Natural Gas Is Our Best Hope for Energy Independence

From Charles Hugh Smith at the OfTwoMinds.com blog, here's a report from Ray W., an energy consultant. It offers some hope that the United States can overcome its oil addiction, with smart planning and effective leadership. Can we do it? Time will tell.

I try to understand the key dynamics of the energy marketplace because I believe that we have reached peak oil and the modern countries are so dependent on fossils fuels. The report below seems to be very objective.

I worry that the Saudis and big oil companies have so much influence in our government that our energy policy will remain the same, until we run out of money.

Of the three main fossil fuels, natural gas is uniquely situated.

Oil is nearing peak production. To find new reserves, companies such as BP, Shell, and ExxonMobil venture into ever more hostile environments, both physical and political, spend ever higher amounts of money, and take ever greater risks. Deepwater Horizon, the oil platform that detonated and sank in the Gulf of Mexico and spewed four million barrels of crude into one of the world’s most productive fisheries, is a tame example.

For real expense and environmental risk, look at the tar sands in Canada; for political risk, look at the Niger Delta. The increasing cost of oil exploration and production will consume a larger share of GDP, just as health care does, and if we continue to expand our dependency on oil, we will continue to erode the standard of living for all but the very wealthy. The trajectory of the price of oil is structurally upward.

Coal is simply nasty. It’s advantage: it’s plentiful and therefore cheap. Otherwise, it’s a supremely destructive substance at all stages of its exploitation, from mining to transport to combustion to ash disposal.

Natural gas is far more plentiful than oil and far less environmentally destructive than coal.

Gas produces about 40% of the carbon dioxide of coal for the same kilowatt-hour of power generation. It leaves no solid waste at all, unlike coal, which leaves tremendous piles of ash that must be disposed of and that are susceptible to environmental catastrophe. The Kingston spill in 2008 deposited 5.4 million cubic yards (about four times the debris of the World Trade Centers) in the Emory and Clinch Rivers in Tennessee.

Gas contains no mercury, lead, arsenic, or other heavy metals as does coal. At pipeline quality, its combustion produces no sulfur dioxide (the main cause of acid rain) and far less nitrous oxide (the main cause of smog) than coal.

Gas is transported by pipeline, which is extremely efficient. Pipelines, being underground, are also visually and logistically unobtrusive and, despite the recent tragedy in San Bruno, California, generally safe. Far more people have been killed in coal-related accidents, not to mention aviation or automobile accidents, than have been in gas-related accidents.

Now we come to extraction, where things get more complicated.

In the past three years, the amount of natural gas produced in this country has increased 16%, from 18 to 21 trillion cubic feet. This is attributable to recent rapid advances in two drilling techniques: horizontal drilling and hydraulic fracturing. The high price of gas earlier in the decade spurred the development of these technologies, which extract gas from solid rock, rather than from conventional pooled deposits.

Extraction presents some serious environmental issues. Some gas deposits contain a fair amount of sulfur, which must be removed and disposed of. Most extracted sulfur is made into sulfuric acid for industrial purposes. Other deposits contain carbon dioxide in quantities as much as 12 percent by volume, which reduces the resource’s greenhouse gas advantage. And it takes a great deal of energy to drill for gas. The rigs generally run on diesel. The recently developed techniques for extracting gas from shale formations also consume large amounts of water. That said, gas extraction doesn’t use nearly the amount of energy or water as coal mine excavation.

Water will be the limiting factor for expanding gas production in the United States. Some shale gas producers have been working diligently to find environmentally acceptable ways to minimize the use of water, mostly through reuse. In shale gas production, the water is injected under pressure to fracture the rock, which liberates the gas.

The injected water contains several chemicals to provide for the optimal viscosity to enhance fracturing while still being liquid enough to withdraw easily. Most producers use less than a dozen chemicals, which comprise 0.5 percent of the injection stream. The very high numbers of chemicals (approaching 600) quoted in the film "Gasland" are an amalgamation of all the chemicals ever used for fracturing across the industry.

Some producers are racing to gain first-mover advantage in the shale plays, which seem to pop up every three months. These producers tend to be less cautious than others, and this is how accidents happen. But there is nothing intrinsically more hazardous or risky about drilling for gas in shale formations than drilling for conventional gas, or drilling for oil, or mining for coal.

