Our Energy Predicament in Charts

A friend asked me to put together a presentation on our energy predicament. I am not certain all of the charts in this post will go into it, but I thought others might be interested in a not-so-difficult version of the story of the energy predicament we are reaching.

My friend also asked what characteristics a new fuel would need to have to solve our energy predicament. Because of this, I have included a section at the end on this subject, rather than the traditional, “How do we respond?” section. Given the timing involved, and the combination of limits we are reaching, it is not clear that a fuel suitable for mitigation is really feasible, however.

ENERGY BASICS

Energy makes the world go around

Figure 1.  Source: Jewish World Review

Figure 1. Source: Jewish World Review

Energy literally makes the world turn on its axis and rotate around the sun.

Energy is what allows us to transform a set of raw materials into a finished product.

Figure 2. Energy is what allows us to transform raw materials into finished products. (Figure by author.)

Figure 2. Energy is what allows us to transform raw materials into finished products. (Figure by author.)

Energy is also what allows an us to transport goods (or ourselves) from one location to another. Services of any type require energy–for example, energy to light an office building, energy to create a computer, and human energy to make the computer operate. Without energy of many types, we wouldn’t have an economy.

Increased energy use is associated with increasing prosperity.

Figure 3. World growth in energy use, oil use, and GDP (three year averages). Oil and energy use based on BP's 2012 Statistical Review of World Energy. GDP growth based on USDA Economic Research data.

Figure 3. World growth in energy use, oil use, and GDP (three-year averages). Oil and energy use based on BP’s 2012 Statistical Review of World Energy. GDP growth based on USDA Economic Research data.

Energy use and oil use have risen more or less in tandem with GDP increases. Oil is expensive and in short supply, so its increases have tended to be somewhat smaller than total energy increases. This happens because businesses are constantly seeking ways to substitute away from oil use.

Figure 4. China's energy consumption by source, based on BP's Statistical Review of World Energy data.

Figure 4. China’s energy consumption by source, based on BP’s Statistical Review of World Energy data.

China is an example of a country with very high growth in energy use. China’s energy use started growing rapidly immediately after it joined the World Trade Organization in December 2001. China’s energy use is mostly coal.

Figure 5. Per capita oil consumption in countries with recent bank bailouts, based on data of the US Energy Information Administration.

Figure 5. Per capita oil consumption in countries with recent bank bailouts, based on data of the US Energy Information Administration.

European countries with bank bailouts show declining oil consumption.

Increased fuel use is also associated with rising population growth. 

Figure 6. World population from US Census Bureau, overlaid with fossil fuel use (red) by Vaclav Smil from Energy Transitions: History, Requirements, Prospects.

Figure 6. World population from US Census Bureau, overlaid with fossil fuel use (red) by Vaclav Smil from Energy Transitions: History, Requirements, Prospects.

On Figure 6 above, the fuel use and population growth rise very rapidly, after fossil fuels were added about 1800. In fact, the lines overlay each other, so it is not possible to see both. Adding fossil fuels allowed much better food supply, sanitation, and medical care, all leading to huge population growth.

Figure 7. World Population 1980 to 2011, based on EIA data.

Figure 7. World Population 1980 to 2011, based on EIA data.

World population is still growing rapidly, especially outside of the developed countries. The countries with the most population growth (blue) are only now beginning to obtain goods and services that the developed world takes for granted, like better medical services, cars, and electricity for every home. Their fuel use is growing rapidly.

There are many sources of usable energy. 

Figure 8. Examples of usable energy sources. Images from Wikipedia and Power Point clip art.

Figure 8. Examples of usable energy sources. Images from Wikipedia and Power Point clip art.

Figure 8 illustrates a few sources of usable energy. Clearly, there are great differences among them, both in terms of how the energy they provide is created, and in terms of the types of energy services they can most easily provide. Businesses will substitute a cheaper source of energy whenever they can. Businesses especially seek ways to substitute away from human energy, since it is the most expensive type. One approach is automation. This substitutes machines (running on electricity or oil) for human labor. Another approach is outsourcing the manufacturing of goods to countries that have lower-cost labor.

One factor that limits fuel switching from oil to electricity is the amount of machinery currently using oil.  Robert Hirsch says 

Worldwide machinery operating on oil is valued at $50 to $100 trillion (Automobiles, airplanes, tractors, trucks, ships, buses, etc.)

There is also a huge investment in roads, bridges, refineries, and pipelines. Past transitions have taken more than 30 years, because it usually makes economic sense to wait for current machinery to reach the end of its economic life before replacing it.

LIMITS WE ARE REACHING

Unfortunately, we live in a finite world. At some point we start reaching limits.

Figure 9. Humans at this point are winning the competition with other species for resources.

Figure 9. Humans at this point are winning the competition with other species for resources.

One limit we are reaching is how many people the world will support, without unduly affecting other species. There are now over 7 billion humans on earth, compared to fewer than 200,000 gorillas and chimpanzees, which are also primates.

The natural order is set up so that each species–including humans–reproduces in far greater numbers than is needed to replace itself. Natural selection chooses which of the many organisms will survive. With the benefit of fossil fuel energy, humans (as well as their cows, pigs, goats, chickens, dogs and cats) have been able to survive in far greater numbers than other species. In fact, paleobiologists tell us that the Sixth Mass Extinction has begun, thanks to humans. At some point, interdependencies are disturbed, and we can expect more population collapses.

Figure 10. Air pollution in Taiwan, from Wikipedia.

Figure 10. Air pollution in Taiwan, from Wikipedia.

Another limit is pollution of many types. This image is of air pollution, but there is also water pollution and CO2 pollution. Even what we think of as renewable energy often poses pollution challenges. For example, battery recycling/disposal can pose pollution challenges. Mining of rare earth minerals, used in electric cars, wind turbines, and many high tech devices is often cited as being very polluting in China.

Another limit is declining soil quality. In the natural order, soil is not disturbed by plowing, and the nutrients animals use are recycled back into the soil, after they use them.

As we disturb this natural order, we find erosion reduces top-soil depth. The amount of organic matter in the soil is reduced, making crops less drought-resistant. Nutrients such as phosphorous and potassium are often depleted, and need to be added as soil amendments, requiring fossil fuel transport. Soils often suffer from salinity related to irrigation. Nitrogen levels also become depleted.

It is possible to mitigate these problems using fossil fuels. However, we discover that our ability to feed 7 billion people becomes increasingly dependent on continued fossil fuel use. If we increase biofuel production, this tends to make the situation worse. Techniques such as regrading of hills to improve rainwater absorption can help the situation, but this too requires energy.

Another limit is imposed by the Second Law of Thermodynamics.  Entropy happens. Things fall apart. All of the “stuff” humans have produced (including roads, bridges, pipelines, electricity transmission equipment, cars, and computers) keeps degrading, and eventually needs to be replaced. If we intend to continue to have roads, we need to keep repairing them and building new ones. Using current technology, this requires an increasing amount of fossil fuel energy.

Figure 11. Declining resource quality image by author.

Figure 11. Declining resource quality image by author.

Another limit arises because we extract the cheapest, easiest to extract resources first. (Figure 11) As a result, at some point, the cost of extraction rises, because the cheap resources have already been depleted. Outside observers don’t necessarily notice a difference as the quality of resources drops over time; it always looks as if there is an increasing quantity of reserves available as we move down the resource triangle.

Unfortunately, the apparently increased resources are not really comparable to what was already extracted. The resources lower down in the resource triangle, such as oil and gas that requires “fracking” to extract, require the use of increased energy resources. The speed of extraction is often remarkably slower–light oil flows like milk, while heavy oil can be the consistency of peanut butter. Extracting oil using fracking has been compared to getting oil from the pores of a concrete driveway.

Another example is fresh water. Initially we take it from a local stream, or from a shallow well, where little energy (and cost) is required to obtain it. As this resource depletes, we  seek other sources–deeper wells, or water piped from afar, or desalination. All of these approaches use much more energy. If the world’s total energy supply is not growing rapidly, using more energy for water supply is likely to mean less energy is available for other uses. I discuss this issue in Our Investment Sinkhole Problem.

OIL LIMITS

Figure 12. US crude oil production, based on EIA data. 2012 data estimated based on partial year data. Tight oil split is author's estimate based on state distribution of oil supply increases.

Figure 12. US crude oil production, based on EIA data. 2012 data estimated based on partial year data. Tight oil split is author’s estimate based on state distribution of oil supply increases.

An example of how resource depletion can work is illustrated with US oil supply. US oil production (blue) suddenly began to decline in 1970, despite the oil industry’s best efforts to extract more. By scrambling around quickly, it was possible to add more oil production from Alaska (red), but this soon declined as well.

It wasn’t until oil prices rose in the late 2000s that it made economic sense to use technology which had been developed much earlier to extract tight oil. Tight oil is expensive oil to extract. How much production will rise from current levels depends to a significant extent on how much oil prices are able to increase in the future. The higher that oil prices rise, the greater the recessionary impact that can be expected, but the more oil that can be produced.

Figure 13. World crude oil production based on EIA data. *2012 estimated based on data through October.

Figure 13. World crude oil production based on EIA data. *2012 estimated based on data through October.

World oil supply is now about level, except for the small increase added by US and Canadian oil supply. (Figure 13) One concern with world oil supply as flat as it is, is that at some point, world oil supply will suddenly take a nosedive, just as US oil production did.

Figure 13. Oil consumption by area, based on BP's 2012 Statistical Report. FSU is Former Soviet Union.

Figure 13. Oil consumption by area, based on BP’s 2012 Statistical Report. FSU is Former Soviet Union.

Another concern is that the developing world will get the majority of the world oil supply, leaving little for historically large users (Figure 13). US, Europe, and Japan experienced severe recession in the 2007-2009 period, and still are seeing economic headwinds, at the same time that countries that were able to obtain the oil continued to experience economic growth.

I think of our current situation as being like that of a host who gives a party for 10 people. There is enough food to go around, but just barely. The host decides to invite another 50 people to the party. Surprise! Suddenly there is a shortfall. Globalization has its downside!

Figure 15. World oil supply and price, both based on BP's 2012 Statistical Review of World Energy data. Updates to 2012$ added based on EIA price and supply data and BLS CPI urban.

Figure 15. World oil supply and price, both based on BP’s 2012 Statistical Review of World Energy data. Updates to 2012$ added based on EIA price and supply data and BLS CPI urban.

A third concern is that oil prices will disrupt economies of oil importing nations. Oil prices rose sharply after US oil production dropped in the 1970s. They began rising rapidly again about 2003, as the world became more globalized. In addition, oil resources became increasingly expensive to extract. There is little possibility now that oil prices can decline for long without a drop in oil production.

Oil price spikes lead to recession. Economist James Hamilton has shown that ten out of the most recent 11 US recession were associated with oil price spikes. When oil prices rise, food prices tend to rise at the same time. Consumers cut back on discretionary spending, because fuel for commuting and the price of food are necessities. This cutback in spending leads to layoffs in the discretionary sector and recession.

Figure 15. High oil prices are associated with depressed wages. Oil price through 2011 from BP’s 2012 Statistical Review of World Energy, updated to 2012 using EIA data and CPI-Urban from BLS. Average wages calculated by dividing Private Industry wages from US BEA Table 2.1 by US population, and bringing to 2012 cost level using CPI-Urban.

Figure 15. High oil prices are associated with depressed wages. Oil price through 2011 from BP’s 2012 Statistical Review of World Energy, updated to 2012 using EIA data and CPI-Urban from BLS. Average wages calculated by dividing Private Industry wages from US BEA Table 2.1 by US population, and bringing to 2012 cost level using CPI-Urban.

High oil prices also seem to lead to depressed wages.  (Figure 15. Here, I am dividing total wages for all non-government employees or by the total US population, and then taking this average wage, and adjusting if for inflation.) This is the effect we would expect, if the major substitution caused by high oil prices is a loss of human employment. This shift tends to occur because human energy is very expensive, and because wages tend to be a big share of a company’s costs.

Figure 16. Illustration by author of ways oil price rise could squeeze wages. Amounts illustrative, not based on averages.

Figure 16. Illustration by author of ways oil price rise could squeeze wages. Amounts illustrative, not based on averages.

Figure 16 shows an illustration of the effect that happens. If oil prices rise, the cost of making goods and transporting them to their destination rises. If the sales prices of goods doesn’t rise, a business’ profits will shrink. (Before and after the oil price rise shown in black box). The company will consider low profits unacceptable.

The company has several ways of fixing its lower profit. Wages tend to be one of the company’s largest costs, so these are a likely target. One approach is automation. This may slightly raise electricity costs, but it will lower wage costs, and raise profits. Another approach is outsourcing production to a low-cost country like China. This will lower wage costs and probably other costs, leading to higher profit for the company.

A third approach is what I call “making a smaller batch.” It involves closing unprofitable offices, or flying fewer jets, so that the quantity produced matches the new lower demand for the product, given the higher required sales’ price, now that the oil price is higher. Any of these approaches reduces the amount of wages paid to US employees.

HOW DOES THIS CONCLUDE?

A person could argue that any of the limits could eventually bring the system down. The pressure on wages is particularly a problem, since a further rise in oil prices would seem likely to lead to more job loss, and further pressure on wages of those who keep their jobs. The large amount of debt outstanding is another issue of concern.

Figure 17. Author's view of how various limits might work together to produce different symptoms.

Figure 17. Author’s view of how various limits might work together to produce different symptoms.

My personal view is that the most likely scenario is that the various limits will work together to produce secondary effects, and it is the secondary effects that are likely to bring society down. These secondary effects are Financial (wealth disparity, debt defaults, inability to collect enough taxes), Political (not enough taxes, uprising by the lower classes, government collapse) and Disease Susceptibility (inadequate food, medicine, and sanitation due to inadequate wages and government cutbacks).

These effects are similar to ones experienced in the past when economies started reaching resource limits, based on the research of Peter Turchin and Sergey Nefedov reported in the book Secular Cycles. In the past, societies seemed to go through about 300 year cycles. The first was Growth, lasting over 100 years. The second was Stagflation, lasting perhaps 50 or 60 years. This third was Crisis, with population decline, lasting up to 50 years (but perhaps a much shorter time). The fourth was Depression/ Intercycle.

If we estimate that today’s complete cycle started in 1800 with the use of coal, and the Stagflation period started about 1970 with the decline in US oil production, then we now seem to be nearing the Crisis stage. Of course, each situation is different. This is the first time we are reaching resource limits on a world-wide basis.

Figure 18. Government receipts divided by private industry wages, and government expenditures divided by private industry wage, based on BEA data.

Figure 18. Government receipts divided by private industry wages, and government expenditures divided by private industry wage, based on BEA data.

There is considerable evidence that we are already reaching the situation where governments are encountering financial distress of the type shown in Figure 17. With wages being depressing in recent years (Figure 15), it is difficult to collect as much taxes as required. At the same time, expenses are elevated to handle the many issues that arise (such as payments to the unemployed, subsidies for alternative energy, and the higher costs of road repairs due to higher asphalt costs). The big gap between revenue and expense makes it hard to fix our current financial predicament, and increases the likelihood of political problems.

