I’m Caren Black (CB) and I’m Christopher Paddon (CP) and this is the Life Boat Show where we discuss sustainable life style and why we need them.
(CB) This month we bring you highlights of a talk by Matthew Savinar (MS), Matt participated in the recent Life Boat conference, here in Astoria in June.
(CP) Matthew Savinar received his law degree from Hastings in 2003, passed the bar and wasted no time in making his mark on the world. In the course of studying the war on drugs, he encountered information about Peak Oil, as he probed further accumulating more and more information on Peak Oil, he realized that “this is the larger context”, the “big picture” which contain and define everything else.
(CB) … right, and Matt wrote out the facts as he saw them and presented the results to one of his former law professor, who told him, interestingly, to forget starting a law practice, that this will be his work.
(CP) … and now, Matt sure does not pull any punches, does he ?
(CB) … no, he’s direct and to the point and extremely well documented, but he still retain a rye sense of humour, he set up this extensive web site which became a book, in a question and answer format, typical of the lawyer.
(CP) … it’s amazing, just two years after graduating law school at the ripe old age of 26 (CB: … that’s right), attorney Matt Savinar has been quoted on the floor of Congress as an authority on Peak Oil and it ramifications.
(CB) … right, he’s really an amazing man, when Matt was here with us last month at the conference, we asked him to say a few words about himself.
(MS) … so, first I’ll tell you a little about myself, my name is Matt Savinar, I operate a web site call: “Life after the Oil Crash.net”, you can also go to “Oil truth.com” to get it, and I’m author of a book: “The Oil Age is Over: What to Expect as the World Runs Out of Cheap Oil, 2005 - 2050”. I graduated at law school, two years ago, took the bar, moved back home and then was doing some research about the drug war, and I came across Mike Ruppert site: “From the Wilderness”, I’m going to guess some of you are familiar with it ?
I knew, I was actually amazed, I have not come across this site before and I can tell Mike, ok, well this guy, knows what he was taking about when it come to how drug money work and also his article on oil, and I knew that we’re probably in Iraq for oil, you know - obviously, and if what he is saying is true, about all this “stuff”, we’re in really really deep “stuff”.
I did what most people do when they first heard about Peak Oil, you read a little bit, a little bit, a little bit more and you get progressively more disturbs, and so finally the light bulb when off, where they got the “feeling in the gut”, I was like “Oh “WOW”, this is really big”.
I didn’t really know what to do, so I put up my site, just figuring, maybe I’ll use it to meet other people who are concerned about the issue, and if I make it comprehensive, I don’t have to constantly re-explains why Hydrogen isn’t going to save our “butt”, why zero-point energy isn’t going to do the trick, so on and so forth, next thing I know, the site is getting 10,000 visits in a day, I was getting invited on radio shows and it just mushroomed from there.
(CP) A little later, we’ll get into some of Matt’s landmark book: “The Oil Age is Over”.
(CB) … it’s very powerful, in fact, it was in reading Matt’s book, which convinced me personally that I had far less time to prepare for changes that I had previously thought.
(CP) … his words seem to have that effect on a lot of people.
(CB) … that’s right, although he personally doesn’t come on that strong, he’s rather soft spoken and he seem a little surprised, at the age of 26, he’s already cause such a stir. He explains himself, why he feels, his work has been so effective.
(MS) … I’ll tell you, you see the information, I have, everything’s linked up to the original source, so you don’t have to rely on my word for it, you can actually go to the original people, as far as the strength of the site, why it has been so effective, is, you can’t say: “ Whoa, who the hell is this guy, and what is he saying ? ”, you go to the original document and check it out for yourself.
(CB) … and in case you’re not sure, what Peak Oil means, we’ll listen to Matt, explains it now.
(CP) … but first, you’ll need to imagine a “Bell Curve” in your head, so called, because it’s shape like a bell. Think of a “Liberty Bell”, slopping sides, rounding up to a flat top, and then it’s slopping back down again.
(CB) … Ok, are we ready then, (CP: … yeah), take it away Matt.
(MS) … Ok, so what is Peak Oil ?
All oil production follows a “Bell Curve”, it’s true, whether you are talking about an individual field, a particular oil producing country or the world as a whole. We have been going up, the up slope of a global oil production curve since 1859, when the first commercial oil well was drilled.
Ok, so what happens, oil production goes up, then it reaches a plateau, commonly refer to, as a peak, and then it goes down. Then if you look at the individual “Bell Curve” for certain nations or certain fields, “Bell Curves” will not always look perfect like this, it has been known, if there is a war, production might drop or it might go up, if there is political disruption you may get similar effects.
