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Printer Friendly Version

The Year 2002: The End of "Enough"

By Peter Goodchild

20 August, 2012

There have been various harbingers of the irreversible collapse of the world economy. In 1970 US domestic oil production went into permanent decline. Then global oil production per capita reached its peak in 1979 (BP, annual). Quite commonly the energy required to explore for, drill, and pump a barrel of oil has exceeded the energy gained from it (Gever, Kaufmann, & Skole, 1991). Finally, retail gasoline prices in the US, which had been fairly steady for decades, tripled from 2002 to 2008 (EIA, 2011, October 19).

On page 5 of "Austerity – Our 'New Normal'" (2012, August 8) Chris Clugston writes: "During the mid/late 20th century (1960-1999), a barrel of oil cost $19 on average; during the years prior to the Great Recession (2000-2008), the average price of a barrel of oil had increased to $47; and during the years immediately following the Great Recession (2009-2012), the average price of a barrel of oil had further increased to $75."

On page 11, he further explains: "The Great Recession was not simply another temporary economic downturn, from which we in the industrialized world will recover by 'stimulating' our national economies with borrowed money, printed money, and manipulated (artificially low) interest rates.

"The Great Recession was caused by a permanent ecological (geological) phenomenon -- ever-increasing global NNR [non-renewable natural-resource] scarcity. The Great Recession marked the permanent transition from our old normal of ever-increasing, NNR-enabled prosperity to our new normal of ever-increasing, geologically-imposed austerity."

It's that last sentence that seems to sum up the situation: increased annual production could no longer hold off a condition of permanent austerity.

I would add that his theory is vindicated by the prices of US gasoline. According to the EIA (2011, October 19), the prices in US dollars per gallon from 1991 to 2001 were fairly flat. Then from 2002 to 2008 they nearly tripled, although there was a dip after 2008:

2002 -- 1.319
2003 -- 1.509
2004 -- 1.810
2005 -- 2.402
2006 -- 2.705
2007 -- 2.885
2008 -- 3.803
2009 -- 2.467
2010 -- 2.563

The year of global peak oil per capita, 1979, seems an example of a date relevant to a statement by Clugston on page 4: "Owing to a fundamental shift in global NNR demand/supply dynamics that occurred during the past several decades, there is still 'more' in most cases, but there is no longer 'enough' in an increasing number of cases." As he says on page 10, the balance was finally upset "at the dawn of the new millennium." In a world of rapidly increasing population and rapidly decreasing resources, Clugston's analysis may provide the fundamental answer, not fiscal or monetary but geological, to the troublesome question: "What caused the Great Recession?"


BP. (Annual). Global statistical review of world energy. Retrieved from http://www.bp.com/statisticalreview

Clugston, C. O. (2012, August 8). Austerity ·our "new normal." Retrieved from: www.countercurrents.org/clugston190812.pdf

EIA. (2011, October 19). Total Energy. Table 5.24, Retail motor gasoline and on-highway diesel fuel prices, 1949-2010 (dollars per gallon). Retrieved from http://www.eia.gov/totalenergy/data/annual/showtext.cfm?t=ptb0524

Gever, J., Kaufmann, R., & Skole, D. (1991). Beyond oil: The threat to food and fuel in the coming decades. 3rd ed. Ed. C. Vorosmarty. Boulder, Colorado: University Press of Colorado.

Peter Goodchild is the author of Survival Skills of the North American Indians , published by Chicago Review Press. His email address is prjgoodchild[at] gmail.com



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