Sunday, October 26, 2014

Taking a short break--no post this week (and why)

I'm taking a short break. I expect to post again on Sunday, November 2.

Update Oct. 27, 2014:

Here's why I missed posting this week. I've been helping to publicize a new report by the Post Carbon Institute that takes aim at the Energy Department's rosy forecasts for tight oil and shale gas. That report is now available.

For the report, click here.

For the full media kit, click here.

(Full disclosure: I was a paid consultant for this publicity campaign. But, as my readers know, I've been saying for several years that the tight oil and shale gas boom would be short-lived. This report offers a broad and detailed analysis that supports that view.)

Sunday, October 19, 2014

Oil decline: Price makes the story

So oft in theologic wars,
The disputants, I ween,
Rail on in utter ignorance
Of what each other mean,
And prate about an Elephant
Not one of them has seen!
--The Blind Men and The Elephant by John Godfrey Saxe

When the world's business editors sent their reporters canvassing to find out what is behind the recent plunge in the world oil price, they were doing what they do almost every day for every type of market: stocks, bonds, currencies, commodities and real estate.

In financial journalism more often it's the price that makes the story rather than the story that makes the price. If a story is about something very surprising which almost no one can know in advance--a real scoop--say, an unexpected outcome in a major court case affecting a company's most profitable patent, then the story will move the price of the company's stock.

But much more often prices move, and then business editors send their reporters to find out why. Usually, a number of financial and industry professionals are asked: Why do you think prices went up/down? Then, the story is written and published.

However, on a daily basis, unless there is a big and obvious story like the one above, the only true answers are these:

There were more buyers than sellers. (UP)
There were more sellers than buyers. (DOWN)

These answers, of course, aren't really news. They are more like axioms.

The answers for the recent swoon in the oil price include:

  1. Oil is purchased in dollars and the dollar has been rising which puts downward pressure on the oil price.
  2. Demand is declining in Asia and Europe which is leaving excess oil on the market driving down the price.
  3. Growing production from the United States is adding to world oil supplies and bringing the price down.
  4. Libyan production has rebounded sharply following the country's recent period of unrest.
  5. Saudi Arabia, the only OPEC producer with significant additional production capacity, is pumping more oil to punish other OPEC members with a low price, a move designed to restore discipline among members so that they will abide by future oil production quotas.
  6. Saudi Arabia is pumping more oil to bring the price down to aid the United States in its diplomatic objectives, pressuring Russia, the world largest oil producer.
  7. Saudi Arabia isn't trying to help the United States; the kingdom is actually trying to hurt the United States and restore the exporter's dominance in the oil market by crushing the U.S. tight oil boom which requires high prices to be profitable.
  8. No, Saudi Arabia is really trying to help the United States in its fight against ISIS by showing its support for the United States and Europe through lowering oil prices and by making the price that ISIS gets for the oil products it now controls lower. The lower price is also harder on Iran which requires high prices to sustain its government revenues.
  9. Saudi Arabia is simply trying to defend its market share in the face of waning demand by continuing to pump oil at current levels and offering discounts to customers.

Of course, the above answers aren't necessarily mutually exclusive. People and countries can have multiple objectives served by the same action. And, some or all of the above assessments could be wrong or at least of very little explanatory value.

Now, I'll weigh in. It seems entirely likely that the Saudis are being opportunistic. Like many oil exporters, they need high oil export revenues to pay for their government expenditures, much of which consists of food and fuel subsidies and social programs designed to keep the public docile. In the face of what looks like declining demand, rather than cut production to maintain prices as they have done in the past, they've decided to maintain their market share worldwide by cutting prices. This has the benefit of making much American tight oil production uneconomic, thus discouraging new drilling.

The Saudis know something very important about the U.S. tight oil drillers. Most of them are independents who are loaded with debt and don't have the financial wherewithal to weather a period of sustained prices below their cost of production. They will quickly reduce their drilling to only those prospects which seem as if they might be profitable at these new lower prices.

