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Why Your World Is About to Get a Whole Lot Smaller: Oil and the End of Globalization
An internationally renowned energy expert has written a book essential for every American–a galvanizing account of how the rising price and diminishing availability of oil are going to radically change our lives. Why Your World Is About to Get a Whole Lot Smaller is a powerful and provocative book that explores what the new global economy will look like and what it will mean for all of us.
In a compelling and accessible style, Jeff Rubin reveals that despite the recent recessionary dip, oil prices will skyrocket again once the economy recovers. The fact is, worldwide oil reserves are disappearing for good. Consequently, the amount of food and other goods we get from abroad will be curtailed; long-distance driving will become a luxury and international travel rare. Globalization as we know it will reverse. The near future will be a time that, in its physical limits, may resemble the distant past.
But Why Your World Is About to Get a Whole Lot Smaller is a hopeful work about how we can benefit–personally, politically, and economically–from this new reality. American industries such as steel and agriculture, for instance, will be revitalized. As well, Rubin prescribes priorities for President Obama and other leaders, from imposing carbon tariffs that will increase competition and productivity, to investing in mass transit instead of car-clogged highways, to forging “green” alliances between labor and management that will be good for both business and the air we breathe.
Most passionately, Rubin recommends ways every citizen can secure this better life for himself, actions that will end our enslavement to chain-store taste and strengthen our communities and timeless human values.
In a compelling and accessible style, Jeff Rubin reveals that despite the recent recessionary dip, oil prices will skyrocket again once the economy recovers. The fact is, worldwide oil reserves are disappearing for good. Consequently, the amount of food and other goods we get from abroad will be curtailed; long-distance driving will become a luxury and international travel rare. Globalization as we know it will reverse. The near future will be a time that, in its physical limits, may resemble the distant past.
But Why Your World Is About to Get a Whole Lot Smaller is a hopeful work about how we can benefit–personally, politically, and economically–from this new reality. American industries such as steel and agriculture, for instance, will be revitalized. As well, Rubin prescribes priorities for President Obama and other leaders, from imposing carbon tariffs that will increase competition and productivity, to investing in mass transit instead of car-clogged highways, to forging “green” alliances between labor and management that will be good for both business and the air we breathe.
Most passionately, Rubin recommends ways every citizen can secure this better life for himself, actions that will end our enslavement to chain-store taste and strengthen our communities and timeless human values.
304 pages, Hardcover
First published January 1, 2009
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968 people want to read
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Jeff Rubin
15 books43 followersLibrarian Note: There is more than one author in the GoodReads database with this name. See this thread for more information.
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August 3, 2011Jeff Rubin GETS it. From the very beginning of our energy relationship with the hydrocarbon, we have consistently failed to account for the environmental and social impacts of burning it. Western countries in particular built consumer empires of fantasy fulfillment through conspicuous (and inefficient) consumption of oil, and through every periodic crisis of supply, we continue to believe the fiction that politics or technology was the bottleneck hampering its limitlessness.
More recently, we blame our current economic crisis on poor lending techniques, poor oversight, or exotic financial instruments. The real culprit is artificially cheap energy, Rubin holds, and he makes a solid case.
The rapid rise in oil prices during 2008 to over $140 per barrel was the first domino that toppled our economy. Oil prices are built into everything we consume, from food to roofing materials, and their run-up to stratospheric price levels created a vacuum of liquidity that merely exposed the risky bets and collateralized debt obligations for what they were: cheap money chasing better returns than those offered by Treasury Bonds, whose interest rates had dropped to near zero. And why was this money so cheap? because in the macroeconomic sense, it failed to properly account for the cost impacts of oil in myriad ways, not to mention the frothing demand from India and China, who are itching to consume after our example. Cheap oil allowed the globalizing activities of the consumer product manufacturers of the world to proceed apace, and cheap oil made China rich at our expense.
Through lack of regulation, lack of appropriate taxes on gasoline, lack of environmental oversight and lack of innovation by the Big Three U.S. automakers (Congressional lobbyists, take your bow), we have built a society as addicted to oil as the stereotypical provincial Russian male is to vodka, and the shaky economy is merely our delirium tremens. Though thoroughly documented by now, Rubin provides a sad and disgusting reminder of the complicity of General Motors in the deliberate destruction of many valuable trolley systems:
"In the United States [of the 1920s], 90 percent
of all trips were taken on electric-powered rail,
and only one in ten people owned a car. Many
people thought the auto market was saturated,
and GM was losing money. And so the carmakers
set about creating new markets. GM built cars
and buses, not trolleys, and thus had every
reason to lobby hard to see cities across North
America abandon electric rail. The process of
switching from trolleys to buses began in Detroit
in the 1930s but was interrupted by [the war],
when the need to conserve precious fuel
temporarily favored electric-powered streetcars
over buses again."
After the war, GM, Standard Oil of California and Firestone Tire & Rubber joined forces in a disguised effort to quicken the destruction of trolley lines:
"The three firms... created National City Lines
in 1936, which itself gave birth to another
subsidiary, Pacific City Lines... and yet another
company... called American City Lines. Their
purpose was to buy and tear up rail lines, which
they did with remarkable success. They targeted
over a thousand municipal electric rail systems,
and managed to motorize 90 percent of them..."
GM also used bribery and kickbacks to get its way, and though later indicted for criminal conspiracy for what they did, that could never restore the now-destroyed light rail systems. All of this led to the creation of the U.S. Interstate Highway system, of course (the committee overseeing which was chaired by Eisenhower buddy and GM Board of Directors member Lucius D. Clay), because millions of cars were purchased to fill the transportation void left by the vanquished light rail system. And THAT led to the culture of the automobile, to the sudden wealth of Middle Eastern countries, to the flight of the middle class to suburbs and exurbs (and to bigger, inefficient homes stuffed with stuff), and, of course, to all of the party favors that come with addiction to Arab oil (political instability, income inequality, and most recently, global terrorism). If you believe in Karma, you could say the past couple years have shown it to be quite the Bitch to General Motors.
But back to the main point. We have now built global economies, and we are all intricately dependent on them for low-cost food and cheap labor (so that we can have cheap consumer goods). The United States and China have effectively stalemated each other - they are totally in control of our Dollar, but we, WE are now the so-called "corporation that is too big to fail," which nonetheless WILL fail if the Chinese decide to dump their $US trillions in holdings for other commodities. Purportedly, they are using their state wealth to secure mineral and energy resources all over the world as a hedge against the falling Dollar, so they might thus soften the blow if they decide to cut and run.
How does Rubin make that case that oil supplies are, in fact, dwindling? By pointing out the obvious, along the lines of Willie Sutton's famous answer to the question "why do you rob banks?" Oil companies are now literally scraping the bottom of the barrel when they pursue oil in oceans many miles deep; when they consider molasses-like gunk such as is found in the Canadian tar sands in Alberta as a viable energy resource; when they risk life, limb and arbitrary Nationalization by setting up partnerships and joint ventures with unstable and corrupt governments such as those of Nigeria, Venezuela and Russia; and when even the most extreme of Earth's climates cannot dissuade them from exploring and drilling. All valid proof that all the "easy" fields are tapped out.
