transcribed by Miranda Huey
Els Cooperrider: Welcome to The Party's Over. I'm your host, Els Cooperrider. I'd like to remind those of you who are just tuning into The Party's Over that this show is actually a series. All the programs are basically about the topic of peak oil. And, so, I wanted to remind you that each topic will relate to the consequences of running out of oil in industrial societies. And today's program will deal with money and the economy and what we need to do in order to stave off a financial collapse. And, we're very happy to have on our program a wonderful guest, Julian Darley, the director of the Post Carbon Institute and author of High Noon for Natural Gas. Julian is a British environmental philosopher who researches and writes about non-market and non-technology-based responses to global environmental degradation. He is also engaged in piloting such responses. In order to further both dissemination and ideas of pilot projects, Julian runs an internet broadcasting station which is globalpublicmedia.com, develops open source web database sites for non-profits and civil society organizations and he's currently writing a book on how and why we need global relocalization of the economy, society, and culture. Hello, Julian, thank you for joining us today.
Julian Darley: Good morning. Thank you for inviting me.
Els Cooperrider: That's wonderful that you could be here. Of course, it's a holiday in the US. I don't know about Canada.
Julian Darley: I believe not in Canada.
Els Cooperrider: No, I didn't think so. But, here we are today on The Party's Over, and there's been a lot of interest in what's been going on with this show, but really what's been going on with the idea of peak oil, and that we need to start paying attention. And, Julian, you've done a lot of work on this issue already, and I was wondering if you could explain to our listeners what we need to worry about, what is it about our economy, the way things are set up now, that won't work when we run out of oil.
Julian Darley: The full range of what will happen will only be revealed to historians, which is not a way – and I'm going to go into quite a lot of detail – but what that means is we don't know to the full extent which fossil fuels, oil, natural gas, and also coal, which is going to come under other kinds of pressure, not running down or running out for coal, but too many terrible side effects. We don't know the full extent to which these extraordinary fossil fuels, for all the damage that they've done, they've also enabled all sorts of things, some good and many bad, we don't know the full extent to which they're intertwined in our lives, in our economies, in our governments, and in our whole business way of life and our food production systems. So, one of the first things to say is we're going to have some surprises, in terms of the way in which natural gas and oil are going to be starting to run down and the prices running up in a very bouncy but fairly quick way, I suspect. We're going to have all kinds of surprises and I suspect not many of them are going to be pleasant in terms of the way they'll jolt what we're used to thinking of as normal life. So, in terms of consequences, one of the things I'm most concerned about is the way it's going to affect food production, and that's because, so often, oil and natural gas are used to prop up failing agricultural systems and make them appear to be gloriously productive. This applies to everywhere in the world, from Australia through to North America and everywhere in between.
Both in terms of East and West, you can think of them as in the middle of the Pacific, but to most people, it's much more important what happens as you go around Indonesia, China, Japan and all the way around through Russia, across through Europe, to North America. And what happened in so many countries, and to India, of course, is that we've converted from various kinds of agriculture which was variously problematic or successful. And we've substituted oil, and mainly in the form of diesel, but not only, but often insecticides, and herbicides and fungicides and so forth, made largely out of oil, and huge amounts of nitrogen fertilizer, other kinds of fertilizer, too, but particularly nitrogen fertilizer, almost entirely made out of natural gas by the Haber-Bosch process, which was developed between 1909 and 1913. These things have now produced an agricultural system, industrial agricultural system, one must stress, which is hugely dependent on oil and natural gas.
So, as these things either run down or run out, our whole food production system is going to come under enormous strain, and it's going to behave I think in very curious ways. At the same time, unfortunately, at which we're seeing, world-wide levels of soil erosion and depletion, wrecking and salinization and all the other litany of problems that soil has undergone in the millenia since we've been doing agriculture, these things are all under the worst pressure they've ever been. And then, climate change is effecting precipitation, particularly rainfall, and also, we've got more and more people using more and more water, and that's reducing the amount of water that's available to the rest of the ecosystem, which I think we should all be deeply concerned about, and also providing more and more problems in terms of water for irrigation and farming. So, this is not usually the first area that people think about when they think about Peak Oil. But I think it's one that should be of the highest concern to us, and also because people are going to turn to biomass and they're going to think of things like biodiesel, but also trying to make plastics, which are very problematic stuffs, actually, plastics. We can make them, and I think we're increasingly going to try to make them out of biomass, as I say, growing crops and other things for substituting, because plastics are almost entirely made out of oil and natural gas. And we're also going to be putting more and more pressure on our already largely over-pressurized forests and wood-growing system as we again turn to more biomass for growing things and for making things. Once again, as plastics come under pressure, look at all the other kinds of things we've been using for thousands of years, also come under pressure, again wood as a building material, but also metals, because many metals, especially aluminum, take vast amounts of energy to process them, as well as to take them out of the ground, and, as in almost all mining, wrecking the place in the process and often leaving it poisoned, for thousands of years if not in perpetuity.
There's a gold mining and leeching technique which effectively leaves the place poisoned forever, so its up there as the mining equivalent of nuclear waste, which is another horror. So these are the kinds of things which are less obvious and then there's a whole aspect of transport which is almost 100% dependent on oil, or mechanized transport I should say. Walking is certainly not dependent on oil and neither is the bicycle, nor the ox and the mule, the donkey, or the horse. But most of the industrial world is not dependent on the oxen or mules. They're dependent on cars of course, and cars are almost entirely dependent on oil for their fuel, not to mention the manufacture of cars. They're made out of plastic, which is made out of oil and gas, as I said, or have parts of metal which are processed with large amounts of energy, a good deal of which also comes from oil and natural gas. So, the picture that one needs to paint, as many people who understand oil peak and who will be listening to your program already know, but for those that don't, it's that oil and natural gas and coal, but particularly oil are the lifeblood, the oxygen, the alpha and omega of our entire industrial way of life. They've become that way over the last 150 years.
Coal filled that role from the beginning of the Industrial Revolution in the – if you could date from the early 17th century, I think it's an interesting moment in 1712 when Newcomen finally got a steam engine working that would pump water efficiently enough out of coal mines because they, running short of coal, because they couldn't get the water out of the ever deepening coal mines, they'd taken all the easiest coal in England at the top. So that's another little example of the way the whole thing is interleaved together and you need to develop one thing in order to develop the other thing to develop the other thing and they all get interlocked together and this all seems to be all right, as long as you ignore all the dreadful side effects which we know so much about now, in pollution, global warming, and all the rest of it, toxins, endocrine destruction, and have a three day program going through all the lists without even discussing them.
Even so, you get to the stage where you have to realize that these primary energy sources start to run out, start to run down. And let me just make clear that while eventually things like tin mines and gold mines and coal mines run out in the sense its no longer economically viable to go on mining them because of the costs involved, for many on-land reservoirs, oil reservoirs, they'll never exactly run out, in the sense that there'll still be a few pints or liters coming out of them in a hundred years if we keep pumping them, but they become economic, just as another other mining system or extraction system does. It becomes economic when you have to put more money or more energy into the system than what you get out. And, it's true that as the price of oil, for instance, goes up, and it's approaching $50 again, it broke through $50 in the autumn, back in the fall last year of September, October. It's just about $1.50 short of $50 dollars again now. As the price gets high, it looks as if it becomes worth tapping into all kinds of rather poorer reservoirs which have smaller quantities of oil or are more awkward to get at. But something else comes into play when you're trying to get energy out as opposed to other things, as opposed to gold or diamonds or things like that, is if you start having to put almost as much energy or as much energy into the process of getting that energy mineral, as it's sometimes called, oil or coal, out, you've lost, because you have to spend more on the energy than the energy you get out. So that's a special characteristic of energy extraction. You must always make an energy profit, and in some ways, the economic profit doesn't necessarily matter so much because you could decide, for instance, “Well, we're just going to simply subsidize this procedure,” as many people say, for instance, nuclear is heavily subsidized and some economists, some fairly right-wing economists claim that nuclear doesn't make an economic profit. But it may well make an energy profit. I won't go into that right now. But the point about energy is that it must make an energy profit as well, otherwise you've lost. So this is one of the many ways in which this situation is going to get very strange, and I think that we obviously haven't faced this kind of situation on such a broad scale ever before and we're going to find the world gets very, very strange indeed. And we'll see just how interconnected, and badly interconnected, this world is as it starts to get more deeply into the difficulties of decline.
Els Cooperrider: That was a wonderful overview of the issue. Thank you about that. I'd like to let our listeners know that you're listening to The Party's Over. I'm your host, Els Cooperrider, and with us, on the line, is Julian Darley. He is the director of the Post-Carbon Institute and author of High Noon for Natural Gas. And we're discussing peak oil. After that wonderful synopsis, I was wondering if you could go into what we might expect to see happen with our financial institutions.
