IEA Investment Report – What is Right; What is Wrong

Recently, the IEA published  a “Special Report” called World Energy Investment Outlook. Lets’s start with things I agree with:

1. World needs $48 trillion in investment to meet its energy needs to 2035. This is certainly true, if we assume, as the IEA assumes, that world economic growth will actually improve a bit, from 3.3% per year in the 1990 to 2011 period to 3.6% per year in the 2011 to 2035 period. It is likely that the growth in investment needs will be even higher than the IEA indicates.

In my view, this is a CYA report. The IEA sees trouble ahead. There is no way that investment of the needed amount (which is likely far more than $48 trillion) can be met. With the publication of this report, the IEA can say, “We told you so. You didn’t invest enough. That is why energy supply ran into huge problems.”

2. Without reform to power markets, the reliability of Europe’s electricity supply is under threat. The current pricing model, in which wind and solar PV get feed in tariffs and electricity prices for other fuels is set using merit order pricing, produces huge market distortions.

In my view, the problem is even worse than the writers of the report understand. The value of wind and solar PV are inherently difficult to determine, because they produce intermittent supply, and this is not comparable to other types of electricity. Furthermore, a big chunk of costs relate to transmission and distribution–42% of electricity investment costs in the New Policies Scenario. Many well-meaning researchers looked at wind and solar PV and thought they were a solution, but they tended to look at the situation too narrowly.

To look at the situation properly, one really needs to look at the total system cost of generating electricity with intermittent renewables (of a given amount) compared to the total system cost of generating electricity without intermittent renewables. Proper pricing needs to include all of the additional costs involved, including the additional cost for storage, the additional cost for long distance transmission, and the additional costs encountered by fossil fuel providers in ramping up and down their generation to match changing output from intermittent renewables.

A study by Weissbach et al.(here or here) suggested that wind and solar PV were “an order of magnitude” less effective than fossil fuels, hydroelectric or nuclear, when full costs were considered. Broader analysis also raises questions as to whether there is any real carbon savings from wind and solar PV–did the belief they were helpful just come from underestimating true system costs?

I would raise the question as to whether competitive markets for electricity even make sense. Regulated markets allow the various players to make an adequate return, and allow utilities to collect adequate fees for infrastructure. The overseer can increase or reduce investment of a particular kind, based on the needs of the particular system. I notice a recent Bloomberg article says, Europe Faces Green Power Curbs to Stop Grids Overloading. The current system is clearly working badly.

3. Tight oil from shale deposits will need significant supplementation from other sources, if it is to be sufficient to meet our needs to 2035. This is the chart I made from data provided by the IEA in its November 2012 World Energy Outlook, with respect to its New Policies Scenario.

FIgure 1. My interpretation of IEA Forecast of Future US Oil Production under "New Policies" Scenario, based on information provided in IEA's 2012 World Energy Outlook.

FIgure 1. My interpretation of IEA Forecast of Future US Oil Production under “New Policies” Scenario, based on information provided in IEA’s 2012 World Energy Outlook.

The current report is not intended to be a report regarding future oil production, but one highlight is, “Meeting long-term oil demand growth depends increasingly on the Middle East, once the current rise in non-OPEC supply starts to run out of steam in the 2020s.” This implies that not only is US tight oil not going to solve our problems, neither will tight oil elsewhere. Instead IEA is back to its old plan of “calling on OPEC”–hoping that the Middle East is there to help, if no one else is around. This is wishful thinking–something I will discuss later.

4. IEA’s investment report is one documenting diminishing returns, even though it never uses that term. Diminishing returns take place if society is becoming less and less efficient at producing energy products. For oil, the issue is that the easy to extract resources were pulled out first; we must now move on to more difficult to extract resources. For electricity, the issue is that the old resources produced too much carbon; we must now move on to higher-priced approaches that (hopefully) produce less carbon.

We can see diminishing returns many places in the report. The major point of the report is that investment costs are expected to rise faster than either the amount of oil or the amount of electricity produced. There are other more specific statements, too. In US tight oil, “High production rates mean that resources are rapidly depleted, with a corresponding rise in costs per barrel as operators move out of the sweetspots to areas where the recovery per well is lower”(page 65). EU will need prices higher than today’s prices for LNG transported from America (page 76). In refineries, the drive is toward more complex and expensive technologies (page 77). There is a steady upward trajectory of the oil prices in the New Policies Scenario (page 81). Offshore wind is expected to move farther offshore, with higher expected costs (page 104).

The point that the IEA does not seem to understand is that diminishing returns affects buyers’ ability to pay higher prices for products. The IEA assumes that buyers will be able to pay higher prices (than the general rise in inflation) for energy products, without it adversely affecting the economy. This clearly isn’t true because salaries do not rise to match the higher cost of energy products. Buyers will cut back on discretionary goods, when energy prices rise. This leads to layoffs in discretionary sectors and quite possibly recession. It also leads to higher default risk.

