Chris Martenson http://en.wikipedia.org/wiki/Chris_Martenson

Has released another of his very informative videos. Martensen subscribes to the idea that the World cannot carry on consuming at it's current rate and goes into detail to describe how exponential increases in everything from the population to the debt based fiat monetary system is bad.. He predicts the next big oil shock saying prices will double probably even triple in a very short timeframe.

Lengthy at 1hr and 11 minutes but worth it as it gives the viewer a grasp as to why the World is in the current financial state it is and why it will never recover to anything resembling what has been called normality.

I noted yesterday that Tesco Yeadings petrol has gone up to 142.9 from 140.9

Shell Ottershaw (Surrey) is now at 144.9

Now, if Ken gets back in, couple that to 'congestion' cameras along the M4 by Heathrow and along the western M25, as he had previously indicated, and I won't be able to afford to get to and from work.

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Lets be careful out there !

I watched that video; very interesting.

How does such information affect you? How do you view the future? I mean - in our honest moments we all know we are going to die someday; but how do you face a future where the world is literally falling apart, where everything rapidly becomes more rare and impossibly expensive? Do you just tuck it away in the back of the mind and hope against hope that things will never be that bad? Do you bother to pay off the mortgage, pay into a pension scheme, save for that rainy day? How do you handle it? We all know that the rich run the world now to their own advantage; what are the chances for the survival of the poor and the least able in a world where life's essentials are beyond the reach of ordinary folk? Do you think the rich will care about us? What does the future hold for we ordinary folk?

Or is the whole oil and commodity shortage scare a fiction?

I look at it this way. 100 years ago the World was completely different to what we see today. It is very easy to see what has made it different and that is cheap energy.
100 years from now it almost certainly be very different again, although of course none of us will be around to see that.

Martensen presents his data and established facts very professionally, his reasoning is sound and his claims on ongoing oil finds (in relation to what has been found before) are verifiable via other web sites (oildrum is one of these).

His explanation about the field under the Gulf of Mexico was quite startling. BP's Deep Water Horizon was drilling right to the limit of of current human ingenuity and knowledge when it blew out. Martensen claimed the entire yield of this field was only 12 - 24 hours of total world consumption.
It is easy to understand that there must be a unit of energy in to get units of energy out, the oil industry measures this in barrels. The easy fields of the 20th century were returning 90 barrels out for each one used to recover it. Tar sands and some of the other ways they recover it today are less than half of that and continually falling.

He also covered the abiotic theory explaining that some wells ran dry in the early 20th century and yet have shown no evidence of replenishing themselves.
I have considered at length the possibility that there is some sort of cartel (over and above OPEC) which is restricting supply to the markets and thereby controlling the price. At last count there 116 nations across the World listed as oil exporters (http://en.wikipedia.org/wiki/List_of_countries_by_oil_production). It would take a conspiracy of immense proportions and amongst competing and unfriendly nations to be able to 'pull it off'. Yes we know OPEC have done it in the past and it is this which gives life to the theory today but if this was the case why are the big producers investing ever more $$$ in trying to get to ever more difficult oil and risking life, limb and the environment in such ventures as deepwater horizon?

Lets assume for a moment there is some substance in this chap's theory and that the trigger (using the one he demonstrated) which will tip the oil price upwards is maybe a small to medium producer like Norway acknowledging that there is a problem in future supply and thereby cancelling all exports keeping their production for internal use . The effect on the market could be profound and double even treble barrel prices at a stroke.

Here in the UK we pay duty and tax on road fuels, pretty much the highest in the world today. Couldn't the Government take some slack up by reducing or removing the duty and VAT elements on a litre of fuel?

A conservative litre of unleaded is currently around £1.42 of that around 96 - 98p is tax. leaving say 44p for the cost of the oil and its distribution,refining. If prices were to treble (and across the World this would be a pretty seismic event) the cost without the tax moves to around £1.32 a litre actually less than we are currently paying!

Of course if we apply the tax and duty the tripling of the price moves to £4.26 a litre with almost £3 of that going straight to the exchequer.

Does this give the UK government some latitude to respond to a huge oil shock? Of course if they are forced to reduce or remove the taxable elements it will have a severe downside to our current way of life but it will still mean the ordinary man in the street will still be able to afford fuel to get to work and the foodstuffs as they are delivered to the shops.

