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Local Ph.D. candidate discusses energy, natural resources

April 23, 2009

Ellsworth resident Nate Hagens, a Ph.D. candidate at the University of Vermont and online editor of a Web site called the Oil Drum, spoke to a small crowd in the University center about energy, natural resources and the economy: Human Behavior on a Full Planet April 22, Earth Day.

He began the presentation with the opening sentence by giving a “whirlwind” of energy supply and a new definition of energy.

“Energy is what we have to spend. Not dollars,” Hagens said. “Dollars are just a marker for real capital. All energy is not equal you can’t just say let’s go to a green economy lets go renewable and just assume there is going to be a seamless transition. There are costs to procuring energy.”

“Early on in my Ph.D. I discovered that it’s how humans behave that is really the leverage point of the special sauce in being sustainable and changing humanity’s path.”

Hagen’s background is “most ‘expert’ in financial aspects of what is happening and the biological mechanisms on how we compete.”

At 26 years old, Hagens was a high net worth broker on Wall Street, but said when he saw clients who had $200 million and set a price range of $400-500 million, a goal, and when they reached it they only wanted more. The fact that the clerks who made $30-40,000 were happy and content happy intrigued Hagens.

So he quit his job as a hedge fund manager and attended graduate school.

“There are few with his Wall Street background, and his international connections and knowledge of energy related issues. Much less his integration of that with daily decisions in preparation for a rapidly changing world,” Director of the St. Croix Institute for Sustainable Community Development Kelly Cain said in an e-mail interview.

Since the United States went off the gold standard in 1971, money became worthless in the sense there is nothing backing it.

“And right now it’s gone way out of control,” Hagens said. “The government has these bailout announcements and each one announces that the previous one is failure by definition. They are flying blind right now.

Hagens talked about four real capitals that should replace financial capital—which is just a maker for real capital—sometime in the future.

Hagens said built capital is things like the University Center or fences, natural capital is rain, ecosystems, wind and sun and rivers, social capital is the network system of people whom includes friends and family and human capital represents knowledge and how to do things.

Hagens said the brain has autonomous functions happening all the time. Valuing the present more than the past is called a steep discount rates and an evolutionary function. The reason this matters is climate change and peak oil are long-term issues.

He said it is part of cognitive load theory.

“When we are max out with Twitter and Facebook and e-mails you can’t access thinking about 2012 or 2015.”

The next point he made involved habitual cognition.

“Culturally defined money had been taught as what we should pursue. And we’ve evolved to compete for more. And I know this cold from working with these guys on Wall Street,” Hagens said.  “And myself I’m dealing with this still to this day. But I can assure you this is true although you young people probably will not take my word for it you will have to find it out for yourself.

He said he believes that all of the trends will reverse.  Substituting time and labor will slow the brain down so it functions at more of a pace it was evolved to.

Another point Hagens made is that the social capital in Minnesota and Wisconsin—measured by how many boards and civil organizations—is pretty high.

“Gradually we will have to go more local and regional,” he said.

At the end of the presentation Hagens acknowledged the broad range of topics he hit upon and the problem that comes with it.

“The things I talk about are so disparate. And who is going to be the integrator of these things? We’ve heard for generations that we have environmental problems,” Hagens said.  “And unless we have a smoking gun all the environmental success stories we’ve faced there was a clear and present danger. We are not evolved to react unless we see.”

Sophomore geology student Derrick Vail attended the presentation and said he thought the slow pace might be hard for the culture to grasp.

“You are basically talking about reversal to the Dark Ages behavior,” Vail said. “And he is saying, in this current culture, that is not going to happen unless a crisis slaps hard enough in the face so we realize what we are doing.”

Vail said his plan to go into petroleum engineering—managing a quarry or a mine—might have to go on hold, in light of Hagens talk.

“I really have to play it by ear,” Vail said. “I don’t worry about much.”