The document discusses the dire implications of peak oil and the unsustainable nature of modern industrial economies reliant on fossil fuels, predicting financial collapse without alien intervention. It explores the diminishing returns of various societal investments and suggests that a significant societal transition is necessary to adapt to a resource-constrained world. The author stresses the importance of preparing for this change and adopting alternative lifestyles to navigate the impending challenges.

1. Our Future and the End of the Oil Age: Building Resilience in a Resource-Constrained World Dmitry Orlov March 25, 2010 Bristol Community College University of Massachusetts, Dartmouth

2. Peak Oil Theory vs. Reality Theory Global oil production peaks and declines gradually; slow growth Alternative and renewable energy ramps up to compensate Challenging economic environment, many social and political problems Reality Massive spikes in oil prices crash financial markets and kill growth No money for alternatives or further oil exploration and production Financial, commercial, political collapse followed by something completely different

3. HOPE: for an alien intervention? Peak Oil models work well for individual countries. Prima facie: most of USA peaked in 1970 (Alaska peaked later) Individual countries compensate by importing oil from countries that have not peaked yet When the entire planet peaks, there is nobody left to import from - except aliens from outer space, of course! Industrial economies cannot grow without increasing fossil fuel consumption (empirical result). Without growth, debts go bad, economic and political problems mount, and economies collapse

4. HOPE: for an alien intervention? Without help from friendly space aliens, we won't have the energy to power a gradual energy descent. It will be a cliff. The right-hand side of this graph is pure science-fiction.

5. Scraping the bottom of the oil barrel The new oil is not like the old oil: Energy Returned on Energy Invested has gone from 100:1 to 10:1 and is heading down We are using up the dregs: deep offshore, heavy/sour crude, tar sands, arctic oil... Oil consumers will run out of money before oil companies run out of places to drill The agony of the industrial age can be prolonged by destroying what's left of the biosphere

6. Scraping the bottom of the oil barrel Net Energy = Usable Acquired Energy / Energy Expended

7. ...the bottom of somebody else's barrel The US has to import over 2/3 of its transportation fuels High oil prices mean extra revenue for oil exporters Oil exporters invest that money in their domestic economy Their domestic oil consumption increases Consequently, there is less oil for them to export Net exporters become net importers even while they are still pumping some oil (just as the USA did in 1970). Many oil importers end up left out in the cold Oil importers who ride scooters and use kerosene lamps do a lot better than oil importers who drive SUVs This is not a contest for who can use the most oil This is a contest for who can grow their economy using the least amount of oil We have already lost; let's regroup and try again

8. HOPE: for an alien intervention? The aliens better bring us some money too... High energy prices cut into personal budgets, making individuals unable to service their debts Banks are burdened with nonperforming loans, toxic assets, foreclosed properties Governments step in to bail out banks Fractional reserve banking? Volcker: 12:1, Greenspan: 30:1, Bernanke: infinity to 1 Economy continues to shrink, job losses mount, tax revenues collapse Who bails out the governments? Why, aliens from outer space, of course!

9. Lifeblood transfusion? "You see, the flow of credit is the lifeblood of our economy." [Obama, State of the Union Speech, February 2009] According to Treasury data, the long-term trend is that by 2015 an additional dollar of debt will produce 0 additional GDP growth. The short-term trend is that debt is rising rapidly as the economy is continuing to shrink (so we may be there already!) The economic patient is hemorrhaging too fast for the transfusion to work

10. More debt, anyone? The Treasury borrows trillions from the Federal Reserve and promises to repay this debt with even more debt Everyone is supposed to believe that this activity is somehow meaningful Actually we are just writing ourselves IOU's and periodically moving them from one pocket to another (not convincing)

11. Why can't this show go on? A system that evolved in conditions of continuous growth of material resources cannot shrink controllably The key ingredient is confidence; once faith in the future is lost, everyone's behavior changes radically Everyone at the top already knows that this show cannot go on and are (attempting to) plan accordingly, for themselves The name of the game is "Keep the rest of them fooled for as long as possible" People are still paying down their mortgages, putting money in their retirement accounts, etc. Being fooled this way can make people very angry

