De Crash Course 21 & 22
Deze crash course gaat over de veranderingen die de maatschappij te wachten staan. Economische, maar ook maatschappelijke. De focus is uit de aard van de herkomst op de USA, maar ook voor West-Europa bevat het nuttige lessen. Komende weken zullen we er met regelmaat een aantal toepasselijke lessen uit (her)publiceren.
NB: de link naar de gesproken tekst zit onder de link waar de duur staat aangegeven!
Engelstalige transcriptie Chapter 21 – Shale oil
Okay, by now you’ve heard the prior chapters on the Peak Cheap Oil concept and by now many of you are wondering how any of that could be still be true given all the positive recent stories about shale oil and shale gas , many of which proclaimed “peak oil is dead”.
The mainstream press has faithfully repeated every press and PR statement made by the shale producers and if you simply followed the headlines you might even believe this about the US:
- It is soon going to be energy independent,
- Its oil production will surpass even Saudi Arabia putting it in the number one spot,and
- The US will even be exporting oil again like the days of old.
The only problem with this story is that it is misleading in some very important ways and entirely false in others.
Energy Independence
Let’s start with the easiest myth to dispel. The concept of “energy independence” is enormously flawed because the various types of energy being lumped together in this argument are not interchangeable.
When you hear of ‘energy independence’ what’s being calculated is the entire energy consumption of the US expressed in BTUs. So every BTU of coal, oil natural gas, wind, solar, nuclear and hydro power we consume is tossed into a single bucket and then measured.
But coal cannot be used in a manufacturing process that uses natural gas. Nor can wind or solar or hydro be put into a vehicle’s or airplane’s fuel tank.
Here’s an easy way to understand this: it’s as if someone asked you how many calories you had stored in your pantry, and you lumped together not just your food, but also the batteries in your flashlights and other home electronics. They might have caloric energy equivalents, but you sure can’t eat them.
What the US cares about, the same as any country, is Will it be independent with respect to the types of energy it consumes?
The US is not now, nor will it ever be, independent from foreign oil imports. At least not until or unless it finds a way to increase production by another 7 million barrels per day, or decrease consumption by a similar amount, or some combination of both.
However, it should be noted that even using the most optimistic shale oil projections on record for the US only provide an additional 3 million barrels per day leaving a big, fat gap of 4 million barrels per day.
And even then, that gap will begin to widen after only a couple of years as the horrendous decline rates of the shale wells kick in. We’ll talk about that in depth in a moment.
You might also be surprised to learn that the US is still, here in early 2014, a net importer of natural gas.
Here it is far more likely that the US could become independent, and may even produce enough to support exporting natural gas – for a while at least. Until that, too, depletes in a hurry.
Fledged on a Cliff
Regarding the US becoming a net exporting oil powerhouse akin to Saudi Arabia which exports roughly 8 million barrels per day – these could only be true for a very temporary period of time because each shale well produces very little oil relative to a past ‘conventional’ well and it depletes extremely rapidly.
Literally, the best month of production for a shale well is the first month – by far. And things very rapidly go downhill from there.
The typical shale oil well depletes by some 70% in the first year alone. Wow. And is down by some 80% to 90% after just three years.
Because individual shale wells have these decline profiles, many of them summed together end up having the same profile.
That is, to increase production in a shale field requires that constantly more new wells are drilled this year than last year just to outrun the decline profiles of the prior wells.; something oil analyst Rune Livkern coined the Red Queen syndrome after the Alice in Wonderland queen who remarked that you have to run faster and faster just to stay in place!
Here’s what the output from the Bakken shale oil field would look like if we suddenly stopped drilling.
Where the mainstream press only notes the dark line on the top of the data– the steadily increasing production from the Bakken field, what’s obscured underneath is the Red Queen syndrome — that requires more and more and more wells to be brought on line at a furious pace to keep that production rising.
But here’s the rub…it’s not possible to always be drilling more wells this year than last. There are only so many drill rigs, talent, and so much fracking water available.
So there’s a bottleneck limit in there somewhere. And, eventually, there are only so many drill sites — so those run out someday too. Once a shale play is all drilled up, it’s game over and all that happens next is a pretty steep production decline.
Shale Oil = Expensive Oil
But the most important point about shale plays is that they are expensive plays, and shale oil will always be expensive oil.
Here’s why.
