The Real Oil Extraction Limit, and How It Affects the Downslope

There is a lot of confusion about which limit we are reaching with respect to oil supply. There seems to be a huge amount of “reserves,” and oil production seems to be increasing right now, so people can’t imagine that there might be a near term problem. There are at least three different views regarding the nature of the limit:

  1. Climate Change. There is no limit on oil production within the foreseeable future. Oil prices can be expected to keep rising. With higher prices, alternative fuels and higher cost extraction techniques will become available. The main concern is climate change. The only reason that oil production would drop is because we have found a way to use less oil because of  climate change concerns, and choose not to extract oil that seems to be available.
  2. Limit Based on Geology (“Peak Oil”). In each oil field, production tends to rise for a time and then fall. Therefore, in total, world oil production will most likely begin to fall at some point, because of technological limits on extraction. In fact, this limit seems quite close at hand. High oil prices may play a role as well.
  3. Oil Prices Don’t Rise High Enough. We need high oil prices to keep oil extraction up, but as we reach diminishing returns with respect to oil extraction, oil prices don’t rise high enough to keep extraction at the required level. If oil prices do rise very high, there are feedback loops that lead to more recession and job layoffs and less “demand for oil” (really, oil affordability) among potential purchasers of oil. One major cut-off on oil supply is inadequate funds for reinvestment, because of low oil prices.

Why “Oil Prices Don’t Rise High Enough” Is the Real Limit

In my view, our real concern should be the third item above, “Oil Prices Don’t Rise High Enough.” The problem is caused by a mismatch between wages (which are not growing very quickly) and the cost of oil extraction (which is growing quickly). If oil prices rose as fast as extraction costs, they would leave workers with a smaller and smaller percentage of their wages to spend on food, clothing, and other necessities–something that doesn’t work for very long. Let me explain what happens. 

Because of diminishing returns, the cost of oil extraction keeps rising. It is hard for oil prices to increase enough to provide an adequate profit for producers, because if they did, workers would get poorer and poorer. In fact, oil prices already seem to be too low. In years past, oil companies found that the price they sold oil for was sufficient (a) to cover the complete costs of extraction, (b) to pay dividends to stockholders, (c) to pay required governmental taxes, and (d) to provide enough funds for investment in new wells, in order to  keep production level, or even increase it.  Now, because of the rapidly rising cost of new extraction, oil companies are finding that they are coming up short in this process. 

Oil companies have begun returning money to stockholders in increased dividends, rather than investing in projects which are likely to be unprofitable at current oil prices. See Oil companies rein in spending to save cash for dividendsIf our need for investment dollars is escalating because of diminishing returns in oil extraction, but oil companies are reining in spending for investments because they don’t think they can make an adequate return at current oil prices, this does not bode well for future oil extraction.

A related problem is debt limits for oil companies. If cash flow does not provide sufficient funds for investment, increased debt can be used to make up the difference. The problem is that credit limits are soon reached, leading to a need to cut back on new projects. This is particularly a concern where high cost investment is concerned, such as oil from shale formations. A rise in interest rates would also be a problem, because it would raise costs, leading to a higher required oil price for profitability. The debt problem affects high priced oil investments in other countries as well.  OGX, the second largest oil company in Brazil, recently filed for bankruptcy, after it ran up too much debt.

National oil companies don’t explain that they are finding it hard to generate enough cash flow for further investment. They also don’t explain that they are having a hard time finding sites to drill that will be profitable at current prices.  Instead, we are seeing more countries with national oil companies looking for outside investors, including Brazil and Mexico. Brazil received only one bid, and that for the minimum amount, indicating that oil companies making the bids do not have high confidence that investment will be profitable, either. Meanwhile, newspapers spin the story in a totally misleading way, such as, Mexico Gears Up for an Oil Boom of Its Own.

US natural gas is another product with a similar problem: the price is not high enough to justify new production, especially for shale gas producers. The huge resource that some say is there is simply too expensive to extract at current prices. Would-be natural gas producers cannot tell us this. Instead, we find a recent quote in the Wall Street Journal saying:

“We are not dealing with an era of scarcity, we are dealing with a situation of abundance,” Ken Cohen, Exxon’s vice president of public and government affairs, said in an interview. “We need to rethink the regulatory scheme and the statutory scheme on the books.”

Cohen could explain that without natural gas exports, there is no way the natural gas price will rise high enough for Exxon-Mobil to extract the resource at a profit. Without exports, Exxon Mobil will lose money on the extraction, or more likely, will have to leave the natural gas in the ground. With low prices, the huge resource that Obama has talked about is simply a myth–the prices need to be higher. Of course, no one tells us the real story–it seems better to let people think that the issue is too much natural gas, not that it can’t be extracted at the current price. The stories offered to the news media are simply ways to convince us that exports make sense. Readers are not aware how much stories can be “spun” to make the current situation sound quite different from what it really is.

What Goes Wrong with “Climate Change” and “Limit Based on Geology” Views

The Illusion of Reserves. Oil and gas reserves may seem to be “be there,” but a lot of conditions need to be in place for them to actually be extracted. Clearly, the price needs to be high enough, both for current extraction and to fund new investment. Other conditions need to be in place as well: Debt needs to be available, and it needs to be available at a sufficiently low rate of interest to keep costs down. There needs to be political stability in the country in question. Something as simple as a continuation of the uprisings associated with the Arab Spring of 2010 could lead to the inability to extract reserves that seem to be present. Other requirements include availability of water for fracking and the availability of skilled workers and drilling rigs.

In the past, we have been far enough away from limits that issues such as these have not been a big problem. But as we get closer to limits and stretch our capabilities, these become more of a problem. Right now, availability of debt at low interest rates is a particularly important issue, as is the need for adequate oil company profitability–things that are easy to overlook.

Wrong Economic Views Leading to Wrong Oil Views. Economists have put together economic models based on a world without limits. A world without limits is the easy approach, because mathematical relationships are much simpler in a world without limits: a relationship which held in 1800 is expected to hold in 1970 or in 2050.  A world without limits never offends politicians, because growth always seems to be possible, meaning a never-ending supply of jobs and of goods and services for constituents. A model without limits produces the simple relationships that we are accustomed to, such as “Inadequate supply will lead to a rise in price, and this in turn will tend to create greater supply or substitutes.” Unfortunately, these models omit many important variables and thus are inadequate representations of the world we live in today.

In a world with limits, there are feedback loops that cause high oil prices to lead to lower wages and more unemployment in oil importing countries. Thus “demand” can’t keep rising, because workers can’t afford the higher oil prices. Oil prices stagnate at a level that is too low to maintain adequate investment. High oil prices also feed back into slower economic growth and a need for ultra-low interest rates to raise demand for high-priced goods such as cars and homes. 

When prices remain in the $100 barrel range, they are still high enough to damage the economy. Businesses are not much damaged, because they have ways they can work around higher oil prices, especially if interest rates are low.  Most of the ways businesses can work around high oil prices involve reducing wages to US workers–for example, outsourcing production to a lower cost country, or cutting the pay of workers, or laying off workers to match lower demand for goods. (Lower demand for goods tends to occur when oil prices rise, and businesses raise their prices to reflect the higher oil costs.)

Workers are still affected by costs in the $100 barrel range, and so are governments. Governments must pay out higher benefits than in the past, to keep the economy afloat. They must also keep interest rates very low, to try to keep demand for homes and cars as high as possible. The situation becomes very unstable, however, because very low interest rates depend on Quantitative Easing, and it does not appear to be possible to continue Quantitative Easing forever. Thus, interest rates will need to rise. Such a rise in interest rates is likely to push the country back into recession, because taxes will need to be higher (to cover the government’s higher debt costs) and because monthly payments on homes and new car purchases will tend to rise. The limit on oil production then becomes something very remote from geology–something like, “How long can interest rates remain low?” or “How long can we make our current economy function?”

The Interconnected Nature of the Economy. In my last post, I talked about the economy being a complex adaptive system. It is built from many parts (many businesses, laws, consumers, traditions, built infrastructure). It can operate within a range of conditions, but beyond that range it is subject to collapse. An ecosystem is a complex adaptive system. So is a human being, or any other kind of animal. Animals die when their complex adaptive system moves out of its range.

It is this interconnectedness of the economy that leads to the strange situation where something very remote from the real problem (oil limits) can lead to a collapse. Thus, it can be a rise in interest rates or a political collapse that ultimately brings the system down. The path of the downslope can be very different from what a person might expect, based on the naive view that the problems will simply relate to reduced supply of oil.

A Case Study of the Collapse of the Former Soviet Union 

The Soviet Union was major oil exporter and a military rival of the United States in the 1950s through 1980s. It also was the center of a huge economic system, involving many other countries. One thing that bound the countries together was the use of communism as its method of government; another was trade among countries. In effect, the group of communist countries had their own complex adaptive system. Things seemed to go fine for many years, but then in December 1991, the central government of the Soviet Union was dissolved, leaving the individual republics that made up the Former Soviet Union (FSU) on their own.

While there are many theories as to what all caused the collapse, it seems to me that low prices of oil played a major role. The reason why low oil prices are important is because in an oil exporting country, such as the FSU, oil export revenues represent a major part of government funding. If oil prices drop too low, there is a double problem: (1) it becomes unprofitable to drill new wells, so production drops and, (2) the revenue that is collected on existing wells drops too low. The problem is then a huge financial problem–not too different from the financial problem the US and many of the big oil importing countries are experiencing today.  

Figure 1. Oil production and price of the Former Soviet Union, based on BP Statistical Review of World Energy 2013.

Figure 1. Oil production and price of the Former Soviet Union, based on BP Statistical Review of World Energy 2013.

In this particular situation, oil prices (in inflation adjusted prices) hit a peak in 1980. Once oil prices hit a peak, FSU oil production very much flattened. There was a continued small rise until 1983, but without the very high prices available until 1980, aggressive investment in new oil extraction dropped back.

Not only did FSU oil production flatten, but FSU oil consumption also flattened, not long after oil production stopped rising (Figure 2). This flattening helped maintain exports and the taxes that could be collected on these exports.

Figure 2. Former Soviet Union Oil Production and Consumption, based on BP Statistical Review of World Energy, 2013.

Figure 2. Former Soviet Union Oil Production and Consumption, based on BP Statistical Review of World Energy, 2013.

Even though total exports were close to flat in the 1980s (difference between consumption and production), there were some countries where exports that were rising–for example North Korea, shown in Figure 4. This mean that oil exports for some allies needed to be cut back as early as 1981. Figure 3 shows the trend in oil consumption for some of FSU’s allies.

Figure 3. Oil consumption as a percentage of 1980 consumption for Hungary, Romania, and Bulgaria, based on EIA data.

Figure 3. Oil consumption as a percentage of 1980 consumption for Hungary, Romania, and Bulgaria, based on EIA data.

A person can see that oil consumption dropped off slowly at first, and increased around 1990. All of these countries saw their oil consumption drop by at least 40% by 2000. Bulgaria saw is oil consumption drop by 65% to 70%.

The FSU exported oil to other countries as well.  Two countries that we often hear about, Cuba and North Korea, were not affected in the 1980s (Figure 4). In fact, Cuba’s oil consumption never seems to have been severely affected. (It is possible that exports of manufactured goods from the FSU dropped, however.) Cuba’s drop-off in oil consumption since 2005 may be price-related.

Figure 4. Oil consumption as a percentage of 1980 oil consumption for Cuba and North Korea, based on EIA data.

Figure 4. Oil consumption as a percentage of 1980 oil consumption for Cuba and North Korea, based on EIA data.

North Korea’s oil consumption continued growing until 1991. Its drop-off was then very severe–a total of an 83% reduction between 1991 and 2010. In most of the countries where oil consumption dropped, consumption of other fossil fuels dropped as well, but generally not by as large percentages. North Korea experienced nearly a 50% drop in other fuel (mostly coal) consumption by 1998, but this has since somewhat reversed.

By 1991, the FSU was in poor financial condition, partly because of the low oil prices, and partly because its oil exports had started dropping. FSU’s oil production left its plateau and started dropping about 1988 (Figure 2).  The actual drop in FSU oil production meant that oil consumption for the FSU needed to drop as well–a big problem because industry depended upon this oil. The break-up of the FSU was a solution to these problems because (1) it eliminated the cost of the extra layer of government and (2) it made it easier to shift oil consumption among the member republics, so that those republics that produced more oil could keep it for their own use, rather than sending it to republics which did not produce oil. This shortchanged non-oil producing republics, such as the Ukraine and Belarus.

If we look at oil consumption for a few of the republics that were previously part of the FSU, we see that oil consumption was fairly flat, then dropped off quickly, after 1991.

Figure 5. Oil consumption as a percentage of 1985 oil production for Russia, the Ukraine, and Belarus, based on BP Statistical Review of World Energy 2013.

Figure 5. Oil consumption as a percentage of 1985 oil production for Russia, the Ukraine, and Belarus, based on BP Statistical Review of World Energy 2013.

By 1996 (only 5 years after 1991), oil consumption had dropped by 78% for the Ukraine, by 61%  for Belarus, and by “only” 47% for Russia, which is an oil-producing state. At least part of the reason for the fast drop off was the fact that in the years immediately after 1991, oil production for the FSU dropped by about 10% per year, necessitating a quick drop off in consumption, especially if the country was to continue to make some money from exports. The 10% drop-off in oil production suggests that the decline in oil production was more than would be expected from geological decline alone. If the decline were for geological reasons only, without new drilling, one might the expect the drop off to be in the 4% to 6% range.

When oil consumption dropped greatly, population tended to decline (Figure 6). The decline started earliest in the countries where the oil consumption drop was earliest (Hungary, Romania, and Bulgaria). The steepest drop-offs in population occur in the Ukraine and Bulgaria–the  countries with the largest percentage drops in oil consumption.

Figure 6. Population as percent of 1985 population, for selected countries, based on EIA data.

Figure 6. Population as percent of 1985 population, for selected countries, based on EIA data.

Some of the population drop is from emigration. Some of it is from poorer health conditions. For example, Russia used to provide potable water for its citizens, but it no longer does. Some is from conditions such as alcoholism. I haven’t shown the population change for North Korea. It actually continued to increase, but at a much lower rate of growth than previously. Cuba’s population has begun to fall since 2005.

GDP growth for the countries shown has tended to lag behind world economic growth (Figure 7).

Figure 7. GDP compared to world GDP - Change since 1985, based on USDA Real GDP data.

Figure 7. GDP compared to world GDP – Change since 1985, based on USDA Real GDP data.

Nearly all of the countries listed above have had financial problems, at different times.

Belarus’s GDP seems to be doing better than the rest on Figure 7. Belarus, like the Ukraine, is a pipeline transit country for Russia. In Belarus, natural gas consumption has increased, even as oil consumption has decreased. This increase is likely helping the  country industrialize. Inflation occurred at the rate of 51.9% in 2012 according to the CIA World Fact Book. This high inflation rate may be distorting indications.

Conclusion

We can’t know exactly what path our economy will follow in the future. I expect, though, that the path of the FSU and its trading partners is closer to the path we will be following than most forecasts we hear today. Most of us haven’t followed the FSU story closely, because we wrote off most of their problems to deficiencies of communism, without realizing that there was a major oil component as well.

The FSU situation may, in fact, be better that what the Industrialized West is facing in the next few years. The FSU had the rest of the world to support it, offering investment capital and new models for development. Oil production for Russia was able to rebound when oil prices rose again in the early 2000s. As situations around the world decline, it will be harder to “bootstrap.”

One of the things that hampered the recovery of the FSU was the fact that the communist economic model proved not to be competitive with the capitalistic model. In a way, the situation we are facing today is not all that different, except that our challenge this time is competition from Asian economies that we have not had to compete with until the early 2000s.

Asian economies have several cost advantages relative to the Industrialized West:

(1) Asian competitor countries are generally warmer than the industrialized West. Because of this, Asian workers can live more comfortably in flimsy homes. They also don’t need much salary to cover heating and can more easily commute by bicycle. It is often possible to produce two crops a year, making productivity of land and of farmers higher than it otherwise would be. In other words, Asian competitor countries have an energy subsidy from the sun that the Industrialized West does not.

(2) Asian competitors are often willing to ignore pollution problems, reducing their costs relative to the West.

(3) Asian competitors generally depend on coal to a greater extent than we do, keeping their costs down, relative to countries that use higher-priced fuels.

(4) Asian competitors are less generous with employee benefits such as health care and pensions, also holding costs down.

Economists, through their wholehearted endorsement of globalization, have pushed industrialized countries into a competitive situation which we are certain to lose. While oil prices tend to push wages down, competition with Asian countries makes the downward push on wages even greater. These lower wages are part of what are pushing us toward collapse.

To solve our problems, economists have proposed a shift toward renewable energy and the implementation of carbon taxes. Unless these changes are done in a way that actually reduces costs, these “solutions” are likely to make us even less competitive with low-cost competitors such as those in Asia. Thus, they are likely to push us toward collapse more quickly.

To support this position, economists point to climate change models based on the view that the burning of fossil fuels will increase greatly in the decades again. In fact, if collapse occurs in the next few years in the Industrialized West, carbon emissions are likely to fall quickly. Because of the interconnectedness of the world system, the rest of the world will likely also encounter collapse in not many more years, and their carbon emissions are likely to fall quickly, as well. Even the “Peak Oil” emissions that are used in climate change models are way too high, relative to what seems likely to be the case.

If I am right about collapse being a possibility for the Industrialized West, then our problem will be that we as nations become so poor that we can no longer find goods to trade with Asian countries. Most of our goods will not be competitive as exports, and we won’t be able to simply add more debt to rectify the situation. Thus, we will become unable to buy many goods we depend on, including computers and replacement parts for wind turbines.

Breakups of many types are possible. The European Union may cease to operate in the way it does today. The International Monetary Fund is likely to cease operating in the way it does today, because of the collapse of many of its members who provide funding. The US will be subject to strains of the type that lead to break up. If nothing else, oil producing states will want to withdraw, so that they are not, in effect, subsidizing the rest of the US economy.

It is unfortunate that economists are tied to their hopelessly out-of-date economic models.  Part of the problem is that the story of “collapse around the corner” doesn’t sell well. The alternate story economists have come up with really isn’t right, but it is pleasing to the many who benefit from subsidies for renewables, and it makes politicians look like they are doing something. The specter of climate change in the distance gives an excuse to cut back oil use, among other things, so has at least some theoretical benefit.

It is unfortunate, however, that we cannot look at the real problem. Unless we can understand the problem as it really is, it is impossible to find solutions that might actually be helpful.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to inadequate supply.
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347 Responses to The Real Oil Extraction Limit, and How It Affects the Downslope

  1. donsailorman says:

    Gail,
    As usual I agree with your analysis, but with one qualification. I think the U.S. will do better than most other advanced economies in the future because of our huge agricultural exports. Even if our total consumption of oil-based fuels falls to half of present levels, we will still have enough diesel and other fuel to maintain our high productivity of farm products. Hence we will have something of great value for export.

    Oil is fundamental, but food is even more basic than fuel, because food is fuel for humans.

    • OscarThreeKilo says:

      Don Sailor Man,

      Caloric cost of agriculture is now at an astounding 10:1 due to chemical fertilizers and mechanized planting, weeding and harvesting. Add transport across the country, and you can see that this model does not continue past the “stall speed” problem ahead.

      • donsailorman says:

        Oh, I think there will come a time when we go back to organic gardens–but not any time during the next twenty or thirty years. Tractors can run on natural gas, and the U.S. is blessed with vast reserves of natural gas at (say) two or three times the current price.

        • Mark N says:

          Without cheap oil the natural gas will not get produced. Cheap oil is the lifeblood of our system. Take it away and I would not count on resources that seem extractable today.

          • donsailorman says:

            To a large extent, cheap natural gas can substitute for cheap oil. Even at treble current prices, natural gas is a bargain compared to oil at current prices. I think there will be a major shift away from oil and toward natural gas in the U.S. Indeed, this substitution is already happening, and U.S. gas is so abundant that we’ll soon (and foolishly) export a goodly amount of it.

            Note that starting with methane (natural gas) it is easy to make methanol–which is a good substitute for oil-based fuels. While the increase in U.S. production of oil gets all the news coverage, there has been a very substantial increase in U.S. natural gas over the past five years–despite low prices for natural gas.

            • Conversion is non-trivial, though. It takes both time and money to set up the process. There are a few gas-to-liquid plants now, but they are huge, expensive operations. If we make methanol, rather than a chemically equivalent fuel to what vehicles use now, then we get back to the “small percentage extender” problem we have now with biofuels. I haven’t really investigated this much, but if it were really cheap, easy, and chemically equivalent, it would have been done years ago.

        • Current tractors cannot run on natural gas, and it takes time, money, and resources to make the conversion. Getting natural gas price up to two or three times its current price is tricky, because coal price is lower, and coal substitutes for natural gas in electricity production.

          • donsailorman says:

            I think a transition to natural gas from oil-based fuels will take about twenty years. Banks currently have about 2.5 trillion dollars in excess reserves in the U.S. and so I do not think that there will be serious financial constraints when it comes to transitioning away from oil-based fuels. Of course, I’m an economist, and as such I take market power very seriously. But I’m also a sociologist (all coursework toward Ph.D. done), and speaking as a sociologist, I well know that economic models have serious limitations.

            What I am suggesting is that the U.S. may go a long way toward the T. Boone Pickens plan to substitute natural gas for gasoline and diesel fuel, and also to use wind power instead of natural gas for baseload electricity generation. There are problems with the Pickens plan, but to me the broad outlines make a lot of sense.

            • Leo Smith says:

              half right., Its not hard to use coal or natural gas for a chemical feedstock to produce synthetic diesel. It is not cheap though. However the idea of using windmills as baseload power is utter nonsense.

              wind is already 2-3 times the price of fossil, to use it to generate synthetic fuels which is a potential way of storing its output, would have a turnround efficiency of less than 30% at best. so trebling its cost yet again, at least. A solution that costs 10+ times more than existing fossil solutions is not a realistic solution.

              And wind without storage is not baseload.

              After fossil the next ‘least worse’ thing is nuclear. I’d guess nuclear synthesised fuel might be producible at less than twice the price of existing fossil.

        • Paul says:

          Don’t be fooled by the claims of cheap natural gas…. it’s only cheap because there is a glut as a result of free money flowing into a ponzi scheme

          Scientists Wary of Shale Oil and Gas as U.S. Energy Salvation
          Hughes sums up: “Tight oil is an important contributor to the U.S. energy supply, but its long-term sustainability is questionable. It should be not be viewed as a panacea for business as usual in future U.S. energy security planning.”
          http://www.sciencedaily.com/releases/2013/10/131028141516.htm

          U.S. Shale-Oil Boom May Not Last as Fracking Wells Lack Staying Power
          “I look at shale as more of a retirement party than a revolution,” says Art Berman, a petroleum geologist who spent 20 years with what was then Amoco and now runs his own firm, Labyrinth Consulting Services, in Sugar Land, Tex. “It’s the last gasp.”
          http://www.businessweek.com/articles/2013-10-10/u-dot-s-dot-shale-oil-boom-may-not-last-as-fracking-wells-lack-staying-power

          THE FRACKING PONZI SCHEME
          Robert Ayres, a scientist and professor at the Paris-based INSEAD business school, wrote recently that a “mini-bubble” is being inflated by shale gas enthusiasts. “Drilling for oil in the U.S. in 2012 was at the rate of 25,000 new wells per year, just to keep output at the same level as it was in the year 2000, when only 5,000 wells were drilled.” http://www.forbes.com/sites/insead/2013/05/08/shale-oil-and-gas-the-contrarian-view/

          Why America’s Shale Oil Boom Could End Sooner Than You Think
          http://www.forbes.com/sites/christopherhelman/2013/06/13/why-americas-shale-oil-boom-could-end-sooner-than-you-think/

          FRACKING WILL CREATE AN ECONOMIC CRISIS
          Overinflated industry claims could pull the rug out from optimistic growth forecasts within just five years. A report released in March by the Berlin-based Energy Watch Group (EWG) concluded that: “… world oil production has not increased anymore but has entered a plateau since about 2005.” Crude oil production was “already in slight decline since about 2008.”
          http://www.guardian.co.uk/environment/earth-insight/2013/jun/21/shale-gas-peak-oil-economic-crisis

        • sponia says:

          It is possible – although not exactly trivial – to convert a gasoline tractor to burn Propane at a reasonable cost. Methane – I’m not so sure. For one thing, you are not going to be able to drive a tractor around attached to a big plastic bubble; it’s going to require a pressurized tank of some kind to work as a vehicular power source. Or perhaps something along the lines of this invention: http://www.freepatentsonline.com/4495900.pdf

          If the plan is to produce Methanol from the methane first instead, the barrier to conversion is not so high; but the cost of the fuel is instead. I’m not sure what all would be involved in converting a diesel tractor to run on Methanol. I’ve never heard of it being done, at least not yet.

          I think there are a few assumptions here that are not justifiably likely. In any case, the real beneficiary of cheap Natural Gas is – cheap ammonia based fertilizer. In that case the relationship is direct. NG is the feedstock for ammonia. This could have a much bigger impact on the price of food than any shifting of the cost of production and transport from oil does, I think.

