Interview with Bob Hirsch on his team’s new book—“The Impending World Energy Mess”
Guest Post by Steve Andrews
Robert L. Hirsch, Roger Bezdek and Robert Wendling have coauthored a new publication, this time a book called “The Impending World Energy Mess: What It Is and What It Means to You,” a book to be released by publisher Apogee Prime late this month.
Andrews: In your earlier work dating back at least five years, you resisted forecasting a time frame for peak oil. There seems to be a bit of a change on that front in your book. Care to comment on that?
Bob Hirsch: In years past, there was considerable uncertainty in my mind about when the decline of world oil production might begin. Recently it became clear to me that it’s going to be sooner rather than later. I believe that the onset of the decline of world oil production is likely in the next two to five years. And when I say “oil,” I mean all liquid fuels.
Andrews: You say that once declining oil supplies hits, we’re likely to experience deepening worldwide economic damage. How is that likely to unfold? What is your most likely scenario?
Hirsch: Our thinking is that what happened in the two sudden oil shocks of 1973 and 1979 is very likely to be repeated when oil decline sets in. Those were two real world examples of oil shocks surprising people and causing panic. We believe that the same kind of thing is going to happen again, except that the problem is going to last much, much longer because, unlike before, there will be no unused oil supply valves to turn on this time.
While economies have changed since the 1970s, the dependence on and importance of liquid fuels has not. And human nature hasn’t changed. People panic when they get suddenly frightened. Even though -peak oil‖ is recognized by a number of people, it is yet to be realized on a wide scale.
In the book we avoided consideration of such things as anarchy, wars, and other catastrophes that are conceivable. We see very little chance that things will be any better than what we describe, but things could easily be worse.
By the same token, we have faith that humankind is not going to collapse because of the oil decline problem. The world is in for considerable pain for a long time. Nevertheless, we have great faith in human resilience. People will come around, get very pragmatic, dig in and do what’s necessary to meet the challenges. As a result, when we get through all of this-which is going to take longer than a decade-the societies that emerge are going to be much stronger and much more pragmatic than they are today.
Andrews: You note that there will be no quick fixes. What mix of crash programs are you currently recommending as the focus of any accelerated policy efforts today?
Hirsch: We sketch practical, physical mitigation options for the world. They are the ones we described in 2005, plus or minus a few changes due to our being a little smarter now in some areas. In the book, we added what we call “administrative mitigation,” such as forced carpooling, forced telecommuting, and rationing. There is benefit to be gained from those options, but their implementation will not be simple.
For instance, rationing seems like a relatively simple concept but after one considers the details, it is incredibly complicated due to decisions that have to be made, the bureaucracies that have to be built, and the enforcement that has to be implemented. Understanding the complexities is necessary for practical decision-making.
Andrews: You introduce a new acronym in your book. What does LFROI stand for?
Hirsch: It stands for Liquid Fuels Return on Investment. The point is simply that if we have to invest liquid fuels into a process that is going to produce liquid fuels, we had better get a large multiplier on our liquid fuels investment or it is not worth the effort. The concept is clearly of fundamental importance. Options where LFROI is of particular concern are biomass-to-liquids processes, like corn and cellulosic ethanol, where large liquid fuels investments are required for harvesting and transporting biomass to processing.
Andrews: Following up there-since 1978, the most consistent investment we’ve made in alternative fuels is in ethanol from corn. If you were to address the US President and Senate as Energy Czar, what would you tell them about the policy we pursued vis-a-vis ethanol from corn?
Hirsch: I would tell them to learn from past mistakes. Corn-ethanol was appealing in many ways, but it turned out to be a loser from energy, cost, and environmental standpoints. People were grasping at straws — pun intended, sorry. People in the federal government wanted to do something to impact oil imports and to help farmers. I want to protect farmers myself; part of my growing up was on my grandfather’s farm.
Instead of grasping at this or that option which sounds good, government needs to demand serious, unbiased energy analysis so that pragmatic decisions can be made, and the private sector can carry out intelligent, unimpeded implementation. Right now we’re messed up because governments are picking winners and losers and strangling our energy systems.
