Limits to Growth–At our doorstep, but not recognized

How long can economic growth continue in a finite world? This is the question the 1972 book The Limits to Growth by Donella Meadows and others sought to answer. The computer models that the team of researchers produced strongly suggested that the world economy would collapse sometime in the first half of the 21st century.

I have been researching what the real situation is with respect to resource limits since 2005. The conclusion I am reaching is that the team of 1972 researchers were indeed correct. In fact, the promised collapse is practically right around the corner, beginning in the next year or two. In fact, many aspects of the collapse appear already to be taking place, such as the 2008-2009 Great Recession and the collapse of the economies of smaller countries such as Greece and Spain. How could collapse be so close, with virtually no warning to the population?

To explain the situation, I will first explain why we are reaching Limits to Growth in the near term.  I will then provide a list of nine reasons why the near-term crisis has been overlooked.

Why We are Reaching Limits to Growth in the Near Term

In simplest terms, our problem is that we as a people are no longer getting richer. Instead, we are getting poorer, as evidenced by the difficulty young people are now having getting good-paying jobs. As we get poorer, it becomes harder and harder to pay debt back with interest. It is the collision of the lack of economic growth in the real economy with the need for economic growth from the debt system that can be expected to lead to collapse.

The reason we are getting poorer is because hidden parts of our economy are now absorbing more and more resources, leaving fewer resources to produce the goods and services we are used to buying. These hidden parts of our economy are being affected by depletion. For example, it now takes more resources to extract oil. This is why oil prices have more than tripled since 2002. It also takes more resource for many other hidden processes, such as deeper wells or desalination to produce water, and more energy supplies to produce metals from low-grade ores.

The problem as we reach all of these limits is a shortage of physical investment capital, such as oil, copper, and rare earth minerals. While we can extract more of these, some, like oil, are used in many ways, to fix many depletion problems. We end up with too many demands on oil supply–there is not enough oil to both (1) offset the many depletion issues the world economy is hitting, plus (2) add new factories and extraction capability that is needed for the world economy to grow.

With too many demands on oil supply, “economic growth” is what tends to get shorted. Countries that obtain a large percentage of their energy supply from oil tend to be especially affected because high oil prices tend to make the products these countries produce unaffordable. Countries with a long-term decline in oil consumption, such as the US, European Union, and Japan, find themselves in recession or very slow growth.

Figure 1. Oil consumption based on BP's 2013 Statistical Review of World Energy.

Figure 1. Oil consumption based on BP’s 2013 Statistical Review of World Energy.

Unfortunately, the problem this appears eventually to lead to, is collapse. The problem is the connection with debt. Debt can be paid back with interest to a much greater extent in a growing economy than a contracting economy because we are effectively borrowing from the future–something that is a lot easier when tomorrow is assumed to be better than today, compared to when tomorrow is worse than today.

We could not operate our current economy without debt. Debt is what has allowed us to “pump up” economic growth. Consumers can buy cars, homes, and college educations that they have not saved up for. Businesses can set up factories and do mineral extraction, without having past profits to finance these operations. We can now operate with long supply chains, including many businesses that are dependent on debt financing. The ability to use debt allows vastly more investment than if potential investors could only the use of after-the-fact profits.

If we give up our debt-based economic system, we lose our ability to extract even the oil and other resources that appear to be easily available. We can have a simple, local economy, perhaps dependent on wood as it primary fuel source, without debt. But it seems unlikely that we can have a world economy that will provide food and shelter for 7.2 billion people.

The reason the situation is concerning is because the financial situation now seems to be near a crisis. Debt, other than government debt, has not been growing very rapidly since  2008. The government has tried to solve this problem by keeping interest rates very low using Quantitative Easing (QE). Now the government is cutting back in the amount of QE.  If interest rates should rise very much, we will likely see recession again and many layoffs. If this should happen, debt defaults are likely to be a problem and credit availability will dry up as it did in late 2008. Without credit, prices of all commodities will drop, as they did in late 2008. Without the temporary magic of QE, new investment, even in oil, will drop way off. Government will need to shrink back in size and may even collapse.

In fact, we are already having a problem with oil prices that are too low to encourage oil production. (See my post, What’s Ahead? Lower Oil Prices, Despite Higher Extraction Costs.) Other commodities are also trading at flat to lower price levels. The concern is that these lower prices will lead to deflation. With deflation, debt is strongly discouraged because it raises the “inflation adjusted” cost of borrowing. If a deflationary debt cycle is started, there could be a huge drop in debt over a few years. This would be a different way to reach collapse.

Why couldn’t others see the problem that is now at our door step?

1. The story is a complicated, interdisciplinary story. Even trying to summarize it in a few paragraphs is not easy. Most people, if they have a background in oil issues, do not also have a background in financial issues, and vice versa.

2. Economists have missed key points. Economists have missed the key role of debt in extracting fossil fuels and in keeping the economy operating in general. They have also missed the fact that in a finite world, this debt cannot keep rising indefinitely, or it will grow to greatly exceed the physical resources that might be used to pay back the debt.

Economists have missed the fact that resource depletion acts in a way that is equivalent to a huge downward drag on productivity. Minerals need to be separated from more and more waste products, and energy sources need to be extracted in ever-more-difficult locations. High energy prices, whether for oil or for electricity, are a sign of economic inefficiency. If energy prices are high, they act as a drag on the economy.

Economists have missed the key role oil plays–a role that is not easily substituted away. Our transportation, farming and construction industries are all heavily dependent on oil. Many products are made with oil, from medicines to fabrics to asphalt.