    • You may be right about food. It depends on how well we are able to keep up production and transport. If we can keep the food production part operating all right, I agree that we will do better. The question is how tightly everything is interlinked.

      • donsailorman says:

        I think everything is tightly interlinked. In 1970 I asked my students in Grand Rapids, MN what would happen if for one week there were no shipments of gasoline or home heating oil into Grand Rapids. Immediately, all the students grasped the importance of interdependence. When gasoline went to high prices in the 1970s a majority of male students publicly admitted to siphoning gasoline. When presented with the facts, most young people can accept them.

    • Dan Formin says:

      No amount of oil will make up for topsoil loss, the Ogalalla going dry, Florida getting very salty, or groundwater contamination from fracking, or snowpack disappearing from the Sierras.

    • Paul says:

      Perhaps in the long run – but in the short run the US is in a bad place with agriculture because most farms use oil and gas based fertilizers and pesticides.

      And once those are too costly or unavailable the land will produce nothing. It takes up to 3 years to change what is now dead soil to something that will produce crops.

    • Exports of whatever nature, only have ‘value’ if importers have other things of value to pay for them.
      Money has no value, it is only a medium of exchange. Therefore if countries needing US food imports are not themselves producing anything, they will not be able to import anything.
      World trade is an interlocked system, it is not something where ‘wealthy’ nations will survive at the expense of poorer ones, though in the short term it might appear that they are. Long term, when the system crashes we all go down with it

      • BC says:

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        Speaking of exports, the US is accelerating oil exports to reserves, production, and consumption of oil since 2005-08 (Peak Oil and the onset of the debt-deflationary regime), effectively exporting future oil supplies (and our capacity to replace and grow the capital stock, investment, production, employment, etc.) today to maintain the imperial military and keep “globalization” (US supranational firms’ foreign subsidiaries supplied with oil, capital goods, technology transfer, materials, etc.) going, even as “trade” and real GDP per capita peaks and decelerates.

        The is the definition of “Dutch Disease”, Peak Oil, and the the Red Queen Race/Seneca cliff.

        Regarding nuclear and EVs:

        http://www.nytimes.com/2013/10/09/business/energy-environment/report-says-a-shortage-of-nuclear-fuel-looms.html?_r=0
        http://www.greencarcongress.com/2013/11/20130404-jrc.html
        http://phys.org/news/2013-11-tesla-falls-years-battery-shortage.html

        • I’m no Marxist. but the concept of private property allows the sale of anything and everything for short term gain. irrespective of any future needs.
          We have now reached the stage where the country itself can be stripped out and sold because someone somewhere has the ‘right’ to do so

          • BC says:

            “We have now reached the stage where the country itself can be stripped out and sold because someone somewhere has the ‘right’ to do so”

            Indeed. Wall St. and the principals among the CEO caste have been doing this asset stripping and skimming of rentier gains from asset inflation since the 1980s, and to an increasing scale to wages and GDP since 2001-05 and 2008.

            Taking your argument to its logical extreme, the top 0.01-0.1% could privatize everything of economic value, including the state, print or lend themselves the trillions of dollars to do so, build an Elysium-like offshore, underground, or off-planet rentier techno-utopia, and sell the assets they don’t want to billionaire Chinese or the owners of the oil emirates, securing for themselves in the meantime the necessary resources and alliances to maintain a private military force to protect them.

            The rest of us would then be left to resort to “down-to-earth” cannibalism of the zombie apocalypse.

            Consequently, I fully expect to see the emergence of warrior- and Zen-like stoicism and monasticism/asceticism, i.e., discipline, conservatism, restraint, etc. vs. hyper-individualism, consumerism, hedonism, etc., to become post-growth virtues and default lifestyles for most of us in the years to come. The sooner one allies with like-minded fellows and reduces material and services consumption per capita/household/neighborhood/collective to the sustainable, comfortable/tolerable subsistence minimum/optimum, the better.

            Determine the minimum subsistence cost for one person at the local suburban cost for housing, transport, utilities, food, and health (not necessarily “health care”, which is the opportunity cost of living in such a way that one must become a “health care” consumer), and then cut that in half or by two-thirds (double and triple up); that’s what will be required hereafter for the bottom 90%+.

            But if one begins now to transition and cultivates the necessary psycho-emotional and social resources, one will be much more capable of adapting to the conditions as the “desirable norm”.

            • Leo Smith says:

              Hehe They might own it on paper, but do they know how to run it and keep it running?

            • I am less convinced than you are that the 0.1% will be successful in their efforts. Everything is too connected. We pretty much all will go down together, although there will be differences in different parts of the world.

          • I am afraid you are correct.

            • Interguru says:

              The environmental record of the “marxist” governments in the of the last part of the last century is even worst than those of the “capitalist” governments. In 1975 and 1985 I visited Czechoslovakia and saw forests of dead trees, killed by air pollution.

              I use quotes because the purported Marxist governments were really kleptocracies while our government is crony capitalism.

  2. Thanks for the post Gail! I have two questions.

    1) Isn’t peak oil still a relevant limit considering that even if the economy could tolerate ever increasing oil prices, oil production would still decline in the near future because we are not finding new fields at the same pace as we are exhausting the old, and wouldn’t lower oil supplies then cause problem to the economy anyway?

    2) If low oil prices was a large contributing factor to the FSU fall, how come other oil exporting nations didn’t run into similar problems at that time?

    Regards /Robert

    • kiwichick says:

      robert

      it’s called military expenditure; think cold war/ space race

    • I think the problem is that peak oil manifests itself in a different way than people are looking for it. People have been saying prices would sky rocket, and that production would drop by itself. This really isn’t quite the right version of the story. It is sort of right, but not quite right.

      It is really much more of a “Limits to Growth” story, where oil limits circle through the system, and disturb the overall system in ways that a person would never think of. We can end up with nasty surprises.

      Regarding why other exporters weren’t affected at that time, the Middle Eastern countries had a lot lower population than now, and were not trying to use the proceeds to fund their governments to the extent they are now. Saudi Arabia, Norway, and some others were trying to invest the proceeds instead of depend on them for day-to-day needs. Russia was trying to fund big military and space programs, and had a proportionately bigger population. Production in the UK, Norway, and Mexico was ramping up at this time. They weren’t really depending on it to fund programs. The view seems to have been, “If prices are low, we will sell more and make up the profits on volume.” This is a big part of what kept prices down.

      Venezuela cut its production back. It may have had financial problems–I haven’t looked. I know now it is overspending its income from oil.

      • Leo Smith says:

        Spot on.

        What is happening is that oil prices are hiotting ceilings at which point its simply not worth using oil, because other alterantives exist. And peoiple are naturally in their own micro assessments cutting back on its use.

        In may case for example, it is cheaper to buy online, get delivery, and return if not satisfied than it is to drive to a physical shop, and then find what you wanted wasn’t in stock or what you wanted after all.

        It was cheaper for me to buy a new low powered computer server, than pay for the electricity to keep the old one running.

        And so on.

        In short I am and millions like me are plucking the low hanging fruits of energy reduction. That is reflected in a sharp downturn in consumption in Europe of energy of all sorts. But there is a limit to even that. Maybe we can lop 30% of our energy needs by playing with the fringes, but we can’t knock 70% off without a radical transformation in the way we live, and even that is probably optimistic.

        That means energy gets more expensive as demand stabilises. Until we replace fossil with the next least worse thing wherever possible.

  3. Georgia me says:

    Gail….you are so right about warmer countries producing more food .When you think they also eat foods wrapped in banana leaves …..there is so much less garbage and waste as well.Unfortunately it appears that many of those Asian countries will be losing land mass and with their growing populations they will be sorely challenged as well.

    • kiwichick says:

      warmer; ie tropical areas will be devastated by global warming

      eg Philippines , Haiti, Thailand, pakistan in just the last 2-3 years

      November 2013 was the hottest november globally on record

      we have 3-5 years left before the Arctic ocean melts out completly in
      summer

      Without that NH airconditioner temperatures will soar

      we are in the death spiral

      • If we are in a death spiral, it happens whether or not we make a massive attempt to cut back on emissions now. We are just too close to the limit to cause a change now.

      • Leo Smith says:

        Well at least Arctic ice is substantially up on last year .

        http://ocean.dmi.dk/arctic/plots/icecover/icecover_current_new.png

        Snow is falling in Jerusalem. and across the Alps earlier than usual

        Yes, the jetstream is still far north keeping warm weather up in high latitudes but don’t be fooled.

        http://www.netweather.tv/index.cgi?action=jetstream;sess=

        Cold is coming.

        • Harry Willis says:

          Paul Beckwith of Ottawa University is very interesting on the question of jet stream perturbation. Essentially, since the Arctic is heating at a rate about 5 or 6 times the warming rate at the equator, the temperature gradient between the two is weakening. This is causing the jet stream to slow and meander, producing wiggly effects that carry cold weather and snow to Cairo or even Viet Nam, and produce warmer temperatures in the Arctic Circle than in Minnesota, at times. Part of weather weirding, which has severe implications for the reliability of American agriculture. Check the U.S. Drought Monitor site for the location and persistence of current droughts.

      • Paul says:

        I think that before we get to the point of catastrophic global warming – we will see a global economic collapse which will result in far less carbon being released into the atmosphere because a) industry as we know it will cease b) there will be no vehicles in operation due to lack of fuel and c) the population on the planet will be a fraction of what it is now because of mass starvation and disease.

        Global warming is well down my list of concerns.

    • I know Egypt has had a problem with the growing population taking up a lot of the land along the Nile that had been used for crops. I am sure some of the same thing is happening elsewhere.

  4. Bill says:

    Gail, you’re the only analyst – or one of very few – who seems to really understand the big picture, and more, who keeps distilling it and publishing it. Thanks for staying the course as so many others ‘go Galileo’ (referring to his two investments in the Tulip bubble, the second of which wiped him out) and capitulate to depression, or whatever’s made so many recently quit publishing.

    • I am glad you think I really understand the big picture.

      One thing I realized as I was putting this together is that the “peak oil” and the “climate change” positions have gradually been morphing closer together. The forecasts of the climate change types have been coming down.

      The peak oil folks want to sell their story, and want a way out, so assume that the decline is as slow as possible, and there is as much substitution as possible in the future. Both are concerned about high oil prices rather than low. If oil supply goes up, they have a problem explaining why–a big part of the problem now.

  5. RobM says:

    Well done!

    It seems to me that QE will not be stopped by politicians hoping to be relected until something forces the issue. This force might be one of the more probable triggers for collapse. What in your opinion might force a stop to QE?

    • I understand the Federal Reserve is now talking about a $10 billion month taper in buying ($85 billion => $75 billion). If even this little bit goes badly, and raises interest rates, then I wonder if they will try to go back up. Or if some other financial effects start going badly–the planned cut off in long-term unemployment insurance, for example, they might change course.

      • Scott Walker says:

        Hello Gail, Talking about the taper, the Ten Year T-Bill is rising and is at 3 percent. I wonder if they will likely back off as they see rates starting to rise and perhaps letting some air out of the stock and bond markets will scare the Fed back into a perpetual QE, perhaps even larger.

        I think they may taper a couple of time and see change they will be scared because they cannot roll over all of that debt higher rates. I bet by mid 2014 we will be back into some new kind of QE type program.

        The USA owes far to much to allow rates to rise much it appears but they may loose control and could be big financial collapse event looming. If we see rates again like we did in the 1970′s over ten percent we will surely see more trouble this time around and perhaps a US Sovereign default of debts and perhaps the end of the dollar as we know it. No currency in history has forever and the dollar has already lasted longer than most currencies in history. This will take some time however, but I bet it could be in the next five years.

        Scott

  6. Scott Walker says:

    Thanks, Hello Gail and all, Thanks for your new post which is interesting and Merry Christmas and A Happy New year to all as uncertain as things are. I would argue that higher prices are ahead for fuel, oil and gas etc.

    Since Oil, coal and gas is the most important commodity in the world, I am talking It will simply not just collapse, I see a slow price grind higher and people will be forced to pay the higher prices for extraction of these exotic resources via Fracking and if they are light sweet crude they are desirable to be refined into gas or diesel cheaper than the sour stuff that comes from tar sands and other areas that have the harder to refine crude.

    There is also the new portable nuclear reactors being built at factories that can be shipped.

    Link is below.

    Earlier we discussed the that I saw of too much electric power, but few ways to store it. We discussed our hopes for new batteries and hydrogen as a storage for electric power to run fuel cells these are all giving me hope for a future although I do agree Our Mother Earth has overshot the optimal population which would be under a billion I think given our current resources.

    http://www.utsandiego.com/news/2013/Aug/18/reactor-redefined-general-atomics/

    • It certainly would be “nice” if prices rise. I think that is why rising prices are so attractive to “peak oilers”.

      The rising cost of energy production is a sign of diminishing returns to producing energy. We need to dump more and more of our human efforts and more and more of our resources into extracting oil or whatever substitute we have in mind. This effort has to take place farther and farther in advance of actually getting the energy product out. (The problem is not exactly declining EROI–EROI does not measure enough of the pieces in my view.) By putting more and more into the energy system, there is less and less for everything else, so the “everything else” (that is, non-energy) portion must shrink. The way the economy, in fact, shrinks is through less wages for people and more people without jobs, leading to less ability to pay for goods and services. This lack of ability to pay for goods and services flows back as inadequate demand for products of all types, including energy products. This seems to be happening already.

      Going forward, I expect that collapsing debt will make the problem of too low prices for reinvestment even worse. In the past, increasing debt has been used as way of ramping up demand in advance of people being able to pay for goods. In fact, as we add more and more energy products that need to be paid for far in advance of when they pay back their benefit, this adds to the effect. If the economy could keep growing rapidly, this would not be a problem. The economy can’t keep growing, though, even with the new energy products. The new energy products don’t stimulate the economy enough to keep it from shrinking–they are too high cost, and their true benefit is too low and flows back into the economy too slowly. In a shrinking economy, it becomes harder and harder to pay back debt with interest. So there tend to be many more debt defaults, shrinking the economy even more. (If interest rates rise, before all of these things happen, the higher interest rates also tend to lead to debt defaults, with the same effect.)

      Economists have found a way around diminishing returns with respect to energy, by claiming that the economy doesn’t really need energy. Technology is enough. If you believe this, energy prices can keep rising forever.

      • donsailorman says:

        Gail,
        I think you are being a bit unfair to economists. They believe in the importance of energy. Where you differ from mainstream economists is in your assertion that there is no good substitute for cheap oil. Economists believe in substitutes. It is a dogma. But is it wrong? History supports the economists. But the future will be different. Along with you, I think energy from oil is unique. Substitutes will be awkward and slow and not completely satisfactory.

        • Leo Smith says:

          I’ll yake issue with both of you :). I think Gail’s point is not that economists don’t believe in alternatives, but they believe in an ever expanding economy as the only right and proper goal for social economics to pursue. Gail I think and certainly I,. feel that is a fundamentally unrealistic goal. Instead we need a steady state society that will stabilise most of the things that are currently growing exponentially. Or Nature will do it for us, unpleasantly. That’s where I agree with her and disagree with you.

          Conversely I agree with you and disagree with Gail that there are no viable alternatives. There are. They probably are not the ones you think they are, and they are probably not the ones you want, but yes, they exist.

          • donsailorman says:

            I agree with you that there are viable alternatives to cheap oil. Natural gas is the big one. But coal can be converted to liquid fuels, and I think that coal may be the “next big thing.”
            We will stop burning fossil fuels–but maybe fifty or a hundred years from now.

            • Leo Smith says:

              I’d say that the time scale depends on where you are.
              USA has a lot of coal. NO reason not to use that. Japan has next to nothing. They have to use nuclear. Europe? some gas, no oil. maybe gas is the next few decades but not as long as USA coal. China? coal, then nuclear. India? caol then nuclear.

              Not sure about S America, but probably nuclear too after oil. Canada? spoilt for choice really.
              Africa? coal then uranium in the south., maybe oil in the north and gas.

              I’d say though that peak fossil is about 20-25 years away, after which most countries will be hoarding what they have and looking at alternatives – mainly nuclear.

          • I am not convinced a steady state economy can exist, partly because we are so much in overshoot already and partly because we keep using finite resources. Even building more nuclear reactors would require using more finite resources. For example, fresh water is in limited supply.

            • Leo Smith says:

              Fresh water is not in limited supply worldwide.

              And with 2/3rds of the energy going to waste heat from a typical conventional coal or nuclear power station, desalination of seawater is very very simple and not that costly.

              Each country and each geographical area has its own resource limits. They will fail to grow for different reasons.
              These need to be addressed on a case by case basis.

              My posts are merely to demonstrate that in the end energy is not the primary limiting factor it seems at first glance to be. Energy we have.In abundance.

              Water, food supply, skills, education, political systems – these are all places where attention needs to be focussed more to achieve some sort of pull back from overpopulation and collapse.

              Rich people don’t need many children, and can afford to educate them. Poor people have children either because they don’t know how not to have them, or because its seen as their social security. At least one of 5 sons will look after his ageing parents….in Europe having children is a meal ticket to a free house and enough money to live off without ever having to work.

              As far as fears of not being able to decommission reactors in future…well the Egyptians never decommissioned their pyramids either. 3000 years later they were still gas tight. In the limit once the fuel rods are out 60-100 years and there’s nothing hazardous left.

              I cannot understand people who look with equanimity on a forced populations crash to 10% or less of current populations, with equanimity, and yet refuse to countenance the one thing we cannot do without to prevent it. No person of moderate intelligence and good will can possibly advance such a solution.

        • The idea of substitutes has been badly oversold. The high cost of transition has to be part of any analysis. Also, we gain a real benefit when oil and other energy sources are low-cost, because then the benefit they add in terms of goods and services that can be produced is far greater than their cost. I don’t think that this is considered by economists either.

          • BC says:

            Gail captures the essence here.

            As a trained eCONomist (forgive me for the irreverence) who has paid a high price professionally and personally for having tried, and failed, to appeal to the powers that be within the establised intelligentsia and their benefactors on Wall St. and among the owners of the Fortune 25-100, I can state unequivocally that eCONomists are not just clueless about thermodynamics, exergetics, and net energy return per capita, i.e., Peak Oil, there is ABSOLUTELY NO INCENTIVE WHATSOEVER for eCONomists to examine exergetics/net energy and to collaborate intellectually and professionally with physicists, biochemists, geologists, climatologists, sociologists, engineers, technologists, or any other “ists”. The vast majority of eCONomists are merely vetted, “well-socialized”, properly credentialed, and allocated imperial ministerial intellectuals who are paid handsomely to devise theoretical, mathematical fictions to rationalize Anglo-American oil empire in support of “globalization”, “austerity”, and the interests of rentier elite, increasingly at the expense of the bottom 99%+.

            But one should not blame them for seizing the opportunity for socioeconomic status and security. Would most of us do otherwise? Rather, it is that their status and security is based on false premises and self-deceit, most of which they did not invent but inherited from an era during which the US extracted oil at a constant-dollar price of $12-$20/bbl at 4-5%/year (3-4% per capita) for 50-70 years, an energy regime upon which Anglo-American oil empire was built and against which we increased debt to wages and GDP since the 1970s to an extent we can no longer sustain hereafter.

            However, despite a near doubling of “oil” extraction since 2008, US oil extraction PER CAPITA is down 50% since peak extraction in 1970, and down 40% since 1985 (secondary peak). No country can hope to sustain an industrial or post-industrial, debt-money-based economy and civilization and its standard of material consumption on the basis of such a decline in domestic primary energy extraction and transformation via industrial production into necessary capital and consumer goods and resulting complex, high-entropy, higher-order production and distribution of services.

            And this is the basis (or at least as I understand it by extension) of Gail’s argument, which is perfectly sound and obvious to anyone who has a basic understanding of exponential math and differential growth rates, which apparently most of us don’t, including eCONomists.

            Thus, as a few here have argued, we are not constrained per se by a shortage of “energy” but rather a means by which we can optimally provision EXISTING net energy per capita at necessary scale in the easilty accessible forms that are affordable to extract, process, and deliver per capita at a standard of material consumption and well-being upon which we can agree is acceptable for a large majority of us. As is the great challenge for political economy, and for human ape civilization throughout our history, we face a distributional challenge more than one of availabilty and cost.

            But if I perceive myself as singularly worthy of demanding and receiving 10-100+ times more resources, income, wealth, power, and security than the typical person in order to feel “rich” and “secure”, and thus to validate by worthiness, I will seek, and endeavor with all my energy to achieve, a similar scale of financial, economic, social, and political power vs. the other 90-99 out of 100 of my fellows.

            Thus, we have built a system that requires the labor and no wealth accumulation or socioeconomic status or security for the bottom 90% so that the top 1-10% can receive 20-50% of income and hold 40-85% of financial wealth, at the same time it costs 35% of GDP for local, state, and federal gov’t to protect the top 1-10% and placate (so far), or incarcerate, the bottom 90%.

            This is the story of the rise, peak, decline, and collapse of elites and their hierarchical civilizational systems throughout human ape history. We are not unique. But our civilization and its system of hierarchical upward distribution and power relations is the costliest by far in history; therefore, its decline and collapse will likewise be the costliest to the largest share of the human ape population in the history of the species.

            • Leo Smith says:

              ” requires the labor and no wealth accumulation or socioeconomic status or security for the bottom 90% so that the top 1-10% can receive 20-50% of income and hold 40-85% of financial wealth, at the same time it costs 35% of GDP for local, state, and federal gov’t to protect the top 1-10% and placate (so far), or incarcerate, the bottom 90%. ”

              Er not quite: with machines, requires the labor and no wealth accumulation or socioeconomic status or security of around 5% of a technocratic elite, so that the top 1% can receive 20-50% of income and hold 40-85% of financial wealth, at the same time it costs 35% of GDP for local, state, and federal gov’t to protect the top 1% and placate (so far), or incarcerate, the bottom 99%.

              It is an interesting mix. We have the wealthy, allied to those with political power, against the masses with – as it happens, with democracy – also political power.

              In between and with the real power, we have the technocrats. Those who have actual real practical skills. The Army for example. Those who run the infrastructure.

              The wealthy only hold sway by virtue of the world tomorrow functioning similarly enough so that their wealth actually convinces people to work for them today.

              It is widely believed that in the bronze age, bronze was a form of currency. Then the iron age arrived, and bronze had little or no intrinsic value at all.

              Woe, and thrice woe, to those whose entire fortune was in bronze axe-heads! :-)

              Perhaps this ultimately explains the moves afoot in the financial and political world to ‘save the banks’…

              Those who have usurped, and hold power now, would not do so in a collapsed system: In that system people with skills and with weapons hold power.

              Democracy in modern terms reflects the underlying power and political aspirations of first an elite of landowners, when land on an agrarian society was wealth, then by artisan and mercantile classes when trade and manufacture became as vital as food, and finally briefly, in manual labour when factories ran off manual skills, not off fossil powered machines.

              Post industrial societies require Energy, not Labour. Without the vast exponential expansion, they don’t require much Capital, either.

              The ground rules have already changed: but politics is still embroiled in a struggle between two protagonists, representing essential components of a system that has all but ceased to exist, neither of whom represent the future.

              Interesting times…Sorry Karl,. but I know who is going to win, and it isn’t the proletariat, Lumpen or otherwise, and it isn’t Capital, its the thing you feared more than anything.

              The Bourgeois intellectual.

            • Interesting thoughts. The system does keep morphing, and one thing and then another has value. For example, surgeons are very highly paid, but their work requires energy as well. Financial people are well paid, but once debt ceases to work, and it is clear that the exponential growth underlying financial models is a false promise, these skills will suddenly not be worth much. Even farmers who operate fancy equipment using GPS devices will find themselves without their usual jobs without the oil they need to run their devices.

            • Agreed. The fact that we are dealing with a system which is connected internationally adds a new dimension as well.

              Everywhere fossil fuels are extracted (including China most recently), there seems to be a big debt bubble, providing the ability for formerly poor people to purchase the goods fossil fuels will make. This debt bubble seems to go on and on. At some point, though, it becomes impossible to keep up, as the cost of extracting oil and other fuels rises exponentially, but wages do not. Governmental costs rise at the same time, but workers have a hard time finding good paying jobs. Governments use more and more debt to pay the benefits that they cannot collect enough taxes to pay for. At some point, the system has to crash.

      • Scott Walker says:

        Hi Gail, Yes, I agree – you are describing a forced shrinking of our supply lines against the wills of the millions that like to buy exotic fruits and veggies in the dead of winter. In most of the USA in the north nothing much grows except onions. A walk through our future supermarkets may reveal more scarcity and fewer choices of the stores we enjoy today. They may be available but at a prohibitive cost to you.

        The fresh veggies that appear at our supermarkets now are from far away such as Mexico or farther, so I think we are going to see two markets as we have now, the locals eating what is available locally and the wealthier bringing in the fresh produce, meats and shell fish and fish and the good stuff at higher and higher costs. But scarcity and high prices for quality veggies, fish and meat will be a harder and harder challenge for the many that want these foods in the years just ahead of us.