Among other things we discuss in the book are solar and wind electric generation systems which are losers because they don’t provide what the public demands-electric power on demand; and don’t forget the often ignored fact that electric power generation options will have little impact on our oil import and impending oil shortage problems for a very long time.
Andrews: You state that societal priorities will change dramatically. Can you expound on that?
Hirsch: One of the biggest issues on the table now is climate change-global warming. Related concerns are going to have to give way to the urgent needs of immediate human existence after world oil production begins to decline. Our economies cannot flourish with very high-priced liquid fuels that are in deepening shortage. Massive, rapid, serious mitigation will be required. We can’t do everything at once, which means that global warming efforts and the dreams of a renewable energy future are going to have to be secondary to the urgent, large need to regain some sort of reasonable economic equilibrium.
Andrews: How will some of those changing societal priorities role down to impact individuals?
Hirsch: Every one of us will be impacted by the decline of world oil production. Liquid fuel costs are going to escalate dramatically-that’s what happened in 1973 and 1979, and it will happen again. There will be shortages, which will cause all kinds of problems. There will be rising unemployment and dramatic declines in stock markets. And there will be inflation. It happened before, and it is logical that it will happen again, except this time the pain will last a lot longer.
The question then becomes what can each of us as individuals do to protect ourselves. In our second-to-last chapter, we discuss the issues and investments that people should avoid, places where you can look to protect your nest egg, and things that you can do to minimize your personal damage. For instance, if you have a house in the country, far from a grocery store and places where you might work, you’re likely to get hit very hard when the value of that property declines. Remember, the primary reason those places were viable was abundant, cheap gasoline, which allowed people to get to and from them.
Andrews: When it comes to making personal choices, you write that individuals need to understand the situation in order to make the most intelligent choices. What is the key to that understanding here? Why aren’t more people getting this?
Hirsch: The key to making intelligent choices is having 60-80% of the relevant information. Less than 50% is often insufficient, while waiting for over 90% means you probably waited too long. The subject of the decline of world oil production (“peak oil”) is distasteful and painful, so trying to hide from the substance may be understandable, but the problem will not go away. How many of us really like to hear bad news, and how many of us are pragmatic enough to act soberly on bad news?
The current and the previous U.S. administration tried hard to minimize discussion of “peak oil,” because it’s really bad news. When the public consciousness is raised on this subject, the public will be furious with governments: why didn’t you tell us about this and what are you doing about it? Educating yourself ahead of the problem gives you the best chance of effectively coping, rather than being swept along with the current.
Andrews: Going back a bit, what choices are you making in your personal and family life that anticipate our looming energy problems?
Hirsch: One of my slides for my forthcoming presentation at the ASPO-USA conference in Washington is titled “Some of What I’ve Done.” It lists six points. Years ago, I went through the mental and emotional adjustment associated with what’s likely to happen when world oil production declines, and I pondered when it might begin; I determined then that I didn’t know, but I wanted to be in front of the problem rather than behind it, so I “peak-oil-proofed” my investments and personal life to the degree I thought reasonable.
For reasons outlined in our book, I got out of almost all stocks and bonds. I invested in some three-year annuities, which paid good interest and which I could quickly exit, and I reasoned that gold was going to go up dramatically when oil-related inflation hit. We moved to a home closer to shopping and mass transit, and I traded my gas-guzzler for a Prius. The first four steps turned out to be fortuitous because they helped us to weather the “Great Recession.” Given that I now believe that world oil production is likely to begin declining within two to five years, I think I’ve done about as much as I can do to protect my household.
Andrews: In the book you state that you dig into “realities that others are reluctant to discuss.” How so?
Hirsch: We were referring to the impending decline of world oil production and what it means; the climate change issue, both the uncertainties and the deplorable games being played by many in the environmental community; the realities of other energy sources, including renewables-we use the term “people are intoxicated on renewables;” and finally, what actions people might take to minimize the damage that is likely when world oil production goes into decline.
Andrews: For people who are already familiar with your paradigm-shifting report of 2005, is your book primarily a logical building on that foundation or do you think you have diverged substantially from the findings of that study?
