Saturday, March 05, 2011

'Prophets of Doom' Discuss Impacts of Peak Oil and Debt

Michael Ruppert, Nathan Hagens and James Kunstler were all featured on the History Channel special, 'Prophets of Doom'.

History teaches us one thing; change is inevitable. This most ancient truth has been illustrated time and time again, as every great empire — no matter how powerful — eventually falls.

In every instance, wise men have predicted their empire's end, with their dire warnings unheeded.

Is it possible in modern times that this may be happening close to home? Could America be headed for catastrophe? There are men among us today who think that a collapse is not only possible, but that it has already begun.

Unlike Nostradamus, or other bygone prophets, they look not to crystal balls or the stars, but to actual evidence to reinforce their claims.

Michael Ruppert is an investigative journalist and the author of 'Confronting Collapse' and 'Crossing the Rubicon'. He is certain that our society is now disintegrating from within.

'We cannot — as a nation, as a planet or as a species — continue to live the way we have, under the assumptions that we have. Because if we do, we are committing suicide," says Ruppert.

Ruppert believes that our explosive population growth over the past two centuries is the result of one thing; fossil fuel.

"One of the first applications was to create an internal-combustion-powered tractor for the purpose of plowing because you could multiply the number of acres that could be plowed," Ruppert says. "And then it was discovered that you could make fertilizers out of ammonia, which is produced from natural gas. So it became possible to feed many more people as oil and natural gas began to be used more and more.

"It is solely the fact of hydro-carbon energy — specifically internal-combustion-powered engines, ammonium-based fertilizers made from natural gas and pesticides made from petroleum — that has allowed the human population to expand in just over a little over a 120, 130 years.

"In the starkest terms, the human population was fairly stable, at just under 1.5 to 2 billion people from the time of Christ until oil was discovered. There was a slight dip for the bubonic plague; a slight increase as the beginnings of the Industrial Revolution came along with steam and with coal. But it was not until the discovery and use of oil that human population skyrocketed.

"From a simple arithmetic standpoint, if you just look at the numbers, essentially 5 billion too many people are living on this planet today that are not sustainable by any other means.

"As human civilization undergoes this enormous, painful transition, everything that mankind has held sacred is on the table. It's a matter of life and death now."

The United States' population more than tripled in the 20th Century. It is projected to increase yet another 46% by the end of the end of the year 2050. With fossil fuels running out, Ruppert does not see how our infrastructure will keep pace.

"You know, I think food exemplifies our problem as much as anything else. We have boxed ourselves into a situation where we transport food over enormous distances; where we fail to return nutrients to the topsoil so that it will grow anything else without those chemicals. And if those chemicals that come from oil and natural gas go away, the food goes away. And if the food goes away, people starve. And that process is beginning all over the world, now.

"Our population is still growing, even as the resources needed to keep that population fed are going away. Our population should be diminishing also, but we're in a condition of overshoot. We're still expanding.

"There aren't enough resources on a finite planet, a closed sphere, to sustain infinite growth. We just can't do it."

Ruppert believes the America of the future will bear little resemblance to the nation we know now.

"The indicators that the United States of America is collapsing are all around us. The changes now are going to come much more rapidly; they're going to be much harder to take; and the choices that we make now are going to determine how we're able to deal with those challenges.

"The way of life that the world has come to know since the discovery of oil about 130, 140 years ago is all coming to an end.

"We're going to see things like governments, cities and towns going bankrupt, which is happening. School districts are cutting back to four-day weeks. Everywhere, major cities are doing police cutbacks and fire cutbacks. We're seeing major infrastructure failures; an explosion in San Bruno, California of a natural gas pipeline that was laid in 1948. And nobody had the money to repair the infrastructure. We're going to see major failures and calamities and disasters like that.

"The bridge failure in Minnesota a few years ago, not to mention 30 million unemployed. Collapsing home values all over the place. Foreclosures soaring. We are seeing all the signs of collapse throughout this country and they're becoming more obvious every day."

Ruppert is certain these troubles aren't temporary. Nor are they the ordinary products of an economic downturn. He is convinced they are symptoms of a coming collapse.

"Collapse has happened to every empire in human history," says Ruppert. "That seems to be, if you will, a natural law — that empires can grow to a certain place and then they implode."