        We are already seeing prices for good fish and shell fish from 10-50 dollars per pound and just like oil it will continue to inch higher. This is a time of a harvest but it looks inflationary to me given the governing central banks of the world. Food inflation will surely be a challenge to face many in different countries in years to come. Not only that but the every day items paper towel and razer blades cleaning supplies etc. will also increase this year and in future years.

        I see inflation ahead not deflation due to their ability to inflate currencies along with shortages in food and energy. But I do believe our generation will squeak through this before it gets really bad.

        Scott

  7. SlowRider says:

    Your blog helped me to understand how 100$ oil is a burden on demand and production at the same time. While demand is more flexible, oil investment (fixing huge amounts of capital) has become difficult and uncertain.
    The FSU oil production was running on highly inefficient equipment from the 1920′s or even older. It was only after 2000 with foreign investment and high revenues from global exports that they could start to rebuild the industry and explore new fields.
    About the 4 Asian advantages – comparing China to India and Africa it seems to me that having a very strong central government with an obedient people made most of the difference. India and Africa also have good resources, low environmental standards, cheap labour, warm climate but they are getting nowhere, torn apart by wars, overpopulation and regional differences.

    • Thanks for your thoughts. China has had a strong central government with a lot of five year plans. We thought that model would never work with the Soviet Union, but it seems to work pretty well in China. Communism was a somewhat different, of course.

      I don’t think India and Africa have the history of obedience to central government. China does. In fact, I think the model of obedience is important in things such as school, and in implementing what are deemed to be best practices in farming, as well.

      It may be once “China’s day in the sun” is past, there aren’t any more cheaper places to move production to.

      • Don Stewart says:

        Dear Gail
        I want to just throw in a caution about China’s ‘strong central government’. About 20 years ago I met with a visiting delegation of Chinese. They asked me how to accomplish certain goals, one of which had to do with the burning of brown coal to produce electricity. We talked past each other for a while, and then I figured out that these guys from the Capital didn’t have the authority to tells the local guys what to do. Have things changed? Just last week I saw that the central government is trying to exert control over the hundreds of small coal mines and electricity plants, mostly financed at the local level, to get control over the pollution which is making the cities unlivable. Obviously, I wasn’t able to give very good advice 20 years ago. We’ll see if it works this time.

        Don Stewart

    • Paul says:

      I have lived in Hong Kong for many years and spent a fair bit of time in China – the Chinese – for the most part – despise their blatantly corrupt government – they literally hate the ‘princelings’ (children of high officials).

      The reason they do not revolt is not because they are obedient – it is because the government has (so far) delivered prosperity – the minute that stops the people will be on the streets and the government will be in big trouble.

      When this crisis hit in 08 there were massive factory closures – and there were many, many riots (google that … there is video of some)

      That is why the Chinese government has printed 15 trillion dollars and used that to create jobs by building ghost towns and other infrastructure that was not needed and is returning 0.

      When you hear about the cash crunch (see home page of the Ft.com today) that is all about the Chinese govt pumping in massive stimulus and having to pour more good money in after bad to prevent gargantuan defaults.

      This will not end well – and when it does the people will go after government officials – because they truly do despise them (I’ve heard this many times in conversations with cabbies in Beijing and Shanghai)

      • When I visited China, I heard a many conversations about government corruption. The population seemed to be much more willing to go along with rules, than in, say India. For example, I saw teachers teaching large classes (60 kids) of school children, and the children apparently behaving very well in China. In India, I heard that teachers were not regular in their own attendance. Children are much less attentive in class, apparently.

        So what you say seems to me to be probably right. I was amazed at the amount of building that was going up in China–all financed by debt, I expect.

      • dashui says:

        JBJ in the 1960 election had a net worth of 12 million, which would b 30 million today. He never had anything but a gov. job.

  8. timl2k11 says:

    I think this National Geographic video is a very interesting thought experiment, “World without oil” http://www.youtube.com/watch?v=MKiI1Pu78HA
    Thought experiments are crucial to predicting the future via contemplating alternate scenarios!

    • Thanks! I listened to the first part. The beginning scenario was clearly set up to be different from what might really happen. I notice from the comments that it has a Hollywood type happy ending, apparently from hydrogen energy. The real story is almost too terrible to tell.

      There was also an online game, World Without Oil, back in May 2007. One of the things they asked for was essays, and some of mine were among the winners. When I checked just now, the site didn’t seem to be up. It was up for several years after the game ended. (The link is to a Wikipedia article about the game.)

      • sheilach2 says:

        Unfortunately, those end of oil scenes always seem to work out to a unlikely happy ending.
        I think the corporations in their search for the cheapest place to make their products are cutting their own throats.
        As workers are downsized, automated & outsourced, they lose disposable income & demand more services from their governments who are also losing taxes to pay for those services.
        Without disposable income, they can’t buy the products they make or what’s being imported from rat hole countries. This will lead to more businesses failing & greater poverty.
        As oil becomes more expensive to extract, oil companies must raise their prices but if only governments can pay for it, “demand” will fall forcing “producers” to extract less forcing prices up to cover their costs leading to even less “demand”.

        This is a dead end loop, eventually, they will have to stop drilling to contain their loses.
        Governments will keep buying the oil as long as possible to maintain their control through the military & law enforcement to quell the riots from the people.

        When the governments fail, then so will control then all hell will break loose.

        OTOH, we could experience a massive CME that crashes the grid causing everything that depends upon it to fail, and a collapse of “civilization.”

        I hope I’m not around to see that particular ending either.

        • Agreed. Lots of ways things reach an unhappy ending.

        • Interguru says:

          “I think the corporations in their search for the cheapest place to make their products are cutting their own throats.”

          Whose throats are being cut?

          The workers’ throats is being cut.
          The shareholders’ throats is being cut.
          The society’s throat is being cut.

          Meanwhile the executives vacuum up obscene bonuses which can be used to build fortified redoubts when needed;

  9. “It is unfortunate, however, that we cannot look at the real problem. Unless we can understand the problem as it really is, it is impossible to find solutions that might actually be helpful.”- GT

    We can look at the real problem, and we do, just not at the aggregate Nation-State level. This is already a failed model.

    Reorganization on the cellular level, abandonment of high energy/high technology and elimination of finance and actuarial analysis in favor of Resource Based Living , focusing on Sustaining Universal Needs in Air Quality, Water Availability, Food Production and Affordable Shelter is what is necessary here.

    There ARE solutions. Just none you will get from Politicians, Economists or Actuaries. This is failed thinking, and needs to be abandoned.

    RE
    http://sun4living.com

    • Leo Smith says:

      Its all very well to say we COULD go back to living in the 16th century. The problem is that implies a sustainable population of less than 1/10th of what it is now.

      Unless you actively support a holocaust type solution to the other 90%, you aren’t being honest with yourself.

      And if you are, you don’t get my support.

      • Actually in the long term we need to go to pre-16th Century technology, but we don’t have to go that far back overnight.

        Similarly, though the total Global Population of Homo Sapiens needs to decrease substantially, that doesn’t have to happen overnight either. Downward transitioning of energy inputs along with transitioning methods of Ag from Industrial farming to permaculture, hydroponics and aquaculture can allow for a more spread out population decrease over a century or two, mainly through normal aging.

        To make such a stepwise transition, we need to begin to cellularize and develop more and more communities like SUN. We have to abandon the current systems as quickly as we can, every minute that we delay means more unnecessary death in the short term both for Homo Sapiens and the other creatures we share the Planet with.

        RE
        http://sun4living.com

        • Paul says:

          I don’t see how we get a gradual decrease.

          Without rehashing Gail’s excellent articles on this subject I will distill this into a few short thoughts:

          The cost to extract oil is already manifesting itself in collapsing real growth rates – debt and money printing have been deployed to combat that – they are palliatives – they will of course fail.

          Eventually there will be monumental defaults – and there will be no takers for expensive oil because there will be chaos – and few jobs.

          So the oil will remain in the ground.

          There are obviously massive repercussions from such a scenario but in terms of the global population I cannot see how this does not result in a cataclysmic die-off because:

          1. Industrial scale farms that use oil and gas fertilizers and pesticides will cease producing food. There are some strategic reserves that may be used for farming (but more likely the military will commandeer these resources) but once those are used up the food supply stops

          2. It takes up to 3 years to convert dead soil using organic methods to produce food. This food would be expensive.

          3. Supply chains break without gasoline.

          Sorry to be so negative but I simply cannot see how total chaos breaks out – look at what happened in the Middle East when food prices spiked a couple of years ago – that is a flea bite compared to what will happen when the mega farms stop producing food.

          • Leo Smith says:

            For an example of collapse,. look at many African countries post ‘independence’ for an example of how when even a rapacious corrupt government is removed, things rapidly fall into decay.

            Zimbabwe is a prime example.

          • I would add that even if we can, in theory, move from mega-farms to local agriculture, it is hard to figure out how to do this in practice. We need to keep up production during the entire period. We need methods that are a lot less fossil fuel dependent. Farmers need to be paid for their land or they will be very unhappy. Everything falls apart quickly. Agriculture in general requires a lot of energy input (human or animal labor, for example, and embedded energy of metals). It is not very sustainable.

    • I agree that you won’t get solutions at the aggregate Nation-State Level. You may not get answers from people in their role as politicians, economists, or actuaries. I don’t think we really know what are solutions, until they withstand the test of time.

      • sheilach2 says:

        We have about run out of time to sort things out in a rational manner.
        Politicians aren’t rational, too many of them have irrational expectations.
        They pay too much attention to economist & business & not enough to scientists who keep trying to warn them that their actions are destructive to the future of the nation.

        They continue to struggle for more growth, they continue to allow immigration, outsourcing of our jobs, cuts in wages & social supports but continue to give “welfare” to the wealthiest people & corporations & other activities that cut their income like wars, low tariffs, tax cuts for the rich etc.
        I think we are teetering on the edge of a fiscal & environmental cliff.

        I think we are on our own & will have to struggle to solve our own problems in spite of the actions against us by the governments both federal & local.

        The corporations may succeed in “strangling the government in a bathtub then flushing it down a toilet” but they will also be sealing their own fate.

        • paul starling says:

          Agreed, look at the Afghanistan and Iraq debacles not to mention Libya and Syria.
          One can only imagine if this capital had been spent on infrastructure education or R&D the benefits to society.
          I think we’re heading into a neo feudal existence and the facts on the ground seem to support this line of thought.

  10. J. Arnold says:

    Thanks for your insightful analysis.
    If $3-4 per gallon gas is a limit for US growth, what about Europe where gasoline prices are 2 1/2 times the US cost. These countries have massive expensive Socialist governments. By your line of thinking, these countries should be shut down, boarded up, and in permanent depression.

    • Brian P Woods says:

      Price is not the only factor here. Population density: vertically integrated public transport: relatively high taxes and revenue duties contribute – and we use just above half the volume (on a per person, per day basis) as that of the US and CND. The limit is 2.0 litres person/day (this is a disputed value): 2.01 and its happiness; 1.99 and its doom and gloom! But it serves as a ‘benchmark’. Anyhows, our major problem in Europe is demographics. We have more folk than we can feed, keep warm and house. The Big Bear holds the energy goodies. So, our politicians sort of tip-toe about the place.

    • European countries are hurting. Regarding gasoline price, what we see is the taxes that consumers pay out their petroleum fuel. I don’t think the taxes paid by businesses are correspondingly high. Thus the tax is a way of steering private consumers away from buying oil for vehicles and toward using trains. The price of oil purchased by businesses and reflected in the cost of goods sold is more like ours, I believe.

      In Norway, the taxes on gasoline are high, but the cost of building roads is astronomical. The taxes reflect the reality of the cost of land transport there. We can build roads much more cheaply here, and we need to drive longer distances, because of the way things are set up.

      Europe’s socialist system with the big pensions is not in any possible way sustainable. Europe may very well collapse before the US does.

      • Leo Smith says:

        UK ‘pump prices’ are around £1.39/l for gasoline and £1.45 for diesel.

        That works out at around $8.5 -$8.78 per US gallon

        20% of that price is VAT, a tax which is reclaimable by business. a huge amount is fuel duty, which is not. It varie from country to country,.

        Raw price of diesel ex of fuel duty but with 5% VAT , sold as domestic heating oil is around $3
        Diesel for agricultural and IIRC marine use is similar. It is illegal to use these on road vehicles.

        They both have additives which are detectable for the road. Removing these additives is however not costly enough not to make it worthwhile…and policing road vehicles is not 100% enforced.

        The purpose of the tax is in reality more about financing social policies than reducing car usage.

        Trains are also extremely expensive!

        For example Britain’s NHS (health care system) costs every household around $5000 per year to finance.

        It is however pretty GOOD healthcare, as my continued existence can testify.

        Aviation fuel is also much cheaper.

        The net effect of taxing road fuel is to make everyone very fuel efficient – people drive less road miles, and drive more fuel efficient cars. Few vehicles turn in less than 40mpg (Imperial gallon, a bit bigger than US gallon) and actual figures are often higher with 55-60mpg not being unknown for a domestic diesel car.

        However the impact on the movement of material goods is high, biasing industry towards ‘services’ and away from ‘manufacturing’ , especially of primary materials that are low cost and heavy, like iron and steel and aluminium. These are essentially outsourced to China etc.

        Germany, which prides itself in manufacturing, taxes domestic electricity users, which is used to subsidise industrial users.

        I would say that the final effect of this high taxation regime has been to drive ‘labour and energy intensive industry offshore to the Far East. The sanctimonius ‘low carbon footprint’ of Europe (it isn’t of course) is reflected in the vast carbon footprint of China. And the massive deposits of European money in Chinese banks.

        You are probably correct to say that for all the talk of sustainability, the European economies are essentially unsustainable. It is some what ahead of the curve with respect to the rest of the world, apart from Japan, which has been in a stagnant state for decades.

        However in my view, which you may not agree with, Europe has some advantages: it already is pretty fuel efficient as a result of the high taxes, and in general the infrastructure is of a higher standard than the USA – roads. railways, communications – all these are in reasonably good shape. And distances to and from ports are in general lower, making the high transport costs to and from them, somewhat less.

        It will have to be the first to transition – along with Japan – to the ‘new economic model’ and will ultimately benefit from that. However he transition will be painful, as it will be the first.

        Germany’s ‘Energiewiende’ – a much publicised self congratulatory move to renewable energy, is in reality a total disaster with electricity costs spiralling out of control, grid instabilities threatening industry, and is in fact backed up by massive burning of the most polluting coal known to man – low grade lignite. 50% of German electricity now comes from coal – more than it used to – whilst its remaining 8 or so nuclear power plans generate more than all the ‘renewable’ energy combined. Its carbon footprint has not lowered perceptibly as a result of its massive investment in renewable energy either.

        I collect stories about German ‘energiewiende’.

        http://www.platts.com/latest-news/electric-power/london/german-coal-fired-power-rises-above-50-in-first-26089429
        http://www.spiegel.de/international/germany/high-costs-and-errors-of-german-transition-to-renewable-energy-a-920288.html
        http://www.spiegel.de/international/germany/new-uk-nuclear-reactor-spurs-reexamination-of-german-policy-a-930822.html

        It has been very very tough for most European countries, especially the Mediterranean ones. Unemployment is high, tax takes are low, pensions and social benefits are under attack, and mass migration is under way, to the dismay of those ‘already there’ .

        The European union is now increasingly seen less as ‘our best and brightest, directing us to a rosy future’ than as ‘ a bunch of crony capitalists, disguised as socialists, who have usurped power and are corrupt undemocratic incompetent and dirigiste in the extreme.

        Likewise there is an increasing mood of ‘never mind saving the planet for our children who won’t live to see it at this rate, anyway ‘towards’ can we have something that works to make electricity with, please’ as the vast fraud that is renewable energy is gradually uncovered.

        There is in short a mood of suppressed anger at the failure of politicians either to deal with the situation adequately, as they promised they would, or to even report honestly on why they are unable to. That is leading to the rise of some pretty unusual (for Europe) political themes.

        Europe, having tried the centrist model is disintegrating into an ‘well at least he’s our son-of-a-bitch’ mentality with nationalism on the rise and a mighty backlash against the EU, which is now less the generator of cheap borrowed money to buy votes with than the stern fiscal enforcer of swingeing austerity. And national governments, still not quite puppets under the thumb of Brussels, are starting to defy the Union in ways they wouldn’t have done a few years back. Plans to exit the currency and the Union itself are now discussed openly in many places.

        IN short the European Union has turned from Rich Uncle into Godfather … from dispenser of largesse to criminal protection racket. Comparisons with the USSR, whose ex members are prolific in its ranks (Merkel is an ex East German communist apparatchik) are openly made. More to the point, the EU is now no longer seen as the vehicle by which social and political change is implemented, but as the chief obstacle to utterly necessary political and social change being allowed to take place.

        So whilst the chances of a collapse of the EU are high – turkeys don’t vote for Christmas, and Eurocrats don’t vote to lessen their pay checks power and influence – the chances of a total European collapse are somewhat less.

        There is a lot that works well in Europe, and there are enough smart people who, if they can convince the electorate they know what they are doing, can replace those who patently do not. Normally those smart people would not be in politics at all, but right now, they feel they have to be.

        IN short we have realised that politics, energy, social issues and economics are all far too important to be left to politicians.

        • SlowRider says:

          Bravo! You are summing it up pretty well. I think it is difficult for Americans to grasp the anger we feel about the overpaid, clueless technocrats in Brussel, while at the same time clearly seeing that we will be the first generation for whom the pension system won’t work anymore. But we are made to pay more and more into it. People use every legal and illegal way not to pay taxes.

        • Thanks for your insights and the links. I agree that the low carbon footprint of Europe is part of what led to the high carbon footprint of China. We need to be measuring the whole world, not one country.

          • Leo Smith says:

            The tragedy is it isn’t that low when all is said an done. It has been a pointless expensive exercise in achieving nothing more than a transfer of money and power from the citizen to the rent seeker and his politician allies, and to the Far East.

            And that realisation is dawning on an increasingly angry citizenry.

            They feel rightly or wrongly that they have been asked to make considerable sacrifices, and have done so, in order to prop up what transpired to be banks governments and foreign industry.

            One side of the social(ists) contract has been breached, and they may never be forgiven for it.

        • Chris Johnson says:

          Zbigniew Brzezinski wrote in ‘The Grand Chessboard: American Primacy and its Geostrategic Imperatives’:

          “Too rich to be relevant to the world’s poor, [Europe] attracts immigration but cannot encourage imitation. Too passive regarding international security. Too self-satisfied, it acts as if its central political goal is to become the worlds most comfortable retirement home. Too set in its ways, it fears multicultural diversity”.

          Might Leo have some relevant comments about this observation?

          • Leo Smith says:

            Well I think it is a very understandable view to take if you are looking from outside, at Europe, considering it a monolithic bloc whose citizens actually support what their so called leaders claim to be doing.

            Under the surface, its turmoil. Because they have no hope of delivering any of it..
            .

        • BC says:

          “For example Britain’s NHS (health care system) costs every household around $5000 per year to finance.”

          In the US, public and private “health care” costs $9,200 per capita and $24,000 per household (median US household income is $50,0000). No, those are not typos.

      • Brian P Woods says:

        “Europe may very well collapse before the US does.”

        I wonder. To me its more like a case of Dry Rot: slow and treacherous. Then something, usually semi-trivial, does ‘collapse’ and you start to get difficulties of both increasing difficulty and extent.

        The US is a single political entity with major centres of population (where the cracks will first appear) on East + West coasts. Europe is a very mixed political bag. Its probable that some individual countries will experience problems before others. How and when political disorder spreads across different states would tax the ingenuity of any Political Scientist. And the UK and Ireland are islands.

        My guess, for what its worth, is that we will get stages of economic regression. In Ireland we have regressed at least a decade, to mid 1990s level. We still manage to consume (in the range) 5 – 7 litres per person, per day of liquid hydrocarbon fuel. So we could afford to drop back to 3 litres ppd before really serious problems would manifest themselves. Middle Europe is the bogey: its energy poor.

        If there was a general ‘die-back’ to 1930 economic levels things could probably ‘stumble’ along for perhaps several decades. Unless someone starts another land-war – ‘to settle things’! Hungary, Ukraine and Belarus are looking a tad dodgy.

        • Leo Smith says:

          Only mid 1990s? here in the UK it feels like the 50′s!

          Down in club Med, its looking similar. Or worse.

          https://www.google.co.uk/search?q=European+riots&sa=G&hl=en&tbm=isch&tbo=u&source=univ&ei=AKq2UqK6LIajhge99IHgAQ&ved=0CC8QsAQ&biw=1248&bih=682

          I have to say hats off to Oireland for biting the bullet and doing an almost inconceivably honest job in facing up to the realities. If you would just scrap those useless wind turbines you are planning on building (yes, I have contact with people working for Eirgrid) you would be in fine shape.

          And find a replacement for Brian O’Driscoll. Then Irish eyes will truly be smiling!

          • Brian P Woods says:

            Now, now Leo. Get yourself in some bother with suggestions like that! Yep, its not wind farms we need, its lots of broad leaf forests – and NO fracking! Economy has regressed at least a decade. It will be ‘lights out!’ when oil prices start their up-trend. Best wishes for the holidays.

  11. Pingback: evolveSUSTAIN: News and innovations in global sustainability.

  12. Ikonoclast says:

    If oil limits and general limits to growth (global physical limits) cause economic problems which cause physical economy problems then the ultimate cause of our problems is still the physical limits.

    I would just want that point clear. The ultimate cause of our problems is still the physical limits. The induced economic problems may then mediate the collapse but that does not change the fact the the ultimate cause is real physical limits.

    I think Gail underestimates the level that oil prices could go to. I think $200 a barrel is quite feasible. Yes, the economy would be harder to run at that level but it would run. It might well be the case that the poorer 50% who can mostly own and run cars now could not afford to own and run cars then. So we would see higher unemployment at that time (maybe 20% to 25% i.e. a permanent, deepening depression) and many people unable to travel except by foot, bicycle or mass transit. Mass transit systems by then would be bursting and ramshackle. This is the near future as Gail says; by 2020 it will look like this.

    So what will it look like by 2030? That is anyone’s guess as a lot of disjunctions will occur by then.

    Oil is not the only concern. I think a key concern is fresh water. By 2030 it looks likely that half the world’s population will not have enough fresh water for all necessary uses; drinking, washing, industry and agriculture. Fresh water shortages might be more limiting than oil shortages. Though of course, such shortages will interact and reinforce each other so it will be hard to say which shortage is the major limiting factor.

    • SlowRider says:

      (“I think Gail underestimates the level that oil prices could go to. I think $200 a barrel is quite feasible.”)
      Yes, but it’s not necessary for collapse. Oil prices HAVE already skyrocketed. As long as oil stays in the 100$ range, “peak cheap oil” is here for good, crushing an economic model used to 20$-30$ oil. If oil goes back to 50$ and not only for a short spike, we are in a different setting, but it seems unlikely.
      Watch some movies from the early nineties when oil was cheap for the last time – you can feel the American Dream still alive.

    • I agree that the ultimate cause of our problems is still physical limits. Perhaps I didn’t make that clear enough.

      I am not sure that we have as much lee-way as you think. The financial system is already in bad shape in the US, and there are quite a few countries near the point where they are unable to pay back their debt. Much of Europe and Japan are in terrible shape; the US is not a whole lot better. $200 oil cannot happen in my view. I think we would have a hard time at $125.

      Fossil fuel power plants are a big user of fresh water. The good news is that if they go out of business, there will be more water for people. But I do agree that water is a problem, in part because aquifers have been pumped too low.

      • Leo Smith says:

        IN what way are fossil power plants big users of water?

        The steam cycle is closed. They use cooling water sure, but that doesn’t disappear, it gets returned to the river/ lake or or sea pretty much the same it came out, just warmer that’s all.

    • Paul says:

      As many have pointed out the global economy will not work with 200 oil – it is not even working with 100 oil.

      The problem is that high energy costs result in a cascading effect through the economy – people spend more on energy which means they spend less on other items – this causes layoffs – which stresses the social safety net – as well as additional layoffs as the laid off have no spending power – which means nobody can afford the expensive oil – which means that oil stays in the ground.

      I do not think we will ever see 200 oil because the global economy will collapse well before that happens – it is in fact collapsing now – money printing is delaying things a few years.

  13. I’m pretty sure that our use of oil is too unefficient.

  14. ravinathan says:

    An important new paper by David Holmgren, one of the founders of Permaculture. The paper is consistent with Gail’s outlook financial collapse as a result of expensive oil. Holmgren’s paper takes this outlook further by investigating a number of possible scenarios including the potential for green growth and nuclear energy which he sees as unlikely, again consistent with Gail’s view. Nonetheless he makes the case that increasingly desperate centralized governments will try to keep credit flowing to energy investments even at the cost of ultimately disastrous climate change. His nesting of various scenarios at different regional scales is an innovative and important contribution to the discussion. Overall an outstanding discussion that I would strongly recommend to those searching for analysis grounded in reality.
    http://holmgren.com.au/wp-content/uploads/2013/12/Crash-on-demand.pdf

    • Thanks! The thing I think is wrong with Holmgren’s analysis is that he assumes that central governments have more power than they do. A more likely scenario when oil is in scarce supply is that governments will collapse. Right now, we can see what Mexico and Brazil are doing, when oil investment is too expensive for the central government to finance: They are trying to get outside oil companies to come in and do the work for them, for a not-too-large cut of the profits. The United States is not in any position to finance a huge expansion of drilling either. Neither is Europe.

