Natural Regression Film – Peak Oil and Economics

Posted: May 23rd, 2010 by: h2

A small interview type film feature Colin Campbell (wikipedia) and Chris Skrebowski was just made, Natural Regression (click to watch). Gives a good overview of some of the key points of how petroleum and our modern ‘economy’ interrelate. Good stuff.

These two guys connect some dots that I think are worth considering, especially with regards to how a fundamental component of our economy, petroleum begins to affect things in a ripping manner as it peaks and as the predicted economic volatility begins to occur.

I especially liked the observation that as oil income began to skyrocket in the oil producing nations, that money came back to the USA and other financial sectors, and those financial sectors began to search around for investment vehicles, of increasingly low quality, to generate the returns. Things like, say, sub-prime mortgages, that is.

Not to reduce matters to just one cause, but this was clearly a reality, money was really flowing back to US/British finance from oil countries as prices peaked at $147 a barrel or so.

Colin Campbell

Colin Campbell founded the Association for the Study of Peak Oil and Gas (ASPO) in 2000 and is a trustee of the Oil Depletion Analysis Centre (ODAC). He worked as a petroleum geologist and a consultant for some of the major oil companies including Texaco, British Petroleum, Hydro, Amoco, Norsk and Fina. He has written 2 books and over 150 papers. Today he researches the peak of oil production and strategies for its mitigation.

Chris Skrebowski

Chris Skrebowski is the founding Director of Peak Oil Consulting and until recently was the Consulting Editor of Petroleum Review. Chris Skrebowski has worked as a long term planner for British Petroleum, a Senior Analyst for the Saudi Oil Ministry, and an editor of Petroleum Economist. He is a fellow of the Energy Institute and advises the All Party Parliamentary Group on Peak Oil and Gas. He is also a founding member of the Association for the Study of Peak Oil (ASPO), and sits on the board of the Oil Depletion and Analysis Centre (ODAC).

Unlike our friends at TheAutomaticEarth, I don’t for one minute believe that finance is primary in our real world, although if you study too much financial news and economics, you might start drinking the cool-aid and start believing such nonsense. That, by the way, seems to be a cost of studying too much financial stuff, and it’s one reason I minimize the time I spend tracking such things.

I suspect that one reason mistakes of this type are made is that you begin to forget that money, debt, capital, per se, do not actually exist, but are merely socially arranged agreements of trust, position, status, and power. In a sense, it is completely thinkable that should the entire global economy contract too far, outstanding debts would simply be written off, favoring, of course, the groups who wrote the laws in the first place, and who made the new arrangements. This process may already be happening, but it’s too hard to really see what’s going on out there.

As Campbell notes so clearly, oil is the foundation of our growth, no oil, no growth. It won’t be a matter of replacing it with something else, there is nothing else. Uranium and coal, are declining in ore quality globally (ie, to get the same energy output, more material must be mined), and all other sources of raw energy and materials require far greater investments and materials than oil or coal do relative to their energy output, that includes things like deepwater oil and heavy tar sand oil.

I do not believe our system is going to address these problems, primarily, as you can see with Obama now, because the system is built on the premise of growth, capital based growth to be specific. And that growth depends, and has always depended, on cheap and plentiful raw materials. You know, the raw materials that China is increasingly locking up in long term production contracts.

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