REQUIREMENTS FOR A FUEL TO FIX OUR CURRENT PREDICAMENT

Is it possible to fix our current situation? To really fix the situation, we would need to reproduce the situation we had in the post-World War II period–when energy was cheap, and growing very rapidly. Economists have observed that historically, the cost of energy was very low. Given the importance of energy, its low price was an important feature, not a bug.  It is what allowed society to have plenty of energy for growth, at minimal cost.

In order for a new alternative fuel to truly fix our current predicament, it would need the following characteristics:

  1. Abundant – Available in huge quantities, to meet society’s ever-growing needs.
  2. Direct match for current oil or electricity – Needed to avoid the huge cost of building new infrastructure. Electricity needs to be non-intermittent, to avoid the cost of mitigating intermittency. We also need an oil substitute. This oil substitute theoretically might be generated using electricity to combine carbon dioxide and water to create a liquid fuel. Such substitution would require time and investment, however.
  3. Non-polluting – No carbon dioxide or air and water pollution.
  4. Inexpensive – Ideally no more than $20 or $30 barrel for oil equivalent; 4 cents/kWh electricity. Figure 15 shows wage growth has historically occurred primarily below when oil was below $30 barrel.
  5. Big energy gain in the process, since it is additional energy that society really needs – This generally goes with low price.
  6. Uses resources very sparingly, since these are depleting.
  7. Available now or very soon
  8. Self-financing – Ideally through boot-strapping–that is, generating its own cash flow for future investment because of very favorable economics.

It is interesting that when M. King Hubbert originally made his forecast of the decline of fossil fuels, he made his forecast as if an alternative fuel would become available in huge quantity, by the time of the decline. His original idea (in 1956) was that the new fuel would be nuclear. By 1976, his view was that the new fuel needed to be some version of solar energy.

What kind of solar energy might this be? Solar panels PV located on the ground are heavy users of resources, because they have a low capacity factor (percentage of the time they are actually collecting sunlight), and because they need to be fairly sturdy, to withstand wind, rain, and hail. Space solar theoretically would be much better, because it is much more sparing in its use of resources–it would have over a 99% capacity factor, and the PV film could be much thinner. Timing for space solar would be a big issue, however, assuming financial issues can be worked out.

Also, even if space solar or some other fuel should provide the fuel characteristics we need, we still need to address the population issue. As long as world population keeps rising,  humans are an increasing strain on earth’s resources.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to inadequate supply.
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183 Responses to Our Energy Predicament in Charts

  1. To pick up one one point—about post WW2 prosperity—I’m afraid the only way to do that would be to have rerun of WW2!
    Time and again people sound off about the era of prosperity that followed WW2—not realising that it was caused by the economy freewheeling on the impetus of conflict. Successive governments just kept on pumping more oil and raw materials into the warfactories to turn out peacetime goods, so that every could make stuff and sell it to each other and incur ever-increasing debts.
    That’s all prosperity was from 1945 onwards. A debt fuelled binge.
    So why did it stop?
    It stopped because the USA ran out of its own gas and had to start buying it from abroad on the open market; that was in 1970.
    But we demand that politicians legislate to negate the laws of geology and physics and give use cheap energy.
    The economy has had its ups and downs since 1970—but the trend has been down overall
    I’m assuming that the list of 8 essential requirements for any new energy source has been put in as an attempt at black humour? If it isn’t, then it falls into wish-science category I’m afraid, (with some wish-economics thrown in for good measure)
    I can add another one, by 2030 saudi Arabia expects to be an oil importer!! That should really raise some nervous laughter. Imagine all those thousands of Saudi princes having to scramble around to buy oil at market prices, then finding out that there’s none to be had anywhere at any price.
    Any offers for those towers in the desert anyone? Going cheap—dirt cheap. Get yours now before they fall over

    • Christopher Johnson says:

      To End of More:

      One obvious fact you unfortunately overlooked: in 1945 the USA was the last industrial economy standing. All the rest were pretty well flattened. Yes, the USSR had stolen the Manchuria machinery, but it was sort of a drop in the bucket, and Russia didn’t really contribute to global economic development broadly.

      The victory of the Chinese Communists and the subsequent Korean War (started by Stalin to prevent the US and China from establishing relationships that could be used against the USSR, which was intent on making China into a satellite), provided the excuse for the US to change its rustification policy for Japan and sponsor its rapid re-industrialization. Of course it took a few years, but Japan recovered well by the 1960s.

      The Vietnam War was the big drain on the US budget. By 1970 it was barely manageable. Nixon’s shutting the ‘Gold Window’ led directly to the forming of OPEC and their raising prices in 1973: they charged the same as 1971 when the gold sold for $39.00 an ounce.

      It was the first significant debasement of the currency. Since then the currency has dropped to about 2 pennies to the dollar.

    • Andy says:

      I’d say in addition that the US was the only major power that still had all it’s factories in tact. Whereby it didn’t have to waste time rebuilding, but could instead export a lot of its technology to countries in pretty bad shape, eg Japan and the UK.

      • Christopher Johnson says:

        Exactly so, Andy. However this also led to some interesting results that were not always in favor of the US. The factory and equipment base in the US was much older. New armaments factories were built during the war, but most of the US industrial base was much older.

        Rebuilding Germany, Japan, France and England resulted in those countries having much superior industrial bases by the late 50’s – 60’s timeframe, which gave those countries a bit of an advantage.

        • Not England
          Lease Lend and the US Marshal Plan stopped for the UK the day war ended in 1945, the UK remained in a miserable depressed state until the 50s because we were bankrupt. in part because the USA wanted nothing to do with the UK socialist government
          Our railways for instance were worn out, whereas those of Japan and Germany had been obliterated and so we rebuilt as new, as were factories

          • Christopher Johnson says:

            Thank you for that very significant correction! I would imagine the politics of the period would also have been affected, as the UK descended (I think I remember this fairly accurately) into a serious recession in the late 40s. It would have been natural for the Brits to have been a bit displeased that the Yanks were happy to throw dollars at continental Europe but nary a farthing for their erstwhile allies. Was that the way things went?

          • pretty much
            I think the policy was that if germany was left destitute–as after ww1–then the Russians would just take over and the Germans would be unable to resist
            A prosperous Germany became a buffer against the east , its prosperity ultimately led to reunification of Germany and independence of Eastern Europe.

            • Christopher Johnson says:

              Roger all of your comments. It was also time for Washington to lecture its allies about freeing their colonies and competing for the hearts and minds against those dastardly communists. But on the other hand, what other choices were there? In retrospect, it appears that the West did a pretty good job after WWII of propelling the world to more preferable vectors. We still have a long way to go, of course, but at least we’re talking about solutions.

          • Essentially, the restoration of the west’s prosperity was entirely dependent on burning ever increasing quantities of oil coal and gas
            so the factories that powered the war machine also powered the peace machine, basically turning out objects that people wanted to buy instead of fire at each other, but fuelling a debt based economy at the same time.
            In addition, nations needed munitions factories to maintain employment. (as opposed to prewar, when arms production was more of an arm of the government, postwar it became an independent profit making industry in its own right)
            You cant go on producing munitions ad infinitum, so every so often, they had to be used to keep warfactories in business
            As to the colonies, no empire can survive beyond the point when its colonies cost more to control than they return in commercial profit. Thats why ancient Rome ultimately collapsed, the food and loot from their provinces was insufficient to maintain the military strength necessary to keep the invaders out
            the English Dominions remain under the British crown as a voluntary thing–they can vote to become republics if they so wish. Canada looks at American politics and decides thanks but no thanks!
            With regard to the future, if our energy supplies fail, then our nation states fail—just like the Roman empire and the British empire. The USA is in effect an empire within its own contiguous borders, but as a empire it is held together only by energy output. Reduce that energy, and the nation will devolve into autonomous regions well within a decade. There will be no way of holding it together over such a vast area.

            • I think you are right about the energy being what holds America together. Without enough energy, the central government will have all kind of tax problems. It is likely to move programs back to the states. The states won’t want any part of a central government that just wants taxes and doesn’t provide programs any more. Local areas may band together, especially if there are resources they want to continue to exploit.

  2. icarus62 says:

    I find it very difficult to envisage any kind of high technology civilisation which is indefinitely sustainable and has the same kind of freedoms and conveniences that we enjoy today. Virtually everything we use in our daily lives consumes materials and forms of energy which are non-renewable on human timescales. Recycling will help but that still requires plenty of energy and I would imagine that any recycling processes entail losses along the way. The so-called ‘renewable’ sources of energy rely on hardware that is itself not really renewable. Nature gets around the entropy problem because everything is self-replicating – people in the past have envisaged self-replicating machines using resources from their environment (Von Neumann machines) but we have no idea how to make such a thing.

    You pretty much have to conclude that in the long term, resource limits and pollution are inevitably going to curtail industrial civilisation, and there’s probably not much we can do about it.

    As a mental exercise I like to think: What would I do if I was the world’s richest person, and I understood all of this, and I wanted to Make A Difference?

    I think the first thing I would do is hire the world’s brightest engineers to make a repository of human knowledge and culture that is virtually indestructible. Most machines are made to a price rather than made to last, but spacecraft engineers show that we can still do remarkable things if cost isn’t the only consideration – the Mars Rovers are a prime example. I’m sure it wouldn’t be beyond the best of the world’s 7 billion people to devise some kind of knowledge bank that was extremely robust, self-contained, self-sustaining (perhaps powered by an RTG or whatever we can come up with), needing no maintenance, and capable of running for many thousands of years. It would be built entirely from scratch with the toughest materials we can devise, no moving parts, impervious to corrosion and so on. It would be such a tragedy to lose all the knowledge we’ve accumulated over many thousands of years.

    Second, I would try to use some of our remaining resources to design and build something that can provide a minimal source of energy using the same standard of extremely robust, self-contained and virtually indestructible engineering used for the knowledge bank. It certainly wouldn’t be wind turbines or nuclear power stations. Perhaps it would be TEGs or some kind of PV panel that never deteriorates – I don’t know, but surely we can come up with something. They wouldn’t run our current high-energy civilisation but they might at least light our homes, and run some basic services that make life more pleasant and comfortable – medical services for example.

    I think if we survive at all then we’re going to be forced to convert society back to a much more local, self-reliant model – growing food where it’s to be used, growing wood for construction and fuel, using essentially zero non-renewable resources, and producing zero waste. If our global civilisation is going to gradually (or not so gradually) fall apart, then it would be nice for someone to be planning how we can still provide the basics of a reasonably comfortable existence, essentially forever. We need to distinguish between what’s really important and what can be given up in our energy-constrained future. We need to be producing the tools and equipment now to support that future. It’s no good using our precious dwindling resources to produce items which are designed to fail in 5, 10 or 20 years’ time.

    The biggest fly in the ointment is without doubt overpopulation. I don’t believe that a low-energy civilisation (on a hotter and much degraded planet) can support anywhere near 7 billion people, and to me that means there is no possible way to get from where we are now, to whatever an indefinitely sustainable civilisation might look like, without mass die-off through hunger and conflict. Being a father I’d love to be proven wrong but I don’t see it happening even if we had the knowledge and the will to do it, which we’re clearly nowhere near having right now.

    Hope my rambling makes some kind of sense…

    • the only ‘knowledge bank’ we have is that created over the last million years, you cannot plan to have knowledge in the future. Dreams yes—knowledge–no. Hammer and anvil, or a power press—making stuff needs heat and energy. you can’t hire scientists to change the laws of physics.
      the only planning by ‘someone’ will be for that someone to be planning for his own group to survive at the expense of others who do not. (its called resource wars)
      Hate myself for saying this, but altruism seems to be a luxury that can only be afforded by the affluent

    • Your rambling does make sense. Trying to accumulate some hard copies of the knowledge we have today would certainly seem to be valuable.There is a lot that today is only on the Internet that would be gone forever. Ideally, the information would be fairly accessible as well as fairly safe from harm–probably a hard combination.

      • Xabier says:

        In terms of preserving basic knowledge, the old technology of the book cannot be beaten: a viable book can be produced using goatskin for both the pages and cover, wood for hard boards, ink from various sources. Such books are very durable if cared for with intelligence, and can last thousands of years (this is no exaggeration.) However, they would not last at all in very humid climates.

        • I read somewhere that in 500 years the only readable/usable historical documents will be 1000 years old. ie those that are 500 years old now

        • I agree that books are probably our best way of preserving knowledge. I have quite a few, some of them used. In the humid Atlanta climate, though, they probably would not be long-lasting.

        • Karl says:

          There is also the fact that for knowledge to be useful it must be understood by a human.

          This requires education, a lot of time and effort invested. Thus, knowledge must be carried by humans, which require that society can afford to have a lot of humans carrying this knowledge. This has not yet been a problem. But as we acquire more and more knowledge we will at some point reach peak knowledge, or perhaps you could call it peak human, where the available humans for carrying the knowledge will have full occupation by just keeping the existent knowledge available.

          • That is a good point. We won’t be able to afford our current education. People will be educated, perhaps, but it will be on a different range of subjects–how to grow (or perhaps gather) the various foods available in the area. How to store it, if it can be stored. What peoples live nearby, and what kinds of attacks can be expected if you get too close to them, and things of that sort. A whole range of different things will be of interest, and will be learned instead of what we consider important now. We probably won’t have the kinds of schools we have now, certainly not as much advanced education.

            • Mel Tisdale says:

              That is a good point. We won’t be able to afford our current education. People will be educated, perhaps, but it will be on a different range of subjects–how to grow (or perhaps gather) the various foods available in the area. How to store it, if it can be stored. What peoples live nearby, and what kinds of attacks can be expected if you get too close to them, and things of that sort.

              If we have reached that stage in the collapse that is believed to be coming, assuming it reaches such a stage before we manage to grab the reins, then we will have gone through a tremendous period of turmoil. I wonder if there is anything that can be done about it, all things considered.

    • Christopher Johnson says:

      To Icarus62 and others:

      Just because we’re not receiving daily updates about evolving technologies doesn’t mean the efforts are not well underway and may soon begin to yield results.

      If electricity were so cheap that recharging your automobile for a 400 mile range cost $10.00, would that have any impact on the global economy? Perhaps? How about on global warming?

      If the electricity was produced with no pollution, and was very abundant and inexpensive, would that make any difference?

      If we could easily and inexpensively purify water and pump it wherever needed would that make any difference?

      Or would you maintain your gloominess about the future?

      If cars were so lightweight — less than 800 pounds including engine — that putting wings on them might be feasible to convert them to flying machines, would that be of interest? (Who wants to be the traffic cop?)

      Please understand that just because some people don’t know about something doesn’t mean that every doesn’t know about it.

      If you want to try to keep track of all (almost all / most / many) technological advances that are currently underway, then perhaps you can find two or three hours each day to start exploring the internet. You will find that there is a truly amazing volume and diversity of technical effort underway in areas that you didn’t know existed.