      The current US interest in drilling wells will run out three years or less, especially if interest rates rise. Homgren’s concern about climate change assumes that the energy decline goes on for decades if not centuries. It is hard for me to imagine this. We will lose electricity about the same time as oil–within a few years at most. Without electricity, we can’t do much today. Banks can’t even operate.

      • sheilach2 says:

        I think governments are only as strong as their tax base.
        As that shrinks, there is less $ for the military & law enforcement & without that, they lose control of the country.
        Some corporations would like that, the extreme right has constantly fought to shrink the government giving them more power but if the economy collapses, they lose their wealth thus their power.
        I also don’t think fracking will last much longer & once that fails then oil prices will rise again causing a further downturn of the economy which leads to fewer taxes & a weaker government & fewer social services leading to “civil” unrest & worse.

        A lot of people are going to get real pissed off when their “god of Israel” fails them as thoroughly as he did the Jews during WW2. Nothing fails like prayer.

      • ravinathan says:

        What Holmgren offers to you Gail is an example of meta- analysis which results in four meaningful scenarios on a grid of climate change severity versus oil depletion rate. I think your work can benefit from a similar scenario based exercise since it allows for manageable complexity in analysis. Holmgren’s Brown Tech scenario which he sees is already upon us results from lower depletion rates due to substitution from non conventional sources associated with severe climate impacts from dirtier production including nuclear. (Yes, nuclear is ultimately dirty). To your question as to where the money is going to come from for these investments, my response (and I suspect his) would be from western government subsidies for energy production through money printing. Western governments will stop at nothing to keep the system afloat. The consequence of Brown Tech will be risking extreme climate disaster and a disastrous shift to a Lifeboat scenario. Sinking Ship may be a better description since permaculture assumes the availability of a viable ecosystem for plant growth. Without that it’s curtains folks, sorry Permies. What Holmgren is suggesting is that a significan portion of the middle class exit the system (and that means no banking, no IRA’s, or 401k’s) in sufficient numbers worldwide to bring down the system quickly before Brown Tech succeeds in destroying the environment required to support life. He is willing to be labeled a anarchist/ terrorist and I suspect many among the climate activists will agree with him. This is a path breaking turn for a permaculturist if you think about it. Will he succeed? What do you think?

        • Don Stewart says:

          Dear Ravinathan
          Here are a few thoughts on Holmgren’s proposal.

          First, see James Hansen and others on the true nature of the carbon emissions challenge:
          http://www.plos.org/wp-content/uploads/2013/05/pone-8-12-hansen.pdf
          We must immediately begin to ramp down carbon emissions and we must take action to sequester a significant amount of carbon in the soil and in trees.

          Second, see the carbon footprint graphs near the end of David’s article. Clearly, it is possible for ‘middle class’ people to live with a much lower carbon footprint. Darren Doherty describes the Holmgren household as ‘enlightened peasants’. It can be done.

          Third, see this video from Geoff Lawton:
          http://www.geofflawton.com/sq/34650-reforesting-with-goats
          The Lawton video is just one of many examples of using money and human effort to create wealth which is actually a capital asset. And the capital asset is real, rather than monetary.

          Fourth, consider that if Gail is right, money invested in promises to pay are virtually worthless over a realistic time span. Close your ears to the sound of the Central Banks telling you that the rise in stock market values is real wealth.

          My conclusion is that, looking strictly from a selfish view of the world, it makes sense for a middle-class person to withdraw their money from the faux world of the bankers and to invest it in building real capital assets which will have value even if the monetary system collapses. As David speculates, the withdrawal of middle class money might be enough to collapse the system, and if the middle class invests money in the carbon farming and reforestation programs which Hansen mentions and which people like Albert Bates promote, then disastrous climate change is averted and we go into the future with more real capital assets than we otherwise would.

          As for the argument that ‘if we don’t consume it, someone else will’, it all hangs on David’s speculation that a determined group of middle class ‘disinvestors’ can crash the system. Gail talks about how fragile the system is, so perhaps a few determined people can bring it down.

          As for the argument that it will be horrible. David and others living a frugal lifestyle give the best possible reply to that argument.

          As for the argument that people living in London apartments or Fifth Avenue condominiums can’t participate…of course they can. Jan is always seeking investors. I know a pretty rich man who is investing his money with small farmers.

          Don Stewart

          • ravinathan says:

            The fact remains that permaculture presupposes a viable bio system and builds its strategies upon that. It’s a fundamental article of faith that needs to be recognized and questioned. The triggering of 25 self reinforcing feedback loops in a Brown Tech world with still growing human population threatens the core assumption of viability. Unfortunately permaculturists slide over these inconvenient facts and speak of greening the deserts, use of goats etc. Unfortunately all permaculture strategies presuppose the existence of an atmosphere that supports desert greening and goat life among other things.

            • Don Stewart says:

              Dear Ravinathan
              I guess I don’t understand your comment. When Darren Doherty focuses on carbon sequestration in grasslands and when Albert Bates comes to North Carolina to talk about carbon farming, I would have to say that at least some permaculturists are talking and doing real world things which demonstrate an ability to mitigate climate change. Albert recently wrote an article for the UK magazine Permaculture which laid out the hard work in terms of gigatons of carbon and what we have to do to become carbon negative for several decades. That doesn’t sound to me like he is just assuming BAU.

              When Toby Hemenway delivered his lecture at Duke, he talked about a 21st century population sliding to ‘between 500 million and 2 billion’. That doesn’t sound like BAU, either.

              I agree that Geoff Lawton’s herculanean efforts to Green the Desert could probably be more productive if applied to some more promising terrain. But, then, perhaps we do need a small demonstration of just what is possible. One potential way out of our box canyon is to bring trees back to the Sahara. If Geoff can grow trees on the Dead Sea, could we regreen the Sahara? There have been some very low-tech and low energy methods employed to plant trees in Mali and other places.

              Can you be more specific?
              Thanks…Don Stewart

      • Scott Walker says:

        Hello, the world is so dependent on oil the price it could well pass $400 per barrel at some point, then you will see everyone downsizing their cars, large trucks and SUV’s left parked rotting for sale. The trucks will be useful but perhaps we will see fewer of them running empty of loads on the highways if gas goes above say $5.

        In the US, it is currently more dangerous to drive a little car since the small cars are totally out numbered by the big trucks and suv’s. It would be safer if we all drove small cars and the big trucks would be instead trains. Perhaps smaller electric delivery vehicles in our cities to make deliveries from Train Depots instead of all of the diesel trucks, truckers may be out of a job but could get new jobs driving the electric delivery vehicles. Hopefully new jobs would be available driving the smaller electric delivery trucks.

        Once again – another expensive transformation that we may not be able to afford. I do see a comeback in rail at some point when the prices of oil rise to say $200 a barrel.

        Regards,
        Scott

      • Paul says:

        I very much agree with you Gail. It will be impossible for a centralized government to exert control – particularly in the larger countries like the US, Canada and Russia.

        I see these countries splitting into small communities with local governments (that is a best case scenario)

  15. Leo Smith says:

    Its very interesting to look at primary energy in terms of a levelised cost per unit energy to make sense of what you are saying here Gail

    1 boe = 1628.2 kWh according to the internet ;-) so at say – $100/barrel, the levelised cost of a raw kWh of energy of the oily kind comes out at 6c give or take.

    That is substantially similar to European (but not US) natural gas and well below renewable energy (especially with accompanied storage to render it usable) and somewhat below nuclear power, but not below what nuclear power COULD cost if it were subject to rationalisation.

    Its is IIRC somewhat above US coal derived electricity as well. Coal is massively cheaper than oil in the US.,

    Let’s look at coal, as an example. Ok its not as useful as oil, but in raw energy terms., we can do a comparison.

    http://www.eia.gov/coal/news_markets/coal_price.cfm

    Shows that delivered coal is around $150 per short ton and again using rough conversion, with 1000kg per short ton and 6.7Kwh per kg energy density, that comes out at 2.2c per Kwh.

    Totally ignoring climate change and carbon issues*, that means that coal burnt at 37% efficiency in a power station, will yield a fuel cost of 6c a kwh also.

    Or if you just want heat, then its 2.2c a unit.

    Its old data, but this link estimates that nuclear power could be even cheaper than coal or gas

    http://www.nuclearfaq.ca/cnf_sectionC.htm

    Coal to gas and coal to diesel synthesis is possible also. a 30% yield of coal to diesel or gasoline yields a fuel cost of around 7c a kwh. Very close to ‘$100/barrel for oil’ prices. Especially as the oil itself needs distillations and cracking.

    Now my point is simply this: we are approaching oil and gas prices – not everywhere, not all at once, and not all the time, but we are approaching oil prices, that make it uncompetitive with other fossil fuels and with nuclear.

    Foe the first time in 20 years I can smell coal being burnt in open hearths in my rural English village.

    Anecdotal yes, but someone somewhere has worked out its cheaper..

    As I pointed out when I wrote ‘beyond fossil fuels’** there is no complete replacement for liquid hydrocarbon fuels, especially for transport, but these are in principle synthesisable, and if they can be gotten from cheap coal, then that’s what we will do. In S Africa under embargo, I was briefly resident, and the gasoline was part imported by embargo breakers, part synthesised from coal and part bulked out with methanol and ethanol made from fermenting maize. It wasn’t the greatest racing fuel ever made, but it worked.

    Alternative fuels exist and in your ‘complex adaptive system’ ( a description I wholly support) they will (shorn of government meddling) simply replace fossil oil – and to a point gas – as and when the economics favour them. They have the effect of setting a non-linear negative feedback cap on top of energy prices.

    So do not make the same mistake you rightly accuse others of, of projecting one curve alone and seeing its effect alone.

    Oil or gas at a levelised cost of more than $100-$150 a barrel of oil (in energy equivalent terms) will simply never be extracted at all. Not while coal exists in abundance, and uranium and thorium.

    We will have problems to face as a result of deploying these as alternatives to be sure, and a huge hurdle to jump in the face of (deliberately engendered?) public disaffection with them but, and its a $trillion dollar ‘but’, faced with societal collapse or embracing them, I know where my money is.

    YMMV of course ;)

    *because when the brown stuff hits the rotating blades, it will be ignored…

    **http://www.templar.co.uk/downloads/Beyond_Fossil_Fuels.pdf

    • Ikonoclast says:

      There is some data around that suggests we are close to peak coal, at least in terms of peak energy from coal. We can mine greater tonnages of coal but get less energy from it as the high quality coal depletes and we resort to lower grades. Also, easy to mine coal runs out and we move on to harder to mine coal (more overburden, more and deeper tunnels and so on).

      Nuclear energy, at least fission, will fail too in the near term (peak uranium) unless we can use breeder reactors and thorium. I am not sure how that will all pan out. It’s a discussion in itself. No matter where we get our energy from, peak energy is not our only problem. Peak fresh water is a big problem that is looming soon. Peak fresh water will turn out to be as strongly limiting as peak energy, and maybe more so. Then there are many other peaks and the interaction of those peaks to worsen each other. The net result of these interactions may well be worse than a simple application of Liebig’s Law of the Minimum would suggest.

      • Leo Smith says:

        Rubbish. Do some proper research.

        • Paul says:

          Which part is rubbish? If you are referring to water then do some research on China and India’s water situations – both are pumping far faster than their acquifiers are being replenished. And China has just removed its one child policy

          As for nuclear energy – it is expensive – dangerous energy. The issue at hand is not a dearth of energy – it is a dearth of cheap energy.

      • I agree that we are likely close to peak coal. Furthermore, water is heavily used in mining coal (washing it) and in making electricity. It is also used in coal to liquid plants. All of these things mean that if coal is a solution to the oil problem, it is only a very temporary solution. Needless to say, China has been looking into this possibility. I believe water shortages are one obstacle to China doing much coal to liquid production.

    • OscarThreeKilo says:

      You obviously haven’t spent much time in Cornwall then. We burn coal in the brazier at The Rising Sun in Kingsand all winter.

      Cheers

      • Leo Smith says:

        Sadly we swore never to enter Cornwall again as long as a single wind turbine was obscuring the view, or I would buy you a pint.

    • You make some good points. Coal to liquid hasn’t quite been competitive yet. There are some water issues as well, that make its production difficult to do in some arid areas. It also takes some time and investment.

      Natural gas to liquid is another possibility, but as a practical matter, we can’t get natural gas out cheaply enough for this conversion to work at today’s prices. Shell recently pulled the plug on a proposed plant, because it didn’t look to be economic.

      As long as these are options, they likely put an upper lid on oil prices.

  16. Lindon says:

    It is very interesting to consider what some of the top military strategic planners have to say about the subject that Gail is exploring in this post. In the Joint Operating Environment of 2010, a document published (and declassified) by some very high-ranking military staff, we find this quote on page 24:

    “The central problem for the coming decade will not be a lack of petroleum reserves,
    but rather a shortage of drilling platforms, engineers and refining capacity (due to not enough investment, as Gail points out). Even were a concerted effort begun today to repair that shortage, it would be ten years before production could catch up with expected demand. The key determinant here would be the degree of commitment the United States and others display in addressing the dangerous vulnerabilities the growing energy crisis presents.”

    And they make this point regarding peak oil:

    “As the figure at right shows, petroleum must continue to satisfy most of the demand for energy
    out to 2030. Assuming the most optimistic scenario for improved petroleum production through
    enhanced recovery means, the development of non-conventional oils (such as oil shales or tar
    sands) and new discoveries, petroleum production will be hard pressed to meet the expected future
    demand of 118 million barrels per day.”

    And they make this dire prediction:

    “By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD.”

    Many factors, including the ones Gail points out, are diverging to a point where we are indeed in a situation of disappeared “surplus oil production capacity”. If the 2015 10% shortfall in output prediction is correct, then we can go ahead and mark down 2015 as the year that collapse knocks on our door vigorously.

    http://www.fas.org/man/eprint/joe2010.pdf

    • Lindon says:

      Also: Notice how the 2013 JOE (at least the unclassified version) addresses only security needs in regards to cybersecurity. Nothing about oil/energy. The lack of discussion about our oil/energy security outlook is, I think, a thunderous silence.

      http://www.jcs.mil/content/files/2013-03/031813153411_JIE_-_CJCS_White_Paper.pdf

      As far as I can tell, there are no unclassified versions of JOE for 2011 or 2012. If there are, could somebody please give me the link(s).

    • Thanks! I have seen that report. There are right about the lack of investment.

      The thing that they miss is in their dire prediction:

      “By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD.”

      It may not look that way at all, to most people. It may look like financial default and job loss, or even government default. I doubt that it will look like long lines a gasoline stations–at least not for long.

      • Lindon says:

        Long lines at gas stations and cars/trucks parked along the side of roads and highways due to running out of gas would be a Stake In The Heart of BAU. The only thing keeping the oil/gas flowing at this point is the extremly high cost of that oil/gas — AND the investment of millions of “retail investors” and retirement funds, etc… into oil/gas extraction. TPTB spend billions to pump the illusion of “plentiful oil/gas forever” into the minds of the masses, to keep that investment coming. Once the gas lines start forming that illusion will burst, the investment will shrink, and BAU will experience the twitching convulsing but otherwise immediate death that a stake through the heart implies. If TPTB don’t want that happen then they MUST prevent the gas lines, and as you suggest, those PTB might prefer to see massive unemployment with people simply unable to purchase gas rather than the lines. The mass media can always frame the massively unemployed as “moochers” and “freeloaders looking for handouts” as they are currently doing, leaving those with jobs and money to invest still believing in their own superiority and the wonderful future of BAU.

        • Stilgar Wilcox says:

          You’ve got it sized up Lindon. Because of these factors I’m becoming ever more convinced the pursuit of growth no matter what the feedbacks will lead to a shark’s fin decline. Intractability will keep BAU pumping harder and faster like the red queen, then suddenly shudder and drop like the leading edge of a wave into a frothy aftermath of pandemonium. Never in the history of humankind will so many people have so much stuff zealously gripped tightly as the great cliff’s edge draws into focus, causing palpitations on a scale never before seen or likely ever to occur again. I want to be there in that moment to experience the eventuation of cause and effect from myopically pursuing a goal without a plan oblivious to resource limits. May that excruciatingly harsh lesson be etched in the consciousness of our species as a legacy of the oil age.

      • Military groups seem to be more willing to talk about this issue than some others. There was also a US military report that touched on peak oil. I participated in a symposium at the Naval War Academy in Rhode Island, in which peak oil (and the problems it might bring for the navy) was one of the topics of discussion. I mentioned the issue of lack of funding for the military, and thus budget cutbacks.

  17. Angel says:

    Superb analysis

    When talking about solutions, I think first we have to address the kind of problem that we want to deal with. If, for instance, our problem is that we want to keep our standard of living and consumerism of occidental middle-class, then there is no viable solution. This would be more a predicament than just “a problem”.

    However, if we want to mitigate the wort part of societal collapse (pandemics, war, massive die-off, starvation), then I think it could be done as still we have huge amounts of energy in various forms that we are wasting in a bunch of non-basic things.

    • Leo Smith says:

      We are not even running out of cheap abundant primary energy sources.

      There’s about 3bn tonnes of uranium in the sea and the Japanese reckon a large fraction could be extracted at less than $200 a kg.

      Currently reasonably refined uranium sells at about $100/kg.
      or about 0.05c per kwh

      It would have to be 100 times more expensive – well above the cost of seawater extraction, to be ruled out as ‘economically unviable’ and that is U235 only reaction: using breeder technology and getting far more energy out, it is vanishingly small. And we haven’t mentioned thorium yet…

      The problem of nuclear power is not the cost or availability of the fuel. Neither is it technical.

      Its political and human.

      There is enough economically viable uranium and thorium to keep the entire present population of the planet in a very comfortable lifestyle for the next 5000 years – longer than civilisation has existed. Possibly even long enough to develop a viable fusion reactor :-)

      WE will run into other limits long before we run into cheap energy limits.

      Right now it seems to be a global shortage of rational thought and common sense.

      • OscarThreeKilo says:

        You might want another perspective of the real costs of construction of the plants by looking into Finland’s issues with Olkiluoto 3 & 4 Nuclear Power Plants. Double the original estimate of 3bn Euro and delayed start-up until 2017 for Olkiluoto 3.

      • Lindon says:

        Leo, how is nuclear going to power the millions of vehicles, ships and jets that are needed to keep BAU going? And I believe that you are correct that the “problem of nuclear power” is “political and human”. Basically, humans don’t want to die from radiation poisoning and have legitimate reasons to suspect that nuclear plants ultimately do far more damage to humans and to the environment than good. The political side of the problem is that politicians know that promoting or supporting nuclear energy is not a winning strategy, for the “human problem” reason stated above.

        • Leo Smith says:

          Read my paper.

          http://www.templar.co.uk/downloads/Beyond_Fossil_Fuels.pdf

          I am not going to type it all over again.

          • Lindon says:

            A quick read-through reveals that you recommend:

            Nuclear powered ships and trains — that would be thousands and thousands of little piles of radiation spread around the world running the multitude of small nuclear reactors — but let’s not discuss the significant danger and indeed probability that some lunatic or terrorist could EASILY get their hands on enough nuclear fuel to reak absolute havoc, given the thousands and thousands of targets of opportunity around the world. Not realistic.

            Aircraft — very expensive synthetic fuel, only choice. Not realistic.

            Autos and trucks and other land transport — nuclear plant charged batteries at huge cost and with technology not yet proven and with a resource demand for all those “lithium” batteries that does not exist to be mined — OR — nuclear plant powered synthetic fuels (hydrogen, etc…) produced at huge cost, much more costly and significantly less efficient than current gas/diesel, and including a need to spent trillions on infrastructure for said synthetic fuels. Not realistic.

            I don’t understand your enthusiasm for nuclear power plants and nuclear powered trains and ships. It seems to me that you haven’t thought it all the way through. Just my opinion.

            • Leo Smith says:

              Nuclear powered ships exist already.

              Trains are electric. These exist alreready.

              Elecyrc batter cars exist already but suffer limited range and stupid costs.

              Synthetic fuel exists but is marginally uneconomic.

              You may not like it and its not going to be as cheap as fossil BUT it is real technology that actually exists.

              You don’t have to buy it either. You are welcome to starve instead.

              All I am saying us that there is a future beyond fossil fuels, and although its not ideal it is the least worst alternative.

              If you would rather fill your head with green dreams, be my guest.

              We are heading for a very sticky patch. You must believe that or you wouldn’t be here. I am saying there is at least one way through it that requires radical re-thinking in many areas, but its the least amount of disruption to the ‘way we do things now’ that I as a professional engineer and business person can envisage.

              ‘Sustainable organics’ is pie in the sky, at current population levels, as is ‘renewable energy;’ and ‘living more economically’. They are qualitative faith-based solutions, suitable for the faithful and political groups as a way to sell snake oil and avoid facing up to the situation.In terms of how we can generate enough food fresh water, deal with sewage and continue to run a massively urban society, they fundamentally totally inadequate.

              Reality is what happens whether people believe it will or not.

              Engineering is the art of the possible, at the least cost overall.

              If you don’t like the answers it gives, try believing very hard in a perfect world. It wont change a damned thing, but you might feel better.

          • Ralph says:

            Leo
            As much as I agree that fossil fuels are not going to extend much into the future in a BAU manner, why can we not cut our use of power to a much lower level?
            There is no need to continue the levels of consumption we currently have for either goods or power.
            I see people around me whinge if their annual overseas holiday is impinged in any way, a lot of them borrow to take that holiday, they need the new iphone/ipad etc etc. Last years perfectly good tv is thrown out to make room for a 10cm bigger plasma unit.

            Why can we not cut our energy use to at least a quarter of what is used now?

            • Leo Smith says:

              Ralph: That is actually a very good question, because to ask it means you are already questioning the whole thesis of many arguments advanced here..

              So I will try and answer it, and show the reasoning behind it.

              The short answer is ‘population density’, and you need to examine anthropology to understand that. Hunter gatherers live at extremely low populations density, and have had stable populations for milliennia. They are really the only ‘sustainable’ populations of humans on the planet. They simply skim a little of natural renewable resources off the top as it were, and don’t markedly affect the environment in so doing.

              The moment you even start herding food animals and killing their predators, because you can, in an effort to sustain higher population levels, you are already messing with the planets ecology.

              But by efficient breeding guarding and husbandry, suddenly you have perhaps 10 times more population density for a given land area. You also invent a social notion of ‘property’ and ‘theft’ and warfare of the cattle raiding kind becomes a viable modus vivendi. Social units move from a family, to a the tribe or clan. Because as hunter gatherers more than a few people on any given area leads to shortages, but with herding, hundreds can live off the same herd, and the economics of fencing and guarding work better. Economies of scale etc.
              .

              Then along comes agriculture. And a whole new ball game. Agriculture gives another order of magnitude increase in population density, but it involves the use of at least bronze tools to really do the ploughing and if its cereal being grown, harvesting.It also destroys mobility. With agriculture you enter a whole new phase in terms of sticking in one place, cutting down trees for firewood and metal smelting, tending and panting the land, managing crop rotations and using animal waste to fertilise it, needing access to water supplies and so on. With agriculture also comes the notion of the first ‘bank’ – a grain store that will keep you alive across a lean year or two., Yes cattle were currency before, but now there is a real currency – grain. Because grain really can last years in store.

              And other things happen with grain – for the first time a sophisticated hierarchy is needful to sustain the whole system, You need miners and smelters, and smiths to make the various bronze, and latterly iron tools that agriculture needs, and once their local wood and ore are exhausted, a system of transport to bring the wood or charcoal to the smith, rather than uproot the smithy and move it to the woods. You now have a society where one man does one thing, and exchanges his product for the fruits of another’s labour. We see in fact the rise of mercantile and urban civilisations, and the rise of such ideas as a common currency, the notion of debt and the notions of capital. And the city state and the ethics and morality needed to run such. Read the Old testament, not as a book on religion, but as a book that develops the ideas of how to run complex societies regulated by a moral code whose enforcement is backed by the authority of a scary powerful idea, just as scary and powerful as climate change, and just as fictitious.

              Pause here and look at the energy balances of these civilisations. Hunter gatherers, are such low population density and use such renewable resources that they are fully capable of living stably for millennia. They are not even paleolithic cultures. It is fully possible to use instead of stone, such materials as sea shells, to cut and flense a fish, for example: wooden arrows and bows and spears. fire hardened – and you can make fire with just a bow and some bits of wood, by friction: When people talk glibly of ‘sustainability’ and hoping for the collapse of civilisation, this is what they are in reality hankering for, and indeed this is where humanity might end up. BUT we are talking about a world populations of only a few million, not 70 billion or whatever it is. Any more than that and we are into organisation, and non renewable use of resources. Even flintstone runs out eventually.