12. The logic of diminishing returns Joseph Tainter, in his Collapse of Complex Societies , pointed out that social complexity increases until further investment in complexity becomes counterproductive He also pointed out that complex systems do not self-simplify; they collapse catastrophically and are eventually replaced with much simpler systems Diminishing returns are observable and measurable Diminishing returns cannot be explained using the internal logic of the systems involved The people involved in maintaining these systems struggle along, but are eventually forced to give up

13. Examples of diminishing returns Each additional dollar of debt causes the economy to shrink even faster Each additional dollar of defense spending makes the country less safe Each additional dollar spent on health care makes the country sicker Each additional dollar spent on education makes the people more ignorant Each additional dollar spent on the justice system increases injustice Each additional dollar spent on job creation increases unemployment Each additional dollar contributed to a political campaign makes the people even more powerless

14. Escaping from diminishing returns What can we do to avoid wasting our efforts on perpetuating doomed systems? How do we construct alternatives? Lower your official exposure/profile Decrease your environmental footprint and burn rate Avoid financial arrangements and legal documents Rely on personal connections and relationships Avoid the mainstream, look for fertile margins, fringes, niches Be hard to classify (use the SEP field to your advantage)

15. Reasonable expectations Money will not be very common or useful (government defaults, growing joblessness, savings wiped out or taxed away, access to imports lost, etc.) As the US loses ability to import 3/4 of transportation fuels, economy will stall and population will become stranded Political system will maintain appearances as long as possible - "Proud and Purposeful Paralysis" Many local authorities will fail (close police stations and fire departments, stop supplying sewer, water and garbage removal services) Other local authorities will try to charge confiscatory rates, and fail just a little bit later Various officious busybodies will have a hard time figuring out whose side they are on, and will probably need help

16. The Big Transition BEFORE Cars and trucks Municipal water supplies Municipal sewage Trash removal Garbage removal Fast food Supermarkets Hospitals High Schools Colleges Office work AFTER Bicycles, boats, 2 feet Rainwater collection, wells Composting toilets Local junkyards, incinerators Local compost piles Community kitchens Open-air markets Local clinics Home Schooling Apprenticeships Physical labor

17. The future is very unpopular Each resident of North America employs the equivalent of 100 "energy slaves": services provided by machinery that runs on fossil fuels. But emancipation is at hand! People do not like to be persuaded by fact or logical argument People like their comforts: cars, HVAC, etc. People are seduced by TV, consumerism Manual labor and farming are low-status activities People lack the skills to lead a non-mechanized existence It is almost impossible to convince people to do what will be necessary - until it becomes necessary It will be almost impossible to do what is necessary without a significant amount of preparation Those who take the trouble to prepare will be a tiny minority

18. The Pre-Collapse Checklist Food Water Shelter Lighting and communications Medical care Transportation Security These have to be provided without access to savings without a positive cash flow without an official economy

19. Food Enough food to feed a family can be grown on 2000-3000 sq. feet (It takes a bit of practice to get this going.) Some foodstuffs (cooking oil, grains, wine, coffee, chocolate) need to be "imported" somehow A lot of wild foods can be gathered (berries, mushrooms, roots & shoots, nuts, [white] acorns "Edible Forest Gardens" can be planted on public lands - useful plants surrounded by thorny thickets Community kitchens are more efficient than personal ones Eliminate all food waste: chickens, rabbits, guinea pigs, carp, catfish, crayfish - something out there will eat it all up Nanny goats can provide milk for infants/children Seasonal migration out to the land to grow food Harvests have to be "floated out" (road transport expensive)