Economists have assumed that wages can grow without energy inputs, but recent experience shows the economies with shrinking oil use are ones with shrinking job opportunities. Economists have built models claiming that prices will rise to handle shortages, either through substitution or demand destruction, but they have not stopped to consider how destructive this demand destruction can be for an economy that depends on oil use to manufacture and transport goods.

Economists have missed the point that globalization speeds up depletion of resources and increases CO2 emissions, because it adds a huge number of new consumers to the world market.

Economists have also missed the fact that wages are hugely important for keeping economies operating. If wages are cut, either because of competition with low-wage workers in warm countries (who don’t need as high a wages to maintain a standard of living, because they do not need sturdy homes or fuel to heat the homes) or because of automation, economic growth is likely to slow or fall. Corporate profits are not a substitute for wages.

3. Peak Oil advocates have missed key points. Peak oil advocates are a diverse group, so I cannot really claim all of them have the same views.

One common view is that just because oil, or coal, or natural gas seems to be available with current technology, it will in fact be extracted. This is closely related to the view that “Hubbert’s Peak” gives a reasonable model for future oil extraction. In this model, it is assumed that about 50% of extraction occurs after the peak in oil consumption takes place. Even Hubbert did not claim this–his charts always showed another fuel, such as nuclear, rising in great quantity before fossil fuels dropped in supply.

In the absence of a perfect substitute, the drop-off can be expected to be very steep. This happens because population rises as fossil fuel use grows. As fossil fuel use declines, citizens suddenly become much poorer. Government services must be cut way back, and government may even collapse. There is likely to be huge job loss, making it difficult to afford goods. There may be fighting over what limited supplies are available.What Hubbert’s curve shows is something like an upper limit for production, if the economy continues to function as it currently does, despite the disruption that loss of energy supplies would likely bring.

A closely related issue is the belief that high oil prices will allow some oil to be produced indefinitely. Salvation can therefore be guaranteed by using less oil. First of all, the belief that oil prices can rise high enough is being tested right now. The fact that oil prices aren’t high enough is causing oil companies to cut back on new projects, instead returning money to shareholders as dividends. If the economy starts shrinking because of lower oil extraction, a collapse in credit is likely to lead to even lower prices, and a major cutback in production.

4. Excessive faith in substitution. A common theme by everyone from economists to peak oilers to politicians is that substitution will save us.

There are several key points that advocates miss. One is that if a financial crash is immediately ahead, our ability to substitute disappears, practically overnight (or at least, within a few years).

Another key point is that today’s real shortage is of investment capitalin the form of oil and other natural resources needed to manufacture the new natural gas powered cars and the fueling stations they need. A similar shortage of investment capital plagues plans to change to electric cars. Wage-earners of modest means cannot afford high-priced plug in vehicles, especially if the change-over is so fast that the value of their current vehicle drops to $0.

Another key point is that the alternatives we looking at are limited in supply as well. We use far more oil than natural gas; trying to substitute natural gas for oil will lead to a shortfall in natural gas supplies quickly. Ramping up electric cars, solar, and wind will lead to a shortage of the rare earth minerals and other minerals needed in their production. While more of these minerals can be accessed by using lower quality ore, doing so leads to precisely the investment capital shortfall that is our problem to begin with.

Another key point is that electricity does not substitute for oil, because of the huge need for investment capital (which is what is in short supply) to facilitate the change. There is also a timing issue.

Another key point is that intermittent electricity does not substitute for electricity whose supply can be easily regulated. What intermittent electricity substitutes for is the fossil fuel used to make electricity whose supply is more easily regulated. This substitution (in theory) extends the life of our fossil fuel supplies. This theory is only true if we believe that  coal and natural gas extraction is only limited by the amount those materials in the ground, and the level of our technology. (This is the assumption underlying IEA and EIA  estimates of future fossil use.)

If the limit on coal and natural gas extraction is really a limit on investment capital (including oil), and this investment capital limit may manifest itself as a debt limit, then the situation is different. In such a case, high investment in intermittent renewables can expected to drive economies that build them toward collapse more quickly, because of their high front-end investment capital requirements and low short-term returns.

5. Excessive faith in Energy Return on Energy Investment (EROI) or Life Cycle Analysis (LCA) analyses. Low EROI returns and poor LCA returns are part of our problem, but they are not the whole problem.  They do not consider timing–something that is critical, if our problem is with inadequate investment capital availably, and the need for high returns quickly.

EROI analyses also make assumptions about substitutability–something that is generally not possible for oil, for reasons described above. While EROI and LCA studies can provide worthwhile insights, it is easy to assume that they have more predictive value than they really do. They are not designed to tell when Limits to Growth will hit, for example.

6. Governments funding leads to excessive research in the wrong directions and lack of research in the right direction. Governments are in denial that Limits to Growth, or even oil supply, might be a problem. Governments rely on economists who seem to be clueless regarding what is happening.

Researchers base their analyses on what prior researchers have done. They tend to “follow the research grant money,” working on whatever fad is likely to provide funding. None of this leads to research in areas where our real problems lie.

7. Individual citizens are easily misled by news stories claiming an abundance of oil. Citizens don’t realize that the reason oil is abundant is because oil prices are high, debt is widely available, and interest rates are low. Furthermore, part of the reason oil appears abundant is because low-wage citizens still cannot afford products made with oil, even at its current price level. Low employment and wages feed back in the form of  low oil demand, which looks like excessive oil supply. What the economy really needs is low-priced oil, something that is not available.

Citizens also don’t realize that recent push to export crude oil doesn’t mean there is a surplus of crude oil. It means that refinery space for the type of oil in question is more available overseas.

