A Frog in the Kettle Slowly Coming to a Boil

Fa l l 2007 Th e So c i a l Co n t r a c t America: A frog in the kettle slowly coming to a boil

By Ri c h a r d C. Du n c a n , PH.D. namely in 1974, 1979, 1998, 2000 and 2006. How- ever the first four are very brief. And three of them Abstract are sharp peaks: 1979, 1998 and 2000. But the he peak of world oil production has most recent maximum in 2006 is tellingly differ- possibly pased. The Olduvai Theory ent. Production increased rapidly in 2003 and 2004, looms large. Mexico is sweeping and then tapered off in 2005 and 2006. This was its people and problems into the followed by a de- United States. If we don’t solve these cline from January Tproblems ourselves, then Mother Nature will solve to June 2007. Hence them for us. The first two sections focus on the it’s likely that the work I’ve done over the past thirty years. The next maximum in 2006 two sections relate the insights of many diverse is dominated by the specialists about how Mexico’s problems are fast depletion of the oil becoming America’s problems. Are there the time still in the ground. In and the will or is it too late? other words, the increasing production Peak Oil from new wells can’t keep up with the decreasing The peak of world oil production (“Peak Oil” production from old wells. Hereon geology is des- for short) might already be a historical milestone tiny. for industrial civilization, as shown by the curve in The rates for Figure 1 follow: Oil production Figure 1. increased by 3.6 percent in 2003 and by 4.0 percent in 2004; next it slowed to 1.1 percent in 2005 and further to 0.3 percent in 2006. This was followed by a half-year decline at 0.4 percent from January through June 2007. (OGJ, 2007a) 2 Of course we’ll have to wait for several years to confirm (or reject) a long-term decline in world oil production. However the decline during the first half of 2007 could be a harbinger of things to come. Time will tell. 3 Geological reality and numerical clues about Peak Oil have been emerging for many years, but Figure 1: most were ignored or flatly rejected. Selections World oil production may have peaked in 2006. follow. “Commercial oil production from shovel-dug Figure 1. The first glimpse of Peak Oil? Shown wells was underway before 1833 in the Chechen are the annual world oil production data from 1970 Republic. Hence, if we assume it began in 1833 through 2006 (BP, 2007) followed by data for the and grew exponentially up to 1859, then world oil first half of 2007. (OGJ, 2007a) production grew exponentially at an average of 8.8 Note in Figure 1 that five maximums appear; percent annually during the 137-year interval from

3 Fa l l 2007 Th e So c i a l Co n t r a c t 1833 to 1970. Then production slowed to various I focused on the same curve as shown in Figure 1 linear rates of growth and decline from 1970 to (above) except that the data stopped at end 2006. 2003.” When I discovered this in 2004, I postulated The key clue was that the year-over-year changes that the end of exponential growth was the most in world oil production had gone ‘gracefully’ from reliable clue that Peak Oil was nearing. (Duncan, strong growth to near zero growth during the four- 2005-2006; Figure 1, curve 1, p. 138) year interval from 2003 to 2006. (Duncan, 2007a; “The peak of GAO, 2007). world oil discoveries Many of us recall occurred in 1965. that virtually everybody [Moreover] world oil in the U.S. was either production exceeded oblivious to, or else in world oil discoveries outrageous denial of, in 1981 and the gap is the possibility that our still growing. I suggest oil production might the downward trend peak anytime soon – of oil discoveries is until it happened in imposed by nature and 1970. it has nothing much “We live in an to do with any human age of converging cri- endeavor.” Campbell ses. The depletion of (2005, “Real Discovery freshwater supplies, Trend” the devastation of fish Walter Youngquist populations in the and I, in 1996 and 1997, used System Dynamics oceans, the destruction of topsoil and growing cli- and a graphic-heuristic method to make our first mate change are just a few of the issues we face. two forecasts of world oil. Both indicated that Peak Until this point, industrialized society has been able Oil was dangerously near. Our first forecast put the to deal with these issues by making use of cheap peak in 2005 and our second in 2007. Forecast #2 and widely available fossil fuels. … But the crutch (peak in 2007) was published in a scholarly journal. of cheap energy won’t always be around. In fact, 4 (Duncan & Youngquist, 1999) the consensus among retired and independent pe- Our first five forecasts put Peak Oil successively troleum geologists is that the crutch is about to be in 2005, 2007, 2006, 2005, and 2006. Thus we yanked out—and soon.” (McBay, 2006, p. vii) realized that 2006 was also a strong candidate for “With global oil production virtually stalled Peak Oil. So our Forecast #5 (peak in 2006) was in recent years, controversial predictions that the the focus of my invited talk at the Pardee Keynote world is fast approaching maximum petroleum out- Symposia: Geological Society of America, Summit put are looking a bit less controversial. … And if 2000. 