These and other salient points lay groundwork for Rubin's thesis: "oil is cheap only when we can't afford to consume it." The economy tanked, and the price of a barrel of oil dropped immediately, to reflect the lower demand. But with the deep recession, even at the lower price, fewer bought gas than at the same price years earlier. The impetus toward public transportation was aroused. So called "shovel ready projects" were discussed left and right. (Wouldn't we like to have back all those wonderful electric trolleys GM destroyed!) As soon as the economy stirs back to life, old habits of consumption resume and will drive gas prices significantly higher than $4.00/gallon, which will kill the recovery and throw us back into recession again. The only remedy is to keep gasoline prices high enough to force us once and for all through the painful transition back to public transportation, back to living small, back to having home and workplace in close proximity to each other. The oil economy was like a century long game of musical chairs, whereby the world got a chance to blend cultures and peoples, thanks to cheap long-distance travel, and now the music is ending and we have to more or less sit down where we are and fix ourselves firmly in place again, as humans have done for most of their time on Earth.
My only complaint about this book is that Rubin doesn't consider human population as a bubble along the lines of the credit bubble; for it can also be argued that along with everything else the oil economy made possible, it fostered a temporary blip during which we overfilled the Earth with people. Thanks to everything oil made possible in food production, medicine, clothing and so many other areas, life expectancy and general safety increased, perhaps more than they should have. Rubin does note that "as we get richer, we slowly but inevitably make the planet less habitable," but he doesn't, or perhaps cannot, bring himself to the point of making the very dark conclusion that perhaps five out of every six of us are essentially surplus.
But there's a potential silver lining, if we can adapt to a downsized role for oil in our lives. We will reclaim the skills and knowledge that used to inform the phrase "Yankee ingenuity" - we will all turn away from being broadly inept specialists in particular fields and go back to being broadly talented generalists. We will know our neighbors and act locally. We will have control over and trust in our food supply, because it will be grown locally and will have little distance to travel. Power will dissipate from central governments back to where it belongs - right where we live. We will again value the knowledge workers of the past - those who taught us self-sufficiency and thrift - rather than those who taught us how to "create nothing, but to own," in the words of Gordon Gecko.
Jeff Rubin has written an amazing book that challenges the whole linear notion of progress that is our burdensome inheritance from Western religious traditions. If we will start thinking more cyclically, we don't have to feel the world's impending retreat from globalization to be a form of regress.
More recently, we blame our current economic crisis on poor lending techniques, poor oversight, or exotic financial instruments. The real culprit is artificially cheap energy, Rubin holds, and he makes a solid case.
The rapid rise in oil prices during 2008 to over $140 per barrel was the first domino that toppled our economy. Oil prices are built into everything we consume, from food to roofing materials, and their run-up to stratospheric price levels created a vacuum of liquidity that merely exposed the risky bets and collateralized debt obligations for what they were: cheap money chasing better returns than those offered by Treasury Bonds, whose interest rates had dropped to near zero. And why was this money so cheap? because in the macroeconomic sense, it failed to properly account for the cost impacts of oil in myriad ways, not to mention the frothing demand from India and China, who are itching to consume after our example. Cheap oil allowed the globalizing activities of the consumer product manufacturers of the world to proceed apace, and cheap oil made China rich at our expense.
Through lack of regulation, lack of appropriate taxes on gasoline, lack of environmental oversight and lack of innovation by the Big Three U.S. automakers (Congressional lobbyists, take your bow), we have built a society as addicted to oil as the stereotypical provincial Russian male is to vodka, and the shaky economy is merely our delirium tremens. Though thoroughly documented by now, Rubin provides a sad and disgusting reminder of the complicity of General Motors in the deliberate destruction of many valuable trolley systems:
"In the United States [of the 1920s], 90 percent
of all trips were taken on electric-powered rail,
and only one in ten people owned a car. Many
people thought the auto market was saturated,
and GM was losing money. And so the carmakers
set about creating new markets. GM built cars
and buses, not trolleys, and thus had every
reason to lobby hard to see cities across North
America abandon electric rail. The process of
switching from trolleys to buses began in Detroit
in the 1930s but was interrupted by [the war],
when the need to conserve precious fuel
temporarily favored electric-powered streetcars
over buses again."
After the war, GM, Standard Oil of California and Firestone Tire & Rubber joined forces in a disguised effort to quicken the destruction of trolley lines:
"The three firms... created National City Lines
in 1936, which itself gave birth to another
subsidiary, Pacific City Lines... and yet another
company... called American City Lines. Their
purpose was to buy and tear up rail lines, which
they did with remarkable success. They targeted
over a thousand municipal electric rail systems,
and managed to motorize 90 percent of them..."
GM also used bribery and kickbacks to get its way, and though later indicted for criminal conspiracy for what they did, that could never restore the now-destroyed light rail systems. All of this led to the creation of the U.S. Interstate Highway system, of course (the committee overseeing which was chaired by Eisenhower buddy and GM Board of Directors member Lucius D. Clay), because millions of cars were purchased to fill the transportation void left by the vanquished light rail system. And THAT led to the culture of the automobile, to the sudden wealth of Middle Eastern countries, to the flight of the middle class to suburbs and exurbs (and to bigger, inefficient homes stuffed with stuff), and, of course, to all of the party favors that come with addiction to Arab oil (political instability, income inequality, and most recently, global terrorism). If you believe in Karma, you could say the past couple years have shown it to be quite the Bitch to General Motors.
But back to the main point. We have now built global economies, and we are all intricately dependent on them for low-cost food and cheap labor (so that we can have cheap consumer goods). The United States and China have effectively stalemated each other - they are totally in control of our Dollar, but we, WE are now the so-called "corporation that is too big to fail," which nonetheless WILL fail if the Chinese decide to dump their $US trillions in holdings for other commodities. Purportedly, they are using their state wealth to secure mineral and energy resources all over the world as a hedge against the falling Dollar, so they might thus soften the blow if they decide to cut and run.
How does Rubin make that case that oil supplies are, in fact, dwindling? By pointing out the obvious, along the lines of Willie Sutton's famous answer to the question "why do you rob banks?" Oil companies are now literally scraping the bottom of the barrel when they pursue oil in oceans many miles deep; when they consider molasses-like gunk such as is found in the Canadian tar sands in Alberta as a viable energy resource; when they risk life, limb and arbitrary Nationalization by setting up partnerships and joint ventures with unstable and corrupt governments such as those of Nigeria, Venezuela and Russia; and when even the most extreme of Earth's climates cannot dissuade them from exploring and drilling. All valid proof that all the "easy" fields are tapped out.
These and other salient points lay groundwork for Rubin's thesis: "oil is cheap only when we can't afford to consume it." The economy tanked, and the price of a barrel of oil dropped immediately, to reflect the lower demand. But with the deep recession, even at the lower price, fewer bought gas than at the same price years earlier. The impetus toward public transportation was aroused. So called "shovel ready projects" were discussed left and right. (Wouldn't we like to have back all those wonderful electric trolleys GM destroyed!) As soon as the economy stirs back to life, old habits of consumption resume and will drive gas prices significantly higher than $4.00/gallon, which will kill the recovery and throw us back into recession again. The only remedy is to keep gasoline prices high enough to force us once and for all through the painful transition back to public transportation, back to living small, back to having home and workplace in close proximity to each other. The oil economy was like a century long game of musical chairs, whereby the world got a chance to blend cultures and peoples, thanks to cheap long-distance travel, and now the music is ending and we have to more or less sit down where we are and fix ourselves firmly in place again, as humans have done for most of their time on Earth.
My only complaint about this book is that Rubin doesn't consider human population as a bubble along the lines of the credit bubble; for it can also be argued that along with everything else the oil economy made possible, it fostered a temporary blip during which we overfilled the Earth with people. Thanks to everything oil made possible in food production, medicine, clothing and so many other areas, life expectancy and general safety increased, perhaps more than they should have. Rubin does note that "as we get richer, we slowly but inevitably make the planet less habitable," but he doesn't, or perhaps cannot, bring himself to the point of making the very dark conclusion that perhaps five out of every six of us are essentially surplus.