Gas-bearing shale tends to be several thousand feet (one to two miles) below the aquifer. There is virtually no way for the gas to migrate into the aquifer except through the vertical component of the well that penetrates the water table en route to the gas resource. Gas wells, like oil wells, are encased in cement to protect the surrounding ground from seepage. Sloppy procedures can result in bad cement jobs. But this risk is present for any gas or oil well; it is not particular to shale gas.

The United States can substantially reduce oil usage and coal usage and improve carbon dioxide emissions by increasing the production and consumption of natural gas. We can reduce carbon dioxide emissions by 20% within weeks, simply by switching about 15% of coal-fired electric generation to gas-fired, using existing spare capacity in the gas-fired fleet.

There is plenty of gas to make this happen without risking huge price run-ups. Gas prices on average might move up about $1.00 per MMBtu, from the $4.00-$5.00 range to the $5.00-$6.00 range. While this would be a 20-25% increase, other costs would go down, specifically the costs of coal-caused pollution. This does not consider the future value preserved by slowing climate change. Also, increased demand would spur increased production, which would moderate such price increases.

Eventually, gas use will have to be reduced if we are to avoid the worst of climate change. Increased gas use is a transitional strategy for the next 20-30 years, to provide time for renewable energy and efficiency technologies to be developed and deployed. However, even at that point, gas would still have a role. It is the logical fuel to use to complement the intermittent nature of renewable electric generation.

Technological improvements are likely in electric storage, but electric storage is unlikely to be economical enough to span all 24 hours of the day. Gas, delivered through pipelines, is an on-demand electric generation fuel, unlike coal or oil, and can respond instantaneously as minute-to-minute consumer demand and renewable generation fluctuate.

If we craft public policy to favor gas to displace coal and oil, we have to be careful not to grow complacent. Gas is not a panacea for climate change. It is still a fossil fuel. However, it is a readily available, pragmatic, interim solution as we move to renewables and efficiency over the next 20-30 years.

 

Where Have All the Jobs Gone?

Charles Hugh Smith at OfTwoMinds.com describes why so many jobs have migrated to China and Asia. Sad but true.

Several of my informed friends say that a few corporations are moving jobs back to the US. Let's hope it is a trend.

The key dynamic to understanding trade with China is U.S. corporate profits. In broad brush, what happened was simple: U.S. global corporations had run out of profitable places to invest their capital in their home domestic market of the U.S. The technology boom had been underway since the early 1980s, and much of the low-hanging fruit of improved productivity had already been reaped.

In the big picture, the U.S. market was "mature"–everybody already had everything, and the only gains to be had were marginal, shaved off at the expense of competitors. So the marketers conjured up a new line of toothpaste and various gimmicks were added to vehicles, but growth in the U.S. was modest, as befits a mature consumer economy.

So how could corporations increase profits? By slashing production costs. If you can't sell 30% more every year, then how do you make 30% more profits? By cutting your production costs by 30%.

How do you do that? By moving production overseas, mostly to China. … profits for the companies in China which make the goods for Corporate America are slim–from 1% to 3%. The big profits flow not to China-based companies, but to the foreign firms which own the production facilities and sell the goods in advanced economies.

This is the fundamental dynamic of trade with China–it has enabled an explosion in U.S. corporate profits to unprecedented heights. If you think about it, it is absolutely staggering that 10% of the entire U.S. GDP ($13.5 trillion) is corporate profits.

The full story of the decline of manufacturing and industry in the U.S. is not complete without looking at the dominance of finance.The U.S. economy has been effectivelyfinancialized, meaning that Financial Elites have come to completely overshadow industry and manufacturing.

Financialization of the U.S. economy and the exploitation of trade with China are deeply related. Domestic industrial capitalism ran into the limits of overcapacity and saturated markets; additional capital investments reaped marginal gains in profits.

The "answer" was to financialize the U.S. economy with vast increases in credit, debt and leverage, enabling a hyper-consumerist economy built on a pyramid of debt and leverage. Industrial Capitalism shifted capital and production overseas for a "two-fer"–to skim unprecedented profits from lowering production costs and by expanding into newly opened economies in China, India and elsewhere.