Hirsch: The findings of our 2005 study have held up remarkably well over the last five years. Nobody has strongly argued that our mitigation estimates were wrong. One could argue the details of our estimates, but the story remains basically the same. In the book, we’ve updated our earlier considerations and added some things.
One of the biggest differences between 2005 and today is that, back then, we tended to think in terms of “peak oil” as a relatively sharp peak-production rising and then suddenly turning around and going into decline. That was what happened in the US Lower-48 States. Now we don’t think in terms of a sharp peak because world oil production has been on a fluctuating plateau since the middle of 2004 – world oil production has been essentially flat. We see that plateau as very likely continuing for the next two to five years and then decline setting in. So when I say “peak oil,” what I’m really talking about is the impending decline of world oil production from the existing fluctuation. I sometime use the term “peak oil” because it’s widely used, but it’s not now a strictly accurate descriptor. By the way, can you think of anyone who predicted the current five-year world oil production plateau? I can’t.
Andrews: So, at the end of the day, why did you write the book?
Hirsch: Along with you and many others, I’ve been talking and writing about this subject for years. A number of books and articles have been written, but the issue is still “below the horizon” for the general public. My hope was the kind of book that we could write might make a useful difference, so we undertook the effort.
By laying the oil, energy, and climate issues out in writing and carefully selecting our words, we hoped to be able to better communicate with a wide audience of intelligent lay-level people and to conceivably make a difference. That’s why we wrote the book.
Andrews: Why should people buy the book?
Hirsch: People should buy the book because the issues are very important to them in their personal lives. They need to understand the problems, however distasteful. The chances of not getting burnt are essentially zero. Being forewarned is to be forearmed.
Hirsch will present material from his upcoming book at the October 7-9 ASPO-USA conference. Please see the full agenda for details at aspousa.org. He has spent his entire career working in the energy realm, from the oil sector to numerous forms of electric power generation. In 2005, this team published “The Peaking of World Oil Production: Impacts, Mitigation & Risk Management.” Steve Andrews caught up with Bob Hirsch last week for Steve’s last interview and final work with the Peak Oil Review. (Steve co-established the Peak Oil Review the Tom Whipple some 243 issues ago in January 2006 and has both enjoyed and enormously appreciated a very close collaboration with Tom for nearly five years; Steve is now moving on to other endeavors.)
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You tube seems to be broken tonite? Last comments were around 30 minutes ago at every site I was going to?
I must agree that most people are still totally oblivious to the coming storm. There is no viable energy sources developed at this point to mitigate the a decline in oil production. We have waited too long and I still see no global effort to even start this huge undertaking. Since the amount of sunlight striking the earth in a year has supported less than a billion people in mans recorded history (up to the use of hydrocarbon fueled energy), how do we expect to support the 7 billion plus that will exist as oil declines.
The resource wars will really take off in the next few years. China is already in dispute with Japan, Malaysia, Philippines, Vietnam, etc over land and water oil reserves. The USA and Afghanistan, Iraq, Saudi Arabia, etc. All the world’s powers are now scrambling for strategic “reserve supplies” in their own and other countries. Notice how up and coming power devouring China is quietly making deals with Venezuela, Brazil, etc. All the countries,all for oil.
I have seen nothing yet to make me believe mankind will be in a position to help the five or so billion people who must needs perish from starvation if a substitute for petroleum is not soon found. How will we feed the world without oil? Oil is the sole cause for the unbelievable crop yields that modern farmers achieve. No infrastructure is in place whatsoever at the present time. I am not a scientist but I try very hard to find and listen to the people who perhaps have a way to avert the coming catastophe. There are plenty of superbly gifted and intelligent people out there but how can we get them together in a meaningful working relation with the world leaders to overcome our oil dependence? I believe it will take an effort that will dwarf all of mankinds previous achievements in all our history to solve our energy problem. And have we even started?
Anyway, the coming years are sure to be quite…interesting.
Haven’t read the book but aware of the topic. The only thing I can say is that I understnd nature of the problem and why we’re in some serious, serious trouble in the coming decades.
