Peak Oil Demand is Already a Huge Problem

We in the United States, the Euro-zone, and Japan are already past peak oil demand. Oil demand has to do with how much oil we can afford. Many of the developed nations are not able to outbid the developing nations when it comes to the world’s limited oil supply. A chart of oil consumption shows that oil consumption peaked for the combination of the United States, EU-27, and Japan in 2005 (Figure 1).

Figure 1. Oil consumption by part of the world, based on EIA data. 2012 world consumption data estimated based on world "all liquids" production amounts.

Figure 1. Oil consumption by part of the world, based on EIA data. 2012 world consumption data estimated based on world “all liquids” production amounts.

We can see an even more pronounced version of this pattern if we look at the oil consumption of the five countries known as the PIIGS in Europe: Portugal, Italy, Ireland, Greece, and Spain. All of these countries have had serious declines in oil consumption in recent years, as high oil prices have impeded their economies.

Figure 2. Oil consumption for Portugal, Italy, Ireland, Greece, and Spain, based on EIA data.

Figure 2. Oil consumption for Portugal, Italy, Ireland, Greece, and Spain, based on EIA data.

Oil consumption for the PIIGS in total hit its highest level in 2004, before the decline began. Peak oil consumption by country varied a bit: Portugal, 2002; Italy, declining since 1995; Ireland, peak in 2007; Spain, peak in 2007; Greece, peak in 2006.

Peak demand is very much related to jobs. Peak oil demand occurs when a country is not competitive in the world market-place, and because of this, loses industry and jobs. One reason this happens is because the country’s energy cost structure is not competitive in the world market-place. With the run-up in oil prices starting about 2003, oil is by far the most expensive of the traditional energy sources we have available today. Countries that use a large percentage of oil in their energy mix can be expected to have a hard time competing, because of oil’s higher cost.

Figure 3. Oil consumption as percentage of energy consumption for selected countries, based on BP's 2012 Statistical Review of World Energy.

Figure 3. Oil consumption as percentage of energy consumption for selected countries, based on BP’s 2012 Statistical Review of World Energy.

Anything else that is done which raises costs for businesses will also have an impact. This would include “carbon taxes,” if competitors do not have them, and if there is no tariff on imported goods to reflect carbon inputs.

High-cost renewables can also have an adverse impact, regardless of whether the cost is borne by businesses, consumers or the government.

  • If the cost is borne by businesses, those businesses must raise their prices to keep the same profit margins, and because of this become less competitive.
  • If the cost is borne by consumers, those consumers will cut back on discretionary expenditures, in order to balance their budgets. This is likely to mean  a cutback in demand for discretionary goods by local consumers.
  • If the government bears the cost, it still must pass the cost back to businesses or consumers, and thus reduce competitiveness because of higher tax costs.

This importance of competitiveness holds, no matter how worthy a given approach is. If costs were “externalized” before, and are now borne by the local system, it makes the local system less competitive. For example, putting in proper pollution controls will make local industry less competitive, if the competition is Chinese industry, acting without such  controls.

One issue in competitiveness is wage levels. Wages in turn are related to standards of living. In a global economy, countries with higher wage levels for workers, and higher benefit levels for workers (such as health insurance and pensions) will be at a competitive disadvantage. Countries that use coal as their prime source of energy will be at an advantage, because workers’ wages will tend to “go farther” in heating their homes and buying electricity.

Countries that are warm in the winter will be at a competitive advantage, because homes don’t have to be built as sturdily, and don’t have to be heated in winter. Workers can commute by bicycle even in the coldest weather.

Energy usage (all types combined, not just oil) is far higher in cold countries than it is in warm wet countries. Countries that extract oil also tend to be high users of energy.

Figure 4. Per capita energy consumption for selected countries for the year 2010, based on EIA data.

Figure 4. Per capita energy consumption for selected countries for the year 2010, based on EIA data.

The difference in per capita energy usage among the various countries is truly astounding. For example, Bangladesh’s per capita energy consumption is slightly less than 2% of US energy consumption. This difference in energy consumption means that salaries can be much lower, and thus products made in Bangladesh can be much cheaper, than those made in the United States. This is part of our competitiveness problem, even apart from the energy mix problem mentioned earlier.

In my view, globalization brought on many of our current problems. Perhaps globalization could not be avoided, but we should have foreseen the problems. We could have put tariffs in place to make a more level playing field.  See my post, Twelve Reasons Why Globalization is a Huge Problem.

Inadequate world oil supply isn’t exactly the problem. The issue is far more that the price of oil extraction is rising.  The price of oil extraction is rising for a variety of reasons, an important one being that we extracted the easy to extract oil first, and what is left is more expensive to extract. Another issue is that oil exporters now have large populations that need to be kept fed and clothed, so they don’t revolt. This is a separate issue, that raises costs, even above the direct cost of extraction. There is no reason to believe that these costs will level off or fall, no matter how much oil the US produces using high-priced methods, such as fracking.

When oil prices rise, wages don’t rise at the same time. In fact, in the US there is evidence  that wages stagnate when oil prices are high, partly because fewer are employed, and partly because the wages of those employed flatten.

Figure 5. 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 5. 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.

The countries that are most affected by rising oil prices are the countries that use oil to the greatest extent in their mix of energy products. In Figure 3, that would be the PIIGS. The rest of the US, EU-27, and Japan would be next in line.

When oil prices rise, consumers need to balance their budgets. The price of oil products and food rises, so they cut back on discretionary items.  Their smaller purchases of discretionary goods and services means that workers in discretionary sectors get laid off.

Businesses find that the price of oil used in manufacturing and shipping their products has risen. If they raise the sales price of the goods to reflect their higher costs, it means that fewer people can afford their products. This too, leads to cutbacks in sales, and layoffs of workers. Sometimes businesses decide to outsource production to a cheaper country, or use more automation, as a way of mitigating the cost increases that higher oil prices add, but automation or outsourcing also tends to reduce US wages.

The net effect of all of these changes is that there are fewer workers with jobs in the countries with high oil usage. This reduces the demand for oil in the high oil usage countries, both from business owners making goods and from the consumers who might use gasoline to drive their cars. This price mechanism is part of what leads to the oil consumption shift we see in Figure 1.

We are dealing with is close to a zero-sum game, when it comes to oil supply. The amount of oil that is extracted from the ground is almost constant (very slightly increasing for the world in total). If prices stayed at the low level they were in the past (say $20 barrel), there would not be enough to go around. Instead, higher prices redistribute oil to countries that can use it manufacture goods at low overall cost. Workers in factories making these goods are then able to afford to buy goods that use oil, such as a motor scooter.

Citigroup recently released a report titled, “Global Oil Demand Growth, – the End is Nigh.” Its subtitle says,

The substitution of natural gas for oil combined with increasing fuel economy means oil demand is approaching a tipping point.

This is out-and-out baloney, for a number of reasons:

1. There are way too many of “them” compared to the number of “us,” for energy efficiency to make even a dent in our problem.

2. When we look at past oil consumption, changes in vehicle energy efficiency did not make a big difference.

3. Substituting natural gas for oil still leaves cost levels for the US, Europe, and Japan very high, compared to those for the rest of the world, where little energy is used.

4. There are really separate markets in many parts of the globe. Our market is collapsing because of high price. Perhaps increased efficiency and natural gas substitution will help low-cost producers until they reach a different limit of some sort.

Let’s look at these issues separately.

There are way too many of “them” relative to us, for energy efficiency to even make a dent in our problem.

If we look at world population, this is what we see:

Figure 6. World population split between US, EU-27, and Japan, and the Rest of the World.

Figure 6. World population split between US, EU-27, and Japan, and the Rest of the World.

Using a ruler, we could probably make fairly reasonable projections of future population for each of these groups.

If we look at per capita oil consumption for the two groups separately, there is a huge disparity:

Figure 7. Per capita oil consumption separately for the group US, EU-27, plus Japan, and for the rest of the world, based on BP's 2102 Statistical Review of World Energy, and population statistics from EIA (since 1980) and Angus Maddison data. (earlier dates).

Figure 7. Per capita oil consumption separately for the group US, EU-27, plus Japan, and for the rest of the world, based on BP’s 2102 Statistical Review of World Energy, and population statistics from EIA (since 1980) and Angus Maddison data. (earlier dates).

Per capita oil consumption for the EU, US, and Japan group peaked in 1973–a very long time ago. In recent years, it has been drifting down fairly rapidly, just to keep up with a slight per capita rise in oil consumption of the Rest of the World. Even with recent changes, per capita oil consumption of the EU, US and Japan group is more than 4.5 times that of the rest of the world.

If cars were made more efficient, more people could afford them. The market for cars is unbelievably huge, compared to today’s market, if costs could be brought down. Furthermore, gasoline accounts for less than half of US oil consumption. Even if efficiency were improved to allow cars to use half as much fuel, it would save a little less than one-fourth of current oil consumption. How far would this oil go in satisfying the needs of 6 billion other people–and growing every year?

When we look at past oil consumption, changes in vehicle energy efficiency did not make a big difference.

If we look at per capita oil consumption in the US, split between gasoline and other oil products, we see that the big drop in oil consumption came from the drop in other oil products–that is the commercial and industrial part of US oil consumption.

Figure 8. US per capita consumption of oil products, split between gasoline and other. Total consumption from BP's 2012 Statistical Review of  World Energy. Gasoline consumption from EIA. (Amounts include biofuels.)

Figure 8. US per capita consumption of oil products, split between gasoline and other. Total consumption from BP’s 2012 Statistical Review of World Energy. Gasoline consumption from EIA. (Amounts include biofuels.) Difference by subtraction.

The amount of fuel used for gasoline has stayed in the 10 to 12 barrels a year per capita band, since 1970, in spite of huge improvements in vehicle efficiency.

I recently wrote a post called Why is US Oil Consumption Lower? Better Gasoline Mileage? In it, I looked at the decrease in US oil consumption between 2005 and 2012. I concluded that the majority of the decrease in consumption was due to a drop in commercial use. Only 7% was due to an improvement in miles per gallon for gasoline powered vehicles.

Substituting natural gas for oil still leaves the US (as well as Europe and Japan) very high priced, compared to the rest of the world, that doesn’t use much energy.

Living in the US, Europe or Japan, it is  hard to get an idea of the cost structure of the rest of the world. We are so far above the cost structure of the rest of the world that substituting natural gas for oil would do little to fix the situation.

Figure 9. Photo I took of an auto-rickshaw while visiting India in October 2012. A total of 10 of us (including driver) traveled for several miles in a three-seated version of one of these. Those of us on the edges held on tightly to the frame, because there was not room for all of us.

Figure 9. Photo of an auto-rickshaw I took while visiting India in October 2012. A total of 10 of us (including driver) traveled for several miles in a three-seated version of one of these. Those of us on the edges held on tightly to the frame, because there was not room for all of us.

We can also debate how much substitution of natural gas will actually do, and in what timeframe. In the US, natural gas is temporarily very cheap. But it costs more to extract shale gas than the market currently pays, in many areas. Also, a recently University of Texas study showed that Barnett Shale was past peak production, if prices do not rise.

There are really separate markets in many parts of the globe. Our market is collapsing because of high price. Perhaps increased efficiency and natural gas substitution will help low-cost producers, until they reach a different limit of some sort.

When a country is not competitive, it is not just oil consumption that drops, but consumption of other energy products as well.  If we look at the per capita energy consumption of the US, EU-27, and Japan combined, we see that non-oil energy consumption per capita reached its peak in 2004, and is now declining (Figure 10, below).  If consumers are too poor to buy oil products, they are also too poor to buy products made with other types of energy.

Figure 10. Per capita consumption for the sum of the EU-27, US, and Japan, based on BP's 2012 Statistical Review of  World Energy.

Figure 10. Per capita consumption for the sum of the EU-27, US, and Japan, based on BP’s 2012 Statistical Review of World Energy.

The Rest of the World followed a very different pattern of energy consumption. Non-oil consumption soared, on a per capita basis. Oil consumption also increased on a per capita basis.

Figure 11. Per capita energy consumption for the Rest of the World, based on BP's 2012 Statistical Review of World Energy.

Figure 11. Per capita energy consumption for the Rest of the World, based on BP’s 2012 Statistical Review of World Energy.

More detailed data shows that the big increase in non-oil consumption was a huge rise in coal consumption, after China was admitted to the World Trade Organization in December 2001.

How does peak oil demand work out in the end?

I would argue that lack of competitiveness in world markets is a limit that the US, EU-27 and Japan are hitting right now, but at slightly different rates. EU-27 now seems to be ahead in the race to the bottom, partly because its combined currency. I wrote a post in March 2012 called Why High Oil Prices Are Now Affecting Europe More Than the US, explaining the situation.

It seems to me, though, that a big piece of the problem with lack of competitiveness gets transferred to the governments of the affected countries. This happens because collection of tax revenue lags, because not enough people are working, and those who are working are earning lower wages. At the same time increased payouts are needed to stimulate the economy, and to provide benefits to the many without jobs.

Governments increase their debt to meet the revenue shortfall. They reduce interest rates to record-low levels, to stimulate the economy.  They also use Quantitative Easing, or “printing money” to try to lower long-term interest rates, and to try to make their exports more competitive. Unfortunately, these actions do not solve the basic structural problem of high and rising world oil prices, and the fact that these rising prices make their economies increasingly less competitive in the world marketplace.

One possible way I see of the current situation working out is that the total energy consumption (including all types of energy products, not just oil) of the EU, US and Japan will continue to fall, as high-priced oil continues to erode our competitive position in the world marketplace.

Figure 12. One view of future energy consumption for the EU-27, US, and Japan. Historical is based on BP's 2012 Statistical Review of World Energy.

Figure 12. One view of future energy consumption for the EU-27, US, and Japan. Historical is based on BP’s 2012 Statistical Review of World Energy.

The slope of the decline is based on the type of decline experienced by the Former Soviet Union, in the years immediately following its collapse. This pattern might reflect a combination of different patterns for different countries. Greece and Spain, for example might continue to fall quite quickly. The US might lag the EU in the speed at which problems take place. The likely path seems downward, because any action taken to fix the government gap between income and expense can be expected to have a recessionary impact, and thus have an adverse impact on energy consumption.

The Rest of the World is now growing rapidly, but at some point they will start reaching limits. One of these limits will be lack of an export market. Another will be lack of spare parts, because businesses in the US, Europe and Japan are failing for financial reasons. Some of these limits will relate to pollution and lack of fresh water. The effect of these limits will also be to raise costs. For example, a shortage of water can be worked around through desalination, but this raises costs. Lack of spare parts can be worked around by building a new plant to make the spare part. Pollution problems can be mitigated by pollution controls, but these add costs. These higher costs, when passed on to consumers will also lead to a cutback in demand for discretionary goods, and the same kinds of problems experienced in oil exporting nations. Thus, these countries will also have “Peak Demand” problems, because of rising prices, related to limits they are reaching.

I don’t know exactly how soon the Rest of the World will hit limits, but given the interconnectedness of the world system, it would seem to be within the next few years. Figure 13 shows one estimate of how this may occur.

Figure 13. One view of energy consumption for the Rest of the World. Historical data is based on BP's 2012 Statistical Review of World Energy.

Figure 13. One view of energy consumption for the Rest of the World. Historical data are based on BP’s 2012 Statistical Review of World Energy.

