oftwominds-Charles Hugh Smith

A Meandering Update
April 8, 2009

Thank you very sincerely to all who tolerated the sporadic posts and non-existent email replies of the past two weeks. Making matters even worse, I have been struggling to construct a comprehensive analysis of the multi-layered crises we face ahead, and not always successfully as patient readers already know who have tried to read the Survival+ posts without glazing over....

Now that I am back at my desk, I can report that I spent the past few weeks in rural Hawaii without wifi networks or even a dialup Internet connection. No, it's not my "bugout" hideaway, though it could certainly fill that role nicely--not because it's so remote or defensible but because it's a sparsely populated island with tremendous undeveloped agricultural potential, and my wife's family is close by. That offers us a network of reciprocal support in tough times--the ultimate "security" in my opinion.

Since I have roughly split my adult life between California and Hawaii, and since I have lived on three of the seven inhabited Hawaiian Islands and went to high school and university there, I can claim some passing knowledge of the Island State.

Thus I don't consider it hyperbole to suggest that Hawaii offers an apt metaphor for the U.S., and indeed the entire industrialized global economy. Honolulu is the most isolated metropolis in the world, lying some 2,500 miles from any source of petroleum, industrial goods, non-native foods, etc.

What strikes this observer is the immense distance between the residents' unconscious confidence in the supply chain which fuels and feeds the islands' 1.2 million people and the actual extreme fragility of that supply chain. Having thought obsessively about the issues raised in Survival+ for months, I am sobered by the reality that a mere week without the steady arrival of oil tankers and ships loaded with foodstuffs would render Oahu/Honolulu vulerable to shortages and perhaps outright rationing--and if the supply chain disruption lasted longer than a week or two, hunger and civil disorder would become distinct possibilities.

How different is the nation? Perhaps not as much as most believe. The vaunted Strategic Oil Reserve holds some 600 million barrels of oil--a princely sounding quantity until you divide it by the 20 million barrels the U.S. consumes every day. Thus the U.S. holds a mere month of oil in reserve. Yes, there are millions of barrels in other commercial storage facilities, but even 1.2 billion barrels is only two months' supply.

Even more crazy-making is the fact that the islands have grown increasingly dependent on the Mainland for such basic food items as milk and eggs. Where a mere decade ago, the islands boasted numerous dairies and egg farms, the last dairy closed last year. A major egg farm on the Island of Hawaii recently closed after almost 20 years in business, a victim of rising costs and state/county neglect/disinterest.

Instead of raising official alarms, the demise of fundamental agricultural production has elicited either yawns--Mainland milk is cheaper--or the sort of handwringing which passes for official "concern."

Knowledgeable private citizens such as Richard Ha (please see his website in the right sidebar) are deeply concerned, and are trying to raise awareness about the need for what they term "food security"--that is, food which is grown in the islands for local consumption.

But the state and county governments have offered only lip-service encouragement--the kind which costs nothing and accomplishes even less.

Again--how different is the rest of the nation? How dependent are we on food and fuel trucked over great distances from elsewhere? The dependence of the U.S. as a whole on liquid petroluem fuel is essentially 100%.

The state of Hawaii, like many other local governments, touts a goal of generating 50% of the state's energy from alternative sources by 2030, but the actual costs and planning are left harmlessly vague. Maybe private investors will step up and make it happen, blah blah blah. California announced a "million solar roofs" goal a few years ago, but how many units have been installed? What resources have been devoted to making this ambitious goal a reality?

Plans to lay undersea electrical transmission cables from Lanai to Oahu are being bandied about, with a price tag drifting from $600 million to $2 billion--obviously just wild guesses. Meanwhile, a significant number of the 100,000+ roofs on Oahu could be covered with solar panels for the same amount of money being discussed for a cable which would waste up to a third of the energy transmitted and generate not a single kilowatt.

This pie-in-the-sky, "a new technology will save us from actually having to adapt to a new reality" is compelling not just in Hawaii but everywhere. As I have endlessly noted here, all the pie-in-the-sky technologies other than photovoltaic and other solar technolgies are far from scaling up to replace oil. At least distributed solar has the advantage of tapping into the existing electrical grid, but without some new storage technology it must be backed up at night by fossil fuels or nuclear power. Perhaps wind and tidal sources can contribute significant percentages of 24/7 power, but scaling these up poses enormous challenges.

In other words, a smug faith that some new technology will magically blossom in time to avoid a decline in petroleum is not a substitute for the hard tradeoffs and sacrifices which must be made now to be ready for that decline, which could occur within a decade or even sooner.

Like the nation as a whole, Hawaii's economy has been dependent on real estate development/speculation and cheap oil for the past 50 years. A "plan B" to these fast-disappearing sources of growth is nowhere in sight. The entire point of the Survival+ exercise was to examine the models of finance, economic growth and governance which served up 20 years of real prosperity (1946-1966), 15 years of post-industrial malaise (1967-1981) and 25 years of essentially bogus debt-based prosperity (1982-2007).

If these models are failing, what's our Plan B? The TV "news" (that is, an entertainment "if it bleeds, it leads" simulacrum of news) was busy touting the opening of Victoria's Secret in a Honolulu mall as the savior of the faltering Hawaiian economy (tourism down 12% or more from a year ago) and boasting that real estate prices have only fallen 5% in the past year--never mind the pages of foreclosures filling the back pages of the local papers--as if tourism and speculative real estate development will be coming back shortly.

How different is California, Florida, et al.? Not much. Like superstitious cargo-cult believers in remote South Seas islands who hoped to spark a return of the World War II plenty with appeals to stone radios and other talismans, the U.S. citizenry hoping for the return of debt-based, cheap-oil "good times" are doomed to the bitter realization that superstitition is no substitute for an appreciation of the extreme fragility of the supply chain--both physical and financial--which feeds our consumerist economy.

In an attempt not to drive off yet more readers, I will give Survival+ a break and return to the site's usual scattershot, semi-random coverage of various diverse topics.

Thank you, Sander B. ($20), for your very generous contribution to this site. I am greatly honored by your support and readership.