It’s all about scale. We have a colossal infrastructure built around cars and oil and products. People keep saying that EV will save the day. Doubtful. For one very important reason.
Who’s going to buy these vechicles? And where will the money come from since the US is in the grips of a nasty recession with millions out of work and losing homes.
Look, we had our chance and blew it.
Flushed it comepletely down the toilet. We’re never going back to what we had before and a lot fo people are going to lose their jobs, probably for good in a shrinking economy as this reality sets in.
And let’s not even talk about the real elephant in the room problem. Population. 7 plus billion humans stripping every single resource on the planet to sustain them is going to only end in one ugly and unavoidable scenerio.
Take a guess what that will be.
And what about countries that aren´t so developed?¿ We also need a sotution that could face this peak! It seems that agro-fuels (corn ethanol, for example)aren’t a real solution! we still have nutritional problems!
There are a number of sustainable energy sources, but changing to them is the problem. It will cost an enormous amount of resources to make electric cars. At the same time more and more people will be clamoring for food, for jobs and so on.
Geothermal is a good idea, but how are you going to distribute it? And where do you get the rawmaterials for all those electric cars?
The ramp up time is long compared the when we need it. That comes from intentional ignoring the problem until it cannot be hidden anymore.
A lot of people are going to experience a very real decrease in their ability to consume and even survive.
Remember the 1 billion that are already on a starvation diet…
awbeattie,
To the best of my knowledge, PV prices have plateaued. In any case, credit is no longer there so where is the money to come from for the changeover?
Bill,
Check out http://theautomaticearth.blogspot.com where low oil prices are explained combined with affordability. It is all relative.
I checked out Google News and it is clear that the mainstream media does not want to hear what Hirsch has to say. Sad.
Thus, batteries.
They may not be sufficiently advanced, economical, or prolific right now, but this is sure to change. Seems like a mistake to treat wind and solar as intrinsically nonviable when a variable this big (and unknown) governs their success.
I am surprised that nobody, not even Mr. Hirsch, is suggesting GEOTHERMAL energy. This wealth of heat beneath the earth’s crust wisely applied, might even reduce some of the atmospheric warmth now trapped but created by us, energy hungry humans. Well, I am not a scientist but there seems some unjustified ignorance among our governments to recognize Geothermal energy as an important part of the solution. Or are there any other methods, other than solar, possible to make use of our mighty sun’s energy?
“We can’t do everything at once, which means that global warming efforts and the dreams of a renewable energy future are going to have to be secondary to the urgent, large need to regain some sort of reasonable economic equilibrium.”
Do you hear, Mother Nature? “We can’t do everything at once”, so hold on a little, and we’ll let you know when we are ready to cope with global warming, got it?
The solution to peak oil is obvious. An electric car in every driveway. We don’t have to build them all in the next 5 years either. We just need to produce enough to stay ahead of depletion rates. The technology is available. All we need is the impetus. I’m sure the first shocks from peak oil will provide that.
WOW! I sure never thought that I would ever be considered an optimist, but it looks like my guess of the oil crisis starting in 2016, might be on the high end.
I find it interesting that he says to get out of the stock market. I have no doubt that most stocks will tank, but wouldn’t the oil companies make out like bandits, as the oil price skyrockets? Or will things get so bad that they will be taxed to death, with the Government taking all the gravy in the form of a windfall profits tax? I can’t see their nationalization in the USA, but who knows, when things get bad enough, anything might happen.
Many people on this site fail to appreciate the lack of awareness within the general population about the coming peak oil catastrophe. Whenever I try to discuss it with people that I come in contact with, they look at me like I have started a discussion of UFOs. Most people still confuse electricity with the liquid fuel that moves the world ecomony. I want to grab them and ask, “Do you have the slightest idea of the enormous size of the oil industry, and how long it will take to replace even 10% of it with electric cars? Do you know how many battery plants you would need to build? Do you know how many trillion dollars they will cost? Do you know how long that will take? Where do you plan to get the lithium for hundreds of millions of very expensive batteries? Do you think China will stop building more and more cars and trucks powered by oil? Even if electric cars could be produced at a very rapid rate, where will people get the money to buy these electric cars fast enough to have any impact on total fuel usage?” I could go on, but it won’t do any good because most people still believe that there is plenty of oil left, with those greedy oil companies keeping wells shut until the price goes way up. That won’t change until it is far too late to do anything about it. Oh, I forgot to mention the algae oil dreamers. That should only cost about $20 a gallon.
Be glad the Canadian oil sands are close. At least we won’t starve. I hope the Canadian government realizes that, once the crisis hits, plans to sell oil to China will not be viewed too favorably by the world’s largest military power. Desperate people might do desperate things.
Even on financial web sites, where the level of intelligence is higher than on the vast majority of sites on the Internet, many people believe that oil should be selling for $30 a barrel. Some smart people can’t grasp the concept that we live on a finite planet, and that the conditions necessary to make oil are rare. They seem to think that oil companies are drilling in mile deep water because they like to fish.
Books like Mr. Hirsch’s don’t sell enough copies to make much money for the authors. I just heard a statistic that 95% of the books published barely break even, so I doubt the author is just trying to scare people to make a quick buck.
Hirsch says he no longer believes in a a sharp peak and I have to agree with him. However, for nations that import most of their oil it is Peak Net Exports that is more important than Peak Production. As developing nations use more and more of their indigenous production, the peak and decline in oil available to export markets may be quite sharp and steep.
Peak Net Exports should be explicitly addressed in any book intended for US consumption.
The emphasis the renewable crowd places on such technologies as solar pv and energy storage tech are large-scale wishful thinking. In the 2000 World Energy Outlook, published by the IEA, it was apparent that the sanguine predictions of a secure energy future based on renewables, was misguided.
As was obvious from their charts and graphs, the reduction of oil used to generate electricity were indeed compelling. But looking at the US response to peak production in the contiguous US tells a different story. Even as liquid fuels took a smaller and smaller role in production of electricity, their use in transport kept increasing at a faster clip than production, necessitating a larger and larger import bill, one which more and more, our exports were unable, to this day, to pay for.
Even so US citizens were lulled into the complacency required to market gas-guzzling SUV’s to a nation utterly dependent on the kindness of strangers to fuel them. The same thing has occurred on a world-wide basis, via the Washington Consensus, as more and more countries are completely dependent on imports of more and more of essentials, even as the fuel required to transport them is coming under more intractable constraints.
When Obama reiterated the Bush doctrine that “The American way of life is not negotiable”, this is what he was referring to: the free-wheeling ever-expanding car culture that defines users of buses and other mass-transit solutions as losers, (thanks Peggy Thatcher) and bicyclists as communists. This stance has not changed and dooms us to the worse scenarios pictured by other-wise sober-minded individuals.
I’m glad to see Hirsch bring up the difference between liquid forms of energy and others that are hard to put on mobile platforms, like electricity.
We forget sometimes that the best Lithium batteries are over 40 times less energy dense than that beautiful black gold.
So, maybe we humans will invent some amazing energy storage device. I’m still waiting for prototype one. Lot’s of news and fancy headlines but nothing is even close.
People also forget just how much energy we humans use. They think we can just turn up the renewables or switch to this or that. Unfortunately, that this or that, even if better than oil, will take decades of extremely hard work. We don’t have anything even close to how good oil is. Not only does it pack a punch but it is just sitting there in the ground ready for us to scoop up. Well, those easy oil days are just about over. EROIs are dropping like a stone down the peak oil curve. Old Saudi oil: 100:1 (you get out 100 barrels of oil for every one barrel you need to burn to get it out) Tar sands: 4:1
Some say we need around 20:1 just to hold. Oh, Ethanol is currently around 1.3:1, on a good day. Have a nice day.
awbeattie,
there doesn’t even to be a panic — all that is required is that contraction set in for a protracted period of time to turn the world financial system on its head. A panic due to shortages is almost certainly going to happen, in my view, but even if it didn’t the global economic system as it’s currently designed will undergo great stress even with just simple oil production decline.