Here again, individual countries may do better than others. Countries with little connectedness to the world system (for example, countries in central Africa) may have fewer problems than others. Of course, their energy consumption (of the type measured by the EIA or BP) is very low now. They may use cow dung and fallen branches for fuel, but these are not counted in international data.

Figure 14, below, shows the sum of the amounts from Figures 12 and 13. Thus, it gives one estimate of  future world energy consumption based on Peak Demand considerations.

Figure 14. One view of future energy consumption for the world as a whole. History is based on BP's 2012 Statistical Review of World Energy.

Figure 14. One view of future energy consumption for the world as a whole. History is based on BP’s 2012 Statistical Review of World Energy.

If there is a silver lining to all of this, it is that world CO2 emissions are likely to start falling quite rapidly, because of Peak Oil Demand. World CO2 emissions could quite possibly drop below 20% of current levels before 2050. In the scenario I show, energy consumption drops faster than forecasts such as those put out by the Energy Watch Group. Such forecasts do not take into account financial considerations, so are likely overstated.

The downside of Peak Oil Demand is that the world we live in will be very much changed. Population levels will likely drop, indirectly because of serious recession, job loss, and cutbacks in government benefits. The financial system will need to be completely revised, because debt financing will make sense much less often than today. In fact, in a shrinking world economy, money can no longer act as a store of value. There no doubt will be some people who survive and prosper, but their lives will likely be very different from what they are today.

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.
This entry was posted in Financial Implications, peak oil and tagged , , , , , . Bookmark the permalink.

198 Responses to Peak Oil Demand is Already a Huge Problem

  1. dolph says:

    An interesting analysis which points a pretty dim picture going forward. However I would say the following:

    Dividing the world between US, EU, Japan and everybody else seems to me to be fairly arbitrary. I think of the world mostly in terms of geographical regions rather than energy use per say. Even if you use energy use, it makes much more sense to group, say, Japan and Europe together, and North America and Russia together. Japan and Europe are heavily dependent on energy imports, whereas North America and Russia have considerable reserves and could, in a collapse scenario, fall back on them.

    • We have built up a substantial infrastructure around the way things are right now.

      The countries that were more borderline for inclusion in my view were Canada and Australia. But they, like Norway, are big energy exporters. There is a demand for that. Population has been growing rapidly in those countries. So I didn’t include them in my group.

      But perhaps, in retrospect, we will say that Europe and Japan were the ones that failed first.

      Russia is like the US, in that its cost structure is way too high to manufacture goods to sell elsewhere. Thus, its economy today is overly dependent on energy exports. How long it can keep this up depends on whether energy prices can stay high enough to support its economy as a whole. The US has a more diversified economy.

  2. Bicycle Dave says:

    Hi Gail,

    I know that, as a matter of policy, you don’t spend much time monitoring MSM – especially things like cable TV. However, if you did, you’d learn that that the economic future of the US has never been brighter. Indeed, the energy revolution brought on by fracking of oil and gas will not only bring us energy independence but vast fortunes from exporting oil and gas to the rest of the world. The US will force Saudi Arabia into the cheap seats. This glut of energy will bring industrial jobs back to our shores and create enormous opportunity for many generations to come. We will once again be the economic powerhouse of the world as we have hundreds of years of abundant energy supplies. Not to mention American exceptionalism as regards creativity for conservation and efficiency. No less than the trusted corporations of BP and Exxon have multiple advertisements every hour informing us of their ability to provide hundreds of years of energy supply with no environmental concerns by virtue of their wonderful new technologies.

    So Gail, just turn on your TV and forget all those depressing numbers you love to caress – be happy, don’t worry. No kidding – talking heads are banging this drum every day – look at the stock market!

    Of course, you and I fundamentally disagree on the reason we have such a gullible citizenry and why they don’t march with pitchforks to the energy companies corporate headquarters and demand an end to these lies. But, that aside, it seems to me that your analysis is extremely compelling (I mean this as a real compliment). As you probably recall, I was part of an effort to get the National Academy of Sciences to take on these issues in a full blown study. If they ever would, you should be their star witness.

    • Thanks for the update on MSM. I haven’t figured out a way of taking them on directly–figure it wouldn’t make much difference if I did.

      I keep trying to put together the real story, no matter how it turns out. I had forgotten that you were involved in trying to get the National Academy of Sciences to take on these issues. I am not sure they would have been a lot more unbiased than the others though. Perhaps I am too cynical.

      • Bicycle Dave says:

        Citibank came out today claiming the end of the commodity bull market has come.

        “Citi expects 2013 to be the year in which the death bells ring for the commodity supercycle after its duly noted sunset, ushering in a new decade of opportunities based on how individual commodities will perform against one another and against broader market indicators such as equities or currencies”

        Note – they are not suggesting the idea that you have put forth that prices might drop because consumers are too poor to afford this stuff. No indeed, they are suggesting that our wonderful technologies are creating surplus supplies for all to enjoy at lower prices. They have rosy predictions for the 2013 stock market:

        “”So long as Washington doesn’t flub a solution to the nation’s fiscal problems, the S&P 500 should log a 13 percent gain in 2013, ….Citigroup’s chief U.S. equity strategist”

        So, here we have it from one of the most trusted financial sources that many commodities are going to be cheaper in 2013 and business will boom as reflected in the S&P. Regardless of the technical nuances and fudge factors, the basic message is: Happy motoring and all you can eat.

        • The end of the commodity bull market will come as countries sink into recession. Europe is already doing fairly badly, with a 12% unemployment rate in the Eurozone. The US is hanging on, but barely. People find their wages cut because of the SS tax increases that went into effect at the beginning of the year. A new round of layoffs is gradually working through the system, as the sequester cuts come through. One woman I know is being laid off in May at Lockheed, after 28 years of working there, because of the sequester cuts.

          Cuts of any sort affect the system. Less Social Security benefits mean those who receive those benefits have less to spend.

          QE is helping real estate values to stay up (because of corporate buyers in the markets, purchasing homes to rent out), as well as stock market values. Once QE ends, or once interest rates rise, things could deteriorate fairly quickly.

          • Mark Stern says:

            I think your reply to Bicycle Dave really hits the nail on the head. The problems I am grappling with are the official policy responses to further economic deterioration and the subsequent market reaction. In theory it makes sense that governments will pull out all the stops in the attempt to prevent collapse. Recall Ben Bernanke’s “at any cost” comments in 2008-2009. Logically the implication is the continued devaluation of paper money relative to oil and other real materials and useful assets. Carmen Reinhart continues to support the view that currency devaluation or debasement must inevitably continue even assuming modest growth and some austerity (that she believes is also required “so you don’t add further to the pile of debt”). However, as Goldman Sachs, Paul Krugman, and the market itself made clear this week, this whole discussion is well outside the mainstream conversation. The “shale revolution” has augmented the belief that the US is in an “accelerating recovery” and accruing all the good things that follow. As “they” see it, the US can grow vigorously enough for the Fed to back out of QE & ZIRP, cut the deficit, restore employment – and all this with falling oil demand and falling oil prices. I have a bridge I would like to sell these people. According to a long-time and very respected independent oil analyst oil prices are far more likely to surprise to the upside this year because the physical oil market is tightening up and we have a scant 1 MMb/d of genuine spare capacity.

          • Bicycle Dave says:

            Gail, Over the longer run, I’m pretty confident that you are right. However, I wonder if commodity prices might experience a saw tooth effect over the next year or so: prices rise and depress economic activity; low prices stimulate economic activity which leads to higher priced commodities; rinse and repeat in a downward stair step fashion.

            • Christopher Johnson says:

              Because stock market gurus ‘carefully observe and compare the patterns of lines on pages in order to optimize profits doesn’t necessarily translate into near term or longer range profits. Nor should copper’s link to China imbue it with mystical qualities: China’s construction industry is in a cool period while they try to sell some of their abundant surplus. The saw tooth could well continue into the future as ‘market makers’ periodically dance on their desks to attract ‘investors.’ Good luck.

            • Scott says:

              I keep bringing up the subject that there is something else out there not yet know to us and Chris I want share why with you and the group to give hope to us all. I have something very special to say.

              I think I told you all that I am retired manager from a taxing authority in a courthouse where I worked for nearly 30 years and since moved to Oregon in order to find a more sustainable simpler life for retirement and time ponder all that is at hand.

              My story that I want to share with you goes back to 1976 when I was 16 years old, you can think I am crazy and I have told this story many times and I am not sure who believes it, but I want to share this with all of my friends on this forum.

              You see I was working for a summer at age 16 in 1976 in a mountain lodge in a cook house very high up in the Sierras and we mined gold in the streams during our time off with friends. Well, one day late in the summer there was a forest fire burning about ten miles away a group of 4 of us drove up at sunset to take a look at the fire. It was dark when we reached the ridge and in the Sierra skies you could see even the tiny stars there were millions of them so if you have been to the high Sierra mountains on a you will know what I mean.

              Well anyway we could see the fire burning off in the distance down the canyon some miles away.
              But our attention turned to an even brighter blue and white very powerful light hovering over a ridge just a couple of miles across the deep canyon we were overlooking. 4 of us watched it for a few minutes and it suddenly decided to leave and took off an if you had not had your eye on it you would have missed it. I observed the craft moving at speeds faster than any rockets we have and it became a small star in matter of a second or so. It started jumping and appearing in farther location each like it was quantum leaping.

              One of the people with us fell to the ground and started rolling around in denial we had to help him up, he just wanted to go home and he kept saying he did not see that.

              Well my point is, you know my point, there is something out there that is not yet known by most of us but I have seen the power of it. This was one of this things that still clear in my mind this many years later. What ever powered the craft had an enormous power. That is why I brought up the Stuff from Star Trek.

              Looking at things right now look grim, but if I had not seen this I would think we are really in for trouble. I hope this information helps many as I do not like to talk about this often, but I have read many similar accounts out there.

              Well here you go, there is my story!

              Scott

            • Christopher Johnson says:

              Well Scott, thanks for sharing. On the other hand, that’s just one more subject we can’t expect any self-respecting politician to bring up in mixed company.

              It might be a useful drill to list all the social and economic innovations that emerged in the last decades and determine which ones are really essential and which are less so. Think you can’t live without your iphone? Well, maybe you might just have to?

            • Scott says:

              Hello, yes I did not really like my years working at the courthouse, I liked the early years better before things changed and more tense under higher security and surveillance. But I stuck it out because I have a family and bills etc and I finally made it to retirement.

              My story that I shared about the UFO which I understand was hard to believe for many was something I saw at age 16 and we saw it close, a powerful craft now of this world powered by some unknown energy.

              I do not expect many to believe it and that is okay. A powerful technology we witnessed that was not from this Earth. Someone out there possesses this and the question is do we? I am not sure what it was Fusion, Fission or anti gravity etc. But the fact is there have been thousands of sightings out there many far more bazaar than my own.

              I just wanted to point out that there seems to be a solution out there but it may or may not be in our hands. Someone seems to have the solution, but will they share. Who knows. Could large ships land and take us away to a new garden planet? Who knows.

              There is no information what so ever that any one out there is really going to bring us a rescue remedy, I just wanted to point out that that it appears that there are things out there that perhaps we do not yet understand. So unless these ships come in and share or save us with their new ways of making power, we may be hung out to dry left to our own means. I for one am watching that one.

            • Christopher Johnson says:

              Scott, that was quite an experience you had, and I think you appreciate how lucky you are to have gone through it. If you might be interested in some technology that’s beginning to emerge here, I’d invite you to look up ‘graphene.’ I won’t try to explain it, but suffice that the scientists have been experimenting with Dirac properties on graphene that could lead to gravity manipulation. Lot’s of other great things, too.
              Like you, I’m not ready to toss in a towel. There’s too much that needs to be done.
              Cheers, Chris

            • Scott says:

              Yes, quite an unforgettable event for sure back in 1976.

              Thanks for sending that on about Graphene, Had to recheck the word because my computer does not recognize the spelling. It looks like this actually floats in the air?

              It looks as though it could contain Hydrogen too as it is both light and dense it seems, I mean as some sort of vessel. But I also noticed that it can take a laser beam and absorb it somehow. The military has been rolling out new lasers lately and I imagine they are putting money into research for their own means.

              Graphite’s are surely a useful thing and I hope they can be used for peaceful means instead of a new military jet that can take a laser beam.

              Well, I am no scientist, but this stuff interest me.

            • Christopher Johnson says:

              Good for you. Graphite is one source, sugar and coal dust and lots of other things are other sources. Over the last 5 years the amount of R&D funds dedicated to graphene has more than doubled every year. It’s somewhere over $100m this year, and many countries are pushing multi-year budgets in the B’s. In all areas, including the military. Who wouldn’t want invisible aircraft and armor — put it on and disappear, plus it make bullets bounce off.
              Yes, graphene will hold H2 leakproof. The only problem with it right now is nobody has yet figured out how to manufacture it cheaply. But there is some progress. Later on it can make a space elevator, but the engineering for that is a little challenging. And it’s so lightweight and strong that motor vehicles can become airplanes before they disappear. BTW, it’s pretty good for computing and computers also.
              Have a ball and check in regularly!

            • Scott says:

              Yes, there are some good things out being developed if only they were pointed towards helping us instead of a new attack aircraft or something. They need to be deployed as civilian technologies but you it seems anything new gives and edge on the military like bullet or laser proof aircraft.

              It seems this threat that we are always fighting with all the good stuff going to military really holds us all back and is part of the problem.

              I do think there is an energy source out there, perhaps an anti gravity anti matter type of device that would enable us if knew about it and used it for peaceful means.

              If this in our hands and shelved somewhere…
              Like I said before perhaps after the oil and gas enterprise is played out, they will let us know it. But will it bee too late. Maybe.

            • Scott says:

              Getting back on subject for this blog, I think Gail’s main point was that it is all too little too late unless something comes along that can reach into poorest corners of the world which is not out there right now aside from Diesel and Coal etc. And she said there is a big heap of coal out there which is true and also which would be better left alone than burned right now.

              So unless something comes along easy and portable enough and cheap enough which is no where in sight from this point the problem will continue.

            • Christopher Johnson says:

              Yes sir, that’s a pretty good summary of Gail’s approach.
              One other item, you may have noticed several comments about a supposed ‘right wing’ bias of this blog. Well, I’m not sure that the observation is accurate / correct, but would probably agree that Gail assiduously guards it’s ‘centrist’ approach that may be rather skeptical of government good intentions and will efforts, such as financial stimulation that includes Quantitative Easing. Does skepticism about things that cannot / have not been proved or disproved make anyone a ‘right winger’? Well, perhaps from the perspective of a ‘left winger’ it does, but for me it’s a stretch. It’s not my role to criticize or raise questions about political and social philosophy and economics, etc., so I won’t.

            • Scott says:

              So it looks like we understand Gail’s outlook and I agree especially about how that much of the world cannot afford or does not have the means to change from using fossil fuels even if there was something out there to change to it seems.

              This problem is worldwide and knows no political party and it appears to be out of reach to fix for any politician left or right. Politicians likely will be helpless against worldwide depletion and rising fuel prices that will result somewhere down the road.

              It looks to me that we have reached the peak production especially when all large fields that like 60 or more percent depleted already in places like Saudi. So were are looking at a flat production level and growing world population which is going to collide with a brick wall.

              I guess the question is how soon, could we ride this plateau of flat production for awhile? Perhaps, I was hoping at least for a few more generations, but it is not looking that way, I think my son will have to face this problem and I likely may live to see it too.