In fact, wages tend to drop from diminishing returns, because workers are becoming, in some sense, less efficient and thus producing less goods per hour of work. Joseph Tainter in The Collapse of Complex Societies says that diminishing returns were what led to the collapse of ancient civilizations.

Points of Disagreement

1. Many OPEC countries which hold the largest, lowest-cost reserves are deliberately limiting their production rates so as to keep reserves for the longer term.  This is common misbelief, repeated by the IEA, but it not true.

The true cost of production in the Middle East is not just the cost of pulling the oil out of the ground. Instead, one has to look at the full cost of the entire system needed for the extraction, including whatever costs are needed to pacify the people in the area, plus whatever costs are needed for additional infrastructure. Even if Iraq can in theory ramp up oil production, this does not automatically happen. Even if Libya can in theory ramp up production, we shouldn’t expect fighting to stop tomorrow. With these costs, the cost per barrel is up close to, or above, today’s oil cost.

Saudi Arabia publishes high reserve numbers, but there is no indication that Saudi could, if they wanted to, greatly ramp up production. Saudi’s big recent addition was 500,000 barrels a day of refinery capacity in 2013, so that it could make use of heavy, polluted oil from Manifa field, that was supposedly part of its “spare capacity.” An additional 400,000 barrels a day at the same facility is supposed to come on line in 2014. There are declines going on elsewhere, so it is not clear that even these additions will actually add to its total oil production. Saudi Arabia’s total output was slightly lower in 2013 than in 2012, according to the EIA.

The Saudi “proven oil reserves” are unaudited numbers. Its big oil field is Ghawar, producing something like 5 million barrels a day. We don’t know how long it can continue producing. We know that horizontal wells can keep production from declining for a while, but that if a drop-off comes, it is likely to be more severe than with vertical wells. If Ghawar production starts declining significantly, world oil production is likely to drop.

We know that Saudi Arabia has some heavy oil it can in theory develop, not that different from Canadian oil sands or Venezuelan Oronoco belt heavy oil. Such oil would require large front-end investment and flow very slowly. According to the Wall Street Journal, “That the Saudis are even considering such a project shows how difficult and costly it is becoming to slake the world’s thirst for oil. It also suggests that even the Saudis may not be able to boost production quickly in the future if demand rises unexpectedly.”

2. It makes sense to find new sources of investment that will provide funds at lower rates for energy project finance. The report talks trying to find new sources of investment for energy projects other than the traditional source. In particular, it mentions the possibility of tapping funds held by institutional investors (pension funds, insurers, sovereign wealth funds and so on). Pensions and insurance companies are of course currently involved by holding stocks and bonds of oil and other energy companies.

The reason why new sources of lending are needed (besides the problem with high costs) is that the fact that prior sources are getting burned out at the same time huge amounts of new lending are needed. Governments used to be sources of funds, but can no longer be taken for granted (page 38). Changes in Basel III rules make it harder for banks to make long-term energy loans, without charging higher rates (page 39). Quite a bit of the lending in the future will relate to developing countries (see Figure 2 below). Many who have lent to developing countries in the past have suffered losses (page 39). With respect to oil projects, there are many examples where oil companies have made big investments, with virtually no return, such as Kazakhstan oil (page 81).

Figure 2. Energy investment required by part of the world--IEA exhibit.

Figure 2. Energy investment required by part of the world–IEA exhibit.

Perhaps sovereign wealth funds, if they feel that the risk is appropriate, can lend in situations where past experience suggests prudence is needed. But with a background in the insurance industry, I am not sure that makes sense for insurance companies and pension funds to get into financing ports in Iraq, refineries in India, or long distance transmission lines to offshore wind turbines. If they do, it needs to be as part of program where adequate risk premiums are included in the interest rates, and the risk is distributed over a large number of participants using bonds or securitization of some form.  It seems like an intermediary such as a bank would need to be involved.

The big interest in those writing the report is getting costs down for the borrowers. If risk is going up, it is not at all clear that interest rates should be going down. Furthermore, developing an undeveloped country using $100 barrel oil is far more difficult than developing an undeveloped country using $20 barrel oil. This is a big reason that financing debt in undeveloped countries doesn’t work well.

Comment

What the IEA has inadvertently stumbled upon is the reason why oil limits are a problem, and in fact, the reason why energy limits in general are a problem. It looks like there are plenty of resources available and plenty of ways to reduce energy use through mitigation. In fact, it becomes to impossible to finance everything that needs to be done.

An energy-providing device, or an energy-saving mitigation, requires up front payment. This payment reflects the fact that oil and other scarce resources (high priced metals, for example) need to be used in creating these devices. Oil and other scarce resources need to be used in developing new oil, gas and coal fields and power plants as well. This puts pressure on both debt markets and on scarce resources. At some point, the use of scarce resources becomes too great, and debt needs become too high. The projects with high up-front costs are among the worst contributors.

