Richard Heinberg writes: You are no doubt keenly aware that the economy is and will be the matter of overwhelming concern for the coming year (or years), for policy makers as well as for most nearly every individual and family. Following this current project, my research and writing will be devoted to identifying strategies that can help families and communities adapt to the new economic conditions while laying the groundwork for a truly sustainable society.

This report is intended as a non-technical overview of the prospects for known energy sources to supply society’s energy needs at least up to the year 2100. … It shows why energy conservation (using less) and humane, gradual population reduction must be key strategies to achieving sustainability.

The world’s current energy regime is unsustainable. This is the explicit conclusion of the International Energy Agency, and it is also the substance of a wide and growing public consensus ranging across the political spectrum. One broad segment of this consensus is concerned more about the climate impacts of society’s reliance on fossil fuels; the other is moved more by questions regarding the security of future supplies of these fuels—which, as they deplete, are increasingly concentrated in only a few countries.

To say that our current energy regime is unsustainable means that it cannot continue and must therefore be replaced with something else. However, replacing the energy infrastructure of modern industrial societies is no trivial matter. Decades have been spent building the current oil-coal-gas infrastructure, and trillions of dollars invested. Moreover, if the transition from current energy sources to alternatives is wrongly managed, consequences could be severe: there is an undeniable connection between per-capita levels of energy consumption and economic well-being (see Robert Ayres and Benjamin Warr, Two Paradigms of Production and Growth). A failure to supply sufficient energy, or energy of sufficient quality, could undermine our global economic future.

It is a commonly held assumption that alternative energy sources capable of substituting for conventional fossil fuels are readily available, whether fossil (tar sands or oil shale), nuclear, or renewable. All that is necessary is to invest sufficiently in them, and life will go on essentially as it is. But is this really the case? Energy sources have varying characteristics. And it is the characteristics of our present energy sources (principally oil, coal, and natural gas) that have enabled the creation of a society with high mobility, large population, and high economic growth rates. Will alternative energy sources perpetuate this kind of society?

While it is possible to point to innumerable successful alternative energy production installations within modern societies (ranging from small home-scale photovoltaic systems to large “farms” of three-megawatt wind turbines), it is not possible to point to the example of an entire modern industrial society obtaining the bulk of its energy from sources other than oil, coal, and natural gas. The energy transition is still more theory than reality. But if current primary energy sources are unsustainable, this implies a daunting problem. The transition to alternative sources must occur, or the world will lack sufficient energy to maintain basic services.

Thus it is vitally important that energy alternatives be evaluated thoroughly according to relevant criteria, and that a staged plan be formulated and funded for a systemic societal transition away from oil, coal, and natural gas and toward the alternative energy sources deemed most fully capable of supplying economic benefits similar to those of conventional fossil fuels. (03/08/09)
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Ilargi reports: There are two separate issues today in the US that occupy my mind. One is the Wall Street Journal revelation that at least $50 billion in taxpayer money ostensibly doled out to save AIG has gone straight to a consortium of the world’s largest banks. That is worrisome because it should never have gone there. It also is because just a few days ago, Fed officials refused to tell Congress about these behemoth transfers of public funds. Yes, perhaps it’s also worrisome that the Journal found out regardless, and it certainly is that the banks’ dealings with AIG consisted, purely and simply, of gambling wagers for which the once mighty insurer volunteered to be counterparty. The American taxpayer did not, and should never have been forced to pay a dime for the bets. The reason why (s)he was anyway leads to the by far most troubling part of the story. It shows that in the White House and on Capitol Hill, it’s the bankers who have final control, not the people.

The second issue, which increasingly occupies my thoughts, is the Federal Deposit Insurance Corporation. Last night, the FDIC seized its 17th bank this year. Only one. The agency operates under a veil of secrecy, so it’s hard to prove much of anything, but I find it very hard to believe that out of the 8500 banks the FDIC insures, there was only one in deep enough trouble this week to warrant a seizure, even if many have been handed TARP cash. What I think is happening is that the FDIC has lost control of the situation, that it can’t effectively handle more then one bank at a time at this point, and a small one at that.

I’d like to know what stage of the game the previous 16 2009 takeovers are in. The recently and hastily introduced Depositor Protection Act of 2009 would give the FDIC emergency access to $500 billion in government funds. The introduction of the act is somewhat bewildering, since the agency is part of the government to start with, and already has a window at the Treasury. I can understand the fears that the funds are designated for a major bank failure in the near future, but we simply won’t be allowed to know until it happens.

FDIC chief Sheila Bair may be a competent financial servant, though I would doubt it by now. What I don’t doubt is that she is way below par when it comes to communication and PR (unless she’s deliberately trying to create a panic). She has recently warned that the FDIC could go broke, and she has fumbled an initiative to force banks to pay more to the agency to be covered under its programs. While it’s obvious that the FDIC’s guarantee of $250,000 per bank account largely has a symbolic function, since it lacks both funding and manpower to execute the seizure of one or more major banks. Still, I’m sure it’s not part of Ms. Bair’s job description to cast doubt on her agency’s role, even on the symbolic part of it. Once people start doubting the FDIC, events could unfold very fast.

Both issues above give me the impression that it’s not just the FDIC that’s losing it’s grip, it’s the government itself, and with it the entire political system. …

Not a penny of the $50 billion for AIG’s bookies serves to alleviate
the plight of the people, and they will grow less and less willing to
believe otherwise. Washington politics has changed precious little
since January 20, which means that for better or for worse, Obama is
losing what Congress and the Senate have long since seen evaporate”
political capital. …

The government can’t sit on its hands much longer if Citigroup shares
keep on falling. It has to act, to do something, too many Americans
have too much money deposited with the bank. In fact, there is at least
$600 billion in Citi accounts, while the company’s market cap is hardly
above $6 billion. (03/08/09)
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