Shale wells are more accurately called “tight rock” wells, because they might be in shale, or limestone, or even sandstone but each rock type shares the characteristic of having really incredibly tiny pores that do not allow the oil or gas to flow easily. The rock is referred to as “tight.”
So when you hear of a shale play, the rock that’s being drilled into is similar to the slate used to make chalkboards in a classroom. Imagine trying to suck water through that chalkboard and you get the problem. It’s pretty much impossible.
So if your classroom chalkboard were made of the same rock found in a shale oil play, the only oil you could reasonably get from it would be the oil you could squeegee off of the surface.
The purpose of fracking is to shatter that chalkboard which creates a lot of tiny pieces, which hugely increases the surface area from which oil and/or gas can be liberated from the tight rock matrix and flow into the well bore for collection.
As you can easily imagine, that trick wears off rather quickly as you get the most in the first few instants after the chalkboard has been shattered, and this explains why the first flows after fracking are the best and why production drops off precipitously after that.
In the good old days we might have drilled down a thousand feet, hit a gusher and then had a well that can produce thousands of barrels per day for the next 20 to 50 years.
And now?
With shale plays, the typical well goes down for 10,000 feet, turns sideways for another 10,000 feet, and then gets fracked in 20 or more stages to fracture the tight rock formations so that gas and or oil can flow.
Clearly we can already detect that far more money, and energy, is required to drill and multi-stage frack a 20,000 foot well vs. a 1,000 foot well that required no fracking. A shale well typically costs between $7 and $10 million to drill, and just think of the all the steel piping and diesel required to run the rigs that drill the 3 to 4 mile long wells.
So shale wells can only possibly deliver to us more expensive oil than in the past but, as you now know and most critically, that’s the same thing as saying shale wells deliver far less net energy than the conventional wells of the past.
The environmental costs of the shale plays are high. First there is the footprint of the drilling pads and collection pits to consider. Each drilled section requires a drill pad of 1 to 2 acres to be scraped flat.
Seen from the air, the impacts are obvious.
And then there’s the fracking fluid itself. Mixed with millions of gallons of water, this stuff is a downright toxic nightmare.
While we don’t know everything it contains because the exact concoctions are protected trade secrets due to the so-called “Halliburton” amendment that specifically protects the oil and gas industry from having to reveal anything about what all is in there, we do know that it usually contains things like benzene and toluene and other highly toxic chemicals.
Even if the drilling is done right and no fracking fluid ever gets into the water table, the fracking process involves first injecting this soup, and then collecting all the flowback into an open air pond before oil or gas collection begins.
At this point anything and everything in the fracking water — which includes the fracking fluid, heavy metals and radioactive compounds like radium — liberated from the depths is free to evaporate and/or aerosolize and drift with the wind. And much of it does, creating enormous health issues for people and animals living downwind.
Further, there are now over 2,000 complaints about damaged water wells which, sadly, will probably remain compromised for many generations to come.
Speaking of water, shale plays require an extraordinary amount of it. And in places where water is in short supply, shale wells compete vigorously for this scarce commodity.
Another impact of shale plays is that the because the drilling is so intensive, and the fracking requires so much material to complete, upwards of 1,200 fully laden, heavy duty trucks arrive and then leave each well site just to get that well into production, and then a further 350 trucks rumble across the roads for each year of operation for each well, and then another 1,000 trucks are required if or when a well gets re-fracked.
This crushes roads and destroys bridges, and the repair costs for these damages are not even remotely covered by the taxes and other remittances made by the oil and gas industry.
In Texas, the Department of Transportation estimated that $4 billion dollars of road damage is done by oil and gas trucks each year. The state and the affected counties are the ones that have to bear the costs of repairing the damage, which are vastly higher than the taxes they collect from the oil and gas industry.
So, again, the taxpayers and local citizens are the ones that subsidize the full costs of these activities.
The key point here is that, yes, tight oil is much more expensive than conventional oil. But its full costs are likely even much higher than what’s appreciated today.
Unlocked By Price
The current story about the shale revolution is that technology unlocked those shale play riches, but that’s not at all accurate.
In fact it is a myth. The twin technologies of horizontal drilling and fracking have both been around for many decades, and yet the shale plays just sat there untouched for all those decades.
So what did unlock the shale riches? Price. Specifically energy prices above a certain level of economic return.
Horizontal drilling and fracking are very expensive. The amount of oil flowing from the shale wells is low. The only way to make that equation balance economically is if oil is safely above a certain price.