Two thousand years ago, the Roman Empire was the most powerful on earth. The similarities between Rome then and America today are striking. And the story of what ultimately befell that nation is told in museums around the world.

"Like here in America today, Rome's armies were spread too thin, in too many foreign countries," says Ruppert. "Barbarian invasions — like terrorist attacks and cross-border incursions as we see in Mexico's drug wars — were constant. The government was corrupt, and the only way to get anything accomplished was through bribery or by increasing taxes.

"This is no different than the stranglehold lobbyists, banks and corporations have on our government today. America, like ancient Rome, has this blind faith that we are superior to the rest of the world and it's our destiny to reign supreme forever. It's not gonna happen.

"We are going to learn some hard lessons and adjust to some hard circumstances. But we do have choices. The American empire is going to fall, but we do not all have to fall with it."

America dominates the world today on a scale far greater than even Rome could have imagined. But history, as well as nature, prove that size itself is no guarantee of continued survival.

"The question of survival is very much like the Titanic," says Ruppert, "a huge ship that was believed to be unsinkable, that could go forever. On its maiden voyage, it sank.

"The Titanic is going to sink, and there are some people that will not believe it until they're under water.

"If I had to sum all the problems down to one word, it is "overpopulation," because there are 5 billion people on the planet today who did not exist at the dawn of the oil age, and they exist only because of oil and natural gas."

Michael Ruppert isn't the only one with dark visions of the future. Others also anticipate the fall of America.

Dr. Nathan Hagens has a PhD in natural resources. He is also an economist and a former investment banker.

Hagens, formerly a VP at Solomon Brothers and Lehman Brothers, was managing a hedge fund when he came to the conclusion our current economic system was unsupportable. So he resigned.

He sees a financial collapse on the horizon.

"The near-term hurdle is, we have to deal with our excessive errors we've made in our financial system," says Hagens. "We've lived beyond our means, and we've extended that living beyond our means by issuing more credit, and there's gonna be reckoning there. The financial system as we know it is completely untenable, and there are gonna be big changes.

"Our economic system is actually a giant global ponzi scheme. And the way that translates is, a lot of this debt and credit that has been built may someday never be paid off. How that unravels is gonna have big consequences for the average American.

"Capitalism is gonna have to be retooled, or it's gonna completely go by the wayside. What we have now has been a failure. The future is going to look very different from the past in one primary regard, in that the world economy will no longer continue to grow."

"In the 1700s, we basically hit the energy jackpot when we figured out how to use coal and then subsequently, in the 1800s, oil. And then, in the last century, natural gas. Now the question is, what's gonna replace fossil fuels?

"Every American right now has 200 to 300 energy slaves standing behind them doing work that we take for granted: the energy in the taxi that got me here today, the lights in this building, our food system. The average food travels 1,500 miles to get to our plate. And that all uses energy.

"All these things are subsidized by a one-time endowment of fossil energy that is so powerful that, for all human intents and purposes, it is indistinguishable from magic."

Hagens believes the current global depression is the beginning of an economic collapse that will intensify as natural resources run out and alternative energies fail to replace them in time.

"Technology is in a race with depletion, and depletion is winning. People need to recognize, okay, we live on a finite planet and we have virtually infinite wants and perceived needs. But those two trends are butting up against each other, and what are we gonna do about it?

"We've been so endowed with natural resources for 60, 70, 80 years; we have not really thought that this was a problem. There have been some recessions and even a Great Depression, but we've always reset from that.

"We build our institutions and our expectations assuming that this sort of subsidy will continue in the future. And now we've built a lifestyle that is no longer sustainable. We can live within our means, but only when we acknowledge that there are limits. And our economic system right now does not acknowledge that there are limits. The financial system as we know it is completely untenable, and there are gonna be big changes."

The idea that our economic system is completely failing is hard to believe, but Hagens points to America's mountainous debt as proof. The balance between that debt and our available resources is delicate. When it tips, the system collapses.

"We have built an entire industrial civilization on the assumption that there will be more every year," says Hagens. "We now know that resources are harder to find and, in order to keep the system going, we've flooded the American economy — as well as the world economy — with more and more credit.