              What about Fracking though there are large areas in places like China that have yet to be fracked I had read. It may buy us some time, it will likely bring more pollution places that do it on a large scale as we do not know what the chemicals are as they are secret patents.

              Strangely there is not much out there in our national media about any of this, but what I read is entirely the opposite I see stories out there about a new energy revolution has begun in the USA with new shale fracking. But in our media there are a lot of stories about global warming and new areas are opening up due to the melting.

            • Christopher Johnson says:

              Hi Scott:.

              You’ve got the gist of it, I think. The fact is that none of us really knows how many of what R&D efforts are underway out there that could make a significant contribution. Economists tend to not be R&D scientists and vice versa; people deeply interested in the political economy are not necessarily cogniczenti in energy matters. Patience and kindness is always needed. All 7 Billion of us are going to die, it’s just a matter of when and under what circumstances.

            • Scott says:

              I just read another media article about America and our new energy independence and how we are in a few years going to become less dependent on imported fuels. The news feeds are really trying to paint a rosy picture of our energy future.

              It does look like we will get a boost from Fracking for more than a few years? Could this push off the long emergency for a time? Well lets hope so.

              A couple of articles I looked at, but saw a more rosy one today but could not find to post here, I am sure some folks have been seeing them.

              I imagine it will get tougher slowly in countries that can least afford the product, while some big countries still have a pretty good supply for a time. The third world will likely suffer at first as they are now. But we can also all see the decline in the middle class here in the USA and I am sure also in Europe over the last decade.

              http://securityobserver.org/shale-oil-revolution-in-america-how-does-it-affect-the-world/
              http://www.ogfj.com/articles/2013/04/the-economic-bounty-of-shale-oil–gas.html

            • Christopher Johnson says:

              Scott:
              Those are two very readable and significant reports, recopied below: Thanks for sending them.
              http://securityobserver.org/shale-oil-revolution-in-america-how-does-it-affect-the-world/
              http://www.ogfj.com/articles/2013/04/the-economic-bounty-of-shale-oil–gas.html
              The main conclusions (at least I seem them as such) of the authors are worth reviewing:
              1) ‘Peak Oil’ fears may have been kicked down the road a bit, or at least mooted for now (as the author said), so long as fracking other unconventional production methods continue to increase supplies.
              2) The US will gain in many ways, including manufacturing and manufacturing employment, less reliance on high priced fuels from elsewhere, and ‘steps toward’ energy independence.

              If ‘Peak Oil’ fears have, in fact, been mooted or kicked down the road a few meters, they’re going to need kicking again pretty soon, perhaps continuously, as demand for fuel and other petroleum products continues to climb, especially in newly developing countries. GM just announced it will build four new automobile plants in China, and others are following suit. Ditto elsewhere. However, fracking requires lots of water, equipment and experience. So far US drillers haven’t exactly been eager to share their knowledge. But that may change over time,

              US relief is certainly welcome either in general or specific. But we have to beware of a false triumphalism that trumpets congratulations for producing new oil at $80 per barrel. That might be a little too pricey to support growth in manufacturing and general employment. Would $60/bbl have any positive impact on US employment? $40?

              How does the US mesh $40 oil into a market where the price is being kept artificially high ($100/bbl) by the countries who depend on expensive oil for their livelihood? Is the US intending to inform all its trading partners (and those for whom we shed America blood) that the US now is happy to put them out of business? To cause their collapse?

              Such questions might be solvable, but at a much higher pay grade than mine.

            • Scott says:

              Yes that is very profound what you said. Fascinating.

              This morning I was looking at one of Gail’s other articles

              http://ourfiniteworld.com/2013/03/20/renewables-good-for-some-things-not-so-good-for-others/
              That chart that shows consumption is telling and talking about running into a brick wall soon up against scarcity of finite supplies! That was a good article Gail.

              Chris and who ever is out there with comments, since this blog is running out of steam, I would like to leave you with my email address and for you and any of the others who would like to email me to keep in touch as we watch this thing unfold. I am interested in keeping in touch with you and any other folks that opinions and outlooks as time goes on. So I am going to sign off this blog for now unless something comes up compels me to comment further. I think the more we look at this the seriousness of it becomes clear. And Thank you Gail for your fine articles and work.

              Scott

              Please keep my email address if you wish to keep in touch which is: madronehill1@yahoo.com

            • Scott says:

              Well Chris, I hope we have not scared off the others with these posts about the possible existing technologies, And, that perhaps are not yet in our hands or are they? I am not sure.

              1976 was a long time ago, Sometimes dealing with the sightings can be hard. The craft we observed did not put out any kind of trail and I do not believe it used any kind of fossil fuels. The way it jumped and increased its jump each was interesting to say the least. It was night and it moved up fast and stayed lit up as it moved into the sky or should I say shot up in second or so to be a star. So what ever they used did create light and we could clearly see it for hundreds of miles. So perhaps the energy they use does need some outlet in the form of light.

              When we first saw it, the thing we first noticed about is was the light and how intense it was it was very bright and only a couple of miles away across the canyon, it had a brightness I had never seen before a blueish white light, hovering before it took off and became the smallest of stars and then gone. Now almost 40 years later I can only wonder what is out there or here.

              But in getting back to Earth, looking at the corral reefs, and the poles melting and a warm spring here in Oregon already things are getting a bit warmer this year. I was wondering if anyone else sees this spring being early? Seems to be here. Seems like just a few degree changes can really cause change.

  3. Mark Stern says:

    Great post. William Stanley Jevons famously articulated the concept of greater energy efficiency leading to higher energy demand– known as Jevons’ Paradox. This may finally change when efficiency is no longer tool for economic advancement but instead becomes a matter of survival in the face of impossibly high energy costs as you suggest. As a matter of interest, the IEA does in fact estimate the fuel use of animal dung and fallen branches as part of the category termed biomass. From IEA WEO 2008: “An estimated 60% of current biomass use is in the form of traditional biomass such as scavenged fuelwood, dried animal dung and agricultural residues used on open fires and in crude, low-efficiency stoves to provide basic cooking and heating services.” Puts a whole new spin on biomass.

    • I am aware of Jevons paradox, but the post was getting long as it was.

      That is interesting about the IEA including an estimate of animal dung, etc. I will have to admit I don’t use IEA data as much as EIA and BP, because IEA data tends to be behind a pay wall. I have bought a few reports, but I tend to rely on EIA and BP, since their data is free.

  4. Tony Weddle says:

    That falling demand (consumption) in the main developed nations, or groups of nations, give the lie to the idea that they are growing their economies, as seen in official figures (apart from a few countries). As a whole, these countries are surely contracting their economies, in a real way. Contracting consumption of the life blood of industrial economies heralds real contraction of those economies.

    • I think you are right.

      The official story is that the economies are becoming service economies, and they don’t need as much energy.

      Another part of it is that the economies are being sustained by more debt and more financial smoke and mirrors. At some point these fail to hold.

      • “officials” try to delude all of us that ‘service economy’ produces wealth. That nonsense is widely believed and accepted by the vast majority of people from every walk of life. –the butcher pays the baker who pays the candlestick maker who gets his meat from the original butcher—and so it goes on.
        And that is supposed to provide ‘growth’ …they all get rich
        there are a few places where the emperor is seen to have no clothes in this respect, this site is one of them….for which we should be truly thankful
        but still this insistence goes on that passing money hand to hand creates wealth. I get scathing comments for trying to explain why its possible to keep such an economy going only by borrowing money, without that borrowing, everything falls apart.
        this is why the EU economy is collapsing right now. The northern nations still have an energy input economy (for a while longer) while the southern nations by and large have a money passing economy

        • Charles Hall and Kent Klitgaard in “Energy and the Wealth of Nations” likened the idea of money going around on its own and creating wealth to some sort of perpetual motion machine, IRRC. Leaving energy out of the equation leads to some very strange results.

        • What the cycle does do is redistribute wealth- once kings spent the wealth in foreign invasions rather than the needs of their subjects. Even if we saw a slow decline- minus 1% or what ever it would take quite a few years to get back to the wealth of the 90s and if redistribution was equitable – including future generations- perhaps things would not be that bad! well perhaps.

    • Christopher Johnson says:

      Tony,
      Perhaps it might be useful to think of some ways we could or should ‘expand our economy.’ The most obvious changes over the last 30 years are in the computer realm, at least in the ‘rich world.’ Any other significant developments that we can’t live without? Well, if we really don’t need more stuff, why be concerned about not ‘growing’ our economy?

      • Tony says:

        Most people would be concerned about not growing the economy because that is what current economies need to do to function properly (to pay interest on debt). That growth seems to be the number one priority doesn’t mean that it will always happen, or that it should happen. On a finite planet (finite in both resources and its capacity to harmlessly process our wastes) growth can’t continue forever. So we need a non-growing economy and society. That would take a very different way of going about things. I can’t see, for example, businesses operating as they do now (apart from the small one person or family retailers or service companies, perhaps) in a non-growing economy.

        Personally, there is nothing about our current way of life that I feel absolutely wedded to and nothing that I wouldn’t consider giving up (and I may well have to give up a lot of stuff we take for granted right now) in order to ensure a habitable planet.

        • Christopher Johnson says:

          Concur and congratulate your on stating the argument so well. I recall photos of Chinese ‘stuff manufacturers’ from last August: the entire factory was packed full of plastic bags holding ‘stuff’ that some customer in the US determined was not going to sell for Christmas. Apparently that condition was quite common for many Chinese factories. Perhaps the current recession might just remind some of us what is important and which is merely ‘stuff.’

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  6. Mel Tisdale says:

    On a personal level, the take home message I get is that we have to forget any measures to combat climate change if we in the developed world are going to have any chance of competing with the developing world. That sets up an idealogical fight of enormous proportions.

    What a pity that more effort was not expended on creating and ratifying a global treaty on the issue of climate change, instead of letting some nations dismiss it as “bad science”. As it is, I can see how the more selfish among us will be tempted to cry for banning of any green measure, e.g. carbon tax. I wonder if they will be able to get their wish before the fact that climate change has already begun to affect us. The competing call for action to combat it will become ever more strident as the increasingly unpredictable jet-stream works its ‘magic’ on our daily weather. Farmers must already be wondering just what to plant and when they consider the weather anomalies we have had in recent years and will continue to experience in ever increasing degrees (no pun intended). Not a good position to be in as world population increases and food supply becomes ever more important (and a source for conflict). If the developed world does abandon its green agenda, I wonder just how long they will be able to resist the rest of the planet simply telling it to behave. It will be ‘interesting’ to see if the existence of military might will be enough to resist global sanctions (another source of conflict?).

    I have no doubt that the fossil fuel industry are very proud of their efforts to persuade the public that it is all a hoax or that it has stopped or that it is not worth bothering about or some other equally erroneous nonsense and in doing so have influenced government policy. Talk about laughing all the way to the bank. Perhaps they have another planet to send their kids to, or perhaps they don’t care about their families’ future.

    • I am afraid you have more faith than I do in our ability to change human nature, and in fact instinctive behavior. All types of plants and animals make use of energy that is available to them. Humans are no different. Fossil fuel is a form of stored energy. Certain forms of bacteria also use it, as well.

      You and I can come up with ideas, but the basic issue is that a decision must be made to leave fossil fuels in the ground for all times, even though this is likely to mean the early deaths of a lot of people. We somehow must get the cooperation of people from countries around the world, and for future generations. I don’t see this happening, no matter how worthwhile an idea it may seem in theory.

      On a finite planet, it is part of the natural order to cycle from one climate to another, and from one primary species to another. We have decided that humans should be the primary species for all time. I am doubtful that nature has the same view.

      • Mel Tisdale says:

        I guess it is being a parent, and knowing what is coming down the pike for my son, is what drives me to fight for at least some action on climate change, Gail. I don’t like rolling over and saying “tickle my tummy”. It surprising just how many do, even when they know in their hearts that their families are going to suffer.

        I would quibble with one point. It might be just academic, but I suspect that it is more important than that. We know beyond any reasonable doubt, based on the carbon isotopes, that a large portion of the CO2 in the atmosphere is from the burning of fossil fuels. That is the result of human behaviour, not any natural cycle. Climate changes from whatever forces it to change and our profligate burning of fossil fuels is what is currently doing the forcing. Given the will, that is fixable. It will become unfixable as the oceans warm and the permafrost melts with the result that those processes become dominant. But by then it will be game over, so what the hell!

        For me, and for my son, I will continue to fight while there is still a chance. If only the young would join in – it is their future, after all. (My son thinks climate change is all a hoax – kids, eh?)

        • hey—mine too
          But at least my grandson is a computer whiz, and humours his old grandad in putting together stuff online for me
          But I know whats coming too, so I try to think ahead in a practical sense for 10 or 20 years down the line for them even if the do roll their eyes sometimes

          • Christopher Johnson says:

            To End of More and Mel Tisdale, who commented on global warming. While I share your views, I was most surprised by the recent Economist report about global warming slowing down, despite increasing accumulations of CO2. You might wish to see
            http://www.economist.com/news/leaders/21574490-climate-change-may-be-happening-more-slowly-scientists-thought-world-still-needs

            • Mel Tisdale says:

              Thanks, I have already seen it. If you go to skepticalscience.com, you will find a scientific analysis of how they got it wrong (look in ”recent postings’. Their blog post also links to other articles dealing with how the oceans are taking over 90% of the heat input and masking the overall heat imbalance.

              However, it is nice to see the subject being discussed in such magazines. How knows, common sense might begin to prevail when the denialati realise that climate change is already happening and it is going to affect them personally.

          • The economist has been printing stories from both ends of the spectrum, the result is really just that people get confused about the severity of climate change. People tend to like “positive news” and would easily in their minds make a story like this eclipse the whole science of climate change – settling on “its not that important” or “its a hoax”. Its a dangerous way of conveying information. Sites like skepticalscience are good at explaining where the article went wrong, often its because the article is based off some non-peer reviewed document or website that DID refer to real science, only deliberately misquoting and often coming to another conclusion than the original scientific paper did. Its part of a pattern that the “sceptics” or “deniers” have employed lately to confuse the public and add “debate” into the matter – even questioning the physics involved.

            Peter Sinclairs, “Climate Crocks” blog and videos normally deal well with clowns like this “Lord” Monckton – so check out his YouTube videos if you havent. They are very well executed and unlike many skeptics, Peter Sinclair takes the time to read the actual science involved clearly highlighting the conclusions from the researchers.

            http://www.youtube.com/user/greenman3610

            There really is no doubt that the north pole summer ice is gone within the next 5 years if you look at the statistics. However everything can be offset by changes in the major weather systems like El Niño and La Niña – events that has created variations that the skeptics like to cherrypick dates between to show “cooling” – its been repeated over and over. I think Richard Alley explains this in his usual and animated way in this video:

            The real question remains though how fast methane emissions will rise once the area really starts warming up. They can really tip the whole state of the planet into something it hasnt experienced for millions of years.

            • Mel Tisdale says:

              Right in every particular (except the lack of the link to the Richard Alley video).

              I would just like to add that the ‘Monckton Manoeuvres’ and ‘Monckton Bunkum’ videos on Youtube should be watched by anyone who is in anyway even slightly tempted to take that arch clown Monckton seriously (I refuse to use his official title because I fell that he is unfit to be regarded as such. In fact I cannot understand why he remains ennobled, considering how he goes around the world doing his best to stop any action to combat climate change, something that is bound to harm his country). Peter Hadfield produced those videos and his Youtube channel, ‘Potholer 54,’ is an excellent source of information on climate change and a lot else besides.

