Peak Oil Ass-Backwards (part 3)

by Allan Stromfeldt Christensen, From Filmers to Farmers

So here we are on this precipice of sorts, staring upon the twilight of the industrial economy due to peaking energy supplies and thus peaking credit supplies (as explained in part 2 of this 3-part series).

Simply put, being on the peak oil plateau, and with fossil fuel supplies in general reaching their limits (and getting more expensive to extract), there’s going to increasingly be less and less of the stuff to go around. This means one of two things, the first being that what’s left gets spread around thinner and thinner between all the participants. However, since people of the West (and especially those in the richer parts) have become quite used to their energy-intensive lifestyles and seem to have zero intention of giving them up, this likely implies the implementation of the second approach: cut back on – if not cut off – the fuel supplies to people and nations on the lower rungs of industrial civilization. That way, as the fossil fuel pie continues to shrink, those on the higher rungs don’t have to reduce their share too drastically. In effect, this allows for those in the upper echelons of contemporary civilization to hold on to their Nyet-Flix feeds and iGizmos just a bit longer, until the triaging inevitably hits them as well and/or the bottom just completely falls out.

This triaging can be accomplished in more than one way, but for the time being two methods stand out as the most popular. The first is what we know as austerity – cuts are made upon people’s pensions, hours, welfare cheques, whatever, so that they have less credit (read: money) to buy and indulge in the spoils of industrialization. Unfortunately, living in this modern world of ours means that the basic necessities of life (such as food) also often fall under the umbrella of industrialization, so being triaged can entail much more than an inconvenient loss of iGizmos.

Using Europe as the example, Greece is on the lower rungs of European industrial civilization as not only is it not a fossil fuel superpower, but it isn’t a manufacturing superpower either. It does have a lot of olive oil to sell and/or trade, but olive oil (and the rest of their exports) can’t get Greeks the crude oil (and crude oil manufactured products) to the degree that countries on the higher rungs get to imbibe in. Since the manufacturing prowess of Germany places it on the higher rungs of European industrial civilization, this means that it can dish out credit/loans thanks to its manufacturing base. Greece, however, can’t dish out credit/loans like this, because not only does olive oil not provide much relative earning potential, but having ditched the drachma for the euro a few years ago, it forwent with its financial sovereignty and put much of its economic destiny under the dictates of others. (Thinking of the issue in terms of “financial sovereignty” can be a bit misleading, but I’ll get to that in a moment.) One result of all this is that Greece has an even tougher time affording the most indispensible input to industrial civilization – fossil fuels.

This being the case, when energy supplies become tight enough, Germany’s penchant to extend credits to countries such as Greece will be significantly reduced once that means cutting into its dwindling hold on energy supplies. But for the time being Germany has been willing to string Greece along with further loans, not so that old Greek ladies can have enough money to feed themselves, but primarily so that Greece has the funds to service its debts to Germany and so avoid contributing to the eventual implosion of Germany’s/Europe’s/the world’s Ponzi scheme banking system. Furthermore, while the bailout energy credits that do stay in Greece are predominantly accessible only by the upper crust end of society, those credits do of course come at a price. And that price goes a little something like this: