Oil – How much longer can we sustain our Lifestyle?

Sadad I. Al Husseini, a former head of exploration and production for the state-owned oil company ‘Saudi Aramco’ – made a discovery in the year 2000 through his own research where he concluded that many oil experts “were either misreading the global reserves and oil-production data or obfuscating it”.

Mainstream projections display a steadily rising output of oil which keeps up with global demand – Housseini’s calculations however show a decline in output as early from 2004. In addition, he asserted that this new declining level of production would stay at the same rate for at least 15 years – after which the output of conventional oil would merge into “a gradual but irreversible decline”.

The so called ‘optimistis’ dismiss Housseini’s results and that of other who have come to similar data on the grounds that the Earth still has so much oil yet to be discovered. And where previously a “peak” was predicted in history, new technology surfaced in the oil-field which kept oil output rising.
Nobody really knows ‘how much’ oil the Earth really holds. What we do know is that it is not an infinite reserve which will last us into eternity at the current rate that we are consuming it.
We are not finding oil as easily anymore as all the “elephants” (= very big, easy located oil fields) were discovered decades ago – and what remains of them currently is only a fraction.

The rate at which we are finding new oil fields is declining – and these oil fields are significantly smaller than the old ‘elephants’ everyone was used to. This means that in order to reach the same level of output as before, we have to find x-times more oil fields, which means x-times more oil rigs, which means x-times more expenses = everything gets x-times more expensive. So all we are seeing is decline, decline, decline – yet our consumption is just rising and rising and rising. This is a lethal combination.

 

Even the most ‘optimistic’ of oil professionals believe that if a peak is not in sight in the very near future – that we will hit peak oil before mid-century – which is honestly also not that far away. 

Oil is running out – whether we’re ‘optimists’ or ‘pessimists’ – it’s going to happen, it’s inevitable and 2020 seems to be the year all the data is pointing to.

So we still have time – for now – to change our lifestyle and take a different course will oil production and consumption. 

Let’s have a look at all the various products for which oil is needed:

One 42-gallon barrel of oil creates 19.4 gallons of gasoline. The rest (over half) is used to make things like:

Solvents	Diesel fuel	Motor Oil	Bearing Grease
Ink	Floor Wax	Ballpoint Pens	Football Cleats
Upholstery	Sweaters	Boats	Insecticides
Bicycle Tires	Sports Car Bodies	Nail Polish	Fishing lures
Dresses	Tires	Golf Bags	Perfumes
Cassettes	Dishwasher parts	Tool Boxes	Shoe Polish
Motorcycle Helmet	Caulking	Petroleum Jelly	Transparent Tape
CD Player	Faucet Washers	Antiseptics	Clothesline
Curtains	Food Preservatives	Basketballs	Soap
Vitamin Capsules	Antihistamines	Purses	Shoes
Dashboards	Cortisone	Deodorant	Footballs
Putty	Dyes	Panty Hose	Refrigerant
Percolators	Life Jackets	Rubbing Alcohol	Linings
Skis	TV Cabinets	Shag Rugs	Electrician's Tape
Tool Racks	Car Battery Cases	Epoxy	Paint
Mops	Slacks	Insect Repellent	Oil Filters
Umbrellas	Yarn	Fertilizers	Hair Coloring
Roofing	Toilet Seats	Fishing Rods	Lipstick
Denture Adhesive	Linoleum	Ice Cube Trays	Synthetic Rubber
Speakers	Plastic Wood	Electric Blankets	Glycerin
Tennis Rackets	Rubber Cement	Fishing Boots	Dice
Nylon Rope	Candles	Trash Bags	House Paint
Water Pipes	Hand Lotion	Roller Skates	Surf Boards
Shampoo	Wheels	Paint Rollers	Shower Curtains
Guitar Strings	Luggage	Aspirin	Safety Glasses
Antifreeze	Football Helmets	Awnings	Eyeglasses
Clothes	Toothbrushes	Ice Chests	Footballs
Combs	CD's & DVD's	Paint Brushes	Detergents
Vaporizers	Balloons	Sun Glasses	Tents
Heart Valves	Crayons	Parachutes	Telephones
Enamel	Pillows	Dishes	Cameras
Anesthetics	Artificial Turf	Artificial limbs	Bandages
Dentures	Model Cars	Folding Doors	Hair Curlers
Cold cream	Movie film	Soft Contact lenses	Drinking Cups
Fan Belts	Car Enamel	Shaving Cream	Ammonia
Refrigerators	Golf Balls	Toothpaste	Gasoline

 http://www.ranken-energy.com/Products%20from%20Petroleum.htm

Most of these products are your everyday consumption articles – many of them with which we can go without, or find more environment friendly alternatives.