"We've created a large debt overhang, and right now we're kind of in this Wile E. Coyote moment where we've fallen off the cliff and the government is supporting the feeling that things are okay.

"But in reality, right around the corner, there are some very different trajectories. Basic needs; food procurement, water. Just knowing that people are gonna get fed is gonna become more prominent in people's minds, just like it did in the Great Depression.

"The 1920s were this kind of go-go period where a lot of people were invested in the stock market. On Black Tuesday, the stock market lost 12%. And it lost 40% two months later. And, eventually, the stock market — from its highs in 1929, to its lows in the mid '30s — lost 90% of its value. In the Great Depression, around 35 million people lived in families where no one had a job — out of a population of 120 million.

"So during that decade, the average income of those people that worked declined 40%. So it was pretty desperate back then.

"The government is attempting the same things that it attempted in the '30s, by borrowing money and stimulating the economy. But the problem is, we can't continue to inject money from thin air into a system and continue to think that it's gonna hold together. You cannot solve a credit crisis by adding more credit. Period."

The American Economy rebounded from the Great Depression to become larger and more dynamic than ever before, reinforcing the theory of cyclical markets, in which booms are followed by busts and then ultimately a bigger boom. Hagens cautions this belief is more faith than fact.

"I believe the United States is insolvent and that some of these debts that we've incurred from the past are gonna come home, and we're gonna have to face the reality. The moment of bankruptcy comes when people want the money, when they want the claims to be paid off.

"America, unfortunately, is asleep with a lot of these issues and part of this is due to cognitive dissonance. Cognitive dissonance is when our brains don't want to acknowledge the gravity or seriousness of a situation.

"A good example is in Jared Diamond's book "Collapse", where he talked about a dam that was about to break and people three miles downstream were really afraid. And people two miles downstream were, like, really freaked out. But people living within a mile of the dam, they weren't concerned at all.

"If things are too frightening and too threatening, our brains tune it out because it would affect our behavior and it would be too painful to accept. So peak oil and peak credit and the depletion of cheap fossil fuels — and what that means for the end of growth — it's too overwhelming.

"The financial reckoning that's coming could include many different scenarios. It could be no more US currency, and that our US currency is replaced by something else. It may happen that you have $100,000 in your bank, and the next day, you wake up and you have 10,000 patriot dollars, or something like that.

"It's happened many times. People remember Weimar, Germany in the 1920s, where there was the end of a system of claims and the end of a currency, and there was something that would replace it.

"The average American knows that something is wrong. But the problem is that they don't really speak up and get really vocal about it, because they don't know what to do."

Hagens feels this unprecedented financial crisis is the greatest threat to America today.

While the United States has seen its share of hard times, the expectation has always been one of boundless growth. History, however, promises one day we will take a long step back.

"Sometime in the next decade, there's going to be a financial reckoning where we're going to have to dramatically tighten our belts — use less, consume less — because there will be less available," says Hagens.

"The United States right now uses twice the energy as the country of Ireland, per individual. Yet, on subjective well-being studies, they're just as happy as we are. We use 37 times the energy as the average person in the Philippines. Yet, they are just as happy as we are. So I'm sure that whatever comes, we will be able to adapt to it. It's just the six-month window of when it happens that I worry about.

"Here's a subtle point; we evolved to not address a situation until it stared us in the face. There's something in economics called a "discount rate", which is how much we value the present versus the future. A discount rate of one means we care only about this second.

"If you feed a goldfish... if you go out of town for four days and give it four days of food at once, it will eat until it explodes. A discount rate of zero is like a robot, where you would live for a million years and you care about today the exact same as you care about the year 2177.

"Humans have very steep discount rates. And what this means is that we, as a species, won't really address our problems until the problems are staring us in the face.

"You know, Peak Oil and climate change, and all these grand super-themes that we read about, these are like 10, 20, 30 years down the road. That has the mental weight of zero to the average person hearing about it. If there's no toilet paper at the grocery store today, and you heard that there's not gonna be any anywhere in the country, that's like, "Oh my God, stock up on toilet paper." So people need an environmental cue showing them that scarcity or change is going to happen."

Hagens believes people don't recognize change until it's staring them in the face. Hagens also believes great changes could be upon us sooner than we realize.