5 (Duncan, 2000; GAO, 2007) [the pessimists] are right, many efforts right now Eventually we (Youngquist & Duncan) made may be the only way to avert a new Dark Age in an a series of nine forecasts of world oil production overheated world.” (Linden, 2007, p. 94) — updated annually as new data became available. “With Saudi production falling despite these Two of the series put Peak Oil in 2005; three put new [investments], the situation could be serious. … it in 2006, three others in 2007, and one in 2008. And if Saudi production continues to decline, even Hence our series of forecasts clearly converged on as world demand keeps growing, in a few years we 2006/2007. will look back at the summer of 2007 as the last of During a recent (2/1/07) talk I presented several the days when gasoline—even at $3.50 a gallon— clues that Peak Oil had possibly occurred in 2006. was still plentiful and cheap.” (Hamilton, 2007)

4 Fa l l 2007 Th e So c i a l Co n t r a c t Testing the Olduvai Theory rejected by the EIA data from1980 to 2004. Since my WW 31 talk, however, the EIA Ackerman’s Law: “We shall define as a ‘social published an e value for 2005 that is 2.1 percent steady state’ any society in which the quantity of higher than their value for 2004. (EIA, 2007) This energy per capita [e] … shows no appreciable compares to the OT e value for 2005 that is 1.4 change as a function of time. … On the other hand percent higher than my value for 2004. Hence the a society wherein … the average quantity of energy two curves still meld as one in 2005. expended per capita undergoes appreciable change But a more significant fact is that the U.S. e as a function of time is said to exhibit ‘social change.’ (material standard of living, ‘MSL’) in 2005 was … Upon this basis we can measure quantitatively about 58.0 boe/c compared to the world average the physical status of any given social system. … e of about 12.0 boe/c. It follows that the average The energy per capita [equals the] total amount 6 world e would have to increase by nearly four times [of energy] expended divided by the population. (four hundred percent) to raise it to the U.S. level in (Ackerman, 1932, p. 18- 2005. Hence the current 19) U.S. e would appear as a The Olduvai point far above the graph Theory (OT) states that of Figure 2. Details are the life expectancy of given in my previous industrial civilization is essay. (Duncan, 2007b) approximately 100 years. The beginning World energy production of terminal decline of per capita (e) defines it. industrial decline, as The duration of industrial postulated by the OT, Figure 2: civilization begins when will begin circa 2008- Test of OT data against EIA date: 1980-2004. e reaches 30 percent of 2012. its ‘stagnation value’ Of course I hope (plateau) and it ends 7 the Olduvai Theory is wrong. I have children and the year that e falls back to that value. (Duncan, grandchildren. It gives me nightmares. But wishful 2007b) thinking has no place in science or engineering. We can now (1) show that strong growth “The Second Half Dawns: (1) Marked by the (‘social change’) occurred in world society from decline of oil and gas – and all that depends on these 1945 to 1979; (2) next stagnation (a rough ‘social energy sources, and (2) Physical decline is gradual steady state’) set in from 1979 to 2005; and (3) but the perception of its relentless nature may come finally we test the Olduvai Theory against the U.S. as a shock. ‡ Stock market crash? ‡ More resource Energy Information Agency (EIA) data from 1980 wars? ‡ Social and political upheaval?” (Campbell, to 2004. The two datasets are graphed in Figure 2. 2005) Figure 2. A test of the OT against EIA data: “The Olduvai Gorge theory has much basis of 1980 to 2004. “MBtu/c” means million British fact. And it is very relevant.” (Youngquist, 2007, thermal units per person. “boe/c” means barrels of Aug 15) oil equivalent per person. “[The rapidly declining grades of world coal] The Olduvai data for e (curve 1) and the EIA parallel the situation in oil; where high quality data for e (curve 2) were purposely graphed on oil is easier to produce and easier to process into different vertical scales to see if they agree (i.e., higher quality end products. [Thus it] is exploited overlap) from 1980 to 2004. (Duncan, 2007b; EIA, before the lower quality oil (e.g. oil sands, heavy 2006) oil) is extensively produced. The sum of both As you see in Figure 2, the Olduvai curve melds situations is that the quality of both oil and coal, nicely with the EIA curve. Hence the OT cannot be