              The moment you use metal in your culture, you have gone beyond sustainability by and large, you are using up ore bodies faster than they can oxidise and collect in new ore bodies. And you are also, in terms of those metals using up energy to smelt them faster than the stocks of wood can be replenished. And in terms of cutting down forests to use for charcoal, and then the land made available to be used for herding and for agriculture, you are massively modifying the environment, often highly detrimentally ‘The deserts of Mesopotamia are the end result of 10,000 years of organic farming’ as one person once put it.

              In short the energy tradeoffs begin with agriculture by and large, and with civilisation itself. Civilisation is itself not really sustainable long term. Civilisition from a certain perspective can be viewed as a machine – a system, for essentially exploiting things that are unsustainable to gain a short term advantage in terms of survival. And a huge part of what constitutes civilisatins is the decimation of these non renewable resources, and a huge part consists in accessing energy stores that are compact but unsustainable. Because in order to farm efficiently, we need metal implements first, then ox power, horse power and finally tractor power, and rather than hand harvesting and hand grinding we need power to run the machines that do these things. And using all these and more – artificial fertilizers, pesticides and herbicides, we increase the amount of food per acre, and allow yet greater populations to be sustained, until other limits are reached. E.g. people here are getting worried about fresh water, well than can be fixed by desalination, but that takes energy. People hitherto got worried about human waste, that was fixed with sewage that used energy to build and maintain, and to pump and to purify.

              AS an engineer, I see the history of civilisations itself as marching in step with the development of what we now call engineering and materials technology, that is by using irreplaceable resources we fixed the problems – temporarily – of running high population levels, by using technology, and technology runs off energy. And there isn’t enough renewable energy that is practically available to run a technological society much beyond wooden sailing ships. And even those need metal…an all-wood ship is possible, but is a massively hard thing to make and takes far more labour. So civilisations such as it is now, and the populations that we have right now, are the direct result of the exploitation of more, or less, unsustainable resources, and have been so for pretty much 10,000 years. Which is why I get very irritated by people who talk about ‘sustainable technology’. Technology itself is not sustainable in the way they mean.. They are chasing chimeras here. Neither is ‘organic agriculture’ ..these are all fantasies that can only exist as delusional occupations based on the underlying existence of a highly sophisticated technological society that is the very thing they delude themselves into thinking they have escaped from. I am always amused by the ‘organic’ and ‘sustainable’; programmes on television, where its clear that those pursuing these things make far more money from book sales, TV appearances and lecture tours about sustainability, and may generally be seen driving 4x4s around their ‘organic farms;’ than they ever do from selling their overpriced and generally rather poor products in the markets.

              Whenever society has a widely accepted problem, the first thing that happens is a salesman comes along with snake oil that will fix it. It takes a lot longer to work through all the snake oil and discover what actually does work, and the people who buy snake oil die along the way.

              And that is why – although there is obviously no need to live at the massive per capita consumption that North America does – civilisation itself needs a certain amount of energy to run AT ALL. It takes energy to make steel and concrete, or even to plant and cut down trees for structural lumber. Yes, you can do all that by a hand saw and axe and adze, but even that means that someone somewhere is smelting steel to make those tools, and while he is doing that and you are building a house, nether of you are generating the food you eat nor the clothes you wear, you need a civilisation – even if its Amesh style – to do those things.

              So whilst potential does exist for some reduction – perhaps as much as 70% for the USA – of the energy we use to have a reasonable civilised lifestyle, do not delude yourself that you can return to pre industrial levels of energy use without either sacrificing up to 90% of the population, and 90% of what’s left being reduced to the literal grinding poverty of pre industrial agriculture, organised along feudal lines by bands of warlords in city states whose standard of living won’t exceed that of mediaeval London. the whole of civilisation itself will collapse, and those who think they welcome that, have no idea what that really means.

              Because I am an engineer, I have an intimate and instinctive understanding of all the bits of technology that together put the cornflakes and milk in your ‘organic’ breakfast bowl, and indeed put the breakfast bowl on the table, and the table itself in your house or apartment, and the apartment in the city, and the allow the city (and you) to exist at all. Most of your energy footprint is not reflected in your domestic consumption at all. Its reflected in the environment that allows you to have that domestic environment at all. In the cost of everything you buy, and in the fact that there are places where you can buy anything at all.

              AS energy costs rise naturally people who can utilise energy more efficiently (in the absence of government meddling) will outperform those who do not. Framing in the UK is dominated by agricultural consultants, who literally calculate, given the cost of fertilisers pesticides and herbicides and the diesel to run the tractors and combine harvesters, what is the optimal yield/cost ratio and so thereby use as little energy as possible to achieve the food production. This s a lot less than the land area COULD achieve, by massive over fertilisation and over use of pesticides, but it is the best EROI that can be gotten. If food prices rise, then the balance shifts towards putting in (more) energy, now relatively cheaper than food, to push the curve towards higher inputs and higher yields. This is all done on a field by field basis.

              So we are already along that curve. Likwise any fleet operators running transport vehicles, will look at the relative cost of one make to another, in terms of total cost of ownership. If cheap throwaway vehicles that guzzle diesel work out cheaper overall, then that is what he will buy. If capital costs of vehicles rise, he will expect them to last longer and be better built and if costs of fuel rise, the curve shifts towards fuel efficiency. But what he cant do is less road miles, if he needs to get the food from farm to mill, and from mill to supermarket.

              All these transformations towards better use of energy are driven naturally by profit and and a free market. Interference in these makes things worse, not better. The cost for example, of renewable energy show implicitly that it is not as energy efficient as conventional power. Because it is more expensive.

              Another good example is in the data centres that runs the servers and communications kit that run the internet and the ‘clouds’ that comprise it. The majority of the cost of hosting the kit (leaving aside the capital costs of acquiring it) are in the electricity it uses and the air-conditioning needed to remove the energy from the circuitry which naturally gets hot. So a new metric is now in play – MIPS per watt. People are sacrificing out and out performance for performance per unit energy. That and various other techniques of virtualisation to make better use of the MIPS you have, are pulling costs down and energy use down.

              So we are already plucking the low hanging fruits of energy saving everywhere where the free market is allowed to operate.

              But it is a law of diminishing returns. And beyond a certain point the measures you take to reduce energy star increasing energy use in the manufacturing of the measures themselves!

              And that is ultimately the final point: To live in a complex civilised society requires technology and energy that is, in the limit unsustainable, but only by living in such a society can we support the populations we already have, or indeed anything like them, and only in such societies do we actually have the luxury to consider what we are doing in terms of them.

              Those who hanker after renewable lifestyles should relocate to the Amazon jungle, the Kalahari desert or the Australian outback and, having discarded every single piece of metal and clothing that a civilised society has created for their benefit, practice what they preach, where the indigenous populations will show them how its actually done. Anyone who fails to do this and still preaches sustainability is a fraud and a hypocrite. Or, as we generally know them a Green.

              In short my analysis shows that we will – especially if the Green thinking has its way – revert to mediaeval feudalism, or worse, accompanied by a population crash the world has never experienced, or we must take the next step, knowing it to be only a partial solution, and not ultimately sustainable, and solve (most of) the energy problem at least, with nuclear energy, because that is actually the only card we truly have left to play.

              Those are the only two choices really. The war is on between those who fancy themselves as the new feudal overlords of a collapsed society – ‘the rich are getting richer and the future is Green’ – and those who would prefer not to be slaves or dead in a reversion to a pre industrial lifestyle of grinding poverty run by a priesthood, theocracy and warriors caste, and forced to worship the false god Gaia.

              IOn one side is what is generally called the Liberal Left, those in favour of big state control, theocracy, ideology, green, all the people who want to tell you how to do things the ‘right’ way ‘for your own and societies good’ and on the other side are the true technologists, the real liberals, the free marketeers, the ‘let society find its own balance and adapt, without prejudging where it ought to go, just where it finds it can survive’ Or take us back to feudalism. The other takes us into an unknown future where we have to take a few risks but a least its no worse than feudalism and de facto slavery.

              Once you strip away the BS and understand the real equations of a society you don’t believe in snake oil any more. WE have in reality very few options left, and none of them are as ideal as any green leaning person would like them to be. Sorry, but I cannot make the green dream work for you. And anyway, since its profoundly anti-technology why are you asking me, a technologist, to even try? Build your own windmills out of hand woven sack cloth and hand felled trees, and don’t bother me with your nonsense. What I can tell you is what is realistic practical and possible, and what the consequences of adopting it, or not, are likely to be.

              From a European perspective I can see clearly that footling around with renewable energy trying to save the planet will simply result in India and China and Rissia, who don’t, walking unopposed into and taking over, a continent that has become so stupid it won’t even have the power to resist. Which may actually be a good thing. The barbarians didn’t so much take Europe from the Romans by armed force, they simply walked into a continent that was exhausted by taxation and where the cost of maintaining a Roman army was simply too great. Rome as an empire vanished.

              Given the choice, the inhabitants decided that the barbarians were less onerous a burden on the serfs of Europe than the ‘civilized’ Romans were..

              When a civilisation finally is so stupid that it fails to understand and takes for granted the basic underlying economic facts that underpin it, it is no longer sustainable.

              An that is where the West seems to be. The citizens of New Rome are being kept in bread and circuses, whilst the senate footles and fluffs and imposes taxation at every level to pay for it on an economic engine that is obsolescent and has nearly run its course. But no one sees the whole picture any more. And the few that do are derided because ‘everybody knows’ that in reality windmills/organic farming/energy efficiency/social legislation/ will save us.

              Well they wont. Not now, not then, not ever. You will all die. Except the very few who have spent the last 20 years grabbing what they can from the green sheep who believed in them.

              The alternative is massive education and hard work and disciple some real sane analysis of the complex system that is a modern society, ruthless pruning of waste, massive investment in things that actually do work – water management stuff, nuclear power, desalination, and not investment in snake oil. That way we might JUST avoid being overrun by someone else’s society that is still ruthless educated and sane enough to do it for themselves.

              Population? Tax children, supply free contraception, limit immigration. Its that simple.. Less children means you can better educate those you have for less money. Pro lifers to be forced to adopt all the unwanted babies. They wanted em, their problem, They can pay the taxes. Only fair ;-)

              Once populations can be stabilized and reduced, we have a chance. BIG problem with the old, but heck, if we have thrown all the useless bureaucrats out of getting in the way, they can become carers. Didn’t they always preach about how they were the people who ‘cared about society’? Well let em prove it. Only fair. Emptying bedpans and and stripping urine soaked bedding is just the sort of things we need ‘caring’ people for!

              I see a promising future for Mr and Mrs O’Barmy in geriatrics, where their deep social concern for those less fortunate than themselves can finally be fulfilled.

              Do all that and with enough nuclear pwer you have a reasonable chance of forging a post modern society that actually is sustainable as long as fertile materials last – several thousand years at least. And there s always fusion, still years way, but progress is slowly happening.

              Recycle everything. Economics will dictate that it takes less energy to recycle metals than to extract new ones. Recycle nuclear materials similarly. One man’s waste is another man’s fuel.

              All these things are genuinely possible, as far as I can see. What may not be possible is to wake people from their dreams and fantasies of idealised but wholly impractical solutions, and the power of those who sell them for personal short term gain, to the final detriment of the customer base they are selling into.

              And the danger is, if we don’t wake up, someone else is who is already awake is going to steal from us everything we truly value, but take completely for granted.

            • I am not sure that I can support your view regarding nuclear energy (since we would have a very hard time doing it without metals, and without a whole lot of other things, and I am not certain that we can handle the decommissioning on any reasonable time frame), but I agree with much of the rest of what you are saying.

              We live in a society where we are being told an untrue version of what is happening and sold a whole lot of Snake Oil type solutions. It is frustrating.

          • Ralph says:

            Leo
            I again agree with what you have written, I am not an engineer but a tradesman who dabbles in other things as well.

            I have gone through a phase with my current employer where LCA was buzzword and they started to run many areas to get the best result on equipment over many years.
            Then other bean counters got involved and there was a concern from large suppliers that we were not purchasing current equipment (the latest and greatest). There was new gear that was slightly more efficient, so after a few years the older, reliable gear we had was replaced with shiny new gear that had a high degree of non-repairable componentry and was subject to a higher parts failure and replacement rate. The money came from a different bucket so did not reflect on the good (terrible) decisions of management.
            My moto is “I did not design it, approve it, build it or buy it. You want me to do what with it?”

            In Australia we have many population constraints, water being the biggest limiter in a lot of ways. The government and big business are pushing immigration on us as a way to keep the economy going, but we already have areas that have struggled with water supply for many years and adding more people is going to drive the system further into the ground.
            Yes we could add another fifty million or more to our current population but I have stated before elsewhere, do we want to reduce ourselves to a “third world shanty town” type of existence to achieve that level of population growth?

            The biggest problem the world faces is overpopulation as you say, we are on a finite world after all. I write this on a computer courtesy of the system that is allowing us to exploit the resources of the planet, however live in a small house that needs little in the way of AC or heating. Yes I drive a car, use this computer and have tv. Compared to many in my area my impact is small, though large compared to many.

            In the next couple of years things will come a head with the lack of easily accessible fuels, food and water. When that occurs famines will still occur but there will be little in the way of food relief as the traditional suppliers (US, Aus, Europe) will have food supply problems of their own, the US has already suffered large crop failures lately and I see more to come everywhere.

            There is more to it but that is al for now.

            • It seems like “bean counting” goes from one fad to another. The Soviet Union, back before its fall, aimed for making goods that would last forever, with the use of replacement parts. They made huge numbers of the same style of coats and other clothing. They also were early users of cogeneration. In many ways, this was the most efficient use of resources. But they lost the benefits of new technology and of competition.

              We really are living in an era where there are many things that are important, such as the existence of supply chains. Once these are gone, it won’t make much difference whether a big or small quantity of a material is needed, or what its cost is. Without supply chains, we need to start over, with only local goods.

      • It would help if the radiation situation at Fukushima did not seem to be so out of control. It is hard to have confidence in an industry, when there is an apparent counter-example sitting in front of us.

        • Leo Smith says:

          It only seems that way, Gal. In fact it is under such good control that TEPCO has been praised by the regulatory authorities.

          http://www.world-nuclear-news.org/RS-IAEA-praises-Fukushima-decommissioning-approach-0512134.html

          A story that has been loudly ignored by the MSM of course.

          The Japanese are cleaning up the exclusion zone to an insane 1SV region. 100 times what I got on a CT scan.

          In the end there are two ways of looking at radiation., Its like speed limits. If you exceed 30mph on a freeway, which has a limit of 30mph set on it, it is a technical breach of the law, ad if you believe that all speed kills, then of course its dangerous. On the other hand people can and do regularly travel at up to 140mph on German autobahns and don’t instantly die.,

          Fukushima radiation exceeded the limits set for power station release, yes, But it never represented danger to anyone. The maximum dose received by just two workers was 180msV.

          No one will die of any Fukushima radiation. No one will even get ill, except in terms of worrying about a problem that simply doesn’t exist.

          The whole exclusions zone is mostly below 20msV/y

          http://www.world-nuclear-news.org/RS-Fukushima_zone_fully_redesignated-0808134.html

          with only a small part ‘more radioactive than Dartmoor’

          It is not possible to use technology to make people feel safe when irrational fears are constantly stoked by the mainstream media chasing sales.

          http://www.templar.co.uk/downloads/Public_Trust_in_Nuclear_Energy.pdf

          The reality is that radiations is a natural part of life, just like sunlight is. Staying in the sun too long, you get sunburn, stray in it too long too often and you get skin cancer. Skin cancer kills more people in the UK every year than died in 911. Most skin cancer is associated with long term exposure to sunlight. The sun is a vast unshielded nuclear reactor. It is demonstrably dangerous and a killer. Its far more deadly to spend a year in – say the Mojave desert without shade, than in the Fukushima exclusion zone.

          But stories about man made ‘disasters’ suits a certain anti-technology, anti-science, big government, regulate everything narrative.

          Which is why the NY times in particular, has repeatedly lied and distorted and simply made up facts to suit its particular agenda over Fukushima.

          in reality its a minor industrial accident against a backdrop of a massive natural disaster that killed over 14,000 people and laid towns totally to waste.

          The BP oil spill in the gulf was infinitely more serious and as for Bhopal., well don’t even go there….

          “Estimates vary on the death toll. The official immediate death toll was 2,259. The government of Madhya Pradesh confirmed a total of 3,787 deaths related to the gas release.[3] Others estimate 8,000 died within two weeks and another 8,000 or more have since died from gas-related diseases.[4] [5] [6] A government affidavit in 2006 stated the leak caused 558,125 injuries including 38,478 temporary partial injuries and approximately 3,900 severely and permanently disabling injuries.”

          http://en.wikipedia.org/wiki/Bhopal_disaster

          Why is there no call to shut Union Carbide down? To never ever again have a factory doing what they did?

          Of course for real major destruction and loss of life you can’t beat renewable energy

          “The Banqiao dam and Shimantan Reservoir Dam (simplified Chinese: 石漫滩水库大坝; traditional Chinese: 石漫灘水庫大壩; pinyin: Shímàntān Shuǐkù Dàbà) are among 62 dams in Zhumadian that failed catastrophically or were intentionally destroyed in 1975 during Typhoon Nina.”

          “The dam failures killed an estimated 171,000 people;[1] 11 million people lost their homes. It also caused the sudden loss of 18 GW of power[citation needed], the power output equivalent of roughly 9 very large modern coal-fired thermal power stations.”

          http://en.wikipedia.org/wiki/Banqiao_Dam

          No one is saying nuclear power is 100% safe, nothing is – you can drown in your own vomit – or someone else’s – but on the scale of ‘bad accidents waiting to happen’ its WELL below the level of many other things, so why is it always demonised?

          Everything you thought you knew about safety and nuclear power is almost certain to be completely wrong. That’s the conclusion I have come to. I must have chased up dozens of reports of this or that and never found more than than rumour speculation or estimates. The FACTS are few on the ground and buried in official reports and they say ‘mostly radiation is completely harmless, yes even Chernobyl wasn’t in fact that dangerous and the 3000 odd confirmed non fatal thyroid cases could all have been prevented by issuing iodine pills promptly.’

          Fukushima is completely under control with various parts being dismantled. such releases as have happened have been very minor, and the Japanese are being excessively anal about things. Well its their country so that’s their right.

          Ultimately its down to risk benefit analysis..do you want a one in a million risk of a year lopped off your life or a 95% chance of dying in ten years when civilisation collapses around you?

          A world without nuclear power scares me far far more than one with it.

          • paul starling says:

            The definition of incompetence TEPCO.Tell us all Leo how Tepco plans to deal with three melted down reactors and what the final costs will come to,huh any idea mate.
            Lets not even get into the costs for the environment.

          • timl2k11 says:

            Do you have your entire savings invested in Nuclear interests? You sure write like you do.

          • Leo Smith says:

            Paul: why don’t you ask TEPCO that question, or perhaps ask the journalists who gave you the impressions that they do not.

            There are perfectly viable plans in existence, but they are long term plans. You dont march into a reactor still undergoing a lot of decay fission and toss the stuff into plastic bags. You secure it, and wait. Many years . And slowly take it to pieces, in a secure environment. Getting that secure stable environment is step 1, and Tepco are well on the way to doing that.

            The management may have been incompetent, but their engineers are not.

            Tim: No I do not have my entire life savings invested in nuclear. Post Fuku its not a growth area yet. in 5 years time it may well be a different story. Maybe 10% of free capital is in there.

            Most of my savings are invested in companies in the oil and gas and power supply chain, in a coal powerstation, and in high return funds.

            I have a bit in and out of mining and agriculture. But those are both in abeyance now.
            Global slowdowns lop demand of materials and food both. Only power has kept up with the inflation rate.

            The immediate future is with oil gas and coal. Or at leasts companies that supply those industries.

            Investment in renewables has been a disaster and I have been glad I never was tempted. As they fail to deliver, the world will revert back to fossil, and then realise that nuclear is cheaper – the big nuclear build out is at least a decade away, and that’s when profits will start coming from that supply chain, and beyond that from uranium and mining companies.

            Nothing that is givernment subsidises will ever remain profitable for long, because of political pressure to remove profit from it.

    • Perhaps. I think part of the issue is that so little of energy use is determined by individual households. Businesses and governments play a huge role in energy use. A large amount of energy is embedded in our infrastructure (roads, pipelines, electricity transmission, cars and trucks, houses). We can stop building new houses, but we still need to repair them. We start losing jobs and we soon run into long-term problems when we neglect other parts of infrastructure. In fact, we have been doing this–our electrical transmission system is in deplorable condition, and many of our pipelines are 60 years old. Roads are being turned back to gravel.

      Governments and healthcare are other big users of energy. Governments in part transfer money (and energy) from the well-to-do to those who are lacking in money (and energy). These systems get very stressed. Governments can’t collect enough taxes. Healthcare becomes too expensive for consumers and the government. The cost of all of these things makes the goods we make non-competitive with the rest of the world where workers aren’t using so much energy.

      • edpell says:

        “our electrical transmission system is in deplorable condition” Yes after 30 years of deregulation and 30 years of the owners sucking as much money as possible out of the electric system it is in sad shape. Now they want to build a fifth transmission line and towers through our town. We say bury it underground. They say “oh no that would cost to much”. The idea is that a six foot deep by three foot wide trench and plastic insulation around the cable are a financial burden that society can not bear. Looks like we are nearer the end than many think. Modern technology exists but this society can no longer afford it. That is sad.

        • Leo Smith says:

          Undergrounding cables is about ten times the cost of pylons.

          It is a social choice as to whether its worth 10% on your electricity bill or not.

          And its a choice that you are never presented with ’50% renewable energy at 50c a unit, or forget it and have 5c a unit’

          Your choice. But polticians wont give it to you.

        • timl2k11 says:

          Actually, burying high voltage power cables is not only prohibitively expensive, but makes repairs take much longer then for overhead power lines.

          • Leo Smith says:

            Yes and no. I have direct experience of this here.

            I had an 11KV line across my back garden – ugly and prevented me doing a new house, so I undergrounded it. The company involved with running this ‘one step up from domestic voltage – 230V in the UK – said ‘we are not installing any more overheads’ ..

            Being curious, I asked why and the answer revealed that your statement is only part of the truth,. yes undergrounding is expensive and repairs are costly BUT so too is massive post storm fixes when tree branches bring down cables. At the 11KV – local loop level they had done the maths and concluded that undergrounding was in fact cheaper. Its also harder to steal the cables. Scrap value of copper has lead to many thefts of (live!) cables where they are accessible. Trying to steal 33KV and upwards is a lethal exercise, and natural selections soon eliminates the would be thieves.

            So we in the UK have all the new 11kV and 230V final feeds underground. Except for a few treeless isolated places.

            But at the next steps up, 33kV, 132kV and 275kKV and the real stuff – 400kV – safety issues mean the towers and poles have to be higher and they are generally above the storm/tree damage levels, and here the cost benefit absolutely favours overheads.

            Why the ;local stuff is still strung on poles in the USA is something I cant answer. Maybe the labour and fuel costs of all the little repairs needed after every storm or big freeze are less than et cost of undergrounding. It has always struck me when visiting the USA how MANY wires there are in the air – far more than the UK, and I have never quite understood why.

          • timl2k11 says:

            As the original post was about a transmission line, I assumed something around 230kv, like we have in Tampa. 11kv lines *are* buried, if the developer puts up the money to bury them.

    • Paul says:

      Great point – how sad that we have relatively little oil left that can be extracted at a reasonable cost – yet we stupidly pump it into SUVs.

      A superior race would instead save that precious resource for critical functions as we try to gradually shift to a low energy economy – a transition that would hopefully not be cataclysmic.

      But nope – that won’t be tried – we will run this train right into the brick wall at 1000km per hour. And there may be no pieces to pick up afterwards.

  18. edpell says:

    Gail, all good but the last third super good, from “Economists, through their wholehearted endorsement of globalization, have pushed industrialized countries into a competitive situation which we are certain to lose.” onward.

    In the short run the problem with small scale substance farming is the need to pay the property tax. The county sheriff’s staff wants to be paid and they want their friends who are retired to be paid their pensions.

    • Leo Smith says:

      Sadly that is the problem with trying to be a subsistence farmer (I assume that is what you meant) in an industrialised economy. Its the same with the hunter gatherers – here we call them ‘travellers;’ ‘Roma’ ‘gypsies’ ‘diddicoys’ or most usually ‘thieving pikey bastards’ because they insist in hunting and gathering stuff that we consider belongs to us .

      Now how come a subsistence farmer has a computer?

      Or did you hand forge it from sand and silicon, and painstakingly etch the chips personally, using no more than a sharpened elk horn?

    • The problem with property taxes is one reason I am not convinced that a lot of sustainability plans will work. In fact, governments, or new governments, have been known to redistribute land in totally different ways, if there is a major problem. Hopefully, small farmers will be exempt.

      The inability to collect taxes from increasingly poor people is what causes current governments to fail.