But there's a potential silver lining, if we can adapt to a downsized role for oil in our lives. We will reclaim the skills and knowledge that used to inform the phrase "Yankee ingenuity" - we will all turn away from being broadly inept specialists in particular fields and go back to being broadly talented generalists. We will know our neighbors and act locally. We will have control over and trust in our food supply, because it will be grown locally and will have little distance to travel. Power will dissipate from central governments back to where it belongs - right where we live. We will again value the knowledge workers of the past - those who taught us self-sufficiency and thrift - rather than those who taught us how to "create nothing, but to own," in the words of Gordon Gecko.
Jeff Rubin has written an amazing book that challenges the whole linear notion of progress that is our burdensome inheritance from Western religious traditions. If we will start thinking more cyclically, we don't have to feel the world's impending retreat from globalization to be a form of regress.
June 22, 2009
Although this is yet another peak-oil book, this one isn't all doom and gloom. (At least, not for those in developed countries.) Two things I particularly liked:
1. The explanation of how rising oil prices are going to affect globalization. (Pretty much reverse it).
2. The explanation of how, from a purely selfish economic point of view, a carbon tax or cap-and-trade system would be advantageous for developed countries.
Both of these explanations were very clear, and followed logically from his assumptions. And they are pretty much the opposite of what I'm hearing elsewhere.
The author admits himself that there are many unknowns (future technological advances, etc.), so it's hard to predict exactly what will happen. But this book provides a framework, and a lot to think about.
1. The explanation of how rising oil prices are going to affect globalization. (Pretty much reverse it).
2. The explanation of how, from a purely selfish economic point of view, a carbon tax or cap-and-trade system would be advantageous for developed countries.
Both of these explanations were very clear, and followed logically from his assumptions. And they are pretty much the opposite of what I'm hearing elsewhere.
The author admits himself that there are many unknowns (future technological advances, etc.), so it's hard to predict exactly what will happen. But this book provides a framework, and a lot to think about.
June 11, 2021
I'm not sure if a whole book was necessary to get these points across, but given that it's a bit more than a decade old, this viewpoint may itself be a bit invalid.
It's certainly interesting to read at this point in time, after yet another huge drop in oil prices and the recent IEA report (hopefully) condemning all fossil fuel reserves to a future of remaining in the ground. It's kind of fun to note that it isn't the price of oil that's driving us to a smaller world, but the external environmental costs associated with it.
So one can't really lambast Rubin for being off-target. Even if oil prices themselves haven't (yet) re-localized much of the world's economies, his arguments and vision of what a smaller world will look like are still worth paying attention to.
It's certainly interesting to read at this point in time, after yet another huge drop in oil prices and the recent IEA report (hopefully) condemning all fossil fuel reserves to a future of remaining in the ground. It's kind of fun to note that it isn't the price of oil that's driving us to a smaller world, but the external environmental costs associated with it.
So one can't really lambast Rubin for being off-target. Even if oil prices themselves haven't (yet) re-localized much of the world's economies, his arguments and vision of what a smaller world will look like are still worth paying attention to.
May 20, 2024
Second time reading this book. Written in 2009, Jeff Rubin describes that higher oil prices will make globalization less attractive. In that case, individuals and countries will look for goods, foods produced locally and the attraction of driving your car will become less. While I think he brings up some valid points, I do feel the author thinks that higher oil prices will have a dramatic effect. Also, this book was written before Fracking became such a significant use in oil and gas extraction. We now have oil to last decades going forward.
“Back in 1925, when oil averaged $1.43 a barrel, the team with the best regular season record in the NHL was the Hamilton Tigers. The players went on strike before the playoffs began, on thing led to another, and when the next season started up, the team had been sold to a bootlegger south of the border and was playing in Madison Square Gardens as the re-named New York Americans.”
“I pose a question: will we decide to reinvest in a global economy and an infrastructure that keeps us bound to oil consumption for every dollar of wealth we produce? If we do, we are committing ourselves to a damaging cycle of recessions and recoveries that will soon lead to what I call “Peak GDP”. In other words, if you re-start the economy by pumping money into new ways to burn oil, don’t be surprised if the recovery itself is what triggers the next recession.”
“Enough oil drips out of cars and trucks and runs off the streets of a single city of 5 million people to fill an oil tanker each year.”
“One way to reduce the amount of oil we need to keep the economy running is to make your world smaller. And that is exactly what is going to happen.”
“Not only must we decouple our economy from oil but we must reengineer our lives to adapt to a world of growing energy scarcity. And that means learning to live using less energy.”
“It costs money to turn oil into gasoline, a process called “cracking”. Cracking involves heating crude oil and adding hydrogen in order to turn it into lighter, more valuable fuel like gasoline. The cost difference between what goes into a refinery (oil) and what comes out (Gasoline) is called the crack Spread.”
“There are 42 gallons of oil in a standard barrel.”
“The energy rate of return measures the energy you get back from the energy you expend. Obviously, the bigger the return, the better. The one common denominator amount all those nonconventional deposits like the Canadian tar sands that the world is not turning to is that you are going to have to burn a lot of energy to get that oil out of the ground. In other words, it has a poor or diminishing rate of return.”
“Roughly 90 percent of every new barrel of oil consumed in the world goes for transportation fuel like gasoline and diesel. Look at where care sales are booming, and chances are you will find where oil demand is booming as well.”
“Cheap energy makes the economy grow, and growing economy is greedy for more energy. When economic growth outstrips the rate of improvement in efficiency, the result is a very powerful rebound effect.”
“At the end of World War II, the city’s public transit provided over a million rides a day. A decade later, that same vital system was effectively dismantled, displaced by the onslaught of vehicles that were pouring out of its thriving factories. Today, Detroit is the largest city in the United States without some kind of light rail system.”
“Standard Oil of California and Firestone Tire and Rubber also had a lot at stake. The three first joined forces and created National City Lines in 1936, which itself gave birth to another subsidiary, Pacific City Lines, in 1938, and to yet another company in 1943, called American City Lines. Their purpose was to buy and tear up rail lines, which they did with remarkable success.”
“Ricardo’s idea of comparative advantage is very simple, and very persuasive. It goes something like this: if everybody does what they are best at, rather than what they are just good at, and does only that, everybody will be better off. You don’t have to be the very best at anything. In fact, you don’t even have to be better than your trading partner at anything. All that matters is that you produce what you are least worst at.”
“In cap-and-trade, the government sets an overall environmental target by imposing a limit on the total amount of emissions that can be released from the power industry. You don’t set up the rules ad incentives and hope they work – you determine just how much should be allowed to be emitted, then let the emitters figure out the most cost-effective way to hit the target. Those who don’t figure it out end up having to buy emissions credits from those who do. Then the market sets a price on those emissions by allowing utility companies to bid for the right to emit, and rewards companies that cut their emissions fastest and deepest.”
“If you want to stoke the economy, feed it a steady diet of cheap oil. And, if you want to choke it, give it expensive oil.”
“When the public buys treasury bonds, the broad supply of money in the economy has not changed. As a result of holding more treasury bonds, the public now holds less of some other asset in their portfolio, like corporate bonds, stocks, or even cash.”
“Today only the relatively affluent can afford to eat locally. This should tell us that food is going to be more expensive when it is no longer subsidized by cheap energy and global wages.”
“We now face the choice between propping up a collapsing way of life built around the car, designing and building systems better scaled to the future we face.”