5 Fa l l 2007 Th e So c i a l Co n t r a c t the current two major world sources of energy, are inability to see ourselves from the perspective of an declining and are more costly to produce … These indifferent spectator or from the outside: “This self- facts have profound implication for the future of deceit, this fatal weakness of mankind, is the source the industrialized world and of society in general. of half the disorders of human life.” … Energy cost and availability largely determine How we manage this gift of oil, the finite physical living standards, which are almost certain energy bank account, known as the World’s Oil to decline in the coming decades.” (Youngquist, Reserves, will determine our future. Now is the GeoDestinies, 2nd Ed.) time to wake up to the fact that we need an oil age Reese R. Raybon, a finance and psychology end-game strategy!” (Raybon, 2007) graduate, recently described a highly relevant and Mexico: A failed nation very timely theory that—in my judgment—helps explain the great Facts and figures about Mexico resistance to Peak International Energy Outlook 2007: “The Oil and the Olduvai EIA’s new version of Mexico’s oil arrived today Theory. His words (IEO, 2007). After thoroughly going into it, it is follow. clear to me that they have already peaked in oil “People’s reproduction unless the deep water does great things luctance to accept or for them—which they cannot afford to try to get adopt the warnings apparently. And deep water may not even hold the of Olduvai Theory answer. is best explained by It is also clear that Pemex is the national ‘Cash basic human psy- Cow’ and the Mexican government is milking it chology. People for all they can—and more. Pemex has no money don’t want to hear to invest in oil development in a serious way.” bad news and in the (Youngquist, 2007) case of the Olduvai Crime-ridden, smog chocked: “Mexico’s Theory, bad news capital of nearly 20 million people exemplifies has some really bad chaos. More than 4 million drivers snarl its potholed consequences for the world, as we currently know streets each day. The city is notorious for ‘express it. kidnappings.’ In which victims are forced to drain When people hear news that’s in conflict with their bank accounts from automated tellers at a belief or an existing idea they develop an uncom- gunpoint.” (Associated Press, 2007) fortable feeling or a dissonance and when people Sabotage: “The Mexican government said have two or more thoughts which are inconsistent the coordinated attacks on oil and gas pipelines with each other they take on a state of cognitive … caused hundreds of million dollars in damages dissonance or clashing thoughts (Leon Festinger, … ‘At a time when Mexico’s oil production is 1957) and people in this state of mind will be moti- declining rapidly due to natural production declines vated to reduce these uncomfortable thoughts. in the country’s Cantarell field, the country can In the case of the Olduvai Theory and the ill afford to spend hundreds of millions of dollars negative future it presents, people will reduce on repairing pipelines from terrorist attacks, …’” their cognitive dissonance by either taking the (Fletcher, 2007) warnings to heart and plan for a future of reduced Insolvency: “Some 40 percent of [Mexico’s] oil availability or by simply ignoring it to a state of generating capacity is over 35 years old and is blissful ignorance. … due for replacement, … approximately $58 billion In Adam Smith’s words from The Theory of will be required over the period 2005-2014 … As Moral Sentiments (III.4.6) it may be due to our a consequence, management of the electric power

6 Fa l l 2007 Th e So c i a l Co n t r a c t system in Mexico bears implications for the overall 1.5 km. It is now the most polluted mega-city in the health and welfare of the energy sector in general.” world.” (Yip & Madl, 2000) (CEE, 2006) Illegal drugs: “According to a U.S. State Blackouts: “[Neither] the World Bank nor the Department report, Mexico is: the principal transit Mexican government is prepared to put up the tens country for 70 to 90 percent of cocaine entering of billions of dollars needed to upgrade and expand the United States; the supplier of 30 percent of the the power grid and distribution system. … Mexican heroin; and the largest outside source of marijuana energy policy in electric power will be noted for and methamphetamine.” (Nauman, 2006) blackouts, …” (Baker & Ramirez, 2002) CIA provides information: A concise summary Southern tsunami? — “If you thought the of Mexico—its people, population, poverty, out- influx of immigrants migration, illicit drug from Mexico was bad trade and much more— before, it’s about to is available online get much worse. … from the U.S. Central Cantarell has gone into Intelligence Agency. steep decline (at lest 15 (CIA, 2005) percent per year) which Labor dumping: means that Mexico’s “For nations like economy is going off Mexico, it’s far easier a cliff. Guess which to push jobless workers country is going to be abroad than to reform a the recipient of large sick economic system. numbers of Mexicans? There is little chance (Butler, 2007) of stemming migrant EIA lowers its inflows, as long as the forecast: “Projections Raw sewage pollutes a small tributary near Tijuana, countries supplying for Mexico’s crude Mexico. immigrants embrace oil production in the policies that effectively International Energy Outlook 2007 (IEO2007) are mandate labor dumping. … much lower than those in IEO2006. … In 2004, Today Mexico is the world’s largest labor Cantarell held more than 26 percent of Mexico’s dumper and the source of