" />
Building a world of
resilient communities.

MAIN LIST

 

Commentary: 2012 Predictions

(Note: Commentaries do not necessarily represent the position of ASPO-USA.)

Last year ASPO-USA brought together a host of leading thinkers and their predictions for what to expect in 2011. While not all the predictions were on target, last year’s thinkers and leaders on energy issues were remarkably prescient, accurately anticipating among other things Arab Spring, the flow of energy prices, the re-emergent world food crisis, and the next step in the Transition movement. While foreseeing the future is a delicate exercise, there are real trends that are evident to eyes prepared to see. Here are their thoughts about the coming year. A Hopeful New Year to all from ASPO-USA!

COLIN CAMPBELL
“Oil and gas are finite resources formed in the geological past, which means that they are subject to depletion. For every gallon used one less remains, and the more we use the steeper the decline. A debate rages as the date when production peaks but misses the point when what matters is the vision of the long decline on the other side of it, which is beyond dispute. The main reason for the uncertainty is the unreliable nature of public data due to lax reporting and ambiguous definitions. For example, the Oil & Gas Journal reports that 66 countries have unchanged reserves at the end this year, although it is manifestly implausible that new discovery and/or so-called reserve growth should exactly match production. Oil-based energy is central to the modern world fuelling transport, trade and agriculture, which has allowed the economy to expand and the banks to lend more than they had on deposit confident that Tomorrow's Expansion was collateral for To-day's Debt. The decline of production during the Second Half of the Oil Age, which now dawns, implies economic and financial contraction. The transition threatens to be a time of great tension as already seen in demonstrations from Moscow to Wall Street and revolutions in the oil-rich Arab world. Coming to terms with what unfolds is a major challenge but as always there will be winners, who react in a positive way, and losers, who continue to live in the past.”

Colin Campbell was born in 1931 and went on to take a degree and doctorate in geology at Oxford University before joining the oil industry as a field geologist, working in South America and Papua-New Guinea. An analysis of Colombia in 1966 perceived the finite limits of oil and gas in the country and the nature of depletion, which in turn led to a regional analysis of Latin America in 1969. He then moved into an executive role, ending his career in Norway in 1989. In retirement, he consulted on oil and gas depletion, writing seven books and many papers as well as lecturing widely, and giving interviews to the media. He helped found the Association for the Study of Peak Oil, which has expanded around the world, holding major conferences.

CHRISTINE PATTON
“An increasingly bankrupt American populace, enraged by a weakening economy punctuated by crises various and sundry, begins to boil over with belated recognition of the corruption which now appears endemic to the politico-corporo-financial system. With the presidential election looming, President Obama takes the time-honored path trod by Presidents, Kings, and Emperors before him and (reluctantly) triggers a military action aimed at corralling a desperately sabre-rattling Iran, which happens to have a not-so-subtly expanding nuclear program, a threatened capability to block the Straits of Hormuz, and the third highest amount of world oil reserves. Operation Duck and Cover distracts the public from the country’s growing tent cities and loathsome bail-outs, temporarily gooses a small battalion of corporate stocks with the anticipation of trillions in military spending, and incidentally triggers an apparently insane poison-pill shutdown of Iran’s several mbd from the oil markets. On the bright side, the Pentagon plants an edible landscape. Hey... it could happen

Christine Patton is co-chair of Transition OKC and author of the Peak Oil Hausfrau blog. A former risk management consultant, she now focuses on urban homesteading, improving community resiliency and skilling up to power down.

RAYMOND DE YOUNG
“As it becomes more acceptable to openly talk about the need to downshift our personal material expectations, a few geographic locations (e.g., Flint, Detroit) will come to realize this same need exists at the community level. In 2012, in a few locations, new governmental institutions will emerge (e.g., Departments of Descent) tasked with creating and implementing policies and procedures that intentionally shrink the services, infrastructure and political boundaries of cities, towns and villages.

This intentional transition will not initially be driven by an understanding of the limits posed by declining net energy; the sole driver will seem to be local economic constraints. Nonetheless, the process will create a community-level response consistent with emerging bio-physical limits. And the very existence of these new institutions may diminish our psychological confidence in the role and predictability of centralized economic and political systems in our future affairs.”