"Eventually, the currencies we have right now might go away and might be replaced by something," says Hagens. "It's not even my imagination. Our own treasury secretary last year mentioned a global currency.

"I am absolutely convinced that the imposition of a global currency will expedite the crash of everything much faster," adds Michael Ruppert.

"You know, it's helpful to remember that paper currencies are only about 150 years old. This has been a very short-term experiment," adds James Howard Kunstler, an investigative journalist and author.

Kunstler's specialty, since the 1970s, has been the oil industry. He has lived through an oil embargo enforced by foreign suppliers. Now he is convinced the planet will soon impose a greater one that will likely lead to the collapse of society as we know it.

"What I'm seeing in our culture these days is what I call a disease of too much magic. And I think it's perhaps a very fortunate thing that the human race is facing what I would call maybe a reset of its activity — not necessarily a collapse — but let's call it a reset.

"When I was a young reporter starting out in the early '70s, I covered the OPEC oil embargo of 1973, and it made a huge impression on me. You started to see lines form at the gas stations. People were unable to get to work.

"You know, I have this vivid memory of somehow I managed to get a full tank of gas, and I wanted to drive down to New York City to see a girl. And I drove down the New York state thruway and I was the only car on the thruway for about 150 miles. And it was like the day the earth stood still.

"It made a big impression on me to see how fragile the everyday world that we've gotten accustomed to really was. That was 40 years ago.

"I think that the energy crunch of the 21st Century is going to be much different, much harsher, have permanent repercussions that are gonna thunder through the lives of generations to come. We are heading into uncharted territory of civilization.

"I think the people of the United States a generation from now are gonna be astounded at how we squandered the wealth of the 20th Century.

"I think the people of the future are gonna look back on us in wonder and nausea at what we've done. They're gonna be left holding the bag — and it's gonna be a very empty bag."

History is a graveyard of fallen empires. And today there are those who say America is in danger of suffering the same fate. Among them, James Kunstler is convinced diminishing oil supplies will play a critical role in our downfall.

"Peak Oil is the moment in history when an individual oil field, or a region, or a nation produces the most oil it ever will. The US had its moment of Peak Oil in 1970 — that was 40 years ago — when we produced 10 million barrels a day. And we're down to 5 million barrels a day now.

"The problem is when the world hits Peak Oil. And that's where we're at now. We're on that bumpy slope down that's gonna get rougher and rougher.

"The oil story really starts around 1860 in the USA. We are the first nation that ramps up a multi-layered, comprehensive oil industry, and it's been normal for many generations of Americans now. So, it's hard for us to imagine us not having oil. But, in fact, Peak Oil happened in America in 1970.

"Forty years ago, America produced the most oil that it will ever produce in a given year — which was around 10 million barrels a day. And ever since then, it's been going down. America made up for its problem of Peak Oil — and of entering the arc of depletion — by importing oil from other countries.

"The problem for the world is that, once the world passes their production peak, we're not gonna be able to import oil from other solar systems. The assumption is that the downslope is a gentle downslope, that we're just sort of gliding into depletion. But I think that that really misrepresents the reality of the situation.

"The real story is going to be how the major complex systems of daily life begin to destabilize and mutually reinforce each other's instabilities and failures as we get into trouble with this Peak Oil problem."

We consume 20 million barrels of oil each day in the United States, most of which is imported. And every day, our demand for oil increases. Oil, however, is a finite resource. The US government is aware of the problem.

"The US Department of Energy hired a scientific consulting firm run by a guy named Robert Hirsch," says Kunstler. "The Hirsch Report was published in 2005. Hirsch reported that we were indeed facing a Peak Oil predicament that was gonna rock our world, that was going to change all the terms of everyday life in advanced societies and deprive us of many of the comforts, conveniences, amenities, and necessities that we had come to take for granted.

"The Hirsch Report was buried by the Department of Energy because they saw no way that the American public could deal with the idea that this way of life might be threatened.

"The Hirsch Report was really rather bad news. It was telling the USA that we were facing an imminent crisis. America didn't want to hear it. It was too painful."

The Hirsch Report projects that oil production worldwide will peak either in this decade, or almost certainly by 2030. The report also states that the economic, social, and political costs will be unprecedented.