It is no coincidence that shale drilling began in earnest once oil rose over $80 per barrel and stayed there.
Below $80 a barrel and the drilling will slow down enormously or even cease entirely.
Above $80 and the best parts of the best shale plays are economically viable. The whole story here is that the shale plays were unlocked by price, not some magical technological breakthrough all by itself.
Conversely, they could just as easily be locked in again by price too if the price of oil or gas were to fall below the all-in drilling and production costs.
Our Energy Worries Are Over – or Are they?
Of course, we might be tempted to think that because we’ve only drilled intensively in 6 out of 20 potential shale plays that there’s a lot of runway left to this story.
While there is quite a bit of drilling left to be done in each of those 6 plays, the remaining plays are, unsurprisingly, not nearly as attractive as the first ones.
Why is this unsurprising? Because we’ve been drilling into and through these tight source rock formations for decades and the those with the most tantalizingly high petroleum and gas profiles were carefully catalogued by interested parties.
When the price rose enough to justify making a go at these plays, the very best ones were gone after first.
This is not to say that the remaining ones are not worth going after, only that it would be inappropriate to linearly extrapolate the early returns from the first 6 across the remaining 14.
The remaining less attractive shale plays will come into full production in the future when the price of oil hits some other, much higher number, as their net energy returns are much lower.
Not Equal Across Plays
Okay, so what if the first plays are already in decline? Perhaps we can just move over one shale field and drill up the equivalent of another Barnett or Haynesville and thereby grant ourselves a few decades before this story runs dry.
Unfortunately, the early results from the later shale plays are not encouraging.
The Utica in Ohio, once billed as $500 billion worth of fossil energy has turned out to be pretty much a complete bust, with individual wells pumping out less than 100 barrels per day on average.
The rock is simply too tight and will not yield economical energy until and unless oil increases in price several fold from here – in current dollar terms of course.
The Mississippian formation under Kansas was extensively explored by Shell, which ended up completely throwing in the towel on that shale play in September 2013 after disappointing yields were obtained from all 45 completed wells.
The Monterrey shale in California, long billed as a huge potential source of oil and gas, is turning out to be tricky for what I think are obvious reasons.
California has been extensively folded, bent, shaken and cracked by earthquakes which creates the sort of tricky underground geological realities that prevent the story of easy drilling in the Bakken in North Dakota and the Permian in Texas.
Those geologically unmolested plays are really more akin to plumbing operations where pretty much any well bore put down in a sweet spot will yield predictable results.
But not in the twisted, folded, bent and fault-ridden Monterrey.
There each hole will be an exciting experiment, with plenty of financial and operational if not environmental risks involved because the nature of the shale varies enormously from spot to spot.
But it’s also no surprise that the very best shale plays were drilled first. It’s not like these shale plays were suddenly stumbled upon only recently.
Petroleum engineers have been drilling though them and into them literally for decades in their search for conventional oil.
Along the way the petroleum-rich rocks were noted and catalogued and therefore well known, which is why the best plays were tapped first.
Not Equal Within Plays
But even within a given shale play there are, predictably enough, sweet spots and less-than-sweet spots.
Typically the sweet spots are the places you read about in the newspaper when a superior well is drilled. The resulting headlines invariably imply that the whole play will be that tasty.
All you need to do is multiply the total acreage by the very best results and – voila! – North Dakota alone will rival Saudi Arabia.
Alas, things are not that simple, or abundant.
Each well located in each spot can either be a monster, an average well, or even a complete dud.
The ones that are usually reported on in the news are the monsters, as these are the ones the involved companies are most proud of, for good reasons.
However, when David Hughes plotted out all of the producing wells from the Bakken play recording their highest, and very best month of production, he got this shape of a curve.
Very few of the wells produced out at the often reported “1,000 barrels per day” and the actual mean was 400 barrels per day, while the median, – the number at which precisely 50% of the wells were either higher or lower than, was only 341 barrels per day.
As you can see, there are very few monster wells in the play, with those recording over a 1,000 barrels per day being roughly 2 or 3 out of every 100.
Hughes also plotted out all of the producing wells on a satellite map and color-coded them. Those that are in the upper 20% of initial monthly production at just over 500 barrels per day, are black dots while the remaining 80% are red dots.
What is immediately and obviously clear here are the sweet spots with their tight clusters and galaxy spiral arms tracing out the underground complexity.
