Monday, May 24, 2010

Author and Peak Oil Activist Michael Ruppert

Very powerful 21 May interview with Michael Ruppert, author of Confronting Collapse. Ruppert speaks of our dire economic condition, society's complete dependence on oil and the tangible steps required to confront the grave global realities standing at our doorstep - to include:

- Massive unemployment
- Disapearing State pensions
- More bailouts
- Massive monetary printing
- Gvt a servant of the Fed Reserve
- Far reaching implications of our current Gulf Oil crisis
- Chinese bubble

A few of his Major Concerns / Predictions

- Coming $200BBL Oil
- Dow 4000 in 2010
- Civil unrest
- Hyperinflation
- Complete breakdown of the US and Industrialized world

Suggest you skip to 6 minute point to start...

BTW: I know this is a long clip (~90 mins), but it's well worth your time. Suggest you save it to favorites and listen to smaller portions when time becomes available.

***Warning*** this video will likely scare the ____ out of you.

Hat tip JB


BxCapricorn said...

Well, the Dow 400 thing keeps getting bandied about, and I personally believe it's being promoted by traders to widen people's acceptance of trading bands. The government likes the idea because people will buy treasuries in their retirement fund, accepting no return, and funding the government at essentially zero interest. This gets them off the hook, just as a low interest loan for a home, gets a refinancing home owner off the hook.

I'm watching Obama's new push to tame the deficit spending of Congress. Government stimulus is obviously over and done for now but the inflation/deflation debate rages on.

BxCapricorn said...

Well, the speaker has never owned a home, and has very little money. He doesn't seem to know how to profit from his endeavors, outside of book sales, so his financial advice is suspect. I did like the fact that he stated that each area has its own set of challenges, so knowing those faced by local authorities helps clue you in to what your needs may be. If tomorrow, BP states they've plugged the well using drilling mud, there will be a market rally fueled by short coverings. As always, I look for opportunities to buy or sell the outer edges of trading bands.

Ruppert fails to understand just how many natural gas and domestic oil wells were capped when oil dropped to $40/barrel. Horizontal drilling quadrupled our gas reserves over the past five years. You can see this by looking at our oil reserves and domestic usage of oil.

He was also incorrect in stating that no nuclear power plants were built. Browns Ferry added a unit, and Watts Bar finished their delayed build out in the 90's.

His statement that the "grid" is in bad shape, shows his lack of knowledge in that area. Maybe his judgment is based on what he sees in California. Certainly CA's desire to outsource its power generation has resulted in a greater dependence on a grid with long power lines. CA has willingly "islanded" themselves.

How an audience in Vermont could feel more concerned about a complex society's downfall, when they have agriculture, farming, and are embracing wind turbine technology, baffles me. The collapse of governmental meddling opens the door to various "growth" potentials in Vermont, and Ruppert would be standing in line for said opportunity.

I've got a list of ideas generated from watching this video and enjoyed hearing his perspective. Very frank. I have long thought CA would split three ways, and first heard this idea in the late 80's when I lived in CA.

As fertilizers ramp in cost, and people without work multiply, we may see a return to manually intensive farming and an exodus from cities. This seems to be the most logical future for civilization anyway. Good stuff.

BxCapricorn said...

Some Ideas

Resource restrictions to avoid peak power demands, which takes the idea of tiered power pricing (night time rates are cheaper for running large appliances), to a forced level.

American version of kibbutz promoted, to put people to work in a self-sufficient manner. May also be used in prison systems, but not to make products which compete against the free market, as many do now. Food grown for self sufficiency (i.e. Angola Prison, LA)

Elimination of HOA restrictions that do not allow outdoor line drying of clothes, limits vegetable gardens to "hobby" status in the backyard, etc.

Trading water credits so farmers can decide to skip a season and sell their water rights when a crop is a bumper crop elsewhere (i.e. FL strawberries this year).

Promotion of local farmer's markets through tax reliefs, which would be similar to a carbon tax, in effect. This offsets the incentive to grow/produce, and ship long distances to undercut local merchants/growers.

There are a ton of great ideas, but each one faces well funded lobbying efforts. Lobbying and lawsuits have to stop, and that requires more bravery than any politician has ever shown...lately.

BxCapricorn said...

This is exactly the type of information that Michael Ruppert is seemingly unaware of.

Peak oil meet Shale Gas.

Jb said...

Although I do follow Rupperts blog site, I sometimes think his external links are a bit sensational. That said, he mentions his collaboration with people whom I hold in high regard including Heinberg and Campbell.

If we accept that peak oil production occured in 2005-6, then I think we should assume that world governments and major financial players are aware of pending gasoline/commodity shortages. I'm not a conspiracy theory kinda guy, but it does make me wonder if our current economic situation is part of a much broader agenda. It's like chess: perhaps you need to sacrifice a few pawns, maybe a rook, to put the Queen into position.

Right now I feel like a pawn. I don't believe the US government will ever admit their knowledge of peak oil. If they did, the whole Iraq war becomes a lie. Not only that, but the stock market and our unfunded entitlement programs become a joke.

How are we going to pay off our national debt if economic growth is impossible without cheap energy inputs?

On a personal level, why would you buy a house with a 30year mortgage if you knew we didn't have 30 years worth of petroleum left?

Is our government trying to mask oil depletion rates by purposefully wrecking the economy thereby destroying demand for oil?

Is the US government involved in destroying the Euro to hold onto world reserve status?

I don't know, but I have come to a
simple conclusion. Its time for us to begin taking our future into our own hands.

My friends, thank you.

Anonymous said...

Any discussion about oil prices over the next decade must include an attempt to quantify emerging economy demand as an important driver at the margin. Here is a simple thought experiment using Chinese demand to give some idea of the magnitude of the supply issues we face:
- China moves from 3 bbls/person/year to the South Korean per capita consumption level of 17 bbls/person/year
- Transition takes 30 years
- No peak in global production

In next 10 years we must find 44 million BOPD. If you superimpose peak production on top of this demand profile using the following parameters oil prices would increase approximately 250% in real terms over next 10 years:
- Oil demand elasticity of -0.3
- Current production 84 million BOPD, current price US$ 80
- Peak production 100 million BOPD
- Post peak decline rate of 3-4%

If you want to try the model for yourself using your own assumptions it can be found at: