by Perry Arnett
Why do I believe what I do?
The projections made by others that fossil fuels will decline at a rate in the 2-5% per annum range after reaching the peak,  while possibly technically accurate projections,may not be universally understood in their importance. The ‘real’ rate, once begun, is liable to 2 to 3 times that ‘projected’ rate. And the EFFECT of that decline rate is liable to be on the order of 2-3 times that!
In fact, they will all have a motivation to report a SMALLER decline than may actually be happening. So, I believe that when the initial reports of “decline” begin to be issued, they will be erroneously reported SMALLER by a factor of 2 to 3 times the ‘real’ rate. The interests of those currently in power to try to stay in power, and of those who sell stocks to continue to sell stocks will cause them to mislead constituencies and investors. Thus, the “real rate” of decline after ‘peak ’will be illusory, at best. 
As the decline concept becomes known and generally accepted by most of the masses, people will begin to use less fossil fuel. They will have to — as it becomes either less available, or less affordable.
Some of the first things to go will be discretionary mobility. People will first begin to travel less for recreation, then for shopping, then they will commute less, then they will use their cars and SUV’s less, generally. The cost of all goods and services will begin to rise as the availability of energy begins to decline and is spread throughout the economy.
There will be migrations into the cities by those looking for work that is closer to home, until they realize that there is no safety in the cities. When they realize this, they will begin to migrate out of the cities and ‘upriver’, to those places where they mistakenly believe they can find peace, security, food, and water. Watch LA, Phoenix and Vegas empty out, and Flagstaff, Grand Junction and Boise fill up.
When the above occurs, the auto plants will lose sales so fast that they will lay off autoworkers by the tens of thousands; who will buy cars if there is not enough fuel to drive them? The auto industry as we now know it will cease, largely. This effect will be repeated in the other major transportation industries — trucks, trains, air, ships, etc.
When the decline begins in earnest and it is generally accepted as a fact of life, we will see major lobbying organizations fighting for the spoils; i.e. truck transportation, auto makers, rail, airlines, and agribusiness will all be in line to lobby the legislators to give them their “fair share” of the dwindling resource. “Give US more fuel (than the other guys) and we will save your butt…” they will say.
So along with rolling blackouts, we will see rolling handouts: the politicians will do that, and they will initiate rotating allocations of the declining resources. Rationing will be reinstated.
Agri-biz will get the spoils THIS quarter, airlines the next, trucks the next, and so on. The lobbying for their ‘fair share’ of the spoils will only, as it always does, cause mis-allocations of the dwindling resource; greater mis-allocations than if they had not lobbied at all. The greater the lobbying effort, the greater the mis-allocations As the mis-allocations become rampant, the inefficiencies of the mis-allocations caused by the controlled market will begin to be realized.
I see a ‘negative multiplier’ here that is not mentioned by others. When the decline of fossil fuels is say, 3%, because of those mis-allocations brought on by graft, corruption and the like, the loss of fertilizer to agri-biz may become 6%! And when the loss of fertilizer is say, 6%, the amount of food reaching the stores by the transportation industry may be 10% less because of the greater inefficiencies in that industry, and so on.
My point is that the worse it gets, the worse it WILL get.
So the spiral down will be like the vortex of a toilet bowl; the velocity of the water is gentle on the edges, and motion is barely discernible; but the action is progressively more violent the closer to the middle one gets, until the rate of decline in the middle — where all the REAL action is — bears almost no relation to the rate of decline on the edges.
Most today seem to be concentrating their thinking on the rate of decline “on the edges”, (“how much will the rate of decline in the fossil fuel industries be after the peak”), but few seem to be asking what the rate of decline may be in the middle — where you and I and our familles will be.
So, while some talk of projected annual production declines of only 3-5%, I see the real decline ‘effects’ being in the 8-15% or greater, range, thus, the premises that lead to my conclusions. Where the “reported” rate of decline may be in the range of say, 3-5%, and the “real” rate of decline may be in the range of say, 4-12% , the “effective” real rate of decline, that is, the rate of decline as effects humans in their ability to do a job, keep a job, earn a living, put food on the table, and survive, — may really be in the range of say 8-20% per annum. At that rate of decline of the benefits of cheap, readily available fossil fuels — food, fiber, transportation, communication, energy, etc., gross population numbers have to decrease rapidly.>Thus, with less fuel, less fertilizer, less transportation, less efficiency in ALL areas of industry and commerce, there will be less food; — less food planted, less food fertilized, less food irrigated, less food grown, less food harvested, less food processed, less food transported to markets, less food available to be sold at retail, and less food, ultimately, to be put on familles tables. And the only things of which there will be more will be hunger, disease, violence, and death — and graft and corruption A black market in food, fuel and energy will arise and will compete with the supposed ‘open market’ controlled by the government, major corporations, and their lobbyists.
(Witness the recent “mis-allocation of resources” in South Africa where the government forbids the people to have grain because it is genetically modified. Regardless of what position one may take on that issue, the effect is that people will not receive the nutrition they need because of political and other inefficiencies in the system. I see that scenario playing out numerous times in multiple other areas of life — soon.)  When the masses finally realize that governments of all types are helpless to provide any substantive ‘benefits’ i.e. food, for individuals and familles; e.g. when people realize that regardless of how powerful he may be in other areas, GWB cannot create a bushel of wheat, spontaneous anarchy will probably arise. When that occurs, even GREATER mis-allocations of resources, and thus, GREATER inefficiencies of production and distribution will occur. For so long as there is a military, the military will HAVE to have it share of gas and oil; to hell with the peons (that’s you and me…). And the spiral downward will just accelerate. Remember, this society and its culture are clearly based on the nearly universal, ready availability, of cheap, fossil fuels.
Sorry to be so pessimistic, I see what I see and have to conclude what I do. Again, I think that Duncan has put us on the right track; I just think, however, that not enough have grabbed his great analyses and run with it — to wherever it leads.
Western civilization really does hang by a thread, or rest on a knife-edge balance — and that thread is oil — or more accurately, the combination of fossil fuels that we currently exploit. While cheap, readily available, high quality energy is within the reach of most, life seems to be pretty damn good! But the increase in world population combined with the decline in world fossil fuel production can only lead to a tipping of that balance — in a direction none of us want to go. Yet in a direction none of us can change.
This really is a zero sum game : GWB can only invade and control all the nations on earth with oil reserves. When he has them ALL, he’s done! (and so are we) At that point, when the soccer mom cannot pickup her kids from practice because there is no more gas to put in her Excursion, the s**t will have already hit the fan and the splatter will have been felt my most.
Not much ‘factual data’, and not much ‘documentation’, — just my view.
Perry in Utah