"The Peak Oil story is not really about running out of oil," says Kunstler. "It's about what happens to all these complex systems that we depend on for everyday life. The way we produce our food — that's one system. And that mainly means industrial agriculture, where you're applying a lot of oil and gas by-products to huge factory farms and producing cheese doodles, and chicken, and Pepsi-Cola, or hogs, or whatever it is.

"That's how we do farming. That's how we feed ourselves in America. That's gonna be coming to an end — and probably fairly shortly. And it'll be a huge problem. You can't imagine anything more destabilizing to a culture than people going hungry.

"The way we make things, buy things, sell things, move them around — that's all gonna change. There's been really one model for the last 30 years or so, and that's national chain retail. Giant corporations moving massive amounts of stuff. The semi-trucks that are incessantly circulating around the interstate highways — they pick the stuff up in San Pedro, California, and they schlep it across the nation to Philadelphia.

"And that's how we do commerce in America. It's normal for people. You know, they love the Wal-Mart. It's become enshrined as an institution now, like apple pie and motherhood.

"There's a lot of fantasizing that's going on right now — a lot of wishing that's going on in America right now — that we're gonna run this stuff by other means. That we're gonna run all the cars, and that we're gonna run Walt Disney World, and the interstate highway system, and Wal-Mart, and the US Army, and suburbia on something other than oil. It's not gonna happen. We're gonna be very disappointed about that."

We will develop alternatives to fossil fuels, but many experts believe we may never develop replacements. Oil is simply more potent and costs less to produce than any other energy source — at least for the foreseeable future. We are not the first society in history to face the depletion of its most precious resource. We just have to hope we are the first to overcome it.

"Other cultures have gotten into trouble with their resources and with their political response to their own resource problems," notes Kunstler. "Look at what happened to Easter Island. They were a Polynesian culture on a remote island in the pacific. If you go there now, what you'll find is a treeless island populated with giant stone heads left behind by the Easter Islanders.

"But the island wasn't always barren. It used to be covered by trees. And the trees were, to the Easter Islanders, what oil is to us today — their primary resource. They used it for all the important daily needs of life and their population grew to, we estimate, about maybe 20,000 people at the height of this culture. And before you know it, there's not a whole lot of wood left.

"And their population starts to crash, and they get pretty desperate. There's a lot of evidence that they actually started getting into cannibalism in the final florid phase of this collapse. They started building all these immense stone monuments. You know, they may have been an attempt to appease the gods to allow them to get some kind of resource back.

"You know, I think you can state categorically that as a society becomes more fearful and desperate and economically stressed, that the delusional thinking increases. I think it's a kind of thing that the human brain does in a state of desperation."

A world without fossil fuels would be a dark, difficult place. There are some who believe that we may still be able to find solutions if we act quickly. Many, like Kunstler, know that the consequences for not finding alternatives will have repercussions for generations to come.

"I think the people of the future are gonna look back on us in wonder and nausea at what we've done. They're going to be inhabiting a planet whose resources have been largely depleted. And we're gonna be back to living off the true solar energy of the planet, you know, the stuff that comes in from the sunshine every day. They're gonna be left holding the bag — and it's gonna be a very empty bag.

"I think the future is gonna be difficult for America. I think it's going to be a surprisingly austere place: struggling to stay warm in the winter, struggling to feed themselves or have any kind of a really a gainful occupation, living among the detritus and the salvage of the industrial age and trying to make something of the pieces that are left.

"America's gonna have to contract and probably, to some extent, retreat back into our corner of the world — the Western Hemisphere — with lower expectations for being able to influence and moderate the behavior of other people in the world and a reduced ability to control the great issues of world economy and global politics.

"We're so psychologically invested in all of the mythology of what we became in the 20th Century, you know, the greatest power that the world has ever seen and the greatest economy that the world has ever seen. And it was quite a trip. And it was a lot of fun. And it was exciting and comfortable and convenient — sometimes joyous and thrilling. And now we're done with that. It's over."

James Kunstler is convinced nothing can prevent Peak Oil. But he and others are equally certain that the havoc it creates will be lessened if we can make changes now.

"For me, the most important thing is to stimulate and liberate local food production," says Michael Ruppert. "To do anything possible to help people grow food where they live."

But how do you grow your own local food if you're living in a high-rise apartment?