20. Water Municipal water = bad risk Flushing with potable water = insanity! Many grades: drinking water, washing water, irrigation water, gray water, "lively" water Sewage is a very bad idea; composting much better Roof rainwater collection, barrels, filters for drinking water Swales dug into hillsides can boost groundwater Hot water for washing: rocket stoves fed by brush piles Passive irrigation systems instead of pumps and hoses Runoff from disused parking lots and other structures can be saved in cisterns Flat roofs can be planted with sod to soak up water and keep buildings cool Proper placement of shade trees and evaporation pools can make air conditioning unnecessary

21. Shelter Single-family dwellings are no longer affordable for nuclear families; single-family dwellings become extended-family GULAGs where the residents eventually go insane There is a lot of unused commercial real estate that will belong to nobody in particular once all parties are bankrupt There are a lot of unused shipping containers that are very easy to customize for a wide variety of uses Large structures are cheaper and easier to retrofit for off-grid use than small ones Transportation needs are much reduced if the entire town relocates into the shopping mall and the office park Basements of demolished suburban houses can be flooded and used for aquaculture, or for tree nurseries, etc. Freed-up land can be used for community agriculture

22. Lighting and Communication Relying on the electric grid - a high-risk, high-cost proposition. Keeping the existing system running through "renewable" means is not achievable, sustainable or renewable Using wind/solar/micro-hydro to power to run AC appliances is an expensive proposition - not affordable All it takes is 100-200W of solar and/or wind to power a few LED lights, radio, laptop, 2-way radio, cell phone charger, etc. That's something that can be put together for a few thousand dollars. It's all made in China! Yikes! Get yours now! (Install it later.) 12V batteries, alternators and voltage regulators will come from scrapped cars/trucks - then what? (Food for thought.)

23. Medical "care" Stay healthy: eat little, mostly vegetables, avoid exercise, but do some physical labor, sleep plenty and get lots of rest, avoid stress, have a sense of humor Avoid doctors and hospitals (they prescribe toxic drugs, spread disease and deplete family savings) Know how to treat/cure yourself and the people around you - good hygiene, herbs, massage, rest & TLC For serious medical needs, have a medical evacuation plan in place - to a country with a functioning medical system (Canada, Mexico, Cuba, Russia...) Know when it's time for you to go (your life isn't worth half a million to extend by a year or two, no matter who you are - the country can't afford it)

24. Medical "care" - steer clear of fraud Avoid American medical "care" if at all possible Making a profit off of sick people is deeply unethical Health is not insurable. If all houses burned down, there would be no fire insurance. Nobody dies healthy. Resist efforts to tie you to a "job" by the threat of cutting off your access to medical "care" Resist efforts to force you or your family into medical bankruptcy through medical extortion You have no choice of doctor who isn't an American doctor and violates the Hippocratic oath by putting financial and legal considerations ahead of what's good for the patient And now, you have no choice but to buy federally mandated private health insurance

25. Transportation To recap: 2/3 of transportation fuels are imported, and these entire 2/3 are going away Daily trips to town by private motor-car will once again be reserved for the aristocracy (chauffeur not included) There is not much hope for continuation of air travel, air freight or interstate trucking Rail freight could actually be revived at very little cost (much more cost-effective than road freight) Water freight is supremely efficient, especially if by sail Our harbors, bays, sounds, estuaries, rivers and canals are our prime regional transportation assets Many people will be delighted to once again be able to make a living on the water

26. Security One happy family: former military, former prisoners, former police, former government spooks, plus some drug lords An "online community" is a hacker's playground Easy pickings: loaners (armed or not), people who can be tracked using their GPS cell phones and other gizmos Hard nuts to crack: cohesive communities that deal face to face and are electronically "dark" Having a lot of witnesses about makes crime more difficult A 24/7 watch/patrol is an excellent idea Obvious ideas: Surround yourself with people you know Mistrust electronic communications Cultivate friendships in places high and low

27. In conclusion Many people can't be persuaded by either fact or reason. Let's hope you are not one of them. Running out the clock on our current living arrangement is a bad idea: the longer you wait, the fewer options you will be left with A rather exciting time to be alive, wouldn't you say?