      My advice to any and all is to quit grousing and start exploring.

      • I think you may be falling into the trap of waiting for ‘they’ to come up with something. (too many ‘ifs’ there too!)
        A good analogy is aircraft travel–or wheeled transport.
        When the Wright brothers started tinkering about with flight, they were on a lonely beach messing about to see if the thing would work. They had no concept of what the future held for flight–same applies to Ford or Benz
        Above all–they didn’t have billions of people waiting expectantly for them to ”come up with ideas” so that life could carry on as usual.
        But that is exactly where we are right now, with millions of cars and planes, and we are expecting some mysterious ‘they’ to come up with ideas that will allow us just to carry on as normal
        We forget that our ‘normal’ is just a century old
        It just aint gonna happen folks—this has been a one time event–good while it lasted
        And to add another thought for those waiting for ‘new technology.’..the Wright brothers overcame gravity by using exploding chemicals, so how did Armstrong get to the moon for his first step? –Exploding chemicals. Refined and sophisticated technology agreed, but still the same fundamental means of propulsion

  3. Phil Harris says:

    Gail
    This looks like a very useful set to have in one place.
    Your chart of those EU countries (Eurozone) that were first to suffer financial problems is interesting.
    I co-incidentally found the following (I put it on The Oil Drum yesterday).
    “Electricity power from oil is negligible across EU except for Greece, Portugal and Spain and Italy. Whether numbers have changed much since 2005 I am not sure. UK is back to importing high levels of coal for power generation.
    See this 2005 chart, Figure 1. http://www.iea.org/publications/freepublications/publication/En_Efficiency_Indicators.pdf
    I also added on TOD: “Ireland also uses substantial oil for power generation. Oil is a very expensive fuel for mass power generation. All those Euros to buy an essential input? It can’t help when trying to cover for the fiscal deficits racked up recently in attempts to cope with bank collapse / vulnerability and other imbalances?”
    Any comments?

    best wishes for your further presentations!
    Phil H
    PS Personally I would have put a link to the ongoing chart for the remoreseless rise of atmospheric CO2 (NOAA), and perhaps also another one recording the more transient CH4 clocking for a while now 2.5 pre-industrial atmospheric levels.

    • I know that the countries with financial problems are pretty much the ones with the highest oil use as a percentage of total energy use. I did’t have a breakout of how this occurred–using oil for electricity would be an easy way to do it. Depending on vacation travel or business travel rather than making goods with electricity (made with something other than oil) would also tend to have a similar effect.

  4. David Hughes says:

    Hi Gail.
    I just saw you on Keiser report so thought I would look up your blog. You were talking about the energy crisis we are facing and looking for replacement fuels for humanity. I was just wondering if you are aware of the Liquid Fluoride Thorium Reactor or “LFTR”? I will post some links below but suffice to say if implemented well it could fulfil all of your above requirements and with the bonus of being able to actually burn the “waste” that we have stockpiling from current reactor designs.
    I know that Nuclear is a bad word and I would agree with that with the current processes that we use the word nuclear poses many dangerous outcomes that we should be avoiding, they are inefficient and produce the most poisonous and dangerous substances that we have to keep isolated from our environment for 30,000 years. I will give you a brief summary of the promise it holds below and then encourage you to investigate further for yourself.

    1. It can breed thorium into uranium, thorium is one of the most abundant minerals on the planet and it is so efficient recovering 95-98% of the potential energy compared to current nuclear which operates at only 10-15%.

    2. it can burn the dangerous waste we already have reducing it down to products that are far less by volume than our current reactors produce, whilst still dangerous this waste is less dangerous and will only require containment, isolation for 200-300 years. Think about it 30,000 years to 300 years.

    3. It is much safer than the pressurised reactors we use today. Because it is a LIQUID, chemical, nuclear process it operates under atmospheric pressures and shouldn’t require massive containment buildings. The risk of it exploding into a Chernobyl is extremely unlikely maybe even impossible if designed correctly. It could never be a Fukishima as it can use a passive cooling system that doesn’t need a backup power supply to bring it down to safe passive limits.

    4. The process has been proven before by the American govt in the 50s and 60s whilst they were exploring nuclear. The reactor they had at Oak Ridge ran over many years and they would sometimes shut it down on Friday and start it up again on Monday.

    5. To me it could represent Lewis Strauss’ promise of energy too cheep to meter (although I’m sure someone will be billing people for it). if we had such an abundant energy source we could use the it to desalinate water or to make other fuels such as hydrogen or synthetic hydrocarbon production which could replace diesel or petrol using our current engine designs.

    6.Do not just lump “Thorium Nuclear” all together as there are many different processes for getting energy from Thorium some of which are not as efficient and will still leave us with a hazardous waste problem. The only process that gives us all the advantages i mentioned above is the “LIQUID FLUORIDE THORIUM REACTOR” so please don’t get confused and lump all Thorium processes together.

    I know that Nuclear is such a dirty word and full of potentially dangerous outcomes but I would emplore you to investigate this particular process as it as it has such compelling attributes that could really change things for the better, It is the ONLY WAY I know of that we have to get rid of our current nuclear waste time bomb that we are leaving for future generations. Even if we did it just for that it would be worth it but we would be foolish to let all that free energy go to waste.
    Sure it isn’t perfected just yet and there are definite challenges to be faced to get it up and running but with the advanced technological understanding of materials and chemical processes that we have nowadays I’m confident that all the issues it poses could be solved in short time.
    The Chinese are currently pouring a lot of recourses into refining the process and there are other consortiums around the globe who are also exploring it including the Japanese and Russians. The Japanese are proposing to have a test reactor online on line by 2015 I don’t think it will be that soon unless we have a lot of research put into it.

    I have taken the time to send you this as a citizen of the world that is like you concerned for the future of our civilisation. I have no stake in the process I am not a scientist and not involved in industry above apart from wanting to stop us from going on creating huge problems for future generations. The systems we have in place for things like energy and economic management are the true definition of madness i.e.. doing the same things over and over and expecting a different outcome. I am just a concerned person sometimes truly despair for the way things are so I use the internet to look for solutions and they are out there if you look but it just seems like the people with a stake in the status quo don’t care to look and consider options as well.
    I just want more people like you to understand so the word can get out to people who matter.
    Some people in Green Peace are beginning to see the potential.

    Thank you
    David Hughes.

    (Quote from website below)

    http://theenergycollective.com/charlesbarton/64177/what-are-problems-lftr-technology

    “”In most cases, comments are or can be referenced back to ORNL MSR research. I could quote more of the graphite pebbles discussion which illuminates a number of problems, but this is enough to suggest that MSRs problems exist, but that solutions and work arounds are available. Each solution or work around may have its cost, so any MSR/LFTR design is going to offer a compromise. The question facing the LFTR designer is, which set of compromises works best given design goals. Because the graphite moderated LFTR is highly scalable even without a high breeding ratio, designing the LFTR to produce just one U-233 atom for every fissionable atom burned. Not only does this decrease proliferation risks, but it allows for more breeding ratio lowering compromises in the LFTR design.
    There would be a set of problems for every MSR/LFTR design, but there appear to be an acceptable set of compromises for the problems we have looked at. At least some of the compromises I have reviewed, seem to have secondary benefits that are consistent with probable design goals. In the nearly 40,000 comments of the Energy from Thorium discussion section, no one single killer problem has yet popped up. This most likely means that development of various MSR designs including LFTRs will not involve serious development challenges, and we can be reasonably but not entirely certain that serious problems will not impede MSR/LFTR developmental progress.
    Thus it can be assorted with reasonable certainty that the LFTR offers a potential long term solution to human energy needs, that is consistent with a high energy lifestyle, and which will not create the sort of safety, waste, proliferation and capitol cost problems associated with LWR power technology.””

    https://en.wikipedia.org/wiki/Liquid_fluoride_thorium_reactor

    (just look at the list of advantages on the wiki page)

    • Yes, I am aware of the Liquid Fluoride Thorium Reactor. In fact, you will see my name on the post that appeared on the subject on The Oil Drum (not as author, but as the one who worked with the author). This is a link: The Liquid Fluoride Thorium Paradigm.

      I would be more convinced, if we actually had reactors of this type, and we had ways of handling their spent fuel.

      • Ert says:

        Wow,

        from 2009! I know LFTR from http://thoriumremix.com/ only 1,5 years ago. But whenever I stressed that topic within a energy discussion – zero feedback, totally unknown.

        Wikipedia has some nice information regarding this topic – it seems that basically all required technology is different from the current nuclear industry. So even if all is possible and there is no hidden problem: It may take a while until everything is developed, tested and rolled out big time (if someone wants to take the development and investment risks….).

        Oh… I forgot: No one has started the (re-)development yet – at least to my knowledge.

        • davekimble2 says:

          Even if the technology was ready to go (which it isn’t), the problem would be that to build the infrastructure, at the scale required to make a difference, would take an enormous amount of energy. Given that we are already past Peak Crude Oil, we are entering an era of increasing energy scarcity to do the things we are already doing, and to increase economic activity that is required for a healthy economy. Now, on top of all that, you want us to build an entire new energy generation system, and presumably an entire new fleets of cars and trucks using electricity, and the associated infrastructure to charge their batteries, which would involve a doubling of the capacity of the local electricity network.

          This is simply not possible under the circumstances, and represents the old thinking of pre-PO, when you could have as much energy as you could pay for. Generating the money can be done with the click of a mouse at the Central Bank, but energy can’t be spontaneously created in the same way.

          We could make a start on the transition, but we could never complete it, because a some stage we will run short of energy, and the choice will be between building another reactor and keeping the lights on.

          • Ert says:

            @dave

            I would only try to secure electrical energy. That’s a lot.

            I no battery technology will be found – transportation concepts have to change. But still, having electrical can sustain a lot. And there will be much enough oil to sustain all areas with oil, if transportation oil consumption is reduced first. Would gives us another 5 decades time.

            But I do not think that will happen. To develop and deploy LFTR in big scale – we would need many decades. It is estimated that China alone will require 4.5TW/h of electrical in 2020 alone (Source: Red Alert, Leeb, 2012). Thats. approx 4500 standard reactor blocks or coal power plants.

            So LFTR might compensate for peak-coal – but thats it. LFTR without storage technology may not compensate for gas in an electrical network – to regulate for peaks and PV/Wind imbalances.

  5. Lurker says:

    Couldn’t the higher price of fossil fuels lead to a rise in employment due to human labor becoming more profitable again?

    If this happens, the government in the future could even manipulate the data to show that unemployment has been falling and the situation is back to normal, even if people are working for less and the living standard drops.

    • no because our living standards are entirely dependent on how much work we have to undertake in order to get hold of the amount of energy we need to support ourselves.
      In other words a medieval peasant had to work dawn till dusk all year to live at subsistence level, whereas we can earn enough in an hour to buy a weeks food, (more or less)
      That is the economics of work-output

      • I would love to find some hard facts- but food production is not a particular problem, given enough land. Much of farming is waiting and you can use animals to do a lot of the work tractors do now. The problem is consumerism, if we want stuff we need extra energy, if we want meat every day we need extra energy, if we want to import our food we need extra energy and if we want cheaper food we need to travel to the centralised market to collect it. As I mention in a later post we live like kings with 300 slaves each some of whom are collecting exotic foods from around the world.

        • you cant use animals to replace tractors.
          such nonsense thinking is part of the problem that faces humanity
          Horses and oxen pulling a plough need 2 acres each for fuel, and need to refuel after half a days work, refuelling a horse takes a day at least—whereas you just pour more diesel into a tractor fuel tank
          ( that concept seems so difficult to grasp)
          If you work out how to manufacture land, I want to buy shares in your process

          • I was talking about using livestock to do a lot of the work not horses. There is no dig methods and using chickens to weed and pest control, as an example. Horses are a luxury but they do reproduce unlike tractors!

            The western agribusiness model is labour efficient because of oil so the UK has 0.1 workers per hectare, the US has only 0.05 per hectare and this is compared to China’s 3.5 people [ http://www.nationmaster.com/graph/agr_wor_per_hec-agriculture-workers-per-hectare ] so there is room for more people to replace oil workers in the West. But it does mean lower wages and less luxury. And it in no way a solution to diminishing oil abundance.

        • ultimately we exist by extracting our life-energy from the land on which we live, every species of life is governed by that rule
          Not a pleasant thought, but we are meant to return the food we eat–and ultimately ourselves to that soil–just like everything else. A few thousand years ago, we decided to stop doing that, and appropriate the land for our own use.
          We even invented property ownership!
          Nature is slow to deliver retribution to lawbreakers, but that is what she is doing now. We are being ejected from our earth home for being disruptive tenants and upsetting the peaceful existence of all the other tenants in the neighbourhood

          • I hadn’t thought about putting it that way.

          • Ert says:

            We even invented property ownership!

            That’s core and mandatory for our monetary system! Without property rights – no security for lending. The concept of property started the next big evolutionary phase of our civilization.

            What onethinks of it is another question.

            • It seems like when missionaries visited “undeveloped” countries, the idea of property rights came along. I know that is the case for the US State of Hawaii.

          • Ert,,,,,,,,
            the concept of property did kick off our ”civilisation”, but unfortunately it has been a dead end
            Aboriginal peoples had no concept of property ownership, and they lived in a stable relationship with nature, and didnt exceed natures limits.
            Once we ‘owned’ land, we had no option but to go on acquiring more and more, meaning others had less and less. (think colonisation)
            Land has to be defended–hence bigger and bigger wars
            Yes, its the core factor for our monetary system, but it is that system which has destroyed our environment–we ”buy” houses, cars, roads and so on, using the collateral of land and the types of energy it can deliver (oil-coal–food and so on) as security.
            Everything we make, sell and buy is in fact embodied energy in one form or another
            It has been that manufacturing process that has destroyed our environment, and will go on doing so until we run out of energy.

      • Tax freedom day in Medieval times was 4 months [tithes freedom day] it is 5 months and more for us! and working all the hours is a bit of a myth- rural workers actually have quite a lot of free time although they can’t afford a tv or electric light in the evening! As for food- currently wages are $1-2 dollars a day in Afghanistan but you can buy 30 loaves of bread for $1 and rent is cheap. In the UK -$120 a day will buy the weekly shop but may just cover the cost of rent or mortgage.

        http://www.nevermindthebuspass.com/wealth/today-is-tax-freedom-day/

        • You are right about there being a huge difference in living costs. People historically got along with very little, compared to what we have today. Over the very long term, most people were hunter-gatherers. Over the last 10,000 years, the vast majority of people were farmers. It is only in very recent years that we could afford to have very many people in other professions.