The plan to keep adding more and more debt doesn’t work. The economy is growing too slowly. People’s salaries are not rising to match the higher costs involved. The locations where the debt is needed are not in the part of the world with adequate banking services. It is the inability to finance all of the investment that is needed that will bring the system down. Resource scarcity will be behind the scenes, playing a role as well, but its problems will be hidden behind the problems of financing the needed energy investments.

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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709 Responses to IEA Investment Report – What is Right; What is Wrong

  1. Thanks again, Gail (I follow this blog “religiously”.

    • This morning, I added section to the end of the post called Comment. Readers may want to read it as well.

      • momist says:

        Gail, I’m so glad I came back to this page to read the “Comment”. Your description is put so well and succinctly. Would you object if I extracted just that section to pass to others? I know that most messages longer than a few lines do not get the attention they deserve, but this would fit the bill.
        Thanks again for all your hard work.

        • No problem. I put the post together quickly and put it up. After I went to the gym Tuesday morning, I had some further thoughts that I thought I should append to the article. I usually try to let articles “gel” a little while before they go up, but it didn’t happen to this one.

      • Lizzy says:

        Gail, what do you make of this, from this morning’s FT:

        Looking past the death of Peak Oil
        Production has not peaked, but prices could be volatile
        Peak Oil is dead. The news that US output of liquid petroleum has regained its previous peak, reached in 1970, is enough to read the last rites over the idea that a region’s oil production will follow a shape like a bell curve, rising to a peak and then inexorably falling away.
        Much of the theorising about Peak Oil failed to anticipate technological progress, or understand the power of economic incentives. The US boom in production from previously uncommercial shale reserves has been made possible by advances in horizontal drilling and hydraulic fracturing, and made a reality by oil prices that 15 years ago barely seemed possible.

        Yet while the strong form of the Peakists’ argument can be consigned to the dustbin of history, they were not entirely wrong. Producing oil has become harder, for reasons of both geology and politics; a crude price stuck above $100 per barrel is evidence enough of that. It may become harder still over the next 15 years.
        Talk about an “age of abundance” in oil is justified only from a North American perspective. There, it is true that production is rising strongly and has the potential to rise further. Elsewhere, though, it is a different story: one of decline in fading regions such as the North Sea, and political and security threats in countries from Iraq to Venezuela. It is a striking fact that since 2005, all of the increase in the world’s crude oil production has come from the US.
        Looking out a few years, prospects do not seem very different. Global demand for oil will continue to increase because of rising prosperity in emerging economies, barring some shock such as a financial collapse in China. Supply, however, will be constrained. The International Energy Agency, the watchdog backed by rich countries’ governments, predicted last year that over 2012-18 the largest contributors of new supplies to world markets, after the US and Canada, would be Iraq and Brazil. But companies in Brazil are struggling with the technical challenges of its deepwater fields, and Iraq is in chaos. Neither country looks as though it can be relied upon.
        Thanks to the US boom, world oil prices have been remarkably stable recently. However, Christof Rühl, chief economist at BP, observed yesterday that that was the result of the “sheer coincidence” that increased US production had matched the barrels lost in the disruption following the Arab uprisings of 2011.
        The pick-up in Brent crude last week – the sharpest one-week rise in almost a year – has been a reminder that in any market, stability is a temporary rather than a permanent condition.
        For consuming countries, recognising that fact means doing what they can to strengthen their own production and infrastructure. The US, for example, should approve the Keystone XL pipeline from Canada, and help its oil production industry by allowing exports of crude. Governments also need to be careful that they are not crippling their industries with excessive taxation.
        It makes sense for the US to help the development of alternative sources of supply, including the shale reserves of countries such as China and Argentina.
        At the same time, consumers should be made to be more careful with the oil that they use. Higher road fuel taxes are the best option, but where that is politically impossible – as in the US – regulations enforcing fuel efficiency are an acceptable second best.
        Finally, governments should continue their support for alternatives to oil. Corn-based ethanol may be a gigantic boondoggle, but advanced biofuels and electric vehicles are important technologies for the future.
        Mr Rühl describes the past few years as a period of “eerie quiet” in the oil market. As he rightly observes, that will not last forever.

        • Thanks for copying this. Financial Times limits the number of articles they will let a person read for free each month.

          Clearly the Financial Times recognizes that there really is still a problem.

          I agree that “Peak Oil is dead.” The story that was being disseminated was often too simplistic. There is no way that oil starts declining when 50% of recoverable resources are reached, and the amount of oil recovered extracted declines slowly thereafter. The story is different–more financial, unfortunately more connected to Limits to Growth. The consumption of all fuels fall more or less together, quite quickly, long before the full amount that seems to be recoverable, really is recovered.

          In terms of “What can we do?” the Financial Times is trying to put together a laundry list of thing that might help keep oil production from falling, and might support alternatives.

