Frosting On The Cake

My mother never dared turn her back after making the frosting to spread on a cake. I was right there with a big spoon in my little hand, ready to dunk and run with whatever I could get. Second best was a beater to lick, and third best was the chance to scrape the mixing bowl with my fingers. I always wanted the frosting to last forever. It was much better than broccoli. To me the bowl always looked so big, but unfortunately the frosting always ran out.

A lot has happened in the years since then, but one thing has remained true: nothing lasts forever. As adults of course we plan around things running out; we have contingencies and “Plan B’s.” We even plan for outages of normally reliable things like electricity. For some reason though, many of us find it difficult to plan around the concept that the earth has a limited supply of something we extract from underground: petroleum. Surely we will never run out of that!

The answer is: yes and no. Because the oil industry actually drills for profit, not for oil, there will always be some oil left in the ground. At some point the only oil left in the ground will be so deep, or so contaminated, that it becomes unprofitable for the industry to extract, refine, and deliver. To do so would mean selling it at a cost the market simply wouldn’t bear. So yes, there will always be oil in the ground, and the Earth will never run out. But you and I, and all our vehicles, and all our businesses, and all our governments, we will all definitely run out. Running out of petroleum is not a question of ‘if’ but rather of ‘when.”

Some people make it seem as though the world will run out of oil tomorrow; others as though the Earth has a miraculous endless supply. Scientists have run countless computer models, most of which give us about another twenty years. Here’s how it works:

Remember the bowl of frosting? The first oil mankind drilled was the low-hanging fruit. It was close to the surface, and had relatively few impurities to be refined out. That was easy picking, akin to dipping a spoon in a bowl of frosting.

In the second half of the twentieth century mankind had tapped a lot of the low hanging fruit. In 1972, America’s oil wells began producing less than they used to. It was as if a balloon were deflating. When oil extraction productivity had been maximized and the curve began dipping, the USA had hit what is called “peak oil.” Luckily for us the rest of the world was still highly productive, so we began importing to meet demand. Hello 1973 gas crisis!

Since then many other oil-producing countries have also hit peak oil production and also begun downward slopes in extraction and refining. As a planet, Earth hit peak oil globally back in 2005.

When a country passes peak oil extraction, most of their easy and clean oil is gone. If you can no longer dip a spoon in the bowl of frosting, the next step is to lick the beater. It’s more work for less reward, but it tastes the same. In oil’s case, the next step is to drill in awkward places like the ocean, or by hydrofracturing (fracking). These are terribly expensive methods of extraction, generally result in smaller yields, and the oil extracted contains more contaminants that must be refined out – making that process also more lengthy and expensive. At this point, the costs involved are often so high that it’s simply not worth the oil industry’s investment.

Back in the kitchen, if we cleaned the beater we could always run our fingers through the bowl. Then that was it, the frosting was all gone. In oil terms, if the industry exhausts the easy oil fields, then secondary options such as ocean drilling and fracking, there is one final option left: tar sands. This is the most expensive, dirtiest, petroleum in the world. To extract and refine a usable vehicular gasoline product from tar sand the industry requires a high retail price, one much higher than we are seeing at the pump today. Tar sand oil would be sold at a price many consumers would find objectionable, and most responsible businesses would plan around.

Something to consider: if efforts are already being made to extract oil from tar sand, how close are we really to the bottom of the barrel?

It would be nice to think that business as usual could last indefinitely, but there is only a finite amount of anything that is extracted from the ground. At some point we need to plan for what’s next. That means petroleum’s gradual disappearance from our lives, and embracing the products and energies that replace it.

Do you or your business have a 20-year plan?


Why has the price of oil fallen so much recently?

Three things have contributed: first, due to their slowing economies, demand has fallen in China, Japan, and the EU. Second, oil production has increased here in the US so we are importing less. And third, despite sluggish demand worldwide, Saudi Arabia (the world’s biggest producer) has not slowed down exports. All these factors mean that the world temporarily has more supply than demand, and this has naturally forced down prices.

You may have noticed that this has benefited American consumers, and has lowered many costs for American businesses. On the other hand, it has strengthened the US Dollar relative to other currencies, making American exports less competitive. Some companies with a global presence are hurting, and individuals may be finding evidence of this in their investment portfolios. Such conditions are not likely to improve until the dollar weakens.

