, calculated by
comparing the quantity of energy extracted, to the quantity of energy
put in to enable the extraction.
The chance of future economic growth matching the current trajectory of the human population is inextricably bound to the wide and growing availability of highly concentrated energy sources enjoying broad applicability to energy end uses.
problem is that since the 1980s, the share of oil in the global energy
mix has declined. To make up for this, economic growth has increasingly
had to rely on clever financial instruments based on debt: in effect,
the world is borrowing from the future to sustain our present consumption
conventional oil peaked around the year 2005. All the following supply
increase was due to unconventional oil exploitation and, since 2009,
basically to US shale (tight) oil, which in turn peaked around March,
a business as usual trajectory, then, the economy can quite literally
never recover unless it transitions to a truly viable new energy
source which can substitute for oil.
will this end up?
this means, Meneguzzo adds, delocalizing manufacturing to economies
using local, cheaper and dirtier energy sources (such as coal in China)
as well as lower wages, further shrinking domestic aggregate demand
and fueling a downward spiral of deflation and/or debt.
2008, oil price shocks played a key role in creating pre-crisis economic
conditions for consumers in which rising living costs helped trigger
debt-defaults in housing markets, which rapidly spiralled out of control.
is likely to be crunch year for another reason. 1 January 2018 is the
date when a host of new regulations are set to come in force, which
will constrain lending ability and prompt banks to only advance
money to the best borrowers, which could accelerate bankruptcies worldwide,
according to Bloomberg. Other rules to come in play will require banks
to stop using their own international risk assessment measures for derivatives
fact, two years earlier in July 2006, Dr David Martin, an expert on
global finance, presciently forecast that Basel II would interact with
the debt bubble to convert a collapse of the housing bubble into a global
source insisted that the event was bound up with the peak of global
conventional oil production about two years earlier (which according
to the UKs former chief government scientist Sir David King did
indeed occur around 2005, even though unconventional oil and gas production
has offset the conventional decline so far).
called it then, and Im calling it now.
or not a crash takes place in precisely the way suggested here, whats
clear from the new research is that the economy is hugely vulnerable
to a financial crisis for reasons that conventional economists dont
talk about reasons relating to the energy system on which the
economy is fundamentally dependent.
truth is that the cycles of protracted economic crisis are symptomatic
of a deeper global systemic process.
Dr. Nafeez Mosaddeq Ahmeds new book, Failing States, Collapsing
Systems: BioPhysical Triggers of Political Violence (Springer, 2017)
is a scientific study of how climate, energy, food and economic crises
are driving state failures around the world.
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The following is a comment to the above article by Norman Pagett which is most relevant.
one cannot but agree with what Dr. Ahmed says in this excellent and
thought provoking lecture, I think it is necessary to take issue with
his (rather wishful) thinking.
is a lifestyle choice.
We are on course to reach 9 or 10 bn by 2050. Common sense says that we cannot sustain that number, so something has got to happen within the next 30 years to stop it.
This is going to be our ultimate holocaust.
HOW QUICKLY WE ARE DESTROYING THE EARTH'S ABILITY TO SUSTAIN HUMAN LIFE !!!
are perhaps expecting to have a downsized future where we
will be only mildly inconvenienced by changed (energy) circumstance
where they will fix things.
now, Trump is offering what might be the final straw to clutch at, promising
to make America great again, in denial that it was cheap
energy that provided that greatness.
our leaders still offer that future.
sapiens has existed for 100,000 generations, give or take. Those countless
generations have had one overriding factor, that of homicidal intent,
driven by the genetic force of survival. That drive has brought us to
where we are now.
book will explain how we got into this mess:
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''BY 2050 - IT IS ESTIMATED THERE WILL BE MORE PLASTIC IN THE OCEANS THAN FISH"
WE ARE POISONING OUR PLANET AT A CATASTROPHIC RATE !!!
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