“Maybe we will find we don’t have to commute sixty kilometers back and forth to work each day in an SUV. And maybe we wont buy our steel and our food from somewhere halfway around the world. And we just might find that the new, smaller world around the corner is a far better place to live that the big oily one we are about to leave behind.”
“Back in 1925, when oil averaged $1.43 a barrel, the team with the best regular season record in the NHL was the Hamilton Tigers. The players went on strike before the playoffs began, on thing led to another, and when the next season started up, the team had been sold to a bootlegger south of the border and was playing in Madison Square Gardens as the re-named New York Americans.”
“I pose a question: will we decide to reinvest in a global economy and an infrastructure that keeps us bound to oil consumption for every dollar of wealth we produce? If we do, we are committing ourselves to a damaging cycle of recessions and recoveries that will soon lead to what I call “Peak GDP”. In other words, if you re-start the economy by pumping money into new ways to burn oil, don’t be surprised if the recovery itself is what triggers the next recession.”
“Enough oil drips out of cars and trucks and runs off the streets of a single city of 5 million people to fill an oil tanker each year.”
“One way to reduce the amount of oil we need to keep the economy running is to make your world smaller. And that is exactly what is going to happen.”
“Not only must we decouple our economy from oil but we must reengineer our lives to adapt to a world of growing energy scarcity. And that means learning to live using less energy.”
“It costs money to turn oil into gasoline, a process called “cracking”. Cracking involves heating crude oil and adding hydrogen in order to turn it into lighter, more valuable fuel like gasoline. The cost difference between what goes into a refinery (oil) and what comes out (Gasoline) is called the crack Spread.”
“There are 42 gallons of oil in a standard barrel.”
“The energy rate of return measures the energy you get back from the energy you expend. Obviously, the bigger the return, the better. The one common denominator amount all those nonconventional deposits like the Canadian tar sands that the world is not turning to is that you are going to have to burn a lot of energy to get that oil out of the ground. In other words, it has a poor or diminishing rate of return.”
“Roughly 90 percent of every new barrel of oil consumed in the world goes for transportation fuel like gasoline and diesel. Look at where care sales are booming, and chances are you will find where oil demand is booming as well.”
“Cheap energy makes the economy grow, and growing economy is greedy for more energy. When economic growth outstrips the rate of improvement in efficiency, the result is a very powerful rebound effect.”
“At the end of World War II, the city’s public transit provided over a million rides a day. A decade later, that same vital system was effectively dismantled, displaced by the onslaught of vehicles that were pouring out of its thriving factories. Today, Detroit is the largest city in the United States without some kind of light rail system.”
“Standard Oil of California and Firestone Tire and Rubber also had a lot at stake. The three first joined forces and created National City Lines in 1936, which itself gave birth to another subsidiary, Pacific City Lines, in 1938, and to yet another company in 1943, called American City Lines. Their purpose was to buy and tear up rail lines, which they did with remarkable success.”
“Ricardo’s idea of comparative advantage is very simple, and very persuasive. It goes something like this: if everybody does what they are best at, rather than what they are just good at, and does only that, everybody will be better off. You don’t have to be the very best at anything. In fact, you don’t even have to be better than your trading partner at anything. All that matters is that you produce what you are least worst at.”
“In cap-and-trade, the government sets an overall environmental target by imposing a limit on the total amount of emissions that can be released from the power industry. You don’t set up the rules ad incentives and hope they work – you determine just how much should be allowed to be emitted, then let the emitters figure out the most cost-effective way to hit the target. Those who don’t figure it out end up having to buy emissions credits from those who do. Then the market sets a price on those emissions by allowing utility companies to bid for the right to emit, and rewards companies that cut their emissions fastest and deepest.”
“If you want to stoke the economy, feed it a steady diet of cheap oil. And, if you want to choke it, give it expensive oil.”
“When the public buys treasury bonds, the broad supply of money in the economy has not changed. As a result of holding more treasury bonds, the public now holds less of some other asset in their portfolio, like corporate bonds, stocks, or even cash.”
“Today only the relatively affluent can afford to eat locally. This should tell us that food is going to be more expensive when it is no longer subsidized by cheap energy and global wages.”
“We now face the choice between propping up a collapsing way of life built around the car, designing and building systems better scaled to the future we face.”
“Maybe we will find we don’t have to commute sixty kilometers back and forth to work each day in an SUV. And maybe we wont buy our steel and our food from somewhere halfway around the world. And we just might find that the new, smaller world around the corner is a far better place to live that the big oily one we are about to leave behind.”
September 24, 2010
This is a generally good book about oil depletion and its economic effects. I came to it already familiar with the concept of "peak oil," but I think it is a good basic explanation of what peak oil is and what its effects will be.
Rubin's take is that this is the end of globalization. Suddenly, cheap plastic toys from China are going to get a lot more expensive, as China's labor advantage (much less costly than American workers) is overwhelmed by the disadvantage of transporting it. We'll have to manufacture our own cheap plastic toys domestically. He believes that the Great Recession was not about the housing bubble, it was about the spike in oil prices due to flat supply in the face of increasing demand.
This is a surprisingly upbeat book. He talks about how quiet and unpolluted Belgrade was during the time of UN sanctions during the breakup of Yugoslavia. Oil was about $36 a gallon. See? Rising oil prices won't be all bad. Also, the end of globalization means that suddenly, American workers will have jobs again. Another interesting point is that since American industries produce relatively more efficiently per unit carbon, a global cap and trade scheme to limit fossil fuels would actually help America and make it more competitive.
His points are well taken, and he certainly doesn't have to convince me that peak oil is coming (or here). I would like to have heard him address the questions of debt and growth more thoroughly. He seems to think that with proper policies, we will still have an economy, just with more moderate growth, and not dependent on oil. The problem I see with that is (1) the whole economy is heavily dependent on oil, and energy transitions take decades and are very expensive, (2) we are depleting our supply of other stuff, too, like land, water, rare earth metals, and so forth. In short, we face (in my view) a general "limits to growth" problem and not merely an oil problem (and not even an oil + climate change problem).
We need to go in the direction of a "steady state economy" with an economy at a lower level. In the meantime, all our debt will push us inevitably towards a depression. Peak oil is basically bad news for the economy, and we need to face it and the reality of a smaller economy that does not grow at all. In the meantime, though, Rubin's slightly more cheery book is a good way to get started on investigating these problems.
Rubin's take is that this is the end of globalization. Suddenly, cheap plastic toys from China are going to get a lot more expensive, as China's labor advantage (much less costly than American workers) is overwhelmed by the disadvantage of transporting it. We'll have to manufacture our own cheap plastic toys domestically. He believes that the Great Recession was not about the housing bubble, it was about the spike in oil prices due to flat supply in the face of increasing demand.
This is a surprisingly upbeat book. He talks about how quiet and unpolluted Belgrade was during the time of UN sanctions during the breakup of Yugoslavia. Oil was about $36 a gallon. See? Rising oil prices won't be all bad. Also, the end of globalization means that suddenly, American workers will have jobs again. Another interesting point is that since American industries produce relatively more efficiently per unit carbon, a global cap and trade scheme to limit fossil fuels would actually help America and make it more competitive.
His points are well taken, and he certainly doesn't have to convince me that peak oil is coming (or here). I would like to have heard him address the questions of debt and growth more thoroughly. He seems to think that with proper policies, we will still have an economy, just with more moderate growth, and not dependent on oil. The problem I see with that is (1) the whole economy is heavily dependent on oil, and energy transitions take decades and are very expensive, (2) we are depleting our supply of other stuff, too, like land, water, rare earth metals, and so forth. In short, we face (in my view) a general "limits to growth" problem and not merely an oil problem (and not even an oil + climate change problem).