That will pave the way for sustained higher world prices later as growth in U.S. oil production comes to a halt. After the damage is done, the Saudis will try to bring the price back up.

It's always possible that the Saudi strategy will fail because what's really happening may be the first stages of a colossal economic and financial crash that will take the world economy into prolonged recession. That would bring the price of oil down to levels not seen in a decade where they might stay for a considerable period.

I'm not predicting that. And, in fact, none of what I've written may have any validity. Even though the Saudis have publicly stated that they are defending their market share, they may not be telling us exactly what their aims are. Saudi acquiescence to lower oil prices may simply be having consequences the Saudis don't intend, but can't avoid.

In truth, the whole issue of oil prices is too complex and too lacking in transparency to be discussed intelligently when it comes to short-term price movements. I am reminded of the tale of the blind men and the elephant of which the last stanza of a poetic version is quoted above.

But, as I say, price makes the story.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, October 12, 2014

World War III: It's here and energy is largely behind it

I've been advancing a thesis for several months with friends that World War III is now underway. It's just that it's not the war we thought it would be, that is, a confrontation between major powers with the possibility of a nuclear exchange. Instead, we are getting a set of low-intensity, on-again, off-again conflicts involving non-state actors (ISIS, Ukrainian rebels, Libyan insurgents) with confusing and in some cases nonexistent battle lines and rapidly shifting alliances such as the shift from fighting the Syrian regime to helping it indirectly by fighting ISIS, the regime's new foe.

There is at least one prominent person who seems to agree with me, the Pope. During a visit to a World War I memorial in Italy last month Pope Francis said: "Even today, after the second failure of another world war, perhaps one can speak of a third war, one fought piecemeal, with crimes, massacres, destruction."

In citing many well-known causes for war, he failed to specify the one that seems obvious in this case: the fight over energy resources. It can be no accident that the raging fights in Syria, Iraq, Libya, and the Ukraine all coincide with areas rich in energy resources or for which imported energy resources are at risk. There are other conflicts. But these are the ones that are transfixing the eyes of the world, and these are the ones in which major powers are taking sides and mounting major responses.

In Syria, Iraq and Libya, of course, it is oil and also natural gas that underlies the conflict. The ISIS forces in Syria and Iraq have seized oil refineries to power their advance. They and every fighting force in the world understands that oil is "liquid hegemony."

In the Ukraine natural gas supplies lurk in the background as rebels (supposedly with Russian help) fight to separate parts of eastern Ukraine from the country. The Russians who hold one of the largest reserves of natural gas in the world have threatened to cut off Ukraine, a large importer, this winter and to curtail supplies to Europe which depends on Russia for about 30 percent of its gas. The threat against Europe is in response to trade sanctions levied on Russia for its alleged role in helping Ukrainian insurgents.

Since summer, a friend and I have been periodically reviewing the World War III game board to assess whether the war is heating up or cooling down. The temperature changes as we have gauged them would look like a sine wave on a graph revealing no definitive trajectory. And, that is just the kind of war that I believe World War III will be--years of indecisive battles, diplomatic ploys, half-hearted engagement by major powers, and new, unexpected conflicts arising in unexpected places.

There are, of course, many other reasons for the conflicts I cite. But I wonder if the major powers would be much engaged in these conflicts if energy supplies were not at stake. So, the resource wars that are developing, especially those relating to energy, are not about direct conquest so much as concern about access to energy resources, or to put it more clearly, concern about possible interruptions to the flow of energy resources.

The low-intensity confrontation in the South China Sea between China and its neighbors, Vietnam and the Philippines, is the most prominent dispute over actual ownership of energy resources rather than the mere flow of those resources. But in the article cited, the Indians, while laying no claim to resources in that area, have said publicly that they are worried that shipping through the South China Sea could be affected if the conflict heats up. Again, we are back to concern about the flow of resources by countries not directly a party to the dispute--yet.