              Gail sees climate change and the demise of our species as just part of the natural cycle. I think we are above that. We are the only species that can not only change the world’s climate, but also undo those changes. In geological timescales, we are changing the climate ‘in the blink of an eye.’ We will be lucky if we can undo them at such a rate, but surely we should try, rather than run away from the challenge, ’bravely’ waving a white flag of surrender before the real fight has really begun.

            • I would point out a few of things:

              1. Most people have unrealistically high expectations for the stability of the climate. We built our infrastructure, assuming that the locations of today’s cities and farms are the correct ones, and that climate will continue to support current industries. If we look back even a few hundred years, we will see huge variability; we see even more variability if we go back thousands of years. Humans, over something like 98% of our existence, have been hunter-gatherers. If we continued as hunter-gatherers, we would simply pick ourselves up and move, if the climate changed. I don’t think we could find a 1000 year period of time that had a nice enough, stable enough climate, to support our current population, no matter when in the past we looked.

              2. Climate change is not a threat to the earth; it is a threat to humans. The earth is finite. It is normal for it to cycle from state to state. Staying constant would not be normal.

              3. Climate models do not have other limits built into them. Thus fossil fuel use will likely decline far more quickly than planned, and population will decline much more rapidly than contemplated. I expect climate may change even faster than the models predict, but because of other changes not built into models. For example, fewer humans mean fewer particulate emissions.

              4. If we are dead, in some sense it doesn’t matter what we are dead from. Climate models have captured the popular imagination because climate scientists have picked one variable, assumed it is the only one, and built models showing how badly the result would turn out, if only climate deteriorates. Financial limits, if they were modeled, would give a very much worse result, coming far sooner than the adverse results of climate models. But because these have not been shown to the world as models, no one worries about them. (The current Limits to Growth model does not include financial impacts, so, as I see it, gives a misleading impression of how much growth can continue, and what today’s issues really are.)

            • Mel Tisdale says:

              The climate changes in line with whatever forces it to change. It does not change because it just happens to feel like. We know that the main drivers of climate change are obviously the sun and the Milankovitch cycles that drive us between glacials and inter-glacials. The sun is currently very stable, so we know that that is not the cause of the current increase in temperatures we are experiencing. Also, we know from the current position within the Milankovitch cycles that that they are not driving the temperature rise either.

              What we are confident of is the fact that the greenhouse effect is having a major influence on the earth’s climate. And we know where the gases come from that are causing that effect, the burning of fossil fuels. We know that the CO2 is from fossil fuels because of the isotopes of the carbon portion (the C bit, not the O2 bit). And not only that, we are changing the climate at a rate that is guaranteed to ensure that crops cannot adapt quick enough to cope with the change and so will perish in large amounts. We know that, Gail. It is not in dispute (among scientists, at least).

              If we were all hunter gatherers today and had to cope with the coming climate change, we would not be seeing the crops move over thousands of years to where growing conditions were more favourable. Instead we would see them die off all around us because the climate had changed too rapidly to give us a clue as to which direction to up sticks and move to.

              We are able to predict with a fair degree of certainty where ‘business as usual’ will take us as far as the climate is concerned. O.K. we might get lucky and the decline in fossil fuel burning might have some beneficial effect, but there are no guarantees. There is a whole heap of the dirtiest fossil fuel of them all, coal, still in the ground just waiting for an energy crisis for it to be extracted and burnt. If that happens, we will be sentencing future generations to a living hell at worst and very unpleasant conditions at best. I see no reason why we should not fight to avoid such a possibility, regardless of what the finance system does, or does not do.

              Yes, financial collapse seems inevitable and imminent. But the whole finance system is a massive confidence trick anyway, so anything is possible. We are expected to respect a system where central bankers can simply hit a few keys and magic trillions out of thin air. We are supposed to have respect for a system that relies on our believing that little pieces of paper have real value simply from the numbers printed upon them. We are expected to believe that unless we give bankers and City/Wall St traders millions in bonuses that they will leave, so we had better give them their money instead of doing what most of us would prefer to do, namely hold the exit door open for them so that they can get out as fast as possible and damn good riddance.

              The finance system has been a confidence trick ever since we dropped the gold standard. When it collapses, something new will come up to replace it, or repair it. My guess is that it will be WWIII, but it is only a guess and I hope and pray that I am wrong. We have enough nuclear weapons to cure the overpopulation problem in a matter of days, perhaps months, depending on just how long it will take for the survivors of the initials nuclear detonations to die from radiation sickness. I hope my guess is wrong and so will continue to fight climate change. We know precisely where that is taking us. We have no idea where the finance system is taking us because it is impossible to know exactly when the confidence there is in it will evaporate and the Emperor will be seen sans clothes by all and sundry. Perhaps the sooner that day dawns, the better for all. Perhaps we might start over, and put the bankers and the rest of that great trading tribe of parasites to proper work. There are going to a lot of empty supermarket shelves that will need stacking as the recovery kicks in.

              In short, we can be sure of what the climate is likely to do for any given level of atmospheric CO2 content. We have no idea what the finance system is likely to do because it operates in a land of make-believe of its own construction. One has only to read the prognostications of the financial pundits to see what a joke it all is. “Buy silver” “Don’t buy silver” “Paper money is valueless” “Hoard as much paper money as possible” “Buy Bitcoin” “Don’t bother with Bitcoin, it is all a big bubble”- the list is seemingly endless. One might just as well go out and buy a load of tulips, after all, they used to be a fantastic investment.

              I don’t know if you have any children and grandchildren, Gail, but I for one will do whatever it takes to protect my son and any children he might have in the future. I just cannot do otherwise.

            • There might possibly be a tiny bit we can do about finance, but I don’t think we have enough control over worldwide human actions, both now in the future, to possibly make a difference on climate change. We are dealing with instincts, which are very hard to change. So I don’t see a point in endless discussion of the issue.

              I do have adult children, but not grandchildren.

            • Mel Tisdale says:

              We will have to agree to differ on the topic, Gail. Perhaps it is a difference between our relative cultures. Whatever it is, there is a clear distinction between the U.K. and the U.S.A. in our attitudes to climate change. Perhaps it stems from those of us on this side of the pond having our backs to the wall in WWII when invasion was a very real possibility. We fought tooth and nail for our freedom, while for the U.S.A. it was a fight somewhere else.

              Whatever the difference, if you believe that saying it is all down to instinct and it should be left to run its course is the best way you as a mother can protect your children, then that is between you and them. I for my part will continue to do whatever I can to protect my son’s future (even though he thinks it all a hoax).

              What I do recommend is that anyone else who does not believe that climate change is the subject of a disinformation campaign should watch Monckton Bunkum. It is in five parts and well worth watching for its comedic value, if for no other reason.

              On a serious note, surely anyone concerned about what the climate is going to do to their offspring has a right to be annoyed, indeed very annoyed, about any attempt to sway public opinion one way or the other by promoting falsehoods. It is only with a full knowledge of the facts that people can make a properly informed decision and surely if an issue deserves a properly informed decision, it is that of climate change. I agree that there will be many whose instincts will lead them in a selfish direction. However, among them will be a sizeable portion who will only act selfishly if they can provide some justification, such as ‘”It is all a hoax” or the like that these disinformation campaigns promote. Trying to fool us into harming our children so that they can turn a profit is worth fighting whatever one’s views on the matter, surely?

            • Tony Weddle says:

              Mel, whilst I agree that climate change is a serious issue, possibly our most pressing predicament, I’m wondering what you or anyone can actually do about it. Of course, personally, we can each try to live life differently and not continue to destroy our own habitat as we (and I include myself in that) have done up to now. So I’m not sure that anyone can actually do anything to protect our kids, no matter how much we love them, and even if they listen to us.

              Just to reiterate one point you made, in response to Gail’s saying that climate always changes. Climate has very rarely, if ever, changed at the speed with which we’re causing it to change right now. That is a crucial point because it means species’ adaptation responses will not be possible and the sixth mass extinction will continue, and maybe humans along with it.

            • Mel Tisdale says:

              I will bet a pound to a pinch of snuff, as we say, that if we were going to face the conditions we are commiting our children and grandchildren to, then we would find all kinds of things possible. It comes down to whether you care what your children think of you after you are gone and they are left wondering why on earth we as a generation did not do more to reduce our production of CO2 (and equivalent other gases) so that they were not having to cope with what are going to be horrendous conditions if b.a.u. is maintained.

            • Tony Weddle says:

              I don’t have that worry (what our children will think of us) so much now as I’ve tried hard enough to get the information, about our predicament and the need to tread lightly, into their heads. They know what I think and they know the measures I’m taking (never enough, though). If they are taken by surprise by events they largely have themselves to blame. Of course, in general terms, future generations may ask of past generations, “what were they thinking?” They’d be justified in that but most of the current generation clearly don’t understand our predicaments, otherwise it would be trying to do something about it – who drives off a cliff willingly?

              I won’t be doing whatever it takes to protect my kids, because I don’t have the mental, intellectual or physical abilities to do whatever it takes, unfortunately, so I’ll do something but never enough. It’s a tough road to go down and my adult kids have their own opinions and drives; I can’t force them to do anything they don’t want to do.

              So, there is almost nothing that each individual can do that will have a global impact and reduce the impact of climate change. We’re all going to have to face that one. Some will be better able to cope and some may even have reduced their personal environmental footprint to the minimum possible for their circumstances, but it will still affect everyone. I just hope it isn’t as bad as some projections (up to the extinction of our species and most of the other species).

            • Mel Tisdale says:

              Your argument is that of the ‘tragedy of the commons’. “Look at China, whatever I might do will not scratch the surface compared to their pollution, so I won’t bother to do anything.” Meanwhile China looks at the developed world and says “Until those in the developed world act to combat the problem and thus come at least some way towards having the living conditions to which we aspire, we are not going to act.” (That is a bit hard on China because it is actually doing a lot to combat climate change despite the U.S.A. efforts to screw up every international conference on the matter. It is clear that China is fully aware of the danger climate change poses to its people and has actually decided to act regardless of what America might do, or rather not do.

              The general public have a lot of power, as long as they don’t give up at the first hurdle, something you appear inclined to do. Once we can get past the deliberate misinformation campaigns by the fossil fuel industry and get the public fully aware of just what is likely to happen when climate change bites, then the only politicians that will win seats in the House and the Senate will ones supporting action to combat it. It might be too little too late, but at the absolute minimum it would not do any harm. (And please do not ask me to swallow that ridiculous notion that we must make loads of money now so that we can afford to adapt to the new climate. If we know anything, we know that the current finance system is geared around making the rich richer, no more, no less.

              We will get nowhere if we all raise our arms in surrender and moan that there is nothing that we can do, as appears to be your stance on the matter. Movements start at the level of the individual and the journey to utopia starts with the first step.

              There may well come a time in the future when the U.S.A. is no longer the ‘king of the castle’ (Britain used to have that role and now look at it). Should the U.S.A. cease to be top dog, it will in all probability need co-operation from other nations. I wonder just how willing they will be when they recall the U.S.A.’s failure to act to alleviate the privations that climate change will by then be visiting upon on humankind. Even if I did believe that there was nothing I could do, I would want to act so that my country would not be ostracised in times of future need, especially seeing as the worse climate change is allowed to get, the greater will be that need.

            • Tony says:

              As I suspected, you’ve taken my remarks the wrong way. I’ve always said that we should be altering our lifestyles and I’m doing that more and more. Reducing our environmental impact seems a just response to the realisation of the damage that our lifestyles have done to our only home. However, I also realise that my actions won’t “save the planet” and won’t halt the destruction. You write as though there is something individuals can do to convince the populace of the predicament we’re in and so, in democracies, at least, get voted in a government that will quickly reverse our growth dominated paradigm and move towards sustainability. If so, I support you whole-heartedly, but I see no significant evidence that that is the case. I also see no significant evidence that China gets it – the closest they’ve come is to sort of commit, maybe, to reducing their energy intensity (which doesn’t equate to reducing their emissions). I don’t see China reversing their policy of growth and getting more people into cars and more people off bikes.

              This isn’t giving up, just a realistic assessment of the situation, which will have to get very much worse (and, so, very much uncorrectable) before enough people get it. Meanwhile, I will continue to try to live more simply and more locally, and occasionally try to convince my children of the error of their ways.

            • Mel Tisdale says:

              So, there is almost nothing that each individual can do that will have a global impact and reduce the impact of climate change.

              You might not call that giving up, but in my book it is as close to giving up as makes no difference.

              The world’s leading climate scientists see that there is still something we can do and that we should be doing it. In fact one of them, James Hansen has just taken retirement in order to fight for that action. (See his TED talk to understand why he sees the need for such action.) Unless we at least try to persuade the politicians to act on the issue, we stand no chance and that is very much something that applies at the personal level. It might take some other overdue action beforehand, though.

              It seems to me that the U.S.A.’s electoral system is more crooked than any in the undeveloped and developing worlds. Perhaps I have got it wrong, but from the outside it very much looks as though most politicians can be, and are, bought with campaign funding from large corporations – assisted in large part by the revolving appointments door between government and big corporations including lobby jobs. (One can imagine the following being said by almost any senior politician saying: “Screw the public, their votes can be obtained with negative advertising. I need campaign funds to make any adverts and I need a safe, well paid job if I lose office, so don’t tell me what my priorities should be!”) What I don’t understand for the life of me is why the American public stand for it. Get the political system fixed so that the politicians not only listen to what the public say, they act on what they hear, on any issue, not just climate change. Then there is at least a chance for some serious action on issues of public concern, such as climate change.

            • Tony says:

              Mel,

              I think you need a new book, if what I’m doing is your book’s definition of giving up. I’m not an activist but have been in marches and have communicated with a couple of ministers in my country (NZ) who are closely tied to much of the problem. I got nowhere. You, yourself, are expressing incredulity at the attitude of people; simply wanting your politicians to see the light will not get them to see it. I have the same desires that you have but I have no agency in getting those things to happen. Heck, if I can’t persuade my family and friends to change tack, I’m not likely to have any impact in a wider arena or with the shakers and movers of this world. I still get involved on ineffective on-line forums such as this but I certainly don’t expect humans to change generations of behaviour, given the commitments they have and entitlements they feel they have.

              Hansen is to be commended for giving it a go but 350 parts per million is now totally beyond reach, given the lifetime of carbon dioxide in the atmosphere, so he and McKibben are in fantasy land as far as that’s concerned, no matter how much I agree with their aims. I certainly don’t expect those sorts of people to just stop and, if they did, I’m sure others would take their place. What I’m saying is that I have virtually zero expectation of them having any significant impact. I hate that but it is reality. Reality can, and will be, harsh.

            • Mel Tisdale says:

              Tony, too many commenters on this site play comment ping-pong. You and I will have to agree to differ.

          • Michael Lloyd says:

            For a brief description of climate models and their limitations see:

            https://www.ipcc.unibe.ch/publications/wg1-ar4/faq/wg1_faq-8.1.html

            Climate models model the climate. Period. Economics is not part of those models but proxies can be used, i.e via scenarios.

  7. xabier says:

    Another post by Gail that hits the nail on the head.