  19. Ert says:

    Hi Gail,

    you condense your story / reasoning better and better – applause :-)

    You may be interested in the fact, that the EIA has pre-released a new report, the “AEO2014 Early Release Overview: http://www.eia.gov/forecasts/aeo/er/index.cfm

    Basically they forecast the top/peak of the US tight oil production in 2016 – with a plateau to 2020. This confirms a recent analysis at peakoilbarrel.com: http://peakoilbarrel.com/when-wil-us-light-tight-oil-lto-peak/

    You may look at the German peak-oil site http://www.peak-oil.com/2013/12/eia-us-oel-fracking-erreicht-seinen-peak-in-2016/ for a summary of the EIA report – at least the graphs are in English (the other stuff Google may translate).

    EIA took also a look at the prices. EIA may expect $92 in 2020 and maximum of 150 current dollars in 2040 – which is laughable from my viewpoint. They even have a low-price scenario, forecasting 75 current $ in 2040 – with no data or reasoning stated in the report.

    I think the shell game may end soon….

    • Thanks! I had noticed the AEO2014 Early Release Overview was out, but not really looked at it. The problem with oil prices is that salaries don’t go up. If oil prices go up, but salaries do not, there is a terrible mis-match. If oil sales prices don’t go up very much, but the cost of extraction does go up, there is a huge problem as well. You are right about the shell game.

      • Paul says:

        Japan will show us how this game ends. Wages are actually decreasing while energy costs are accelerating due to a weakened currency. The MSM is applauding this as success :)

        This will end in tears for the Japanese – and it portends what is in store for the entire world

  20. Ikonoclast says:

    I wonder if Leo Smith realises his derisive and scornful attitude towards anyone who does not agree with him 100% on absolutely all issues will play a major role in ensuring nobody will ever be convinced or attracted by his views and arguments? In other words, he is completely wasting his time and alienating everyone. To me it is not surprising that such totalitarian intolerance is associated with the push for nuclear power (with its associations of centralised and military power).

    The idea that you can get a positive EROEI from extracting uranium from seawater is indeed total nonsense. It is Leo Smith who should do some research. As soon as people trot out this crank solution to world energy problems I know… well that they are cranks.

    • Leo Smith says:

      I had given up replying to your posts, but yes, the EROI of uranium is fantastically high even from seawater.

      That was why the Japanese made a study of it.

      Currently uranium raw is around $50/kg. That needs enriching by around 6 times to create a tonne of power grade uranium, so that’s $300 a kg as a fuel rod. At once through burnup reacors of current design deliver 40GWd/t or about 960,000 units of electricity per kg of fuel rod

      Sop that’s around $0.03c per kwh for the RAW FUEL COST alone.

      If you use the U238 to breed plutonium, that’s a 140 times more energy in it. And 40GW/t burnup ratio reflects the fact that its so cheap you can waste most of it. We could do a lot better than that.

      IN short EROI on actual uranium and uranium fabricated into fuel rods is far far better than any fossil currently available. That is not the problem.

      The problems is the high cost of building reactors, which is dominated by regulatory ratcheting.
      The actual fuel cost which reflects the EROI is peanuts. EDF reckon the total fuel cycle cost – mining, processing and dealing with the waste and recycling is 16% of the total cost, which is dominated by the depreciation and interest charges on the capital cost of the reactor itself.

      Of that 16%, only 1% is the actual cost of the mined uranium.

      If mined uranium were instead $5000/kg, 100 times more expensive and therefore energy intensive to extract the impact on electricity generations would be to increase it by 3c a unit approximately…still well below renewable costs. To used seawater extracted uranium at $200/kg is to add $0.09c to the cost of nuclear electricity.

      Economically viable sources of fissile and fertile material are enough to power a world of the current population at a western lifestyle for over 3000 years.

      But you didn’t want to hear that did you?

      • dashui says:

        And I think that is a fantastic money making opportunity for u 2 get into!
        So how much of your money are you investing in it?

      • Paul says:

        Leo – if this is the magical solution then it better happen very very soon. Because we are out of cheap energy – and we things are collapsing all around us.

        Reminds me of the Japanese claim that they were going to tap energy frozen many miles below the sea and that would save the day for them – like all these miracle cures, when I see one that works and is cheaper than 100 buck oil – I will believe it

        In the meantime we have nearly 60% youth unemployment in some countries…. they are not consuming – they are not paying taxes – we are hanging from the cliff’s edge by our finger nails.

  21. RobM says:

    I am an engineer. I used to think nuclear was our only chance of maintaining civilization. Then I changed my mind for 2 reasons:

    1) Energy is our most important current constraint. If we eliminate this constraint with nuclear then another constraint will emerge since we depend on many non-renewable resources and use many renewable resources beyond their replenishment rate such as fossil water and soil. So nuclear just kicks the can and is not a proper solution.

    2) I am confident that nuclear can be designed and built to be acceptably safe if we have sufficient wealth and a functioning society. I am concerned that the impending EROI and debt driven economic collapse, plus chaos and costs from climate change, will take so much fossil energy offline so fast that we won’t have the wealth or order to maintain nuclear in a safe manner.

    The only solution that makes sense to me is a worldwide 1 child (or less) policy to drive down population faster than we are depleting our non-renewable and renewable resources. With a low population should be able to maintain a comfortable lifestyle for a long time,

    • Ellen Anderson says:

      I totally agree with you. To rely upon nuclear is to assume that we will always have sufficient knowledge and resources to decommission it. All of the costs kick in when the benefits cease. I find it very hard to understand how a person of average intelligence and good will could promote nuclear energy.

      • Leo Smith says:

        Ellen : its a cinch to decommission. Wait 100 years and then march in with pickaxes, or simply let it rot.

        Only the fuel rods represent any serious long term issues, and even those, buried under a few feet of earth are not hazardous. Even the leach rates into water are pretty low.

        If you are seriously interested in the subject (which sadly, I doubt) there is a remarkably good section on the cost benefit and risk benefit of nuclear waste treatment in here

        http://www.phyast.pitt.edu/~blc/book/chapter11.html

        ” In fact, if all the world’s electricity were produced by nuclear power and all the waste generated for the next hundred years were dumped in the ocean, the radiation dose to sea animals would never be increased by as much as 1% above its present level from natural radioactivity.”

        What’s stopping us? People & Politics.

        Read on.. a section about a public outcry over some waste…

        ” I have met the government officials who chose the billion-dollar plan, and have discussed these questions with them. They are intelligent people trying to do their jobs well. But they don’t view saving lives as the relevant question. In their view, their jobs are to respond to public concern and political pressures. A few irrational zealots in the Buffalo area stirred up the public there with the cry “We want that dangerous waste out of our area.” Why should any local people oppose them? Their congressional representatives took that message to Washington — what would they have to gain by doing otherwise? The DOE officials responded to that pressure by asking for the billion-dollar program. It wasn’t hurting them; in fact, having a new billion-dollar program to administer is a feather in their caps. Congress was told that a billion dollars was needed to discharge the government’s responsibility in protecting the public from this dangerous waste — how could it fail to respond?”

        “That is how a few people with little knowledge or understanding of the problem induced the United States Government to pour a billion dollars “down a rathole.” I watched every step of the process as it went off as smooth as glass. And the perpetrators of this mess have become local heroes to boot.”

        A very similar process is happening in Japan right now, with billions being poured into a clean-up that wont save a single life in the exclusion zone and will certainly kill more, by reasons of uprooting the populations, than it saves.

        “Abel Gonzalez of Argentina has served for many years on the UN Scientific Committee on the Effects of Atomic Radiation (UNSCEAR). He explained its conclusion that, “No discernible increased incidence of radiation-related health effects are expected among exposed members of the public and their descendants.” The American representative of UNSCEAR, Fred Mettler, noted that fear of effects on future generations were unfounded: “You should be assured that many scientific studies have shown that this does not appear to happen in humans.”

        “Gerry Thomas of Imperial College, London said, “We have lots of information from studies where high doses of radiation have been used to treat cancer, but have found that the lowest dose of radiation that we can see health effects of radiation exposure, such as increased cancer incidence, is 100 milliSieverts.” By contrast, UNSCEAR expects that no resident of Fukushima prefecture would be exposed to more than 10 milliSieverts over their entire lifetime. Gonzalez said, “Even people near the damaged power plant received such low doses of radiation that no discernible health effect could be expected.”

        http://www.world-nuclear-news.org/RS_Fear_and_Fukushima_0309131.html

        You will notice that these people are not nuclear industry advocates, one is from a regulatory body that essentially exists to keep nuclear safe, and has if anything an interest in making it look scarier than it is, if he wants to boost his job value. The other is from the medical industry where radiations is used routinely and the most understanding of radiations and human tissue interactions exist.

        Windscale, Three mile Island, Chernbyl Fukushima. All these incidents set nuclear power back in the short term, but in the longer term they represent if anything more justification for nuclear than ever before. They did the unthinkable experiment that no one could have ever done – they exposed huge areas of land to modest, or in the case of Chernobyl pretty high levels of radiation. And the results are still coming in, but the real story of Chernobyl., is how amazingly few people have in fact died at all. Less than 100. Even the people who refused to be evacuated. ( http://www.telegraph.co.uk/earth/environment/9646437/The-women-living-in-Chernobyls-toxic-wasteland.html ) Perhaps there are cancers beyond the ones directly attributable to fallout (thyroid) but they are not statistically detectable. They were predicted, they simply never happened.

        Gail mentioned that public *perception* of nuclear dangers was an issue, and so it is.

        Why is it so at odds with the reality?

        I will present a narrative.
        1/. Cold war and atom bombs. All reactors produce plutonium, and plutonium makes great atom bombs. A propaganda campaign against nuclear power was a way to limit bomb making capability: a nuclear free country can’t make plutonium for bombs.
        Likewise if you HAVE bombs, as a deterrent, the scarier they are the more deterrent value they have.
        2/. Commercial interests.. Nuclear power has the potential to undercut oil gas and coal completely for most electricity generation. These are all established interests swinging big cash flow streams. One effective way to increase nuclear costs is to surround it with massive ‘safety regulations’ that ensure it’s not economic. Which is why nuclear power plant constrictions costs have risen from about the same as a coal plant to 6 or more times as much.
        3/. Actual real scientific ignorance. In the 60s we simply did not KNOW what the long term effects of low level radiation were. No studies had been done beyond observing death and cancer rates at Hiroshima and Nagasaki, (where no clean up was ever done: They are thriving towns today) and in certain industries that used radioactive materials in a thoroughly casual way. Imagine licking a paintbrush and then dipping it in radioactive paint, to paint on the luminous dials of WWII aircraft… There is still a beach in the UK where its considered ‘too radioactive to enter’ simply because piles of WWII aircraft were dumped in the sea there, along with the luminous dials that any person in the 40s and 50s would have worked behind and slept next to. I know I did.
        The girls in the factories got lip and tongue cancers, and they stopped them doing that trick. IN the absence of any real knowledge the regulations around nuclear power were drawn up on the basis of ‘that’s as safe as we can make them whether its necessary or not’ And that style of thinking pervades the whole debate to this day. And it is a godsend for those to whom nuclear power is competition. They can point to a technical breach of regulations, and say ‘panic, fear danger to the public EVEN THE GOVERNMENT HAS SAID ITS NOT SAFE – a lie, the government has
        merely said ‘those are the limits you set yourselves: anything beyond that is a reportable breach;”

        Which is why for example cinder blocks made from coal fly ash are used in construction all over the world, but if they had in fact come from a nuclear power station, instead of a coal power station, would be classified as low level nuclear waste…why no reactor could ever be built in the south west of England, because the natural level of radioactivity in its many towns and villages already exceeds the annual limit for nuclear power station workers.

        All this didn’t really matter when we had plenty of coal and gas to burn. We didn’t need nuclear power and why go to the trouble of correcting a huge mythology that had grown up around radiation when there was no need to? And it was political suicide to try…

        The situation however has changed,: I am not advocating nuclear power because I work in the industry, or have invested heavily in it. I am advocating it because I can see no other alternative, and therefore the time has come to look at the FACTS of it, not the mythology. We need nuclear power now, we need it very very badly. That is the view that – for different reasons – I (because fossils fuels are getting scarcer and more expensive) James Hansen late of the IPCC (because he Believes in Climate Change, and sees nuclear as the most effective solution) Mark Lynas, George Monbiot, both committed Greens who ‘Believe in Climate Change’, for the same reasons.. (I broadly don’t. a little warmer, nothing to worry about and probably overall beneficial for agriculture before fossil fuel tapers off).. that is the view we all take..

        And fear of nuclear power – unreasonable fear – is either pushing the cost of it to up to 6 times what it deserves to be, or taking it off the agenda altogether, we cannot afford to do that.

        In the past we felt we couldn’t afford to use nuclear power.

        Today, I believe we cannot afford not to.

        “Science, not the result of litigation or a popular political vote, is the
        only firm basis for radiological safety and genuine reassurance.”

        http://www.templar.co.uk/downloads/Public_Trust_in_Nuclear_Energy.pdf

    • sheilach2 says:

      That would be great if it were possible to implement that but if the dictatorship of communist China couldn’t achieve that then there is no hope that the rest of the world could. The population “bomb” has exploded, it’s too late to stop it from collapsing our economies with chaos following.

      If they try to use force to stop people from having more than 1-2 children, there would be massive resistance.
      Using tax disincentives might help a little but for those too poor to pay taxes, what else can be done other than forced sterilizations? There would be massive resistance against that as well.

      I’m afraid we are doomed to collapse because of peoples belief systems & lack of affordable or even available birth control or abortion.

      I suspect governments will have to triage fuel with the first draw going to the governments, the military & law enforcement & so on down the line with the ordinary people being last in line & that fuel will be rationed one way or another.

      We have met the enemy & they are us. Pogo.

    • If we have enough time, and enough ability to convince everyone, a one child policy might work. It certainly would be a step in the right direction. I am not sure that we have the time or the ability to carry it out.

      • Leo Smith says:

        Tax children
        Free contraception.
        Its that simple

      • SlowRider says:

        The focus of the new government in Germany is actually to encourage families to have more children, with the introduction of special “mothers pensions”, free childcare etc., paid for with the exorbitant taxes of today that won’t be available tomorrow. If you want to have a good life and be socially accepted in Germany, you buy a house on cheap credit, put heavily subsidized solar on the roof, use it to charge your electric car, and get 2 or 3 children. That this is a crazy experiment in the late stages of an industrial superpower everyone blissfully ignores.

      • Paul says:

        Unfortunately corporations do not want this – so it will not happen :(

    • RobM,
      Very nicely put. No matter how much we might believe we can find a source of energy that will continue to propel our civilization, we are hitting too many limitations on finite resources.
      I certainly agree that we need to limit our population, but I would also add that we need to find happiness in life from something other than the consuming of goods and services. We can relearn how to grow our food and try to become more self-reliant. As jobs continue to decline with a shrinking global economy, more and more people will find themselves out of ‘paid’ work, but this doesn’t mean there isn’t still work that needs to be done. In fact, without all the energy that oil provides us, there will be even more labor for us to do.
      Our modern civilization has lost much of its civility, along with good health and happiness! The more we reach out and connect with ‘community’, the more we learn to help and depend on others for help, the more we will find a sense of belonging that is often missing in our world. Life isn’t going to be easy, but it can still be meaningful.

      regards,
      Jody

      • sheilach2 says:

        I think any transition will be very difficult for most of us.
        People depend upon jobs that pay $$ to pay their expenses. When those jobs go away, how will they pay those bills?
        Millions of us have no land, most are renters. Without a paying job they will end up on the cold, heartless streets of this country. In the mean time, mechanized farming will continue for a while longer as I expect the government will to see to it that they get the fuel they need.

        My area is going bankrupt, there just isn’t enough income in the county to pay their expenses, the crab season is a bust, their already piling up their pots, services are being cut, we have only a few law enforcement people for the entire & large county, that’s why I have guns, to protect myself against the criminals taking advantage of this situation.

        We can’t even begin to change our way of making a living until our “leaders” here recognise there is a problem. They continue to “plan” as though it was still the 1950″s. We don’t need more development to attract more tourists who won’t be coming here.

        I keep writing letters to the editor as have some others about how things are changing, but we continue to be ignored & antique “planning” continues.
        I’ll continue to plant my garden & I’ve reduced driving as much as possible but that’s been made more difficult since our only, local grocery store is closing.

        I know we need to have more housing in town, to use our remaining farmland to grow food not lily bulbs & to remove homes on farmland as they become empty if not sooner. We need to teach the young the skills we will need as the oil age fades away but so far, their still being taught computer programing, auto repair, & other skills that could be obsolete by the time they graduate.

        I feel we’re between a big rock & a very hard place.

    • Paul says:

      Amusingly many ‘greenies’ tell him ‘if only we could discover a cheap non-polluting energy source our troubles would be over’

      I respond with this ‘think about the implications of say a totally free – non-polluting unlimited energy source’

      They think this would be great – utopia would have arrived

      Then I inform them that we already had a plentiful cheap energy source for nearly 200 years – fossil fuels.

      And that resulted in a population burst from under 1b to over 7b.

      Now if we have an even cheaper more plentiful source of energy we’d no doubt have an every greater spike in population (we’d desalinate and grow more food)

      But what about all the other resources these additional billions would consumer – what about the fish – the forests – the copper – the iron – etc…

      That usually leaves them stunned and speechless.

  22. Pingback: Sliding Down the Oil Slope | Ecopoliticstoday's Blog

  23. St. Roy says:

    Gail
    I often have to read your posts 2-3 times to understand your key points. I would summarize this post thus. We built a world to run on $20/barrel oil. It won’t run the same on $100/barrel oil, so governments are feverishly printing money to substitute for the loss of the cheap stuff. This won’t last long and more and more consumers will soon have to power down their life styles. They can’t afford $100 oil life styles and will buy less and less causing the prices of oil products to decline. New oil now costs $80/barrel to extract and this is going up. The squeeze between the price that people can afford and are willing to pay for oil products will come down as extraction costs go up. Thus, most of the rest of the oil will remain in the ground. Did I get it right?

    • Sorry this post is difficult.

      People are already powering down their lifestyles. This isn’t happening uniformly–it is the young people who often don’t have jobs, or have only part time ones, even after getting a good education. Some have so much education debt that they can’t afford to buy homes. There are others who are powering down their lifestyle as well–the disabled, and older people who used to be in the workforce, but have found the market for their skills has disappeared. This powering down of lifestyles is already keeping the price of oil from going up high as oil producers would like (say $120), because people aren’t buying as many new homes and cars as a few years ago, and aren’t driving them as many miles.

      Oil producers, back when oil was cheap to extract, could sell oil at a high enough price (often $20 or $30, more recently $50) that they could (a) pay hefty taxes to governments, (b) pay dividends to their shareholders, and (c) still have enough money left over to invest in new wells so that they could keep oil production at the same level, or even increase it. Now the cost of building new wells is so high, oil producers really don’t have enough money left over to build enough new wells to keep production at the same level. They have to borrow money and go further and further into debt instead. Furthermore, with the high price of new wells, oil producers really need a higher price than today’s price to make selling oil from the new wells they want to build profitable (even more than $120). Of course, when they go to sell the oil from the newly-built wells, they are going to be faced with a continuation of this spiral–ever rising investment costs, when workers who buy the oil aren’t getting any richer, and many are getting poorer.

      The real problem is stagnating wages and ever rising investment costs for building new wells. This mismatch means that oil prices can’t rise enough.

      • SlowRider says:

        But please do not forget that the oil market is global with a huge display of different interests. Non-western economies are not downsizing oil consumption, but adding to it. On the other hand, some effects that have kept prices down may come to an end. Russia and Iraq came back online, SA still has the giant fields, Europe and Japan became very fuel efficient.
        Of course, the oil price could collapse somewhere down the road, but before that it could rise to 200$ and more. Driving cars and having cheap stuff is so attractive to us, we will give up many other things before.

        • I would be very surprised to see the oil price rise to $200 or more. Governments around the world (including developing countries) are already showing signs of weakness at the current level. Other countries are finding it harder to import expensive oil. Oil is so part of all parts of the economy, it is hard to single it out for favorable treatment. If the economy does badly, everything lags behind. I am afraid that is the direction we are headed.

          • Scott Walker says:

            Hi Gail and all, I do think the oil price will see $200 in the next 5 years or so. But I do not think it will bring total collapse just living with less than we are used to having, less money, less food, less stuff and perhaps a smaller car.

            If all of this money that has been printed is loaned out it cold easily double prices, and we also look at food, the costs are rising pretty much everywhere even in the USA.

            There is a lot of newly created money sitting in vaults of the Fed and in Banks that has not been lent, and could very inflationary if it comes out into our world.

            The folks running the Fed are following the model of Keynesian economics and they will inflate rather than have a deflation – like we saw the 1930′s great depression.

            We could probably get by with less than half of what we currently consume and that may be in our near future? I could see 50 percent inflation in the next five or so years if this new money makes its way into our economy.

            Kind regards in this upcoming New Year – it will surely be interesting.
            Scott

  24. Xheexie says:

    Now here’s another perspective, a look at The Biggest Picture:

    It’s well-known that the oil and nuclear industry regularly hires bloggers to check out what all of us stoopid little Sheeple are thinking, and saying, about their out-of-control polluting industries.

    So here you go: How many Fuk-U-shimas, how many Deepwater Horizons, is it going to take, guys, before you realize you’ve poisoned the planet on which you live to the point that your kids will either die of cancer or be so compromised from all the genetic destruction that your genetic line will have NO choice except to go out of business, literally..?? But then again, maybe that’s what’s needed here on Planet Earth.

    • James says:

      If humans truly understood the “biggest picture”, the nature of their evolution and technology, where they’ve come from and where they’re going, they just wouldn’t be the happy-go-lucky cancer that they currently are. Do we want to interfere with their fun-loving self-annihilation? Yes. I think we do. Like the Nazis made to witness and clean-up the extermination camps, let’s open their eyes to their ignoble lineage so they can revel in the truth as they condemn their children to this planetary gas chamber.

    • Leo Smith says:

      “How many Fuk-U-shimas, how many Deepwater Horizons, is it going to take, guys, before you realize you’ve poisoned the planet on which you live to the point that your kids will either die of cancer or be so compromised from all the genetic destruction that your genetic line will have NO choice except to go out of business, literally..?? ”

      About 20,000 plus to cause that level of catastrophe, to be reasonable and accurate and factual about it.

      On the other hand ceasing all petroleum coal gas and use of uranium would result in the death of 95% of the world population in less than ten years.

      You could try growing up enough to take responsibility for
      (a) understanding the facts
      (b) deciding what you personally think should be done.

      Until then it is just emotional posturing and cat belling.

      • Archie Stanton says:

        Leo,

        By my very quick and rough division, I come up with ~~ 28,000 large nuclear power plants to replace all (all=all: coal, oil, biomass, hydroelectric, etc.of humanity’s current energy usage. At that level, the one-time-through uranium cycle would not be a viable approach. Perhaps fast breeders, with a complex re-processing and nuclear waste transmutation scheme.

        And we better screen out the Homer Simpsons form those tens of thousands of plants!

        Perhaps automated/robotic security systems would be required as well.

        Even ~ 10,000 such plants would require a global, long-term fundamental huge commitment to a ‘nuclear priesthood’!

        Possible..no warp drive required,,,but perhaps inventing warp drive (or controlled commercial nuc fusion) is easier than wishing for a global sea change in human discipline/organization.

        • Archie Stanton says:

          Leo,

          i just skimmed your paper…it is worthy very-high-level, first-order treatment on the choices humanity faces right now.

          Obviously, there is a /lot/ of detail .that needs to be filled in…not only the amount of metal and concrete and skilled construction workers requires, but the number of skilled worked required over the World nuclear regimes’ on-going life cycle.

          Need a detailed description of the fuel cycle, plant maintenance, decommissioning, and recycling and replacement.

          I am not hanging this millstone on you alone…are you part of a formal interest group or organization which has the resources to publish a proper credible plan?

          I like how you advocate population reduction as well…you are not an ‘infinite growthist’.

          • Leo Smith says:

            Archie, I fly solo mostly, though I have connections.

            ALL I can do is spark debate. star by dispelling the myths that I know to be myths, and hope that that directs people with more resources and more detailed knowledge into the debate.
            IF you like I want to direct people to the correct agenda from the false agendas of the green camp.
            They have don an assumptive close, its no longer to them ‘shall we have renewable energy’ its ‘how much and what type’ WE have to get back to a debate of whether or not its worth having any at all, and my conclusions is that it is not.

            Sticking Gails thesis on top of that, that cheap fossil energy has limited time left to it, which I broadly agree with, that means we have to go for the nuclear option.

            That represents a massive change anyway, and I wanted to understand the key elements of such a change. I.e from where we are now, given as smooth political and social transition where could we be in say 50 years time without fossil at all? I cant believe its collapse. Well I believe it could be, but if there is a better alternative, I wanted to do the broad brushstrokes on a ‘powered by nuclear society’ and see where it was easy, and where it was not.
            And many things are not that hard. Probably the two or three tougherst nuts to crack are

            - public perception of nuclear power
            - off grid mechanical energy
            - limiting population to something that represents a decent standard of living and education for those you have already.