The stories consumers read about growing oil supplies are made even more believable by forecasts showing that oil and other energy supply will rise for many years in the future. These forecasts are made possible by assuming the limit on the amount of oil extracted is the amount of oil in the ground. In fact, the limit is likely to be a financial (debt) limit that comes much sooner. See my post, Why EIA, IEA, and Randers’ 2052 Energy Forecasts are Wrong.

8. Unwillingness to believe the original Limits to Growth models. Recent studies, such as those by Hall and Day and by Turner, indicate that the world economy is, in fact, following a trajectory quite similar to that foretold by the base model of Limits to Growth. In my view, the main deficiencies of the 1972 Limits to Growth models are

(a) The researchers did not include the financial system to any extent. In particular, the models left out the role of debt. This omission tends to move the actual date of collapse later, and make it less severe.

(b) The original model did not look at individual resources, such as oil, separately. Thus, the models gave indications for average or total resource limits, even though oil limits, by themselves, could bring down the economy more quickly.

I have noticed comments in the literature indicating that the Limits to Growth study has been superseded by more recent analyses. For example, the article Entropy and Economics by Avery, when talking about the Limits to Growth study says, ” Today, the more accurate Hubbert Peak model is used instead to predict rate of use of a scarce resource as a function of time.” There is no reason to believe that the Hubbert Peak model is more accurate! The original study used actual resource flows to predict when we might expect a problem with investment capital. Hubbert Peak models overlook financial limits, such as lack of debt availability, so overstate likely future oil flows. Because of this, they are not appropriate for forecasts after the world peak is hit.

Another place I have seen similar wrong thinking is in the current World3 model, which has been used in recent Limits to Growth analyses, including possibly Jorgen Randers’ 2052. This model assumes a Hubbert Peak model for oil, gas, and coal. The World3 model also assumes maximum substitution among fuel types, something that seems impossible if we are facing a debt crisis in the near term.

9. Nearly everyone would like a happy story to tell. Every organization from Association for the Study of Peak Oil groups to sustainability groups to political groups would like to have a solution to go with the problem they are aware of. Business who might possibly have a chance of selling a “green” product would like to say, “Buy our product and your problems will be solved.” News media seem to tell only the stories that their advertisers would like to hear. This combination of folks who are trying to put the best possible “spin” on the story leads to little interest in researching and telling the true story.


Wrong thinking and wishful thinking seems to abound, when it comes to overlooking near term limits to growth. Part of this may be intentional, but part of this lies with the inherent difficulty of understanding such a complex problem.

There is a tendency to believe that newer analyses must be better. That is not necessarily the case. When it comes to determining when Limits to Growth will be reached, analyses need to be focused on the details that seemed to cause collapse in the 1972 study–slow economic growth caused by the many conflicting needs for investment capital. The question is: when do we reach the point that oil supply is growing too slowly to produce the level of economic growth needed to keep our current debt system from crashing?

It seems to me that we are already near such a point of collapse. Most people have not realized how vulnerable our economic system is to crashing in a time of low oil supply growth.

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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598 Responses to Limits to Growth–At our doorstep, but not recognized

  1. Jon Freise says:

    Dennis Meadows did a very interesting talk at the Smithsonian on how it is too late for sustainable development. Collapse is unavoidable.

    However, I don’t think the collapse will be equally distributed. Smmmrm areas will do well. US steel peaked in the 50’s while China iron ore production is still growing. So some areas will have industrial capacity to grow for some time. Those that are past energy peak, as the US will likely be once natural gas peaks, are going to be facing long declines.

    It might be worth looking for example nations that have seen a long decline, and how did their financial system react?

    • the global industrial/commercial economy exists as an interdependent, interacting system….or in plain language, a house of cards.
      take one piece out and the entire edifice collapses.
      whatever peaked/declined in past periods is irrelevant, because the energy system that enabled the function of global business continued unaffected. once the energy system is seen to be failing, the realisation that imminent collapse is on the horizon will cause that collapse to spread like a contagion.
      we are interlocked by financial capital, without the certainty of that, everything will collapse virtually overnight.

    • Danny says:

      A comforting thought…usually by rich people of rich nations…but not true at all….I believe that QE has made a lot of people think that they themselves will be fine no matter what happens…but that is a false assumption.

  2. Christian says:

    Hi. My provincial representative cancelled our meeting; I suppose he feels he just can’t hold the issue. Nevertheless, he invited me to another meeting attended by the party’s head. It’s a national congressman that reached the second place in the last national run for president (with a modest 14%). I declined because there would be a hundred people and limits to grow were certainly not in the agenda. Still on the run, I was invited to another political meeting march 8, which the top guy and some other congressmen are expected to attend. I am supposed to speak in a round table on “environment and sustainable development”. I told the event organizer the only sustainable thing is to move urbanites into the field, and there was no problem. So, I’m engaged and will start speaking on oil and energy, and on whatever comes. May be I can even bring another guy to speak, a repentant orthodox economist now talking on peak oil and Cuba. Meanwhile, I’ve issued another post updating the problem and outlining the way out. There is a draft for a continental currency too. It’s the last post, now my work must go institutional or finish. I have nothing more to say on an individual basis.
    I’ve seen some visits to it from the US, so I will help you a little more. Somebody talked here about the impossibility of debt jubilee because this means the end of petrodollar. This is right, of course, but will happen anyway as we all know. The point is to suffer it as a crash or to produce it as a political and organized act. Excluding imports and shale, the US is still producing 4.5 Mbd, which is more than enough to its basics needs and federal state can handle this work, closing operations that contradict thermodynamics. US conventional oil production falls smoothly and is able to last some decades. Moreover, you can still buy some oil to other nations, using another currency or barter (remember they need money or some stuff, the green banknote being not eatable). It’s better if you reach an agreement upon this before leaving capitalism. You’re not the kings of the world anymore but that doesn’t mean you’ve become bums. So you may loose just a half or so of total consumption. No planes, less traveling, etc. You can do it. Just have to accept it. Less NG? Use high efficiency wood stoves, close all automakers and other not useful industries (almost all of them). And freeze a little. Use less electricity, bye bye air cond and highway lights. Dismiss bureaucracy, close banks and lawyers, accounting and most engineers buffets and faculty departments; stop wasting energy spying (I made some “anti-American” proposals here and they had gone fine, so spying is not working or not useful). Make Paul happy and close American Idol and some scrap media. A lot of people will be out of work, almost everybody. Given you still have a lot of oil people can easily be feed and put to work in the fields, especially building little new houses and preparing for living in as farmers; teach them. Issue a new currency and let it spread. The State may collect it again by taxing or by selling energy (kwh, cf and gallons) and whatever it produces (clothes, food, etc.). Pay extra wages to people moving to the country, or give them some kind of immediate benefit along with that of having a future. Talk to Mexico and Canada, you’re in the same boat. Restructure democratic system.
    It’s almost the same we have to do. I don’t know if Gail do work in a think tank or if some government or military staff reads this, but this is the path.
    I’ll tell you what happens here next month, bye