    The rapid contraction of consumption in Europe and Britain is very evident: the poor, whether working or on social security, are very hard-pressed to afford necessities such as food and fuel – clothing is at the moment a different proposition for them due to very cheap disposable clothing made in Asia; and the middle-income group are noticeably economising even non-discretionary consumption due to price rises and income stagnation. Middle-incomes getting by and trying to maintain their old standard of living, but somewhat nervous and low-income groups steadily sinking…. Just keeping the one or two family cars running which are now necessary (as they were not i the 1930’s Depression) is becoming a problem for many people. Green agenda taxes which add about 20% to fuel costs are further reducing consumption in other areas.

    In consequence, I think we can expect, in the very short-term, rapidly escalating business failures, and bad loans – both business and private – to simply soar, with all the obvious consequences for government revenue income and the stability of the financial system. I have a feeling this will all happen relatively quickly.

    From my own point of view, working in a niche market from Britain, I lost all my American customers in 2005 and few of them have come back (trans- Atlantic shipping costs are a major part of this), and I have noticed whole categories of local customers scale back on spending or disappear altogether. With high profit margins and low overheads, I can take this better than most, but it’s a dismal picture for many. But of course, Growth is just around the corner, I must believe the MSM!

    • THanks for your on-the-ground view. It is hard to get an accurate picture from the media. Even locally, people aren’t very willing to say, “I’m losing my home to foreclosure,” or “I got a new job, but it only pays 50% as much as the old one.”

      • xabier says:

        Gail

        Here’s another on-the-ground fact, showing how things are worsening in parts of the EU: in a recent survey, over 30% of Spaniards stated that they had fallen from the middle-income group to a low-income group, since 2008. Only just today, a commentator pointed out that it is only the state pensions shared among families that are preventing a ‘Spanish Spring.’ And, anecdotally, my Catalan cousin tells me that ‘rush hour’ of traffic doesn’t exist anymore in his coastal town: much less car use (of great interest I would suggest to this blog!)

        These are significant and telling facts: people on the edge, losing purchasing power rapidly, falling down the social ladder they imagined themselves to be secure on or climbing.

        And yet one reads today of a Euro-leader saying that Spain will be ‘the motor of the European recovery’! Individuals feel ashamed of what they are experiencing, the MM distorts, and the politicians just lie shamelessly.

        • Thanks for the update. Catalonia is the part of Spain that is supposedly doing best–wants to secede. After a while, it gets hard to get enough taxes to pay the pensions, and then there is a real problem.

  8. What I think is going on is, largely,that the pressures of resource depletion are being responded to with the egregious financial profligacy of things like “QE” & “stimulus” — the result may be the financial system “snapping like a rubber band” — maybe see http://davecoop.net/patterns.htm, or http://davecoop.net/interest.htm

    • It is hard to see exactly how the financial mess will work out. It seems like stopping QE will be a problem. Or maybe it will just be rising debt defaults that ripple through the system. Or maybe the falling apart of the European Union, as more and more countries in it have financial problems.

  9. Don Stewart says:

    Take a look at ShadowStats chart of US real GDP:
    http://www.shadowstats.com/alternate_data/gross-domestic-product-charts

    These numbers are used with ‘old style’ deflators which I think probably give a better picture of what is happening in the real economy. ( My Note follows). The last positive GDP year in the US was 2004. Last really strong growth was the late 90s, which was followed by the dot.com bubble bursting. So the 21st century has been basically down.

    My Note on ‘the physical economy deflator’. Governments like to understate inflation because it reduces their cost of complying with ‘inflation adjusted’ benefits. The latest episode is Obama going to a ‘chain’ method of calculating cost of living. In principle, if trips to the Tropics become more expensive, there will be no legal impediment to the government substituting for a real trip… an imagined trip. Perhaps renting a video of a happy and young and sexy couple strolling on a deserted beach with palm trees.

    ShadowStats uses older methods which rely much more on the cost of a quart of milk or a gallon of gasoline. It seems to me that, for our purposes, the ShadowStats numbers are the more useful.

    Don Stewart

  10. yt75 says:

    Gail, thanks for yet another great synthesis.
    About “peak demand”, there is currently clearly a move to use this wording as a form of cover up for “peak oil” or “peak production”(or peak consumption), typically in the citigroup report.
    But of course this remark isn’t directed to your post, which puts it back the way it should be.

    Otherwise regarding the tax or fiscality aspect, I still don’t agree. That is I think raising taxes on fuel and oil in particular, if done not to increase government budget but to increase it relatively to taxes on work, is a valid policy for a net importing country, in a pure competitivness or “country selfishness” approach.

    And taxes on fossile fuels, whether called carbon taxes or not, and especially for a net importing country, is a form of tariff at a macro level, so how do you relate your position on this to : “We could have put tariffs in place to make a more level playing field.” ?
    Because it is “raw materials” in this case and not “value added products” ?

    And again this to push the “technical infrastructure or capital of a country in a very general sense” towards efficiency, for instance would the average MPG of European cars be the same as the US one, Europe would be currently in a worse position (or let’s say even worse) than it is today. And the level of taxes on fuel clearly had an influence on the vehicles stock and transport infrastructure in general.

    But for sure it is very late, it is only about efficiency, about accelerating possible adaptations and not a “silver bullet” in anyway, and all this is rendered kind of “moot” with the current monetary policies, as shown for instance on figure 3.6 page 37 below :
    http://www.tullettprebon.com/Documents/strategyinsights/TPSI_009_Perfect_Storm_009.pdf

    And not forgetting the “image” aspect, like having huge cars or tons of skyscrapers (which especially for housing are stupid buildings), to do or “look” better than the US.

    • From the point of view of a country not wanting to increase its oil imports necessarily, putting taxes on oil (rather than other things) is a worthwhile endeavor. If these taxes are on imports of coal or gas, they might leave some in the ground (because total supply is not constrained), but this is much less the case for oil, since its supply is constrained.

      Putting taxes on incomes is probably not the way to go. We used to tax corporations, but now they have the possibility of relocating to the lowest tax country available–Ireland or Cyprus, for example. I still would like a way to tax corporations, except that they have learned to outsmart the system.

      I think we need a tax on imports form low energy countries, or we will find ourselves drifting down to their level. If the workers in their factories live in one-room unheated huts, or in dormitories, ours will need to as well, to be competitive.

  11. jeremy says:

    Climate change will be another “cost’ society will have to face in addition to “peak resource” issue.
    Seems to me we are so desperate to maintain the “system’, dirtier, toxic and destructive forms of “energy” will be extracted and burned.

    • Which is why Guy McPherson is repeating that “only a complete global economic collapse can stop runaway global warming”. With all the effort at “saving the economy” there is no room for climate change – especially as the unconventional oil like tar sands and increasing use of coal is needed to keep the wheels running. And it will do until a major uprising happens due to the effects of climate change and ecological disaster that each of these energy sources leaves in its trail.

      I don’t quite agree with the short time scale of the planets demise that Guy works on, but I agree that we most likely will completely ruin the biosphere if we continue on this path for 20-30 more years. Again, it all depends on how fast the poles warm up, how fast the ice disintegrate and then naturally how fast and in what quantities methane will be released as a consequence. I don’t have enough information into the effects of increased sea temperatures, but Guy say that mass death of phytoplankton can really mess up the oxygen levels too. In any case, when you mess with the lowest level of the food chain, the consequences can be pretty severe. I certainly did not sign up for that, and neither will I if that’s supposed to be the cost we must all take for “keeping the wheels spinning”.

  12. St. Roy says:

    Gail:
    I am missing something? Why are countries, such as Bangladesh, that use far less energy per capita (fewer energy slaves) able to make goods much cheaper than in the US, EU or Japan?

    • Countries such as Bangladesh use very little energy besides the energy used to produce the good themselves. I haven’t been to Bangladesh, but I did visit India.

      When I visited India, it became clear that businesses could operate at a tiny fraction of the cost level of US factories. I visited a number of recycling factories on one tour I went on. The factories operated out of simple buildings, without glass in the windows (just bars). (Needless to say, the buildings were not heated or cooled.) Storage was on the roof, with a ladder leading to the roof. Lighting was very dim–often from one or two small fluorescent bulbs. One factory had a hole in the roof for light. Workers wore no protective clothing. There was one outhouse type restroom for over 1000 people. (Many just used a field.) We heard stories about workers who slept on the floor of the business where they worked. The workers were paid very low salaries-something like $2 or $3 day.

      It is hard to compete with that cost structure.

      • its important to remember too, that those ”businesses” only exist even in those conditions, because the have our western markets to sell stuff to

        • Christopher Johnson says:

          Exactly right, End of More. Some ‘analysts’ claim China’s exports have climbed back to 10-12% above 12 months previous. But when they check who’s buying — Europe or the USA — then they begin to check a little harder and realize somebody was fuzzing the numbers.

          The basic economic numbers — who’s selling how much to whom — is being overlooked every day by the analysts, who would much rather talk about Wall Street ups and downs because that’s all black magic anyway.

  13. danlxyz says:

    Whenever I see the chart showing a decline in oil consumption in the US, I wonder how much of that is because of the offshoreing of manufacturing. Does anyone know to figure that?

  14. Jeffrey says:

    I’m residing in India right now and while the middle class is optimistic about the future, the working class people are having to pay a lot more for their lentils and rice. Inflation increases, but wages don’t go up when you have hundreds of millions of poor willing to work for a few dollars a day. Minimum wage in much of the country is between 2 to 3 US dollars per day.

    PM Singh addressed the country a few months ago and said he needed people’s patience and support to keep the economic growth rolling along. The well-being and existence of the nation rests on economic growth (the same with China). Economic stagnation won’t be tolerated, especially by urban dwellers.

    That’s why there’s no alternative but to continue industrialization and urbanization. To do otherwise would be political suicide and moreover many Asian countries, both the rich and poor, have come to feel entitled to economic growth. They want their iPhones and a better life, though it’ll all be quite short-lived.

    Still, the paradigm shift towards de-industrialization, even if it is forced on people, won’t be so heart wrenching for the folks who are already poor, though of course the hundreds of millions of urban dwellers around Asia will remain clueless about why their lifestyles are not improving as they had expected. When I talk to educated Indians I hear about how Indian can only prosper. I think these sentiments are common in the military as well.

    • Christopher Johnson says:

      Thanks Jeffrey for your strong report. I don’t know India well, but do have some time in East Asia. Your last paragraph implies that some educated people are beginning to get glimmers that all might not be well, that stagnation may be afoot. Is that correct?

  15. Pingback: Peak Oil Demand Destruction | Doomstead Diner

  16. Ikonoclast says:

    I think there are two important forces at work. One is Limits to Growth. That propositon is irrefutable. Growth cannot continue indefinitely in a finite system. In many ways energy is the KEY resource and I am not the first one to make this point. If you happened to have boundless energy available for useful work then you could obtain, refine, synthesise, filter, recycle and substitute materials to your heart’s content. However, if energy available for useful work has limits, as it clearly does in the biosphere, then those limits alone are enough to determine our trajectory.

    There is however something which almost seems to know no limits. This is human stupidity and short-sightedness. This is the other force at work. At Gail notes, we evolved, like all animal and plant life, to exploit our immediate environment and to only react to immediate and proximal stimuli. That is why it is hard for us to imagine we face impending disaster at the moment many of us in the West (me included) are still pretty much at our most comfortable.

    The particular form current stupidity takes is to;

    (1) Fail to develop transition protocols for the very different and difficult future we face; and
    (2) Adopt precisely the wrong economic policies of economic austerity.

    The above might seem paradoxical. We face increasing material austerity and yet I am saying government budget austerity is the wrong policy. Government budget austerity does two things. it reduces total consumption (by reducing aggregate demand) but it also moves more consumption decisions into corporate and wealthy hands. The oligarchs and capitalist corporations make more of the decisions on where we are going. Since they promote BAU and endless growth we can see what we will get from this strategy. We will hit the wall faster. We need to move more decisions and more control of the total national purse and direction into people-controlled democratic government decision making hands. Otherwise, we are leaving control of all the outcomes to secretive and unelected oligarchs and corporate boards.

    • Mel Tisdale says:

      I’ll second that, Ikonoclast. I fear that the way we have decided to govern ourselves has put the wrong sort of people into positions of power.

      We need to plan for the manner of the forthcoming collapse and for post collapse conditions. I am sure that there will be people in backrooms here and there making such plans, but that is not good enough and probably not good at all for the majority. We need to bring post collapse planning out into the democratic process, i.e. out into the open. It is not as though it is too big a secret for such action. There are enough pundits predicting turmoil in the very near future for it to be such. The problem is they all tend to be in disagreement as to what form the turmoil will take and where it will end, which leaves people like me not knowing which way to jump with my two savings bonds and the contents of my piggybank.

      One is forced to ponder whether maintaining the status quo is designed to enable the top 10% to grab as much wealth as possible from Q.E. and along with the top one percent, convert enough of it into precious metals, financial instruments, or whatever, that will be least hardest hit when the ungazi hits the ventilation device in the not too distant future. If that be the case, we need to have it out in the open P.D.Q. Perhaps we need to (re-)occupy Wall St. and the City of London, but do it completely this time!

    • I don’t think unlimited energy would really solve our problem. When that energy is used, some of it will end up as waste heat. The waste heat will cook us, if nothing else. I remember Tom Murphy doing some calculations in this regard.

      I agree that human stupidity seems to know no limits. A big part of this is instinctual behavior though. Having more children than needed for replacement is an instinct. Hierarchical behavior, especially in the face of resource shortage, is another instinct. See my post Human Population Overshoot-What Went Wrong?) Making use of every energy resource at our disposal is an instinct. Also, nature works on a “cash flow” basis, rather than an “accrual” basis, so it is not instinctive to plan ahead very far, either.

      THe problem with the government doing more, as more people fall through safety nets, is that the ability to collect taxes erodes as well, since those who are not working can’t pay taxes. It is a great idea in theory, but it is virtually impossible to fund.

      • Ikonoclast says:

        For sure, taking the energy argument to extremes merely ends in the waste heat problem. It’s hypothetical in any case. We don’t have access to unlimited energy.

        On the other issue, if the government does more, it moves people from welfare back into work. Thus they pay more taxes. It’s a virtuous circle. If the government does less then more people fall into welfare and revenues drop. That is a vicious circle.

        In the situation where the economy is already soft and private spending is low, government budget cuts further throttle economic activity . It has to do with the paradox of thrift. If one person is thrifty then this is beneficial long term to that person. If all persons are thrifty, consumer demand drops, the economy drops and people are thrown out of work. Nobody is buying what they are making.

        The government can prime the economic pump in a slump by leading with government spending which creates jobs. It does not have to wait for tax receipts to do this. It can create money by fiat. That is to say, it can run a deficit budget.

        However, this sort of Keynesian economics is predicated on growth and predicated on the premise that we are not at the limits to growth. I fully admit that and since we are at the limits to growth this is a new problem. Thus greater government action must now be based on moving more of the economy from private hands to state hands. I admit that also. This is a statist, dirigist approach.

        Whenever nations have faced existential threats, i.e. threats to their very existence, which were usually great wars in the past, the national governments have conscripted people and co-opted resources. This is what is done in great national and civilizational emergencies. We are now at that point. Now the great threat to our existence is the limits to growth and all its attendant problems. We cannot face this threat in a piecemeal fashion. We cannot allow the market to attempt to solve the problem piecemeal. Indeed, the market has failed dismally, led us into this very problem and promoted the approach of consume and grow like there is no tomorrow.