Traditional diplomacy among great powers does not seem to have been effective at resolving these conflicts. And, traditional military operations seem less than effective as well. Kurds in Syria report that U.S. airstrikes against ISIS are not working. This conflict and others like it which are characterized by poorly defined boundaries, shifting participants and unclear goals are confounding major powers and wreaking havoc on countries where these conflicts rage.

One of the most obvious strategies for responding to these conflicts--deep, rapid and permanent reductions in fossil fuel energy consumption through efficiency measures, conservation, and expansion of renewable energy--does not seem to be a prominent part of the policy mix. Such a reduction would not necessarily cause these conflicts to disappear; but they might become far less dangerous since the major powers would be less interested in them and thus less likely to make a miscalculation that would lead to a larger global conflict.

That is the danger that lies in my version of World War III--that it could morph into the kind of global conflict that risks nuclear confrontation between major powers--not because those powers would seek such an obviously insane outcome, but because they might miscalculate and by mistake push the conflict in this terrible direction.

It is not clear how this danger can be avoided given the current trajectory of world energy use. And, it is not clear how to get the world's leaders to focus on the obvious need to reduce not only fossil fuel energy use, but use of all the world's nonrenewable resources in order to forestall conflict.* That humans can have good lives without perpetual growth in the consumption of resources is simply not a possibility in the minds of most world leaders. And that means we should prepare for a very long World War III.

______________________________________________________________

*Such reductions imply the reorganization of our daily lives with an emphasis on conservation as an ingrained habit. They also imply significant changes to our infrastructure. But they do not necessarily mean that we cannot have the essential services that the current system provides while using far less in the way of inputs. The main impediments to moving rapidly down this road are vested interests such as the fossil fuel industry which profit from the current wildly inefficient and wasteful global system. I agree that this is no small obstacle.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, October 05, 2014

Irony alert: Yergin gets award named after peak oil realist Schlesinger

Where is George Orwell when you need him?

It is a supreme irony that cornucopian oil industry mouthpiece and consultant Daniel Yergin should receive America's first medal for energy security named after James Schlesinger, the first U.S. energy secretary. For those not familiar with the late Dr. Schlesinger's views, in a keynote speech he told attendees at a 2007 conference sponsored by the Association for the Study of Peak Oil (ASPO) the following:

Conceptually, the battle is over. The peakists have won. I was sitting next to an oil executive in New Mexico just recently, and he said to the audience, "Of course, I'm a peakist. We're all peakists. I just don't know when the peak comes." But that represents part of a conceptual victory. And, therefore to the peakists I say, you can declare victory. You are no longer the beleaguered, small minority of voices crying in the wilderness. You are now mainstream. You must learn to take yes for an answer and be gracious in victory.

This was not a one-off announcement from Schlesinger. Nor did he fail to understand the context in which he was speaking for he said it all over again in 2010 at a conference sponsored by the U.S. affiliate of ASPO:

Some five years ago in Italy, I concluded a talk by saying that like the inhabitants of Pompeii, who ignored the neighboring volcano Vesuvius until it detonated, the world ignores peak oil at its peril.

Naturally, Yergin completely ignored the contradiction between his views and Schlesinger's in accepting the award from the U.S. Department of Energy. But, it is difficult to understand just exactly how Yergin contributed to American energy security. This is the man who throughout the last decade kept predicting a flood of new oil that would send oil prices plummeting. That flood never appeared. Because of his vast influence, Yergin led a chorus of voices telling the United States and the world that there was nothing to worry about, that we didn't need to prepare for an era of constrained oil supplies and high oil prices. And, this is the foresight that has earned him a national award from the Energy Department for aiding our energy security?

In the news piece cited above Yergin behaves as if he foresaw the shale boom in oil and natural gas in the United States. But, back in 2003 in an article for "Foreign Affairs," he advocated a vast expansion of import capacity for liquefied natural gas (LNG) in the United States because "[i]n the next five years, it is likely to become a large gas importer; within ten years, it will overtake Japan as the world's largest." I'm not sure how this gem would have helped U.S. energy security either. To show that it was taken seriously, the Congressional Research Service in a report to Congress cited Yergin's article as evidence of the need to expand U.S. LNG import capacity.