  3. Christian says:

    Some extra tips. First of all, don’t wait politicians do all the job. They don’t know what to do, and if they know they are afraid the public will not like it. You must start. Talk to the military and to the politicians. Some US Senators advisors attended Transatlantic Energy Security conference. Talk to them. Talk to local politicians. Join Graeber, Occupy Wall Street and other movements. Gail is doing a fantastic job, but you can start a new site more centered in possibilities rather than limits. Translate my stuff if you wish. Learn about Cuba, its goods and bads. Learn about the Third World. Learn about Russian stoves and the like. All the countries must do it. We must work together.

  4. Paul says:

    Here’s the headline:

    Nuclear fusion breakthrough raises hopes for ultimate green energy source

    Here’s the story:

    In their experiments, researchers at the National Ignition Facility at the Lawrence Livermore National Laboratory in California use a bank of 192 powerful lasers to crush a minuscule amount of fuel so hard and fast that it becomes hotter than the sun.

    The process is not straightforward. The lasers are fired into a gold capsule that holds a 2mm-wide spherical pellet. The fuel is coated on the inside of this plastic pellet in a layer as thin as a human hair.

    When the laser light enters the gold capsule, it makes the walls of the gold container emit x-rays, which heat the pellet and make it implode with extraordinary ferocity. The fuel, a mixture of hydrogen isotopes called tritium and deuterium, partially fuses under the intense conditions.

    The scientists have not generated more energy than the experiment uses in total. The lasers unleash nearly two megajoules of energy on their target, the equivalent, roughly, of two standard sticks of dynamite. But only a tiny fraction of this reaches the fuel. Writing in Nature, the scientists say fusion reactions in the fuel released at best 17 kilojoules of energy.

    Though slight, the advance is welcome news for the NIF scientists. In 2012, the project was restructured and given more modest goals after six years of failure to generate more energy than the experiment consumes, known as “ignition”.

    And we wonder why people think the miracle cure is ‘just around the corner’ — the MSM encourages them to believe that — with ridiculous headlines like that.

    • Chris Johnson says:

      The standing joke is that when fusion was first proposed circa 1970, the scientific community said it would take about 20 years to develop and perfect. And every year since then the scientists have said just about the same thing…

      • timl2k11 says:

        I would think that any self-respecting scientist would understand that the only way sustainable (and not runaway like in a hydrogen bomb) fusion can occur is inside a star. Experimenting with fusion is one of the many acts of delusion/desperation I see in our society.

    • Adam says:

      Even if we did find cheaper energy, of whatever sort, it would still not solve our problem of resource depletion – in fact, it would allow us to trash the planet even more comprehensively.

      There is an argument that the big oil companies have quashed research into cheap alternative energy because they would regard this as a threat. It would certainly be a threat to the USA, which derives a lot of its financial power from the fact that most oil is priced in US dollars, therefore creating a huge demand for its currency. Some regard this as a “conspiracy theory”. Well, conspiracies do exist and have existed. Throughout history, organisations have struggled to gain power and maintain that power. If you look up, say, “the Hutchison effect”, you will find that there are still clever people who are pushing the boundaries of science. Progress did not stop with the invention of the atom bomb. Just look at the technologies developed by the military-industrial complex that have been used in Iraq and elsewhere: microwave weapons and directed energy weapons. How much does the average person know about these – and why not? How much do I know? Not as much as I would like. We know that states around the world have indulged in various secret activities that have only become known decades later: experimentation, torture, sterilisation, etc. Personally, I prefer not to be naive.

      However, none of this invalidates Gail’s point that we live in a finite world. That won’t change. But as to whether we will one day acquire appliances that will at least provide us with cheap and non-destructive alternative methods of heating our homes, for instance – on that, I prefer to keep an open mind.

  5. Quitollis says:

    Paul, why don’t you go to Russia and join Putin’s party if you still think that Marxism is so helpful?

  6. Quitollis says:

    Bob and Rasta took down the Marxists in Jamaica in the 1970s. LOL @ the Marxists.

  7. Pingback: gail tverberg sobre los límites del crecimiento y la extralimitación donde nos hallamos | tratar de comprender, tratar de ayudar

    • Chris Johnson says:

      Congratulations, Ann. You connected the dots of the most despicable travesty since World War II. Recommend you / anyone interested query YouTube for ‘Bill Clinton — Glass Steagall’; he admits he ‘erred’. Note that the banksters and their toy politicians substituted with Dodd Frank, which is unenforceable, but continue to fight mild attempts to reimpose Glass-Steagall.
      Is our civilization finito? Doomed?