        The unfettered market is private greed, instinctual beahviour and selfishness unleashed. That is precisely why the unfettered market economy fails us in this crisis. The private market still has a place in a circumscibed sense. It is a useful tool for certain outcomes. To use the old phrase, the market is a good servant but a bad master. If we let private markets determine all out outcomes then we get… what we are getting; a headlong consumer rush into oblivion. We need to take state directed, planned, dirigist action. The democratic state needs to become a bigger actor. The capitalist corporations need to become smaller actors.

        • You have more faith in the government than I do. I am doubtful that they would do the right things. They are do what sounds good, and what will please the corporations that contributed to their election. Their interest is in getting themselves or their party elected again.

          There is also the issue that without energy, governments can’t do a whole lot either. Maybe they can print money, and give it to poor people, or to people who agree to paint murals on walls, but at some point the overspending comes back to bite, and everyone is faced with severe inflation on the necessities of life. There really needs to be energy to do things like fix roads, or build bridges, or repair electrical transmission.

  17. Scott says:

    I have a simple view on this…
    This reminds me of Europe and old story I read about how they had cut all the trees and no fuel, not wood out there to find to burn, people did get hungry.
    Oil and Gas wells are unlike Water Wells that get filled back up from the rains, it took many millions of years to create these stores of energy and they being used very fast and many wells deplete in 30-40 years and dry holes. I have studied this for a long time and it is not a hard concept to grasp. We do seem to have gotten a bit of a break from what I expected to be here now due to new drilling techniques (Fracking).

    In many countries through out the world the cost the food takes more than half a monthly income, and I believe that will likely be here too someday soon as costs rise and debt markets dry up eventually. It is surprising how long the game can keep rolling on with debt and government bubbles. Food has been really on the rise in the USA in the last few years and I also suspect this will continue, just a slow grind of higher energy and food prices over the years to come. Eventually it will reduce our population by force. There is lots of coal out there but takes so much energy to mine and handle and it is dirty but once again expensive to refine into a clean fuel much like the tar sands.

    Oil and Gas wells are not water wells. Looks like we are a bit too late to fix this due to the infrastructure that is massive and in place, not ready for change any time soon but I fear the change will come anyway sooner than many wish to see in the absence of a replacement.

    Not one in sight yet that solve this one as the infrastructure is truly built for oil and gas.

    Let’s hope we can develop the Di-lithium Crystals by then (as seen in Star Trek).

    • Susan Ring says:

      Went to a forum recently discussing food security and relationship to Arab Spring, such as rising cost of wheat and bringing down the Egyptian Government. Transport costs, food wastage (which also includes wasted fuel in producing, transporting and disposing) will no longer just be problems for the developed world as economic ‘solutions’ offered by transnationals destroy local sustainable farming. China has taken up large farming projects in Africa and Australia, to try to make up for their failure to feed their population from within their political boundaries (as have many European countries). Not only local effects of taking food growing land out of production for local populations, but increasing dependence on long distance transport of food, makes China more vulnerable to price changes in fuels. Research seems to focus on making arid lands more fertile and productive, but where is the return to old fashioned food preservation (vs horrible glut of programs for menus that cost $300!). As was pointed out in the forum, since the 1970s we have relied on policies of ‘buying in’ when there is a shortfall in production rather than maintaining stored real food. As the recent US drought shows, we can ill afford to mess around with food pricing to manage such climate variations.

  18. Christopher Johnson says:

    To Mel Tisdale
    Thanks much for the directions to the Skeptical Science site article about global warming that contradicts / corrects the recent Economist article. It’s rare that I’ve seen the Economist taken on so squarely and forcefully. It will be interesting to see how they respond to the criticism.

  19. Jamesneo says:

    Hi Gail, i disagree with you on the timing though not on the principle. The view of future energy consumption of the rest of the world dropping by 2020 is way too early. There could indeed be a temporary setback during 2015 to 2025 that drives world wide consumption down. But all that will just means the destruction of the old financial world order and emergence of the new financial system based on the BRICS. China has been actively preparing for precisely such a fall by engaging in currency swaps with a lot of countries.
    It is more likely that the rest of the world can weather through the tough times with more internal consumption or trading within the rest of the world. The energy consumption of the rest of the world is only likely to fall during the 2030-2050s (unless there are great improvement in energy efficiency usage) due to the peaking of fossil fuel availability that will drive up the cost structure of the rest of the world and leading to what you suggested.

    • Scott says:

      Thank you Gail for your insight on this pressing subject. It may be the biggest challenge of our time aside from Nuclear war.

      I can see Fracking giving us an extra 20 years of relatively affordable oil and gas, but it should be here now if not for that. I have read that fracked gas wells are very short lived. So enjoy the boon for now.

      Oil and gas and coal are dug out or pumped out and are forever gone and hard to replace.
      Not like water wells that are replenished by rains and water, these become dry in like 40 years or less.

      I hope we can invent the DI-lithium crystals (Star Trek)

      Scott

      • Perhaps fracking will give us an extra 20 years of relatively affordable oil and gas, or perhaps not. If what I am saying is right–that we are hitting financial limits–then the fact that we seem to have these supplies will turn out to be fairly irrelevant. “Fairly affordable” will turn out to more than we can really afford. When the oil and gas producers actually crunch their numbers, their costs will be seen to be higher, at the same time that more and more people are unemployed, because governments are laying off workers and raising taxes to balance their budgets.

        Dilithium crystals on Star Trek supposedly enabled interplanetary travel, but were limited in quantity. In this way they were analogous to oil. We do need an oil analog, at a cheap price, to keep expanding. The catch is that there are other limits as well. Even if we have cheap oil to overcome our current limit, we are likely to run into other types of limits–such as fresh water, arable land, soil quality, population, pollution of various sorts, climate change affecting our fixed installations.

    • A drop by 2020 for the rest of the world is possibly too soon, but we are now already hearing stories of slowing growth for these countries. I am a co-author of a recent article about China’s coal supply. The article concludes that Chinese coal supply will peak in the 2025 to 2030 range, at the latest. There are issues with pollution and water supply that may make the peak earlier than that. Of course, financial issues could make it earlier yet.

      I expect your 2030 to 2050 range is too late.

  20. Geo from Maryland says:

    The chart in fig. 4 is quite an eye-opener. Per-capita energy consumption in Saudi Arabia is almost on a par with the U.S. And we are counting on Saudi Arabia to be a swing oil producer!

  21. Scott says:

    On Saudi, their main fields are very old and they are a very hot country needing their oil to keep a growing population cool, perhaps in 20 years they will not be an exporter anymore, think of that!

    • I recently the biggest (sick) joke of all—that by 2030 Saudi expects to become an oil importer
      I get the impression that some people are living in a parallel universe

      • Ikonoclast says:

        Didn’t you hear? They are going to import turbinium from Mars and unobtainium from Pandora. That’s right! Cohagen is still in charge on Mars. Quaid was just having a dream after all at TOTAL RECALL… Recall…recall. And the Na’vi on Pandora are selling unobtainium for jeans and light beer. Turns out they like them. They use jeans as board shorts and their six-legged “horses” love light beer.

    • I know that we hear estimates that Saudi Arabia will perhaps not be an exporter in 20 years, based on a comparison between the amount they are producing now, and how it may change, compared to how local consumption is likely to grow. The caution I would give in believing these numbers is that they are in some sense “best case” scenarios–if everything goes right. If oil prices can’t stay up high enough because of recession in oil importers, there may be “Arab Spring” type revolutions, and damage to oil fields.

      There is also a question of how reasonable Saudi Arabia future production estimates really are. They are working with very old fields, and have been using some quite advanced techniques to keep up oil extraction. Other countries have hit roadblocks, where it becomes physically impossible to keep extracting oil as fast as they have in the past. Certainly the US did this, as did the North Sea, Mexico, and virtually everywhere else. Saudi Arabia has every reason to paint as positive a picture as possible about its future productive capacity, but it is not at all clear how long current production will continue at its current level. The recent decline in production could represent an attempt to hold prices up, but it also could be an indication that they are having production problems.

  22. Conservation by Other Means, as Steve likes to phrase it.

    Overall, decreasing consumption of Fossil Fuels is necessary, so this is a good thing. The bad thing is that the economic pain involved is dispraportionately burdenned on those least able to afford it.

    Best way out is to leave the industrial economy before it leaves you.

    RE
    http://doomsteaddiner.org

  23. Reblogged this on Hechos & Opiniones and commented:
    Interesante aproximación al equilibrio suministro-consumo…

  24. Pingback: Peak Oil Demand is Already a Huge Problem in the United States, the Euro-zone, and Japan | alternative renewable energy Pakistan

  25. Perk Earl says:

    Gail, you wrote: “Governments increase their debt to meet the revenue shortfall. They reduce interest rates to record-low rates. They also use Quantitative Easing, or “printing money” to try to lower long-term interest rates, and to try to make their exports more competitive. Unfortunately, these actions do not solve the basic structural problem of high and rising world oil prices.”

    This is what I see too, that the basic structural problem of high oil prices and their effect on the economy is not changed by the trillions borrowed or added to the monetary system via QE’s, only delaying temporarily in hopes of cheap energy returning to once again spur growth. But since cheap energy will not be returning, we will all watch with baited breath as the debt increases and QE continues, with an eye on interest rates, because once they begin rising it will be time to move on to some other setup. The transition should be a hoot!

  26. Pingback: THE LONG DECLINE « The Burning Platform

  27. Ikonoclast says:

    I’d like to see a similar analysis on total energy use. It should focus on energy generated not amounts of oil, coal, uranium etc used up. The real quantity that counts is total energy use or more precisely total energy used for useful work (exergy) after subtracting waste energy. However, statistics for the latter would be nigh on impossible to obtain / assemble.

    Oil is very important but it’s not the only energy game in town. At the same time (of course) all these energy sources are limited so it doesn’t obviate the LTG thesis. It just kicks the can down the road a little. It would be interesting to see how far down the road it kicks the can. My guess is not more than a decade ot two. A decade or two might sound a long time to some people but it’s a blink of the eye in total human history and pre-history.

    • Susan Ring says:

      Interestingly China is the only country I have heard of that is considering life cycle energy use in products, and accounting for the off shore components as well. No good just saying the fridge’s energy use in manufacturing is x units when not counting digging up the resources. And nobody is counting/accounting environmental costs—digging up a rubbish heap for resources vs chopping down a forest to get at what’s underneath.

      • Christopher Johnson says:

        Susan, as one who has been watching and working on China stuff for many decades, please be advised that well-intentioned Chinese are quite capable of publishing innovative ideas, but will rarely/never convince their leaders to adopt them if costs are included. For example, pollution controls are well understood, available and demanded by law, but somehow don’t exist or are left off after money changes hands. 400 ‘cancer villages’ are now admitted, and anyone who can establish residency elsewhere is doing so — if not for now, then for later.

        The Philippines just rescued an ‘aground’ Chinese freighter that had 10,000 kilograms of pangolin / scaly anteater, a protected species, and maybe a delicacy in China.

      • China also seems to be the one who is busy getting long-term contracts for resources in short supply.

        • China might be worth a post of its own
          they are engaged in frantic projects of infrastructure (energy consumption) building, and calling it GDP to make their production figures look good
          to do this they are rolling over trillions of $ of debt
          They have fallen into the trap of thinking consumption is production

    • I don’t think these other energy sources (or renewables either) push the peak down the road at all. The problem is that all types of energy consumption tend to fall together. I showed this for the Former Soviet Union in How Oil Exporters Reach Financial Collapse. The same pattern was also true in the United States during the 2007-2009 recession. The reason is that it is very difficult to change energy sources quickly (or even not so quickly). So the economy tends to contract in total. It is like making a smaller “batch”.

  28. Scott says:

    Yes, a blink of an eye in history if you look at the age of oil and its longevity,

    Oil and gas wells are not recharged fast enough by nature to support our current draw out and are a finite resource. There has been some talk that earthquakes bring up new oil and gas from beneath, but It appears to take many millions of years to form.

    If the Earth had unlimited oil would continue to get more populated and it could continue to grow the chart showed until we overheated and kill every environment.

    Until coal, then oil and gas etc came we could only depend on as many trees as we could chop down and certain parts of the planet became denuded of trees.

    Although America has found much oil and gas recently, it is going to help, but many nations depend on places like Saudi which is very secretive about their fields and oil reserves, but the charts do indicate that they themselves may be need to import in several decades which is hard to believe for many.

    There are other fuels out there that we may not yet even know as the general public but I feel they are out there and I hope they will be implemented in time or otherwise this could this could hit pretty suddenly. I agree it will be certain countries with resources doing better than other countries as supplies slowly grow thin.

    There is clearly not a Di Lithium Crystal out yet that we have seen anyway to replace it. Or perhaps there is a solution on the shelf that we have not been told, that could explain the governments complicit attitude. Perhaps they want to sell all the oil and gas first before rolling out the next thing they have up their sleeve. Let us hope it will not need a huge infrastructure like oil and gas because we likely will not have the time or resources by then to build a new system. Geo Thermal, solar and hydro help but they are still a very small portion of the energy pie.

    I wonder if we would be wasting so much of this resource if we really understood that it may be hard to find in a few years. Look at all the wasted plastic which comes from crude, large cruise ships and aircraft and huge boats on the ocean. We need to get back to rail and get the trucks of the road which no one would really mind anyway.

    • What humans on earth should do and I’m going to say it. Stop building oil powered personal transportation vehicles and reduce the human birth rate. We have enough.

    • Everything I have discovered from reading about past collapses is that limits come much more quickly, and in different ways, than the popular press seems to tell us. You are right–if we continued to grow indefinitely, we would overheat.

      Limits that we reach are financial limits, and we reach them very early on. This means that the whole scenario is different from what everyone seems to think they are planning for. This means that solutions that look like they are solutions–like going back to rail from trucks, may be too little, too late.

    • Hi Scott,

      Welcome to the pity party. You will be hard pressed to find solutions to Our Finite World of resources here. As others have stated before, this is a right leaning Blog and I’m guessing will close up shop as soon as conservatives regain control of the American government. Until than it will be the sky is falling to hold back the economy.

      Of course pushing more freight to rail would be one of hundreds of ways to reduce consumption of oil resources. There is no one solution to the problems that face most human’s standard of living in the future(some think there are only two, tax cuts & free markets-LOL). Which makes it easy to dismiss your statement as ” too little, too late”.

      If all the doomer here really believed in their financial world collapse. They would support a 55 mph regulation (which could save more oil than the XL pipeline could deliver) and than a transition to a non oil based personal transportation economy (even if it meant 35 to 45 mph speeds). But that wouldn’t support the oil industry interest and would require government regulations. Now think about it, when was the last time you heard a solution from the right other than the two I point out above? Have you ever wondered what is so important inside a tractor trailer that it needs to barrel down I-85 at 75 mph consuming 25% plus more fuel than 55 mph?

      Keep your friends close and your enemies closer. And don’t forget to drive 55. The solutions to the world energy problems are on the demand side of the equation, not the supply side (or finite side).

      After a little thought, here is one answer to my first question. A armed guard in every elementary school. I’m guessing paid for by the American tax payer.

      • ChiefEngineer you are pretty off base. It is not a right-leaning blog. Taxes on imports would not set well with the right wing. I am definitely pro-abortion rights and pro Gay Marriage. I am frustrated because I do not see solutions with either the Republicans or the Democrats.

        • Scott says:

          I am going to be the first to put this out there on this blog about Geo engineering and the cloak of secrecy that have to deal with. You cannot believe what either party says as they are both in on it.