You look at individual country, the “Bell Curve” will look kind of “funky”, Soviet Union for instance, they have a “Bell Curve” that got two “Bell Curves” inside of one “Bell Curve”, but the global aggregate comes out to look like a curve like this.
And, so, at some point, production peaks and then you go down the back side of the “Bell Curve”, and as you go down the back side, the oil became increasingly expensive both financially and energetically to pull-out of the ground. And at some point, about half way down the back side of the “Bell Curve” you have to put in, more energy than the oil actually contains, it’s called Energy Returned On Energy Invested. Now oil used to have an EROEI of about 30, you invested 1 barrel of oil, you get back 30 barrels. Depending on where you go, what part of the world and who’s statistics you rely on, that number is down between 5 and 10. Now like I said, when you get to about half way down the back side, it ceases to break even, which means at that point, oil is no longer used as energy source, because you got to invest more than you getting back, it will be like going at the bank giving them a dollar to get back 80 cents. Now the exact date as to when we peaked, nobody knows for sure, we’ll probably won’t know, till after the fact, United States single biggest geopolitical event in the last 100 years, maybe in the last 200 or ever since the industrial age begins, was our production peak in October 1970. Peak Oil is also knows as Hubbert’s Curve, named for Dr M. King Hubbert, in 1956 he predicted U.S. production will peak 1970 – 1971, he turned out to be right.
(CB) Obviously, either no one thought Hubbert was right or no one listened to him.
(MS) … Folks laughed at him, at that point says this is never going to happens, if you had look at the production and discovery curves from back in the 50’s, we’re discovering 30 billions barrels a year and we’re only using 6 billions barrels a year, so you can kind of understands why people thought he was crazy, we were discovering so much more than we were using, how could we ever possibly peak or run out, but he turned out to be correct, he predicted that global production will peak in 1995, so he was off by about 10 years, if I had more time, I can go to, why he was off, that is not very relevant, since most of you already believe that we are peaking and the peak is imminent, we may already be in it, what is called the petroleum plateau.
(CB) Let’s get our listeners a brief sampling of Matt’s book: “The Oil Age is Over” which is available thru his web site: www.LifeaftertheOilCrash.net, throughout his book, he used a “questions and answers” format.
(CP) … Which works beautifully, because he asked all the questions everybody always ask when they first hear about Peak Oil.
(CB) … Exactly, the real punch comes with his answers, often terse “one liners”, which he then backs-up with a barrage of facts, should we act some out for our listeners ?
(CP) … Sure, I will play Matt.
(CB) … Good idea, I will play the public asking questions.
(CP) … Hum, that works.
(CB as public) I heard, we have about 40 years left, was there to worried about ?
(CP as MS) The statement: “ We have about 40 years of oil left” is technically correct, the earth was endowed with about 2000 billions barrels of oil, we have used about a 1000 billions barrels, as of 2003, we consumed about 28 billions barrels per year, 1000 billions barrels divided by 28 billions barrels per year = 35.7 years of oil left. If one’s account for increases demand resulting from population growth, debt servicing and further industrialization, that estimate is slashed to a paltry 25 years. The problem however, is not running out of oil, as much as it is running out of cheap oil, which is the resource upon which every aspects of industrial civilization is built. Oil plays such a fundamental role in the world economy, that we need not, run out of the “stuff”, before we run into a crisis of untold proportions. The more, demand for oil, exceed production of oil, the higher the price goes, the higher the price goes, the more dislocations the world economy suffers, the more dislocations the world economy suffers, the more resources wars, the human population endures.
(CB) … That’s from page six of “The Oil Age is Over”, by attorney Matt Savinar, thanks you Christopher for playing Matt, are you up for another one ?
(CP) … Yeah, go for it.
(CB as public) Ok, Susy Suburbia here: Peak Oil, big deal !, if gas’s price get too high, I’ll just car pool or I will get one of those little hybrid deals, why should I care ?
(CP as MS) The aftermath of Peak Oil will extend far beyond “how much you will pay for gas”, if you are focusing solely on the price of the pump or the more fuel efficient form of transportation, you aren’t seen the bigger picture. Converting your car to run on bio-diesel won’t do you much good if these isn’t enough energy to maintains roads & highway’s, purchasing a hybrid car will seem a bit pointless when you don’t have a job to drive to, because the economy has collapsed due to oil depletion. Spending $10000 to install solar panels on your roof won’t provide you with much comfort, when your fossil fuel, powered foods and water distribution infrastructures has ceases to function. In short, the end of cheap oil, means, the end of everything you have grown accustomed to. All aspects of industrial civilization, and quite possibly, humanity itself.