          For example, “Governments also need to be careful that they are not crippling their industries with excessive taxation.” This could be read that US taxation of oil from shale formations is quite high (which it is, compared to, say, Canada). If US taxes on oil production were reduced, these prodders might be able to keep on longer, before they max out on their borrowing capacity. I am sure Iraq, Saudi Arabia, Mexico, and most of the other exporting countries are depending on taxes from oils well. I doubt they really have any ability to cut back on taxes–they badly need them for their own programs, or unrest would be even worse, and infrastructure development be even slower.

          The authors think that lack of knowledge may be holding back oil extraction from shale formation in Argentina and China, and knowledge sharing would help this along. I think there are a lot more barriers than lack of knowledge, but knowledge-sharing would be fairly cheap, and perhaps could help a little.

          They talk about using less–every reader would like this–even if Jevons’ Pardox says that this approach doesn’t provide very much help.

          Support for alternatives–this is many people’s hope for the future. The naive view of limits (supported by most peak oilers) was that the whole system would stay together. The only issue would be using a smaller amount of high priced fuel, particularly for vehicles. The Financial Times is following this same naive view.

          I don’t see this as being a real possibility. The economy cannot run on high-priced fuel. Governments would collapse before this would happen. The same limits that cut of oil supply cut off electricity in close to the same time-frame, so switching to electricity doesn’t really help. (We can’t keep the electric grid repaired and roads repaired, for example. And maintaining the international trade to make the computers and batteries for electric cars most likely won’t happen.) But it is a nice thought, and electricity is relatively more efficient than the internal combustion engine.

          So, all in all, the Financial Times sees the problem that Peak Oiler’s saw, and are trying to address it in the same naive way Peak Oiler’s wanted to address it (mostly). They are not particularly trying to address Climate Change, though.

          Obviously, they have not figured out that current oil prices are too low for many producers.

          • Paul says:

            Naive — a good word to describe that article… or we could just call it bad journalism

        • Paul says:

          Thanks for the article….

          These writers seem to think shale is the be all and end all… it isn’t … and meanwhile conventional supplies are dropping relentlessly day after day … month after month….

          INDEPENDENT US OIL PRODUCERS SPEND $1.50 DRILLING FOR EVERY $1.00 THEY GET BACK

          http://www.bloomberg.com/news/2014-02-27/dream-of-u-s-oil-independence-slams-against-shale-costs.html

          SHALE DRILLERS FEAST ON JUNKE DEBT TO STAY ON TREADMILL

          http://www.bloomberg.com/news/2014-04-30/shale-drillers-feast-on-junk-debt-to-say-on-treadmill.html

          SHAKEOUT THREATENS SHALE PATCH AS FRACKERS GO FOR BROKE

          http://www.bloomberg.com/news/2014-05-26/shakeout-threatens-shale-patch-as-frackers-go-for-broke.html

          DREAM OF US OIL INDEPENDENCE SLAMS AGAINST SHALE COSTS

          http://www.bloomberg.com/news/2014-02-27/dream-of-u-s-oil-independence-slams-against-shale-costs.html

          THE FRACKING PONZI SCHEME

          http://www.forbes.com/sites/insead/2013/05/08/shale-oil-and-gas-the-contrarian-view/

          WHY AMERICA’S SHALE 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/

          SCIENTISTS WARY OF SHALE OIL AND GAS AND U.S. ENERGY SALVATION

          http://www.sciencedaily.com/releases/2013/10/131028141516.htm

          U.S. SHALE OIL BOOM MAY NOT LAST AS FRACKING WELLS LACK STAYING POWER

          http://www.businessweek.com/articles/2013-10-10/u-dot-s-dot-shale-oil-boom-may-not-last-as-fracking-wells-lack-staying-power

        • Jim Housman says:

          “The news that US output of liquid petroleum has regained its previous peak, reached in 1970″

          Just not even close to true according to the EIA

          http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mcrfpus1&f=a

    • gerryhiles says:

      Ditto. I’m too “on the same page” with Gail to usually comment, but this to let her know that I think her work is excellent.

  2. kesar says:

    Gail, thank you for another great analysis.
    One of my current topics for consideration is the correlation between oil prices, or energy in general, and global food production. I know estimations from Hall, Klitgaard (from the book Energy and the Wealth of Nations – great book btw, I recommend it to all readers/commenters) or Tainter that one food calorie needs 6-10 calories of fosill fuel energy investment in our current model of intinsive and automated agriculture. I would be grateful for long term analysis of this issue from your perspective.

    • Don Stewart says:

      Dear Kesar

      Forgive me for jumping in on your question. But I will be away for several days, and won’t have any other opportunity to comment.

      Here is a chart showing ‘Society’s Hierarchy of Energetic Needs’ (scroll down a little to see the triangle)

      http://www.roboticscaucus.org/ENERGYPOLICYCMTEMTGS/Nov2012AGENDA/documents/DFID_Report1_2012_11_04-2.pdf

      You will see that ‘grow food’ is about 5 to 1 in an industrial agriculture system. (Processing food to put into boxes and cans and bottles and sell in supermarkets is a whole different operation, I think.)