Julian Darley: Yes. One of the things, to set up the idea of strange and unexpected consequences, at least, unexpected and strange until you start delving into it, one of the most profound consequences that I think is going to affect the first world a lot, and North America and particularly America, the USA, is unemployment. I'll come onto the financial system in a minute, but of course unemployment is tied in with that. But as the enormous bounty of oil in particular, but also natural gas, which is also declining on the North American continent, as that goes farther into the decline period, we will find that the economic system starts to slow down. Now, it won't grind to a halt, and if you take all the energy out, and by definition if you take all the energy out, everything grinds to a halt anyway. It won't have to be grinding to a halt, but what will happen is there will inevitably be less economic activity because so much of economic activity, despite, I think, some of the bunk talks about the so-called new economy, in the end, it boils down to the moving around of molecules, be it coal, the primary stuff, or of finished articles, cars and so forth.
So, economic activity generally leads to the moving around of stuff. And the moving around of stuff inevitably requires energy, this is just simply the laws of physics. If you move a pound or a kilogram of something of a certain speed, and particularly if you accelerate it, but if you move it, it creates friction. It requires a continual input of energy, and that will never change, not in, as far as we know, in this universe. That requires energy. In general, that requires energy from oil, or to some extent, natural gas. But, generally, it's from oil. Most of any form of transport freight and so forth is powered by diesel, which is very much made out of oil, although it doesn't have to be, but in our quantity it is. So here you have a situation where economic activity is indelibly tied to moving things around, is indelibly tied to the need for energy.
And more and more energy, I must say, too, and we'll come to the nature of growth, or the pathological nature of the economy we have. So as this gets constrained, first by price, which is already happening, although freight remains pretty cheap, especially by sea. Trucks and lorries are going to get more and more expensive, but sea has always remained, or, water transport has always remained, always been incredibly cheap, and will remain so. But as these things get more expensive to move, economic activity will reduce. This is inevitable, and the making of things requires energy, and energy prices will all go up, and making things will also get more expensive. So there will be less economic activity of the sort that we're used to, and that's inevitably going to mean, unless we plan for it, given the kind of globalized, energy-intensive economy we've got, that's going to be mean less employment of the sort we're used to, especially, I suspect, in the service economy, which really secretly depends on the good old-fashioned industrial economy, despite, to me, such nonsense phrases as the post-industrial economy. We've just shifted the industry somewhere else that generally has cheaper labor and near zero environmental regulation. The less that happens, I think there is going to be what I call, and I call it this deliberately, is going to be an unemployment Holocaust.
And the interesting thing is, and the terrible thing is, we've already seen a great unemployment Holocaust in the rich countries, in the developed countries, so-called “developed”, an unfortunate term in itself, the industrialized countries, and that was the one caused by automation, which was much talked of. I remember as a boy in the 60's and the 70's as the great computer revolution came in, there was a great deal of talk of automation causing huge unemployment. And then, apart from all the extremely good work of Jeremy Rifkin and a few others, almost no one seems have mentioned that the automation revolution did cause catastrophic unemployment. Now, and that's not been really, to some extent, it's been filled up by the service economy, which, if you are on the top end of it, working in a brokerage or something, this probably looks pretty good, get a fat wage, and if you're on the bottom end in a low end job, working for Walmart, and the thousands of other companies which emulate Walmart, some of them or all the rest of them, then things look pretty lousy, if you could admit it and see it. So this was not really addressed.
The automation revolution causing all this unemployment, it was all glossed over, but there was a huge amount of structural unemployment left from this. Now, ironically, as the energy which helped fuel the automation revolution, not just energy, but there's a great deal of it, now, as that goes into decline, that energy source, particularly oil, I think there's going to be a second wave of unemployment, and it's going to be much bigger than the first wave, and it's going to be much harder to cover up. Now, what should happen as we move into energy decline, particularly the oil decline, is that we should restructure our economy to realize this and start planning for the fact that there'll be less exogenous energy, external energy, you might call it free energy, I mean it's so cheap, it's effectively free energy, and free energy often means available energy, and as this reduces, we should be substituting human muscle, which there's plenty of around, often being wasted in gyms and places like that, start substituting that as we always used to. We had to use human muscle par excellence because that's what we had around. We certainly used animals, too. So this should mean that if we were to plan to change our economy back to something that looked much more like the way it did 150, 200 years ago, Pre-Industrial Revolution, particularly, then we would be able to take up the enormous amount of flak, at least, we should be able to plan to do that, and then start doing lots of experiments, and try to prevent what I think is going to be a ghastly nightmare.