        • the balance of living in medeival times was held by paying peasants just enough to live on–food/clothes/hovel but never more than that. it was subsistence living, under landowners holding enormous tracts of land.
          As for the working day–you worked your lord’s land a fixed amount of time, then you worked your own, All over UK those old field strips are clearly visible and very evocative to a history nut like me.
          Until the 1930s in UK the 10% church tithe was still legally enforceable in many areas
          Thus the peasant could rarely escape that that trap. He could theoretically walk away but without means could be thrown in jail for vagrancy,
          The Black Death changed everything, when the number of able bodied workers decreased by two thirds, so those left could ask for more pay
          The aristocracy tried to stop it, and the (UK) King tried to hold wages at the old rates, but that failed
          looked at from a distant perspective—and I think this fits with what Gail said on Keiser last night– wages are now gradually slipping back to that bare minimum of just feeding the workers and little more, because our excess wages and luxuries have been the result of increasing energy output, first from virgin lands, then from fossil fuel energy.
          Now things are turning full circle, Much of the USA for instance was given to the first settlers in relatively small tracts, but over the years, these have fused into enormous holdings (agribusiness). Our feeding frenzy on fossil fuel is now ending.
          So inevitably, workers will find themselves subverted into working for the great landholders, just as they did in Medieval times, because they have no other choice.
          In any breakdown of society, those with real power will be those with the means to produce energy (food) and the means to defend it. (if that sounds like the ‘frontier’ thinking of the wackier end of US politics—just give it a few years to become mainstream, particularly when those on food aid find theres no more government money available to support them)
          Just like medieval times the choice becomes work or die. The only difference between the Lords of the 14thc and 22ndc will be their weaponry
          Serfdom anyone?

          • You may very well be right. Sometimes when governments are overthrown, the new government breaks up land and gives it to individuals. That is unlikely to work, because few individuals have the skills to work the land, any tools will need to be shared, and water resources are not available on most small plots. So it probably makes sense to have fairly big plots, worked by an army of (low paid) workers. The people who get those jobs will probably consider themselves lucky, given the alternative. Not an easy kind of transition for most folks, if that is the way things work out.

    • There are a lot of jobs in the world that pay $1 or $2 a day. A large share of the jobs that don’t depend on fossil fuel are in this category. People usually aren’t too happy going from today’s jobs to these jobs. I saw someone in India making rope by hand, for example. Not exactly a high-paying job.

      • Ert says:

        @Gail

        Yes – I see the same when I do work in my fruit and vegetable garden. I reduce “payed” fulltime work hours in the company i work for to do the garden. When I count what it “saves” me in bought fruit and vegetables from the market place – it’s a finacially desastrous undertaking.

        But fortunatly I have a different perspective on the garden and on the results of my work. The garden and the work outside makes my happy. The work I do results in the end only in more consumption for compensational products for some people – that do not really make their live better, but only try to reduce the accidential complexity that our current lifestyle brings with it.

        • Most of us could use a little exercise, and a garden provides that as well, so it probably provides some health benefits too. That helps compensate as well.

  6. One of the gems I came across on a post peak website was a reference to the power of oil. A human slave is 1/6th of horse power, to bring back your car driven 30 miles on one gallon of petrol would take a fit slave a week. a slave in your basement on a cycle generator could power a 100w light bulb and you would need at least 2 slaves to keep a fridge running 24 hours a day. We live like kings with over 300 slaves each and the US citizen probably has double.

    As a farmer a tractor using 4 or 5 gallons of fuel can do the work of hundreds of slaves so paid slaves would have to be on below survivable wages and this in no way competes with fuel at even $10 or $20 a gallon.

    Cheap energy is the solution and conservation and efficiencies will possibly cope with population growth. I am a technological optimist to a degree but it will take the ingenuity and vision of a super power whether the US or the EU or even China to do another Manhattan Project. Perhaps it will be space solar, or next generation batteries or something we haven’t thought of. Whatever we need leaders to lead and not be lead by the oil and finance industries.

  7. Xabier says:

    Gail’s excellent posts make me think of how kindly courtiers used to tell the English Queen Victoria about someone’s death, so as not to shock her too suddenly:

    1/ Your Majesty, Mr X is somewhat indisposed.

    2/ He is in fact rather ill, but there is hope.

    3/ We may still hope for some improvement, although the situation is very grave indeed.

    4/ I regret to inform your Majesty that Mr X died, some four hours ago.

  8. davekimble2 says:

    EIA data for petroleum production splits out “Other” and NGPLs, but Crude Oil and Condensate (from gas wells) are always lumped together – e.g. http://www.peakoil.org.au/charts/EIA.world.oil-prod.split.2001-2011.gif . As world gas production has increased 32% over 2001-11, Condensate must have increased by the same, so Crude Oil production alone must have fallen. Has anyone quantified this split and eliminated this statistical trick to hide Peak Oil?

    Your estimate of split of US oil production into tight oil, Alaska and remainder is very interesting. Is that based on publicly available data?

    “Average price” for a whole year, used in Fig 15, is another trick which disguises the true nature of things. If the 2008 Brent price had been a steady $97.26 /b (the average), we probably wouldn’t have had the crash. It was the rise in the first 6 months that sucked money out of the economy that caused the problem: http://www.peakoil.org.au/charts/Brent.price.2003-13.gif

  9. KenJ says:

    Hi Gail
    Nice summary
    You mention “world oil supply will suddenly take a nosedive, just as US oil production did”. It always intrigues me that when I see global depletion forecasts they show a nice orderly decline based on a combined individual reservoir depletion rates etc etc. I term this the “high road” scenario. What I seldom see discussed is what I term the “low road” scenario which I refer to the disorderly chaotic scramble that is likely to ensue as remaining oil producers start reducing or stopping international sales to conserve the little remaining oil they have for their own future generations and first world countries start muscling in with armies and navies to guard what remaining supplies they can get their hand on. This in my opinion is likely to result in whole regions, predominately third world nations (first) being cut off completely from global supplies in a very short time indeed. Time is a key factor; a nosedive may turn into a cliff face within a few days to weeks! There are no magical fuels waiting to save us in the timeframe we have.

    • Ert says:

      @KenJ

      The IEA has kind of a published scenario at Ugo Bardis Blog. There was an article that applied EROEI correction and well depletion characteristica to the IEA NPS 2010 graphs – some things the IAE does not do or is very very optimistic about: http://cassandralegacy.blogspot.de/2013/02/the-twilight-of-petroleum.html

      In the EROEI corrected case, Peak-Oil will be approx. 2015 if the IAE projections are right. If the IEA decline rates of the wells are worse (i.e. 5%) than the IEA estimates of 3.3% – we are already have a problem.

      The good news: You still have time to catch a super-cheap intercontinental flight – before someone other does it and burns that cheap fuel for you in a big SUV ;-)

      • The one thing that bothers me about Ugo Bardi’s graphs is the fact that he is backing out the effect of EROEI of oil as if it were and oil/oil type of situation. The real situation is that oil is constrained right now. Coal and natural gas are not, or at least not so much. So a decreasing EROEI may well mean more natural gas and coal used to make oil (especially natural gas). The question is how much “net oil” we will be getting, since this is the product with the big shortfall. Ugo’s calculation is sort of in the right direction, but will somewhat overstate the oil-only decline. (Of course, he is starting with IEA assumptions, that are likely to be high to begin with, so perhaps this doesn’t matter.)

        • Ert says:

          Yes, Gail – I forgot to mention that.

          It’s because the energy the goes to the tar sand cookery may mostly be gas – and lots of electrical power comes from coal that goes to construction. But nevertheless, especially the fracking stuff is heavily depended on diesel fuel (trucks, road building, diesel generators for electricity), deepwater oil requires a lot of oil (supporting ships, etc.). And all the steel, etc. – still requires big chunks of net-oil in its mining and production.

          Its not exact science – but even if only the middle curve is right (with the IEA 3.3% decline) – we have some problems at hand. I don’t think the world is ready for a plateau in oil right now.

    • I have a hard time believing the orderly decline forecasts. One issue is that investment capital for infill drilling and new sites may very well dry up. For example, Venezuela has already borrowed a lot from China, and as far as I can see, spent a lot of it, but not yet produced the promised oil. Unless oil field are really producing a positive cash flow from very near the beginning, this may become more of a problem.

      Another issue is that there is likely to be a lot of civil unrest. I am afraid Egypt and Syria are only a foretaste of things to come. We could see the number of oil exporters drop, just because of civil unrest.

      A third issue is that countries who do export are likely to choose their partners more carefully. The current marginalization of Iran is setting the stage for Iran to become more closely allied with China and Russia. Venezuela and Ecuador have already formed closer alliances with China.

      Oil producers will need an increasing dollar amount for each barrel of oil, to keep civil unrest at bay. Oil importing nations won’t be able to pay this.

      None of this works for a nice, slow downturn.

      • Ert says:

        None of this works for a nice, slow downturn.

        That is also my current conclusion. Factors are:
        – Exportland Model (ELM)
        – Well depletion / decline rates
        – Worsening EROEI
        – Best first problem (or: easy and cheap is first pumped out)
        – Increasing global consumption
        – Heavy dependency of current (transport) infrastructures an low oil price
        – Heavy dependency of countrys on the automotive industry (i.e. Germany) as pacemaker
        – A lot of investment debt that is indirectly bound to cheap oil (financed vehicles, car factories, distributed global and just in time manufacturing)
        – etc. pp.

        In case oil would double that would have a lot of global consequences. A lot of people could not afford anymore to drive to work with current setups. Also car-manufacturers and suppliers would face dire sales reductions. That would in turn set a lot of workers “free” and reduce demand on many other products as steel, plastics, etc. pp.

        During the 2008/9 crisis the members of the works council of the top 30 DAX companies in Germany came together and jointly declared that the German “Cash for clunkers” program (which was later a global template) was key to keep everything running. From steel, other metals, plastics, chemical components, machinery, etc. pp.

        • Thanks for the additional list of impacts.

          I think other things going on at the same time–trying to add too much renewables to the grid, for example, will tend to make things worse, too.

          • Ert says:

            I think other things going on at the same time–trying to add too much renewables to the grid, for example, will tend to make things worse, too.

            As far as I know this is not a problem if the PV and wind renewable are distributed over the network. A paper from the Frauenhofer Research Institute in Germany claims that: http://www.ise.fraunhofer.de/de/veroeffentlichungen/veroeffentlichungen-pdf-dateien/studien-und-konzeptpapiere/aktuelle-fakten-zur-photovoltaik-in-deutschland.pdf (it’s in german).

            More problematic is that sometimes there is winter, no wind and it is night! Yes, that can happen! In that case the conventional generation capacity has to be there – from which a bigger part is not required in other times of the year. But it has to be build, to be maintained – and makes no money! So it’s basically BAD for the total EROEI of PV/solar – a fact that is always omitted.

            To see what I like to express here a big PDF from Frauenhofer showing all types of power generation in Germany in 2012 with monthly/weekly/daily/hourly resolution! It can be understood also with no German language skills: http://www.ise.fraunhofer.de/de/downloads/pdf-files/aktuelles/stromproduktion-aus-solar-und-windenergie-2012.pdf

            Hope it helps to get a better perspective on PV/Wind. It’s the best resolution data of a single country I know of.

            • I have read about the issue. Basically, what happens is that the fossil fuel industry is shortchanged when feed-in tariffs are used. That is sort of OK, until someone wants some new fossil fuel production built. Then it is a no-go, unless there are subsidies involved. (I believe that Germany is running into lack of interest in building new natural gas plants, if they will be rarely used.) I could see some fossil fuel plants going out of business and not being replaced. At some point, it is possible that subsidies will be needed for building fossil fuel electric plants as well as solar. In addition, the real cost of all of the production has to be paid–building nearly the full set of fossil fuel plants, plus the wind plants, and somewhat reduced fuel for the fossil fuel plants. It seems to me that Germany is seeing some pretty high electricity costs now.

          • Ert says:

            @Gail

            “At some point, it is possible that subsidies will be needed for building fossil fuel electric plants as well as solar”

            Yes, that is already an political issue. It is discussed that those who invested in PV/Wind and got 20 year guaranteed fixed rates for putting electrical energy to the network – shall now pay 3 cent per Kw/h to subsidize gas powerplants. This, because they can’t legally change the guaranteed input rates.

            The guaranteed rate are so high – it was basically a no brainer to do solar when you had the appropriate house roof – and do not fear that when your house burns, that no one will put the fire out.

            Private consumer prices in Germany for 2013 reach the 0.3€ level – thats approx 0.4$ per Kw/h. So every kind low powered devices make sence – especially for refrigirators, ovens and heavy used lights.

            • Thanks! With those high electricity prices, it also cuts back spending on other things. This may be at least part of the reason the economy is not doing very well.

          • Ert says:

            “With those high electricity prices, it also cuts back spending on other things. “

            Oh, that are only end consumer prices as I wrote – the Industry pays totally different prices. Heavy industry consumers did actually not have to pay the renewable subsidy contribution – they where exempt. But that exception was declared illegal by a court last week (source: http://newsticker.sueddeutsche.de/list/id/1426684).

            Numbers I read some time ago where speaking of sub 0.01€-0.02€ KW/h for large consumers (i.e. steel plants) depending on time and dynamic pricing (“Strombörse”).

            It really stays interesting. Alternative energy is not for free – and as long we do not poses cheap storage technology it will be tricky. But even if we have cheap storage in the range of several GW/h – it still reduces the EROEI of renewables. So the best personal investment is when something does not need energy at all – or a lot less of it.

            • It was my understanding that the cost of renewables was paid primarily by consumers. I meant that those consumers would cut back buying new cars, more expensive homes, and going out to restaurants, and that would tend to hurt the economy.

              If the cost gets transferred over to businesses, I am sure they will be very unhappy. Higher costs will make them less competitive with other countries. It will also either lower their profits, or raise the price they must charge to consumers. If it lowers their profits, they will likely take action to get their profits back in line–like lay off workers, or outsource to a cheaper country.

              No matter how the cost is transferred, it tends to hurt the economy.

      • I think far too little attention is being paid to the danger of civil unrest
        Most people seem to think that the oncoming crisis can be ”fixed” if only politicians ”do something” and demand a return to a life of cheap food cheap gas and cheap housing, blind to the fact that all of those were dependent on cheap energy
        therefore all that’s necessary is to elect the right political party to office.
        Obama gets elected, and is expected to fix things immediately, the guy does his best, but is as helpless as you and me—and knows it.
        so in 2016 someone else will be in, with more promises, none of them logical, because the problem isn’t political.
        So the national situation will worsen and people will get angry.
        The danger then is that the real wackos get voted in, probably on the Jesus ticket—after all, nothing else has worked has it? Pray harder and the oilwells will get refilled, or better still, prayer will change the laws of physics and we can run cars on water.
        when that doesn’t work, people are going to get really annoyed with the charlatans they voted into office and the political impetus of the mob will take over, especially if it’s a hungry mob.
        the government will then have to take ‘emergency measures’ to counteract it, after that things will get really ugly

        • I am not sure there is anything we can do to fix the political problem. There won’t be enough resources to fix our problems, and people will want to blame someone. There are lots of ways things could end badly. There could be a break-up, like the Former Soviet Union. Or there could be fighting like Syria and Egypt. Or there could be a dictator that takes over. Or as you say, someone from a really strange party could be elected. It is these unknowns that make planning impossible.