much of the contentious total remaining oil reserves and produced 2.1 U.S. immigration reform debate. … Like Yugoslavia, million barrels per day, accounting for more than 61 Mexico can’t produce enough jobs. percent of the country’s total crude oil output. Since Rather than modernize the economy, Mexico’s its peak production in 2004, Cantarell has been in politicians use Tito’s broom. Mexico’s 47 consulates decline.” (IEO, 2007) in the U.S., more than any other country has, Pemex plummets: Mexico listed its “proven” facilitate the sweeping by issuing passports and oil reserves at 48.5 billion barrels in 1996, but then offering assistance when Mexican immigrants run reduced them to 12.9 billion in 2006. (BP, 2007) into trouble. Thus 30 percent of Mexico’s labor Exports ditto: “Mexican crude exports to the force is working in the U.S., and in 2006 they sent United States are down 13 percent in the first four home $23 billion, 12 percent of Mexico’s exports.” months of this year.“ (Ellsworth & Bremer, 2007) (Hanke, 2007) Most polluted: “Mexico City’s air has gone Sinking city: “Mexico City’s latest urban ill from among the world’s cleanest to among the stems from its unique geography and history. Built dirtiest in the span of a generation. … The average on a drained lakebed after the Spanish destroyed visibility of some 100 km in 1940s is down to about the Venice-like city of Tenochtitlan, Mexico City

7 Fa l l 2007 Th e So c i a l Co n t r a c t has been sinking steadily for centuries, sinking the bivalence, which has been vividly described in Ra- equivalent of a three-story building since 1900.” spail’s chilling novel, the Camp of the Saints. Will (Schwartz, 2007) America, like invaded France in Raspail’s novel, Non-payment: “Water costs in Mexico City continue to be immobilized by ambivalence in the have escalated dramatically, and existing revenues face of a silent invasion? If we cannot muster the do not come close to paying the marginal costs will to protect ourselves we will find that we have … a majority of water bills go unpaid.” (National shared not wealth, but poverty with our invaders. Research Council, 1995) This fate, if it comes, will not be peculiarly Ameri- Not to be missed: The Nation- can; it is the fate that awaits any na- al Geographic abstract for its vid- tion that refuses to take the tragedy eo “Sewer Diver in Mexico City, of the commons seriously.” (Har- World’s Worst Job?” reads: din, 1980) It’s a dirty job, literally. But U.S. immobilized: “A friend Carlos Barrios, a former accountant of ours recently returned from Ger- in Mexico City, thinks he’s the one many, her daughter is married to to do it. a German. And I heard this before As workers across the United from a German young fellow in States take a day of rest this Labor Bolivia—the Turks are taking over Day, Barrios will likely be swim- Germany the way the Mexicans are ming the Mexican capital’s sew- taking over America: by the much ers. He’d be submerged in the toxic higher reproduction rate. At this brew of garbage, bacteria, excre- time there is nothing to stop this ment, and dead animals—even the process, so the trend will continue. occasional murder victim. The Germans are very concerned His job is to clear blockages about the increasing Turk minor- and ensure these contaminated wa- Author Jean Raspail’s novel ity— they don’t know what to do! ters don’t gush into city streets, sub- The Camp of the Saints vividly They have overreacted against the way tunnels, or people’s homes. describes the “silent invasion” spirit of the ‘40s and are immobi- Watch as his team responds to of Third World immigrants. lized.” (Anonymous, 2007) an emergency call, and try not to hold your breath Letter to a Senator: “You either do not under- [and nose] as Barrios dives into the bowels of one stand the problem [of overpopulation], or like most of the most polluted cities on Earth. public officials, chose not to recognize it. … The National Geographic’s 4 minute and 3 sec- The Rockefeller Commission in 1972 … said ond video is — Um, how to put it? — memorable. there was no advantage to the US having more peo- (YouTube, 2006) ple—population then 260 million. Now we have Finis: “Mexico is broken.” (Navarette, 2007) more than 300 million and more pour across our America: A failing nation borders every day. We do not have the resources now to take Facts and figures about America care of those who are here—much less more and Silent invasion: “This, I think is the most tell- more. The U.S. Census Bureau predicts 400 mil- ing point [economist Jan] Tinbergen has to make. lion by 2050. The Population Reference Bureau The process of takeover by uninvited guests has says 450 million. That is a disaster. Why is this indeed started, and there is little sign—yet—that not recognized and something done about it now?” Americans are going to resist. Technically, it is easy (Youngquist, 2007) to control immigration; politically it is not so easy. Infrastructure in disrepair: “[A] report un- All too many of the rich suffer from a moral am- derscores the broader disrepair of transit, power and