Raymond De Young is Associate Professor of Environmental Psychology and Planning at the University of Michigan School of Natural Resources and Environment (www-personal.umich.edu/~rdeyoung). He is co-author of The Localization Reader: Adapting to the Coming Downshift. Cambridge: MIT Press (2012).

AARON NEWTON
“The average US citizen will lose one week of 2012 due to the pervasiveness of Presidential campaign commercials on TV. A structural collapse of the global financial system will usher in rationing of key items including some foods. Everyone will be sick of Mayan Calendar jokes by Mid-March.”

Aaron Newton is the Local Food System Program Coordinator for Cabarrus County, NC and raises chickens. He is the coauthor of A Nation of Farmers: Defeating the Food Crisis on American Soil.

JEFFREY J. BROWN
“The actions by many OECD countries aimed at encouraging consumption in the face of declining available global net oil exports can be seen as the OECD 'Thelma & Louise' Race to the Edge of the Cliff. I suppose that the ‘winner’ could be viewed as the first country that can no longer borrow enough money, at affordable rates, to maintain their current lifestyle. So, based on this metric, Greece would appear to be currently in the lead, with many other countries not far behind them.” I suspect that we will see a continuation of this trend, as more countries are unable to borrow enough money, at least from non-central bank sources, to fully fund their deficit spending. As this trend continues, I have concluded that there may be a global shortage of calculators, because most of the world seems either unable or unwilling to subtract domestic oil consumption numbers from domestic production numbers in oil exporting countries, in order to derive net export numbers, which are calculated in terms of total petroleum liquids. While it is true that the EIA shows that total liquids production worldwide, inclusive of low net energy biofuels, increased at 0.5%/year from 2005 to 2010, the use of a calculator shows that the global supply of net oil exports available to importers other than China and India (what I call Available Net Exports, or ANE) fell at 2.8%/year from 2005 to 2010. I estimate that the ANE decline rate will accelerate to between 5%/year and 8%/year in the 2010 to 2020 time frame.”

Jeffrey J. Brown is the creator of the Export Land Model and a Member of ASPO-USA’s Board of Directors

BART ANDERSON
“I'm looking at the Occupy and similar movements across the world. My prediction is that these movements will change the political landscape, more quickly and on a larger scale than most of us imagine. This is not a hard prediction to make, since power has become polarized and political opposition has been neutered. This is true not only in the US, but in Russia, China, Europe and the Middle East. My co-editor Simone has her eye on China.

In good times, a population will put up with this, but we are facing continued bad times and cutbacks of some sort are inevitable. As in the 30s, we can expect something like Occupy on the left, and nationalism and scapegoating on the right.

Occupy has the potential to open up the conversation, and enable us to begin addressing peak oil, climate change and the end of growth. Will we be able to make our voices heard? Can Transition exert an influence with its positive, community-oriented approach?”

Bart Anderson, Energy Bulletin co-editor is also active in Transition Palo Alto. In previous lives, he was a journalist, high school teacher, and technical writer.

STEVEN KOPITS
“In 2012, US natural gas prices finally bottom and start turning around, beginning a bull market in natural gas that reaches $6 per million btu or above. Shale oils continue to power the US economy. US crude oil production rises by 250,000 b/d and breaks 6 million b/d barrier for the first time since 1998. The Chinese take notice and drill their first shale oil well during the year. The US economy stills wants to recover, but will it? Europe may collapse, and if so, oil prices will collapse in tandem, bottoming below $60 per barrel. If Europe muddles through, then Brent oil tests the $130 threshold. US oil consumption, down 1.5% in 2011, drifts down another 1% in 2012, averaging 18.75 million b/d for the year and a full 2 million b/d less than 2007 levels.”

Steven Kopits heads the New York office of Douglas-Westwood, energy business consultants. The firm assists energy service providers with market research, strategy development and commercial due diligence.

BOB WALDROP
“I predict that in 2012, things will go from bad to worse for lower income households, as they are targeted with a tsunami of austerity by rent-seeking elites acting to protect and expand their privileged economic positions and their access to government cash. The significant cuts programmed for the coming year in funding for programs at all levels of government that benefit lower income households, coupled with the continued deliberate suppression of free economic activity that would promote abundance for all, will accelerate the on-going devolution of the bottom 40 percent of the population. Homelessness, family dissolution, crime, domestic violence against women and children, alcoholism and drug abuse, abortion, and food insecurity will increase. We may see some beginnings of social unrest as people object and attempt to evade the collective fate programmed for them by the economic managers on Wall Street and at the Fed. In other words, in 2012 it will become increasingly evident that since there isn’t enough to go around, the preferred choice of our economic and political elites will be to leave the poor behind for the wolves to devour.”