        • Mel Tisdale says:

          Daft as a great many politicians appear to be, there are people behind them who are not so daft and clearly have ambitions that are not directed towards the common good, but towards self-centered ends.

          If people just stopped and examined the scientific evidence surrounding the events of 9/11 they would see that the official explanation contradicts fundamental science in many respects. Just to take one example, the collapse of WTC7, the building that was not hit by an aircraft and remains the only builiding in the history of steel-framed buildings ever to have collapsed due to fire, if indeed fire was the cause, as stated by NIST. It fell symetrically within its own footprint at free-fall acceleration. Even NIST was forced to concede this rate of fall in their final report after being challenged at the pre-publication technical review. It is impossible for the roof of the building to have fallen at free-fall acceleration without the input of exta energy to remove the tens of thousands of tons of building materials that would impede its fall. This is because all of its potential energy would have had to have been converted into kinetic energy in order to maintain the rate free-fall, that is simply basic physics. The presense of nano-thermite and thermate in the dust of the WTC complex explains a lot.

          There are many other aspects to 9/11 that just don’t add up. What does add up, though, is that many freedoms have been lost. Also, as a direct result of the response to it, many governments around the world, especially in the U.S.A., are much better equipped with tools and legislation to handle the unrest that End of More fears may come to pass. Perhaps the biggest indicator that the powers that be have the same fears as End of More is FEMA camps, hidden in plain sight as I write.

          This is not the forum for discussing 9/11, I only raise it because it does seem to be part of a jigsaw whose other pieces include the FEMA camps, Patriot Act, Dept of Homeland Security and the militarisation of the police, to name but a few that would fit End of More’s endgame scenario. What I will say is that there is a lot of hard science available to anyone with a mind to find it that shows the official explanation concerning the events of that fateful day to not just be wrong, but to be ridiculously wrong. Add to that the general reluctance on the part of the authorities to help the scientists, architects and engineers who are trying to get to the bottom of what really happenend on 9/11 and one has a right to be suspicious. When one realises that many of those seeking the truth of that day are university professors, architects (including members and fellows of the AIA), Airline pilots (including some with logged hours on the aircraft involved) and civil engineers, including demolition and building fire experts, then surely the idea that 9/11 was an inside job is not just a ‘conspiracy theory’ with all the connotations that term has come to imply. Consider the fact that the FDR of American 77, as analysed by the NTSB, clearly shows it missing the lampposts that the 9/11 Commission declared were knocked over by it on its way to the Pentagon, one has to conclude that there has to have been two aircraft involved, because the lampposts were actually knocked over by something. (Two eyewitnesses report seeing two aircraft, though seeing one travelling at 530 mph at very low level is a remarkable achievment.) That second aircraft can only have been a military one, almost certainly operating as a drone, and if it was, then surely 9/11 has to have been an inside job.

          I recommend the websites of Pilots for 911 Truth and Architects for 911 Truth as good places to start if one wants to explore the matter seriously (their videos are on Youtube). Just remember, if it was an inside job, those who did it are still in positions of enormous influence. Do we really want such types pulling the strings as the whole house of cards that is society today falls in a nice heap (without nano-themite one hopes)?

          • as you say—this isn’t the forum for 9/11 conspiracy theories, but to infer that the trade centre towers could be brought down through the casual activities of a couple of “maintenance” guys carrying the necessary equipment/explosive or whatever (I can only assume in their lunchboxes) is ludicrous (even over a period of time).
            more than a couple of guys and big equipment means dozens (and heavy transport)—then you run into ongoing secrecy problems.
            The end game, as I see it, is the result of logical thinking—civilised society has a single prop (essentially surplus energy) remove that and there is no civilisation–nobody believes or accepts that it isn’t there any more so react in the only way history has taught—with as much violence as is necessary to restore the status quo.
            History shows that is what people always do.
            I’d say the violence is a certainty, current riots across the middle east are about food and jobs, not politics, The slogan in Tahrir square was Food, Jobs, Justice—in that order!
            it’s just that mindless mobs think that changing political/religious leaders changes the laws of physics. Syria has experienced years of drought, so people migrated to cities which brought about culture clashes. So the country exploded. Syria is a stew of different religions and sects, when the current government goes down, they will turn on each other because the food/jobs problem will remain. Every nation now has its mix of cultures, which exist together as long as there is enough to eat. When there isn’t, violence will result. Differing cultures/ethnicities will inevitably coalesce into tribal groups because they see security in their own kind and rejection by others.
            The USA can be divided into several ethnic groups, countless religions and distinct geographic regions, as can Europe. Our common market is following the law of disintegration: not enough energy (trade exchange) to keep the disparate parts viable. So the poorer parts go down first—Greece, Spain etc. All are in denial, borrowing money like crazy. Germany will eventually go the same way, even a shop selling the prettiest toys goes bankrupt without customers. The EU was an artificial construct, covering much of the old Roman Empire, and subject to exactly the same laws.
            Right now the majority have enough to eat, and wages.
            The real trouble will kick in when they become a minority, and you’re left with a wealthy elite who think it doesn’t matter, and a government/military willing to protect them

            • Mel Tisdale says:

              So, explain the free-fall acceleration of WTC7. Remember the Sherlock Holmes quotation: “when you have eliminated the impossible, whatever remains, however improbable, must be the truth.” It is ever so easy to just dance to the government’s tune. I think the issue of 9/11 and those killed as a result demands more than simple conjecture about lunchboxes. My position, reluctant as it is, considering the implications, is to go with the science; your’s clearly isn’t.

          • Freefall acceleration may be open to debate, (take away the support for any structure and gravity does the rest-)–but the sheer logistics of organising the necessary stuff in place to bring down two building of that size, all preplanned, and with the necessary conspiratorial cooperation of people on the ground with the necessary technical expertise as well as people in the planes is simply stretching things too far.
            just too many people involved at every twist and turn of the entire ‘conspiracy’ whatever the freefall acceleration may seem to say
            My guess is you would need to involve 100 + people minimum on such a project. Are there records of ”maintenance” work being carried out on a large scale? You would need a ”maintenance” team totally separate from any existing staff—yet be able to go unnoticed in their access to the buildings interior systems and structure. Contract cleaners?
            As far as I know—no WTC staff have mentioned any one involved in that way? By now they certainly would have talked about ‘structural engineers’ all over the building during the previous month. Thats the weak link in conspiracy theories—no one has said–hey–I remember some guys —–doing whatever.
            The suicide ‘ers were from a society that detests the west, and so would be totally unreliable in doing anything to order, (remember it would need 5 + per plane,) but notwithstanding that, everything would have to
            be timed exactly.

            • nkdawe says:

              Aren’t there better sites for conspiracy theory discussions; such as ones that don’t care about reality and science-based evidence? In checking the available evidence in most conspiracy theories, I’ve found the theorists invariably need a closer shave with Occam’s Razor.

            • Mel Tisdale says:

              @ End of More

              Conjecture, pure conjecture! Nearly 3000 people died in 9/11 and many more since due to the toxic air quality, not to mention all those killed in the wars spawned by 9/11. Your response is an insult to all of them, shame on you. If you want to wonder how it was done, explore it. Perhaps you might like to explore how the weakness of the Sears Tower, discovered after it was built, was secretly rectified without the occupants being aware.

              Now, if you cannot explain the freefall collapse of WTC7 without the use of explosives, then you have to accept that explosives were used. Seeing as nanothermite permeated the dust of the WTC complex, you might have a clue to how it was done. And you do seem to be in need of some clues.

            • davekimble2 says:

              Another way to look at it is to imagine the meeting at the White House where the plan was hatched. Remember that the objective is to create an incident that can be blamed on the Al Qaeda/Taliban in Afghanistan, who can then be invaded “with God on our side”. In fact no attack is necessary at all, as merely the “evidence” of a plan to attack would be enough, and it wouldn’t need to be an attack on US soil – the US Embassy in London or Tokyo or Riyhad would do. But they decide that the planned attack is to be on the WTC1 – those dastardly islamo-fascists ! And then they decide that the attack will also target WTC2 ! And then they decide that the plan will target the White House as well ! And the Pentagon !! After all, the plan won’t actually happen – it will be discovered before it happens. Maybe the 19 Saudis could be arrested at the airports, or on boarding the planes. Then someone proposes that the whole thing would be more credible if one of the planes was actually allowed to follow through with the plan !!!! But what if the attack fails to bring the build down, leaving the top 30 floors of WTC 1 a burned out shell? Well, we’ll secretly fill the building with thermite, so that when the plane hits the building, we can blow the whole building up as well. OK, that’s a good plan, but why don’t we do it to WTC2 as well, and WTC7 for good measure, even though it’s not going to be hit by a plane. After all, we’ve got to make it look real …

            • Mel Tisdale says:

              @davekimble2

              WTC7 was probably the target of United 93. Or, seeing as one of the planes grounded by the stop order issued by the FAA had box cutters stuffed down the seats, it might have been the target for that aircraft.

            • Please, no more discussion of WTC conspiracy on this site. I will delete any more comments I find.

          • questioning the manner of death, in no way disrespects those who have died

            • Mel Tisdale says:

              Questioning the manner of someone’s death obviously does not insult the deceased. But when there are doubts concerning the manner and the cause of that death it is incumbent on all of us to investigate the matter in as much depth as possible, and not to do so is very much an insult to their families who still grieve and still want to know the truth. The unfortunate thing is that once one starts taking the notion seriously that the official line is flawed, one sees so much that fits that thesis. Imagine that a member of your family died in the 9/11 event and you see a comment in a blog where the person commenting simply sidesteps evidence that could advance the campaign to get to the truth of how your relative died. You might be upset, I would. I would be even more upset it the evidence concerned could possibly lead to bringing the miscreants to court, instead of having the gonads to admit that they can’t debunk it

              Now, what explanation do you have for the free-fall collapse of WTC7?.Just to get you started, look on youtube for: Architects Engineers – Solving the Mystery of WTC 7 – AE911Truth.org. It is only about 15 minutes, I think anyone can spare that much for so important an issue.

          • Mel
            I took a look at that website—in my innocence I assumed it was a bona-fide site for an architectural technical association or professional body—something of that sort, able to put out unbiased technical data, instead of that, it is a website created specifically for and by conspiracy theorists—very shaky territory. With every major disaster, conspiracies abound–the Hindenburg had the same problem, right now “Chavez was poisoned by the CIA”—or somesuch nonsense. It’s inevitable.
            I can only accept data from even handed information sources.
            So,,insult or not, my comments stand. The sheer logistics of numbers needed to bring it off makes it vanishingly unlikely to be anything other that it was— a terrorist attack by crazy jihadists
            My personal opinion is that the conspiracy people are insulting the dead. They were in the wrong place at the wrong time–victims of a political insanity that has infected the world. The London and Madrid train bombings come under the same heading.
            keeping the wounds open in some misguided ‘search for the truth” only serves to give a platform to those who insist on doing the searching.
            It would be interesting to know just how many kin of the deceased insist on this conspiracy thing. I suspect most want to grieve quietly

          • I don’t think conspiracy theories get us very far. We have enough other problems that the presence or absence of a few individuals with bizarre ideas in government is not going to make much difference, IMO. Most politicians are doing their best to overlook today’s basic problems.

        • Disturbingly you are right- people will not want to hear the truth. Economic decline throws up extremism whether 1930s Germany or the emergency of extreme nationalism in Greece now. The problem with religiously conservative countries is they are led to perceive decline as an act of god for lack of loyalty rather than the need for more liberal and science based approach. as Gail has mentioned the Arab Spring was as much to do with poor unrest- it seems QE pushed up the price of basic foods beyond the mean of government to subsidise them. Saudi and other Gulf states rely entirely on state subsidies to maintain stability and China relies on ever expanding growth to keep its people from hitting the streets.

          Civil security is a big cost and will be a ‘growth’ area so I’m sure investor will be looking at tear gas suppliers [the UK is sadly a global leader in these products], surveillance, riot control and secret police. No wonder the ‘survivalist’ right in the US fear gun control, interment camps and other state control. So also expect a rise in conspiracy theories: I should imagine that a new ‘protocols’ will come out blaming anyone and everyone for the down turn. I do, however, believe that the rational members of society should stand up and make the ‘never again’ a reality this time round.

        • Xabier says:

          Many of the worst wackos – and biggest murderers – of the 20th century were militant atheists, just think back.

          Religion, or otherwise, is pretty irrelevant here, I would suggest!

          The possiblity of civil disorder is alway underestimated – until it actually surges up. Curiously, in Europe, revolution has been romanticized since the French one, however horribly destructive the results are shown to be.

    • Bill Simpson says:

      When I realized what you just wrote about 5 years ago, I got a bit upset. Things could get ugly fast, after the exporters realize that the peak has indeed occurred, and that the less they export, the faster they can cause the price of oil to go up. Try and find another economic transaction where you can make more money by putting less of your product on the market? There aren’t many. Gem quality diamonds are the only things I can think of because, like oil, there aren’t any good cheaper substitutes for such diamonds.
      Large, powerful oil importing countries would have little choice but to resort to violence, unless some kind of negotiation can’t prevent a planned reduction in exports by the producers as they attempt to get as much money as they can for what oil remains. Who doesn’t like more wealth? I doubt they would stop all oil exports, because many of them need cash to buy imported goods, and food. War isn’t the solution, and it probably won’t work. But it will probably be tried. With nuclear weapons, the global oil demand might go way down within a few hours. Shale gas should delay that day for a decade or more, by substituting LNG for diesel in many applications. LNG fueling stations are now being built across the USA for use by 18-wheelers. Marine shipping firms are looking at LNG power, as are railroads. Lockheed Martin is building LNG storage tanks in the plant where they used to build tanks for the Space Shuttle in New Orleans.

  10. ambivalent_in_ny says:

    This reality is so depressing, and everyone I speak to about it thinks Im some crazy conspiracy theorist. Most people cant bare to accept even most of the basic facts.

    • SlowRider says:

      Speaking of conspiracies.
      I always wondered: why were the Oil Sheiks exporting their one time wealth for relatively few paper dollars during the period between and after the oil shocks of the 1970’s and 1980’s? Oil became dirt cheap for almost two decades. Were they doing it in exchange for military protection? Seemed insufficient as a reason. Were they just naive, corrupt elites like some African despotic regimes? Maybe not.
      This most elegant “conspiracy” (it’s more like a deal) goes like this: They are doing it only as long as they get a fixed part of the oil value in physical gold (for real savings), while using the paper dollars for immediate consumption. The West was supplying this gold directly to them at a premium ever since 1971, avoiding the open gold market in order not to drive the price up – that was “the deal”. Of course, at a fixed percentage of oil value (say 10%) that connects the oil price to the gold price. Then in the 1990’s, the Chinese got into the game, right at the time when central bank gold selling became more difficult anyway, and the deal started to fail, threatening the petro dollar and cheap oil. Western traders also became aware of a gold/commodity “bull market” and took more supply off the market. The gold price startet rising. But the Sheiks still wanted their share of physical gold. So the oil price went up together with gold. Looking at the gold-oil ratio shows flucutations around an average of around 2,3. In terms of gold, oil is at the price of 1950.
      Now, when “all paper burns” and the dollar loses reserve status, the Sheiks will still want their gold, or else they leave the oil in the ground. Then, oil will become very cheap if you have gold, or very expensive if you don’t.
      Another implication: we are using unconventional oil sources because a) it makes economic sense at these prices, b) because we don’t want or are unable to spend enough physical gold and c) a global depression with continuing high oil prices makes the system go on even longer.
      The new jet-setting elite could very well consist of Indian ladies and German gold savers as well.
      All this can be found at FOFOA, it’s not me being a genius, and it is much more complex than described here.