What should also be immediately clear is that the chances that the remaining acreage is going to be as sweet as the initial acreage are not very high.
Any monster well is noted by all the other players and they tend to finish up their current well and hustle over to the same region as soon as they can – assuming they have applicable acreage to drill.
That is, the sweet spots get identified very quickly and drilled up as rapidly as possible – after all time is money and the point here is to make money a fast as possible – not preserve a resource for future generations.
The same sorts of results are being found at each and every shale play. Some areas are sweet and the wells are great, other areas are not so great and the differences are discovered one well at a time.
Or as Arthur Berman, the energy analyst put it, the sweet spots are discovered by the braille method.
The summary here is that within each shale play there is tremendous variability in terms of individual well productivity and that those sweet spots get rapidly located and focused upon saving the less sweet spots for later on.
Again, the big mistake one could make here would be to take the first few years of production for a given play and then just multiply that out across the remaining acreage because it’s extremely unlikely that the remaining acreage is going to be nearly as sweet as that already drilled.
That exact mistake is repeated with exceptional frequency in the mainstream press, unfortunately.
What will make the remaining acreage more attractive is the same thing that made the shale plays happen in the first place – higher energy prices.
Show Me The Money!
Besides the obvious environmental and infrastructure impacts of shale oil gas, there’s a real puzzle on the economic side too. If these plays are so robust, so predictable, and such a great thing, the companies involved should be cranking out money from operations.
The way this is measured in accounting terms is by a measure called free cash flow.
Every business major and MBA student has to understand this measure because it’s a really powerful and easy way to tell if a company is really generating robust profits and whether or not it’s investments are likely to produce future free cash flows.
Here’s where the story get’s really odd for the companies in the shale oil plays…they are collectively bleeding cash, and sport deeply negative free cash flows.
In 2012 the 80 largest north American energy companies spent $50 billion more than they took in from operations, a deficit that was twice as high as in 2001 and four times larger than in 2010.
The current statistic is that the shale operators are spending $1.50 in capital expenditures drilling wells but only getting $1 in revenue for their troubles.
This is really quite a conundrum given that we are this many years into the story of the so-called shale miracle– cash flows really ought to be heavily positive by now and they are decidedly negative.
The only interpretation of this puzzle that makes sense to me is that shale plays are not profitable at the current oil price of ~$100 per barrel.
My best guess is that oil will have to rise to at least $120 a barrel for the equation to balance out at the level of the operating companies, but in reality, it will likely need to rise to closer to $150 per barrel to pay for all the externalities that are currently under or even unfunded such as road and bridge damage and the eventual costs of plugging hundreds of thousands of abandoned wells.
Here we are, deep into the story of shale oil and we find that the basic trend is for the companies involved to be spending increasingly more than they are taking in year after year.
That’s a huge red warning flag for me. It means something is not quite right here economically yet, and if Wall Street hadn’t been flooded with multi-generationally cheap, Fed-supplied liquidity in historic proportions which they funneled towards anything that looked remotely interesting I seriously doubt nearly as much drilling activity would have occurred.
Eventually, though, these companies should be able to settle down, not drill any more expensive wells, and rake in the cash from existing (but obviously declining) production.
However, at that point while the companies should be minting money, the energy miracle will be well and truly over for the US as no more new incremental production will be coming out of the ground and oil and gas production will enter a rapid and terminal decline.
That is, the eventual peak in oil and gas production from the shale plays is a lot closer than most people think. Perhaps there will be additional surprises, but for now the EIA thinks that the peak in production from US shale plays will occur around 2021 with steady erosion in production thereafter.
That is, here in 2014 we are just seven years away from the shale miracle turning from a princess into a pumpkin.
But even there, I have to question the assumptions of the EIA because of this image found in their 2014 annual energy outlook:”
Somehow over the 28 years between 2012 and 2040 all of the conventional plays in the US are going to experience exactly zero production declines despite the fact that over the past 28 years they experienced an average yearly decline rate of 2.3%.
Holding that experience constant, 28 years into the future there would be just 2.3 million barrels per day coming from conventional sources in the US vs the stated 4.0, and that’s a big, big difference.
But the real puzzler is the tight oil in the red at the top of the chart. Again courtesy of David Hughes we see that there’s something odd going on there:
Somehow, by 2015 oil from shale plays besides the Bakken and the Eagle Ford will exceed those two plays, which are by far the best out of the lot. That’s why they were drilled up so heavily first.