            If you want some more on nuclear power. I think I posted a link to this online ‘book’ which is pretty good as a place to start.

            http://www.phyast.pitt.edu/~blc/book/

            Its old, but the issues of cost and waste are well covered.

            Wade Ellison’s short paper on radiation and the perception of it is good too
            http://www.templar.co.uk/downloads/Public_Trust_in_Nuclear_Energy.pdf

            That is a precis of his book ‘Radiation and Reason’ which you can buy as an e-book from him for a few dollars. Or on paper from Amazon for a few dollars more..

            On the fuel cycle, its incredibly wasteful and currently generates a lot of waste that it needn’t for several reaosn. Firstly uranium is dirt cheap so there is little incentive to recycle. That is solved with a uranium tax to make recycled fuel (which wouldn’t be taxed) slightly cheaper than fresh. Secondly high burnup ratio reactors and breeder reactors that make far better use of the fuel are more expensive to build. The fuel is so cheap they aren’t worth building.
            Thirdly because of regulatory ratcheting is really hard to get ANY power station design approved, and even stuff that is relatively conventional takes years of box ticking and sign off by half a dozen authorities before the reactor can even start to be built. There is massive scope for reducing that, but while its in place it tends to favour ‘more of the same;’ over ‘radical new designs’

            What is needed is the political will to address all these issues, and that only comes from a groundswell of public opinion in favour of the technology, and that is a long way off. Each reactor is the West faces an absolute barrage of well meaning but utterly misguided opposition, and few politicians want to come out in favour as a result. And yet the idea in the UK and parts of Western Europe is coming that we may not in the end have much choice in the matter, and try to sell the ideas as ‘green’ to help it along.

            The matter is not so urgent in the US what with cheap gas and coal, the reactors are not yet needed. The US doesn’t have to lead the field, it can sit back and pick the winner.

            But at least half a dozen European countries want new nuclear quite badly, if they don’t have their own coal and gas, and they don’t fancy buying it from Russia.

            Skill set wise the government here has given grants to some kind of training in these matters for students at a special school.

            http://www.world-nuclear-news.org/NN-Gateway_for_UK_nuclear_skills_development-0901134.html

            So it is serious about ensuring that people know – people outside as well as inside – what standards they have to meet to sell into the market.

            If you want to take this offline there’s an address on my website

            http://gridwatch.templar.co.uk

            that will reach me.
            I am afraid its not made easy, so that its doesn’t get picked up by spambots.

        • Leo Smith says:

          Oh dear. what a site.
          yes well.

          I’ll believe it when i see the results of the courtcase. thyroid cancer,, yes just possibly if they were close by early on and didn’t get given or take iodine pills. But I very much doubt it.

          Testicular cancer? Not a radiation induced cancer. agrochemicals and/or oestrogen in the water supplies due to people taking the Pill and the water getting recycled are the generally associated ’causes’; of that.

          the cancers radiation gives you are generally in the bone marrow for a high dose.
          Its hard to see how they could have got a dose big enough unless they were right under the reactor itself. Being offshore wouldn’t be enough. I also find it hard to believe that a US navy ship doesn’t have ANY radiation monitoring which would have been the first thing the captain would o on approaching such a site.

          Nope, doesn’t stack up. Two guys making big money claims., yeah well;. Try it on boys. You might get lucky.

          But I doubt it :-)

          • Harry Willis says:

            Actually, there are 51 U.S. sailors involved in the lawsuit. It’s been dismissed once, but then refiled. One can imagine, since the lawsuit seeks huge punitive damages from TEPCO, that the litigation is something of a foreign policy hairball. The cancers include thyroid cancers and leukemia, as well as testicular cancer. The lawsuit alleges that the desalination system of the U.S.S. Ronald Reagan took on contaminated water when the ship was 10 miles offshore, so the sailors drank it, cooked with it and showered in it. It is suspected that there will be many more claims involved than the original 51. I would imagine the procedural hurdles for sailors on active duty trying to sue a foreign corporation for a problem allegedly occurring during an official mission would be very high.

          • ravinathan says:

            It is typical for a zealot to minimize the suffering of 51 sailors and not read or register and dismiss as gold diggers, those who bring up contrary information that goes against their religion. The plight of these sailors and the US Navy that acted in good faith to help the Japanese during the Fukushima crisis reflects the severe understated consequences of nuclear disasters. Fortunately it is likely that the high and growing costs of establishing nuclear reactors will put an end to nuclear dreams sparing us from further disaster on that front. We have still to deal with the vast stockpiles of nuclear wastes in storage ponds worldwide and find a way to safely decommission the existing slate of nuclear facilities before global economic collapse sets in.

      • Paul says:

        Leo – prior to the industrial revolution which happened because of fossil fuels – the global population was under 1 billion.

        So your 95% number is probably a reasonable carrying capacity (350m) due to the fact that the 7+ b we have now have raped the earth of so many of its resources.

        Perhaps the fisheries that remain might be sustainable – and recovery – if we were in the 350 m range.

        No posturing or cat belling here – the earth cannot sustain anywhere near 7b – so a massive die-off is sadly – necessary. Trying to maintain or even grow this population with nuclear or other ‘solutions’ is a suicide pact.

  25. Ikonoclast says:

    A paper by Ugo Bardi, “Extracting minerals from seawater,” demonstrates that it is not energetically feasible to extract uranium from seawater and use it for net power.

    Among other things it would require a fleet of ships (with membrane nets) greater than the world’s current fishing fleet. On the most optimistic analysis, the EROEI is 2.5. This is not high enough to provide the energy profit needed to run modern civilization. Indeed, it is much lower than the solar panels and wind turbines that are the object of much sneering from the nuclear advocacy community.

    Other limits exist as other commentators above have noted. Fresh water shortages will present a key limit. By 2035 it is projected that half the world’s population will be desperately short of fresh water for all necessary tasks; drinking, washing, irrigating and running industry.

  26. Ikonoclast says:

    Actually, can I ask that Gail do some research and analysis on the fresh water supply problem? Next to energy, water must surely qualify as the other fundamental resource requirement. Just as you can do nothing without energy and utilise no other resource without energy, so too you can do practically nothing without water (in physical survival and economic activity terms).

    All over the world, rivers are drying up from over-extraction (even seas like the Aral sea are drying up), glaciers are retreating and ground water reservoirs are depleting. Rainfall patterns are changing with global warming, with dryer areas getting even drier and wetter areas getting wetter. However, “getting wetter” often now means huge super-storm downpours where most water escapes in floods to the seas, followed by longer dry spells.

    A great portion of today’s water use is “mined”. That is we “mine” it out of rivers by “open-cut” (dams) or we “mine” it from underground reservoirs by drilling and pumping. So there is some considerable analogy to mining and drilling for oil and coal. Large, up-front energy investments (dam building, well drilling and pumping stations) are needed to secure our water. For this reason, I think the analysis techniques that Gail uses for oil, gas, coal etc. could be applied to the water question. Again, just as we have finite reserves of oil etc., we also have finite groundwater reserves. That side of the water equation is fully open to depletion analysis and to the financial and energy analysis that goes along with depletion analysis. Groundwater basins only recharge on geological timescales.

    Also, as Gail has pointed out, the number of sites suitable for hydro power are limited and currently largely utilised globally. In the same way, the number of sites suitable for large water storage dams on reliable, large rivers world-wide are also limited: larger than the number of hydro sites but still ultimately limited. Not only is a large, reliable river required but also a suitable geological and terrain-relief site is needed to build a dam that is feasible technically and economically. Essentially, a natural basin must exist with a natural choke point downstream where a dam can be placed. The rock type and rock footings must also be conducive to dam construction. For example, you don’t build a major dam in a topographical karst area. Karst formations (limestone) are riddled with sinkholes, caves, underground rivers and seeps. Obviously a dam in such an area will have a basin that is like a colander; full of holes.

    • I am not sure how I would go about getting data to demonstrate what you are saying, but I would agree with the conclusions you are coming from. We like to assume that water is readily available, but we are drawing down aquifers. Without fossil fuels, it is much harder to pull water from aquifers (but it can be done). Drilling wells is in particular much more difficult.

      Our access to fresh water will drop way back without fossil fuels, especially for agriculture.

      Hydropower on today’s scale became accessible with the use of coal to make concrete and to make metals in quantity. Without coal, new hydropower would likely disappear. Lack of water places a cap on the number of people the planet can support.

      • Leo Smith says:

        The problem with aquifers is that – especially deep ones – it make take several years, tens of years or hundreds of years to refill them.

        The problem is probably better solved by managing rainfall..but that is itself introduces ecological impacts in terms of dams, flood control, and reduced river flows into estuaries where ports may then silt up.

        Agrculrture is te biggest gulper of water, and you can to an extent control evaporation and subsoil drainage by using glass house above, or polytunnnels and some sort of subsoil treatment to better retain water, but its a biggish job.

        And of course its changing – for better or worse – the ecology of such places as you do so treat. Rain that is retained won’t refill someone else’s aquifer or river system. Or contribute to someone else’s thunderstorm. Food represents water and carbon dioxide locked into carbohydrates and until it is consumed the water and carbon dioxide aren’t released.

        One of the beneficial effects of increased CO2 is of course that to make a given mass of plant, you need less leaf area and so less evaporative losses, so less water is actually used to grow plants in a high CO2 atmosphere.

        IN the end what all of this boils down to is that ‘the ability to feed clothe house and keep warm a 70bn global population cannot be done without significantly affecting the ecosphere’

        IN other words there is no longer a global natural balance e.g. Europe ceased to have any ‘natural balance’ 3000 years ago, when the first trees were cut down for firewood, hut making and to make way for grazing herds of cattle.
        Which leaves you with two options:

        1/. Eliminate 99.5% of the population, return to hunter gathering and feel smug.

        2/. Grasp the nettle, look at what works and engineer for minimum impact on the ecosphere, and try and make it in some way a positive impact.

        What you cant have is both. Our very existence alters the ‘natural balance;’ and in fact it is as valid to regard our existence as PART of the same ‘natural balance’ that saw the first photosynthetic plants strip CO2 pout of the atmosphere, and make it oxygen rich enough to support first insect, then reptile and mammalian life.

        From plant perspective, we are nothing but beneficial. WE are disposing of the long term toxic plant waste – coal oil and gas – that plants cannot dispose of, and producing a warm (allegedly) CO2 rich environment which they will one again become a dominant life form, when we have done our job converting the fossil fuels into CO2 and water.

        Have no fear for the future of the planet. It can take care of itself, and will. Its the future of mankind that is at stake…:-)

        • Leo,
          “The problem with aquifers is that – especially deep ones – it make take several years, tens of years or hundreds of years to refill them.”
          Point of information…aquifers, particularly deep ones, don’t refill to the same level once they are over-drawn. Sand and gravel with void space between the grains is what provides storage capacity in an aquifer. Water is non-compressible. While it is in the voids, the void space is maintained. When removed, grains resort themselves under pressure, into smaller, denser, ‘less void space’ configurations. This lowers the aquifer’s storage capacity. Some things in the natural world are damaged beyond repair.

          “The problem is probably better solved by managing rainfall..but that is itself introduces ecological impacts in terms of dams, flood control, and reduced river flows into estuaries where ports may then silt up.”

          There are simple, cost-effective ways of managing rainfall and replenishing groundwater. One such low technology is called a ‘rain garden’. My husband and I built one around our property. Also our community is installing more and more of these to handle storm water runoff. The concept is very simple, you slow down runoff by diverting it into a bed or swale planted with various perennials. This allows sediment to settle out and water to seep into the ground closer to the point of origin.

          We installed a five foot wide, heavily mulched hedgerow around our 2.5 acre property. Runoff from around our home is checked by the mounded mulch beds and mostly stays on the property and soaks into the ground. It rarely ever flows into the ditch, to the creek, to the river increasing flooding. Our financial investment to install this hedge row was made more affordable because we bought and planted very young trees and shrubs. But our “sweat equity” was high because we did most of the work ourselves. The trees and shrubs were purchased from the local soil and water conservation office and grown within 60 miles of our home. We planted, weeded, and mulched the bed. It also requires annual labor to maintain it but I find the branches I prune can be eaten by my milk goats and what they don’t eat makes good kindling. The mixed hedgerow of native plantings looks attractive, provides privacy for us, and habitat for birds and other wildlife.

          “Which leaves you with two options:
          1/. Eliminate 99.5% of the population, return to hunter gathering and feel smug.
          2/. Grasp the nettle, look at what works and engineer for minimum impact on the ecosphere, and try and make it in some way a positive impact.”

          I don’t believe these are our only options. I grant you that humanity is likely to undergo a significant population crash. I don’t think there is much we can do to prevent this, but I certainly don’t feel smug because I am trying to avoid this consequence! Any natural population that overshoots its resource base is subject to reduction. This is natural and unavoidable. However, it is possible to return to hunter/gathering while engineering for minimum impact on the ecosphere.

          For example, we can find ways to plant edible perennial plants in our landscaping and have a positive impact on the ecosphere. Funny that you should mention stinging nettles. Considered a noxious weed by some, they are actually a wonderful medicinal plant. They grow with no effort on our part to maintain them. If cut carefully, hung to air dry, the leaves provide a safe and effective treatment to reduce the pain and swelling of arthritis. I have been using them for more than a year and no longer need to take ibuprofen.

          The third option might be to look for safe and economical low-tech solutions that we can install ourselves and that provide long-lasting beneficial impact on the ecosystem.

          cheers,
          Jody

  27. Christian Gebauer says:

    Hi, I have come upon the fact that the increase in monetary base is about to reach the increase in oil price, referring to the last decade. ¿What next? ¿Where is all that money? I put it on a text, kind of overview of the financial situation. In Spanish, here: http://ecoentropia.blogspot.com.ar/

    • donsailorman says:

      U.S. banks hold about 2.5 trillion dollars in excess reserves–on deposit at Federal Reserve Banks. This money could be loaned out, but there is limited demand for new loans, and banks are much more cautious than they were back around 2006-07.

      Under quantitative easing the Federal Reserve bought U.S. Treasury securities and also mortgage backed securities. There is no limit as to how much the Fed can buy of Treasury securities, and the Fed’s balance sheet has also risen by trillions since 2007 in part to finance deficit spending. But monetary policy to expand loans is like pushing on a string: The Federal Reserve System cannot force banks to make loans nor can it force potential borrowers to apply for loans.

      • I think failure of wages to rise puts a limit on borrowing. There can’t be much demand for additional goods, if people don’t have wages to pay for them. If interest rates go up and/or tax rates go up, the whole system has a tendency to fall apart.

    • SlowRider says:

      I will read your article tomorrow when I will be travelling by train. Nice to practice my spanish, and seems to have interesting graphs.
      One thing I know though is that some of this money finds it’s way into the real economy, where it prevents “deflation” and keeps the game going. Look at the countries of southern Europe, where the printing machines proved to be too small: unemployment, foreclosures, black markets and barter, emmigration, violence, suicide and – yes – falling prices for some goods and services.

    • Thanks! I will have to look at your post a little later. I am visiting relatives now, and need a little more time for proper attention to what you are writing. Monetary base is not one of the things I have been following much.

  28. Stilgar Wilcox says:

    Let’s see Gail, I’ll take what’s behind door number three:

    “3.Oil Prices Don’t Rise High Enough. We need high oil prices to keep oil extraction up, but as we reach diminishing returns with respect to oil extraction, oil prices don’t rise high enough to keep extraction at the required level.”

    Like many have said before, it’s about flow rates. If for whatever reason flow rate slows, then we are in post peak oil, and that’s when the trouble really begins because economic feedbacks continue to reduce flow.

    If MSM thinks the economy is doing well with oil prices this high, then test it by eliminating QE and balancing the budget. Instead what we get is taper to 75b a month (which is still a whole lot of printing) and political budget shuffle board with a few billion, when in reality 100′s of billions need to be eliminated, or raise taxes (or a combination of both), neither of which are going to happen due to political intransience. But even if they did accomplish a balanced budget it won’t stop what’s coming.

    Great post as usual Gail. Happy holidays!

    • Thanks! You are right–it is about flow rates. Theoretically, it would be possible to get more flow with a whole lot more investment (say in Canadian oil sands or oil shale). But since this money doesn’t drop from the sky, and prices don’t rise indefinitely, the system falls apart.

  29. dolph says:

    One of the things I’ve been trying to determine is whether or not I actually want collapse, whether I secretly wish for it.

    And I’ve admitted…I want collapse, desperately. I want it more than anything. Nothing would please me more to see global industrial civilization go down the tubes. I despise the modern world with all of my heart and soul.

    And I’m going to get it! I’m right and everybody here knows it. That’s why I’m untouchable, and your words can’t do anything to me. You can waste time with your nuclear and solar power plants and kumbaya “we are the world” songs and exhortations for people to use condoms and give peace a chance.

    None of it is going to make a difference. I’m winning every single day, month, year. We are witnessing this Titanic go down, now it’s just a question of documenting it, of observing it.

    • Archie Stanton says:

      Noble Wolf,

      You are entitled to your own thoughts, however, expressions such as your post here will be used to great effect by certain organizations and people who make it their business to discredit reasonable people who wish to affect positive change.

      I hope you embrace more constructive thoughts going forward,

      Peace be with you

      • Stilgar Wilcox says:

        I hope for collapse as well Dolph. In my case because of the extinction rate. Simply put we are decimating the planet’s wildlife. My fear is unless there is a major reduction in human population, at some point in the not too distant future (2060-2140) there will no longer be any such thing as an exotic wild animal. What will survive are viruses, bacteria, insects, rodents, seagulls, opossums, raccoons, etc. but not lions, tapers, ant eaters, snow leopards, bears, eagles, pelicans, etc. Without naming them all you get the point. Maybe a few at some rich person’s estate or in a zoo but not in the wild. Acidification if it continues unchecked with rising CO2 levels will kill off high order life in the oceans. Terrestrial life with any value will be poached to extinction. It’s just a matter of time. It’s the result of a clash between the wild and our economic world. A polar bear fur now gets as much as $80,000 in China. Bluefin tuna even more. The black market trade in wildlife is in the billions annually.

    • Leo Smith says:

      “Nothing would please me more to see global industrial civilization go down the tubes. I despise the modern world with all of my heart and soul.”

      Don’t we all, but

      “always keep ahold of nurse. For fear of finding something worse.!”
      ;-)

      For all its failings it keeps me warm dry fed and in contact with the world.

      Perhaps I have been to too many places and experienced too many times where lack of it did the opposite.

      I’d rather fix it than ditch frankly.

      As one of the first ‘hippies’ in the UK, a teenager at the time, we drove off to the first real rock festival at the Isle of Wight. Must have been 1967 or 1968. WE camped in tents in a corner of a field, next to a small thicket of trees .

      It was a celebration of Gaia, we were exhorted that we were the new ‘woodstock generation’; who would be closer to nature and overcome all the ills of civilisation with a new liberal lifestyle. I have five vivid memories left of that trip .

      One was sitting perched on a scaffolding pole over a 30ft deep slit trench filled with human excrement.

      Two was the disappearance of the thicket we had parked by at the end of the festival . It had been entirely cut down for firewood, and was full of flies and yet more human excrement.

      Three was the – literally – hundreds of tonnes of rubbish that this new generation of ecologically aware people left behind them, that was being bulldozed into trucks as we left.

      Four was the utter relief we felt, on getting on the ferry back to the mainland, to find that it had clean working toilets..

      Five was the comfortable bed on which I slept for 16 hours without waking, on finally arriving back at my parent’s suburban house.

      I have since that time visited many corners of the world and concluded that civilisation really consists of decent food, decent housing, working toilets, comfortable beds and central heating.

      The rest is mere overheads on how you reach that.

      I have seen what emerges from the rear ends of Greens, and I assure you, it smells just as bad as what emerges from the rear end of the most bloated plutocrat. The only difference is the Greens don’t have a plan to deal with it.

      Well not one that works, anyway. It’s all fantasy wish projections.

      What we all see is the froth of society – the vapid entertainment, the pointless consumerism, the ego games people play simply because they are bored, and don’t feel they are relevant to the operations of a society they do not begin to understand.

      But what they don’t see is the vast engine underneath that actually does supply them with water, food, houses, beds and central heating, and disposes of their waste for them.

      And I’ve lived for periods without some of the above, and trust me, you really don’t want to go there.

      Paraphrasing Michael Caine ‘Civilisation doesn’t make you happy, but it does remove the misery of living without it’.

      My time as a hippie taught me that what is important is food, warmth, health, ‘brain candy’ and peace of mind and a good night’s sleep. The rest I can take or leave.

      And if it takes an industrial civilisation to supply those things, its worth it.

      • Leo,
        I enjoyed you hippie story, although perhaps I got something a bit different from its lesson. I’ve never been fond of crowds; crowds without good toilets even less! It wasn’t the idealism of these youth that was the problem, it was the crowds and poor planning. I would never deny young people the enthusiasm of their ideals. I may smile, knowing how much hard work their dreams will entail. But I am fortunate to have lived long enough that my youthful idealism has grown through time and experience into the self-awareness I call ‘peace of mind’.

        I agree with your comment “what is important is food, warmth, health, ‘brain candy’ and peace of mind and a good night’s sleep.” I found it interesting how my brain substituted certain images for the words. ‘Food’ became the shelves filled with jars of food I canned from my garden this summer; ‘warmth’ became a fire in my wood stove and the stack of firewood we stacked this fall; ‘brain candy’ became all the books I recently purchased very economically from our local library book sale; ‘peace of mind’ became my children home and safe in bed; and ‘a good night’s sleep’ was an image of falling asleep next to the warmth of my husband, knowing I am loved. I wonder how different everyone’s imaginings would be?

        You wrote, “What we all see is the froth of society – the vapid entertainment, the pointless consumerism, the ego games people play simply because they are bored, and don’t feel they are relevant to the operations of a society they do not begin to understand.” How sad but true.

        I find that few people living amidst the wealth of our industrial civilization are actually fortunate enough to find ‘a good life’. If there was ever a good reason to condemn our industrialized civilization it would be because of all the sad souls living amidst the plenty it provides, feeling bereft of any joy. Perhaps ‘peace of mind’ isn’t something we are given or purchase, but something we find inside.

        You went on to say “But what they don’t see is the vast engine underneath that actually does supply them with water, food, houses, beds and central heating, and disposes of their waste for them. And I’ve lived for periods without some of the above, and trust me, you really don’t want to go there.”

        As a civil engineer who practices permaculture I am aware of many examples of forward thinking low-tech solutions. There are many types of ‘green’ technology that don’t require running water or electricity. For example, compost humanure is a better way of capturing and recycling nutrients rather than expending a tremendous amount of energy and water to flush, filter, and wash them out to sea, not to mention the pollution. Asian farmers did this for many thousands of years and were able to produce abundant food from land farmed for centuries, without synthetic fertilizer. I grant you, large cities with high population density won’t find this technology easy to incorporate. Not impossible, but not easily. This technology lends itself to much smaller population density, such as small rural towns and villages. Once again, the problem is crowds and poor planning.

        Modern civil engineers built cities using designs that presupposed cheap, concentrated, portable energy and unlimited resources (in particular water). We now know better, but it will take decades, if ever, to replace the infrastructure already installed. So I agree and disagree with you. I think we should try to keep the system going, make good use of the built infrastructure, while we rapidly change over to lower energy, more sustainable technology systems. Fortunately, we already have available much of what we need to do this, and it doesn’t require political and social approval, unlike nuclear power plants.

        regards,
        Jody

        • Leo Smith says:

          Oh so true. Think further however. First of all high density living is unfortunately the only way most people can live. I hate it, but I accept that not everyone can have the space I do.

          And that is a problem. The less energy intensive methods fall down at high density.

          By the way I am fairly sure in the UK we don’t flush much sewage out to sea at all. WE tend to treat it with aerobic digesters, filter it and then whack the solids into compost and dump the purified stuff back in the rivers to often get drink all over again.

          But of course doing that successfully implies people are not tossing e.g. cans of paint down their toilets..

          On the vapidity of culture, I think there the blame rests with political and commercial forces. It suits their book entirely to keep people a bit scared, a bit bored, a bit stupid and moderately discontented and wave ‘solutions’ in front of them to keep them happy wage slaves while all the time telling them how free they are. In a democracy you don’t control ‘hoi polloi’ with force, but with marketing.

          And look where the words we used to describe these things come from ‘captive audience’ ‘glamour’ ‘enchanting’ ‘spell binding’

          The market makers ARE the black magicians ! Spinning webs of lies deceit and misdirection for power and profit. Dark stories of hidden forces like ‘radiation’ and ‘carbon dioxide’ and of course they are the ‘good guys’ always. On the side of sweetness and light. Not!

          Th reason we are discontented, is becausie that is how we are controlled. They are the pushers of the drugs that offer only temporary relief. The bought item is fun, then the fun fades. So buy the upgrade! Last years models is simply not good enough, everybody ELSE has this years model, and how sad you are to be running a 5 years old set of clothes/shoes/computer/ television/etc etc.

          Yours sex life will be perfect with this deodorant, that cosmetic, these condoms!, Or dont bother with a sex life, eat self indulgent chocolates!