  8. Don Stewart says:

    Dear Gail and Others

    There has been considerable discussion of the effectiveness of Cuba’s efforts to grow more of its food. I have addressed their results in a couple of posts. For a broader view, it may be worthwhile to look at Switzerland and Sweden during WWII. Both countries were neutral, neither was invaded. Yet both were cut off from global trade and both suffered food shortages.


    ‘Already in April 1939 the Swiss parliament approved a resolution for the increase of agricultural production. Friedrich Traugott Wahlen planned the so-called “cultivation battle” as a chief civil servant in the Swiss Federal Office for War Nourishing. Every green area that seemed to be usable was cultivated according to the ” Wahlen Plan” with bread grain, vegetables or potatoes. The cultivated area almost tripled till the end of war, the self-sufficiency degree rose from 52 % in 1939 to 59 % (compared to pre-war consumption), which meant 80 % considering the scarcer rations during war . Still, 20 % of food had to be imported. Raw materials like metals, rubber, coal and all sorts of fuel etc. had to be imported almost completely because there are no significant deposits in Switzerland.’

    Note that the cultivated area increased much more than the production of food. I have previously noted that flood plains are the most productive places to grow food…expanding up a hillside is not especially productive, particularly in the absence of terraces. The increased prevalence of floods with climate change imperils the prospects for reliably farming in flood plains, and so should be considered as a threat all out of proportion to the raw acreage involved.

    The greatest energy restriction took place in Norway (20%), followed by Finland
    (17%), while Sweden and Denmark had a restriction of 4–7% compared to pre-war levels.
    The most pronounced effect of WWII on height and weight is seen in Norwegian children,
    while some effect is observed for the youngest children in Finland. Little or no effect is seen
    in Sweden and Denmark

    If you search a little bit, you will find explanations for why Germany did not invade Sweden. Sweden traded with Germany during WWII and particularly supplying iron ore, especially up to the German defeat at Stalingrad. Swedes did have to restrict calories during WWII, but there was no significant health effect of the small restriction. Norway, which imported far more of its food during peacetime, suffered the largest health effects.

    What this tells us, I think, is that a sudden collapse of the global movement in food is likely to have repercussions. The world population in 1940 was 2.3 billion. It is now 7.2 billion. Thus, a trade collapse would be likely to cause far more disruption than WWII did for Switzerland and Sweden. In Japan, the scientist Masonobu Fukuoka, later to become famous as an ecological farmer in his book One Straw Revolution, mostly avoided military service by studying how to increase the amount of insects in the Japanese diet to provide adequate protein. Albert Bates, in his Post Petroleum Survival Guide and Cookbook, includes a recipe for grasshoppers. You might like to check that out in terms of sober reality.

    In short, if a country is anticipating the contraction of global trade in food, then it should be looking very seriously at its options. And, of course, giant cities need to think carefully about supplies from agricultural regions.

    Don Stewart

  9. Peter S says:

    It’s very interesting to read the responses to the potentially extremely dangerous situation we are facing, in this comments section to this blog and other webpages. I notice general types of comments (in no particular order):

    1) Realism and pragmatism: making plans to live on a farm, live more (trully) sustainably etc.
    2) Depression, shock and in a few cases even feelings of “no reason to live”: difficulty rationalizing such a sudden and surreal crisis, as society keeps going on seemingly oblivious
    3) “I can’t accept that it could be so bad”: sticking to media (even economist, company and political) talking points, or hoping that the problem will be localized and that our capitalist system can basically continue, and we can all drive electric cars, maybe just recycle a little more etc.
    4) “It’s fine, we have x”: championing a new, clean, cheap form of energy always “just around the corner” (and maybe a conspiracy theory explaining why we never see it)
    5) Blaming someone else: oil companies for tricking us, the government for refusing to drill in Alaska etc., maybe a conspiracy theory
    6) Appropriating this crisis into pre-existing political or religious beliefs, and then using it to support those beliefs: whether they be “prepper”, conservative anti-Obama, anti-regulation, anti-socialism (but could include beliefs from anywhere on the political spectrum)
    7) Denial and refusal to admit even the possibility of this crisis, often just out of hand: “Is it absurd? Of course it is.”
    8) Pessamistic, gleeful and with claims of authority, but without real evidence (I’m not remarking on the probability of such a worst-case scenario, just how much some replies really like to talk about the worst-of-the-worst)

    I’m not referring to analysis with links, evidence, numbers etc. (like Gail’s blog posts for example), more the comments and reactions. I suppose a lot of these reactions correspond to the stages of grief. I’m finding the reactions to this crisis almost more interesting than the crisis itself (but perhaps that’s because I’ve been studying social/cultural anthropology). I really respect Gail’s work because she includes numbers, and discusses it in a very dispassionate and rationally argued manner. Not to mention that I can’t fault the arguments, and the fundamental predictions from the “peak oil” movement have happened as stated: that oil production really did peak about 2006, and it has had a huge and complex effect on our economic system – a very bad effect.

  10. Hartley Schultz says:

    Hello once again Gail,
    After reading a number of your posts, I am doing my best to understand what could push Australia into the next collapse. Since I was born well before there was a global economy, and lived through the depression and the war, I don’t see why Australia couldn’t go back to being largely self sufficient like it used to be. As I look around me on the street, I can’t see any evidence that there is another depression just around the corner. People are spending on their credit cards here like there is no tomorrow. We still seem to be in the throws of the biggest economic boom ever seen, certainly in construction. That said, I don’t like what I am reading the papers.