Simply put: Finance took over America, and Industrial Capital moved overseas. Both profited immensely, and China gained an industrial sector paid for by overseas capital and 200 million jobs for its restive, ambitious populace.

Link: Trade and "Trade War" with China: Who Benefits?

Is Our Democracy Failing Us?

Charles Hugh Smith at the Of Two Minds blog identifies some troubling trends among our elected representatives:

Representative democracy has an enduring fatal flaw: the small body of representatives can be "captured" by highly concentrated centers of wealth and power. Ironically, the rise of mass media has had a perverse effect on the process of getting elected to public office: in order to afford the "media buys" needed to reach a mostly disinterested citizenry (less than half bother to vote in the U.S.), the candidates must raise vast sums of money.

This gives the Power Elites the lever they need to effectively "buy" the candidates' attention and loyalties.

…extreme concentrations of power act as positive feedback loops: when their power reaches a certain threshold, they are able to cancel out any counteracting forces and thus add to their power. As a result, their wealth and influence becomes more concentrated and their control of the poltical agenda and process becomes stronger, which feeds and protects their perquisites, tax breaks, income streams and political power.

As they ceaslessly work to protect their fiefdoms, then adaptation, evolution and innovation are stymied, leading to economic and institutional stagnation. Phony "reforms" which leave their power intact are trumpeted in the corporate media while armies of lobbyists craft legislative bills which run to the thousands of arcane pages, as there are now many fiefdoms, Elites and power centers to feed and protect.

That this process has become dominant shows that the state government in California is so supremely, systemically dysfunctional that the representative democracy of the Legislature has been reduced to a body whose only task is dividing up the tax revenues amongst the various fiefdoms who own the legislators.

Defenders of representative democracy claim that the citizenry is not up to the task, and that "professional" staffers, lobbyists and legislators are uniquely competent to sort out the complexities.

I think California shatters this defense completely, and offers evidence that the opposite is true: that "professional" staffers, lobbyists and legislators are uniquely qualified to destroy the state. Quite honestly, the citizenry could not do worse even if they set out to do so.

The "insoluable problem" is the capture of representative democracy by extreme concentrations of power and wealth.

The entire point is to reduce the influence of concentrations of wealth and power. Right now, legislators are beholden to small constituencies who fund their campaigns, and who hold the threat of financing an opponent's campaign next election. This system has led to dysfunction without end and the corruption of democracy.

Parallels Between the Financial Crisis and the Gulf Oil Spill

Charles Hugh Smith describes the similarities between the financial crisis and the gulf oil spill. Hubris, Incompetence, Corruption, and Denial combined to create a disaster.

How many more can we endure?

Link: Of Two Minds

1. The extreme levels of inherent risk in each system were downplayed/misunderstood by those responsible for their management.

2. The unprecedented risk intrinsic to each system was masked by facsimiles of regulation and specialized expertise.

3. The initial warning signs were dismissed, downplayed or ignored.

4. Each system was on the outer edge of human engineering (mechanical and financial) but was treated by regulators and managers as entirely standard.

5. Once the system collapsed, nobody knew how to fix it.

6. As the full extent of the damage became apparent, those responsible sought to mask the true extent of the damage.

7. The mainstream media and elected officials unskeptically accepted prevarications, mis-statements, misinformation and manufactured facades as representations of the truth.

8. As the true extent of the damage, distortion/manipulation and failure of responsible authorities became undeniable, public confidence in government, regulatory agencies and the market irrevocably eroded.

A garden and a homecooked meal are revolutionary acts

I am very grateful to my wife Ann, whose green thumb provides us with home-grown food which become tasty and healthy homecooked meals. Her blog at Inspired Gardening documents her garden and food preparation.Fresh from the garden

From the Of Two Minds blog, Charles Hugh Smith writes:

…"a garden and a homecooked meal are revolutionary acts." These simple acts are revolutionary because they upend the oppressive regime of agribusiness, packaged/fast food and the sick-care system–all parts in a seamless system of ill-health, derangement, torpor and chronic disease which can be treated with enormously expensive and mostly needless medications and procedures.

