Why Your World Is About to Get a Whole Lot Smaller

Razor wire and leaves

Jeff Rubin is a Toronto-based economist for CIBC World Markets, and he has written a book predicting a future of “triple digit” oil, and some of the consequences it will have. While the book is interesting and many aspects of the hypothesis are plausible, the lack of rigour in analysis makes the work less convincing than it might otherwise have been. For one thing, “triple digit” oil covers an awfully broad range. For another, it isn’t clear whether the effects he predicts will unfold in the order he anticipates. For instance, if severe climate change impacts emerge before acute and permanent increases in the price of fossil fuels, the global consequences may look rather different.

When he says that the world is going to get ‘smaller,’ Rubin is reversing the normal sense of globalization having shrunk the world. What he really means is that the world will get larger, relative to our ability to travel and move goods, and that we will have a correspondingly more local focus as a result. That means less imports of all kinds, less travel, and the re-localization of industry. Rubin’s strongest points and arguments relate to the production and use of fossil fuels: such as the effect of domestically subsidized fuels in oil producing states, the limitations associated with energy efficiency, the problems with corn ethanol, and the importance of energy return on investment, when contemplating alternative fuels and sources of energy.

Rubin’s habit of mixing established fact with speculation, and sometimes dismissing important possibilities with a brief splash of rhetoric, makes this book more valuable as a prod to thinking than as a guide to what is likely to happen. The book also contains the occasional overt error, such as referring to prosperous South Korea as the ‘Hermit Kingdom’ – rather than the tyrannical regime to the north. The chapter on climate change was certainly lacking in ways that make me doubt the overall quality of Rubin’s understanding and analysis. He doesn’t really seem to grasp the concept of a stabilization pathway, technological wedges, or the physical realities that must accompany the stabilization of greenhouse gasses at a safe level. His discussion of electrical generation – in both fossil fuel based and alternative forms – is similarly lacking in detailed and rigorous evaluation.

In the end, Rubin’s work is an interesting way to set yourself thinking about the effect that constrained energy ability would have upon the world and your life. When it comes to evaluating the macroeconomic and societal consequences of such a development, the book would probably best be read alongside a more transparent and quantitative analysis, such as that in David MacKay’s book on sustainable energy.

Author: Milan

In the spring of 2005, I graduated from the University of British Columbia with a degree in International Relations and a general focus in the area of environmental politics. In the fall of 2005, I began reading for an M.Phil in IR at Wadham College, Oxford. Outside school, I am very interested in photography, writing, and the outdoors. I am writing this blog to keep in touch with friends and family around the world, provide a more personal view of graduate student life in Oxford, and pass on some lessons I've learned here.

7 thoughts on “Why Your World Is About to Get a Whole Lot Smaller

  1. This month’s Walrus has an article entitled “An Inconvenient Truth” regarding a hydro carbon geologist David Hughes who has given The Talk 155 times in the last 7 years. The Talk provides provides an update survey of the planet through the eyes of a hydrocarbon geologist. He outlines the end of the fossil fuel age based on the increased costs of accessing the known reserves of fossil fuels in particular oil. The consequence is that even without any carbon tax or equivalent the costs of accessing the oil will increase dramatically, such that we will dramatically decrease our consumption.

  2. The consequence is that even without any carbon tax or equivalent the costs of accessing the oil will increase dramatically, such that we will dramatically decrease our consumption.

    This is probably true, but the timing is important. We may well be able to do horrific damage to the climate, well before hydrocarbon resources become inaccessible or unaffordable for those living in affluent societies.

    If James Hansen is right – and the threshold for danger is 350ppm – we have already done so.

  3. Sunday, May 24, 2009
    Book Review: Why Your World Is About to Get a Whole Lot Smaller

    Jeff Rubin – the former chief economist at CIBC World Markets – has always struck me as someone who “gets it.” I have seen him do a number of interviews, both on television and in print – and he consistently sounds the alarm on peak oil. He understands very well that cheap oil is the lifeblood of the global economy, yet this is an era that will soon come to an end. His new book – Why Your World Is About to Get a Whole Lot Smaller: Oil and the End of Globalization – goes through the peak oil story in a way that I initially thought of as “Kunstleresque”, but I changed my mind as I got deeper into the book.

    Some will certainly describe Rubin as a ‘doomer.’ However, by the end of the book I had concluded that there are some significant distinctions between the overall message that Rubin is trying to convey and the message Jim Kunstler conveys in The Long Emergency. Maybe it’s because The Long Emergency really slapped me out of complacency, but I recall being mildly shocked after reading Kunstler. I did not experience that same sense of shock while reading Rubin – but those who are only mildly familiar with peak oil may be.

  4. Are we entering an age of reverse-globalization?

    The International Energy Agency is getting a bit worried. It sees that low oil prices — or at least low compared to last summer — have led to under-investment in energy infrastructure, particularly exploration of oil and gas. It also knows that when the economy shifts into recovery mode demand will pick up fast and supply will be slow to respond. It predicts there will be a supply crunch by 2012, and of course that means oil prices will be rocketing back up.

    This scenario, of course, may be understating the problem about to hit world economies, says former CIBC chief economist Jeff Rubin, whose new book Why Your World Is Going to Get a Whole Lot Smaller hit the market today. I’ve got a feature book review here, but in a nutshell Rubin believes conventional oil production has already peaked and unconventional production won’t be able to keep up with demand once global economies recover, and not just because of the incredible appetite the Chinese have for oil. Rubin argues that excessive consumption in the Middle East, massive local subsidies there for oil, and the use of oil-fired power plants to run energy-intensive desalination facilities will shrink the amount of oil supply that OPEC puts on the world market. Ultracheap cars to appear in India and likely to spread around the world, thanks to Tata Motors, will mean even more demand for oil products.

  5. “But what the world has run out of is the oil that it can afford to burn. While oil companies are quick to hold gala press conferences to announce new field discoveries (like BP’s recent trumpeting of its Tiber discovery, over six miles below the seabed of the Gulf of Mexico), you almost never hear them disclosing how quickly their fields are actually depleting. And yet every year, depletion robs global production of about four million barrels per day, or about five per cent of the 85 million barrels the world consumes every day.

    At that rate, the world has to find no less than 20 million barrels per day of new production just so the global economy can burn the same amount of oil in 2014 as it burns today. That’s why, in the oil business, you have to run faster to stand still. And even if global production can keep up with that treadmill, that leaves no allowance for any growth in demand. “

  6. It’s a real question now whether the capital-intensive, high-cost oilsands can overcome the adversities that have sprung up in front of them: oil prices less than half of what they were last year, competition from a whole new bounty of American tight oil, fierce campaigns against the oilsands and bitumen pipelines, higher expectations to reduce greenhouse gas emissions, and looming changes in royalties by the province’s new NDP government. Could they end up a stranded resource, with production plateauing when projects currently under construction are completed by 2020, leaving the vast majority of all that oil wealth in the ground, even as the world’s thirst for energy expands?

    Production growth from the oilsands is expected to continue, albeit at a slower pace, for the next four years, or until the end of the decade. We can see at least that far ahead.


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