In another Oil Drum post titled The Networking of Resource Production: Do the Networks Give us Warnings when They are About to Fail?, which follows directly from his previous work which I covered in Avalanches of Sand, David Clarke sets out a clear framework for understanding why complex networked systems are prone to failing suddenly and massively with the warnings going unheeded, in the specific context of the vulnerability of the resource extraction processes upon which modern human society depends.

David’s motivation for writing this should by now be a familiar story for all peak-aware persons having difficulty communicating with people in their lives whose only data sources are the FT, BBC and CNN:

Lately I have been grappling with a question: I keep hearing that once “non-conventional oil” is accounted for, we have trillions of barrels of oil. Counting coal-seam methane we have gas for centuries. Based on recent claims we probably have enough coal to build a bridge to the moon and enough iron to run a 20-line railway to Mars and back.

Of course this does not consider production rates – but given these forecasts, should we really worry about production rates? Given the technologies at hand, what would cause the production rate of a resource to peak? In a world of networked resource dependencies, what would be the consequences?

The author shows how the exponentially increasing energy & resource cost of resource extraction (as extraction difficulty constantly increases) eventually leads to a situation where the resource extraction process consumes more resources than it produces, at which point there is no surplus left over to provide the standard of living society needs.

In a clearly written piece, David Clarke demonstrates
– why this squeeze comes on suddenly (hint: the exponential function yet again);
– why the individual actors involved in resource production can’t see the squeeze and think that the problem is merely one of wrong prices for their inputs, not a lack of resources in the ground; and
– why a squeeze must eventually arrive, unless we have unlimited energy.

Highly recommended. Sounds too theoretical? A very nice real world example of the vulnerability of complex resource production chains was supplied today when, in the course of an ongoing spat between Japan and China, China blocked the export of rare earths to Japan, disrupting the production of items like Toyota’s Prius automobile.