      • I am sorry, I have not been following the physical gold for oil story. I do know that quite a few countries (Saudi Arabia, Russia, Venezuela) will need increasing dollar amounts for their oil, just to fund the programs they expect to have. The Sovereign Wealth Funds that have been set up will, in fact, be worth considerably less than expected, because of problems related to lack of oil growth. So these countries need lots of money now, gold or no gold.

        • Ert says:

          Interesting perspective / arguments.

          On another account: The exporters need rising oil prices to finance what they what to do or promised their people to do. The right timing for a official note on peak-oil ;-)

        • SlowRider says:

          “…will need increasing dollar amounts for their oil”
          The point is, knowing the dollar so well, they want something else :-)

    • Ert says:

      @ain

      Yes, and because it is so, most people want NOT to go into that thought direction. A well know german forum that also discusses these topics hat a quite line that basically translated to: “Those who fully understand, losse the will to life”. Some can handle that and search for solutions to prolong – but must of our current society that is centered arround consumption and status can’t confront them with the topics discussed here – its simple self protection.

      @SlowRider

      FOFOA is a great place of though, allthrough one does need a whole lot of time to follow that route. Nevertheless, I think that Au might be part of the next world currency – but if that comes true, all nations may confiscate private Au like the US in 1933. A system like Keynes Bancor may be a solution, but if push comes to shove thrust will have eroded and only hard thinks will matter for a lot of international trade.

      On another account, the Saudis have realized that they might need the rest of what is there for themself – or at least – stretch it out for the next generations to come: http://arabmoneymatters.com/saudi-king-halt-to-oil-exploration-to-save-wealth/. They know – we know – everyone who wants to know knows!

      • The Saudis are also running out of water and have no means to feed themselves. Apparently they are buying up land in Africa but for those agreements to work [like a guarantee of no revolution and repatriation of land] the host nations will be looking for better oil deals. The west has technology and military might [although in the last days of Rome it didn't help them] and the Saudis will need allies. Perhaps the west will be ignored in favour of India/china and Africa and the more they are empowered with the last of fossil wealth the more the West has to come up with the tech that made us top in the first place.

        • Ert says:

          Oil is the ultimate barter. Military mighty or gold are only substitutes – or better said a worse derivate of oil. If the Saudis are not stupid, they will preserve part of their oil barter capability, since they have no way of sustaining themselfes otherwise.

    • Xabier says:

      Reality is hard to take: propaganda and advertising are so much more agreeable!

      One of my customers is a very senior businesman who has also been in government: in the last year he has gone from being blandly reassuring (‘just wait for the cycle to come round and it will pick up’) to looking quite rattled and anxious.

      He did say to me, that he has always found that when things are really bad, people just stop looking at the problem, and that’s when the really bad decisions are made.

      On the whole, it’s best not to raise the topic unless asked: or you’ll be labelled a ‘doomer’ or ‘prepper’!

    • In some ways, I don’t blame people. The story doesn’t have a happy ending unless a Higher Power intervenes, and somehow sorts this out for us. I am not willing to entirely discount this possibility, since there are fewer other options that really work.

      If there were things we could easily do to fix the situation (or even not-so-easily do), the situation would be better. I think a lot of what passes for mitigation now is a waste of time and money. and may even make things worse.

  11. Mel Tisdale says:

    One way the world’s population problem could be solved would be for the relationship between Russia and the U.S.A. to break down completely. It cannot have escaped anyone’s notice that the peace that broke out in the eighties is only a shadow of its former self. That we have a coming fight for resources to contend with is food for thought.

    The problem lies in the fact that modern nuclear weapons – specifically the MX and Trident D5 missiles – are obviously counter-force weapons and thus designed to deliver a pre-emptive first-strike. They are not intended to deter, not even Iran, who is more likely to deliver them in the boot of a car or the keel of a yacht than by a missile of known origin. We have moved away from the ‘blunderbusses’ (represented by the old Poseidon and Trident C4 missiles) to the snipers’ rifles represented by the current generation. The only ‘sensible’ policy is to fire first and fire them all at the first sign of trouble. Gone is the Pyrrhic victory. It has been replaced by one of ‘winner take all’. While it would make sense to ban MIRV delivery systems, and thus destroy any hope of a successful pre-emptive first-strike, there is no political will to address the nuclear weapons issue, even despite their new hair-trigger launch status.

  12. Pingback: Our Energy Predicament in Charts | PRACTICAL TACTICAL

  13. nkdawe says:

    Seems to me that one of the worst things than could happen to us is that we do discover a clean, renewable, portable, cheap, energy source. It would undoubtedly remove all concerns about limits that some people (yes, even politicians and business folk) are beginning to recognize. Then it would be full-speed ahead and economic growth would continue its steamroller effect on ecosystems and their biodiversity, severely reducing their ability to function and provide the life support services of the planet. At a time when ecologists have pointed out that we need to preserve at least 50% of all ecosystems in their natural state in order to supply sufficient ecosystem services, we’re still looking to economic growth to solve our economic and environmental problems, the very thing that’s causing them. Homo sapiens, indeed.

    • wotfigo says:

      Absolutely Correct! A cheap inexhaustible supply of energy will mean BAU growth forever or until it destroys what’s left of the planet. Let’s hope that this technology, if it is possible ,comes with STRICT population decline mandates back to a very low 1 billion. But of course this will NEVER happen.

      • Christopher Johnson says:

        Not sure how to call that meeting of the world’s peoples and tell all that we’re cutting back on lots of things, including certain tubes in the bodies of both genders. Any acceptable solutions?

    • We are in a tough spot. No matter what we do, we can’t win. More fuel does theoretically have a chance of putting off the day of reckoning for a while, but then we hit a different limit.

  14. Christopher Johnson says:

    To nkdawe: A few observations.

    1. Societies begin to restrict their populations naturally after they reach a certain economic level. We’ve seen this repeatedly for more than a few generations. However, as long as people remain poor, uneducated and needy, they tend to pop out more babies. Japan is looking at cutting its population from 150 million to 85 million (I think those numbers are right).

    2. A clean, renewable, abundant, portable, cheap energy source — such as a good battery or supercapacitor charged by a very inexpensive electrical system (five pennies per kwh) could seriously affect the global economy.

    3. Among other things, water purification and pumping will require plenty of power, the cheaper the better.

    4. Reforestation and vertical farms in urban settings can both be undertaken if adequate water and power are available.

    5. As long as extracted minerals are prized as fuels, the environmental threat will remain.

  15. wotfigo says:

    Gail; The critical parameter on energy & standard of living of a civilisation is the net energy available per capita.
    This applies on a per country basis as well as globally. Countries with a marked decline of living standards such as Haiti, Egypt etc will have marked declines in the per capita availability of net energy.
    This is the true parameter that each country & the world as a whole needs to watch very closely. It is negatively affected by both a decline in available net energy AND population increase. Both effects now in serious cumulative trends..
    If you have data on this it would be a fabulous report for you to publish.
    Thank you so much for this report. This is the major parameter of our (& every) civilisations decline.
    More please.
    wotfigo

  16. gazon says:

    In “Figure 7. World Population 1860 to 2011, based on EIA data.”, the X-axis goes from 1980 to 2011

    • Thanks, I fixed it. I don’t usually include numbers in titles of charts, so I don’t usually do much checking of them (beyond what spell-check gives). Spell check isn’t good on numbers.

  17. The mention of conspiracies brings to mind the need to risk assess the situation. I have been anti- apocalyptic attitudes for years but find my self informed to a point of ‘alarm’. I don’t see the solution as a survivalist [guns and bible] mentality or getting back to nature although I have recently switched to horticulture as a living. A green solar home has always made sense as I would rather spend the money on fun things and it occurs to me that now is the time to shop for the long term as well as enjoy the fruits of cheap travel and out of season food.

    It would be a real shame to get to a point in a few years when I would look back and think ‘why did I not travel more, eat more exotic food and benefited from humanities 2 short centuries of abundance.

    But risk assessment is key. a 3-5% decline will mean the end to growth but we will be still very wealthy. Sure, the pretend wealth of the derivatives market may fall apart but perhaps not as the super rich will still visit their casino. Social divide between the poor and the rest of society will always be the issue in any country but this could happen without peal oil/climate change as societies decline just like Greece is currently going through and have other nations at the expense of new up and coming nations like BIC.

    We are not going to run out of food as around twice as much food per person is produced, it is just the rich put the extra half into meat production. Countries like Egypt which do not have the means to feed their growing and youthful population will see more extremism which may get exported along with refugees and migrants.

    The west won’t run out of fuel- we will just spend more on it or use less. Europe pays twice the price for fuel than the US but owns cars that do twice the mileage and invest in rail with public funds.

    And even if diesel were 4 or 5 times the cost my tractor does more work than a person for a quarter of the cost.

    We will have to get used to the idea that our homes will be worth less, and that we need to do something useful to earn $200/£150 a day. We may need to learn to work less for less pay otherwise we will spend all our taxes on the police and social services.

    • BlackDragon says:

      “a 3-5% decline will mean the end to growth”
      The end of growth means the USA is bankrupt.
      “we will still (be) very wealthy”
      Well, that’s good. What will your wealth consist of? Remember, the USA is bankrupt, along with pretty much every other government of consequence, so what will you be buying diesel with? Currency as you know it will not exist. Will you barter for fuel? Pay in gold or silver? And what currency will those workers out there, getting that fuel out of the ground and refined and delivered to your tractor be using? Will they be paid in goats?

      • wealth is an abstract concept, the only real measure of it is the amount of work you can buy for what you have to offer in exchange for it. ie barter, …..I will exchange this pig for your labour in fixing my roof. So you get the food energy from the pig which gives you the muscle energy to fix my roof, with some excess to feed your wife and kids at home.
        Not having a leaky roof means I can conserve my energy by using less to keep warm and dry and healthier.
        So wealth is clearly the ability to buy and exchange energy in one form or another for mutual benefit.
        Few people realise that we have an energy exchange system, not a money exchange system.
        No matter how far removed from energy sources, or how high flown and sophisticated you think your employment is, that is how our ‘civilisation’ functions.
        We trade energy with one another. Money is just an abstract token of that exchange, it has no value without the certainty of energy input. This is why industrial nations are bankrupt, because the certainty of energy input (ie cheap oil) is no longer there.
        We cannot support an economy built on cheap oil by using expensive oil, but our leaders borrow money to convince us that we can. (and to keep their jobs of course)
        Blame the bankers and politicians all you want, but ultimately our problems are due to energy costs.
        If you can’t sustain an energy exchange system in some way roughly along those lines, then ultimately you have to gather your own energy from your immediate environment.
        And that makes you a hunter-gatherer. Just how legal that will be in our future depends where you do your gathering I guess

        • BlackDragon says:

          EOM, I agree with and am aware of everything you are saying here. My point was really that of course running an oil-based, energy-intensive civilization is not going to be possible based on goat exchange.

      • Christopher Johnson says:

        Do you have any idea of what the wealth distribution in the USA is? I hadn’t until this week, and I was, quite literally, shocked.

        Here it is: http://www.youtube.com/watch?v=m3mxifcsE8A.

        The basic question is ‘what can we do about it?’

        • not a lot, given our current environment
          in a hunter gatherer situation, your wealth in that context was entirely dependent on physical prowess. You killed better, ate better became physically stronger and in so doing attracted the most breeding females and passed on your characteristics.
          In our money orientated situation, in the broadest sense wealth and/or intellect attracts the best females, because, like it or not, your wealth will give her offspring the best start in life. Hunting skills are no longer important, but it explains bimbos on the arm of billionaires and otherwise dim footballers.
          so wealth begets wealth, so for instance you have generations of Rothschilds going back to the 18th c, or monarchies passing down their wealth by heredity.
          Slowly the wealth accumulates in bigger and bigger pools controlled by fewer and fewer
          people.
          When an explosive tipping point is reached, there’s a revolution, the tumbrils roll and everybody expects a share of the spoils, But it doesnt work like that. The smartest revolutionaries just take over the vacancies left by the aristos, and it starts over again
          Its called human nature.

          • Christopher Johnson says:

            Is it not true that revolutions are sustained by the flesh and energy of their members? What is remarkable about the most recent agglomeration of wealth in the USA is that it happened so quickly, within a decade.

        • it is true yes, and the flesh of the revolutionaries is being torn apart right now in Syria, and across the middle east.
          I think the speed of it is just the function of the way the financial system is working at this time, it’s an acceleration into oblivion because those accumulating wealth are convinced that money is wealth and energy is a side issue, when in fact the reverse is true,
          Ultimately you can’t eat money, and I think it will inevitably come to that as cash gets totally devalued

          • Xabier says:

            I know of a very wealthy – and very disagreeable – man who likes to ‘joke': ‘Friends? I’ve got millions and millions of them: little green foldable ones!’

            Not being able to buy anything with those green friends certainly has never occurred to him, and he certainly takes on-tap power for granted, as – to be frank – we all more or less do if brought up in the second half of the 20th century, historical anomaly as it is.

      • Well yes the end of growth does mean those in debt will have no means to pay it back but it also means those that have lent money have no means of reclaiming it. The financial world has been running a confidence trick for the last few years- which begs the question as to how the world revalues its self.

        Real wealth are the skills, technology, services and resources a nation has. 2008 crisis was the trailer to the coming main feature- all the QE- bail-outs and extra borrowing are fake solutions based on a future of growth that might not exist. But countries will still have real value wealth, they will still produce technology, food, energy and finished goods- what will be in question is the financial sector as well as the consumer reliant wealth. in the UK too much growth has simply been in the retail/consumer sector based on imagined wealth of property prices. The idea of people buying their way into growth seemed absurd even before peak oil or AGW.

        The future will be interesting!

      • SlowRider says:

        “The end of growth means the USA is bankrupt.”
        And was bankrupt from the point in time when debt rose faster than growth.
        They will print their way out Weimar Style.

        • talkin about going broke—run out of energy and you run out of money an all
          has anyone caught up on todays EU news?
          Cyprus, an EU member, has just lifted 10% out of everybody’s bank account to pay its EU bailout
          That cuts out the argument about whether banks are just doing creative accounting, or just plain robbing their customers. the Cypriots don’t mess about, they just stick up their own banks

          • Christopher Johnson says:

            Regarding Cyprus, should we not be careful and first determine who was assaulting whom? One can almost expect Greek Cypriots to proclaim Turkish Cypriot banks are theirs for the plucking, and vice versa. Or perhaps they hit some of those banks that have been receiving major transfers from wealthy and somewhat unscrupulous Chinese wealthies (more billionaires last year than anywhere else…) that have been shifting their funds there.