    According to our federal treasurer, Mr Joe Hockey, we are at the end of the age of entitlement with too many Australians on welfare payments ie. aged pensions, war pensions, disability pensions, not to mention unemployment and student benefits, which the country can no longer afford.

    I couldn’t make head nor tail out of Mr Hockey’s solution to the problem, but then I am probably too old. Have I got this right? Is Australia going to usher in a golden age of economic growth, by getting younger women back into the workforce and making private enterprise pay for it? At the same time, government assets will be sold off and bought by superannuation funds. The government is then going to buy “new assets that are going to drive the new economy.” Don’t you think with Mr Abbott and Mr Hockey at the helm, our economy is decades away from doom and disaster?

    The value of our dollar has fallen sharply against other currencies, This is largely blamed on foreign ownership of LNG resources.
    “This means that less of the extra revenue associated with both existing and new resource ventures will accrue as profits paid to Australian residents than might have been the case in earlier booms,” Does that mean that there are fewer jobs for Aussies, and more profits for overseas companies, who are not going to spend the profits here?

    Do you really think with all this good news in the press, collapse is just around the corner in Australia?

    Kind regards H.

    • Paul says:

      I recall my lawyer in Hong Kong commenting in 2007 after a trip to the US “that place is booming — the amount of wealth is absolutely incredible”

      Within 6 months we saw that the wealth was not real.

      Like Jim Rogers said in 208 — with all the trillions of money printing going on we’re gonna have one hell of a party — but the hangover is going to be brutal.

      Whatever prosperity there is in the world right is false – it is 100% based on QE and ZIRP.

      It’s all awesome — till it’s not.

    • edpell says:

      The countries that get there tax money from primary resource extraction will do fine until the primary resource is on the decline. My impression is that Australia has lots of natural gas and coal. Until production peaks you will be fine. When it declines it will be all against all fighting politically for the shrinking pie. Yeah, let’s throw _____ off the gravy train.

      Even if the north west off shore natural gas is owned by foreign companies the territorial and national government will collect their tax cut of the action.

    • edpell says:

      Hartley, I do not know how it works in Australia, in the U.S. “new economy” would mean crony capitalism giveaways of tax payer money to the pals of the politicians.

  11. Don Stewart says:

    Dear Gail and Others
    Here is a highly provocative interview of David Holmgren by KMO. You will have fun parsing out how David thinks and the way others such as Gail, Orlov, Kunstler, Foss, and geological peak oilers think.

    Also stay tuned for KMO’s concluding statement. Don Stewart

    • timl2k11 says:

      Provocative? Hardly. I couldn’t discern what the point of the discussion was. I certainly couldn’t discern anything coherent coming from Holmgren, nor parse what in the hell he thought he was trying to say. Not fun at all.

      • Don Stewart says:

        Dear timl2k11

        Are these statements correct?

        Holmgren thinks we have plenty of resources to provide the necessities for the human population, at least in the near future. But we do not have the ability to provide the necessities for poor people in the current ‘trickle down’ system. Gail thinks we do not have the resources needed to provide the necessities for most of the people on the planet, no matter what we do.

        Are those accurate statements? Would you modify them? Do you think one person is right, and the other wrong, or do you think both have some germ of truth but not the whole truth? Would you like to put forth a statement of your own?

        Do the same exercise for Holmgren vs. Kunstler in terms of the value of suburbs going forward.

        Pick some more contrasts and repeat the exercise.

        Don Stewart

  12. Paul says:

    It Doesn’t Take Much For People To Start Behaving Like Crazed Lunatics

    If an ice storm can cause this much panic in our major cities, what will a real crisis look like? The biggest news story in the United States right now is the “historic ice storm” that is hammering the South. Travel will be a nightmare, schools and businesses will be closed, and hundreds of thousands of people will lose power. In fact, it is being projected that some people could be without power for up to a week.

    But at the end of the day, the truth is that this ice storm is just an inconvenience. Yes, the lives of millions of Americans will be disrupted for a few days, but soon the ice will melt and life will be back to normal. Unfortunately, it doesn’t take much for people to start behaving like crazed lunatics.

    As you will see below, the winter weather is causing average Americans to ransack grocery stores, fight over food items and even pull guns on one another. If this is how people will behave during a temporary weather emergency, how will they behave when we are facing a real disaster?

  13. Paul says:

    Knowing that collapse is imminent, let’s assume that saving for retirement is pointless because you will never see that money.

    So let’s say one had USD250,000 in a 401k or other plan — and one decided to absorb the tax hit and take this in cash immediately.

    You could of course just blow it on a ‘bucket list’ — or you could attempt to invest in some sort of preparation that would help you survival the new abnormal that is coming.

    If the former, what would your bucket list be?

    If that latter, what would you use the money for specifically?

    • Danny says:

      I wonder when we will start seeing stories on cnbc about how important your 401k is etc…I know there have been a ton of adds lately on how much you need to save for a retirement well into old age and “oh my gosh!! what happens if I don’t have enough in my 401k….”! I try to watch sports as a distraction from the insanity and I am hit with one of these ads every third one; I wonder if they know something?!!! In my previous life I was in the corporate world of marketing and I am still fascinated by what commercials say about a society lots of psychology goes into marketing stuff to people and we have become very good at telling people what happiness is. Yes I am a bad American cause I don’t contribute to my 401k and buy health insurance…etc…I am the grasshopper and they are the ants but what happens when when paradigms shift and I am the ant and they are the grasshopper? It is so strange to see this train coming down the tracks and then so many people oblivious to it….I think they have an idea it is there but just don’t want to think about it. I think a lot of the people I know have been the “privileged few” and don’t think it will touch them much; even here I see that sentiment echoed throughout…Danny

      • Paul says:

        One other thought on this — as things worsen the gov will require that pension funds invest in gov bonds — that is what Spain has done — public pensions have loaded up on bonds of an insolvent Spain — so there’s your precedent.

