http://www.slideshare.net/deirdrekent/sustainable-economics-without-fossil-fuels-21 This slideshare show is now updated and made clearer. It is the first time it has been published on this site and represents a lot of feedback from our members. If others have a method of reforming the tax and money system in a way that is politically possible and in a way that doesn't shock the economy, we would love to know. Meanwhile this is a serious proposal. Feedback is welcomed.
When we first started talking about peak oil (I heard about in 2004) we were worried about the price of oil going over $100 a barrel. Many people say “They will find something” They hear a radio item about shale gas being plentiful and are happy. Or others might dismiss it as a plot by the left. As oil gets discovered in so many new corners of the globe, people now say the concern about peak oil was unnecessary. But actually, because of climate change, almost all those resources have to be left in the ground!http://ftalphaville.ft.com/files/2013/01/Perfect-Storm-LR.pdf. I have printed it off and had it bound. Morgan says: There are four factors bringing down the curtain on growth. The economy as we know it is facing a lethal confluence of four critical factors – the fall-out from the biggest debt bubble in history; a disastrous experiment with globalisation; the massaging of data to the point where economic trends are obscured; and, most important of all, the approach of an energy returns cliff-edge. When oil bubbled from the ground in Saudi Arabia a century ago, only one barrel of oil was required to extract 100 barrels of oil. The energy return on energy invested (EROEI) was 100:1. But for tar sands it is 20:1, North Sea oil today 5:1, shale oil 5:1 or less and biofuels 3:1. He says below an EROEI of 15 the profitability falls off a cliff. For decades EROEIs are declining. Few discoveries today offer much more than 10:1. So as time passes economies are spending a larger percentage on energy. At the household level when petrol and power costs rise we have less and less for other essentials. A nasty little graph of oil’s dying EROEI is shown at http://deepresource.wordpress.com/2012/11/22/eroei-estimates-for-shale-oil/ The economy is a surplus energy equation not a monetary one. Too much energy has to be reinvested into energy extraction and too little energy is left for the essentials of food, government services, housing and investment. The interesting thing is that Tim Morgan works for Tullett Prebon. It is the messenger which is unusual saying all these things. It isn’t Richard Heinberg or some sandal wearing, folk dancing greenie. In a way Tullett Prebon seems to be taking over where Matt Simmonds left off. I think the most scary thing in his whole book is the graph of the energy returns cliff. While we blithely go into debt to build motorways and while we waive civil rights to protest at sea about deep sea oil drilling, it must be worthwhile paying attention to what this energy firm is saying.Then we had the Global Financial Crisis in 2008 and all got busy worrying about housing bubbles, derivatives, debt bubbles, too big to fail banks and bailouts. This is all important stuff. The price of oil declined as the global economy declined and now keeps repeating these waves. Affordability oil became the issue. In 2012 that same brother in law commented that my worry about oil was unfounded as the oil price hadn’t gone up as much as forecast and “they were always finding something”. Now I realise what is happening and there is no better little book to explain it than the one former Green Party leader Jeanette Fitzsimons recommended in a recent talk run by the local Quakers. The book that blew her mind was The Perfect Storm – Energy, Finance and the End of Growth by Tim Morgan, Global Head of Research at finance broker Tullett Prebon. It is freely downloadable at
We have received a letter from the Minister of Energy in reply. At a Transition Town Otaki meeting, a speaker from the Otaki Clean Tech Centre told us that our emergency oil is kept in the form of a contract in Japan.So I wrote to the Minister to get this clarified and confirmed. Here is his letter of confirmation. I guess it is time I wrote again (or someone else did) to clarify this further. 19 March, 2013 Deirdre Kent New Economics Party Dear Ms Kent Thank you for your email dated 28 Feb 2013 regarding New Zealand’s “strategic oil reserve”. As a member of the International Energy Agency (IEA) New Zealand has a treaty obligation to contribute to global oil security by maintaining oil stockholding equivalent to 90 days of net imports. Commercial inventories held by oil companies in New Zealand contribute to part of the IEA obligation. New Zealand meets the remainder of the obligation by entering into “ticket contracts” with companies in other IEA countries. Tickets are an option, in return for an annual fee, to purchase specified quantities of stock at market prices in the event of an IEA-declared oil supply emergency. Tickets are backed by government-to-government agreements that specify that the host government will not impede the release of stock in an emergency. New Zealand’s ticket contract stockholding is our closest equivalent to a “strategic oil reserve”. For the period 1 January 2012 to 31 March 2013, New Zealand held ticket contracts for 55,780 tonnes of crude oil in Japan. For further information on New Zealand’s IEA obligation I refer you to the website of the Ministry of Business, Innovation and Employment: http://www.med.govt.nz/sectors-industries/energy/international-relationships/international-energy-agency/international-energy-programme. Yours sincerely Hon Simon Bridges Minister of Energy and Resources.