This is what I term an integrated understanding of the entire system of growing and consuming food and health. Agribusiness, fast food, high salt, high fat and high sugar processed "foods" (poisons is a more accurate term), chronic illness and various derangements, and an immensely profitable sick-care system are all one. There can be no "solutions" without an integrated understanding that simple behaviors are the heart of any and all real solutions. Buying something "new" is a simulacrum "solution" marketed to reap profits.

The solution to sick-care starts not with 1,000 pages of legislation, paid for with trillons of dollars of borrowed money but with an understanding of the causal connections between gardening, vegetables/food, cooking rather than consuming, self-reliance, goal-directed activity and responsibility for one's health.

Link: oftwominds: Rant or Revelation: My Money's on Revelation

Is Consumption-Based Happiness Real?

In the first chapter of his book Survival+: Structuring Prosperity for Yourself and the Nation, Charles Hugh Smith provides some intriguing insights about false and real happiness as an introduction to adapting to reality after the financial crisis of 2008.

Since he launched his blog www.oftwominds.com in May 2005, Charles Hugh Smith has warned readers that the unsustainably leveraged global financial system was poised to break down. When the system finally crashed in late 2008, his goal switched to writing a practical guide for not just surviving but prospering – a concept he called Survival+ (Plus). He recommends liberating ourselves from failed models of credit expansion, resource depletion, financial looting and a counterfeit prosperity built entirely on debt.

Below is an excerpt from the end of Chapter 1. Warning: Reading this may make you uncomfortable. I started to see how much advertising and consumption affect our view of reality.

Link: Survival+: Structuring Prosperity for Yourself and the Nation

…happiness has been distilled down by the marketing/advertising complex to a simplistic, superficial formula:

1. You are a consumer

2. A consumer's worth is measured externally by what is owned, worn, displayed, and by what high-status markers are certified by authority (diploma, membership) or the mass media (desirable avatar, fame, etc.)

3. Self-worth results from the acquisition of goods and external markers

4. The internal state of owning scarcity-valued goods and high-status markers is happiness

What is left unspoken is the motivation for this formula:

5. The purpose of this formula is to profitably sell the insecure consumer an unnecessary good or marker which has no connection to self-worth or happiness.

Being social mammals, humans' reproductive success depends to some degree on the level of status, power and material wealth each individual reaches; thus some 8% of the men in a wide swath of Asia carry genes which trace back to the extraordinarily prolific conqueror Genghis Khan.

But to equate high social status with happiness is to confuse two complex issues: higher status may well provide more access to material sources of well-being, but happiness–a state of mind, an understanding, a practice and a process–cannot be reduced to material ownership.

Indeed, numerous studies of the multi-faceted inner sensation we call happiness (which I would term well-being) conclude that the sources of happiness are largely internal and relationship-based rather than material or status-based. Common sense suggests that the security offered by wealth and income boosts well-being, but studies find additional wealth provides diminishing returns. Beyond a certain relatively low level, additional wealth in any form (cash, goods, travel, etc.) offers little improvement in well-being.

Factors often listed as sources of well-being include: Meaningful work, recreation, love, friendship and worship.

We might ask: since shopping did not make the list, how did the pursuit of happiness shrivel to the pursuit of goods and services?

The answer is self-evident: a secure individual identity does not require status or limitless externalities, and thus it does not offer many opportunities to sell unneeded goods and services at a profit.

The first project of the marketing/advertising system is to break down internally produced self-worth and identity and replace it with a permanent insecurity. Convince the target audience that their worth is not internally sourced but totally dependent on externalities, and you create a fundamental insecurity: one can never have enough external goods or markers to establish enduring inner security.

A new fad or status marker will soon be introduced, driving down the value of whatever you own and thus your own "value" will plummet. Gratitude is impossible when there is never enough.

In a peculiar dynamic, the undermining of inner security–that is, of an independently constructed sense of self–by relentless marketing has sparked the emergence of a simulacrum of identity and self-worth: the so-called self-esteem industry.

Such is the perfection of the marketing/advertising system's induced insecurity that the connection between relentless marketing and our culture's pervasive sense of inner worthlessness is never made.