We need to go in the direction of a "steady state economy" with an economy at a lower level. In the meantime, all our debt will push us inevitably towards a depression. Peak oil is basically bad news for the economy, and we need to face it and the reality of a smaller economy that does not grow at all. In the meantime, though, Rubin's slightly more cheery book is a good way to get started on investigating these problems.
August 11, 2014
I read this only after reading his later book 'The End of Growth', where he continued to expound on the ideas and themes in this earlier work providing updates since then. Though I was already familiar with the premise of oil scarcity resulting in the reversal of globalization, I did again enjoy Rubin's style of writing - frank and candid, with an occasional flair for ironic humor. I should say however, that this book provides a more well rounded and comprehensive introduction to the underpinnings of the fossil fuel industry and how it all relates to global financial conditions, explaining clearly the link between cheap oil, low inflation, cheap credit and globalization of manufacturing and farming. There were a few in depth discussions on topics I felt were tangential to the main theme, for e.g. the history of electric cars, the failure of the biofuel saga in the USA, the argument made to set a price for carbon emissions. Topics that could've been more tightly edited out to give more impact to the book. The author also ends with a note of optimism for a future of less oil dependency, which I felt was a tad based on faith in humanity than anything concrete. He avoids the issue of a much reduced carrying capacity of the planet when the era of cheap oil ends. Sure we shall all be forced to become more local in our economic activities and lifestyles, but how much food can we produce without the fossil fuel energy subsidies i.e. artificial fertilizers and farm machinery that we have been relying on? Can 7,8 or 9 billion people all live locally when the global supply network goes down?
July 5, 2012
I'd rather give this a, wow, I'm scared to death of the world my child is going to inherit from the past few generations of me-me's who have systemically raped and pillaged this planet for a quick buck star rating. Come on people, this is ridiculous, we've globalized ourselves to death. While this is a great read, it is also depressing. I can see why so many people stick their heads in the sand, enable corporations and elect governments that make it easy for them to take trips, drive here, there and everywhere every two seconds, fill up their lives with stuff, have iPhones, tablets, huge houses, mocha lattes frappawhatevers; ignoring that corporations and governments are destroying our planet for fast, cool billions. Cheap oil seduced billions into believing just because you could that you should. Think about it, they can ship anything anywhere, go to the stars, extract whatever from the earth, connect billions of people in an instant, but they can't cure cancer? They can't fuel cars and homes with green fuel? We can't elect a government that doesn't lie, steal and cheat? Really? Of course we can, but all these things keep the pockets of corporations full and the masses distracted. Wake up. Local real food, local manufacturing, green technology, cures for illnesses, proper governments, etc., despite the lies you've been fed, it's all possible. Pull your head out of your, er, sand and quit saying you love your children and prove it.
February 23, 2011
An accessible and often engaging introduction for the layperson (and I am definitely a layperson on these topics) on the concept of "peak oil" and the effects that diminishing oil supplies will have on the world we live in, where cheap transportation costs have enabled a large degree of globalization. There are some interesting tangents in the book, as well - a few pages on coffee were particularly interesting. I had no idea that Lloyd's of London could trace its history back to a coffeehouse named Lloyd's, for example.
An added bonus for me - this book was written by a Canadian, so Canada was well represented in the examples he used. Not just the competing economic/energy potential versus environmental impact of the Albertan oil sands, which were certainly germane to the book, but also in certain cultural comparisons. The swallowing up of farmland around Toronto by urban sprawl makes the memory of farms just outside the city as "hazy a memory as the Toronto Maple Leafs' last Stanley Cup parade." (1967, by the way. Go Leafs!) By no means do I mean to imply that the rest of the world is ignored. The world's oil-producing nations and its oil guzzlers are all well represented. I just enjoy the occasional shout out to Canada, eh.
An added bonus for me - this book was written by a Canadian, so Canada was well represented in the examples he used. Not just the competing economic/energy potential versus environmental impact of the Albertan oil sands, which were certainly germane to the book, but also in certain cultural comparisons. The swallowing up of farmland around Toronto by urban sprawl makes the memory of farms just outside the city as "hazy a memory as the Toronto Maple Leafs' last Stanley Cup parade." (1967, by the way. Go Leafs!) By no means do I mean to imply that the rest of the world is ignored. The world's oil-producing nations and its oil guzzlers are all well represented. I just enjoy the occasional shout out to Canada, eh.
October 26, 2021
This was a thought-provoking book that left me unsettled. I've read books on this topic before, but Jeff Rubin explains everything really well in laymen's terms, and I know when he discusses the economy, he knows what he's talking about. I am looking at things in my life differently, and suddenly I'm aware of HOW MUCH PETROLEUM is in every aspect of my life. It's crazy. How did it get this saturated so quickly? How did we let this happen? It's got to stop. And there's no really viable alternative at this point. And I want to sell everything and move to a log cabin in the bush. Except I've done that before and it didn't work out so well. But I've got to get out of the city and out of the mainstream economy. This book was written prior to Covid, so I'd really like to see how the stats he provided look right now. And I think I'm going to re-read this again, like, immediately. So much to absorb. Can you tell my mind is sort of blown?
March 27, 2012
Peak Oil. If you have not heard the term, look it up and absorb all the information you can find, because in the next few decades, Peak Oil is going to drastically change the world as we know it.
The thing I truly enjoyed about this book is that the author does not take a "Gloom & Doom" outlook on Peak Oil and the end of Globalization. According to him, as oil prices raise to insane levels, it will be the exact inspiration that we have needed to return to simple living and self-sufficiency as a nation.
I find books on economic crash and peak oil very interesting, and it was nice to finally read one with a happy ending LOL. Hopefully our nation will be fortunate enough to have the same happy ending as Jeff Rubin describes.
The thing I truly enjoyed about this book is that the author does not take a "Gloom & Doom" outlook on Peak Oil and the end of Globalization. According to him, as oil prices raise to insane levels, it will be the exact inspiration that we have needed to return to simple living and self-sufficiency as a nation.
I find books on economic crash and peak oil very interesting, and it was nice to finally read one with a happy ending LOL. Hopefully our nation will be fortunate enough to have the same happy ending as Jeff Rubin describes.
August 10, 2011
We’ve reached peak oil, and it will run out. The world will never be the same. Sound bad… not really. Sure, the error of excess will be over, no more cheap Chinese crap. No more cheap food from across the planet. Gas will cost way more, and everything will inflate. The upside will be the return to the past. Tighter communities. Less pollution. More jobs resulting from the cost benefit of local work over transportation. This book is a must read. Amazingly concise and extremely well written, even a lay person will grasp all of the details clearly.
September 6, 2013
A must-read for sure. I found this book to be both engaging and easy to read (which is always a positive for non-fiction!). It is a few years out of date, published in 2009, but I'm sure Rubin is/was spot on with his assessments and predictions for the economy. I'm even more convinced now that we as a society need to stop twiddling our thumbs, wake up, and extricate ourselves from oil and other fossil fuels.
July 28, 2020
This book is structured as a prediction from the viewpoint of 2008, and in that respect it falls flat. Many of the events Rubin foretold have not yet come to pass. However, as an explanation of the global importance of oil, and as a guide to how the society can respond to the growing carbon crisis through altered behaviours, it's enlightening
August 23, 2020
I didn't expect a book about oil production to be this interesting, but his somewhat folksy tone and the vaguely apocalyptic mood kept me reading, despite the fact that his predictions haven't at all come true.... However, he is correct that oil is a finite resource, and I appreciate the Canadian and European perspective.