          • SlowRider says:

            Yes, I read that, just some hours ago, really a nice robbery.
            But ECB does it’s single mandate perfectly: maintain 2% inflation (and patiently wait for dollar collapse). No overprinting until now! Remember Draghi said he will save the Euro, but not that he will protect individual countries and their debt. They are given the choice between exit and austerity. The first governments on earth who cannot print their currency, that’s the secret. And until now, everybody wants to stay in! Moderate inflation is part of the plan. I repeat, no overprinting, just what was necessary for saving the crazy banking system. They are smart and successful. Gail as most Americans is pessimistic about the Euro – time will tell!

            • It will be interesting to see how this all works out. There are a lot of other countries and banks with problems not that different from Cyprus’.

          • Cyprus seems to be panning out in a sort of economic parallel with a lot of stuff discussed on here in a number of posts—in ways nobody had anticipated. who would have imagined that a bank would rob its own customers—must be a first?
            But maybe it’s given the world the nasty jolt it needed, suddenly all the world’s banks can be seen to be supporting a ponzi scheme
            So perhaps we should thank cyprus

            • Somebody has to be first.

              In the US (and a lot of lot of other places) there are ultra-low interest rates. This is good for some segments of the market (real estate, buyers of cars, investors in businesses, governments paying interest on debt) but is a disaster for other segments (pensions with guaranteed payouts, some bank products dependent on differences in long-term and short-term interest rates, long term care health insurance). The ultra low interest rates also cause bubbles that are likely to break, if interest rates ever go up again. So a rise in these low interest rate is one potential source of problems. Another is defaults related to the low interest rates. The US Pension Benefit Guarantee Corporation guaranties pensions, but doesn’t collect enough premiums. It seems like the Federal Government may need to print money to cover its obligations. At some point, all of the money printing becomes too much.

        • davekimble2 says:

          That should read: ‘They will print, Weimar style, to postpone the inevitable for a bit longer.’

          For people wanting to continue their affluent lifestyles, that is what they’ll want to. “Nobody ever rioted for austerity”.

          • SlowRider says:

            Of course, it’s not really what you would call a sustainable solution :-)
            But they might avoid nominal bankruptcy somehow. Just close the system down for national security and then reset with austerity FOR GOOD.

      • Bankrupt governments devalue their currency so we won’t be bartering, home grown goods should remain stable but imports will become expensive. The US is at least food self sufficient but most of Europe is not. I think Africa which is less susceptible to globalisation will turn the tables on the west and sell it food and resources – how shall say- competitively.

  18. Pingback: Our Energy Predicament in Charts | Doomstead Diner

  19. Christopher Johnson says:

    You might also enjoy Elizabeth Warren’s talk of a few years ago, titled “The Coming Collapse of the Middle Class.” This has been building for more than a decade, and it appears to be getting worse. Are more middle class going bankrupt as the richest few get richer and fewer? Is anyone publishing or announcing the truth?

  20. Michael Lloyd says:

    I think Tom Murphy did a good job explaining the absurdity of continued energy growth.

    See http://physics.ucsd.edu/do-the-math/2011/07/galactic-scale-energy/

    To paraphrase Feynman : “Nature cannot be fooled.”

  21. John Van N. Dorr III says:

    An editorial suggestion that is also substantive.

    Illustration 8, “Different Kinds of Energy” should be re-captioned to “Different sources of useable energy” [The horse and person are, obviously, consumers of energy a form different from the other three examples, and it is the product of their effort [from energy extracted through metabolism] that introduces energy into the consumable product that they produce.

    This conceptual distinction is important: Public discussion that is focused on only the broad category of “energy”, rather than on the “form of energy” that provides the input for the production function, obfuscates the continuum from input to final output. I’d suggest that material that is presented to the consuming public, and particularly to the public channels of communication relied upon by the media, should be clear on this.

    The American Geological Institute [AGI] published MINERALS: FOUNDATION OF SOCIETY, written by my mother, Ann Dorr. It was first written to assist her in presenting to congressional staff and others in policy positions the relationship of our material existence to the availability of and access to natural resources. [Available on Amazon at http://www.amazon.com/Minerals-Foundations-Ann-P-Dorr/dp/0922152608%5D Those presenting information on energy issues might find it a useful additional resource to assist those who want to understand the field of play more broadly.

    Thanks for your excellent efforts in helping us try to get beyond the pressures of short-term interests.

    John Dorr

    • Thanks! I think the caption “Different sources of usable energy” is clearer. It seems like most people consider sources of usable energy too narrowly.

      The link you gave wasn’t quite right. I think you mean, “Minerals: Foundations of Society [Paperback]” by Ann P. Dorr (Author), Alma Hale Paty (Author). I see used books are available for $0.01.

      • John Van N. Dorr III says:

        Yes, correction appreciated. Not a bedside read unless you grew up with geologists. But what a deal!

  22. Solar PV mono- crystalline 16% efficient panels are available today from Sun Electronics of Miami, FL for $0.32/we. Given their mounting on the suitable roofs of US buildings, the USDOE estimates 900Gwe could be accomodated. From our work for Moraine Power Corporation, we devised a mounting system costing $0.68/we. Balance of plant, including collection system, grid connected inverters, and batteries amounts to $1.25/we. This totals $2.25/we. LEC for the produced power is $0.09/kwh. This assumes 3 hours storage at rated power.

    Solar PV systems last 20-30 years. They emit no pollutants. They are primarily
    made of Silicon, including the glass cover. They are quiet.

    Were such systems augmented by solar passively heated/cooled housing. Holdover
    plate refrigeration. Solar nano tube hot water heaters, it is practical for each dwelling to become a net energy exporter.

    Of course, it will be necessary to shift our transport system to electrified rail, and water. And it will be necessary to shift our agricultural system to one without diesel fueled tractors, perhaps using plant oils grown on the farm, otherwise forks, shovels, and hoes, or draft animals.

    But we could still maintain a civilization.. . .

    INDY

    • davekimble2 says:

      Do you have an energy budget for the full life cycle of one plant? Since almost 100% of the Energy Invested has to be expended before the Energy Returned can be enjoyed, there has to be an energy subsidy (mostly from fossil fuels) to make it happen. The transition would have to be done over a number of years, have you modeled the amount of fossil energy.years that would be required to make the transition ? How long before the project as a whole is making a net energy profit?

      • Of course I have such a thing. And I’m not the only one who did an energy
        budget for PV. I organized utility scale renewable power companies in Africa, and in the Midwest.

        Your problem is one of being behind the 8 ball. Pricing of PV crossed the magic $1/watt number last year. It has been dropping steadily since
        to the current level of $0.32/watt.

        I myself, installed 600 watts of PV on my ship 2 years ago at $2/watt. My system eliminated 450 gallons of diesel consumed annually to produce the power necessary to operate it. That is; $1,200 spent on PV eliminated $2,250 spent annually on diesel. The payoff was 6 months. Do the math.

        PV works, it’s now cheaper than alternatives, it doesn’t put mercury and sulfur into the atmosphere, it’s silent, needs minimal maintenance, and uses one of the most abundant elements in the earth’s crust.

        INDY

        • davekimble2 says:

          I asked about an energy budget, not a financial budget. The two differ when the price of energy changes, as it does for a variety of reasons. The recent drop in the $/W of PV has been due to Chinese companies having access to easy finance to increase production, leading to massive over-capacity and over-supply. Many manufacturers in US, Germany and Japan have gone bust under this pressure. But this appears to be coming to an end with the Chinese Government now refusing further easy money to Suntech, which has defaulted on its loans and is expected to go into bankruptcy. When the over-supply has been corrected, prices will rise again, including in the US. This will make a non-sense of a financial budget, but won’t affect the energy budget – which is why it is of particular interest.

          • How many times do I have to say, that yes, I and others have done energy budgets
            for PV, GeoThermal, and Wind? How many times do I have to say that the
            result of those analyses give an EROEI > 20 for PV?

            Hmmm… …. …

            Are we still in denial? Hmmmm???

            INDY

            • Charlie Hall is saying that for installed Solar PV in Spain, the EROEI of the system is 2.4. It is not clear to me whether intermittency is considered at all in this. This is reported in his new book, Spain’s PV Revolution, by Pedro Prieto and Charles Hall.

            • Yes the analysis of solar in Spain came up with 2.4. To achieve this they threw
              in everything including the kitchen sink. By this I mean they included the Grid,
              Transmission lines, allowed for a very low capacity factor.

              The household PV system doesn’t need a grid. Doesn’t need long distance Xmission
              lines, actually doesn’t need an inverter, because it is easy to run a house on 36 VDC and given utility PV produces 40 VDC, conversion losses are eliminated, wiring sizes are minimized.

              Given a holdover plate refrigeration system which operates during the day, LED house lighting, a computer system like mine with an AMD Athlon II X4 620e 45watt
              TDP CPU, running with a DC-DC power supply, solar nano tube hot water heating,
              passive solar heating/cooling, only 1000 watts of PV can run the house, in NYC no less.

              How do I know this? Because I am doing it in NYC now. Given a sunnier clime
              like the West Indies or Florida, things work even better.

              If you want electric cooking, best go for 6Kwe of PV. Choose convection ovens, immersion heating of hotwater, ie: electric kettle, crock pot.

              Before you discount PV, I suggest you begin with the EROEI of tight oil ~ 4-5 just to get it out of the ground, subtract the energy embodied in the pipeline gathering and distribution system, subtract the energy embodied in the conversion system, automobile, power plant, divide by the efficiency, subtract the energy embodied in the road network or transmission system, and see where you are.

              Less than (1) ???

              The nay sayers like comparing apples to oranges.

              Like nuclear? How about subtracting the energy cost of sequestering the waste for 10^6 years? The energy involved in cleanup. The energy involved in concentrating the U235 to > 4%, the energy involved in mining the ore, crushing it, extracting the U at generally 0.5% from the waste rock, conversion energy into yellow cake, the energy embodied in the concrete and steel and exotic alloys of the plant, the energy embodied in the grid, ( oh, I forgot you threw that onto the PV and wind sources ) adjust for transmission and conversion losses, capacity factor, subtract the petroleum energy used, too.

              By the time you are done, I’m certain you can convince yourself that what you need to do, is live in a cave, eat raw roots and berries, wear sheep skins, rise with the sun, and go to sleep with the sun. Of course, there had best be only a few of you.

              BTW: did you subtract the energy embodied in the useless multi levels of government, which is doing it’s level best to make a FUBAR of everything? It takes energy to make hot air, you know….

              INDY

            • I don’t really have a problem with off-grid solar; it is on-grid solar that is the problem.

              With off-grid solar, it is pretty clear the person is buying it as a reasonable investment. They are matching up the system with their needs. Subsidies generally are not the reason for the investment.

              With on-grid solar, we get a whole host of other problems–a transmission system that must accommodate this variable electricity, fossil fuel generation that must be adapted for the new system, feed-in tariffs that shelter the owner of the solar panels from the true cost of the new electricity (and thus tend to keep the owner from making reasonable changes to reduce his own usage), plus a subsidy system that tends to lead to subsidies of the rich by the poorer members of the community.

            • davekimble2 says:

              I have seen the energy budget for this, and the system boundaries are set much wider than is usual. It includes the actual energy costs for all the things like office computers needed to build and run this extensive solar farm in the real world.

            • Christopher Johnson says:

              Dr. Oprisko: How do you respond to naysayers who cite recent studies about erosion of solar panels by sand and other detritus. They claimed an average efficiency decline of more than 40% after three years of operation in hot/dry/desert climates.

            • davekimble2 says:

              ERoEI is an important single figure, but it is not as useful as the energy budget from which it is derived. Can I see your energy budget ?

              You haven’t tried to address the point I was trying to make, so it could be that it is you who is in denial. I used to be an avid supporter of PV, and then I realised that I had made a ghastly mistake in dismissing the timing of ER and EI. This is something that is counter-intuitive, but can be calculated mathematically, so there should be no dispute about it, given the energy budget.

          • Regarding PV erosion and production decline in deserts, due to sand storms.
            I didn’t know that a significant number of folks live in places with no vegetation. When I was stationed in Namibia, between the Kalahari and the Namib deserts, our local population consisted of the Ovambo, San, Herrero, and Himba. The Himba live in the Namib, the San in the Kalahari. Only the Namib is a desert with virtually no vegetation, the Kalahari and the region in between has plant cover. Generally thorn trees, but plant cover nonetheless.

            We designed Solar Gradient Pond Electricity Generating Plants for Namibia. Omusati Region and other parts have lots of salt pans, and salt aquifers, so sourcing salt was no problem. The ponds did suffer from evaporation, so we had to incorporate RO systems to produce makeup water. We ran these on waste heat. The latitude was between 21 and 16 degrees south, so we had good solar insolation, and the lack of rainfall meant we had high capacity factors, nearly 90%.

            We developed bimodal organic fluids for the power conversion system, used radial inflow turbines, and were operating with 95 degree celsius high temps, vs 30 degree celsius cold temps, for a delta t of 65 degrees celsius. Thermodynamic efficiency was ~ 15 %.

            On the cattle stations, PV was used extensively by the remote operators, and no one I met complained about sand erosion.

            So from my experience in those two deserts, you don’t have the problem mentioned there. I also crossed the Gobi Desert 3 times, found it covered in vegetation too, with no flying sand. So the described problem doesn’t exist there either. Sounds like a localized problem endemic to one place.

            I have an idea. There are no trees atop the Matterhorn. Just snow and rock.
            Since the Peak of the Matterhorn has no trees, we should only consider options suitable for treeless snow covered rocky areas, with steep slopes.

            Cooking on a campfire, in front of your forester tent, doesn’t work on the Matterhorn, so we should never build either campfires or forester tents don’t you think?

            While you ponder that, I’m going off to the Adirondaks with my canoe, forester tent, sleeping bag, axe, bowie knife, matches, a side of bacon, some salt, sugar, tea, flour, and pepper. I’ll build a spruce bed using spruce tips over a rectangle warmed by a wood fire, which I’ll move to one side, I’ll pitch my forester tent over the spruce tip mattress, and while you’re ruminating, I’ll cook the salmon I killed with a stick over my fire, and wash the whole thing down with some Earl Grey Tea.

            Let me know how it all turns out.

            INDY

    • Thanks! I think that there would likely need to be a grid upgrade and changes to remuneration of fossil fuel plants to make such a system work, as well.

      There get to be a lot of details–quantities that are really feasible, pollution, who will pay for all the systems, how to deal with the intermittency added to the system. etc. Nothing is a slam-dunk.