(CB as public) The end of the world is here, once again, so what else is new, Y2K was supposed to be, the end of the world, and it turned out to be, much to do about absolutely nothing.
(CP as MS) What’s new, is that, this is the “real thing”, it isn’t a fire drill, it isn’t paranoid hysteria, it is the “real deal”. Peak Oil isn’t Y2K reloaded, Peak Oil is not an “if” but a “when”, Peak Oil is based on scientific facts, not subjective speculations. Governments and industries began preparing for Y2K a full 5 to 10 years before the problem was to occurs, we are within 10 years of Peak Oil, and we have made no preparations for it. The preparations necessary to deal with Peak Oil will require a complete overhaul of every aspects of our civilization. This is much more complex then fixing, just a computer bug. Had the Y2K predictions come true, our civilization would had been knocked back to 1965, with time, we would have recovered. When the oil crash come, our civilization is going to be knock back to the stone age, we will not recover, as there will not be enough economically available oil left to power a recovery for more than a handful of people.
(CB as public) … Dude, can technology find a solution, or find a better, more efficient way to use the oil that’s left ?
(CP as MS) … Oh, Absolutely, but, that increased efficiency means nothing, unless we use less oil overall, thus far, the more energy efficient we get, the more energy we consumed. To illustrate, what do you think will happens if the average fuel efficiency of every vehicles on the road today was magically raise to 200 miles per gallon ? It doesn’t take a psychic to accurately predicts how we would reacts to this “miracle”, we will continue to build our homes farther and farther away from our jobs and grow our foods farther and farther away from our stores.
(CB as public) … We will all’s think of something, we always do, “necessity is the mother of invention”.
(CP as MS) … Yes, and lot’s of cheap oil has been the father of inventions for 150 years, no inventions has ever been mass produced and no resources, has ever been extracted or distributed globally without an abundance of cheap oil. Dealing with an energy crisis of this scope is not as simple as just “thinking of something”, we are talking about the collapsed of an highly complex society, complex society such as our, are like the Titanic, in order to change course, they have to initiate the course’s change, a long time before any iceberg are actually visible.
(CB) … Wow, Matt doesn’t pull any punches, does he ?
(CP) … Not a bit.
(CB) … You’ve done a great job of portraying him, (CP: Thanks you), and now I’ve ask Matt himself, why all of this, is so important ?
(MS) … Ok, so, why is this important ? Well, it’s important, because oil is your God, I don’t care if your worship Jesus, Buddha, nature, the mother God, or whatever, you actually worship oil, because it provides virtually everything for us. All pesticides comes from oil, all fertilizers comes from ammonia which comes from natural gas. Natural gas production will peak about 10 years after oil production. Natural gas production when it peaks, it does not go down a “Bell Curve” like this, it falls off a cliff. Average piece of foods in the U.S. travels 1500 miles, from were it is produced to where it is consumed, in Canada, that’s 5000 miles. Roads, tractors, trailers, air transport, boats, all those are constructed, transported and fashioned using oil. Of course, they are also powered using oil. All forms of alternative energies, solar panels, windmills, nuclear powered plant, go out and get the resources to make the solar panels for instance, that’s is done with oil powered machinery, the solar panels are constructed at oil powered factory, they are shipped to an oil powered distribution point, so on and so forth. It take about 18 barrels of oil to manufacture a ton of copper, It take about 360 barrels of oil to manufacture a ton of aluminium. Average car consumes the energy equivalent of about 27 barrels or 1200 gallons of oil during it’s construction, average computer consumes 10 times it’s weight in fossil fuel during it’s construction, one microchip consumes 630 times it’s weight in fossil fuel during it’s construction, average cell phone got 18 microchips in it, this has implications for our uses of alternatives energy, because solar panels, windmills, whatever your favorites alternatives is, it’s usually evolved advanced technologies, even bio-diesel, bio-diesel can actually bepolluting if you screw up the chemicals and dumping them into the ground, they going to be produced in a factory somewhere, so all’s are using technologies. Guest how many men or women hours of labor are contains in one barrel of oil ? It will take a human 25000 hours of efforts to produces the amount of energy in one barrel of oil. That barrel of oil, if it’s pulled out of the ground in Iraq, it only take a dollar to pulled it out of the ground. If it is pulled out of the ground in the U.S., it take 10 dollars, the reasons for the difference, is we’re way on the back side of our Hubbert’s Curve, Iraq is still on the up slope. Saudi Arabia it’s $2.50, global average