          This political party really cares about you, your children, the planet!. No the other one does, Vote for me, don’t vote for him. I am the man who REALLY understands the deep sorrow of your life, your essential victimhood.!

          You don’t feel a victim? then you should feel guilty for being so happy when others are miserable! you must dedicate your life to giving me your money so I can give some of it to them! (keeping a nice wedge for myself of course).

          HOW CAN YOU BE SO SELFISH AS TO BE HAPPY WHEN OTHERS ARE NOT. You should be ashamed of yourself!

          Meanwhile the same ***holes are in power, sales of antidepressants (that don’t work) are through the roof, and any that do are illegal (can’t have happy stoned people fer chrissakes, they don’t BUY anything and they don’t VOTE)..

          sound familiar?

          The WHOLE things is a stage managed production, a bubble of public consciousness managed to put people exactly where those with the cash to rent a marketing agency want them put.

          Ohmigawd, financial meltdown,let’s have some MORE of your money. Ohmigawd, WMD, let’s have MORE of your money, Ohmigawd, Al Qaeda, let’s have MORE of your money, Ohmigawd global warming let’s have MORE of your money.

          Is there a grain of truth in any of it?

          It doesn’t matter. They don’t know and they frankly don’t care. There might be. I’ve talked to them. What counts is the narrative quality and whether it has ‘traction’ because if it has ‘traction’ they can make money and gain political power with it. In the end its not their problem anyway. Some technocrat will fix it, they assume. If its really important. Heck there are stupes out there that actually care about this stuff, whether its real or not. let them argue over it, and if they convince te public its all prime manure, then heck, we always had our doubts, and of course what the public wants is what we do. Yes sirree, I’m a man or the people and I share your concerns. as long as I am on top drawing a fat salary and riding a personal bandwagon of gloryamd having fun and not feeling the least bit guilty about being so smart..I’ve pulled the wool over your eyes since forever. Not my fault of you’re a dim but sincere person who believes in stuff that a normal ten year old can see through is it?

          “97% of scientists believe” …and the subtext is, if you’re a scientist and you don’t, your a stupe, and if you’re a member of the public you’d better believe too else you are going to look as stupid as we know you are, too. No we don’t know it its true, 97% of scientists could be lying, or plain wrong. What matters is you had better believe it because otherwise you are gonna be PISSED when we stick another 10% on your utility bill for no good reason.

          I am so glad to be an engineer. Machines don’t lie to me. And I cant shit them. They do exactly what you tell them to, and seldom answer back, and if they aren’t working it is never their fault.

          You simply built them wrong and you have to go back and fix that.

          People? People lie consistently all the time to reach other, to themselves and to their therapists. I’ve seen the narrowing of their eyes when I tell them the bald truth, as they wonder where the angle is, and what the truth is. Heck the thought I might be telling it is one they wouldn’t entertain for a moment, strangers to the truth themselves, they assume that everyone is lying to them..WE have created a culture so steeped in hierarchy and humanness, that people are utterly divorced from reality, it doesn’t matter what they really are, or what they really can do, what counts is what the boss thinks they are, and thinks they can do..and that is a terribly dangerous state of affairs. Puppets dancing to the tune of the puppet master, but does he know what he is doing..?

          Because there is truth, and it needs to be respected, and when the wind stops and the sun sets and the lights go out, and nothing works anymore, perhaps they will realise that, after all, there is something beyond what people think there is.

          • Leo,
            I stopped watching and listening to commercial T.V. and radio 18 years ago for exactly the reasons you discuss above, the brainwashing did nothing to improve my life.
            You appear to be an intelligent man who believes strongly in his convictions. I would like to point out another truth to you…railing at windmills such as pointing out how stupid everyone else is, is a poor investment of your time. What return do you get?
            Jody

            • Leo Smith says:

              Jody: you would be surprised.

              I can’t claim all the credit, or even most of it, but by jingo the pendulum is swinging.

              One I worked through the system it was obvious that only public opinion matters to politicians. So I aim to change it.

              The only sure way is to counter BS with facts, so I push them out at every opportunity.

              this is my best site

              http://gridwatch.templar.co.uk/index.php

              This is what its historically been doing in terms of people accessing it

              http://vps.templar.co.uk/admin/

              3 times increase this year alone.

              People are shocked. They think renewable features much larger in UK power generation, those are the facts however. They also know what it costs. They can see its pretty much useless and costs a packet. That’s their opinion given pause.

              I’ve had research students downloading the data and sales engineers selling gas turbines into the UK market trying to predict what the cost of wind is to the their users. I’ve had schoolteachers email me and thank me for the educational aspect ‘it really shows what’s going on’

              Journalists pick up on it and quote data from it. In the three years I’ve been running in this arena, public perception of renewables in the UK has turned from enthusiasm to deep scepticism. A member of the public walked up to me and when he heard me talking about it, and said ‘they don’t work, do they?’ .

              I think that isn’t a bad result.

              IN the end the ONLY people who can change the political attitudes to energy are the voting public. They have been inundated with green snake oil propaganda, but once journalists are picking up in the theme, there is counter propaganda. I’ve written papers trying to express complex technical ideas simply. The journos plagiarise them Good. I don’t want the credit, I want the result.

              That’s all I can do: lay out ideas that are as factual as I know how in as simple a way possible and hope that people with intelligence understand them, and spread them.

              Friends of the Earth got £2.5million from the European Union to spread their agenda. I have received precisely £300 from a private individual to support what I do.

          • Leo
            the problem you and we face is that our current level of prosperity has been derived through energy input on a uniquely colossal scale.
            Naturally everybody wants that to continue, so the politicians who promise that will always be voted into office, at least in the short term.
            In political shorthand, what this means is that people delude themselves that energy supplies are a matter of political will, and cheap energy can be obtained by spending ever increasing amounts of paper money.
            nonsense of course, but that is the majority viewpoint

            • Leo Smith says:

              All I can say is that energy is not really the biggest problem.
              Population is, and political chicanery that doesn’t ever trust the public with the facts, because they might ask ‘what do we need these jerks for anyway’ if they found out.

      • Paul says:

        Indeed – this is a classic ‘be careful what you wish for’

        I’d rather see the system reformed – but sadly I do not think that will happen – our response to the crisis is to frack, deep sea drill and rip up Alberta – at an accelerated rate fueled by cheap money.

        I see not a single politician saying – let alone doing – anything about this crisis.

        Perhaps they have determined (in their think tanks) that there is nothing that can be done – so they print like mad fools trying to put off the collapse as long as possible?

        • Interguru says:

          We complain that politicians lie. The ones that tell the truth either do not get elected, or do not get re-elected. We have met the enemy and they are us.

          • Leo Smith says:

            Its more that all the main parties are stitched up – unless as in the UK you have a credible alternative that doesn’t lie that much, and sees it as an opportunity. Happening all over Europe actually – emergence of alternative parties from the grass roots.

          • Unfortunately, I am afraid you are right. No one who tells the truth will get elected.

    • Dolf,
      It is a sad state of mind we reach when all we see of humanity is the sum of terrible things we have done to each other and to ourselves. Rapacious greed and consumption does indeed make our modern industrial world appear as something we should despise. I’m not arguing that we aren’t doing terrible things in the name of holding onto our “industrial world”. But since you are correct, it is dieing, perhaps now would be a good time to find compassion, say goodbye and mourn what we will miss when it is gone.
      regards,
      Jody

      • Leo Smith says:

        Glad to see that guilt complex is coming along nicely there. If it gets depressing I’ve a great bottle of snake oil for you. It is red, and it comes in a green bottle, so you know you can trust it..

        • Leo,
          One can feel overwhelming sadness and loss when confronting our current situation. One can feel anger and resentment because life isn’t going to turn out the way you want. Or one can accept reality and do the best they can to make the most of our life while we live it, one day at a time. I fail to see how that sentiment leads to a guilt complex or the sale of ‘snake oil’?

          Jody

    • I’ve often thought that the crows nest of the Titanic must have been a perfect vantage point to watch the ship go down
      what a pity iphones wouldn’t be invented for another 100 years

    • I find it hard to sympathize with the idea of “hoping for collapse.”

      I am afraid we don’t observe it for very long. We get drawn into it as well.

        • I have been saying that there is no way out as well. Interest rates will rise, and we will be in deep trouble.

          • Scott Walker says:

            Hello Gail and All, Yes! The high interest rate trap seems to be looming ahead, I wonder who the government and the Fed will blame it on. And, that is a recipe – perhaps for a recession or very inflationary time. I think inflation… as – they have no choice but to inflate otherwise the economy will shrink and they will be out of office. I am expecting higher prices for most needed items in the next five years but not a total collapse yet, I think we have been lucky so far in the USA they have not risen as much as in other places in the World. It seems to me that things will just get harder as time goes on higher prices and fewer choices in the markets. I think the 1960-2000 period saw a fairly abundant time, a time we may soon wish had not disappeared.

            Best Regards,

            Scott

            • When interest rates rise, the ability of people to purchase goods such as cars and homes falls. The government has a need for more tax money, so that it can pay its interest expense, so tax rates need to rise as well. The combination means less and less disposable income for most people, and more debt defaults. This results in fewer and fewer people with jobs.

              I find it hard to get inflation out of this scenario. How is the government going to get money into the hands of all of the unemployed people to bid up the prices of goods and services?

  30. Aware says:

    I have been seeing small occasional signs in various publications that at least a few people in various industries and government function and the media seem to be starting to understand resource and energy limits.

    The latest example I saw is in the December 16, 2013 issue of Aviation Week and Space technology, which is a solid ‘booster’ for the government and commercial aviation industry.

    The commentary is on page 15: ‘Recycling is becoming a serious business for aviation.’

    The gist of the article is that some aircraft engine and other parts manufacturers are looking at the idea of tracking the different materials (mostly metals) in aircraft engines and reusing these materials for new engines (in-house, without the waste stream going through third parties). The article notes that Europe already hold its car manufacturers for the entire life-cycle of their vehicles, including disposal (and reuse in new vehicles).

    From the article: “We are beginning to realize that these metals live in a finite universe; there is no Earth Version 2.0.”

    It seems that these people are not confident in the idea if mining seawater for materials using very abundant energy sources.

    A drop in the bucket…probably too little, too late, but there is some awakening.

    • Leo Smith says:

      Yes. Scrap recycling is already big business. And the purer the metal or alloy you can recycle the more worthwhile it is.

      No need for legislation. the price of copper now means that any plumber or electrician worth his salt will take surplus copper pipes and cables along to the merchant and get a few quid in exchange.

      Unfortunately it also means that any itinerant thief with a pickup can and will load into it anything he finds lying around on someone else’s property and do likewise.

      http://www.heart.co.uk/essex/news/local/essex-trains-halted-after-cable-theft/

      Those were IIRC live cables with 25KV going through them.

      So its not all roses, as anyone who has had perfectly good stuff ‘recycled’ by thieves will tell you.

    • Interesting. Of course, recycling takes energy resources, and it is hard to get the purity one needs for high tech goods.

      • Leo Smith says:

        Cost benefit rules in the absence of government interference.

        purification works, but takes energy. If its more energy than actually mining/refining is, its not worth doing.

        I visited a lead smelting plant in France some years back. Filthy place with sulphuric acid dripping everywhere. IN addition to smelting lead ore, they recycled car batteries but the 100 tonne lot. It wasn’t greatly profitable, but they made a little.

        Its all down to relative energy costs in the end, as mining energy costs go up, recyling gets attractive.

        Its just another example of negative feedback on costs, as one way gets expensive another way gets competitive.

        IN the absence of government interference.

        We are a long way from e.g. plastics being worth recycling, and its arguable as to whether wood paper and glass are worth it either.

        Metals mostly are though.

        • I wish we could get rid of this delusion that recycling is going to preserve our infrastructure
          Its possible to take old glass bottles and melt them on a fire, but that’s not the problem—it’s reworking that glass into quantities of reusable ‘stuff’ that’s the problem.
          Same with metals. Most dumped metal is ferrous, which means it rusts away rapidly. We’ve all found old cans buried in the garden…after 10 years , what’s left? Practically nothing. There’s precious little other stuff dumped, other that thin steel material. So fast forward 10-20 years when desperation kicks in and we start mining the dumps from maybe 50 years back… is anyone really suggesting that we are going to have concentrated mining operations to find the remains of tin cans or car batteries?
          So you find a few hundred plastic bottles. Hooray—wealth!!, what exactly are you going to do with them?

          • Leo Smith says:

            ” is anyone really suggesting that we are going to have concentrated mining operations to find the remains of tin cans or car batteries?”

            Yes. scrapyards represent a FAR greater density of ‘ores’ than do many strip mines.

            What we don’t have are the peculiar technologies adapted to extracting it.Yet :-)

            “So you find a few hundred plastic bottles. Hooray—wealth!!, what exactly are you going to do with them?”

            Plastic is not valuable. And probably never will be. Plastic is merely water, carbon dioxide and energy. That’s how (a lot of it) it was made, by organic photosynthesis, and substituting other energy for sunlight, can create it again. It’s not the atomic constituents of plastic and oil that have value, through scarcity, its the ENERGY in them.

            Steel? who needs steel? We could make many things out of aluminium. Its a very common element. Steel is just cheap because iron ore and coal were cheap, whereas bauxite needs electricity in vast quantities to make it.

            “Known reserves of its bauxite ore are sufficient to meet the worldwide demands for aluminium for many centuries. Increased aluminium recycling, which has the advantage of lowering the cost in electric power in producing aluminium, will considerably extend the world’s bauxite reserves.”

            (Thank you Wiki!)

            In a steady state world atomic elements are on theory infinitely recyclable. All it takes is energy.
            Even the so called ‘crucial’ elements like copper, rare earths like neodymium and so on, are not irreplaceable.

            In essence, apart from nuclear fission processes, the earth came with all the elements it now has in pretty much the same quantities. Geological processes have filtered and concentrated them, and a lot of them finally ended up on the sea bed due to erosion. A place we haven’t even bothered to look for them yet.

            What we are short of is land area, and fresh water to support the current population by photosynthetic energy capture. Population alone is the biggest problem, but its one that will inevitably solve itself by one or another unpleasant means.

            Given a few smart people. smart machines and plenty of energy, the rest of the problems vanish. If the surplus populations do, anyway.

            If for example a nuclear power station can be built purely by robots, using 1% or less of the energy it can actually generate in a lifetime, who needs the people?

            What you must needs look for in a massive chaotic system are the attractors. Hunter gathering is an attractor. It will always remain the lowest common denominator of existence, whereby a few million people will always survive. So to is subsistence manual agriculture. But they are not the only ones: we have seen how, in the presence of readily available energy excesses a technology based society can flourish. A technocratic society that today embraces nuclear power will dominate tomorrows world. It will have the robot tanks and the drones and the electronics to do what it likes, militarily. Even if the cost of synthesising the fuel needed to prosecute such wars is massively expensive – well military technology has always been massively expensive. A mediaeval knight’s armour might represent the work of hundreds of people for a year or more.

            And nuclear weapons, with a high gamma to neutron and high specific yield, are excellent ways to eliminate populations without contaminating land very much.

            If ‘lebensraum’ is what you are after…

            I don’t especially advocate these things as any kind of solution: I merely note, that others will have noted the particular effects of the technological toolkits that are available….nuclear war between e.g. India and Pakistan that reduces the populations of both by 50% would be to the advantage of all those who survived.

            Even with considerable infrastructure loss. It is another attractor.

            In the end a cynical assessment of society and humanity as a complex system, done properly and eliminating the idiocy of ‘should’ and looking at the practicalities and costs of ‘could’ shows why, for example, military dictatorships are pretty common around the world: they exist because the ruling elite and the military are in the end the same thing in some forms of technocratic society, because the military has the final authority, and if it controls whatever resource tit is that faces it, then you have a quasi stable system. Of course the pheasants get plucked, but that’s what pheasants are for..pheasants are two a penny, easily replaced with 9 months of totally unskilled labour. and if they aren’t actually generating anything of value (to the technological society) , who needs ‘em anyway?

            Think Amerindians and settlers.

            The cheap fossil fuel technology attractor has expanded to dominate the world. The high technology nuclear attractor will replace it, and unless you want to live on a reservation and sell beads to tourists, you had better get with the program.

        • steel?—who needs steel?
          have you tried cutting down a tree with an aluminium axe?
          Or using an aluminium chisel on a block of stone?
          What about cutting meat with an aluminium knife? (Especially raw)
          Or indeed making aluminium itself without the colossal steel infrastructure necessary to do it?
          Yes, I know that aluminium can be hardened, but not to the level and versatility necessary for our complexity of living.
          In raw terms, our infrastructure has been constructed using very hard materials for shelter, transport, food production and warfare. Essentially…that covers most of what we need to survive.
          Without the means to work and shape hard materials, all the ‘technology’ and energy input you can imagine wont sustain civilisation at any level, no matter what our population number falls to

          • Leo Smith says:

            You want surface hardness, use ceramic.

            A diamond encrusted saw will cut through stone that a steel saw will not.

            Steel is actually second best at almost everything. Which is why its gradually being replaced.

            Diamond is harder, and ceramics
            Carbon fibre has greater tensile strength
            Aluminium is lighter, and titanium even more so.
            Plastic is more ductile.
            All of the above degrade less than steel does.

            Steel like coal is simply what we use because its CHEAP.

            It is just that iron is the most stable ELEMENT in the nuclear reactions scale, so it is overwhelmingly the most abundant – the earth is largely made of iron. It takes more nuclear energy to spilt or fuse iron than it does to make it.

            But its actually not that good an element to start with for many purposes. The only real property it has that I cannot think easily of a alternative to, is magnetic. But that property is not n the limit necessary anyway. its merely a cheap and useful way to use magnetic properties that would otherwise be more expensive.

        • I expect it depends on available energy supply. If we have to use charcoal from wood, we can’t even do a whole lot of metal recycling.

      • Scott says:

        Hi Gail and Everyone . I remember in the 1970′s – when one of my school teachers said that someday we would likely be mining our old dump sites for materials, minerals etc.
        40 years later I think she was correct, we really wasted so much good stuff.

        Here in Oregon, we are just happy for another Christmas without severe world troubles.

        The new year New new year will bring a whole set of changes

        These things that we can all take look at will be in the next year, Well at least we can say were do not live in a boring time.

        Merry Christmas everyone.

        Scott

        • “Recycling” means that we have been mining our dumps for years. There will be a lot less that we might want to take from dumps in the future, and a lot of it will be polluted by mercury and other toxic substances.

          • Scott Walker says:

            Hello Gail, Good point on mining the dumps with all of the toxic things like mercury, solvents etc.

            Interesting that many of these places (old landfills) have been covered over as parks and restored to some point without any thought of value of the metals etc buried.

            Perhaps, someday they sell these old landfills lands for mining and they may go to the highest bidder.

            I guess that is – if we can separate all the bad stuff like mercury from the needed things like plastics and aluminum, iron or what ever is valuable and extractable. I guess also it depends on the area and what was dumped there, for example places that dumped demo scrap from boats and buildings that contain much metals etc. But the average towns land fill must contain a host of elements that could be reused if a system was devised. Many of the things that that are in these landfills will last for many hundreds of years and can still be recovered.

            But her we go again the energy to extract and reprocess will likely be scarce or not be cheap in the future.

            However, the old land fills may indeed yield more per BTU if they were able to recover from a new mine in a Finite World, we may find in these old land fills and military dump sites a host of usable metals but also danger and perhaps in the future we will find better ways of digging this stuff up and reprocessing it.

            Perhaps just a dream…time will tell..

            Too bad we cannot recover all of that natural gas that was just burned off too when all those wells were just flared off, that was a pretty clean source of fuel and it is going to be a big part of our future. In those days it was believed that the Earth was too big to ever run short on resources like oil, water and minereals etc.

            Although, my research indicates that the fracking will be a disappointment the gas/oil runs out very fast compared to the old fashioned wells that pumped oil and gas from large reservoirs in plentiful amounts. Now we are down to the small stuff, the small wells. There are a few big areas in the far north in wildlife refugees that will also surely be tapped in the next 5 or 10 years if the price of oil rises enough there will be a public outcry to open these lands and also our strategic reserve here in the USA.
            Makes a good case for higher prices ahead.

            Scott

            • It makes a good case for higher cost of extraction. It does not make a case for people being able to afford the higher cost of extraction. The two are quite different.

    • Ert says:

      @Aware

      There surly is something going on in the industry.

      Car-manufacturers use local material e.g. Coconut fiber for the interior of a car when produced in a county where it is available. Energy and waste are more and more a “cost” issue – so they are being reduced in optimized processes and new plants that are build.

      Water management in Mexico? A big problem, so at least one manufacturer invested in re-forestation (Google: 420,000 conifers planted).

      But the underlying problem is still, that all the world’s industry still focuses on expansion. But there is no “sustainable” expansion – so instead of making the whole thing better, they are trying to make – parts of it – less worse, while they still keep on expanding a failed paradigm.

      • Leo Smith says:

        Boom and bust cycles are as natural in any species as they are in free market economies.

        Man is no different.

        If he can’t find a new ecological niche to exploit, its bust time.

        There are new niches, but will he find them?

        Uniquely the possibility exists for (consciously) self limiting populations.

        But will it become actualised?

        • Ert says:

          @Leo

          “Uniquely the possibility exists for (consciously) self limiting populations.”

          That would be my wish. But as long the people are branded and named as “Consumers” – the indoctrination of the current growth and consumption oriented paradigm continues.

          I do not know how it is in the US, UK or Canada – but here in Germany it is clearly readable, hearable and visible (in newspapers, radio, magazines and TV), that the people or citizens are more and more branded as “consumers”, where everything is good then there is a lot of consumption (i.e. winter and Xmas sales), the consumption growths, etc.pp.

          This kind of indoctrination has even speed up in the recent years – and is exactly the wrong direction (in my opinion).

          “But will it become actualised?”

          I don’t think so.

          • Leo Smith says:

            In any system response lags input.
            The vast majority of people do not have the time to rise above the immediate and see the broader picture.

            It takes a generation of no-growth before people start adapting paradigms of economics and social and political ideologies and moralities to accommodate it.The Japanese will be first. Probably the Anglosphere second.

            Meanwhile all we can do is look at what a steady state-ish society looks like and needs and ensure in whatever ways we can that these things exist. The froth of consumerism will evaporate when net disposable income fails to meet more than the bare essentials of life.

            Europe and Japan have the advantage, both have rebuilt themselves post being smashed by war, and they have at some level the knowledge to survive on very low inputs.

            USA has an advantage in that it doesn’t yet quite need to.

            It will be a very rough 30 years on the way, though.

          • Ert says:

            @Leo

            Europe and Japan have the advantage, both have rebuilt themselves post being smashed by war, and they have at some level the knowledge to survive on very low inputs.

            This generation doesn’t exist anymore. My parents are born in the last years of the second world war. They had hard times, but also head a steady better life every year. They know those old times – but they are also totally hooked on the goodies of today. The car is totally ingrained in their thinking- but not so much in the people which are twenties today.

            And even my mother had/has gardening practices that would scare any 10% permaculture person to death. I would count more on the people in eastern Europe…. and probably everywhere where are still poor economic conditions.

            USA has an advantage in that it doesn’t yet quite need to.

            And the US + Canada has still a lot of land mass + resources.

            It will be a very rough 30 years on the way, though.

            Indeed.But not because of peak-oil, but probably because of climate change: http://guymcpherson.com/2013/01/climate-change-summary-and-update/

            • Leo Smith says:

              We will have to agree to differ there. Climate change is just another weapon in a rather protracted propaganda war. As ‘nuclear fallout’ and ‘nuclear winter’ were before it.

              It serves to endorse transfers of wealth to governments and to weaken societies economically that believe in it.

              *shrug* time will tell.

              Reality is what happens, whether you believe it will or not..

          • Ert says:

            @Leo

            I thought in the same lines regarding climate change as you until approx. 18 months ago. But that has changed as further I diged into the evidence, reasoning and data.

            Its the same with PeakOil – some say it’s only to scare the people to put lots of cash into the buckets of big oil. But the picture and the data is different.

            “It serves to endorse transfers of wealth to governments and to weaken societies economically that believe in it.”

            My thinking – as with PeakOil and Climate change is that we have to weaken current economies to reduce consumption of oil,fossils, etc. If not for climate change, then for the pure sake of avoiding more massive pollution. The current industrial way of living destroys the environment – and we are part of the environment.

          • Economists seem to think that keeping the economy going is in our hands (and in the hands of Ben Bernanke and others). With this view, more spending and more debt is the way to go. If cheap energy is not available, the plan doesn’t work all that well.

      • I like the phrase “less worse”. They of course want to make money while they are making things “less worse.” In the end, it probably is about the same.

        • Leo Smith says:

          nothing wrong with making money – for the right things. Its when governments interfere and then you make money on all the WRONG things …

          • Ikonoclast says:

            Counterfactual. People can also make money on the wrong things when governments don’t interfere. They can make money by insider trading, drug dealing, extortion, gun running and so on. They can even make money by building unsafe nuclear power stations (Fukushima) and telling lies to regulators over the years about the safety of the plant.

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