      However, I have come to believe that the 5 to 1 ratio isn’t really an answer to the questions we should be most vitally interested in. Suppose, for example, that the EROI of oil fell to 6 to 1. Would that mean that food at 5 to 1 was safe? No, it would not. You will see that maintaining family life requires 7 or 8 to 1.

      Does the 5 to 1 ratio mean that we MUST use the industrial agriculture system to grow food? The answer is obviously ‘No’, since there are still people in the world growing their own food independently of the industrial agriculture system.

      Does the fact that SOME people are growing their food independently mean that all 7.2 billion of us could follow their example? The arguments on this point get technical pretty quickly, and I don’t want to complicate this by getting into them. Suffice it to say that feeding 7.2 billion people with subsistence agriculture would not be a slam dunk.

      Suppose that the EROI of oil stayed above 10 to 1. Then we can maintain a family. But can we maintain global corporations and governments with 10 to 1. Some will argue ‘No.’ Therefore, if any of the industrial agriculture depends on global corporations and governments, then it will be in jeapordy. In short, are there any weak links which may fail and bring down the whole system?

      But there are still people in the world who essentially have no government beyond a village head-man and no global corporations supplying them with anything except trash (as the Coke bottle which fell on the native from an airplane in The Gods Must Be Angry). Could 7.2 billion of us live like villagers? Or maybe ask the question this way: Could some of us form villages and survive Oilmageddon?

      Toby Hemenway, the permaculturist, gave a talk recently where he opined that the level of Transformity in any particular object or service was an indicator of what will collapse first. So, in his example, Wall Street and Health Care will collapse first, because they have enormous Transformity. He might be right, but he might underestimate the interconnectedness of everything. A collapse of Wall Street and Health Care might collapse the governments and with that a cascade of failure will bring down all industrial systems regardless of their Transformity.

      Even if we restrict ourselves to very simple systems, a cascading failure may bring down all of us. For example, suppose you are a subsistence farmer relying on energy from the sun, rainwater, and your own sophisticated crop rotations to keep the soil fertile. Part of your plan is to feed food scraps to your brother-in-law’s chickens and then collect half the manure for use on your land. You and your brother-in-law may get along fine until the day when bandits arrive and take everything you have.

      Gail in this post emphasizes the role of diminishing returns. One way to look at our situation is to build a mental model of the way the world works in the industrialized countries. Big Wall Street, Big Government, Big Health Care, Global Corporations, Complex supply chains, voracious use of natural resources, escalating pollution, social dysfunction, and simply ask ourself whether the system as we understand it is hitting the wall of diminishing returns. If it is, then we face some daunting challenges. For one thing, everything that I labeled ‘big’ controls governments. Yet these are the very institutions that we no longer have enough net oil to support. While a rational government might go about disassembling them all, and reverting to simpler systems that we can support, I wouldn’t hold my breath.

      For example, consider the Legal system. Are we ready to replace it with blood feuds between clans? Blood feuds are a lot cheaper in terms of oil, but not too many of us are anxious to go back to that. And the oil companies are not about to give up their ability to get governments to impose the oil companies will on recalcitrant native peoples. In a poisoned dart war, and the oil companies with no industrial weapons, my money would be on the natives.

      Don Stewart

      • It’s been pretty conclusively shown that when our overall EROEI drops below 10:1 in the sense of affecting the major industrial nations of the developed west, then our sophisticated civilised infrastructure will fall apart.
        the danger this brings of course is in the denial that it is happening, or has happened.
        I’d guess that it will happen quickly, because oil will spike and crash our economies, (2008 was just a dress rehearsal) but the denial of it might last a generation. Human nature being what it is, that denial will bring on a lethal mix or prayer and warfare until our numbers are reduced to a sustainable level. (Holy wars leave no room for industrialised healthcare)

        • As I see it, the required EROI is changing over time. Its going up, not down.

          I think that the calculated numbers are very much “approximately”. They don’t take into account the financial system and debt, for example. Interesting, but there is a reason I don’t quote them.

          • I can only disagree..(unless I have misunderstood Gail’s above comment)—our infrastructure is entirely dependent on the excess energy in our industrial system. ie–that which is left over after we have fed, clothed and housed ourselves. When those essentials are covered, we are free to take vacations, pay doctors, build cathedrals, indulge in fine art, grow flowers, and violent conflict. All of which are the product of excess energy availability to the mass of people.
            While EROEI might fluctuate a little, the laws of thermodynamics state that that it must decline.

            • Jan Steinman says:

              If I may be so bold as to interpret Gail, I think you misunderstood her.

              Of course, ERoEI is declining. What Gail said is “the required [emphasis mine] EROI is changing over time. Its going up, not down.”

              In other words, in order to maintain our increasingly complex civilization, we need more padding, more return on investment, greater ERoEI.