It’s just not at all clear to me yet which remaining shale plays the EIA projects are going to supply that additional oil or nearly that fast as communities and states wake up to the fact that there are both environmental and infrastructure concerns that need to be better addressed and priced in.
After that, the tight oil declines very gently, which is an interesting prediction.
Conclusion – That Pesky Context
Okay, so there are five main things to know about the shale plays.
- They deplete very quickly. The typical shale, or tight rock, well production declines by 80% to 90% within three years.
- They are expensive. All oil and gas coming form them is several times more expensive than what we got from conventional oil plays.
- They are environmentally damaging because the fracking fluid is highly toxic and much of it escapes during the blowback process and sometimes water wells are contaminated.
- Because each well has low flow and depletes quickly, massive numbers of wells must be drilled creating significant infrastructure damage to roads and bridges. Currently no state or municipal authorities are capturing anything close to the total cost of the infrastructure damage from the shale operators which means taxpayers are gong to be left paying those bills. Not all shale plays are created equally – some are vastly superior to others. And even within a given play there are sweet spots and dry holes which can only be determined by punching a well in and seeing what comes out. Some call this the ‘mapping by braille’ approach.
When we put all of these together it adds up to a very expensive set of plays that will only last for a very short while.
To the extent that mainstream press has been conveying the message that peak oil is dead and that our energy concerns have been laid to rest is the extent to which they have been misleading us.
Sadly, many of the articles I have read in the press about the so-called shale miracle read very much like they’ve been lifted directly from shale industry public relations collateral. Indeed, many certainly were.
The context is both relevant and essential and it is only now just beginning to creep into a few mainstream press articles.
In closing, the shale plays are really a feat of engineering, and they have bought us some time. We can either use the temporary boost in energy supplies, expensive though they are, to build towards a future when these too eventually run out, or we can use them as an excuse to carry on with business as usual.
If we do choose business as usual as our operating strategy – I use that word very loosely – then we will just march straight into the shale oil peak around the year 2020 and be very disappointed with ourselves and our utterly inappropriate transportation infrastructure.
Publicatie 4 juli 2014
Engelstalige transcriptie Chapter 22 – Energy & the economy
OK – now we are ready to complete our tying of the Economy to Energy. Finally!
Economics has been defined as the science of satisfying unlimited human demands with limited resources.
Given our druthers, most humans would choose to live the life of a billionaire; but this is clearly not possible even with our current massive abundance of surplus energy.
Luckily for us, we’ve had massive amounts of surplus energy to work with over the past 100 years and many people enjoy lifestyles that would be the envy of kings and queens not too long ago.
Okay – here’s where the story gets really interesting. Remember all these exponential graphs?
In theory there’s nothing problematic with living in a world full of exponential growth and depletion curves – as long as the world does not have any boundaries.
However, exponential functions take on enormous importance when they approach a physical boundary as seems to be the case for oil, water, soil and numerous other essential resources in the near future.
As in our stadium example where the fixed volume of the facility dictated that the last few minutes would be very exciting to anyone sill handcuffed to their bleacher seat, there are numerous examples from the natural world where fixed limits are in plain sight.
Population, Money and Oil demand are all exhibiting exponential behavior.
Of the three we can make a very strong case that both population and our money system are utterly dependent on the continued expansion of oil energy. It’s not the other way around.
And here are the questions that arise from that line of thinking. What if our exponentially based economic and monetary systems, rather than being the sophisticated culmination of human evolution, are really just an artifact of oil?
What if all of our rich societal complexity, advanced technology, and all of our trillions of dollars of currency and debt simply are the human expression of surplus energy pumped from the ground?
As a scientist, there is no doubt in my mind that we owe nearly all of our progress over the past 150 years to our discovery and use of fossil fuels.
We are perfectly within our rights to wonder what will happen when, not if, but when the total net, or surplus, energy from oil begins to decline. What will happen to our exponential, debt-based money system during this period?
Is it even possible for it to function in a world without constant growth? The evidence so far says that the answer to that question is “no!”
My opinion is that the financial instability we are now experiencing is due at least in part to the early stages of this process.
Our complex monetary and associated economic system only knows growth and it is now struggling with low growth, and the adaptation process is proving to be confusing and difficult.
I can even drum up some sympathy for the various economists at the world’s central banks who are certainly confused by why their massive monetary injections have not worked as they expected.