          I also do not see a solution coming from any political side.

          I do see the excessive spending going into secret programs

          Here is an example that needs to be known:

          And likely that you and I did not vote for it.

          I am talking about the Chemtrails. They are using a lot of resources to try to change our weather or change us somehow and spraying chemicals in the skies. This has been going on for about 20 years or so at a great cost I am sure. Does anyone on this blog realize that here are thousands of aircraft up there burning and wasting fuel while dumping chemicals in our air to experiment on us and perhaps Geo Engineering. What are they doing, have you seen them up there laying down the chemicals in the skies, I have.

          Secret Operations in our skies.

          I want to turn this blog into the truth, there are tons of things going on we did not approve of or did not vote for that are making folks sick.

          Is that were all the missing trillions are? Time to wake up folks.

          Scott

          • Christopher Johnson says:

            Scott: Your mention of ‘geo-engineering’ is a first. Please provide some website references. I remember years ago some stratospheric testing and adding silver iodide crystals (??) in experiments to determine if they could inspire thunderstorms to precipitate during summer droughts. But that was all.

            • Scott says:

              Chris,
              Here are a few links to look at on Geo-engineering, talking about a waste of fuel and sinister!
              Scott

              http://chemtrailsplanet.net/
              http://www.whatintheworldaretheyspraying.info/
              http://www.theweatherspace.com/chemtrail-forecast-systems/

            • Christopher Johnson says:

              Hi Scott:
              Thanks for sending the reference websites about chemtrails. I took a look and agree that the subject is interesting and worthy of attention and probably action.
              I’m much less certain, however, that this website / blogsite is the proper forum for that discussion. It’s not for me to decide, of course, but I think the masters of this site might want to keep it focused on its particular subject matter.
              And I’m sorry that I don’t even have a solution for your to try. I’ll keep an eye peeled for an appropriate forum.
              Cordially, Chris

            • Scott says:

              Hi Chris,

              Okay to stay on subject, lets go back to the subject of Saudi Oil, it interest me about the depletion rate of those larger fields they have.

              I found this article on Saudi today.

              http://alcalde.texasexes.org/2012/10/an-end-to-saudi-oil/

              I am sure most of us remember Matt Simmons and what he had to say about this.
              Here is a paragraph from the article that was interesting about the giant Ghawar Field and how it is already 60 percent depleted. I would like to more data of about the depletion status of other larger fields too, but I guess it is safe to say that most fields are good for no longer than a century if Ghawar started pumping in 1951, but I am sure they can pump them out faster now with new equipment than they had in the 1950’s?

              “The giant Ghawar field, the country’s largest, which alone accounts for fully 50 percent of Saudi oil production—and 8 percent of total world production— is 60 percent depleted, he argues. In production since 1951, Ghawar has yielded in excess of 55 billion barrels of oil. Still, Saudi Arabia hasn’t reduced its total reserve estimate. “The death of this great king leaves no field of vaguely comparable stature in the line of succession,” Simmons writes.”

              Scott

            • Christopher Johnson says:

              Thanks, Scott, for your flexibility. Ghawar is certainly a major engineering effort; I’ve seen a few reports about steam injection and other methods to increase pressure. Of course the Saudi’s don’t talk about it; anything they say can come back to haunt them. Everybody knows Ghawar is losing strength; what they don’t know is 1) how much exploitable is left in Ghawar and 2) what might be out there to replace it when it fails.
              Have you taken notice of the growth in African oil fields? Many successful explorations in both east Africa, some near the horn, and in Southwest Africa. Angola was the fastest growing country in the world a few years ago due to oil.

            • Scott says:

              Yes, I have heard they are pumping in lots of sea water to keep the old fields going.

              Africa is interesting, I have heard of the finds in Africa, and have seen the problems they are having with things like pipeline security and how some have died trying punch holes in the pipe lines and fill buckets.

              I wonder if Gail sees Africa as a new long term source of oil and is there enough there to keep things going for awhile? I do know she mention that China was in there securing deals for themselves. I think she mentioned that some countries like China that control over these places may be new global powers which I think we can already see that happening today.

              It also worries me to see oil being used to make fresh water from the sea, in many places and the waste of it all when you look at cities like Dubai you see indoor skiing. If people really understood this, they would not be building such things.

              We could have done a much better job as humans and we could made this fossil fuel endowment last many centuries but I see that we have squandered so much and now look where we brought ourselves to point of the bring of our own demise.

              As many have discussed I do not think much will change until it is all gone and used.

              I was thinking about the distant old days and horses…
              Not enough horses for 8 billion people, and the amount land needed by each horse large, I remember the stories about New York City when there were horses on the streets and smell and all the carriages. There is not a chance of us going back to that now, there are far to many of us, However after this is all over, those that are left will likely go back to those old ways and start over, but this time there will not be the fossil fuels and it is not happen again like this. The world will not be able to grow like it did with fossil fuels.

              I still wonder if there is something out there that we do not yet know of, I guess that is our only hope if there is.

            • Christopher Johnson says:

              Scott, let’s see if I understand your question correctly: “Is anything good going on”?

              Heck yes. In many ways the human animal has never been more creatively engaged. The total quantity of R&D that’s going on rises by several percent per year, in private, corporate and public (government) efforts, and in all measures: bodies assigned, moneys committed and spent, etc.
              Will that make all our problems go away? Nope, but eventually we might get to the point where we can manage and then even control the problem.

              Most of us have a real problem trying to get our heads around something as complex and intricate as the energy problems we face. Since we were children energy was something we paid for when necessary, and respected to avoid getting shocked or having gasoline blow up in your face while smoking. But very few are actually engaged in making it or understanding the economic aspects.

              For instance, only very few American understand that OPEC was founded in reaction to President Nixon’s devaluation of the dollar after delinking the dollar with gold in 1971. And take it from there. The greenback is fiat paper; all people want better, the rich can demand and get it. We’re all a little poorer now, except the very rich, and as Gail points out, wages have fallen to the point that more and more blue collar families have a harder and harder time making ends meet. It’s not there fault, there are too many people earning less and less, barely making it.

              What’s the solution? I don’t have any panaceas, Scott, but I do know that innovation and R&D have been the main ingredients of our success over the years, and can be again.

              Cordially, Chris

            • Scott says:

              Hello,

              Yes, Chris and to the group, my message was that I believe there is a very good chance that there is something else out there that we do not yet know of. Many good inventions have been shelved and the early electric car was a good example.

              I just wonder and I think that when things really get tough those shelved inventions and secrets may be released to us. It just seems to me that there is much greed in our world and they will exhaust sell off all of the fossil fuels first in order to get wealth.

              They may be well sitting on something that would be much better and general public does not yet know.

              It was kind of an only hope thing for me as I know the path we are on is the wrong one for sustainability.

              We have heard of cold fusion and things but is really something out there that will come forward in our time in need which seems to be approaching very fast. So without something major like this we can all see “troubled seas” ahead…

              One can even ask if our neighbors from the stars will lend a hand.

              So let’s bring this up for discussion with the group, since we have come to a point that we know doom it out there otherwise… Any thoughts on this anyone on the forum?

              Best Regards to all.

              Scott

            • Tony Weddle says:

              I can’t see some unknown or suppressed energy source coming to the rescue. This sort of idea has been covered in books by Heinberg, Kunstler, and others. The concentrated transportable fuels that are fossil fuels have enabled the growth of a highly complex global society that is largely focused on activities that have little lasting benefit for our communities. It’s a society predicated on waste and growth. It’s so hard to see another energy source being able to replace fossil fuels at a rate and cost that allows our consumer, complex, diversified society to continue unabated. But, as I’ve mentioned in other comments, our problems do not revolve entirely around energy, even though energy has been at the heart of most of them. our way of life is damaging our own environment in almost every aspect. Don’t expect a technological answer to our overall predicament, even if the odd can gets kicked down the road.

          • I seem to recall that in the days after 9/11 when all aircraft were grounded, l temperature went up by 1 degree F over the USA because the chemtrails cleared

            • Tony Weddle says:

              After 9/11, the temperature didn’t go up by 1 degree C; the diurnal temperature range (day maximum to night minimum) went up by 1 degree. This misstatement might have come from Guy McPherson, who once added the “fact” to his talks. I don’t think he does now.

        • Lurker says:

          Well, one can be a mixed bag. What about these two political dynamites: gun control and amnesty. I think the U.S. democracy is outdated since the beginning of the last century. I’m tempted to say that the U.S. is not a democracy.

          • you can only have democracy (ie universal and reasonably uncorrupted suffrage) for all as long as prosperity for all is there to support it.
            Democracy has never existed without that
            check any point in history, (Though I readily admit there may be an odd one that I havent thought of) and you’ll find that government has always been the prerogative of an elite, and they have invariably been landowners, ie the energy producers.
            the people who worked that land, serfs or slaves (there is little difference) did not participate in government in any sense.
            they were just ruled.
            Magna Carta was drawn up between royalty and landed gentry–it had nothing to do with peasants like you and me. (well you anyway)
            Dates vary from country to country but universal suffrage grew with the rise of universal prosperity and the age of enlightenment, and people leaving the land and producing energy by other means–ie the factory system and fossil fuel burning
            As the use of that energy declines, we will have to return the land as our sole energy source, and once again fall under the control of those with the means to provide our food/energy.
            those forces are already in place to expedite that, and to return us to a state I saw neatly described the other day—the age of endarkenment

      • Scott says:

        Hello,

        Yeah, I agree it looks like tough going at some point. Our generation or the next or so on?
        Although, I am always amazed at how long things can keep going on and how long they can keep the “balls in the air”.

        I do believe however that there are better solutions, perhaps very likely still being still hidden from us! However, just until they can milk out all the money from the oil and gas enterprise.

        This is a subject dear to my heart, It does look like Pity is the word unless we something new come along fast.

        The financial crisis although appears to be ready to break loose before the bad peak oil long emergency.

        Scott

        • As far as I am concerned, a financial crisis is precisely what we should expect from limited oil supply.

          At some point (which may be in the next year or so–or not) oil supply will go down. It is not entirely clear to me that what we will see will look at all like a “peak oil crisis”. Instead, it is a Limits to Growth crisis, that manifests itself very much in a financial way.

          • Scott says:

            Yes, a financial crisis seems sure to come soon in looking at things. I am not one wanting to see this soon, but is out there kind of looming around.

            You can see the writing on the walls now. Folks should be getting prepared little by little.

            Oil price is down today, but I guess we may see a situation where few can buy gas just because they are just broke. Not yet but it is looming.

            Good time to prepare some supplies just in case like you would for an earthquake.

      • Bicycle Dave says:

        Chief Engineer,

        IMO, Gail’s contribution is her analysis of “Our Predicament “. My life experience leads me to believe that good solutions depend upon thoughtful goals which are, in turn, are based upon a very good understanding of the problem(s) by a critical mass of stakeholders. Laundry lists of solutions (regardless of merit) are mostly just good thought experiments – which might possibly shed some light on the underlying problems. Otherwise, great solutions have little value without the framework of highly motivated people pursuing solid goals.

        Currently, the overwhelming majority of humans (the stakeholders) may understand some symptoms of our predicament, but are clueless about the underlying causes. Gail is making a solid contribution to that understanding – even if only a tiny minority of the people on the planet are listening. Therefore, we have no realistic goals to pursue and hence lists of solutions are mostly useless.

        Most of us here agree with the problem definition embodied in the idea of “limits to growth” that is driven by human population overshoot and wasteful consumption in technology based cultures. Oil depletion, GW, soil/ocean/aquifer issues, deforestation, etc, are symptoms of the problem. Human population overshoot exacerbated by excessive consumption is generally believed (on this blog) to be the underlying cause.

        But I completely agree with you that Gail and many people who comment on this blog regarding solutions demonstrate a right wing agenda. But, it really doesn’t matter. Iconoclast, myself and a few others (looks like you joined the group) could easily be accused of having a left wing agenda. Which still doesn’t matter. In a perfectly rational world we would agree on the nature of the problems, set goals, and then debate and test solutions to figure out what really works without contamination by rigid ideologies. We don’t have this world. We have an irrational world molded by the nobility, shaman, and warrior classes that evolved after the birth of agriculture – now their memes have crippled certain aspects of our mental capacity with the result that we can put a robot on Mars but not comprehend the basic Limits to Growth math.

        I agree with you that humans have the innate capability to understand the problems, set goals and implement solutions to greatly mitigate the impending consequences of our collective behavior. Yes, instincts and biological drives are a factor – but we have the means to redirect these drives. So, just for fun, here are a couple of my goal-solution sets:

        Goal: humane reduction of global human population to 4B by 2200. Solutions: universal sex education, totally free contraception-abortion, a plethora of no-child incentives (starting with a 1 child per 100 adults plan), etc. Of course the major impediments are the memes encouraged by political, religious, and economic forces – a minor detail!

        Goal: reduction in consumption of earth’s resources (and sinks) by 90% by 2200. Solutions: eliminate all transportation mechanisms that directly depend upon the burning of FF. Electric and human powered vehicles only – max speed limit of 35mph (for a variety of reasons). Localization of most food supplies. Eliminate A/C in nearly all places (hospitals exempt). Homes rely on passive strategies with 60 degree max winter temp from non-passive sources. 80% reduction of energy intensive industrial production of consumer goods, etc. Good luck with this!

        Goal: within 10 years achieve equity between today’s rich and poor (for many reasons). Solution: eliminate current interpretation of free enterprise, capitalism, monetary systems and replace with systems that value both human dignity and earth’s carrying capacity – long discussion.

        I’m sure you get the idea as you’ve said much the same (maybe less radical). So, my question is: how do we get humans to actually understand our predicament so we can proceed to the next steps?

        • Dave, you can call me David. I love to ride. I’m on my second road bike; a 04′ Trek 5000 that I would bet has 20,000 miles on. You really can have a different respect for energy & speed when it’s your legs pushing that carbon fiber horse down the road. Today’s bikes are a fine example of what could be. A ten when it comes to energy efficiency.
          Great question, I would love to say in a very short answer, education. But there is no time for that. It needs to come from the top down. The 55 mph is a great symbol, saves a lot of energy, optimal speed for a current system and starts to slow down the public. Realistically 2030 at the earliest would be the goal of Electric and human powered vehicles only. And that’s a big jump from 2025 54.5 mpg. The only way you’re going to sell this concept is to put the regulations far into the future and that’s also the best way to achieve the goal. I still have faith in mankind.

          • Bicycle Dave says:

            Hi David,

            Today’s bikes are a fine example of what could be

            Yesterday, I needed to do a bit of bicycle advocacy at a county advisory committee about 10 miles away. It was about 40F with a good breeze and I was pretty tired from a longer ride the day before – also, I’m older than dirt. But, it would be poor form for me to show up driving a car. So, I took it easy and let the bike do most of the work. It’s truly amazing how a modern bike can multiple human effort! I think most people just don’t realize how efficient bicycles have become. Of course, we need decent road surfaces and defense from motor vehicles. My wish (which is probably only a wish) for a 35mph limit is to make it much less dangerous to operate a Human Powered Vehicles (HPV) especially trikes and velomobiles.

        • xabier says:

          It’s very unfair indeed to suggest that Gail has a ‘right-wing’ agenda. In fact it’s perfectly ridiculous! Or is the failure to advocate left-wing solutions in itself deemed to be ‘right-wing’? Really, one gives up!