There's absolutely zero sign that this is being done by the government, most of which, in fact, as far as I know, all of which as yet has not officially admitted to peak oil. The British government has admitted that Britain is in rapid decline as far as both oil production and natural gas production is concerned, but they think they are just going to go on importing it easily from traditional and new places, and no doubt they will import it. But as everybody turns to more and more importing of natural gas, which America is going to be doing, and ironically, so is Canada, the prices will go up, and there'll be more and more competition for that natural gas, which is becoming a so-called globalized commodity, and the same thing's going on for oil, especially as China and soon India, are competing massively for basically the same global pool of oil.
What we're going to see is inevitably energy prices will go up, and I think economic activity is going to reduce, and we will see this unemployment starting to, a second wave of huge unemployment, starting to become yet another huge thicker layer or stratum of structural unemployment, with the governments, as I say, not recognizing, refusing to admit the problem, yes, piecemeal in the sense that “Yes, our local production's in decline,” as Canada is starting to admit that, for instance, its natural gas is in decline. But until you admit that the whole system is so dependent on these fossil fuels and that the fossil fuels, the inevitably non-renewable fossil fuels, particularly oil and natural gas, are soon going into decline, oil, globally much more quickly, probably much more quickly than natural gas, then governments are going to refuse to admit this and refuse to plan and try to deal with it. Of course, even when they do admit to it, it's going to be such an extraordinary problem for them to deal with and it's not a problem any politician would relish, even when they've admitted to it. But I think it is going to take governmental action and I fear that it's already dreadfully late in the day and that still there is very little sign of this.
And, before I go on to talk about growth, which is a staggeringly important and awful subject, one of the things that we at Post Carbon Institute are doing, and the website for that is postcarbon.org, one of the things we're trying to do at Post Carbon Institute is help start things we call outposts or, have been called outposts by some of the people that are in them, and these outposts help to start to relocalize, as they say, bring back control over your local production of so many things, including energy. It would need to be money too, you'd need bring money into that, which is a complicated subject, which we'll get onto, and also food production, but also culture and governance. These things all need to be relocalized so that local people have got much more control over producing their daily needs, which is going to be the most extraordinary task imaginable, and we talk of global relocalization because its not going to be very much help just relocalizing your bit, no matter how well you do it, because if your neighbors don't do it, well, there'll be trouble, and anyway, for nearly, probably more than 10,000 years, because of the nature of the way nature is, we've found that we find certain things vital, but they're not distributed evenly, everything from soil, through glass and obsidian, which is a kind of organic glass, which is used for tools, everything you can imagine is not evenly distributed, so we've developed this system of trade, which can be helpful, but not always.
Trade can be absolutely pathological and we're going to need to reexamine trade and our incredible obsession with trade, and, of course, the ghastly idea of free trade, which is a very bad form of trade. I'm not saying that all forms of trade are bad. I am saying that free trade is clearly dreadful, and it was meant to be, too. So, as all this plays out, we're going to need to restructure just about the whole way we've done what has turned out to be for many the massive industrial society, industrial civilization, and it has to be honestly admitted that I think considerable swathes within the industrial world are not going to make this transition comfortably. That's a sort of euphemism. However, what I strongly believe is that pockets of people, and by a pocket I don't mean 3 or 4, possibly tens of thousands, hundreds of thousands, even millions of people may decide that this is a serious problem, they may decide to face up to it.
And so, pockets, fairly sizeable pockets, and I hope they are fairly sizeable pockets of people, will face up to this, and will start to make the very tough transition into a world which starts to try to be reliant on the solar ration, which is not very much actually, per square foot or per square meter, not a very great deal of energy, that is, if you put it up across the whole planet, though we're already grabbing far too much of the available energy, so we shouldn't do that. We should first cut dramatically our usage of energy whilst we try, with great effort and some desperation, I can envisage, to make alternative ways of furnishing our living needs. Now, all of this would be a lot easier if only it weren't for the dreadful financial system and the dreadful economic system which we've developed over a period of hundreds of years, which is based on a number of unfortunate things, but one of the most unfortunate things is based on if the dreaded growth, the dreaded economic growth, and I think dreaded because it's an absolutely stupid idea to develop a system on eternal, endless growth on a finite planet, people often say, because its spherical, and anything spherical is limited, and sometimes who people don't believe this, I'm not saying they don't believe the earth is spherical, although you can always wonder about this, that they call “flat-earth economists” or “cornucopians”. Cornucopia refers to the horn of plenty in Latin, which is basically an endless, fruitful source of everything you've wanted.
