Over the last thirty years energy prices have increased about twice as fast as the general consumer price index. There is no reason to believe energy prices will not increase even faster in the future. This video lecture by Chris Martenson explains why energy availability will dramatically impact our lives - he expects declining availabliity to push the price over $200 a barrel by 2013. This is why we at OEIC feel the need to help people use less energy.
Below is an index of Martenson’s video lecture and a summary of the follow-up questions and answers presented November 16, 2011 at the Gold & Silver Meeting in Madrid, Spain. The number on the left is the min:sec into the 38 minute presentation plus 33 minute Q&A, so you can skip around a little more easily, if you like:
0:00 Introduction of lecture topic, book and available free, online course.
2:00 The next 20 years will be different from the last 20 years.
4:30 Expectations of continuous growth is a major underlying problem.
6:45 Credit Market Debt - the one chart that best explains why we are reaching our limit.
11:20 National debt loads are at historic levels and require the economy to grow.
13:00 Exponential growth is difficult to understand, but we must to avoid disaster.
16:45 Expectations for oil production – the “master resource.”
18:45 Problems have solutions vs. Predicaments which have outcomes.
19:50 Predicament in energy – Peak Oil production.
21:30 Peak of oil discovery was in 1964.
25:40 Oil shock 1 - 1970; oil shock 2 – 2008; oil shock 3 – 2013?
26:45 Energy Cliff: energy return for energy invested – what is left is the energy available to us!
28:30 Tar sands and shale oil yield energy returns of around 3 to 1 vs. earlier 100 to 1 and current 20 to 1.
30:50 Key resources are becoming depleted and they require more energy to extract.
35:00 Summary of conflict between the need for energy to grow our economy and the reality of decreasing supplies.
38:20 Pitch to provide investment advice.
Follow-up Questions & Answers
39:50 Won’t our cleverness, technology, increased efficiencies and the market save us? Probably missed that opportunity in 1970. Fastest energy transition was 40 years, due to embedded capital and need to restructure.
43:20 Anything on the horizon that can transition us until we discover another high density energy source? Not many alternatives for liquid fuels. Natural gas is most promising, but still need a large infrastructure transition.
45:00 Is there a conspiracy to hold back oil or abiotic theory likely to be true and the problem will not materialize? No, too many people need the money now to not pump. All the data and science show biotic oil to most probable source.
49:00 Wasn’t Malthus found to be wrong and therefore there is no problem? We should look at the science today and not look back to the early1800s for answers.
52:25 What do you expect oil prices to be? Can’t say the price, but expect a significant supply and demand imbalance in the 2013 timeframe, which will cause oil to double or even triple in price. Real issue is oil availability on the world export market; when that begins to decline the world will recognize Peak Oil.
55:45 Will electricity prices escalate similar to oil because uranium availability declining? While uranium is declining, coal and natural gas are also used for electricity and these will provide part of the bridge needed, but prices will certainly increase.
58:20 Won’t shale gas help to slow decline of available energy? Texas/LA gan field shows this is not a clear solution. It will help bridge the oil depletion gap, but still there is a need for massive infrastructure. When you hear, “100 years availability” remember that there is always an * saying, “at current rate of use.”
60:45 What will the role of gold and silver be in the future [remember forum]? Martenson claims 75% of his investments are in gold and silver. He looks at them separately and expects them to be strong for the foreseeable future.
64:30 Will the Testla Coil be part of the solution? Believes extraordinary claims need extraordinary supporting data. But, even if some new technology was available it would still take an unprecedented development to make it useful in next 20-30 years. He says he has hope; but that hope alone is a terrible strategy.
66:30 Are China and/or the U.S. beginning to preserve their natural resources? China is acquiring resources by outbidding everyone, using a checkbook diplomacy. [after all they are holding trillions of U.S. dollars] They are acting as though resources are very scarce and beginning to stockpile – copper, iron ore, oil, etc. There will be increasing friction between all powerful nations as we proceed.
69:15 Can you give us your view on palladium and platinum? He looks at both as industrial metals that will become increasingly important in manufacturing high tech products. Gallium is another critical resource. All these are subject to the same resource depletion discussed earlier.
Chris Martenson sells investment advice, he wrote a book, “The Crash Course,” offers a variety of online & printed material for free, as well as publishes a newsletter. He is also a scientist and businessman learning and educating others about the current situation in the World. Here is more About Chris Martenson.