February 23, 2021
Not great with predictions but engagingly written and with a good explanation of the macro economics of oil.
January 15, 2023
I would categorize “Your World is about to get a Whole Lot Smaller” as a fear-mongering – doomsday-parading book, which is not all bad. This book was published not long after the ’08 crisis, hence a lot of the information and prediction of the future is of where we are now in time and unfortunately, did not stand the test of time. Nevertheless, the polemic posed in the book on the exigency of energy in powering the economy remains undisputed. A reductive premise of Rubin’s argument goes as follows;
1. Production is powered by oil
2. Cheap oil means cheaper means of production, thus creating an economy where countries leverage on competitive advantage by building factories in such places
3. Finished goods are subsequently transported around the world, and competitive advantage will remain true with the added transportation cost so long as oil remains cheap
With the resurgence of awareness of greenhouse gas emissions perforating in “developed” countries which are largely in the west, oil consumption becomes exorbitant, as not only does emitting greenhouse gasses come at a cost but also due to the demand outstripping supply. However, a different narrative is played out in oil-producing countries (referring not specifically to OPEC), where the commodity is heavily subsidized, thus creating a deceptive market that mortgages future comforts for today. For instance, cheap oil encourages prodigious oil demand, which translates into less oil supply that enters the real market, consequently creating a domino effect of increasing oil prices.
The author posits that in the long run, the ultimate repercussion would be a smaller world (non-globalized) where local goods triumph over the market as the cost of globalization becomes untenable. In other words, consumption becomes local first! It would also be remiss to not mention the book’s section dedicated to explaining how efficiency has only led to an increase in consumption, thus nullifying any positive impact, and perhaps can even be more egregious due to said increased consumption. The argument seems specious as the author fails to account for the potential and advancement in clean technology. What the author espouses as a writ large outcome, has yet to show any reifying repercussions leading to so. Given that the book was published quite a while ago, many of the more doomsday-like predictions have, fortunately, not come true.
It would be spurious to say that the author does not believe in the outcomes of capitalism or the force of the invisible hand. Rather, the author places the fallacy on the failure to execute as market intervention, couched under the guise of putting one’s nation first, inhibits the natural course of action dictated by the proverbial hand. The author holds that the tenets of capitalism still reign, as a smaller world outcome would be the outcome of the invisible hand course correcting itself.
1. Production is powered by oil
2. Cheap oil means cheaper means of production, thus creating an economy where countries leverage on competitive advantage by building factories in such places
3. Finished goods are subsequently transported around the world, and competitive advantage will remain true with the added transportation cost so long as oil remains cheap
With the resurgence of awareness of greenhouse gas emissions perforating in “developed” countries which are largely in the west, oil consumption becomes exorbitant, as not only does emitting greenhouse gasses come at a cost but also due to the demand outstripping supply. However, a different narrative is played out in oil-producing countries (referring not specifically to OPEC), where the commodity is heavily subsidized, thus creating a deceptive market that mortgages future comforts for today. For instance, cheap oil encourages prodigious oil demand, which translates into less oil supply that enters the real market, consequently creating a domino effect of increasing oil prices.
The author posits that in the long run, the ultimate repercussion would be a smaller world (non-globalized) where local goods triumph over the market as the cost of globalization becomes untenable. In other words, consumption becomes local first! It would also be remiss to not mention the book’s section dedicated to explaining how efficiency has only led to an increase in consumption, thus nullifying any positive impact, and perhaps can even be more egregious due to said increased consumption. The argument seems specious as the author fails to account for the potential and advancement in clean technology. What the author espouses as a writ large outcome, has yet to show any reifying repercussions leading to so. Given that the book was published quite a while ago, many of the more doomsday-like predictions have, fortunately, not come true.
It would be spurious to say that the author does not believe in the outcomes of capitalism or the force of the invisible hand. Rather, the author places the fallacy on the failure to execute as market intervention, couched under the guise of putting one’s nation first, inhibits the natural course of action dictated by the proverbial hand. The author holds that the tenets of capitalism still reign, as a smaller world outcome would be the outcome of the invisible hand course correcting itself.
July 4, 2019
¿POR QUÉ EL MUNDO ESTÁ A PUNTO DE HACERSE MÁS PEQUEÑO?
JEFF RUBIN
Es el economista más reputado de los mercados financieros de Canadá, Estados Unidos e Inglaterra. Director de economía y estrategia de CIBC World Markets, ha sido también consejero del Ministerio de Finanzas de Ontario.
Debemos desvincular la economía del petróleo y esto significa utilizar menos energía. Es probable que en este escenario la calidad de vida sea menor que la actual.
El precio bajo del petróleo subvenciona muchos precios (por ejemplo el salmón), mano de obra barata en Asia, impuestos, son determinantes. Así, un salmón puede dar la vuelta por el mundo antes de llegar al punto de venta o Wall Mart y tesco pueden reducir los precios de casi todos sus productos.
Si el petróleo aumenta, se usan menos los carros.
La fabricación del vehículo requiere tanta energía como la que consume en varios años.
Plásticos, pinturas y elementos del interior están hechos con petroquímicos.
“El geólogo más famoso del mundo (Carl Campbell) me explicó lo que yo iba a explicar a los ejecutivos de las empresas petroleras de Calgary”.
La producción mundial de petróleo sigue el patrón de un poso individual. Hay un crecimiento significativo y luego sigue el descenso (es una curva de Hubbert – una especie de formación de campana. El descubrimiento de nuevos pozos sigue esta misma curva. Es decir, luego del pico viene el agotamiento y la crisis.
“Si 40 dólares es el precio más bajo que se alcanza en la recesión más grave…” (Página 31).
El mayor yacimiento convencional (Ghawar) como el mayor marinal (Safaniya) del mundo está en Arabia Saudí. Ghawar fue descubierto en 1948 y continúa siendo el yacimiento más productivo del mundo.
Queda poco petróleo, no hay descubrimientos significativos.
La producción de un solo barril contamina 950 litros de agua dulce y emite a la atmósfera más de 100 kilos de anhídrido carbónico.
Cuatro millones de barriles diarios de producción se pierden por el agotamiento de yacimientos, como se arregla este déficit (aumentará el precio a tres dígitos).
Nigeria puede producir 2.500.000 barriles diarios pero la guerra interna no deja.
Cuanto más se subvenciona el petróleo en los países de la OPEP, más alto será el precio del petróleo que todos los demás debemos pagar.
Indonesia ha pasado de ser un exportador a un importador de crudo.
Rusia es el segundo mayor productor mundial de petróleo.
El efecto rebote, paradoja de la eficiencia: una energía barata como el petróleo, hace que crezca la economía y una economía que crece está ávida de más energía- Pasó una vez con el carbón cuando su consumo al principio bajo y luego se multiplico por diez entre 1830 y 1860. Los sistemas de calefacción y de refrigeración son hasta un 30% más eficientes en el uso de energía que los sistemas comparables de hace treinta años. Pero estas mejoras en la eficiencia no han reducido el consumo de energía en la casa media estadounidense.
Desde 1950, la casa media estadounidense ha pasado de 93 metros cuadrados a casi 230 metros cuadrados. Dos veces y media mayor. Con las casas más grandes se han consumido todas aquellas ganancias en eficiencia energética, debido a las cada vez mayores necesidades de calor y electricidad.
Debemos conseguir una mayor eficiencia energética sin la recompensa de unos precios más bajos. Así y sólo así la eficiencia podrá conducir a una auténtica conservación.