For instance, the asset values of virtually every investment on the planet have been set during a period of expansion, both of the real economy and due to the global credit expansion. These assets will be repriced through a combination of credit contraction and the shrinking of the economy due to oil production decline. This process will wipe out all sorts of investment funds, including the various retirement schemes (private pensions, 401ks, etc.). It will put democracies under great stress, too. Economic liberalization will be rolled back as politicians heed their constituents who will demand that “jobs stay at home.” Borders will close and generally geopolitical stability will worsen. For more along these lines, see the recently leaked report by the German military think tank:
Military Study Warns of a Potentially Drastic Oil Crisis
http://www.spiegel.de/international/germany/0,1518,715138,00.html
As for your renewable energy technologies, I believe it is a very common mistake to assume that during this contraction the rate of penetration will stay the same or increase. When money gets tight, even the worthiest projects get shelved. We will enter Energy Descent largely with the energy system we have now and it will stay that way for several decades, at least.
-André Angelantoni, PostPeakLiving.com (speaker at this year’s conference)
Looking forward to reading it. Have been following Peak Oil matter for quite a while now and yes we will very soon find out the answer.
“How many of us really like to hear bad news, and how many of us are pragmatic enough to act soberly on bad news?”
I have the utmost respect for Mr Hirsch and the energy bulletin contributors, but you’ve all missed a trick, and its something i would have thought intelligent people would realise, but such is the nature of mass propaganda. INDUSTRIAL HEMP.
The hemp plant can be implemented on a mass scale by any nation with land space. It requires no fertilisers or herbicides, minimal water, rebuilds the soil and produces fuel (stalk) fibre (stalk interior) food (seed) and roughage (leaves) all from one harvest, which if timed right could produce year round supply. Even if you do not use hemp fuel to sustain the current system, in the case of a collpase or contraction, which we are seeing now, Hemp would save local communities and soften the landing from oil declines. Even without a decline in oil to contend with, the rest of the world have decided to put a stop to the western exploitation, so oil would start getting scarce anyway as america has no savings or genuine wealth production to buy high priced oil.
Do the maths, think about the inputs. Get (unemployed) people onto the land, living in tents or basic accomodation, have them planting and sowing hemp for a year, then you will have millions of tons of the material to rebuild with, all locally sourced, non toxic and renewable. Jobs created, healthy food eaten, stronger soil, plenty of animal feed if you want to keep eating beef etc.
If anyone can find a fault with industrial hemp that would totally exclude it from inclusion as a foundational energy source, i would love to hear it. I read that ethanol is not as energy dense as petroleum, but so what, if petroleum is unaffordable, then whatever can be mass produced in its place will do. Isnt having a car running with a top speed of 50mph better than a car that is too expensive to run at all?
You dont need government or banks to implement hemp, people can do it. its about the only option that can be applied. The plant has been suppressed and demonised because it would ‘supplant’ the fossil fuel competition, and look at the state the western world is in because of it. The race is to educate people about hemp and its deep connection to the human story. America wouldnt have even existed if colonists hadnt used ships with hemp sails to get there. The USA owes its existence to this plant, it shouldnt have turned its back on it.
I’m looking forward to reading the book. However I don’t believe Hirsch is sufficiently knowledgeable in a couple of the renewable technologies that are on exponential cost reduction curves (specifically solar pv and several energy storage technologies). The effect that the very robust growth of these technologies will have — given a primarily “distributed generation” deployment, will be very helpful in mitigating the damage — if their current growth continues at present or enhanced levels. Of course, if the “peak/panic” occurs within a short time frame, all hell will break loose, and Hirsch’s worst imagined outcomes will most likely come to pass.
Hirsch says “By the way, can you think of anyone who predicted the current five-year world oil production plateau? I can’t.”
Actually, there was one person. He blogged on the (now defunct) website Blogging of the President. Here’s a link from the Wayback Machine to a post in November 2004, where he did predict a plateau:
http://replay.waybackmachine.org/20060329175632/http://www.bopnews.com/archives/002421.html#2421
(Interestingly, in the comments, he and Stirling Newberry discussed the idea that a global recession could actually “buy some time” by lowering demand. Unfortunately, he died not long after that post.)