Rather than identify the root cause–the marketing/advertising complex–the self-esteem industry focuses on the symptoms, which it attempts to ameliorate with simplistic "feel-good" slogans ("you can be anything you want!", etc.), a counterproductive reduction in standards and a profoundly distorting goal of eliminating all metrics which might introduce a sense of diminished self-worth.

Just as the marketing complex purposefully confuses happiness with consumption (and indeed, citizen with consumer), so too does the self-esteem industry confuse external metrics and slogans with inner security and well-being.

Even some elements of organized religion have accepted the consumerist framework. In a troubling distortion of the Bible's edict that "It is easier for a camel to go through the eye of a needle than for a rich man to enter into the kingdom of God," some churchgoers have come to confuse wealth acquisition with spiritual attainment.

The Declaration of Independence's "pursuit of happiness"–implicitly a structured process, a journey toward a goal–has been replaced with an illusory and ultimately cruelly misleading end-state: happiness has been reduced from a structured journey (with inevitable setbacks) to the fleeting euphoria of a new purchase/acquisition.

An experience-based understanding of happiness is ontologically structured around the experiences of well-being, warmth and satisfaction offered by true friendship, accomplishment, generosity, romantic and spiritual love and the humility of worship. The acquisition of externalities and superficial markers has no place in this understanding.

In a parallel fashion, an independently constructed sense of self–what we term an individual's identity–grows from humility, self-knowledge and the strength of personal integrity, not from an illusory simulacrum of identity conjured by pronouncements ("I am a member of…") and possessions.

Indeed, all that is truly valuable in one's self and identity can never be taken away or even diminished: integrity, experience, self-knowledge and humility.

Rather than accept the derealizing, dehumanizing reduction to passive consumer, the individual seeking internal and external liberation must renounce the impoverishment of "consumer" and embrace the power of a citizen's independently constructed sense of self.

One key feature of the derealization created by the marketing/advertising system is the erosion of adulthood in favor of a simulacrum of adulthood: permanent adolescence. The very traits needed to negotiate adulthood–an awareness of being tricked/manipulated/cheated, an awareness that life is a series of trade-offs in which one desire is sacrificed to support another deemed more important, the ability to put aside short-term impulses to meet long-term goals, etc.–are derealized in favor of an easily mallable adolescent worldview of spontaneity (that is, impulse), immediate satiation of appetites, escape from everpresent boredom and an obsessively insecure monitoring of one's peers for approved behaviors and status markers.

The adolescent is the perfect marketing target: insecure, focused on gaining approval via external props and cues, easily distracted and bored, powerfully stimulated by "newness" (a key feature of marketing exploitation), drawn to "tribes" of prescribed behavior and identity, and prone to powerful sensory surges triggered by sexual and physical signals (taste, scent, etc.)

The ideal adolescent can barely restrain his/her impulses and emotions and is ever ready to indulge whims and desires. He/she is intensely insecure and doesn't trust his/her own experience but instead seeks the approval of peers or peer tribes via marketable clothing or other externals, suppressing his/her own inner life and experiences lest they conflict with the security offered by conformity. Regardless of the apparent marginality of the tribe he/she seeks to join/belong to, the conformity is equally intense, marketable and unthreatening to the State and the Plutocracy.

The more the "consumer" internalizes these positive cues for adolescence, the more they experience their own alienation as their own fault; given that the very adulthood skills they would need to break free of the trap have been eroded/derided by marketing, they find their inability to feel what they're supposed to be feeling ("happy") only drives them further into complusive, self-destructive behaviors (the primordial "eating a quart of ice cream in the bathtub" experience.)

The very shallowness of this ubiquitously marketed adolescent worldview insures the participating consumer will feel unfulfilled and insecure after the brief high of consumption wears off. Unable to cross the chasm to their own experience, they turn with increasing desperation to marketed escapes and distractions for relief.

When Consumerist Gods Fail

It is important to recall the context of the current Depression: the U.S. has consumed trillions of dollars of goods and commodities in exchange for rapidly depreciating paper. Once credit/debt cannot be created exponentially, then consumption will fall in line with surplus production.

