Game Over by Stephen Leeb, PhD
Stephen Leeb has written several books. His main gig is as a financial newsletter writer. His previous book with the catchy title "The coming Economic Collapse" focuses on oil. He discusses the concept of peak oil. Peak oil is commonly defined as the point at which production of oil has peaked. When a well is first developed production rapidly increases. Eventually it reaches maximum production, peak oil, after which production declines rapidly. If you aggregate all oil fields in the world you can speak of global peak oil. Since the global economy depends on cheap energy, oil is our largest source of cheap energy and considering that most everyone in the world hopes to improve their standard of living the thought of running out of oil is scary.
Game Over reviews this theme and extends it to other key commodities. Leeb estimates reserves for various commodities are very limited with reserves of indium running out in 4 years, lead, antimony and silver running out in less than 15 years and limits on most other basic materials. He points out that it takes steel to make drill rigs to dig for oil. Specialty metals are used for drill bits. Water is needed. All these things are interdependent on each other. For example it takes energy to pump water. A scarcity of any input increases the costs of producing the others.
It will take a massive investment to develop alternative sources of energy. If we don't make that investment now we will move beyond the point were we can solve the problem at all. Once we get to the point where it takes more than a barrel of oil to produce another barrel the game is over.
The concept of peak oil is controversial. Some people think we will continue to find plenty of oil. Others acknowledge the concept is plausible but the peak is far in the future. It seems to me that all the recent big oil discoveries are very deep under ground, very deep under the ocean or under miles of frozen ice in the Arctic. If you change the definition of peak oil slightly to mean the point of maximum inexpensive oil production we are at or very near the peak. So this is indeed a very serious problem.
People talk about solar and wind saving the day. Well they can help but they currently are an insignificant source of energy. We would have to vastly increase production each year for a few decades to solve the problem with solar and wind. This effort will greatly increase the consumption of materials needed to produce solar cells and wind towers. Regardless we must try. Even with a massive investment in wind and solar we will also need to build nuclear power plants as fast as possible. We also need to figure out how to burn coal in a way that doesn't turn the planet into an experimental green house.
Several folks have expressed surprised when I say alternatives are currently an insignificant source of energy. According to the REN21 as of 2006 total wind and solar production of energy amounts to less than 1% of total usage with the vast majority of that solar production being solar heating - photovoltaic energy makes up 0.04% of the total. Hydro is 3%, nuclear is 6%. Oil is 37%, coal is 25% and gas is 23%. Anyone who suggests we simply stop using fossil fuel or we simply just force people to buy solar cells has absolutely no idea of the scale and scope of the problem.
As an optimistic engineer I think the actuality of global climate change will galvanize the world into making the necessary investments vast though they will need to be. I also believe we will make stunning discoveries and inventions which will improve efficiency of both production and consumption of energy.
Another part of the solution is for the world population to decide to live simpler lives. If we can figure out how to have enjoyable and fulfilling lives while consuming less energy and materials that will be a great help. One controversial solution is to have fewer children. Clearly a slower rate of population growth will reduce the growth in demand. I believe all these things will happen. Demographics shows that as nations become wealthy the birth rate declines. The current financial crises (well timed for Leeb's argument) appears to focus people on enjoying simpler lives.
In the mean time Leeb suggests we can make money by purchasing stocks of companies that own natural resources or that help develop them. All commodities will get scarcer. Companies that own vast timberlands, know how to discover commodities, conserve energy, produce alternative energy or own mineral rights should do well if managed properly.
So if you want to scare yourself and get some recommendations on how to invest for disaster by all means buy and read Game Over. If you want to contribute to the solution of the problem then live a greener life. Eat less meat. Drive less. Waste less stuff and compost and recycle as much as possible. Relax and spend time chatting with your neighbors. I will develop some suggestions in other parts of this web site.
Game Over read May '09 - Recommended
This page written 5/14/09. CW
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