              Perhaps 10:1 was the ERoEI required before we had smart phones with video. But now, sneaked videos of misbehaving politicians, or suicides because of widely distributed video that was supposed to be private, raise the ERoEI needed to maintain that complexity.

            • Markus Kemp says:

              What Gail was saying is not the our overall EROEI is going up but that the _required_ EROEI to run our industrial civilization is going up.

            • I think you are misunderstanding what I am saying. Our infrastructure is certainly entirely dependent on the excess energy of the industrial system. The problem is that this need for excess energy keeps going up in absolute level. This is why I say the required EROEI keeps going up.

              I prefer looking at actual amounts of net energy of specific kinds rather than looking at ratios. Also, the EROEI ratios leave out too much–the cost of human labor, which is very much energy related and the timing variable, which is very important.

      • kesar says:

        Dear Don,

        thank you for this extensive explanation. I am aware of the complexity/interconnectedness/transformity matter (btw one of the authors of the document is Charles Hall, who is also the author of mentioned book in my previous post and recently I read all of his books). What I was asking Gail is the approximation analysis of the food production in relation to the upcoming energy crisis. If we can extrapolate the energy production/consumption, we can also try to extrapolate food production. At least I guess so. Premaculture is very popular topic among comments, so I imagine it might be a food-for-thought somehow.

        kesar

        • Don Stewart says:

          dear kesar
          Let me not respond for Gail, but point out something that may pertain to your question.

          I believe Gail thinks that oil production will rapidly collapse. So there may be no oil for use in food production. You may wish to ask pointed questions to see if my understanding of her position is correct.

          In previous posts, she and I have discussed that and I don’t think either of us has persuaded the other.

          Don Stewart

        • The issue is that we need to maintain / create all of society, not just food production. We live in a tightly networked system that will not work, after we cross some thresholds. The issue is that we would need to create a new system. For example, in theory, we might be able to have a system with horses for travel, and cisterns catching runoff from each roof for water. But without horses, and with so many people that we don’t have area even to feed all of the horses, and with asphalt roofs, we can’t make that transition. The question is very much on of, “How specifically, does a society start over and create a new system?”

          Even if Charlie Hall’s work suggests that a transition to a lower EROEI system can be done, this is by no means proof that it actually can be. I think what he is actually trying to prove is the opposite–our current system cannot work if the EROEI is too low. He really isn’t trying to prove the opposite, even though perhaps Tibet or Uganda might be able to live with an EROEI of some lower number. Creating a new system from scratch will not be easy, especially if we lose all oil and electricity. Then it is as if we go to a biomass, water power, and wind power (using wooden capture devices) only system.

      • Thanks for your thoughts. I think we may replace blood feuds with the legal system. It will help keep the system down.

    • Daddio7 says:

      As a farmer I can give you a short term analysis. One American farmer feeds 150 people. One hundred years ago horse drawn agriculture fed 10. Going “green” will reduce most peoples incomes and greatly increase food prices. Tens of billions are being spent on gas co-generation units (my son oversees contracts for a major German supplier). These people are not going to let you take away their gas.

      • Exactly. Cogeneration is something that sort of works (with subsidies) when we have surpluses to give away. When we need to keep our soil in as good condition as possible, we will recycle everything through the soil. Nature doesn’t operate with “leftover amounts” that it is OK to burn.

    • Thanks for your suggestion. Yes, one food calorie requires 6-10 calories of fossil fuels. Even back in hunter-gatherer days though, we came out behind on this comparison, because we learned to use fire to burn wood and other biomass to cook our food. So I suspect the ratio was something like 2:1 even back then.

      We learned to control fire over 1 million years ago. Our bodies have now adapted (smaller teeth, smaller gut, larger brain), so we need some sort of assistance in making food calories and nutrients more accessible. Cooking part of our food, and using heat to purify water is one approach. Another approach “raw food” folks use requires using a blender to make food calories more accessible. Cooking food also makes some foods edible that would not be otherwise.

      • Joy Hughes says:

        Actually probably much higher than today … campfire cooking is much less efficient. If you count the burning hunter-gatherers often did to clear brush for game and forbs, perhaps 1000:1

        • I hadn’t thought about that. Not real efficient approaches.

          We moved on to farming, and got ourselves involved with the need for grinding grain, plowing fields, making roads, administering property ownership, and a huge amount of other things. Kept energy needs per capita high. Lots of draft animals, slave labor, and other human labor involved.

    • Tom Schülke says:

      First…
      many thanks for this great blog. I´ve put a link to this post also to the german website peak-oil.com where a comparable article about the IEA investment outlook has been posted.

      @ kesar. What i would like very much to know would be the strukture, that future cities in the face of peak oil would have to have to have a chance, to find a ballance of producing food near to their living and still to be able, to realise a transport system.
      In times of dimishing oil availability i am sure, big citys will find them selves in big trouble, to produce and to transport enough food to people living there.
      are there any thougts out there, at which EROI, citys will collaps especialy thinking of food?