I realise this is an exceptional leap in the dark but perhaps it has always been deliberate Government policy to tax fuels high in the expectation that when the price shocks come they have far more latitude to be able to address it.

Of course for them to remove or reduce substantially the tax element it will mean some profound changes to welfare entitlement a watershed and maybe drawback to a position not seen since for many many years. It will not be popular but what is the alternative!

Thanks for that Geezer.

You suggest that that Government may be prepared to significantly reduce the tax take on fuel. I think that is most unlikely when considering the size of the national debt, a debt that clearly isn't going to be paid off any decade soon. A debt situation that would be grossly exacerbated by the severe hit to the national and global economies that a cliff-edge price hike and drastic reduction in oil supplies would produce.

Even if Government were prepared to lose a large slice of the tax take on fuel, you seem to be forgetting that oil would quickly be in very short supply by the time the seriousness of the situation had got to the point that Government may even consider losing the tax take. The cliff-edge on oil supply will be just that, a dramatic reduction in supply within a short time-frame. If oil were in such short supply as Martensen implies it could be, then the idea that a tax reduction on road fuel would enable us to all carry on our lives as if little had changed would probably not be the case.

If Martensen is correct in his assessment of the oil supply, and the knock on effect that would have on the price of every other commodity, including foodstuffs; then I suggest the national and global economies would very quickly grind to a near halt. If the crash of Northern Rock was sufficient to effectively stagger the UK economy, then I suspect the kind of oil shock that Martensen is predicting will cause the economy to fall flat on its face.

And if Martensen is correct, then I can see the major military powers making an early oil grab on the Middle East - an all-out war for the remaining oil.

But he does espouse the exponential theory. More oil being produced = a greater take up of the resource. Peak Oil does not mean the wells running dry within a short time frame simply that supply will not meet the demand. Normal market conditions tell us this will drive the price North till one party can no longer afford it, someone then does without or with much less. We were 100 years in producing oil to where we are today a gradual increase in production, if his theory is correct then I expect it will be as gradual on the way down.

Clearly the powers to be (unless it does come to a big all out grab war) will do their best to manage existing resource whilst urgently seeking alternative sources of energy. That said Martensen mentioned it is no accident as to why NATO troops were active in Libya and have been in the wider middle east.

Interestingly Martensen said more than enough electricity is being generated in the World today to meet demand, presumably there will be enough notice to move oil fired to nuclear on the downward slope. He went on to say that it is road fuels which will be the immediate problem. When one of the attendees at the end asked about moving to electric driven motors he was unsure if there was enough Lithium in the world to manage the battery technology.

Technology now means most of the major motor manufacturers can make an electric motor which has a reasonable range. Not many have moved to full out production of such models maybe there is problems with the battery technology as we already know battery stores of energy lose a lot of efficiency over time.

When the oil shock comes National Debts are going to become irrelevant, economic growth will be a thing of the past , it will simply be impossible to maintain economies at current levels let alone grow them (which they absolutely have to do) to address deficits. Foreign exchange will be used for energy purchases little else. Protectionism at home will very much be the order of the day.

It is no accident the UK Government has a little publicised Parliamentary think tank on the subject..... http://www.teqs.net/
They call these 'Tradeable Energy Quota's..... I don't hold out much hope for the little man getting much!!

Saw a program a while back on how steam technology has come on leaps and bounds with smaller power units, that generate steam from cold water in a very short time, no longer than the choke on a cold morning, now has that been stifled or still ongoing I wonder.

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Its not always the biggest and the bestest, its them that make the least mistakes.

Tesco is now 141.9 again after probably checking the local competition and plus it is the middle of the week and most commuters fill up at the weekend - So it will be 142.9 again to catch them all. The price of a barrel has fallen nearly $10 over the last week or so, but of course we will never see the savings at our local garage.

What do they use to heat the water Jim? Coal?

I suspect if things go pretty much Pete Tong steam engines will be making a big comeback!! Watch out for the new taxes on coal though.....

I think it was gas

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Its not always the biggest and the bestest, its them that make the least mistakes.