        The conundrum – take your cash out (and deal with the taxes) before that happens? Or leave it in and probably get nothing?

        • Danny says:

          Probably get nothing?!!! Did you say probably? From someone who talks of imminent collapse and a return to a Feudal system. I have quit my job and told my boss to kiss my big fat a** and told my in laws how I really feel about them and now you are saying probably…..

          • Paul says:

            It all depends on how far they can kick the can and when you are retiring — I cannot see the current situation continuing for more than 2 years.

    • Quitollis says:

      “You could of course just blow it on a ‘bucket list’”

      Or you could just “blow it” on a Bargain bucket, get a massive vegetarian pizza with extra jalapeno peppers and a bottle of gin and just enjoy the time that remains to you.

      • Danny says:

        “It all depends on how far they can kick the can and when you are retiring — I cannot see the current situation continuing for more than 2 years.” Really if the collapse is in two years and I am retired how do you get your pension, medicare, social security, etc.401k drops to 20 percent of what you put in…..I think it would suck to retire right now your money is ripe for the pickens as these people will be risk averse and very confident that the PTB have it all figured out. This is the major problem I see as people in all the “comfortable” positions never can or will question the system. The wealthier or more secure financially a person is the less likely they are to question MSM. I work with a lot of blue collar people but also rub elbows with wealthy elite, just my location and luck or bad luck, but it is the blue collar that really understand some of what is going on and questioning the system…Danny
        From 2112 Rush
        I believed what I was told. I thought it was a good life, I thought I was happy. Then I found
        something that changed it all…’

        [I. Overture]

        And the meek shall inherit the earth…

        • Quitollis says:

          We all inherit the earth in the end. Well actually most people are cremated these days, so we inherit the skies too and even the seas. … which bring us to the point that we will need a lot more crematoria when 6 billion crash out of a sudden. But where will we get the energy to fuel all that? I am actually feeling quite mellow tonight so I will bail out of that digression. Anyone for extra jalapeno?

          • Quitollis says:

            Will we leave large numbers of useless crematoria as monuments to our collapse? It seems pretty dismal. We should plan now to decommission them for the sake of future sensitive persons. OK, back to the jalapeno (promise).

    • edpell says:

      Buy a small farm in an out of the way location, with a water source. Farm for personal consumption and commerce to pay the taxes, up keep the equipment, and car. Buy PV and batteries for off grid electric. I know this will not last forever but nice to have light and power tools while figuring out how to deal with the new economy. Buy wood working tools power and hand. Buy metal working tools powered (lathe, mill, drop saw, drill, sheet metal punches, etc). Learn to use above over time to maintain farm DIY as much as possible.

  14. Don Stewart says:

    Dear Gail and Others
    I believe that I posted some observations about climate change and farming and how flooding seriously impacts fertile flood plains and how, in general, undependable weather increases the capital and maintenance costs of farming. Here is a concrete example. The note is from the Carrboro, NC farmers market. I will note that the hoop houses are also subject to damage from high winds, which have been increasing in frequency….Don Stewart

    Many of the farmers growing year-round rely on hoop houses to extend their season and start their spring crops. Unfortunately these structures don’t always hold up well in extreme weather conditions. Specifically, they aren’t made to handle the heavy weight of inches of snow and ice, and during heavy winter storms farmers often have to go out every few hours and knock the snow and ice off the tops to keep them from caving in. I have heard from a few farmers that are cleaning up damage to their hoop houses, but I think Tiny Farm got the worst of it. The weight of the ice completely caved in their two large hoop houses. Nonetheless, they WILL be at market with lettuces and greens!

  15. Chris R says:


    I came across your blog several months back and have been reading diligently since. Many thanks for your efforts, its refreshing to come across someone who is prepared to be realistic and actually try and discuss these issues even if its somewhat late in the day to be doing so.

    I am certainly not upto speed on everything but I noticed someone raised the issue of shutting down nuclear plants and ensuring cooling of spent fuel rods if things collapse.

    I believe the spent fuel rods have to be actively cooled in deep water pools for upto 20 years just to let some of the more energetic isotopes decay before they can be reprocessed. Without active cooling and the replenishment of the water, the water would eventually boil off, the rods would overheat, melt and burn, releasing large amounts of radioactive particles ‘smoke’ into the atmosphere. The ingestion or breathing in of such particles would result in cancers.

    Whereas I appreciate that the following suggestions hardly qualify as an ideal solution I am curious as to the feasibility and whether they might be preferable rather than hoping that active cooling could be maintained in the event of collapse. Do any of your readers have sufficient knowledge to comment on this.

    Enlarge and modify existing cooling ponds to take in rain water from a sufficiently large catchment area that there is a good chance that they will always remain full without active cooling simply by passive collection of rainwater. Would the rods and contents be stable if the water is boiling? Obviously you wouldn’t want the pond water getting into the local water table.

    Alternatively what would be the feasibility of embedding a rod into a block of concrete, glass or cast iron and either simply burying it in a remote area or simply dumping it in the deep ocean.

    The ocean would probably be the better bet on the assumption that by the time a block and the embedded rod break down most of the high energy isotopes would have decayed and whatever is left would be dispersed in the ocean.