Más de la mitad de petróleo que se gasta diariamente en Estados Unidos se consume como carburante para coches.
El modelo europeo de transporte es sofisticado, en EEUU se han dedicado a construir carreteras que incentivan el transporte en coche, cuando el mundo se haga más pequeño, verán el transporte público saturado.
Luego de la guerra mundial hubo conspiraciones por fabricantes de carros (GM) para socavar el transporte público.
En EEUU el 90% va al trabajo en coche.
La energía eléctrica es un buen sustituto. En EEUU hay 70.000 coches eléctricos de aproximadamente 247 millones. Para alimentar estos coches, habría que generar demasiada energía eléctrica y un costo es una menor calidad de esta, van a haber apagones y no será muy efectiva. El carbón y el hidrógeno son opciones, pero también inviables.
Estados Unidos comete un error al creer que el etanol puede sustituir el petróleo tanto ecológicamente como económicamente.
La eficiencia media de una turbina eólica es más o menos del 20%.
El 80% de la energía del depósito de gasolina que tan cara nos sale, no se emplea en mover el vehículo.
La producción de etanol ya se traga casi un tercio de la producción de maíz total de EEUU, pronto no habrá maíz para el consumo de las personas y animales.
Económicamente no es viable porque hay que quemar una inmensidad de hidrocarburo en los procesos de siembra y cosecha del maíz, aparte de destilar el maíz molido para obtener el etanol.
Su cultivo suma el 40% de los fertilizantes que se consumen en EEUU.
Se usan tractores y cosechadoras, también enormes camiones. Esto requiere mucha energía que se obtiene de la quema de gas natural o de carbón, además no se puede transportar por tuberías, toca con camión o tren y esto usa gasóleo obtenido del petróleo crudo, no del maíz.
¾ partes de la energía de un galón de etanol obtenido del maíz procede de la combustión del gas natural.
Lo que lo hace atractivo a la importación del petróleo, son los subsidios, exenciones tributarias y protección arancelaria.
El comercio se puede liberalizar todo lo que se quiera, pero de nada sirve si no se puede pagar el transporte de los productos que se quieren vender.
En un mundo con un precio del petróleo de tres dígitos, el proveedor más barato será el proveedor más cercano. Un alto precio del petróleo presiona a dejar de traer cosas de China donde la mano de obra es barata y habrá que traer cosas más cercanas o incrementar la producción local.
A los barcos que transportan mercancías, se les ha incrementado la velocidad y esto ha duplicado el consumo de combustible. Queremos ser más rápidos pero esto provoca más demanda de petróleo (paradoja de la eficiencia).
EEUU y Reino Unido prometen que en 2050 habrán reducido sus emisiones de anhídrido carbónico en 80%, otros pises como China o Australia no piensan igual a India.
Las proyecciones climáticas indican que los glaciares del Himalaya podrían haber desaparecido en 2035. Un argumento de China es que un ciudadano consume 10% de la energía que consume un norteamericano.
Unos costos a las emisiones de carbono significa limitar la emisión y así el mundo hará mas verde y pequeño.
Cuanto mayor es el Pib mundial, más petróleo consumimos, siempre que alimentamos nuestras economías con petróleo.
Una recesión media suele durar tres trimestres.
La más larga desde la posguerra duro seis trimestres.
Luego de la crisis “el stock de petróleo disminuirá enseguida y su precio se disparara de nuevo hasta los niveles de tres dígitos”.
“Pero a lo largo de sucesivos ciclos económicos, el precio del petróleo continuara subiendo, hasta llegar a superar los 147 usd el barril que vimos en 2008.”
JEFF RUBIN
Es el economista más reputado de los mercados financieros de Canadá, Estados Unidos e Inglaterra. Director de economía y estrategia de CIBC World Markets, ha sido también consejero del Ministerio de Finanzas de Ontario.
Debemos desvincular la economía del petróleo y esto significa utilizar menos energía. Es probable que en este escenario la calidad de vida sea menor que la actual.
El precio bajo del petróleo subvenciona muchos precios (por ejemplo el salmón), mano de obra barata en Asia, impuestos, son determinantes. Así, un salmón puede dar la vuelta por el mundo antes de llegar al punto de venta o Wall Mart y tesco pueden reducir los precios de casi todos sus productos.
Si el petróleo aumenta, se usan menos los carros.
La fabricación del vehículo requiere tanta energía como la que consume en varios años.
Plásticos, pinturas y elementos del interior están hechos con petroquímicos.
“El geólogo más famoso del mundo (Carl Campbell) me explicó lo que yo iba a explicar a los ejecutivos de las empresas petroleras de Calgary”.
La producción mundial de petróleo sigue el patrón de un poso individual. Hay un crecimiento significativo y luego sigue el descenso (es una curva de Hubbert – una especie de formación de campana. El descubrimiento de nuevos pozos sigue esta misma curva. Es decir, luego del pico viene el agotamiento y la crisis.
“Si 40 dólares es el precio más bajo que se alcanza en la recesión más grave…” (Página 31).
El mayor yacimiento convencional (Ghawar) como el mayor marinal (Safaniya) del mundo está en Arabia Saudí. Ghawar fue descubierto en 1948 y continúa siendo el yacimiento más productivo del mundo.
Queda poco petróleo, no hay descubrimientos significativos.
La producción de un solo barril contamina 950 litros de agua dulce y emite a la atmósfera más de 100 kilos de anhídrido carbónico.
Cuatro millones de barriles diarios de producción se pierden por el agotamiento de yacimientos, como se arregla este déficit (aumentará el precio a tres dígitos).
Nigeria puede producir 2.500.000 barriles diarios pero la guerra interna no deja.
Cuanto más se subvenciona el petróleo en los países de la OPEP, más alto será el precio del petróleo que todos los demás debemos pagar.
Indonesia ha pasado de ser un exportador a un importador de crudo.
Rusia es el segundo mayor productor mundial de petróleo.
El efecto rebote, paradoja de la eficiencia: una energía barata como el petróleo, hace que crezca la economía y una economía que crece está ávida de más energía- Pasó una vez con el carbón cuando su consumo al principio bajo y luego se multiplico por diez entre 1830 y 1860. Los sistemas de calefacción y de refrigeración son hasta un 30% más eficientes en el uso de energía que los sistemas comparables de hace treinta años. Pero estas mejoras en la eficiencia no han reducido el consumo de energía en la casa media estadounidense.
Desde 1950, la casa media estadounidense ha pasado de 93 metros cuadrados a casi 230 metros cuadrados. Dos veces y media mayor. Con las casas más grandes se han consumido todas aquellas ganancias en eficiencia energética, debido a las cada vez mayores necesidades de calor y electricidad.
Debemos conseguir una mayor eficiencia energética sin la recompensa de unos precios más bajos. Así y sólo así la eficiencia podrá conducir a una auténtica conservación.
Más de la mitad de petróleo que se gasta diariamente en Estados Unidos se consume como carburante para coches.
El modelo europeo de transporte es sofisticado, en EEUU se han dedicado a construir carreteras que incentivan el transporte en coche, cuando el mundo se haga más pequeño, verán el transporte público saturado.
Luego de la guerra mundial hubo conspiraciones por fabricantes de carros (GM) para socavar el transporte público.
En EEUU el 90% va al trabajo en coche.
La energía eléctrica es un buen sustituto. En EEUU hay 70.000 coches eléctricos de aproximadamente 247 millones. Para alimentar estos coches, habría que generar demasiada energía eléctrica y un costo es una menor calidad de esta, van a haber apagones y no será muy efectiva. El carbón y el hidrógeno son opciones, pero también inviables.