Bob Waldrop is the founder of the Oscar Romero Catholic Worker House, www.justpeace.org, which works in food security for low income households, and was the first president and general manager of the Oklahoma Food Cooperative, www.oklahomafood.coop, America’s first food coop to only sell local food and non-food items. He has been responsible for the 7500+ member runningonempty2@yahoogroups.com discussion group since 2001. He blogs at www.bobwaldrop.net.

HIRSCH, BEZDEK, & WENDLING
“We prefer to think in terms of the impending decline in world oil production, because world liquid fuels production has been on a fluctuating plateau since mid-2004 and because a small upward fluctuation in production is not of major economic importance. We expect the current plateau to continue. As to the timing of the onset of decline, we see no reason to change our conclusion of a year ago, when we forecast that the decline would occur in 2-5 years. That's now 1-4 years. Note that the onset of decline will be masked by production fluctuations, so the actual onset date will necessarily have to be back dated. As we said previously, the realization of the decline in world liquid fuels production could occur at any time, triggered by political or market events.”

Robert Hirsch, Roger Bezdek, and Bob Wendling are the authors of The Impending World Energy Mess.

THOMAS PRINCEN
“My prediction is that the taboo against questioning material and economic growth will wane. Brought on in part by the inability of policymakers to “restart” European and American economies, people across the spectrum—from workers and mom-and-pop shopkeepers to oil company executives and hedge fund managers (ok, how about mutual fund managers? insurance executives? local bankers?) will be asking, What has a century of rampant growth done for me, for my community, for our planet? (Others of us will keep asking, What has a century of boom-and-bust mining operations, otherwise known as a “strong economy,” done for my children and grandchildren?)

As the growth icon topples we can begin the conversation about living well by living well within the capacity limits of ecosystems, waste sinks, human cognition and social organization. We can begin to learn, dare I say, humility.”

Thomas Princen is the author of Treading Softly (2010) and The Logic of Sufficiency(2005), lead editor of Confronting Consumption (2002), and co-editor (with De Young) of The Localization Reader: A Transition Reader: Adapting to the Coming Downshift (in press), all published by MIT Press. He teaches at the University of Michigan.

RON SWENSON
“While Solyndra (with questionable technology at best) created a tempest in a (largish) teapot in 2011, the big story is that the solar energy industry continued its blistering double digit growth again with 24% more installations and 50% more manufacturing capacity globally, according to IMS Research. From the buyer's perspective, the steep decline in solar (PV) prices was welcomed. At about $1/watt for panels, grid parity* without subsidies seems well within reach. But everything comes with a price; case in point, the price/share for many public solar companies has dropped an order of magnitude in one year. This is not sustainable, so there will be "corrections" in 2012 -- temporary price increases, more bankruptcies, mergers and acquisitions -- common growing pains in hot growth markets. The Chinese government will come to the rescue at a run and create aggressive incentives within its own domestic market. In the USA, in spite of impoverished Federal energy policy, the solar market will grow less aggressively in 2012 at 10% or more, with support at the local and state levels. In Europe, with higher prices for electricity and far keener awareness of fossil fuel limits (Peak Oil, Climate Change) the improved hardware prices will support continued renewable energy market growth albeit at lower rates than 2011.

* electricity prices the same as that generated from coal or natural gas

Ron Swenson, President, Swenson Solar, is a member of the ASPO-USA Board of Directors who has been applying solar energy technologies since 1971. He has developed solar PV projects sufficient to produce the equivalent of 10 barrels of oil per day, warrantied for 20 years and likely to keep producing electricity for the next 50 years and beyond. Since 1992 he has done numerous educational solar projects in Latin America, with activity now primarily focused in the Galapagos Islands.