"It's happening all over the world right now," says Ruppert. "There are rooftop gardens. There are window box gardens. Vacant lots in major metropolitan areas are being converted to community-supported agriculture."

"I think we're facing multiple crises," says Nathan Hagens. "I still believe that they will manifest first in the financial and currency system, and that does have implications — depending on how governments respond — for international trade and availability of resources and our supply chain.

"There are some core assumptions of our economic system that have to be reexamined, and I think that's happening now. I think 2008, Lehman Brothers, we came this close to a total unraveling. And people at the highest levels are thinking about how to avoid that in the future and how to redesign our financial system — and maybe our economic system — so that it doesn't happen again.

"I think the biophysical crises of energy and water and other things like that are gonna first manifest in social crises."

Asked what he sees as the most pressing, concrete problems, Ruppert is quick to answer.

"One in seven Americans now is below the poverty line. One in eight families is on food stamps. Those number are increasing. Thirty, 40 million unemployed — depending upon who is counting the statistics. The people are hurting and they're hurting as a result of an economic collapse, which is exacerbated and compounded by resource shortages, Peak Oil, energy, freshwater, everything else.

"I see signs of a shift in human consciousness," Ruppert notes, optimistically. "I see signs — very clear signs — of a global awakening. Many, many millions of people understanding this. The moves to relocalize food production. To start growing food where people live. To relocalize your support groups close to where you live is really a worldwide movement."

"There are a number of real big game-changers out there, and they seem to be converging," says Kunstler. "The energy narrative is pretty clear. The banking problems we have right now; the shortage of capital; the failures of governance and rule of law in our financial system. You know, these are amazing problems that are going to come back and bite us very hard, and they're gonna bite us all at the same time like a pack of wolves.

"And there are three things that I would recommend that we can do. The first thing is that we can re-establish the rule of law in our banking and financial practice. The second thing I would propose is, we need to direct our dwindling resources into the task of rebuilding local economies. The third thing that I think we need to do is rebuild the conventional railroad system in the United States, and we should do that right away. And if we don't do it, I'm not sure that there will be anything that will physically allow the United States to hang together as a culture, a people, and a nation."

Hagens shares Ruppert's optimism about the future, albeit a very different future.

"We've mentioned the collapse of advanced industrial civilization several times, and my gut and my research of historical civilizations suggests our population will, in the end, be more resilient than some people give credit to. The average person needs to start thinking about a future where instead of more every year, there might be the same every year or less every year.

"I agree that we need to relocalize our food systems. We also need to relocalize the production of a lot of basic needs. In effect, we need to insource where we have been outsourcing because of efficiency and profits around the world. I think "Buy American" makes sense because the things that we need to make, that we need for our lives, should be made locally."

"I think a consensus is emerging that re-localization is a solution to many problems," says Ruppert, "in terms of food production, resource usage and anything else. Also, in terms of starting a local currency. Anything you can do to be sustainable close to where you live."

Modern life moves so quickly it's hard for us to stop and consider where it's going. There are, however, times in our history when we simply have no choice. These men are certain that time is now.

"Pretty clearly, we're not psychologically prepared for the changes that we face," says Kunstler. "We can't afford to be cry-babies anymore. We can't afford to sit around wringing our hands. We have a very big to-do list.

"We face an array of problems. They're all equally severe. The assumption that if we get one thing right, or one part of this right, that we're just going to keep on going ahead and being a hyper-complex society — I think — is erroneous. Personally, I don't think this is the end of the world or the end of the human race. I think it's the end of a certain phase of history. I think we need a timeout from technology."

"I think the American financial system is completely unsustainable at these levels," says Hagens. "We should all strive to be less wasteful. But our economic system is kind of based on waste."

"What we're finding out is that the way we're going to have to live is the way should have been living all along anyway," says Ruppert. "And, in a way, that's probably much more fulfilling from an emotional, and spiritual, and psychological [perspective], and the standpoint of human interaction. I think it's going to be much more rewarding. I don't see it as all suffering, by any means."

It's been said that a generation which ignores history has no past and no future. Now, it is up to us to decide. Will we sit by and watch — as they watched in Rome, as they watched in Mesopotamia, as they watched time and time again — as everything we've built, all we have achieved, disappears into the mist of history?

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