Within an Equal Money System, we do not propose a drastic decrease in production and consumption of objects of consumerism from the starting point of preference or opinion. We propose drastic measures because we are facing a real life-threatening scenario.

Unless we change our lifestyles and let go of all the products designed for the purpose of consumerism only – or by redesigning and re-engineering products to a level of absolute effectiveness and perfection so that they will actually last so people aren’t forced to keep on re-buying the same items over and over which adds to our waste pile --- we are literally ripping apart the future of the children to come.

Putting a limit to our level of consumption is not a choice – it is a MUST – Equal Money is the Future.

Sources:

-          National Geographic Magazine, June 2008, World Oil Bust pp 86-91

-          http://www.ranken-energy.com/Products%20from%20Petroleum.htm

Our Economic System – Doomed to Face a Crisis from the Start?

Note: all economic terms marked with an asterix* are explained at the end of this blog.

At the heart of economic theory and activity lies the dilemma of human ‘unlimited wants and needs’ and ‘scarcity of resources’. Within this, the economist concludes that decisions require to be made in terms of what resources will be allocated to what unlimited wants and needs.

From this, the supply* and demand* model is derived whereby the price of a good or services ‘decides’ whether one will be able to acquire these goods and services or not. (Whereby demand is defined within the context of having a want or need while having the financial means to back up one’s want/need – i.e. whether you have sufficient the money to purchase the particular good or service you want/need). This way, the economy can limit and control the amount of people who can have access to a particular good or service according to the ‘scarcity’ of what it is they want.

Let me illustrate with a diagram how the ‘forces’ of supply and demand interact with each other, which in turn determines the affordability (which in essence is the same as accessibility) to particular goods and services:

 On the vertical Axis we can read the possible prices at which bread can be sold, at $ per unit.

On the horizontal Axis we can read the amount of bread which can be demanded at any particular price.
The red line/curve represents the ‘Supply’, whereby one can distinguish at which price a particular amount of bread will be supplied: At $1.00, the supplier is willing to supply only 1 bread (The self-interest of the supplier lies within the price of a particular product as the supplier wants to be able to reap as much profit from selling a single unit – thus when something is considered to be ‘cheap’, the supplier is not motivated to produce/sell a great quantity of this product/service, as it is considered to be non-profitable, and he could be doing/selling something else which will reap more profit – this is known as ‘opportunity cost*’ within the world of economics), at $2.00, the supplier is willing to supply 2 Breads -- at $3.00, the supplier is willing to provide 3 Breads – and at $4.00, the supplier is willing to supply 4 Breads.
The blue line/curve represents the ‘Demand’, whereby one can distinguish how many breads the consumer will buy at a particular price: When a bread costs $4.00, only 1 bread is demanded (the self-interest of the demander/consumer also lies within the price, but at the opposite pole of the supplier – the consumer wants to be able to get as many possible products/services per unit of money he owns – thus the ‘cheaper’ something is, the more will be demanded (and also the more people who will be able to afford it), and the more ‘expensive’ things get, lesser quantity will be demanded.), at $3.00, 2 breads are demanded – at $2.00, 3 breads are demanded – and at $1.00, 4 breads are demanded.
Where the demand and supply curve meet (the cross in the centre, indicated with the light blue dot) – is what is referred as the ‘equilibrium*’.  At this particular price (in this case $2.50) all the goods/services in question will be met with an equal amount of quantity demanded (in this case 2.5 breads) which implies that all the goods will be sold – there is no ‘excess supply*’, there is no ‘shortage in supply*’, there is no ‘excess demand*’ and also no ‘shortage in demand*’). This ‘equilibrium’ point will then be the point to which prices will be set.

From my perspective however, this is an unacceptable model to lead one’s economy by. Using the ‘Demand and Supply’ model – there will always be winners, and thus there will always be losers. There will always be people without access to resources, simply because they don’t have the money to do so. If we go back to the diagram, we indicate it as following:

Anyone with the a financial capacity which is unable to reach $2.50 for 2.5 loaves of bread (indicated by the grey area in the diagram) simply gets ‘eliminated’ and ‘removed’ from the Supply and Demand framework as their want/need now no longer falls within the category of ‘demand’. The system will not provide for these people – and this is how the economy manages and distributes its resources as a solution to everyone’s ‘unlimited wants and needs’ in the face of ‘limited resources’.

