I’ve been following Jim Hansen’s Master Resource Report for a few months as a way of keeping up with peak oil news and energy trends. I was turned on to it via Jim Kunstler, he of The Long Emergency and Clusterfuck Nation.  The report is a wealth of data and graphs on different things from week to week, and the overall trend is disturbing. Discovery of new oil fields is nil, new wells are down, and the ones that are producing are diminishing. The data is disturbing, and it appears that world oil production may have peaked sometime in the past few years. If this is correct, we may be on our way to a world wide crisis much like what America went through under the Carter administration. If that is the case, the gas prices we saw last summer is just a small taste of what we can expect to see in the next decades.

It used to be that any decrease in the world oil production could be offset to an increase in production from Saudi Arabia. There now seems to be signs that SA may be nearing the limit of their abilities. If supply has indeed reached a peak, then the increasing demand from India and China spells dire news indeed for the American Lifestyle.

One of the big stories coming out of the Report the past few weeks is that Mexico’s domestic oil production is off as much as 13% since last year, leading American policy makers to fear a collapse of the Mexican government. The Department of Defense has put odds of Mexican instability on par with Pakistan.  Of course, any news of political instability in Mexico is blamed on drug cartels, while it is the loss of oil revenues that means the Mexican government will be unable to stand up to the cartels and thier billions in drug money.

Other countries being affected by the recent drop in oil prices includes Russia, Iran and Venezuala, who all get a majority of their GDP from gas and oil sales and are seeing short term instability. Unlike Mexico, it is believed that they still maintain the reserves to benefit from a future increase in price.

I encourage everyone to take a look at the Master Resource Report weekly to see what’s been going on in world energy production. I am convinced that world oil production may have peaked this decade and that we might be seeing a transformation as the world runs out of oil. The report also keeps me informed on many of the issues surrounding natural gas and energy production.

Here’s  a couple facts out of the lastest report that you may find interesting:

• The total amount of electrical energy lost during the generation, transmission and distribution of electricty, exceeds the amount consumed by 2 to 1!
• US coal supply may only be 20-30 years.
• Disposal of dried up coastal and sea drilling rigs may a future growth industry as the wells dry up.
• China’s car sales now exceed the US market, meaning a change in petroleum demand.

Gas prices may be low for now as the economy runs down. Economic recovery will mean increased demand and increase in oil prices. The public may be enjoying the $2/gallon prices now; it is just a matter of time before we see record highs again. Oil is a finite resource, and scarcity will only lead to an increase in the wild price fluctuations that we have seen in the past few years. I have already invested some of my money in oil futures via USO, and when the big oil investors are done playing contango in the market, we’ll be seeing some high oil prices like never before.

I think Juan Enriquez may be my new favorite futurist, right up there with Ray Kurzweil and Victor Vinge. Just when all the economy crushing news of the past few months had begun to tarnish my hopes of a techno-utopian paradise before this century’s midpoint, Enriquez has restored my hope that radical technological progress may indeed save us from a hellish voyage into a post-industrial society.

Enriquez gave a talk at this years TED conference titled Tech evolution will eclipse the financial crisis. (YouTube, about 20 minutes.) He starts out by reviewing the financial crisis, touching on bank over-leveraging, the growing deficit, and budget cuts necessary to keep the doom at bay, then, after building up the the dire importance of our current situation, tells us that everything will be okay because technology will save us all. (Further coverage here)

One of the changes he says is needed to stave off disaster is an increase in the retirement age: one year for anyone 60-65, two years for the 50-60, crowd, and an additional 4 years for anyone under 50. The reason for this, he states, is that when Social Security was created the average life span was only 3 or 5 years past retirement age. Medical technology has significantly increased our life span and has put a burden on the SS war chest. It’s time to make appropriate changes.  Other recommendations he suggests include a cap on medical spending, a 3% cut in military spending , selective budget cuts, limits on deficit spending and, smaller government in general.

He then continues on to say that as big a wave as this current crisis, there is an even larger wave looming over the top of it called technology. He uses this picture to make his point:

As a quick introduction let me describe what Kurzweil calls the GNR revolution, a period when overlapping advances in genetics, nanotechnology, and robotics ushers in a new epoch of human evolution. A favorite Kurzweil quote of mine is that “humans are the first species to create their successor.” I paraphrase as I can’t find the exact quote; the idea is that as our technology has advanced we have gained the ability to direct the evolution of homo sapien towards a point greater than our current ability. Kurzweil belives that this self-directed evolution will culminate in superhuman intelligence, mind uploading and control of the physical environment through nanoswarms. Enriquez is a bit more down to Earth and is much more persuasive to the skeptic with examples of current scientific advances being performed in grad schools around the country today.

The examples Enriquez gives come from the realms of gene modification, tissue engineering, and robotics. Advances in which regular skin cells can be reprogrammed to grow into any organ in the body, which are being performed to day to regrow ears, windpipes and teeth; advances in hearing aid technology that will soon grant superhuman hearing, followed by similar advancements in eyesight restoration; robotic pack animals that can carry hundreds of pounds of gear over hilly terrain; these are just a few of the examples he says will carry us to the next version of the human species, homo evolutis.