So what will happen next? Some economists expect the price of oil to remain relatively low for the next year, possibly two years, before climbing again as US production falls. That one or two years will seem like an eternity though for many fossil fuel companies. Fueled on credit, the industry expanded rapidly over the past several years. With the price of their product halved some fossil fuel companies may now find it difficult to meet the terms of their enormous loans, and this may leave their creditors in a very difficult place. Economists therefore warn of a potential crisis in the banking industry again, which of course would have further ripple effects on the economy overall. Are you prepared for another credit crunch?

With prices so low, oil companies are pulling back from ocean drilling and other high-cost, low-return projects. This will contribute to a slow down of supply, and in one or two years the temporary return to familiar territory of our supply:demand ratio and price. What should us individual and business consumers do? Rather than plan our future around a volatile past, the savvy among us will build foundations for the future on reliable economic theory and solid science.

Worth considering:

How would gasoline at $1 per gallon impact you or your business ten years from now? How about at $10 per gallon?

How would another banking crisis impact you or your business two years from now? How about ten years from now?

Three Questions

It can be hard to know what to believe about the environment. Politicians argue about it and end up doing nothing, and corporations claim to be green but sell us products that pollute. Many individuals are left thinking that maybe the most they can do about this confusing and overwhelming issue is recycle or drive a hybrid vehicle.

Think about these three questions. Your answers may help clear things up for you:

1. Might there be ways to help the environment that do not require politicians?

2. Might there be ways to help the environment that do not require corporations?

3. Might there be simple ways for ordinary people to help the environment?

The answer to all these questions is YES. There are things that you or your business can do right now to reduce your impact on the environment. Anyone, no matter their point of view on politics, religion, or economy, can reduce their impact on the environment and make the world a better place.

Can it really be that simple? Our media often paints a very different picture. Environmental problems are enormous, confusing, and best left to experts. Or they’re not problems at all, and we’re being fooled. Or the answer is actually just to buy lots and lots of “natural” stuff. This confusion leads to inaction or the wrong action, and that has lead us to where we are today: comfortably watching while the conditions necessary for life gradually change.

The time for action has come. And while others fruitlessly demand changes in other people, you can wisely and simply demand change in yourself. It’s more than a quote: it really is possible for all of us to be the change we wish to see in the world.

Evolving Differently

I walked out onto the porch last night with a container of bird seed, leaving a trail of seed where the birds congregate each morning for their breakfast. It was nice to imagine the dawn’s cooing and chirping and fluttering, the bustling among one another, and the boisterous synchronized departure. I’m always especially proud of the one or two birds who remain, not following the crowd.

Yesterday’s temperature reached 100 degrees, which meant that last night the darkness on the porch was still deliciously warm. A gentle breeze blew through the trees and bushes, and as it brushed my skin I imagined the birds feeling that same breeze brushing their feathers. I wondered for a moment how many other plants and animals and insects also felt that very same breath of earth. There was something very unifying in that thought.

I walked past the wonderfully intoxicating scent of a heavily blooming jasmine bush and made my way out to our fig tree. I stayed there for a moment, enjoying the air, the darkness, the stars, and the companionship and connection with everything around me.

While I stood there enjoying the warm night air it occurred to me that the air inside our home had been artificially chilled. The machines that performed this task for us use an enormous amount of energy, despite being “efficient” models, and their use means that my family is less acclimated to the climate that we falsely believe we live in. Our house is truly the one acclimated to the desert; we are merely acclimated to the house. We spend the majority of our lives in a variety of temperature-regulated, humidity-controlled, air-filtered environments which are very often quite different than those outdoors. Rather than living with nature we shield ourselves from it. Without realizing it we have literally ended millennia of climate-related adaptation and evolution.

I wonder what people will do as water becomes more scarce, temperatures continue to rise, storms become more intense, and petroleum and natural gas become more expensive? Perhaps laws will be passed regulating how we use resources, and new shelters might be built, but that would amount to little more than shielding ourselves from a changing world that is simply asking us to adapt.

We adapt to other changes all the time, and of course we can adapt to a changing climate too. Like other things we adapt to, like a new child or a new job, changes in lifestyle need to be made. These adaptations don’t make our lives worse, they make our lives different. And as with so many other things we’ve already adapted to, we often find that adapting opens new doors in our lives – new happiness, new opportunities, new dreams, new directions. In this way, we could look at climate change as a huge gift, a chance to re-assess our priorities, adjust our actions, and begin setting things right in each of our corners of the world.