Estados Unidos comete un error al creer que el etanol puede sustituir el petróleo tanto ecológicamente como económicamente.
La eficiencia media de una turbina eólica es más o menos del 20%.
El 80% de la energía del depósito de gasolina que tan cara nos sale, no se emplea en mover el vehículo.
La producción de etanol ya se traga casi un tercio de la producción de maíz total de EEUU, pronto no habrá maíz para el consumo de las personas y animales.
Económicamente no es viable porque hay que quemar una inmensidad de hidrocarburo en los procesos de siembra y cosecha del maíz, aparte de destilar el maíz molido para obtener el etanol.
Su cultivo suma el 40% de los fertilizantes que se consumen en EEUU.
Se usan tractores y cosechadoras, también enormes camiones. Esto requiere mucha energía que se obtiene de la quema de gas natural o de carbón, además no se puede transportar por tuberías, toca con camión o tren y esto usa gasóleo obtenido del petróleo crudo, no del maíz.
¾ partes de la energía de un galón de etanol obtenido del maíz procede de la combustión del gas natural.
Lo que lo hace atractivo a la importación del petróleo, son los subsidios, exenciones tributarias y protección arancelaria.
El comercio se puede liberalizar todo lo que se quiera, pero de nada sirve si no se puede pagar el transporte de los productos que se quieren vender.
En un mundo con un precio del petróleo de tres dígitos, el proveedor más barato será el proveedor más cercano. Un alto precio del petróleo presiona a dejar de traer cosas de China donde la mano de obra es barata y habrá que traer cosas más cercanas o incrementar la producción local.
A los barcos que transportan mercancías, se les ha incrementado la velocidad y esto ha duplicado el consumo de combustible. Queremos ser más rápidos pero esto provoca más demanda de petróleo (paradoja de la eficiencia).
EEUU y Reino Unido prometen que en 2050 habrán reducido sus emisiones de anhídrido carbónico en 80%, otros pises como China o Australia no piensan igual a India.
Las proyecciones climáticas indican que los glaciares del Himalaya podrían haber desaparecido en 2035. Un argumento de China es que un ciudadano consume 10% de la energía que consume un norteamericano.
Unos costos a las emisiones de carbono significa limitar la emisión y así el mundo hará mas verde y pequeño.
Cuanto mayor es el Pib mundial, más petróleo consumimos, siempre que alimentamos nuestras economías con petróleo.
Una recesión media suele durar tres trimestres.
La más larga desde la posguerra duro seis trimestres.
Luego de la crisis “el stock de petróleo disminuirá enseguida y su precio se disparara de nuevo hasta los niveles de tres dígitos”.
“Pero a lo largo de sucesivos ciclos económicos, el precio del petróleo continuara subiendo, hasta llegar a superar los 147 usd el barril que vimos en 2008.”
December 18, 2022
Now I hope I know..
POSTED AT AMAZON 2010
Absolutely brilliant!! I have found all what I was asking myself about last 30 years of world's economy, globalization, climat change and recent financial crisis. This book cannot be missed, cause it prepares you to what is going to happen in the near future due to shortage of oil. I have pretty clear picture about it now.. We will shift into another reality. Globalization caused huge damage, future generations will pay for it. It will be painful, but the end is near!
But Rubin does not spell the doom and gloom. He predicts that soon, due to rising cost of energy, oil and transportation, and due to carbon tax (to stop climate change), we will be able to buy pair of socks from the factory two streets away from where we dwell(instead from China)! So everything has its good and bad side.
This book, along the "The Upside of Down" by Thomas Homer-Dixon, is a treasure.
POSTED AT AMAZON 2010
Absolutely brilliant!! I have found all what I was asking myself about last 30 years of world's economy, globalization, climat change and recent financial crisis. This book cannot be missed, cause it prepares you to what is going to happen in the near future due to shortage of oil. I have pretty clear picture about it now.. We will shift into another reality. Globalization caused huge damage, future generations will pay for it. It will be painful, but the end is near!
But Rubin does not spell the doom and gloom. He predicts that soon, due to rising cost of energy, oil and transportation, and due to carbon tax (to stop climate change), we will be able to buy pair of socks from the factory two streets away from where we dwell(instead from China)! So everything has its good and bad side.
This book, along the "The Upside of Down" by Thomas Homer-Dixon, is a treasure.
January 2, 2018
We can pretty much say that by 2100 oil resources will be exhausted - where will the massive and growing energy inputs come from that are needed to drive global activity, outputs and civilization? How can exponential economic growth be sustained? Why is economic theory moving us more rapidly towards collapse and, at worst, extinction?
One critical point the book thus fails to raise - is that when the transitions and pain of depleting oil and other energy resources becomes more profound, then history will naturally repeat itself with wars, strife, unrest, mass migrations and more. However, before the global system ultimately collapses from exhaustion - one should sadly expect one final war to have its grim say in global matters.
And there is no-one to blame, as we are just playing into the hands of applied universal and mathematical laws - entropy and exponents.
One critical point the book thus fails to raise - is that when the transitions and pain of depleting oil and other energy resources becomes more profound, then history will naturally repeat itself with wars, strife, unrest, mass migrations and more. However, before the global system ultimately collapses from exhaustion - one should sadly expect one final war to have its grim say in global matters.
And there is no-one to blame, as we are just playing into the hands of applied universal and mathematical laws - entropy and exponents.
June 1, 2025
Could not finish. This reads like someone's first disorganized draft of a high school paper. The writing is atrocious. The first 18 pages are the same incoherent rambling over and over. How no one believed oil could get to $100 a barrel but it went to $140 then dropped to $40. He goes all over the place then repeats himself continually. Constantly inserting a pat on his own back about how knowledgeable he is and no one else is as knowledgeable as he is. He knows it all (except in hind sight he got some things wrong). I had to stop when he wrote 3 paragraphs on how hurricanes impact oil equipment in the gulf, but didn't mention the Saffir-Simpson sale until paragraph 3 although he talked about Category 3, Category, 4 and category 5 hurricanes in the first paragraph. even then he never explains the categorization scale.
January 13, 2020
Excellent introduction to the concept of "peak oil" and an interesting exploration of some of the potential consequences of the end of cheap oil. Having said that it is speculative in that it presupposes no replacement sources of energy that would reduce the economic impact. This book was written in 2009 and in the medium term oil prices have not conformed to his expectations. Perhaps they will during the 2020's.
November 20, 2018
Economist Jeff Rubin, explained how oil is the prime factor for running global economy. Every price tag you see, oil has made its mark. Due to cheap oil globalization attained a such a celebrating status.
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March 23, 2024
Although written in '09 (if memory serves) the statistical data scares me just the same and more. We've not been good stewards to planet Earth 🌍, most all the oil is gone - an energy source we never have gotten on as ravenously as we did. And we're about to pay a hefty price for it - not just at the pump.
November 4, 2017
a hopeful note about the declining availability of oil, a future to be embraced, not feared
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June 16, 2020Loved this book as it helped me understand globalization, energy, and what the future might hold!
February 24, 2021
Interesting discussion on the results of Climate Change. Unfortunately the book was written in 2009and is sadly out of date.
July 3, 2021
This book has been eye opening but I must admit it was too long and dry to read.
September 13, 2024
My first attempt at trying to read something vaguely political, could have been worse
November 17, 2024
He explains the state of the energy sector with facts. There are no political connections. Bit of a shock where the industry is going and what needs to change for our lives to stay the same.
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