Likewise, Yergin's advocacy for repealing a decades-old ban on U.S. crude oil exports--even as America imports about half its crude needs--seems entirely calculated to profit the industry (which can get higher prices for its light sweet crude abroad) rather than secure America's energy future.

So, on oil Yergin got it wrong, way wrong. On natural gas he got it wrong, 180 degrees wrong if we take his current position as a guide. Today, Yergin is touting the need to prepare to EXPORT U.S. natural gas to the rest of the world. This is no surprise since it is the position of his clients in the gas industry who would benefit from the higher prices available on the world market for gas. But, it seems quite obvious that exporting U.S.-produced natural gas would detract from, not enhance American energy security, a fact that is apparently lost on the Energy Department.

When oil was vaulting toward its highest price ever in mid-2008, Yergin felt he had to say something, and what he wrote for the "Financial Times" was essentially an explanation of why he believed he had so badly botched his previous calls. Suddenly, he was advocating energy efficiency and biofuels. He foresaw oil losing some of its dominance as transportation fuel. He also did an about-face on oil prices and for the very first time in the decade forecast RISING oil prices.

What we see then is a man who tries to save face when events show him to be embarrassingly wrong and who shills for the industry he represents the rest of the time. But all of the time the media and public treat him as if he were a disinterested party, only concerned about national and international well-being, an independent analyst who is in thrall to no one.

However, Yergin's company, Cambridge Energy Research Associates (later acquired by IHS, Inc.), has always had major oil companies as clients. Even so, pronouncements from Yergin are not worthless. Rather, they should be viewed as a barometer of thinking in the oil industry. And, anything Yergin says which seems contrary to or, at least, beyond the interests of that industry is meant to maintain his image as an independent analyst, an image that was never consistent with his actual consulting work.

Daniel Yergin is a talented storyteller. He won the Pulitzer for his history of oil entitled The Prize. At any given moment, however, it's important to understand what story he is telling and on whose behalf he is telling it. That he is little concerned with anyone's security except that of his clients is obvious from his previous public statements and his long career of carrying water for the oil and gas industry.

Given all this, perhaps the most puzzling thing about Daniel Yergin is his mystifying ability to inflict amnesia on people regarding his previous pronouncements and predictions. It is this ability, it seems, that has made it possible for him to thrive as a consultant (despite his abysmal forecasting record) and to be the first recipient of an award, the Schlesinger Medal for Energy Security, named after a man whose views on the future of oil are very much the opposite of Yergin's.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, September 21, 2014

Taking a short break--No post this week or next

I'm taking a short break this week and next and expect to post again on Sunday, October 5.

Sunday, September 14, 2014

Are we on the path of 'Limits to Growth'?

Probably the most important thing you need to know about the 1972 book entitled Limits to Growth is that it makes no predictions. Rather, the much maligned study provides scenarios for thinking about the future of resource use, pollution, population, food, and industrial production.

Limits to Growth detailed three scenarios originally, one of them called business-as-usual or BAU. Since then, countless scenarios have been run using the same model--called World3--and some of them are discussed in updates to the book, the most recent published in 2004. Many of the scenarios including BAU result in a collapse of industrial production and population some time this century.

What has surprised those reviewing the model used by Limits to Growth researchers is how closely reality has tracked the original BAU scenario. A recent review suggests that the signs of societal collapse may be around the corner based on the observed trends. But the components of that model have yet to turn in deleterious directions which would suggest trouble.

The review says that if those indicators follow the path suggested by the BAU scenario, we should begin to see the signs of decline by next year with per capita industrial production falling (but not necessarily total production). The knock-on effects in agriculture and services would result in a rise in the death rate from 2020 onward and a decline in world population starting in 2030.

No one can know whether such a scenario will unfold. There are many reasons to believe it will be delayed, perhaps considerably. One of the Limits to Growth authors believes that a collapse will occur only after 2050.