it’s $5.00. So, if you’re in Iraq, and you spends $1.00, to pulls out 25000 hours of person-power, that’s is a miracle, I means, it’s basically free energy. A gallon of gas, contains, before it’s converted into actually usable energy, contains about 500 hours of humans labor, once you accounts for the conversion process, that number is cut to about 200. A gallon of gas, right now, cost what ?, $2.50, so for $2.50 you are given somewhere between 200 and 500 hours of human labor. How much will you have to pay a person, even working at minimum wage to get 200 hours, or 400’s or 300 hours or what not, of labour, well, $5.00 an hour time 200 hours, that’s $1000, I could go at the gas station and get that for $2.50, you go to my site, I got all this linked up, so you can go confirms it for yourself. People have a hard time believing this, even when they confirmed it for themselves, and the link is to the “research”, so you can go confirms it yourself. I’ve been quoted heavily in front of congress, and this is one of the thing that this congressmen in Maryland, he read firstly my entire site to the congressional records, one of the example that he used, was, I’ll say, my say, people have a hard time believe in this, even when confirmed it for themselves, but think about it this way: how long will it take you to push a 3 tons Hummer, 10 miles ? You put a gallon of gas in that Hummer, it will go 10 miles in 10 minutes, now even “Arnold” back when he was “Mister Olympia”, I don’t think can push a Hummer all that far. Even a Hybrid, that will get 60 miles to a gallon, so $2.50 for a gallon of gas, will sent that thing, 60 miles, traveling at 60 miles per hour, how long will it take you to push a Hybrid 60 miles ? Not as long as it will take to push a Hummer, but it’s still going to be a pretty long time. That why we got this wonderful, this very advance complex civilization, because we had access to such an amazing source of energy.
(CP as public) What does Peak Oil, have to do, with our financial system, Matt ?
(MS) Peak Oil and financial system ? Because, lot’s of people don’t understands how our monetary systems work, I’m going to use an example: Let’s say, you want to open up a computer store, I go to the bank, the bank gave me a loan for, just to get the math easy, $10000, they say: “Matt, you need to pay this back, plus 10% interest in one year”. Remember, the computer consumes 10 times her weight in fossil fuel during the construction, the construction of the computer store is going to consumes a certain amount of energy, the roads leading to the store, the food I eat, the foods my employees eat, all that is basically energy, so the money that they’re loaning me, is just a symbol for energy, in order for me, to pays back that loan, there has to be more money available in the future, that there is now, otherwise, I can’t pays back the interest. In a fact, what the bank has done is they say: “Matt, here are a bunch of barrels of oil, go out and do your business, and in a year, pays us back, that same number of barrels of oil, plus 10% extra oil”, so, by paying back my loan, I actually have to go out and create an increased demand for energy, this is how the entire financial system work. So, somebody will says, wow, I’m not in any debt, I don’t have to pays back interest, so, we’ll say you’re my employee, and I pays you, even if you don’t have any debt, the money that I paid you, was created by the bank, at it’s debt based money.
(CP as public) … Wow, wait a minute, won’t I get a decline, 2 or 3 % per year, when it’s get underway, right ?
(MS) What’s the big deal, you know, if you are living on $100,000 a year, can’t you live on $97,000 a year ? That’s the thinking that goes on, but that’s not the way it work in the real world, in a constantly increasing supplies. So back, in the 70’s, oil shock in the 70’s were only caused by about a 5% reduction in supply, and yet, we had all these problems, so what’s going to happens when we get a 2, 3, 4% reduction per year, the financial system falls apart, the financial system falls apart, you can’t scale up, your use of alternative energy, to the degree that we will need, even if we where capable of doing it, physically, when you got a collapse in banking system. Where are you going to get all the network of Hydrogen pipelines, comparable to our system of natural gas pipelines ? It cost 200 trillions dollars, that’s all my say, and you have time, you can follows and read the original article for yourself. Where are you going to comes up with 200 trillions dollars when the financial system collapse ? So, It has implications for energy and everything else, Dick Cheney said: “American way of life has none negotiable”, he is absolutely right, it is none negotiable, I can prove it to you right now: who’s here against the war in Iraq ?, who’s here own a car ?, virtually all of us kept their hands up, ok, so you aren’t willing to negotiate your way of life, so, we are proving him right, unfortunately. That’s one of the tuff aspect of this, is when you really get into, you get a “reality check”.
(CP as public) Is the Oil industry aware of this, and if so, what are they doing about it ?