So that's the cornucopian part, or “flat-earth” because if something is flat, it theoretically could go on infinitely, and therefore you just have to go a few more miles and you'll find more stuff, though sometimes you could have called flat-earthians or flat-earth economists. And this is clearly ludicrous on a finite planet. Any mathematician or anybody else who studies the physical sciences reasonably and honestly will immediately will tell you that everything on this planet, in the way of minerals and other resources or materials of that sort, is inevitably limited. As far as we're concerned, what is unlimited is sunlight. Of course, it will eventually stop, but then everything else will stop, too, when it soon becomes a great big supernova. But that's probably a billion or more years away. We don't really have to worry about that. So what we've developed then is an insanely stupid pathological system, an economic system, based on growth. Yes, the rest came about partly by accident, but anyway, it's here, and one of the chief driving forces behind this wretched growth system is the money system, and a money system which is based on debt, compound interest, and fractional reserve banking is absolutely doomed to consume and destroy its host, which happens to be us and an increasingly large part of the planet, both living and mineral.
And how does this happen? It's quite simple, really. That is, if you have a system of loans, whereby you say to the person, “Well, I'm going to loan you something.”, in this case, money. And then you say to them at the end of the year, “I want a certain percentage of it back with or without the capital or ultimately, we'd like the capital back, too, that's the initial part, so if we lend you $10, and then by the end of this year I'd like 10%, I'd like $1, and I'll lend it to you for a year. So I want $11 back at the end of the year. Now, if you have ten people, and you lend them all $10 and you say to all of them, “Well, at the end of the year, you've got to pay me $11.” But if you just imagine for a moment that's all you've got, you start with $100 in total, lend out at $10 each to 10 people, that's $100. At the end of the year, if all 10 people were to pay you back on schedule, somehow or other, $110 would have to be in circulation in order for them all to pay. Where is that extra $10 going to come from? Well, assuming that you've got a solid $100 and you can't get anymore from anywhere else, well, the answer is pretty simple. One of those people, some of them, but let's assume for a moment, one of them, the other 9 of them might get together and let's say we're going to knock off old Harry over there, and then we'll grab the ten. And that means 9 people can comfortably pay back their $10, plus and extra $1, because those 9 $11's make $99, leaves a spare dollar. So you've come out all right, except unfortunately poor old Harry has got nothing.
So you begin to realize then you've got say, “Well wait a minute. The answer is expand the money system by 10%” So lo and behold you expand the money system by 10%. There's really only a couple of ways you could do this. In the old days, when you had a commodity-backed system, be it silver or cowries, which is a kind of shell, or gold, it meant digging more gold out of things, you dug more gold out, so you could back it with a bit more commodity. We've got a situation now since 1971 whereby almost all money is backed by practically nothing at all, it's a face-based currency, some people think it's an oil-based currency behind it all. In that case, what are the other things you can do, and you can do with your gold backed or not, depending on your level of honesty or not, you can either print more money, which is what I suspect a lot of people think we just do anyway, that has all kinds of dangers for printing more money, including people-produced inflation, once that gets out of hand, only holds if you have a debt-based system, you bring into being another debt. So let's say we go back to our $100 system here. Before the end of the year, another person must go into another $10 debt so that they can pay part of that interest. So what you get is a system where you have to increase the debt evermore. You have to have ever more debt, all the time, to pay back the interest. And so, I think it's hardly any wonder you get to a situation whereby first you have to force more and more people into debt, and when you get into a situation where you can't force more people into debt because you've reached the market limit, then you must force people into more debt, so you increase the per capita debt. I think that's one of the deep, underlying reasons why there's so much incredible credit card debt, and it's also one of the reasons credit card companies go on offering people more and more credit and more and more credit cards, because you've got to go on expanding the money system.
