Greetings – this is my first post on “American Conservative,” and I’m honored to be here. For those who are not familiar with me, here’s where I sometimes hang my virtual hat. In brief, I teach political theory at Georgetown University, and in my spare time I declaim the end of the world as we know it. My record, to date, is actually pretty good, I’m afraid to say.
Scanning the part of the online world where much gnashing of teeth goes on, I came across several reports about the recent meeting of ASPO-USA (Association for the Study of Peak Oil-USA). An association that rarely receives any mainstream coverage, with the recent news of daily catastrophe in the financial system – and concomitant drops in the price of oil – even fewer people have paid the meeting any mind. Indeed, with most of the news coverage devoted either to the demise and resurrection of the “Bail-Out (ver. 1),” on the one hand, and the “election/rout” on the other, most people have forgotten that until fairly recently one of their main concerns was the price of gas.
Well, most people have forgotten, unless you happen to live in parts of Tennessee or Georgia, where they are experiencing some genuine 1970′s-style gas shortages. These shortages are the result of the refining and supply disruptions due to Hurricane Ike, but are forceful reminder that supplies remain tight in spite of the drop in prices. While our attention is focused on the stock market, we ignore a more dangerous crisis still – depletion of worldwide oil supplies – for which government printing presses can provide no solution whatsoever.
Particularly riveting at the ASPO-US conference was Matthew Simmons, a bonafide oilman, member of V.P. Cheney’s 2001 Energy Commission, and die-hard Peak Oiler. Noting the supply shortages throughout the South, Simmons (is reported) to have said something like the following (courtesy of the indispensable “Oil Drum”):
[Simmons] talked about the elements of risk that we have now forgotten how to apply. He noted that we have forgotten how savage a collapse can be, or how fast it can occur. (Enron unfolded in 7 days. The events of the last week showed how even faster collapse can come now). The delays in bringing oil production on line from the recent hurricanes will only underline this point.
As a result places are running out of gasoline (Ed. note: the two folk next to me at the table were from Atlanta and Tennessee and neither town had any gas stations left with fuel, as far as they knew). The South is going to have to cope with a growing shortage until more of the infrastructure comes back on line, and that may be weeks into the future. This will get worse if all motorists suddenly start topping up their tanks, since this will sensibly empty the floating reserve that is the volume moving through the system at the moment. This will, in turn, remove confidence in the system, which will make the situation worse. The heating oil situation for the North East is only going to get worse in this scenario. And there is no data on how close to a collapse we currently are. And the collapse could well be a disaster equivalent to that of Gustav/Ike squared.
In speaking about just what such a “collapse” would mean, Simmons put it in terms that should have resonance in light of the recent calamities in the financial system:
Drawing parallels with the current financial meltdown, Matthew Simmons, the CEO of Simmons & Company International, expresses his alarm about gasoline stocks being the lowest in several decades and refinery production down following recent hurricanes. He warns that if there were a run on the “energy bank” by everyone topping off their gasoline tanks, the U.S. would be out of fuel in three days, and grocery shelves largely emptied in a week.
In light of the “silent” runs on banks that have taken place in the past several weeks, the rising demand for tangible gold bullion, fears about the reality of one’s money, the worth of one’s property, and the declining capacity of government to assuage the fears of the “reality-based community,” we might come to see this financial collapse as a momentary distraction from our deeper problems – our capacity to run our civilization in the manner to which we have become accustomed. We also begin to see why our encounter with peak oil will “be something completely different”: assumptions that we will remain rich enough to “invest” in new energy forms, to build an alternative civilization fueled with french fry oil and moose droppings, is at best a dubious assumption when – as we have seen – fear can cause 1 trillion notional dollars to disappear in a single day. How much will disappear if food fails to appear on our supermarket shelves, one might wonder.
For those contemplating a battle against entropy by building smaller and using less, prepare for resistance from the government-corporate complex - as explained by the famous Leftist George Monbiot (who sounds pretty conservative here in his disgust with disruptive government intervention in localist efforts to prepare for a world with a lot less oil). We see, with each passing day, how the old political alignments are unraveling and the world will soon be divided not between Red and Blue, but grasshoppers and ants.
Again – very good to be here. Doubtless a reconsideration is already underway – assuming that people preparing for leaner days may write “cancel magazine subscriptions” toward the top of their peak oil “to-do” list…