According to the review referenced above entitled "Is Global Collapse Imminent?" the thing to watch is the amount of capital we must spend to get resources:

Until the non-renewable resource base is reduced to about 50 per cent of the original or ultimate level,
the World3 model assumed only a small fraction (5 per cent) of capital is allocated to the resource sector, simulating access to easily obtained or high quality resources, as well as improvements in discovery and extraction technology. However, as resources drop below the 50 per cent level in the early part of the simulated 21st century and become harder to extract and process, the capital needed begins to increase.

As the authors point out, that's just what we've seen with oil. Bernstein Research has noted that major oil companies now say it is costing them $92 a barrel to produce new oil from the highest cost fields. That's way up from 10 years ago and indicates a rise of 14 percent PER YEAR from 2001. Oil is priced based on the marginal barrel of supply. The Saudis can produce oil from their fields for far cheaper, but you won't find them offering it at lower prices!

As capital costs mount for extracting other resources, we'll find that society doesn't have as much wealth left over for everything else including maintenance of the current infrastructure and industrial plant. And, that's what the authors of Limits to Growth are talking about. The economy doesn't grow because the infrastructure and industrial plant that growth depends on cannot be properly maintained.

As the review explains, the Limits to Growth authors also understand one very important thing that their critics don't. The review uses oil and natural gas to explain:

But the protagonists of oil and gas gluts have not understood a crucial point. They have essentially confused a stock with a flow. The key, as the LTG [Limits to Growth] modelling highlights, is the rate at which the resource can be supplied, i.e. the flow, and the associated requirements of machinery, energy and other inputs required to achieve that flow.

So, here is a key conclusion:

Oil and gas optimists note that extracting unconventional fuels is only economic above an oil price somewhere in the vicinity of US$70 per barrel. They readily acknowledge that the age of cheap oil is over, without apparently realising that expensive fuels are a sign of constraints on extraction rates and inputs needed. It is these constraints which lead to the collapse in the LTG modelling of the BAU scenario.

What's important about the Limits to Growth model is not any precise dates which we might get from running a scenario. What's important are the markers described by the researchers as harbingers of limits. Those harbingers have begun to appear.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, September 07, 2014

The more uncertain we are, the more careful we should be

It is a staple of apologists for the chemical and fossil fuel industries to say, "We have no proof that what you are talking about is dangerous." Let me restate that in probabilistic terms: "We are highly uncertain about the harm of what you are talking about."

When stated in probabilistic terms, uncertainty about harm becomes much more alarming. Nassim Nicholas Taleb has added to a working paper which I discussed last week entitled "The Precautionary Principle: Fragility and Black Swans from Policy Actions." As I suggested in last week's piece, climate change is an obvious candidate for the precautionary principle because climate change involves the risk of systemic ruin.

In his addendum Taleb explains that climate change deniers who criticize climate models for their uncertainty don't have the slightest clue what that implies. Rather than suggesting that we should ignore such models, the uncertainty suggests that we should be even more diligent about mitigating climate change since the high uncertainty means, probabilisticly speaking, that we have larger exposure to catastrophic outcomes.

Statistically, this is explained as an increase in the scale of the distribution which leads to an increase in the size of the tails associated with the probability curve. It means that the system we are dealing with is MORE fragile and thus more subject to catastrophic outcomes. Tails represent rare, but highly impactful events and in this case, a ruinous result. If rare becomes a lot less rare (fat tails), then the risk of ruin is greatly increased.