Last month my fiancee went from being blind without her eyeglasses to having 20/15 vision after a thousand dollar operation that took less than an hour. I’ve told her in the past that once they have a version of the internet that you can plug directly into your head I’ll be the first to sign up. While I might joke about her ‘augmentation’ now, I’m deadly serious about predictions of the world we’ll be facing in the next 20 years.  While many naysayers like to get down on those like myself who dream of a ‘nerd rapture’ which promises to keep our bodies and minds strong for hundreds of years, I think that the words of men like Enriquez and Kurzweil hold much promise for the future. Kurweil points out that people tend to overestimate what we can accomplish in the short term and underestimate what we can accomplish in the long term. A lot of people fail to factor in the exponential increase in technological innovation, or change, over time to thier worldview, and these people will be in for a large case of future shock soon.

Of course all this depends on whether or not we can build a human level artificial intelligence before we succumb to oil depletion, drought or other eco-disaster. My money’s on Moore’s Law holding out long enough for us to get there.

Couple of things important enough that I feel I need to post out for everyone.

End of the Financial World As We Know It /How to Repair a Broken Financial World: The only thing you need to read about the self serving and self interest that made things like the housing crisis and the Madoff’s scheme possible. It’s a long pair of articles that I think should be required reading. Via Boing Boing and almost everyone else on the internet apparently.

Also from BB is this link to Bruce Sterling’s State of the World 2009. This is worth reading if you’re interested in the series of bubbles we’ve seen and what to expect after the industrial age. Bruce is a science fiction writer and so is a very forward thinker. There’s plenty to muse over here. Some of the discussion will lead you names such as Carlotta Perez, who writes articles with phrases like “Techno-economic paradigms as the meta-routines for a long period” and The Dynamics of Bubbles and Golden Ages, and Dimitry Orlov, who witnessed the collapse of the Soviet Union and has been predicting financial collapse in the US for several years.

More on Orlov for a moment because he’s written some very interesting things over the past few years that I hope to share with you:

The Five Stages of Collapse Financial, Commercial, Political, Social and Cultural are the phases that Orlov says we have to look forward to, and he’s already saying his job of prostignation is done because we’re already in the first one. As convincing as Orlov is in his other writings I still doubt that I’ll see the collapse of the Federal Government in my lifetime. Closing the Collapse Gap and Post Soviet Lessons for a Post American Century are both sobering thought experiments that make me reconsider and I would hope you to read and think over.

Keeping in line with the rest of the doom and gloom next up is John Howard Kunstler’s The Long Emergency. Kunstler’s blog is called Clusterfuck Nation and let me say that the man must mainline straight vitrol for breakfast, lunch, and dinner because he doesn’t hold nothing back when it comes to saying what he believes.  Some of the things Mr. Kunstler believes:

• World oil production reached a peak sometime between 2000-2008.
• The current way of life made possible from petroleum-fed factories and highways is unsustainable.
• Alternative fuels such as solar, wind or even nuclear will not be able to meet American energy demands in time to meet the decline in petroleum supplies.
• Suburbia and its commuter lifestyle is the worst blight on American culture.
• Walmart and its ilk are the second worst. Save a dollar and destroy society all at the same time.
• A return to localism and self-sustainablility is the key to avoiding a Orlovian collapse and environmental crisis.
• The latter half of 2009 will be worse than 2008.

I just started the book today. I picked it up because Kunstler puts a voice to a lot of the frustration that I’ve internalized over the past few years as I’ve matured and started to think about the way things are in the world. He’s been posted on Metafilter quite a bit lately, most recently for his 2009 predictions. He already has a new post up saying Goodbye to GWB. He’s been pretty prolific lately and and has a good writing voice despite his schadenfreude and snark. I’m hooked, if you can’t stand him there’s still the possibility that we can still be friends, it’s OK.

So far I’ve found little consolation in the naysayers to Orlov and Kunstler. Most of the debate I’ve heard so far is that one is an engineer, so what does he know, and the other wants us to return to hippie commune idyllic utopia that never existed in the first place; I don’t don’t think either are valid ones so I invite your well thought critisicms like I love good games of chess.

Anyone who’s seen Ghost Dog: Way of the Samurai has heard this quote from the Hagakure:

Death is Life
The Way of the Samurai is found in death. Meditation on inevitable death should be performed daily. Every day when one’s body and mind are at peace, one should meditate upon being ripped apart by arrows, rifles, spears and swords, being carried away by surging waves, being thrown into the midst of a great fire, being struck by lightning, being shaken to death by a great earthquake, falling from thousand-foot cliffs, dying of disease or committing seppuku at the death of one’s master. And every day without fail one should consider himself as dead.

I bring this up not to be pessimistic. I bring them up because I find them fascinating. I bring them up because I think that talking about something that may never happen is not as bad as being surprised that does happen. The quote from the Hagakure means to always be prepared for the worst, to keep one’s head in the midst of it and to be mentally prepared for it. I’m telling you because I want to you to think about it lest it ever happen. When I worked in sales I was taught to play a mental trick on myself by setting my goal twice as high as my quota. In this way even if I did miss my self-set goal I would still most likely beat my quota. Hopefully I will be able to look back 10 years from now and say “gee, things weren’t nearly as bad as I thought they were gonna be, were they?”

I hope you can take some time out of your day to read up on some of these links. This is the kind of stuff that I spend a lot of time thinking about so I would appreciate to hear from others who find this stuff interesting. Hit me up on if you’d like to start a new political party or debate this kind of stuff further. Also, I will buy dinner for the person that comes up with the best phrase to describe the theme of this post.

Till next time, meditate on these great Ghost Dog/Hagakure quotes.