      • Gail,
        None of the prerequisites you mention will occur. I believe we will see a disorderly
        process, wherein individuals, fed up with continually increasing electricity costs, do the math. Once they do so, they will buy the panels, erect them on the south facing roofs of their buildings, connect up the inverters, and become net exporters of PV power to their local utility through feed in tariffs currently in force.

        The reduced demand, observed at the grid level, will drive utilities to finally shut
        down overage coal plants, now under the gun for their high level of sulfur, mercury, and other toxic metal emissions.

        Adding to this trend, we now see companies erecting panels on customer buildings, financing the installations themselves, and leasing the units to the building owner.

        This latter activity, will eliminate a previous barrier to implementation by many, and will result in increased rates of construction.

        INDY

        • davekimble2 says:

          The Australian experience is that the coal-fired generators will complain very, very loudly that FiTs for solar are unfair and putting them out of business. In this they will be backed by coal miners, the political opposition, the media, and a rag-tag army of climate change deniers and anti-Green thinkers. What they won’t do is close coal-fired power stations voluntarily. If forced into bankruptcy, the remaining generators will complain all the louder.

          • It works the same way in the US. Some folks complain about mountain
            removal, the rest complain about lack of work. We couldn’t get Moraine Power on line due to this sort of thing.

            The solution to this is found on Bill Mitchell’s blog. It’s called the job guarantee. The job guarantee eliminates a key participant in foot dragging, working people. Then you only have to deal with the coal companies and the utilities. You bankrupt the coal companies, so they disappear. You regulate the utilities to death, to the point they shut up.

            But frankly, none of this is necessary. Mom and Pop home owner, tired of
            paying Con Edison, met Joes Solar Company. Joe puts up PV systems on south facing roofs like that on Mom/Pop’s house. He leases the system to
            the building owner, with small monthly payments, which are half their current utility bill. The lease lasts 30 years, with no price increase. Mom/Pop did the math, and the PV system is a no brainer, it’s cheaper.

            Joe makes his money selling the appliances to match the PV system. He has a line of hold over plate 36 VDC refrigerators, 36VDC kettles, convection ovens, hot plates, lights, computers, and heat pumps. His nanotube hot water heaters, proven in Germany where it’s cloudy, work just fine in the US corn belt, where Mom/Pop live.

            It took Mom/Pop several years to fully make the conversion, but the appliances work great, the cost of power is fixed and cheaper, and Joe does all the maintenance, as part of the deal.

            Con Edison, proposed legislation that would prohibit roof installations of PV, but all the Moms/Pops got together and killed it. Then the Moms/Pops got net metering passed, and then got a feed-in tariff for small IPPs passed. To do this they had to twist the arms of the FERC, but a close presidential race between a black man and a white supremacist, gave them the leverage to do it.

            Deprived of nearly half their former customer base, ConEd had no choice but to close all their old and inefficient coal plants. Finally, the NERC got religion after a close call in California involving Mission San Ofre, and forced closure of all nuc plants over 40 years old (twice their design life). With free liability insurance killed by all the Moms/Pops trying to sell their power, no new nuc plants could be built. So finally, the only thing left was Hydro, Geothermal, some wind farms ConEd couldn’t kill because they were owned by T. Boone Pickens and the sage of Nebraska.

            INDY

            • davekimble2 says:

              So have you counted all the energy costs of making those 36 VDC appliances in your energy budget ? I think not, because you are still in the mindset of things simply appearing because you have money. Not only is your plan going to need the energy to make all those solar panel factories and the panels themselves, but it is going to need all the energy to make the 36 V devices, which nobody currently has.

              If we had started on this 30 years ago, when there was energy easily available, this gigantic transition would have been possible. But the future is not going to be like the past – energy is going to be limited and some people (the poorest, no doubt) are going to have to do without altogether.

        • Government cannot afford these feed-in tariffs on any reasonable scale. Neither can other consumers stand the higher cost that would be needed to support the full system, including more than just the feed in tariffs–the cost of grid upgrades, and if the price of natural gas rises, the price of natural gas subsidies, to maintain the balancing needed to support the system.

  23. still the obsession with shifting energy around goes on, we can power tractors with biofuel. When will people ‘get it’ that biofuel produces an EROEI of little better than 1:1? You cultivate 100 acres and get an actual food return from 1 acre. Such is the genius of putting biofuel in tractors.
    yet the nonsense persists…but I suppose it should get an airing in here, where the collective flak can be concentrated!
    We grew our present 7 billion bodies with mechanised foodgrowing, when we used shovels and hoes we had 1 billion, because that’s all the food that could be produced with shovels and hoes.
    More fantasies persisting in the collective imagination of humankind that we can become gentle pastoralists. Just where our fields will be isn’t made clear. Tower farms probably–we can all pedal exercise bikes to provide lighting and pump water up 50 stories. Full employment for everybody.
    Ive seen nuttier economic ideas getting a Nobel prize.

    • The EROEI for current production mono-crystalline PV is > 20.
      I quoted an LEC. LEC stands for “Levelized Energy Cost”, that is a life cycle
      cost, which considers the cost of capital, O&M, that is Operations and Maintenance.

      I also mentioned that the shift in agriculture could take at least 3 courses:
      1. A return to manual tillage using hoes, shovels, and forks. ( this is what most small gardeners do)
      2. A return to tillage using draft animals. (it should be mentioned that 100million
      acres formerly used to grow feed for draft horses, were given over to human food
      production in the USA during the 50s. This was the root cause of the massive
      food surpluses of that period.
      3. A shift to farm grown oil crops like soybeans and canola, which are pressed on the
      farm for conversion to biodiesel, or are consumed in Elsbet Diesel Engines, with
      the resulting meal fed to livestock as a protein source.

      I am not advocating one over the other. However, if the course taken is option
      1, the percentage of the population necessarily given over to agriculture will be
      north of 50%, specifically because those tools will limit the acreage tillable by one
      family to less than 5 acres, I imagine.

      I quite reasonable case can be made for option 2, using technologies developed
      by the Amish in the US. However, this means 100 million acres now growing food
      for humans will be given over to fodder production for draft animals.

      It must also be mentioned that if the US does not electrify its rail network, and
      does not power that network with grid connected renewable power, there is a real
      possibility that the rail network as well as the road networks, will crater for lack
      of fuel, with the consequence that land transport will be animal driven.

      Should this occur, the corn belt of the US will be effectively cut off from the population centers of the country. Transport of perishables from Florida/California to the cities will end as well. This will have negative consequences that are far reaching.

      Should the shift to passively heated/cooled housing not occur, there is a real risk
      of massive deforestation by a population desperate for fuel to provide winter heating/ cooking.

      All this boils down to the leadership/lack of leadership provided.

      INDY

      • I think the amount of investment needed to make such a change, and the amount of resources devoted to such a change, would have to be extremely high as well. For example, the change to passively heated/ cooled homes would require a lot of investment. People would have to (at a minimum) make huge cutbacks in discretionary expenditures. It is not even clear it could be done, with great leadership.

        • The US has 25% unemployment. It invested $6 trillion in the wars in Afghanistan and Iraq for the express purpose of controlling the oil of South Asia. My research discovered that passive solar homes meeting LEED standards, and passive solar office buildings, are now being built for the same or less money than conventional buildings.

          Innovations in passive solar design, have turned conventional thinking upside down.

          Regardless, if the UK/US can justify the massive expenditures necessary to
          maintain hegemony over middle east petroleum, justification can be found for conversion of the housing stock.

          INDY

      • more black humour as we collectively starve to death
        probably not one person in 100 has the necessary skills to see himself through a year in an agricultural context
        we have lost the knowledge
        it takes great skill to plant harvest and store the necessary food supply through a year, and even those who used to do it as a lifestyle used to call the period between planting and harvest ‘the lean times’
        Most of us would starve before the first harvests, certainly the second
        and PLEASE…leave the Amish out of this. They are a self perpetuating fraud unto themselves, selecting the bits of the modern world they will use, and casting out bits they decree as ungodly. Using machinery so long as it’s not within their dwelling—or some such convoluted thinking that somehow circumvents the use of mechanised forces but allows the use of its benefits, or use ‘stuff’ that has been manufactured by ungodly means by other people. (wheels, spectacles healthcare and so on—it varies according to sect) You either stay out of modern living–or you use it. The Amish might be good farmers, but their system is as unsustainable as anybody else’s long term They live as they do because our industrialised system can tolerate their eccentricities
        The only way you can get millions into agricultural labour is by a system of ‘no work no food’. we have become too used to having our food delivered to us on a regular basis for any other system to work
        Sorry to be so brutal, but that’s human nature. It would be work direction, that would mean dictatorship, (forget persuasion), loss of civil liberties would mean violent revolt. Read up on Stalin, Mao Tse Tung and Pol Pot if you need a clearer picture about what happens when you mess with agriculture
        The root cause of surplus food production was the application of nitrate fertilisers, not taking grazing animals off the land btw
        we cannot go back to using that 100m acres for draft animals because people need the space. And in any event, once the food supply begins to falter, the draft animals will get eaten.

  24. JamesJones says:

    I trust the soundness of the article, but I think that it puts too much trust on the value of the very tools it uses for analysis. It is a bit like trying to measure length with a rubber-band. The rubber band here is the price of finite commodity measured in infinite, free, fiat currency, which was seriously over-abused over the years. The price of oil in terms of gold is back to the values it had in 1985-2000 (1.5-2.0 grams per barrel; price of oil in gold is today lower than it was in 50s when there was a gold standard), which might lead us to believe that the value of US dollar has lost its value after a decade of financial terrorism, and then bail-outs, and then QEs, which of course would lead to higher oil prices even after a downturn. The currency with trillions in debt cannot have the same value as the one without any debt. Now that would not be a big issue for insurance, pension funds if they did not buy into US dollar bonds/stocks and chose to be part of the over-extended rigged system. Why are they not hedging against failing currencies now, as even some central banks are doing it (I am still studying to become an actuary, so I might write a thesis on this)? I have no illusion that the debt can be ratcheted up even with the fixed currency, and thus the need for good regulation, instead of bailouts.

    I think that we have a problem with the shrinking oil supply whatever argument you make, but let’s not forget all other issues which impair the very tools (value of US Dollar, supply-demand, price-discovery, price-rigging, speculation, monetary policy) which we then use to reach this very conclusion. It is like looking in wrapped-up mirror, we all look ugly when we look into it. Fixing our financial system, break up the financial, medical and any other monopolies before we go on and evaluate where we stand with regards to resources. You don’t know what you have until you discover what you waste and that goes for money, food, and in the end, energy. Japan lives with the population density that is unimaginable for the US, and it does not collapse even after the greatest of misfortunes. So people in the US need stop with the spoiled kid mentality, where it is easier to imagine post-apocalyptic future and world end fantasy, and not a little change of lifestyle or little dent in financial industry. When you have a kid that would rather die or hurt himself and do damage to everyone around, when it has to take a simple flu shot. I guess death and pessimism is better, safer, because you cannot ever get disappointed. Either that or over-exuberance.

    • The problems with extracting oil from the ground are very real–the easy sites are gone.It takes more man hours, and more fossil fuels, to get a barrel out now than 50 or 100 years ago. The population limits we are reaching are very real. Neither of these depend on the flawed financial system. I also find that when the price of oil goes up, the amount of energy we are able to consume goes down. This is a physical measurable quantity. I think the story is pretty clear, whether or not the financial system has its problems.

      Energy use per capita declines when fossil fuel costs rise.

    • Pricing energy in terms of precious metals, is a favorite of the gold bugs.
      But let’s get real here. The current tight oil boom in the US, causing the recent rise in production, is limited by extremely high depletion rates, to the point that production from tight oil will peak in 2016, after which it will rapidly plummet.

      The issue staring the US and the OECD in the face is what to do about this.

      Currently these countries are in denial. Indeed, we see nostalgia trips everywhere. Movies about the 30s are in vogue, for example. Why? Because that era was the era of “Giant”, Teapot Dome, and other discoveries, which made energy cheap.

      But living in the past, will not solve the issues of today. Sitting on one’s hands will not carry us forward. The only thing that will work is for us to accept some realities:
      1. We waste 90% of the energy we use. That means we could cut our consumption massively, and still get things done.

      2. The investment in wind, geothermal, and PV has paid off. We currently can produce power from wind at $0.02/kwh, from PV at $0.09/kwh, and from geothermal at $0.05/kwh. The only reason we don’t have greater penetration from these sources is due to a lack of a feedin tariff system in the US. This lack, permits utilities to shut out competing sources of power, so they can recoup investments in nuc and coal plants. This has progressed to the point that utilities have lobbied for extensions of operating licenses on nuc plants that are way beyond their design life. This has progressed to the point that the public has been bamboozled into subsidizing onsite storage of spent fuel, rather than insisting such fuel be reprocessed.

      Were we to shift our transport from diesel trucks, private cars, and diesel locomotives, to renewable light, medium, and heavy rail, we could save 70% of our fuel consumption, or 12.6 million barrels / day. This would eliminate our negative balance of payments.

      Were we to shift our homes to passive solar designs, including solar hotwater, we could save an additional 2 million barrels/day.

      This is no longer rocket science, folks. It’s a done deal.

      INDY

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  27. the problem lies in the ‘if’ part.
    It is human nature to regard what we have now as somehow ”sufficient unto the day”. That is how our brains have evolved. It is a waste o effort to plan and act for something which may or may not happen tomorrow, or next year.
    Our supermarkets are full today, it is exactly the same as having killed an animal in the hunt–we will eat this one, the worry about catching the next one when we’ve eaten it.
    it has been part of the evolutionary system that has worked fine up to now, but it also illustrates the dead end (literally) that we have reached

  28. Mel Tisdale says:

    Anyone concerned about what conditions could be like post collapse if we revert to more primitive societies, might be interested in BBC Radio 4’s current book of the week, week days at 9:45 U.K. time. It is entitled: ‘The World Until Yesterday’ by Jared Diamond. Each episode is available on BBC iPlayer for seven days after transmission.

    (If anyone knows of an actuary ;-), they might be interested in looking into some of the numbers that it comes up with, such as the number of deaths from tribal warfare compared to that from wars between nation states, ratios of elderly in the population and their needs to that of the rest of the tribe etc. etc. – Just a thought.)

    • yes I’ve been following it—a brilliant book

    • I guess I haven’t looked at Diamond’s current book. It would probably be easier to find the book, and look at it, than to listen to a UK show that comes on in the middle of the night here.

      • Mel Tisdale says:

        Middle of the night, no problem. Just use iPlayer. Go to the Radio 4 schedules on the BBC website and when you have found the programme ‘Book of the Week’, click on it and when the specific page appears, click on the speaker symbol. You can listen to it anytime within seven days of it being broadcast. I suggest that you listen to the first programme (only 15 minutes) and see if it appeals to you.

        • I am more of a “reader” than a “listener”. I tend not to listen to talks, if I can find a written version. In written form, it is easier to scan for what I am interested in, and go back to the numbers to make sure I got them right.

  29. Pingback: The Darker Side of Renewable Energy | Green Energy Investing

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