Let's look at other cases where the risks are likely to be greater than widely assumed. U.S. Department of Energy forecasts for energy supplies, particularly oil and natural gas, are treated as gospel by companies and governments across the globe. But the caveats that the Energy Department includes show that such forecasts are highly fragile, indeed, the entire oil and natural gas supply system is fragile in that it may not deliver what we want it to deliver. Here is a sample from an Energy Department discussion of forecast model uncertainty in reference to the presumed renaissance in U.S. oil and natural gas resulting from the exploitation of deep shale resources:

Estimates of technically recoverable tight/shale crude oil and natural gas resources are particularly uncertain and change over time as new information is gained through drilling, production, and technology experimentation. Over the last decade, as more tight/shale formations have gone into production, the estimate of technically recoverable tight oil and shale gas resources has increased. However, these increases in technically recoverable resources embody many assumptions that might not prove to be true over the long term and over the entire tight/shale formation. For example, these resource estimates assume that crude oil and natural gas production rates achieved in a limited portion of the formation are representative of the entire formation, even though neighboring well production rates can vary by as much as a factor of three within the same play. Moreover, the tight/shale formation can vary significantly across the petroleum basin with respect to depth, thickness, porosity, carbon content, pore pressure, clay content, thermal maturity, and water content. Additionally, technological improvements and innovations may allow development of crude oil and natural gas resources that have not been identified yet, and thus are not included in the Reference case.

It turns out that a forecast that many people assume is all-but-certain is admittedly quite shaky according to its creators. The forecast is fragile and subject to catastrophic failure with the possibility that actual production will be significantly below the forecast in the next few decades. A similar failure in current optimistic worldwide oil and natural gas forecasts would carry grave consequences if we were to make no preparations for a surprise on the downside.

But precisely because so many people believe these optimistic oil and natural gas forecasts to be facts rather than speculation, THEY MAKE NO PREPARATIONS FOR AN ALTERNATE AND POSSIBLY DISASTROUS OUTCOME! And, that is the problem with forecasts that are widely accepted and used for planning and policy purposes.

Keep in mind that a forecast is nothing but a model of something over time in the future. It isn't and cannot be based on actual knowledge of the future. Most models, particularly financial and resource models, really only extrapolate the past into the future which is actually a naive approach.

As for genetically modified crops, we are told that there is no evidence of harm from ingesting these crops. Long-term animal feeding studies have been made all-but-impossible by the companies that own the patents to the seeds. So, the lack of evidence is partly intentional. But LACK OF EVIDENCE IS NOT THE SAME AS LACK OF RISK. We did not have any evidence that the drug thalidomide, used to treat morning sickness in pregnant women, would cause deformities in human fetuses. But that didn't mean there was no risk. Wikipedia notes: "At the time of the drug's development, scientists did not believe any drug taken by a pregnant woman could pass across the placental barrier and harm the developing foetus." Why investigate risks to the fetus when you already believe there are none! Likewise, if you've already decided that genetically modified foods pose no greater risk than traditional foods (as the U.S. Food and Drug Administration has), you will not investigate the risks.

Finally, we see a don't-worry-be-happy attitude about the worldwide electrical grid. We have known for many years about the threat of an electromagnetic pulse or EMP. Such a pulse, if widespread enough, could bring down the electrical grid worldwide. Because so many processes in the modern world, especially information technology, must have continuous inputs of electricity, the result would indeed be a wipeout for modern civilization since there is currently no capability to repair such widespread damage. (For more on this, see my piece "Solar storms, EMP and the future of the grid.")

An EMP can be produced by a high-altitude explosion of a nuclear weapon. This is why much military hardware has been shielded from EMP. But it is the natural source of EMPs, the Sun, that should concern us more. If a solar storm similar to the Carrington Event, which hit Earth in 1859, were to occur today, we would very likely face ruin.

What we don't know is the frequency of such high-intensity storms hitting the Earth. And, it is our very ignorance which subjects us to heightened risk. Not knowing whether we might have thousands of years or just a few to prepare for such an event creates that risk. Once again, lack of evidence is not the same as lack of risk.

Our assumptions may be wrong. Our observations or data faulty. Our information woefully incomplete. Knowing this we would be wise to put large margins of safety into the systems we build and the practices we initiate. We would be wise to forego new practices that clearly run the risk of widespread and systemic ruin. Instead, we all too often close our eyes to risk; and, all too often the reason is immediate profit for a few. Meanwhile, the rest of us suffer the consequences.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.