      • Regarding the structure of cities, I am afraid we will see a rapid fall off in all types of fuels, more or less simultaneously. Electric grids will need repairs, and it will become impossible to keep these grids in repair. The underlying problem may be a combination of factors–Middle Eastern countries dropping off in oil production rapidly, indirectly because oil prices are not high enough to keep all populations pacified; rising interest rates causing problems for governments around the world, leading them to need to raise taxes to keep deficits from ballooning; debt defaults rise because of the higher interest rates and higher taxes and smaller world oil supply.

        I am not sure that there is a way cities can survive in such a scenario. People would need to produce their own food and collect their own water locally–not have it shipped in from nearby. This is more feasible out in the countryside than in the city.

        I don’t see that EROI is very helpful in figuring out solutions. Our problem is not a need for arbitrary fuels of desirable EROI; it is breaking supply chains and a system that does not contract nicely when oil reaches limits. Other fuels don’t substitute in the short term. The financial system fails, and the governments of oil exporters fail.

      • kesar says:

        Right, I think of structural changes concerning cities as well.
        What I meant by suggesting food production analysis was that food is on the bottom of Maslow hierarchy of needs, so it is crucial for human survival. We all probably agree that carrying capacity of the planet is unsustainable in a few decades horizon.
        According to Liebig’s law right now we have energy (particularly oil) as limiting factor, but the next one will be food, I guess. Pace of depopulation will be directly correlated with food.

        • I would suggest that water might come even earlier than food. Also, epidemics spread if sanitation is compromised. We may not even have to get to food shortages to see population reductions.

          • kesar says:

            Right, thank you Gail for pointing that. It’s even worse with lack of drinkable water. Water will be probably accessible, but the quality… Then are the health problems, epidemic diseases, etc. It gets scarier every time I find out new limiting factor.

            • Calista says:

              Slow sand filter solves most drinking warer issues. Costs a 5 gal pail, one tube and one valve or faucet. You can find sand most everywhere along with gravel. Clean drinking water is a solvable issue. _

            • Jan Steinman says:

              Yes, one person can easily do this, if they live somewhere they can get sand, and if they had foresight to acquire the bucket, tubing, and faucet ahead of time.

              If you’re just another one of 400 people in an apartment tower, good luck on that one when the water stops running!

              The problem with simple solutions is they only solve simple problems.

            • Calista says:

              Well if you want to have a fatalistic view go for it. I was just pointing out that dirty drinking water is a solvable problem as in it is not the thing that has to take everyone down. That point still stands. If you want details I’m pretty sure you can scavenge sand from just about every place there is a large human settlement minus places with permafrost. I’m also sure that the fancy dancy apartment building has at least one water heater that you could retrofit with sand and easily have a working filter for enough water for everyone in that building, or even a few buildings together as a slow sand filter actually works really fast, on a daily basis if they were willing to haul it. I’m saying it is solvable because I’ve seen people in much more harsh conditions willing to solve such problems. I’m not counting on the population crash others are. I am counting on mass migrations with even more poor people struggling with even less crowded into more temperate and rainy environments. I would recommend a visit to Kibera or a visit to a favela by sao paolo before you begin to count people out because their cushy life just went away. And yes, those places are full of disease and diseases that aren’t commonly found in a US city. But there are a lot of people there and they do raise children in places with little to no resources. Yes, there will be some people that would prefer to die than to give up their heated swimming pool. But I’m betting on humans, in general, attempting to stay alive despite the lack of resources we’ve been used to this last century. I also bet upon items like that becoming very common. Humans use tools to “improve” their lives and anything that will give you a step up ie clean drinking water and the principle involved in getting it will spread as an idea and the tools used to get there might very well be adapted from local materials at hand. So back to the original point. A blanket statement that we’ll all be dealing with endemic disease and dying from lack of water is something solvable and if it is solvable I would bet on a fairly large portion of the population doing so. I would also bet, since we are fairly social creatures, of someone with a supply or an ability to make such an item selling or trading it very widely and very quickly.

            • kesar says:

              Yes, I know. These are on my shopping list. What scares me is the general population problem. Not everyone will have access to filters and the consequences will be huge in terms of societies.

          • xabier says:

            Gail

            Too true: one can be very well fed, and housed, but killed by a drop of dirty water. It really stands out as a cause of death among even the rich in the 18th and earlier 19th centuries. Decent -and easy – hygiene is so commonplace we barely register it these days.

          • Water, food, land and energy are very much interconnected. Energy production needs a lot of water in various stages, such as fracking, cooling and dams. Namibia has two coal fired desalination plants for getting water for the uranium mining (that is really an ironic fact!). Water then needs a lot of energy for pumping and waterworks, cement for dams etc. 20 % of all electricity in California is for the water infrastructure. So there will be a lot of choices not only between using land for biofuel or for food, but also if water will be used for food production or energy production. And water is certainly a scarce resource on many places in the world. I think all these cascading effects are what makes it so hard to predict how the future will play itself out.