8 Fa l l 2007 Th e So c i a l Co n t r a c t water systems in the U.S. In 2005, the American light—it was a big red light.” (Simmons, 2004) Society of Civil engineers graded as ‘poor’ the con- The Mother of all grids: “The greatest tech- dition of the nation’s transit infrastructure as well nological achievement of the twentieth century, … as power grids, dams and systems for drinking wa- was not the Internet, the airplane, the artificial heart, ter and wastewater. The U.S. faces a $1.6 trillion the refrigerator or the assembly line. The greatest deficit in needed infrastructure spending through technology was one that powered all the others— 2010.” (Herrick, 2007) the electric grid. Fiscal anarchy: “What have Americans gained Electricity became America’s primary source from their nation’s mountain of debt? … Supply- of energy, powering GDP growth and an improving siders ignore the crucial distinction between, on standard of living. The grid performed so consis- the one hand, debt tently that electric- employed as an in- ity, like water and vestment vehicle to sewage treatment, enhance competi- came to be noticed tiveness and, on the only in its absence.“ other, debt used to (Karn, 2007) pay off current ex- E l e c t r i c i t y penses and to create theft: “Energy theft even more debt.” in the United States (Varzi, 2007) costs consumers bil- Dream ends: lions of dollars each “Part of the reason year. ... Across the people are spending United States ap- beyond their means proximately 80 per- is because they cent of the revenue are—in a way—wit- protection cases in- nessing the end of vestigated are resi- the American dream.” (Abdelal, 2007) dential. The other 20 percent are industrial, com- House of cards: “Only way to pay off all the mercial, and agricultural. However, 80 percent of debt—public and private—is by continued inflation. the dollars lost to energy thieves is lost at industrial, The 1945-dollar now has the purchasing power of commercial, and agricultural accounts. … Honest 9 cents. It is coming—clear signs as the dollar hits customers then pay for what the few dishonest cus- 15-year low against Pound—diving also against tomers are stealing.” (Seger, 2005) other currencies.” (Youngquist, 2007) Gold & spilling: “The price of gold is a report Lemmings: “USA going right down the tube! card on how a nation is managing its currency. It Bush is leading the charge. Total disaster! Will take hit $738 today. All paper money tends to zero in the USA decades to recover and I don’t think it really long run. Invest in natural resources. ever will. Stay in Iraq 10 years—or beyond —huge Mexico will keep spilling over people—and drain on our resources for nothing. We’re being bled they’ll keep coming, but their oil won’t. In 8 years white in many ways.” (Youngquist, 2007) they’re likely to be an oil importer. Blackout 2003: “More than 50 million people Mexico can’t make up for the loss of Cantarell. in Canada and the U.S. lost power for some several Thus there won’t be any extra money coming from days. Everything in society that we cherish ended Pemex. No more government subsidies to their bur- when the blackout came. If it wasn’t a fire drill for geoning population.” (Youngquist, 2007) how important energy is, I can’t imagine. But you Control has never worked: [The Kennedy- know what? People didn’t get it. It wasn’t a yellow Kyl bill, now in limbo, assumes that the U.S. fed-

9 Fa l l 2007 Th e So c i a l Co n t r a c t eral government will control the borders.] “The zone. We remain a hunted people. Now you think thing that is arousing so much fiery opposition to you have a destiny to fulfill in the land that histori- this bill—embittered cries of ‘amnesty’—is that we cally has been ours for forty thousand years. And have tried something like this before, and it didn’t we’re a new Mestizo nation. And they want us to work.… Pollster Scott Rasmussen reports that vot- discuss civil rights. Civil rights!! What law made by ers aren’t dead set against legalizing current ille- white men to oppress all of us of color, female and gals. But they must be convinced first that this time male. This is our homeland. We cannot—we will border control security is for real.” (Barone, 2007) not—and we must Gutierrez bio: “Professor Jose Angel Gutier- not be made il- rez is on the state of texas payroll at the University legal in our own of Texas—Arlington. He founded ‘la raza’—the homeland. We are group of mexicans openly dedicated to taking over not immigrants at least the southwest portion of the united states. that came from He notes that by the another country to differential birthrate of another country. Mexicans versus white We are migrants, Americans that the free to travel the Mexicans will inevita- length and breadth bly take over, and it is of the Americas because we belong here. We are only a ‘matter of time’ millions. We just have to survive. We have an aging before the Mexicans white America. They are not making babies. They have control. Whether are dying. It’s a matter of time. The explosion is in by this he means just our population.” (Gutierrez, 1995) the Southwest United Loss of sovereignty: “People use energy. More States or the whole people use more energy. We’re presently importing country is unclear.” more than 65 percent of our oil and about 16 per- (Youngquist, 2007, Jul cent of our natural gas. And since 2002 we’ve been Prof. Jose Angel Gutierrez 12) a net importer of agricultural products. The point is We are nice: “If that we already have more people than we can sup- the hot weather hasn’t got you steamed, this [items port with our resources. 