So once you get this, you get a whole pathological system, all of which then has to expand, so the whole economy has to expand, the economic activity has to expand, that's what we call economic growth, and you get the whole dreadful pathological system which is all based on needing to expand, and then, ultimately a great deal of it comes back to needing to service the money system. And, by the way, it also means that you really need to keep expanding the population, a population will expand, a natural population of almost anything will go on expanding to reach the available limits of available or so-called free energy, and in this, we're unfortunately no different from any other species. We just keep doing this. So here we have a system based on this money with compound interest which worsens the whole thing because it means you have to pay back ever more money over time, based on debt. The way you can create more money is by creating more debt, and then you have a fraction or reserve system on top of it, just to compound this whole dreadful mess, which says, that say for instance, many banks are required to hold 10% of what they loan, so you only have to hold, if you want to loan $10 million, you only got to hold $1 million on hand in your reserve. So this is another multiplier.
So you've got a system of extraordinary multipliers based on a very unfortunate and stupid idea of increasing the money system by debt and the whole thing now is completely out of hand, it exploded, especially since Nixon famously closed the gold window in 1971. As it was euphemistically put, he did it on a Sunday afternoon, I believe, when he thought no one was looking, and I think many people weren't looking, and that basically unhooked the gold exchange standard in which gold was, the dollar was tied to the gold, and everybody else, I think it at $35 an ounce, and everybody else was tied to the dollar. But when Nixon, partly in result to the wrecking motion of Vietnam, which was just causing huge difficulties for the American dollar, and therefore it was giving it gold problems, when Nixon unhooked the dollar from the gold exchange system, he unhooked the rest of the world's economic and currency system from gold. And, although bill-backed currencies are generally regarded as a mistake, except by people who are called gold-bugs, I must admit, by comparison, what we've got now, it looks attractive. I'm not advocating a return to the gold standard. I'm just saying by comparison, the system which has gone completely insane, which the current currency system has, other things which we can't rate look good by comparison.
So we've got a system now which I think is completely out of control, we've got the foreign exchange activity, which is completely out of control, and so we've got a growth system completely out of control. It also forces the economic system, and has done for a long time to attack, basically, with economic means and military means, militarily as well, ever increased markets. So we see markets being increased into all kinds of places. It happened to Japan, of course, famously in 1853 when Commodore Perry went in with gun-boats but it's been done all the time, it's often done with economic means and other kinds of skulduddery, to force markets onto people that don't want them, and the other thing is, you force markets onto every younger people, so you get marketing going down to 2 or 3 year olds now, which is incredibly unfortunate.
Els Cooperrider: It is. This is fascinating. I'm wondering, Julian, I don't know if you'd be able to come back in 2 weeks from today on this show because this is too big a topic to finish in one hour. And so what I'm wondering is if you'd be willing to come back two weeks from now, we could take a few questions from the audience and then continue our program in two weeks.
Julian Darley: Certainly.
Els Cooperrider: Okay, great. Well, we have, the phones are starting to light up. This is a very interesting discussion. I would like to remind our listeners that you are actually tuned to KZYX in Philo or KZYZ in Willits and Ukaia. And let's go ahead and take a call. Hello, caller, you're on the air.
Caller 1: Hi, I am so impressed. Thank you so much for talking about the money situation. I think most people probably haven't done their homework on knowing about central banks and federal reserve. I have a wonderful videotape called Money Masters that maybe I'll show at the Willits Library sometime soon, so please listen in the future on the calendars for a time and a date, and I'd be happy to share that, but there's really some history people have to know in order to understand what's being talked about. Okay. The military runs on gas. I don't understand how peak oil can be such a catastrophe, in the future, when the military seems to be expanding, it seems like they're not including that thought in their calculations. So, I'd love him to speak on that point.
Els Cooperrider: Sure, okay, thanks for your call.
Julian Darley: Yes, this is fascinating. You mention the Money Masters, I think it's made by a man called Bill Still, and its a very fascinating look at, I think, the awful system at the Federal Reserve system, and we don't have time to go into that now, but the Federal Reserve, the central bank system is something people should go and look at. It's very complicated, and I hope bankers listening don't think I'm being unfair, but I think bankers themselves don't really understand the money system. I'm not saying they don't understand banking, because they clearly understand how to make a lot of money out of it, but I think a lot of people don't understand the way the money system was developed, and that film Money Masters, I think is very, very useful thing to look at in terms of explaining the money system and the central bank system, so I applaud your showing that, and the more people that go and see that, the better, because you'll get quite a surprise. As for the military, not knowing about it, you said, not taking it into account. But I think they are taking it into account, certainly at the top. The military, the Pentagon, is very well aware of the peak oil situation, and I think they're very concerned, and they're, of course, like any system, unfortunately they're concerned for their own survival.
