SANTA ROSA -- Navigating economic realities involving energy, debt and climate trends that will impact our lives and provide the context for local economic development in the North Bay, was the focus of Richard Heinberg’s presentation May 8 at the Glaser Center in Santa Rosa.
Sponsored by Share Exchange, the Threshold Foundation, Summit State Bank and 20 community partners, the event also included a panel discussion.
[caption id="attachment_74193" align="alignright" width="352"] Panelists (from left) Ann Hancock, Director of the Climate Protection Agency; Stacey Lawson, CEO, the Ygrene Energy Fund, and Marc Armstrong, Director of the Public Banking Institute[/caption]
Share Exchange founder Kelley Rajala was the moderator for the evening and introduced Mr. Heinberg and panelists Marc Armstrong, director of the Public Banking Institute; Ann Hancock, director of the Climate Protection Agency, and Stacey Lawson, chief executive officer of the Ygrene Energy Fund.
Mr. Heinberg is a senior fellow in residence at the Post Carbon Institute, based in Santa Rosa, and is widely regarded as one of the world's foremost Peak Oil educators. He is the author of 11 books such as The End of Growth: Adapting to Our New Economic Reality.
"Our nation has enjoyed over two centuries of excellent financial and economic growth. All of us grew up believing that the world’s supply of food, fuel and other resources was endless, and that limits to economic growth were unthinkable. After factoring in the rise in global population, Earth temperatures and pollution levels, and seeing how these trends interact with industrial output, scientists have concluded that the world is on an unsustainable course," Mr. Heinberg said.Increasing cost of energy
[caption id="attachment_74194" align="alignleft" width="245"] Richard Heinberg[/caption]
According to Mr. Heinberg, we are rapidly depleting cheap oil while some say we have 100 years of inexpensive natural gas and tar sands that could fill energy demand virtually forever.
However, prospectors today are going after lower-quality resources using slant drilling, cluster pad drilling and hydrofracturing techniques to glean oil from impermeable rocks. The problem is the high investment required to get it. Tar sands are another story.
"After the initial puff of fracturing oil is extracted, the rate of production falls rapidly, evidenced by a survey of some 63,000 shale, gas and oil wells over time," Mr. Heinberg said. "Seeking low-grade resources such as tar sands is like turning gold into lead -- with only a 5-to-1 return on the investment. It takes a lot of natural gas to cook tar sands. A much higher ROI is required to sustain an industrial society."
In the early 20th century, cheap oil fueled automated assembly lines as the U.S. made cars and other consumer products faster, leading to overproduction.
Advertising and planned obsolescence were part of industry’s response, but most people could still not afford a $900 Studebaker in 1910. This led to the creation of consumer credit, time payments and rising household debt.
In a paper prepared for the National Bureau of Economic Research by Robert Gordon, he said the 1980s were the turning point when the U.S. continued to see more innovation, but without economic growth.Rising public debt, rising GHG
The 1980s also saw household debt increase three times faster than overall GDP in a range of $6 to $8 trillion.
However, until 2008, government debt was not growing faster than private debt.