You see, the problem lies within the premise itself (people have unlimited wants and needs, but there are only so many available resources – what goes where/who gets what?). The economist immediately jumps to making a plan in alignment with this premise, where the only possible outcome is to satisfy ‘some’ beings their wants and needs, while keeping others from getting the same resources to satisfy their wants and needs -- whilst providing a ‘mathematical system’ to justify why resources are distributed in this particular manner (Supply and Demand).

Instead of just ‘going along’ with the statement and ‘trying to make it work’, they should have looked at the implications of the statement itself, and decide whether this statement in itself is an acceptable basis to build an economic system upon.

If we have a closer look at the statement (here it is again:)

“people have unlimited wants and needs, but there are only so many available resources – what goes where/who gets what?”

we are able to translate this statement into an equation, whereby we are trying to satisfy infinity (∞) with something which is finite (x) – this in itself is simply impossible. So why even try and make it work if you know that it is never going to be able to. Instead of conjuring up a ‘Supply and Demand’ system to manage this equation which is inherently out of balance, they should have changed the very equation itself before constructing a system of distribution based on something unmanageable.

What they ought to have done, is look at the variable of ‘unlimited wants and needs’ and firstly separate them into two separate components (instead of giving both equal value).
Once we distinguish between wants and needs, we can recognize that needs (unlike wants) are actually quite limited and defined. Needs include things we can name such as: housing, food, clothing, security, – etc. There is a limit to what can be defined as a ‘need’ whereby everything placed under the heading of ‘need’ is directly related to the achievability of a life of sustenance. In essence, the first system of distribution that should have been designed should have pertained to the satisfaction of everyone’s basic needs. Once the needs are sorted out, can one look at designing a system pertaining people’s wants.

Currently the system of Supply and Demand is the embodiment of ‘irresponsibility’ – because it decides to spent precious resources on people’s wants, knowing that this cannot be sustained, knowing that needs are not considered if it is not a ‘demand’.

It is fundamentally a system of discrimination between those who have money and those who have not (or very little). In my next blog I will be going deeper into this discrimination point and on what principles it was found, and how it currently is still being justified.

Glossary:

Supply: The supply of a product is the amount of the product that producers are willing and able to offer for sale at a certain price.

Law of Supply:
The law of supply states that if nothing else changes, suppliers will supply more goods and services to the market when these goods and services have higher prices, and will supply less if these goods and services have lower prices.

Demand:
A demand for a product or service exists when people want to buy it and also can buy it, in other words if they have the financial means for it (can afford it).

Law of Demand:
The law of demand states that, if nothing else changes, people will buy more of a product when the price of the product decreases, and will buy less of the product when the price of the product increases.

Excess Demand / Shortage of Supply:
This occurs when the quantity demanded of a good is greater than the quantity supplied of a good at that particular price.

Shortage of Demand / Excess Supply:

This occurs when the quantity supplied of a good is greater than the quantity demanded of a good at that particular price.

Opportunity Cost:
This is the cost of something you have to give up to get something else, that is, the value of alternative opportunities that have been given up.

Equilibrium:
The price at which the quantity demanded equals the quantity supplied.

Equal Money System - “what if I need so much physical help when I'm old that I can't pay with the equal money I get per month”

Equal Money System Q&A – “what if I need so much physical help when I'm old that I can't pay with the equal money I get per month”

Understand that within the Equal Money System, where you receive your basic income on a monthly basis for your basic needs – that this “Equal Money” does not imply “the same amount of money for everyone”. 

Equal Money implies that everyone has the same right to life and that everyone bears equal value as life. This does not mean that everyone is the same and that there is ‘one amount’ that will fit each and everyone. Basic needs will differ from person to person – from context to context – but are all equal in that they are basic needs. 

Hence, if you are an elder person within society and have “more needs” that require to be attended than for example an average healthy 24 year old – then this will be reflected within the Equal Money credits you receive as your basic income.

Not being able to pay for the attendance of your physical needs due to old age will therefore not be an existing concern.

In short: There is no fixed amount that each one will receive. Each one’s situation will be assessed individually and each one’s Equal Money Income will be a function of their individual basic needs.