I think you can take it on pretty good certainty that the military is very well aware of this, and is concerned that a great deal of the military runs on actually jet fuel, which is also got from oil, so it's not exactly gasoline, but a great deal of it runs standardized on a particular kind of jet fuel, so all the machines are on more or less the same thing. It makes life easier for them in terms of provisioning. Sure they understand. They're looking at biodiesel, they're looking at all kinds of things in terms of trying to get fuel from elsewhere. I spoke to the Pentagon recently when I was trying to discover just how much oil the military actually uses. The figure which you see written down in various places is I think about 2% of US oil use. I think that's very low. I've was told they use a billion gallons of jet fuel a day in Iraq alone, if and I believe I've been told that correctly. I think 2% of US oil use is just over 20 million barrels a day. It sounds low to me. I'm not saying they' re not telling the truth is this, they do in other matters, in the way they spend money, but I think what one forgets is the huge extent to which the rest of the American economy is based on military activity. That it is, also cars.
What portion of the economy is car sales is to miss the fact of how much the rest of the economy depends on car sales. And I think the same thing goes for military. Now, I take a pretty hard line on the military, because I detest violence of all forms, especially this huge, mechanized vicious brutality which I'm afraid the American military is leading out, and has been, for an awful long time. I would strongly encourage Americans and other listeners that have it to look at books like Syndey Lynn's The Thwarting of the American Empire and Howard Zinn's books as well for the very unfortunate history of the American empire, because it is an empire. So this brutality has been going on for a long time, it's been masked by very clever PR. So, one of the things I think, mad though it sounds, and some of the things I say may sound crazy, though I'd like to point out to people that I think in not many years these things will sound perfectly moderate, and I think they are quite moderate. All the things I've got to propose are quite moderate and sensible. I think you should de-fund your military. Yes, bonkers, I know, but to think, who's really going to attack America with another army? Canada has a tiny little army, I think we spend about $10 a year on it. Mexico I don't think is going to invade at all with an army, I mean, they might try and get their land back, but they'll just do it with cleaners and nannies and things like that who don't usually come armed. So what is the purpose of this huge military which people say has been as much as the next 20 countries put together and you can pick a number, who knows what's really spent on the military. What's it for? And I think a lot of it is for enforcing capitalism.
Markets and the military basically always go together. The important part, I think, to a large extent, that the American military exists to safeguard capitalism and to safeguard the flows of banking, the flows of the banking system and the money system. So, although it sounds crazy, I think people who are worried about this should actually start thinking very carefully about how to not give the military so much money. In a perfect world, no money at all. In a place like America which is surrounded by oceans and non-hostile neighbors really doesn't have to worry about it, it's really kind of crazy. So I think the military knows all about it. The top does. The average poor old soldier in Iraq probably doesn't know very much about it and is just trying to avoid getting blown up by a roadside bomb. He doesn't know or she doesn't know very much about it. The military knows, and I think this is one of the most important things that Americans who have really large numbers, although unfortunately not large enough numbers, who care very much about people and the planet and other people and other living creatures, they should think very carefully about the role of the military and trying to reduce the size of it.
Els Coopperrider: Right. Well, we have, the phones are just ringing, all the lines are busy, but let's take a few more calls. Hello, caller, you're on the air.
Caller 2: Hi, Julian, this is Steve Higraff.
Julian Darley: Can you speak up a little bit?
Els Coopperrider: Yeah, he said, this is Steve Higraff calling.
Julian Darley: Hello, Steve.
Caller 2: Hi.
Els Cooperrider: I think you know each other.
Caller 2: Yeah. You're on the radio and in our area now, and it's great to hear you. Els, thank you for this program.
Els Cooperrider: You bet.