16 & 17 below] will do it. The U.S. is the only industrial country with a Those people will kill us if necessary to take growing population. And 80 percent of the growth over the USA. But we have one on the state pay- is due to immigration and the rest to the babies of roll supported by the taxpayers of Texas. And we immigrants. Their weapon is their babies. meekly put up with these statements. If WE said we The U.S. now has 302 million people and were going to kill the Mexicans think of what an Mexico 107 million. Further we’re projected to uproar that would be. have 350 million and Mexico 125 million by 2025. But we are nice and civilized and so we submit We’re importing a lower standard of living by tak- to this sort of threat without a protest. Given pres- ing in immigrants. ent trends, they will indeed take over.” (Youngquist, Mexican drug cartels operate in every region 2007, Jul 12) of the U.S. This amounts to 23 billion dollars a year. Gringos must go: “We have got to eliminate And the Mexican government is helping the cartels. the gringo, and what I mean by that is if the worst A country that doesn’t control its borders has lost its comes to the worst, we have got to kill him.” (Guti- sovereignty and identity as a nation.” (Youngquist, errez, 1969) 2007, Sep 21) Reconquista: “The border remains a military The Problem: Too Many People: “Califor-

10 Fa l l 2007 Th e So c i a l Co n t r a c t nians know what’s happening to our state because else the peak is near. we’re forced to face the worsening consequences Hereon the depletion of the oil still in the on a daily basis: impossible traffic, unbreath- ground will dominate all human efforts to increase able air, endless urban sprawl, badly overcrowded production. schools, a dangerously depleted health care sys- U.S. EIA data from 1980 to 2005 cannot reject tem, loss of open space and habitat, depressed the Olduvai Theory. wages, heavier taxpayer burdens, and more. Olduvai Theory Postulate #3 states, “The ter- Too many people and too few resources. America’s minal decline of industrial civilization [i.e., e < 0.0] open-door policies have left California, and the na- will begin circa 2008-2012.” tion, with a continued and unsustainable flood of im- Mexican oil production peaked in 2004 and migration. And something must be done.” (CAPS, Mexico is likely to be an oil importer by 2015. 2007) Mexico’s collapse could send hundreds of Who wouldn’t walk? — In the U.S., according thousands of desperate people surging across our to the World Bank study, natural capital is $15,000 borders every day. per person, produced capital is Despite long-established $80,000 and intangible capital Federal laws, the U.S. borders is $418,000. And thus, consid- are still not secure and more ering common measure used to people pour across daily. compare countries, its annual Public officials refuse to purchasing power parity GDP recognize the problem of over- per capita is $43,800. By con- population. trast, oil-rich Mexico’s total nat- Our backs are against the ural capital per person is $8,500 wall; it may be too late to do ($6,000 due to oil), produced anything about it. capital is $19,000 and intangible The material standard of capita is $34,500 — a total of living (MSL) of the world can $62,000 per person. Yet its GDP never be raised to the current per capita is $10,700. When a U.S. level. But the U.S. level Mexican … walks across our can fall precipitously. border, they gain immediate ac- cess to intangible capital worth Acknowledgments $418,000 per person. Who Walter Youngquist has con- wouldn’t walk across the border tributed to this essay by a thor- in such circumstances? (Bailey, 2007) ough prepublication review. Michael T. Bunker has Mexico’s debt: Whose crisis? — “I have just sent crucial information via DVDs and URLs. Re- [1983] returned from a 2,000-mile trip to the Mexi- ese R. Raybon’s tutorial on ‘cognitive dissonance’ can heartland that zigzagged through the oil-rich is an eye-opener. Francis de Winter forcibly asks, stretch from Veracruz to Campeche Bay. The situa- “Why are taxpayers being mislead by their govern- tion is foreboding. An optimist might give the Mexi- ment?” Information from groups like CAPS, CUSP cans a fighting chance. A pessimist could only con- and ASPO has been most helpful. clude their plight is hopeless. Sitting somewhere between these extremes, I sound the alarm ‘Watch out, End Notes America!’ and hope for the best.” (Duncan, 1983) 1. After my presentation at Writers Workshop 31, Conclusions Denis McCormack commented: “I recall a radio science broadcast I heard a few years back that World oil production either peaked in 2006 or straightened out the non-jumping boiled frog myth.