The marketing/advertising complex will still be flooding every nook and cranny of the nation and its media with messages to consume, but if few have surplus money and credit then it follows that few will have the means to buy, regardless of the persuasiveness of the millions of messages.

Thus it is not that the false god of consumerism will be toppled but that it will be abandoned–in many cases, most sorrowfully–by believers and adherents who no longer possess the surplus cash to offer the consumerist god.

The key factor in a consumerist-based identity is that someone profits by selling you an identity, character and sheen of status. The idea that what you wear, drive, tattoo yourself with, load on your iPod, etc. has zero bearing on anything meaningful about who you are and what you value is sacrilege of the highest order.

If "my stuff" is no longer "me," then who and what am I? And indeed, what can I sell you if all you really need to be "yourself" and happy is friends, minimal shelter, unprocessed food, homemade music, a library and an Internet connection and spiritual communion/worship? How much profit can I make selling you a used guitar, a DSL connection and a bag of carrots?

It boils down to this: when you run out of money, you switch religions from Consumerism to one of the good old spiritual standbys.

The known sources of happiness require little to no consumption:

1. health

2. friends

3. free time to pursue interests

4. spiritual communion/worship

5. exercise/sports/play

6. gardening

7. meaningful work (unpaid qualifies)

The experience of well-being has been so derealized that the sense of deprivation experienced at the loss of fine dining, Caribbean cruises, season tickets to the games, etc. is itself suspect.

We might even speculate that the experience of genuine happiness and well-being has largely been forgotten, or perhaps is an unknown sensation to media-numbed "consumers."

Since sustaining the simulacrum of consumerist "happiness" will cause much misery as the consumerist economy slides to oblivion, we might profitably ask if the happier choice wouldn't be to jettison the entire artifice of consumerist "happiness." Upon reflection, it was never real happiness after all; it was only a means to reap immense profits.

The Structure of Happiness

Let us revisit a key concept:

This process of bridging the widening gap between what we experience and what we're being told we should be experiencing via the substitution of simulacrum for authentic structures is central to this entire analysis.

In other words: when we have lost the possibility of indulging the marketing/advertising system's fantasy of endless consumption of needless goods and services, instead of feeling the loss, deprivation and gnawing sense of insecurity/emptiness we are supposed to experience, we might well feel an unexpected but spontaneously genuine relief and liberation that the burdens of constant consumption have been lifted from our sagging shoulders.

It won't be surprising that an analysis which refers so often to the "politics of experience" seeks to illuminate the darkest corner of the consumerist theology: that there is a politics of experience deep within an apparently superficial consumerism.

That is, we do not experience happiness or fulfillment in a vacuum; it is difficult to pursue happiness in a political structure of randomized violence, suppression of free expression, insecure private property rights (a.k.a. theft by other means) and centralized, ubiquitous propaganda that is dominated by an over-reaching State and its Plutocratic overlords.

Thus if we consider the Founding Fathers' phrase "pursuit of happiness" closely, we find not only that it implies a personal pathway of goals, progress, setbacks and discipline rather than a static end-state but also a political environment in which the individual pursuit of happiness is not just possible but encouraged rather than suppressed.

Perhaps the first step to such an understanding of an authentic "pursuit of happiness" is to recognize the consumerist theology of insatiable acquisition (which benefits the State and the Elites alike) as a perverse and destructive simulacrum of genuine happiness.

Storing Wealth in Uncertain Times

Charles Hugh Smith questions the whether gold is the best way to store wealth in the coming "Great Transformation", when oil becomes very scarce. (I remember how valuable gasoline was in the movie Mad Max 2: The Road Warrior). He suggests that having a convenient supply of energy and food are the most valuable sources of wealth in very hard times. Excerpts below.

Link: Of two minds: The Great Transformation: Trends and Cycles of History.

If we understand that "money" as a store of wealth is simply stored energy, then we reach another understanding of "the problem" and thus of the "solution."

Let's say that the fragile supply chain of remaining oil breaks down in a complex interaction of positive feedback loops. Oil would not just be costly; it would be unavailable to individuals. The government would undoubtedly ration what was left for essential services like agriculture, food distribution, police and hospitals, etc.