    Once again, I appreciate this would not be an ideal solution, I appreciate that the industry would probably be delighted to be presented with a cheap option to get rid of their waste problem but would it not be better to acknowledge reality and deal with the problem to some degree than relying on long term active cooling to prevent large areas of land downwind of the reactors becoming uninhabitable?

    I have absolutely nothing to do with the nuclear industry!

    • Stilgar Wilcox says:

      How about drop them in the Marianna trench in the middle of the Atlantic? Permanent cooling under intense pressure.

      • edpell says:

        Air cooling with a fan from Sears would be better than the Marianna trench. We do not want to put the stuff in contact with water to corrode the metal casing and free the radioactive material. Bury in dry dirt Navada, Sahara, etc.

      • Chris R says:

        Any deep ocean would do! Keeps them away from people and also keeps people from fiddling with them for whatever reason. Any material released should be dispersed very slowly in the oceans where I am guessing it would just blend in with what is already there. Hopefully the fish wouldn’t object.

      • timl2k11 says:

        That’s just what I was thinking, except the Challenger Deep. 35,000 feet below the ocean surface and in a subduction zone that does not have earthquakes. Put it in the right spot and in a thousand years or so it might all have sunk into the mantle.

    • edpell says:

      Chris, my feeling for this is more like, one month after shutdown as long as the rods are spaced apart by 20cm there will be no melting and no burning even if just left in air.

      I do like your idea of rain water feed wet storage ponds. Note storage ponds run a little, 10 degrees C, above the environment, they do not boil. If not refilled they may evaporate to empty. After the first year I expect they would continue to be fine just from air convention cooling, IF not packed too close together.

      • Chris R says:

        edpell, thanks for the feedback. Though it does make me wonder what all the fuss is regards the cooling ponds in Japan (after the tsunami). Is it possible if spent rods are just being stored and not processed that they build up and things become rather messy in the ponds?

        • edpell says:

          Yes, if they were stored with some space between rods and they got moved so they are all sitting touching with no space that could be bad.

          • Chris R says:

            edpell – how bad is bad? I remember seeing a photo of spent rods arrayed in some sort of metal rack glowing blue at the bottom of a holding ponds, years ago. Guessing, if the holding ponds at Fukushima had lots of debris fall into them as well as sea water could well be looking at broken rods, smashed racks and sea corrosion.

    • Quitollis says:

      One last space mission, blast all of the rods off into the great “somewhere else”? Is that technically possible?

      • Quitollis says:

        I have heard it argued that it would be “irresponsible” to blast the rods into space but I am sceptical. It seems to be a case of what FN calls one of the “great errors” of mankind, to make one mistake and to then go to the opposite extreme. Yes it was arguably irresponsible to develop nuclear fuel when provision had not been made for long-term disposal of the waste, and yes, it would be irresponsible to blast them into space because there _may_ be life somewhere that _might_ suffer as a result but I say that there is life here and that we owe it to the earth to make the earth safe for life. If it is either us or the “maybes” of space then I say send them away. Yes arguably we have been irresponsible in our disposal of waste but lets not compound our foolishness by then not disposing of our waste in the most dangerous of cases.

      • Chris R says:

        Quitollis – It would definitely resolve the problem upto that point in time though I do not have any idea how many spent rods there are nor what they mass. I suspect it would consume an awful lot of resources and many liftoffs. Also given the things are lethally radioactive loading them into a spaceship without significant shielding could be problematic. There is also, the not insignificant risks of something going wrong with a takeoff or the rods somehow re-entering which would release the entire load in a cloud of vapour, which is what we were trying to avoid in the first place. Probably best to keep any approach as simple and low tech as possible.

  16. Don Stewart says:

    Dear Gail and Others
    There is some interesting arithmetic in this article:

    See particularly page 11 and immediately following. The political program for ‘green development’ which came out of Rio plus 20 implies an 80 fold increase in GDP during this century. Limits to growth, indeed.

    Don Stewart

  17. Kerryn Higgs says:

    Gail, I saw your posts on OIldrum over the years but did not realise till today that you have an ongoing site. Not many women pursuing the limits studies and great to see you are still at it

  18. Don Stewart says:

    Dear Gail and All

    Here is a link to an Eric Toensmeier talk surveying the methods which are currently being used to ‘carbon farm’.

    Eric is very straightforward about what is proven to work on many acres, what is currently working on small acreages, what is under development and promising, and what has signficant problems. He is also straightforward in stating that we need to get off the industrial corn dripline, and begin to rely on crops that don’t destoy the environment. He also thinks that we need not to eat beef every single day and confined animal operations need to disappear.

    Overall, you will probably find this to be hopeful. We can sequester a lot of carbon. But we cannot sequester carbon as fast as the international agencies predict that we will emit it. He thinks that biological sources can produce many of the products, such as plastics and drugs, that we currently produce from fossil fuels. He does not think that biofuels can power an ever expanding fleet of vehicles.

    So…yes, we have to change, but the new paths in agriculture show light at the end of the tunnel.

    Don Stewart

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  21. Anthony says:

    Hello Gail, this is the second post of yours I have read. I have been thinking for some time now that smoke and mirrors are being used to convince us that we are out recession here in the UK. I am so grateful to have found your blog :-) On a purely selfish level I now feel that my recent evasive actions taken this year are vindicated… However I will be reading the rest of your posts to see if you have an idea of how mankind can go forward… I hope you don’t suggest an agricultural society because my parents wanted me to be a farmer and I declined their offer. Were they right all along?

    • A smallish share of the population can perhaps succeed in an agricultural society, but it will be a difficult transition at best. Long term, humans have been hunter gatherers. Such an approach is much more flexible, especially in times of climate change. People were in better health than early farmers, as hunter-gatherers.

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