11 Fa l l 2007 Th e So c i a l Co n t r a c t By experimentation, they proved that frogs do in Associated Press (2007). Mayor tries to transform fact jump out before it’s too late. And that should Mexico City. Jul 29. www.nytimes.com give us some hope! So I think your original subtitle, Bailey, R. (2007). The Secrets of Intangible ‘The perfect storm,’ was better. Not that the title Wealth. Wall Street Journal, Oct 1. http:// matters anyway.” investoolsfx.wordpress.com/2007/10/01/secret-of- 2. Since my presentation, new data show that the fall wealth-fx-education in world oil production accelerated to 0.5 percent Baker, G. & Ramirez, F. (2002). Power sector from January to July 2007. (OGJ, 2007b) reform—Blackouts before policy: Mexico typifies 3. Michael T. Bunker recently sent me a report by this pattern. IEEE Spectrum, 39 (5), 14-15. the German-based Energy Watch Group that states, Barone, M. (2007). Why enforcement matters. “Global oil production peaked in 2006 and will U.S. News & World Report, Jun 4, p. 30. now fall by 7 percent a year.” http://www.guardian. BP (2007). BP statistical review of world energy co.uk/oil/story/0,,2196435,00.html June. www.bp.com 4. We actually completed Forecast #2 in 1997, but it Butler, B. (2007). Letter from B. Butler to W. was not published until 1999. Youngquist. Jul 29. 5. I was told beforehand that as many as 1,000 Campbell, C. J. (2005). The end of the first half of people might attend my talk – but then only about the age of oil. ASPO Ireland. www.peakoil.ie 30 showed up. This was just another roadblock that CAPS (2007). Californians for population I’ve encountered in trying to convey a dissonant stabilization. www.capsweb.org idea. CEE (2006). Guide to electric power in Mexico. 6. Frederick L. Ackerman was a close friend of M. www.jsg.utexas.edu/news/rels/102006.html King Hubbert. CIA (2005). About.com:Geography. http:// 7. Back to the future: Imagine that you have just geography.about.com/library/cia/blcmexico.htm run a movie that shows the past 10,000 years of Duncan, R. C. (1983). Letter to editor regarding human history. Now stop the projector and run the the Feb 28 article “Why Pemex can’t pay Mexico’s movie backwards. That conveys a rough idea of the bills.” Business Week, Mar 28, p. 7. Olduvai future. Duncan, R. C. (2000, working with W. Youngquist). The peak of world oil production and The above article is based on a presentation to the road to the Olduvai Gorge. Pardee Keynote the Writers Workshop, in Washington, D.C., on Symposia, Geological Society of America, Summit September 30, 2007. 2000. Reno, NV. 13 p. Definitions Duncan, R. C. (2005-2006). The Olduvai Theory: Energy, population, and industrial civilization. “OT” is short for Olduvai Theory. Average Archives (Winter). www.thesocialcontract.com energy production per capita (e) is also a surrogate Duncan, R. C. (2007a). All signs point to Peak Oil. for the average material standard of living (MSL). Presented at Seattle Peak Oil Awareness (SPOA) “Gridloss” refers to a complete blackout that lasts meeting, Feb 1. for a week or more. ■ Duncan, R. C. (2007b). The Olduvai Theory: References Terminal decline imminent. Archives (Spring). www.thesocialcontract.com Abdelal, R. (2007). Debtor Nation: The rising risks Duncan, R. C. & Youngquist, W. (1999). of the American Dream, on a borrowed dime. J. Encircling the peak of world oil production. Shaw, Harvard Magazine, Jul-Aug, p. 43. Natural Resources Research, 8 (3), 219-232. Ackerman, F. L. (1932). The technologist looks at EIA (2006). World per capita total energy social phenomena. Introduction to Technocracy by consumption, 1980-present. www.eia.doe.gov H. Scott. New York, John Day Co. EIA (2007). World per capita total energy Anonymous (2007). Circulated letter. Jul 17. consumption, 1980-present. www.eia.doe.gov

