Peak Oil, AI, and the Straw
Frankly #56
In this Frankly, I reflect on three seemingly unrelated issues whose intersection will be critical to humanity’s path ahead. 1) the new (nominal) all-time high in global oil production, 2) AI’s growing influence in the financial markets and economy, and 3) the environmental sink capacity of Earth.
While ‘all liquids’ just hit an all time high, the varying categories of what is considered oil obfuscates a long plateau that is on the precipice of permanent decline. However, given AI’s expanding reach, this technology may not only invent ways of directing a higher percentage of Original Oil In Place to our economies, but -in the same way as steam engines, or kerosene or computers, may increase demand for energy worldwide. In similar fashion to shale fracking, MMT, and debt, AI may increasingly widen the straw which is resource extraction/ecosystem damage . Artificial intelligence is potentially a wonderful tool, but as it stands today, it is lower down the hierarchy of human goals than money/power maximization and thus will accelerate, not diminish, climate change and other environmental damages.
Can we resist the cleverness of AI and its ability to drain sources to the very last drop to instead navigate the road to the Great Simplification with wisdom?
In case you missed it…
Last week, I was joined by thought leader and ceremonial guide Samantha Sweetwater to share her journey through mysticism and guiding others through their own unique spiritual paths. Strengthening relationality is a critical component for fostering deeper connections to nature - including fellow humans - and subsequently creating more cooperative, peaceful societies. Within a culture which predominantly values linear processes, Samantha’s work has centered around finding a balance between convergent thinking and the relational intelligence we’ve neglected. How can we - as individuals - nurture the subjective, intersubjective, and objective within ourselves to create more holistic sensemaking within a complex world?
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Nate, this was an exceptionally dark Frankly among dark Franklies. I love hearing you speak truth. It's far more calming than seeing peers, colleagues, and people in high places go running from reality. Thank you.
Could you please do a roundtable with energy and economics experts together? I'd like to see them pick apart the economic gyrations of this century, their correlations with oil production and prices, and a look at possible causality between them.
The Great Production Trough of 2007 which nobody ever mentions coincided with the initial implosion of The Great Recession. The one academic paper I could find examining this coincidence concluded that a coincidence was all it was. No causality either way. I found nothing about recovery from The Great Recession in relation to the knee of the curve in tight oil extraction. The recovery was entirely attributed to the Obama Bank Bailout. Did the Bailout provide the funds to invest in tight oil, causing the fracking boom, or did the fracking boom cause - at least in part - the recovery, or are both true?
Nick Hanauer interviewed Aaron Sojourner about current American negative economic sentiment despite strong "fundamentals." Well, there are many other things influencing sentiment, such as still not catching up from the high inflation during recovery from the pandemic, but how is the oil+condensate plateau affecting it? What is the relationship between the plateau and the ever-growing housing shortage? Is there just not enough energy to construct new housing? I assume it's much more complicated than that, but I haven't the tools to pick it apart.