          • Bicycle Dave says:

            Perhaps I failed to make my point. Most of us come to the table with an ideological lodestar and this is OK if we’re sufficiently flexible to modify our beliefs during the course of constructive argument. Scientific hypothesis and political proposal both imply an untested proposition that needs more work and evidence. So, leaning right or left can be healthy for democracy as long as we don’t jump to conclusions. No reason to give up! But, my major point was that these biases really don’t matter if we can’t agree on the nature of the problem – and, I give Gail great credit for her work in defining the underlying causes to our predicament.

        • basically Dave, humans will not face those problems until an external force smacks us in the mouth with them.
          The solutions you suggest (no doubt tongue in cheek) would require a dictatorship far worse than anything Hitler, Stalin or Pol Pot dreamt up. right now Chubbycheeks Kim is trying it in North Korea to keep himself and his gang in charge.
          To regulate human behaviour, that is what we face.
          Not a pretty prospect is it?
          To control people’s lives, you must have controllers. Study history, it’s littered with them, they have all failed because human nature is fundamentally uncontrollable.
          It is nature’s purpose that every species functions at random to achieve the widest diversity.
          humanity has become nature’s oddity, in that we have been able to use fossil fuels to convince ourselves that the laws of physics no longer apply to us.
          Hence more people can exist on land that cannot support them, we ride in comfort at 30000 ft, live in places where we should freeze to death or die of thirst, build towers that do not fall over and double our normal lifespan, and call it the genius of humankind.
          It isn’t.
          It’s the accident if fire, and burning fossilised sunlight
          you will never get humans to understand that, it is not in our collective genetic interest to do so. We have evolved to consume what is in front of us, here and now.
          And than means (for the moment) fossil fuel energy sources.
          Nature has recognised that as a breeding advantage for us, and has allowed us to take it

          When that food/fuel source is exhausted, nature is indifferent to what happens next. We are perhaps unique in being able to imagine what will happen next, but those same thought processes give us denial too. So we don’t believe it. Maybe abstract thinking is our ultimate difference to animals, but we can’t be sure of that.
          That too is part of our future. We must remain in a state of denial and keep breeding and feeding, then when the fuelfest is finally over some of us will survive, most will not.
          It is perhaps an interesting quirk in our predicament that it is our energy use that sustains denial itself, in that it supports the media that says everything is just fine.

          • Bicycle Dave says:

            End of More,

            The solutions you suggest (no doubt tongue in cheek) would require a dictatorship far worse than anything Hitler, Stalin or Pol Pot dreamt up

            Although I think you make many good points, I also think you’ve not quite understood my main point: that the common person needs to understand the problems and force the leadership to act responsibly for the common good. Any solution requiring a dictator is ultimately going to fail. Which does come back to one of your main points that the common person will be clueless until smacked in the mouth. So, not a very cheerful picture.

            As for “tongue in cheek” – well, obviously my suggestions can be compared to the proverbial snowball in Hades. OTOH, I do believe in presenting a wide range of potential solutions to meet agreed upon goals – a kind of “brainstorming” approach. At this point, it’s a moot point as humanity has almost zero agreement on any widely accepted goals.

            • Christopher Johnson says:

              To Bicycle Dave and anybody else who wishes to express an opinion.
              I’ve made the point before and will be pleased to shout it to the skies: there is no point in trying to get a politician involved in an act of self-destruction, which is exactly what would occur if a politician were to address the issues of energy depletion, sustained economic contraction and the probability of rising social disorder.
              You might also wish to search for other references on the web to the limits to growth, the end of oil, armageddon’s imminent arrival, and such things. Do you want to be kept in the same cells as some of those perps? Some good conversations, maybe, but don’t expect your county commissioner to enjoy meals with you.
              Cheers

        • PatrickCN says:

          This is a first time post from a long time lurker. To be honest, my only reason to comment now was triggered by the repeated comments that this blog exhibits a right wing leaning. This baffles me, as I do not see it despite perceiving myself to be clearly left leaning.

          Maybe you could elaborate on what you mean by right leaning so that I can understand how you come to this conclusion.

          As I am European, I may have a different perspective on how left leaning may be defined. Foremost, however I think that any discussion should be based on data, evidence and societal as well as physical limits. Without an evidence based perspective all talk about “solutions”, adjustments of human behaviour and other mitigating strategies is unlikely to reach anybody other than the already converted.

          With that in mind, I have to accept, however unwillingly, that Capitalism, based on property rights, interest and debt has proven superior so far, simply because it is the last one standing. This may change with human societies having found a new dynamic equilibrium after adjusting to the Peak Oil/Peak resources induced changes, but this time has not come yet.

          It is virtually impossible to convince people globally to have less children without employing the strongest means of coercion. Not even the KP in China with its exceedingly strong grip could force that change quickly. And I sincerely doubt that we still have 30 to 40 years to produce a significant turnaround. E.g. the turmoil in Egypt will get worse when the government is forced to further cut food and oil subsidies. Somebody will starve, and it will be the poor.

          Historical evidence indicates that people will go to considerable lengths in times of resource scarcity to secure their survival. And that is what we are talking about. Because of population overshoot, the overwhelming majority of people living now will have to die prematurely. I see this as unavoidable.

          The sacrifices we would have to make so that all 7+ billion of us would be able to die of old age, would be so enormous that you would need a global enforcer to make everybody adhere. Exacerbating this condition is that the sacrifices would grow progressively for decades, as further resource constraints and further populations would make themselves felt. Considering that we do not have a global enforcer, this point is moot anyway. People simply do not constrain themselves willingly for the greater good for decades on end.

          I agree with Gail and Steve from Virginia (see his economic undertow blog) that our financial system is the weakest link, and seemingly already stressed to breaking point. When this link breaks, I expect to see a breakdown in societal and governmental entities (the seceding efforts by Scotland and Catalonia are prime examples for the canary in the coal mine).

          Personally, I expect to see more regional wars, increased civil unrest and, ultimately, large scale wars in the not too distant future. And most people will blame anybody be it bankers, politicians, immigrants, the rich, the poor, the Muslim, the Christian, the Jew, or any other group except from the underlying systemic forces:

          Population growth, Peak Resources and an exponentially growing monetary system in a finite world.

          ps. I love my bicycle.

          • broadly speaking, people only get along with one another when times are good. when times are bad they turn inwards–which is why Europe is fragmenting again
            I don’t think we will resort to war, unless the longbow makes a comeback.
            There isnt enough spare energy in the system for panzer divisions.
            as to global enforcers
            Enforcers invariably favour their own tribe—who they use as sub enforcers.
            therein lies the ultimate downfall of the enforcer. Either he’s bumped off by one of his own after his job, or by the starving mob who storm his palace gates.
            sorry

          • PatrickCN says:

            @ End of More
            I am not sure about the reasons that compelled you to apologise.

            I agree on your opinion vis a vis the enforcer, but think that your assertion about not enough spare energy to wage wars is not in sync with current developments. The Syrian proxy war shows that destruction and death can be delivered with very little energy or money invested. Also, any conflict large scale conflict between regional or major powers would be over in less than a couple of months. Fighting panzer divisions are WWII strategies with little merit today. So, no regression to longbows needed.

            And I think that in desperate times groups and nations are very likely to resort to wars. The Roman and the Ottoman empire were plagued by wars during their decline, and the people were not fighting for the last scraps of cheap energy with nowhere else to go. In my view, more wars with more participants are very much a certainty.

          • xabier says:

            You are very correct when you say it is unlikely that people will constrain themselves for a distant and common good – they usually fail to do so even for a more immediate and personal good!

            Speaking personally, I only learned to do so when I came up, suddenly, against very harsh financial constraints, and have never since lost the habit: the products of the consumer society no longer have any allure. It was a great shock: a shock to habits and assumptions passively acquired from society at large.

            Unfortunately, everything is being done by the vested interests created during the period of peak prosperity to foster the illusion that no such energy constraints really exist – it’s all a matter of ‘political choices’ or ‘political will’…….

            Interesting that you mention Scotland and Catalonia (one could add the Basques too): a central premise of all these movements is that once ‘free’, all problems would vanish and prosperity reign. Nothing more than winding back to pre-2007, which is what early everyone wants. ( Of course, there is a moral aspect in Spain,as central government is so utterly corrupt: but the implicit promise is a return to a Golden Age as far as modern consumers and welfare recipients recognise it.)

          • Bicycle Dave says:

            Hi Patrick,

            Loving one’s bike is a good thing :-)

            People simply do not constrain themselves willingly for the greater good for decades on end.

            I appreciate your thoughts and it seems your above quote is key to your POV. Although this behavior is prevalent today, there are paleontologists who suspect that we had more cooperative behavior pre-agriculture – I’ll have to leave that to the scholars. But, I’d suggest that we do have the capability to act willingly for the greater good. The question is: why not? Are we really no smarter than yeast?

            Regarding the Right-Left business: I’m hesitant to go very far down that path on this blog – It was meant to be a fairly unimportant comment (see my other explanations of this point). I think this blog’s most interesting reading has to do with defining the problems and making predictions (as you’ve done). Predictions are interesting thought experiments – perhaps valuable ones. But, not to completely dodge your question I’ll make some off-the-cuff observations: in the US, the conservative ideology (aka right-wing) espouses small government (“small enough to drown in a bathtub” is a famous line), minimal taxes and regulations, rugged individualism and personal responsibility, austerity is preferred over Keynesian economics, religious fundamentalism including restrictions on reproductive choices and the believe in American Exceptionalism and the miracle of progress, military superiority, skepticism about any science that challenges other beliefs, to name a few characteristics. Of course many will disagree. Liberals (aka left-wing) are generally less consistent in their ideology but tend to feel that more government is necessary to protect the common good and level the playing field, more supportive of taxation, prefer Keynesian economics over austerity, less religious, more environmentally-science inclined, less militaristic, more pro-choice for reproduction, more government provided social, health and educational services. Again, I sure many will disagree and I’m really not interested in pursuing this – just trying to give you a flavor of our left-right politics.

            Of course few people fall totally into one camp or the other. Depending upon the topic, I’m accused of being a radical right or left winger. Hopefully, I’m neither!

            As regards this blog, you can judge for yourself – and, it’s not just Gail but the many of the regulars who comment here that form the overall impression. Gail actually avoids offering explicit solutions as it seems she is not very optimistic that there are any really good options. However, her occasional remarks in this regard lean toward the conservative (IMO) although she clearly support women’s reproductive rights. Gail can speak for herself, this is just my reading. Perhaps her worldview is more accurate than mine – but, as I keep saying, this would be a more interesting debate if we actually had some goals against which to measure our various suggestions.

          • Patrick
            By wars I meant wars on a world scale. Syria is a regional conflict supported by arms
            from elsewhere. Syria doesnt have the energy sources to make munitions in any quantity.
            WW2 was lost by the side that ran out of gas first. The USA had unlimited quantities of it, Germany and Japan could only fight wars by looting it from elsewhere. The Germans made better tanks, but lacked the energy to produce them and fuel them. Warfare really is that simple. That’s why pre industrial battles lasted a day…longer periods just couldnt be supported
            Panzer divisions were allowed by energy availabilty, the strategy followed on from that.
            You cant devise a strategy before you have the fuel to drive it.
            Thats why I joked about the longbow—they are driven by human muscle

            • Christopher Johnson says:

              To End of More Regarding Warfare.
              In particular, WWII. Not only was petroleum critical to success and failure, but so was manufacturing capability. At the end of the war the US had put 50,000 airplanes in Europe. Not quite as many tanks, but still beau coup. The Americans won because they were superior at producing and transporting all the beans and bullets that were needed. The US had sent so many artillery pieces to Russia that when they crossed the Polish border there as one cannon every kilometer.
              US GIs in the Pacific carried much more gear than their Japanese opponents; it made them slower but they were better fed.
              Is all that necessary in war? Probably not for ‘weak’ insurgents such as Viet Cong or Taliban, who rely much more on human than machine power.

            • Mel Tisdale says:

              A modern nuclear war will be fought using counterforce weapons. this means that for the most part the war is over after the pre-emptive first-strike these weapons are capable of has been delivered.

              It leaves the aggressor, the one who fired first, the winner with only small damage from any retalliation that the other side was capable of launching before all its C3I facilities were destroyed and with them the ability to launch anything. Later on they will be too busy burying their dead and just trying to survive to fight any conventional war.

              The only problem that will apply to both sides is that counterforce weapons are ground-burst and thus very dirty as far as radioactive fallout is concerned. Those who have well stocked nuclear bunkers will be best able to survive.

        • there’s no doubt that we understand our predicament, but to expect mankind to switch from thousands of years of collective homicide to a future of collective gardening is taking naivety beyond extreme

  29. Denton says:

    Gail,

    I appreciate your unique analyses. I tend to share your view that solar/wind technologies are fossil fuel extenders, not replacements, at this point. You wrote about the PIIGS countries in this post. I recently read that Portugal is now generating 70% percent of its electricity from renewable, sources, mostly wind and hydroelectric. Spain’s decreasing consumption of fossil fuels since its recession accounts for a portion of this effect, but it is still an interesting development.

    If you are hurting for topics, I think Spain’s electricity generation developments would benefit from your skeptical-actuarial viewpoint.

    Thanks

    • Denton says:

      I accidentally wrote “Spain” a couple of times; I meant to write “Portugal.”

    • Thanks for the idea.

      I ran across this website showing data by year. It looks like the first quarter of 2013 was really unusual from a point of view of weather, from the big jump in amounts. The reports seem to say as much, also.

      • Denton says:

        It does seem like an abrupt jump from the graph you provided. Here is the very optimistic article I read regarding Portugal.

        • The thing you have to remember is that electricity consumption is only part of total energy consumption. Even if electricity gets to 70% renewable in a very wet windy quarter, it doesn’t mean that the economy as a whole has moved anywhere near that close. Auto, trucks, farming, and the construction industry still use oil. The new BP Statistical Review should be coming out in June. I’ll take a look at then, to see how the overall supply has shifted.

          • Dennis Beaudet says:

            I am a little confused. Is energy a poor equity invest or a great one? On one hand the theme seems to be a demand collapse but then the Citigroup report that demand is waning for crude is rebuffed as baloney, citing four points of rebuttal.
            Thanks for your interesting view. BTW in the book of revelation it speaks very clearly (for a book of spiritually discerned symbolism of the coming Tribulation that shall come upon the earth culminating in the public intervention of God in judgement as the end of it) of it taking a days wages to purchase a loaf of bread. That kind of lends itself to a utter financial collapse does it not?

            • Christopher Johnson says:

              Well, the silver value of a denarius, one day’s wages, was about US$1.50 to 2.00, depending on how badly the treasury or local governor had debased the metal. But it was worth 20 loaves of bread. The implication of Revelation is that our labor at tribulation will be worth 1/20 of its normal value. But what the heck, we can blame it on the Federal Reserve and their political masters.

            • Energy (because of the Investment Sinkhole Problem I have written about is taking resources away from other types of investments. If people have the wages to continue to buy it, the price of energy (in theory) should go up, because the cost of extraction keeps going up. One problem is that wages aren’t keeping up, so energy prices don’t keep up with cost of extraction. Another problem is that the companies doing the extraction have trouble getting out as much as they had hoped to–they run out of investment capital. So, I think the issue is that we are rapidly getting to a world where there are no longer good equity investments of any kind. Energy investments would be good ones, if it weren’t for those issues.

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