These poor folks have never studied energy. They are unfamiliar with hard limits, and have no models that include declining net energy and therefore no way of knowing the real reason their policies are increasingly impotent.
By placing oil consumption on a 4 thousand year timeline, all sorts of troubling questions become apparent especially when we overlay a population curve on top of it.
These overlaid charts say that the most important conversation we need to be having globally pertains to population.
We should have some idea of exactly how many people can be supported in a post fossil fuel world and then figure out how to get there equitably and humanely.
Perhaps those studies will show that we can support 7, or 8 or even 10 billion people. Or perhaps they will show a far lower number.
The point I am making is that no such official investigating is being undertaken, and at this point, we’re flying blind.
But, given the fact that there are 10 fossil fuel calories baked into every food calorie, a betting person would place money on the idea that there’s a large and worrisome gap between even the current world population and how many could be fed without the aid of fossil fuels.
And another thing… isn’t it a remarkable coincidence that an exponential form of central bank monetary creation just happened to come into maturity at precisely the same time that the world’s most important abundant and exponentially exploitable energy source had come into being?
Fiat money systems have come and gone but this one had a trillion-barrel energy tailwind that allowed it’s mathematical unsustainability to carry on for far longer than usual.
Distributing ever-larger shares of money during a period of constant growth is a pleasant job that enjoys broad political and popular support.
Operating in a world of declining energy is an utterly new prospect for every single political and financial institution.
It makes the science of meeting unlimited demand with limited resources even trickier – if not impossible – if the people in charge of operating the system are not up to the task.
In the absence of any coherent national or global discussion about the implications of all this, it is up to you and me to wonder what we should expect in the future from a money system that assumes infinite growth.
What if the assumption “that the future will not just be bigger but exponentially bigger, than the present” is incorrect? What then?
This assumption is on full display in the debt chart of the US as compared to GDP. The red circle betrays a profound belief that the future will be much, much larger than the present.
Consider that at the end of 2013 the GDP of the US was just over $16 trillion dollars while the total credit market debt of the US stood at more than $57 trillion dollars.
Lop off a few zeros and round things off and this is the same as considering making a loan of $57 thousand dollars to a person earning $16 thousand dollars.
To continue an earlier metaphor, if we knew that the current tax bracket of that borrower was going to double and then triple, would we be more or less inclined to make that loan?
To our nation the end of cheap oil means, a sustained and permanent reduction in our after-tax take home pay.
My question is, who in their right mind loans more and more money to someone whose earnings are all but guaranteed to decline?
Here’s how it all sums up. There are some knowns.
We know that energy is required for both growth and complexity. We know that surplus energy is shrinking. We know that the age of cheap oil is over. And we know that because of this oil costs will consume an ever-greater proportion of our total budget.
And with these known facts, come along specific risks. There is the risk that our exponential money system will cease to operate in a world of declining energy surplus. It is designed for a world without limits – a world of endless growth.
And there is the risk that our society will be forced to become less complex – a loaded statement if ever there was one.
And finally there is the risk that even as oil winds down, the momentum of the money system will create conditions ripe for hyperinflation.
Each one of these known facts adds to each one of the stated risks and that is what this course is about; Assessing those risks and deciding what, if anything, a prudent adult should do about adapting to these realities and facing these risks.
When I put these together I feel comfortable making the following predictions. Remember, I reserve the right to change these with the arrival of new information at a later date.
Number 1: The status quo will be preserved at all costs. Politicians will hide the truth, economic statistics will become even fuzzier, and central banks will continue to throw more and more money at a system that, at its core, is out of tune with reality.
Number 2: given the likely responses by those in power, the most likely eventual result will be hyperinflation. The price of anything is a function of how many dollars are floating around matched against how much of that product, or good, happens to be available.
Because literally every single failed fiat currency regime has failed for the same reasons, we can reasonably conclude that the future will be filled with ever more dollars. At the same time, declining surplus energy will assure that there are fewer goods floating around.
Together, these spell inflation.
Number 3: Standards of living will decline. This is the logical product of #1 and #2. However, I am living proof that even as ones standard of living declines one’s quality of life can go up.
So this is not a story with a certain and tragic ending, it is a story of change. For those who can see the changes coming and position themselves for it, I am convinced that a fulfilling, enjoyable, and prosperous life awaits.
Yes, it is entirely possible that the issues I have raised here will play out over many years, or even decades, and almost certainly will be influenced by changes in behavior and technology.
Publicatie 4 juli 2014
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