RICHARD HEINBERG
“Last year, in a contribution to ASPO’s annual predictions for the coming year, I played it safe with a forecast for a 30 percent increase in Asia Pacific coal prices. Check. A less cautious reading of omens is called for in 2012: even though the variety and severity of risks at play makes for uncertainty, mapping those risks may at least help us prepare ourselves psychologically, if not practically, for what’s in store.

It will be truly miraculous for Europe to avoid at least a recession this coming year, if not a fully-fledged financial meltdown, and ensuing economic contagion from the EU will almost certainly infect US markets. This makes forecasts for oil prices difficult-to-pointless. Tightness of supply—which would otherwise push prices up—may be more than counterbalanced by an economic downturn, which will reduce energy demand and therefore energy prices. Gold and silver prices may likewise take a hit. Look for continued low natural gas prices in the US to take a toll on the fracking gas industry, with at least one major player selling out or going bankrupt.

Look also for declining economic strength in China. That country is aiming for a soft landing, but events in Europe and in Beijing’s own real estate markets may turn cushions to anvils.

Predicting when and whether tensions between Iran and Israel will go ballistic is a fool’s game. However, only someone on an extended media fast could have failed to notice that those tensions ratcheted up way beyond factory specs in 2011. If hostilities erupt, all bets are off. No doubt there are trolls in Langley and the State Department hard at work this very moment trying to figure out how to keep an isolated aerial attack from spinning into global economic and geopolitical mayhem, but it will be a challenge to keep even the best-laid contingency plans on track. Relations between the US and Pakistan seem set to deteriorate further, and disputes surrounding oil and mineral rights in the South China Sea are likely to intensify, clouding the geopolitical crystal ball to opacity and making nasty surprises more likely.

With the US lurching inexorably toward elections in November, expect the current administration to make every effort to keep the lid on the economy over the short run, no matter what the long-term cost—and, given the penurious condition of the Treasury, that means all the heavy lifting will be up to the Fed. As austerity measures take hold, US states, counties, and cities will take the brunt of the economic impact. Households around the world will increasingly feel pinched. Despite police and army crackdowns, the global end-of-growth uprising (otherwise known as the Arab Spring, the European economic riots, and the Occupy Wall Street movement) can do nothing but grow. Expect a series of disasters this year to rival or perhaps even surpass the floods, fires, droughts, and industrial accidents (Deepwater Horizon, Fukushima) of 2010 and 2011. Specifics are impossible to predict in this regard, but the momentum of global climate change is increasing, while the environmental costs of maintaining the world’s energy supply are burgeoning.

Do not expect the fulfillment of a faked-up Mayan prophecy of doom in December. We have many more years to look forward to, though they’ll be mostly characterized by economic, political, social, and geopolitical turmoil—and environmental degradation—until the world finally begins to adapt proactively to tightening resource limits. However, 2012 will probably feel a bit scarier than the last couple of years, during which the world’s political leaders and central bankers made extraordinary efforts to temporarily halt the unraveling that started in 2008 with a historic oil price spike and the popping of the world’s biggest-ever credit bubble. The available ammunition (stimulus and bailout packages) is nearly used up, while inherent problems (towering debt burdens and a shrinking resource base) are only intensifying.”

Richard Heinberg is the author of eight books including Peak Everything (New Society, 2007). He is a Senior Fellow of the Post Carbon Institute and is widely regarded as one of the world’s foremost Peak Oil educators.

What do you think? Leave a comment below.

Sign up for regular Resilience bulletins direct to your email.

Take action!  

Make connections via our GROUPS page.
Start your own projects. See our RESOURCES page.
Help build resilience. DONATE NOW.


Keeping Oil Production From Falling

Production flows from a given oil field naturally decline over time, but we …

Oil Abundance? Not So Fast- A Risk Checklist

Understanding how we use oil and where it comes from provides many reasons …

Peak Oil Review - July 21

A weekly review including: Oil and the Global Economy, The Middle East & …

Australia Becomes First Nation to Repeal Carbon Tax

With Australia’s standing as the world’s highest per-capita …

Breaking the Grip of the Fossil Fuel Economy: If It Can Happen in Appalachia, It Can Happen Anywhere

The people who agreed to spend their days digging coal from the underside of …

Agrivoltism

What is the best way to utilize sunlight: grow food or to produce fuel?

Peak Oil Notes - July 17

After falling steadily for three weeks, New York oil futures reversed on …