Let's say we anticipated this and responded not by hoarding gold but by buying a 100 KWhr/day solar power array, productive land in a mild climate, a store of fertilizer and a few electric vehicles to share with our family/community. We own zero gold but we own a power supply, the means to grow food and transportation that does not require petroleum.

Now would we sell these productive assets for gold? At what price, if they were essentially irreplaceable? What would we do with our pile of gold if we can't go anywhere, can't grow food and have no power source?

The holder of gold assumes that all goods can be purchased with a means of exchange holding a tangible value, i.e. gold or an equivalent commodity. But this may not be entirely true. Yes, we will sell some of our power/energy output for gold, but we will not sell our "wealth" i.e. the power plant for gold, which may or may not be able to buy a replacement. As a store of wealth, gold is no match for a productive source of energy.

The reason is "money" as a store of wealth is simply stored energy. From this point of view, fertilizer is stored energy. You may or may not be able to exchange "money" in any form for stored energy, for "wealth" is either stored energy or the capacity to generate energy sustainably. Everything else is merely a means of exchange.

Will gold hold more value as a means of exchange than paper money? If history is any guide, yes—but that's a different "problem" than building or storing wealth.

There are many other examples of "problems" whose solutions may well completely fail to address the structural challenges we face.

Economic Solutions at the Local Level

Charles Hugh Smith at the Of Two Minds blog sees economic disaster from over-borrowing and over-spending. In the excerpt below, he describes some solutions that will work without a federal bailout.

Link: oftwominds

So here is a short, semi-random list of solutions which don't depend on Federal borrowing and largesse:

1. Every small business owner who vacates a tiny $3,000/month storefront and hastens the bankruptcy of the commercial landlord who "needs $3K" from the space to pay an inflated mortgage is part of the solution. When the building is sold later for a modest sum, spaces can be rented for what a struggling business might actually afford, i.e. $300/month.

Please note:

Nobody needs to start or operate a small business. You cannot coerce anyone to take the risks of entrepreneurship, hire workers, rent space and pay taxes. Every entrepreneur can opt out at any time when the risk-return ratio turns negative. High rents, high taxes and lower revenues have turned the ratio extremely negative.

2. Every parent/guardian who teaches a child (by their own example) to unplug electronics which are not in use and all those energy-hogging inverters/rechargers is part of the solution.

Q.: What percentage of household electricity in the U.S. is lost to appliances that are turned off?

Saturday Quiz: Energy Lost on Electronics Standby (May 24, 2008)

According to The U.S. Department of Energy, there are 2,776 electrical generation plants in the U.S. That means 140 power plants do nothing but generate the electricity wasted by DVD players, TVs, answering machines, stereo systems, xBoxes and computers plugged into wall sockets while not in use. One easy solution: put as many of these devices as is practical on power strips which can be turned off with one switch.

Although I'm a bit rushed right now and can't look up the statistic, I think 140 power plants burn over a million tons of coal a year. That's a lot of coal to keep your TV and computer speakers on standby.

3. Everyone who focuses not on losing weight but on becoming fit and feeling better via refusing to consume junk food and garbage fast food is part of the solution. Changing the goal from weight loss to well-being is a solution for the individual and for our society as a whole.

4. Everyone who consciously chooses to prepare a home-cooked meal rather than buy a toxic-waste fast food meal is part of the solution–and a revolutionary to boot: "A healthy homecooked family meal and a home garden are revolutionary acts."

Please don't email me that "real food" is unaffordable; beans and rice and vegetables from the Asian or Hispanic or Halal markets are much cheaper than fast food. Please click on the "What's for Dinner?" tab at the top of the page for an analysis which proves this. When it comes to fast food, what we have can be boiled down to one word: excuses.

5. Everyone who forms or helps sustain a community garden is part of the solution: "Food is wealth, health is wealth, energy is wealth; all else is illusion." (For more aphorisms, please scroll down this page.)

6. Everyone who starts bicycling, insulates their water heater, or installs solar panels, etc. is part of the solution. The cheapest energy "source" is conservation. Installing solar panels isn't just a metric of which energy source costs "less"–as measured by what? What if the energy is priced in gold, or oil, or air quality?

There are dozens of other solutions which we control and which don't require unsustainable Federal borrowing and largesse.