12 Fa l l 2007 Th e So c i a l Co n t r a c t Ellsworth, B. & Bremer, C. (2007). Lack of Latin OGJ (2007a). Worldwide crude oil production. V. crude has U.S. on outlook. San Diego Union- 105.34, p. 80. Tribune, Jul 22. OGJ (2007b). Worldwide crude oil production. V. Fletcher, S. (2007). Market watch: Mexican 105.38, p. 80. attacks boost gas prices. www.ogj.com/articles/ Raybon, R. R. (2007). Why people disregard the print_screen.cfm?ARTICLE_ID=305626 Olduvai Theory. (Correspondence, Oct 17). GAO (2007). Crude oil: Uncertainty about future Schwartz, J. (2007). Mexico City finds itself with oil supply makes it important to develop a strategy that sinking feeling. Oregonian, Jul 22, p. A16. for addressing a peak and decline in oil production. Seger, K. A. (2005). Revenue protection: U.S. Government Accountability Office, GAO-07- Combating utility theft & fraud. PennWell Corp., 283, pp. 13 & 47. www.gao.gov Tulsa, OK. 215 p. Gutierrez, J. A. (1969). www.vdare.com/awall/ Simmons, M. (2004). The end of suburbia: Oil gutierrez.htm depletion and the collapse of the American dream. Gutierrez, J. A. (1995). Reconquista. Hear it live. www.endofsuburbia.com http://ccir.net/AUDIO/TakeoverOfAmericaCD/03. Varzi, H. (2007). A debt culture gone awry fuels mp3 anti-American feelings. Oregonian, Aug 19, p. E2. Hamilton, J. D. (2007). Running dry? The Atlantic, Yip, M. & Madl, P. (2000). Air pollution in Oct, p. 42-43. Mexico City. Project-Study Paper. www.sbg.ac.at/ Hanke, S. H. (2007). Labor dumping. Forbes, Sep ipk/avstudio/pierofun/mexico/air.htm 3, p. 146. Youngquist, W. (2007). (Correspondence to R. C. Hardin, G. (1980). An ecolate view of the human Duncan). predicament. www.lrainc.com/swtaboo/stalkers/ Youngquist, W. (2007, Jul 7). Letter to Oregon gh_ecol.html Senator Floyd Prozanski. Herrick, T. (2007). U.S. infrastructure found to be Youngquist, W. (2nd Ed., forthcoming). in disrepair. WSJ, May 9, p. B4. GeoDestinies: The inevitable control of Earth IEO (2007). Reassessing the potential for oil resources over nations and individuals. Portland, production in Mexico. International Energy OR: National Book Company. Outlook 2007, EIA, p. 33-35. YouTube (2006). Sewer Diver in Mexico City, Karn, R. (2007). Modernizing the electric grid: World’s Worst Job? Jul 28. http://www.youtube. Deregulation fostered neglect, but change is com/watch?v=0vTe3hQYXHw coming. Barron’s, Jul 9, p. 39. Linden, E. (2007). From peak oil to Dark Age? Business Week, Jun 25, p. 94. McBay, A. (2006). Peak oil survival: Preparation for life after gridcrash. Guilford, CN: The Lyons Press. 102 p. National Research Council (1995). Mexico City’s water supply. http://lanic.utexas.edu/la/Mexico/ water/book.html Nauman, T. (2006). The green line: Illegal drugs root of evil for conservation community. www2. eluniversal.com.mx/pls/impreso/noticia.html?id_ nota=33512&tabla=articulos Navarrette, R. (2007). Mexican president keeps bobbling the immigration ball. Eugene Register- Guard, Sep 10.