(MS) Now, is the Oil industry aware of this, yes, when an industry begins to contract, corporations begins to merge, it’s sort like the corporate version of cannibalism, this whole Peak Oil phenomenon, the facts, it’s going to happens on a global scale, people in the oil industries began to see this around 95 – 96, they thought that the oil in the Caspian will pull it off, at least a couple years, but they thought, there were up 400 billions barrels, it turned out to be about 40 billions barrels, so here what’s starts to happens, in December 98; BP & Amoco merged, April 99; BP, Amoco & Arco agreed to merge, December 99; Exxon & Mobil merged, October 2000; Chevron & Texaco agreed to merge, November 2001: Phillips & Conoco agreed to merge, September 2002; Shell acquired Penzoil-Quaker State, February 2003; Frontier Oil & Holly Oil merged, March 2004; Marathon acquired 40% of Ashland, April 2004; Westport Resources acquired Kerr-McGee, April 2005; Chevron-Texaco & Unocal merged, they clearly knows what’s going on, these are actions of an industry that contract, not expending.
(CB as public) What about the free market, Matt ?
(MS) Waiting for the market, now, this is what you hear from lot of people, they says: so the price will go up, and the market’s law of supply & demand, I means the “God” that is the invisible hand, that we all worship, will fix everything Matt, chicly, the amount of energy contains in a barrel, if you can get that from renewable resources will cost between $100 and $250 per barrel, that’s not even accounting for the fact that you have to built, an entire new generation of cars, of pipelines, of everything to tap whatever sources of energy we’re going to use. What’s that means, is that energy companies aren’t going to be motivated to aggressively pursuits these other sources, until oil is somewhere between $100 and $200 per barrel, get oil at $100 to $200 a barrel, our economy will collapse, because we will not be able to sustains our debt, when we have to spend that much more on energy. So the market won’t react until it’s too late, so by the time, we’re motivated, game’s over. Then you also get the factor of the bidders of Wall Street, when you heard about the price of oil, lot have to do of speculation of the market, once the bidders wake-up to this, they’ll bid the price up to “Lord knows what”, because they will realize, wow, we’re in a stage of permanent oil scarcity, bidders on Wall Street are always concerns about short term profits, you’re wondering why haven’t they started to do this, as the information is coming out, because they aren’t really concerns about what happens in the immediate foreseeable future. Now, when we get to a point, when on a global scale, we have, what happens to the U.S. in the early 70’s, where production has dropped for two or three consecutive years, it will then becomes obvious what is going on. The Arab oil embargo of 1973, one of the reasons, they hit us with that, is our production has been declining since 1970, so after two or three years of that, we couldn’t just says: “it is just the weather, or we didn’t make the right investments”, it was obvious what was going on, so, let me ask you: Those of you who were, I’m going to use a small scale example and you can extrapolate this out to the society as a whole, if you had to pay $10.00 or even $7.00 a gallon for gas, how are you going to manage to also afford solar panels for you house ?, you’ll probably not going to be able to. That phenomenon is going to happens on the national scale, we are not going to be able to afford to scale up these renewable resources skill that we need when we’re spending all this money just to keep things couple together.
(CP as public) What about conservation, won’t it help, if we conserve ?
(MS) This is the economy, oil goes in one way, garbage comes out the other, to wipe inefficiency doesn’t actually make the situation any better, we’ll go inside this machine and remove it’s internal inefficiency, the extra energy, the extra oil, just gets put back into the machine, they’re just ends up consuming oil and spitting out garbage even faster, let say, you own a business, let say we all go back to the computer store example, you learn about Peak Oil while we need to saving energy, so you install insulation, you have your employees wear sweaters or whatever you do, all the usual steps that people think, let say you save $500 a month on your energy cost, so what are you going to do with that $500 ? You will either re-invested it in the business, maybe take out advertisings or hires more people or what not, and you going to sell more computers, but computers consumes 10 times their weight in fossil fuel just during the construction, so you’re going to be fouling more, even so, what if I just deposit the money in the bank ? Well, the bank will loans out about $6 for every dollar that you deposit, those loans will go to people to buy computers and cars, and built roads and so on and so forth. So we got a system that whatever we do, just make the system more efficient, that’s exactly the economy in the last 30 years is a good example of that. It now takes half as much oil to produce a dollar of GDP as it did 30 years ago, but our consumption is twice as high, it goes you knows as Jovan’s paradox, conservation will benefit you as individual, like companies will be more profitable and I might be able to roll some of the money I saved into solar panels or taking permaculture class or whatever but as a national strategy, it just spit everything up.
(CP) … We’ve been sharing excerpts from attorney Matthew Savinar’s book: “The Oil Age is Over, and listening to remarks he made last month here in Astoria.
This is Caren Black and Christopher Paddon and we want to thank Matt Savinar.
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