Caller 2: I wanted to just comment a bit on the military and that the military is one of the largest purchasers of renewable energy. Currently, they're purchasing a whole lot of photovoltaic panels which seems totally absurd that they're using all these renewable energy sources to try and procure more oil, to take us further down that dead-end path. The other thing I wanted, if you could comment on, is the LNG terminals that are currently being planned for the West coast. They're so expensive, and I know that Russia has 27% of the world's natural gas and Iran has about 15% and Qatar also has about 15%. The rest of the countries in the world have very little, so if you could comment on how you feel about LNG. And lastly, I recently showed the film The End of Suburbia in Fort Bragg and we tried to focus on solutions and a discussion afterwards, and a lot of people are pretty excited about the possibility of getting back to a simpler lifestyle and we were, the talks focused on building greenhouses to extend our growing season. In many areas, I think, we can actually grow enough food to sustain ourselves using renewable energy sources and going back to a much simpler lifestyle where we don't drive around as much. Thanks very much for being on the show.
Els Cooperrider: Thank you for the call, and Julian, before you answer these questions, I'd like to remind all our listeners that you have agreed to come back two weeks from today, which is the 31st, and we will continue this discussion because we didn't have enough time to cover it. I would also like people to know that if you have a question or comment you can call 895-2448 or 1-800-499-7117. Okay, Julian.
Julian Darley: Can I first make post what I hope is a useful comment, that will also sustain this blood. And that is in my book, High Noon for Natural Gas, I of course talk a lot about liquefied natural gas, and don't have enough time to go into this complex subject today. Inevitably in a book about natural gas of course I talk about natural gas and LNG, liquefied natural gas, which I think is a huge and very unfortunate problem which the US faces par excellence just about everybody else, with the possible exception of Britain. So that's a very complex problem. I also talk about, a lot more about the money system and also more about, I don't use the word solutions, but I do use the word response. In the last chapter of my book, High Noon for Natural Gas, which published by Chelsea Green, and it's also available from our website, postcarbon.org, in that last chapter, I talk actually very little about gas in the final and longest chapter, because just reducing the natural gas use is a very hard thing on its own.
So I talk about the whole business of relocalizing to reduce oil inputs, not just your energy inputs, but also the rest of your inputs, which also go with your corollary idea that this will reduce your waste outputs as well. I think the key to reducing waste is to reduce material throughputs. And that means reducing energy and reducing everything that comes into the front end. So that's a great deal about that in the book, High Noon for Natural Gas, which I hope people will, even if you find yourself not interested in natural gas, which I think anybody in America should be, but you can flip straight to chapter 9, and I spend 40 pages really engaging as honestly as I can with the kinds of prospects we've got and the kinds of responses that might make some sense. Also, if you're interested in becoming part of the network which we're developing, the outpost network, please also visit postcarbon.org and getting contact for this file postcarbon.org and you could become a part of either an existing outpost or help form one. All of your organization, which is if you've already got one, and for instance, there's already some excellent work being done by Jason Bradford, and we're already talking to them about how we can help each other whether or not a group explicitly becomes an outpost that can join the outpost network.
Els Coopperrider: If I can just interject that, Jason Bradford's group meets irregularly and people can get more information on that group at their website for the Cloud Forest Institute. So, go ahead please.
Julian Darley: And indeed, Jason has a marvelous piece in our forthcoming outpost, we call it the outpost manual, but actually, it's called Relocalize Now. It's a new book which has been, we're very glad to say, will be published by The New Society Publishers, who also have published Richard Heinberg, who wrote The Party's Over and Powerdown. The New Society will also be publishing this in the fall, in the autumn of this year. But, for those who are particularly interested in what we call outposts, in these groups of people starting on the work of Relocalization Now, an outpost manual preview, a preview of relocalization is available if you e-mail us by going to postcarbon.org, and so you can immediately at least get the preview version of this. It's by no means finished, but there's already 130 pages, about 2/3rds of which is very practical things to do. So, in terms of responses -
Els Cooperrider: Julian, we are running out of time.
Julian Darley: Oh, you're running out of time.
Els Cooperrider: Yeah, it's 10:00, I'm afraid to say. It went extremely fast. I'll ask the next – no, we need to go. So, I'm sorry to have to interrupt at this point, the hour went very fast, but maybe we can start with the answer to this question on the next show we're doing together?
Julian Darley: Yes.
Els Cooperrider: You're willing to come back on the 31st, Monday morning?
Julian Darley: Yes.
Els Cooperrider: Thank you so much. It's a fascinating subject, and it needs definitely more time. So, Julian Darley, thank you so much for coming on the show with us today, you'll be back in two weeks, and we'll hear more from Julian Darley, director of the Post Carbon Institute.
Julian Darley: Thank you very much.
Els Cooperrider: Thank you so much.
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