            • interguru says:

              While there is, at least theoretically, substitutes for oil, there is none for water. We are at peak water with droughts, rapidly depleting aquifers, and overused polluted rivers. Improving water usage efficiency works within limits, but is not a solution. Water shortages manifest themselves as rising food prices, such as those that set off the Arab Spring. Some places, such as Yemen are already running out of water. To make it worst, energy and water both need each other.
              Water and energy are connected at the hip. New sources of water, desalination, dams (evaporation ), pumping from aquifers, require energy. New sources of energy, fracking, refining, solar power ( to clean the collectors ), nuclear power ( for cooling ) require water.
              IEEE Spectrum magazine did a special report “Water vs. Energy (http://spectrum.ieee.org/static/special-report-water-vs-energy)” where they cover many aspects

              re-posted.

            • You are right. If our wages increased infinitely, we could afford all of this stuff. But they don’t.

              And of course, there is not enough to go around, even if our wages increased indefinitely.

  3. Paul says:

    Thanks – another excellent article…

    I am in the interior of BC Canada for a few weeks — and was speaking to the head of the chamber of commerce in one small community – he says the frackers are out in force and there is no stopping them — the laws are being changed to allow them to get away with murder.

    Once again of course one must ask the Big Question — WHY are we allowing this???

    Of course the answer is that the damage done by fracking is dwarfed by the situation that would result if shale and tar sands oil (both heavily polluting) were pulled off the market

    • Harry says:

      And perhaps a deeper answer, and I thank David Korowicz for this insight, is that WE have very little say in the matter. The global economy may be man-made but man does not have dominion over it.

    • xabier says:

      Paul

      Just the same in Britain: excellent and perfectly-functioning legal processes governing mineral extraction and the use of land are being removed summarily in favour of the frackers. There is fear in the air – from Government.

      • Stilgar Wilcox says:

        Interesting point, xabier regarding fear in the air from government. I was born in England, have relatives there and have visited a few times over the years. Never would I have thought it possible fracking could occur there. The energy situation must really be dire.

        • xabier says:

          Stilgar

          To me, here in the UK it’s like watching for a storm: the skies are still blue, but that little lift in the wind and those fast-moving scudding clouds called ‘messengers’ are there alright to warn us.

          It’s interesting to note that the UK government has moved from implausible carrots (‘really cheap abundant gas’, ‘thousands of jobs’ – unquantified, note, – ‘like the US’ (!)) to the stick: ‘OK, were changing the law: this is a vital national interest!’ And lately, ‘We need to do this or Russia can hold us hostage!’ !!

          I feel there is a sense of a real crisis developing here in a few years time if fracking doesn’t pull the rabbit from the hat, hence the more strident tones. Let’s just wait for the ‘potential reserves’ to be revised down….

      • Britain is desperate. It can see it is losing North Sea oil and gas quickly.

        • Robin Clarke says:

          Uk desperate, Really? I’m uk resident here and there’s no obvious sense of desperation about energy. Latest headline today is energy prices have fallen by 30%. Lots of plans for huge new railway HS2, and new airports to accommodate increased demand, lots of other grand developments, building projects all around here, etc. Even lots of lunatics happily chugging their smelly leisure diesels along the canals.

          • Maybe it is a small subset who are desperate. The ones who really understand the situation. They aren’t about to explain the real situation to anyone.

            • xabier says:

              Gail

              I think we can be sure that the UK military planners, at least, are on the ball with this situation. Politicians will as yo rightly observe, never lay down the truth, not least because it would kill ‘animal spirits’ of consumers and damage the UK as a place to invest…….

              It’s going to be fascinating to see how exactly this all plays out.

            • Robin Clarke says:

              This notion that there are people who are thinking one thing about energy peaking but carefully saying another is intriguing. Two other fields of this sort of thing come to mind.
              1 – The pretence that profit-driven pseudo-evidence-based medicine is good for health, when in reality the evidence shows it to be a huge harmful scam. This system appears to be kept going by (a) the profit-driven falsehoods having a lot more money behind their message, and (b) their ability to terrorise others into falling in line with those falsehoods (though currently falling apart in respect of the “benefits” of statins).
              2- “Islam is the religion of peace” [i.e. does not allow spread of Islam by aggressive warfare, terrorism, forced conversion, death for apostasy]. A lot of Muslims are regularly in the news due to their not believing this (Boku Haram, ISIS, Fort Hood massacre, Boston bombings…..), but they are hardly keeping it a secret. Meanwhile many non-Muslims are also not believing it, and instead see evidence that Islam would be better characterised as a religion of war and terror, but they don’t keep quiet about it but rather they speak out in the face of death-threats and indictments for “Islamophobia”.
              The energy crisis information differs from those two in certain ways, not least that it undermines the person’s entire life-plan (where they live, where they are going to get their food, water, security….). And undermines the society’s and organisation’s entire life-plan. The hoax medicine and harmless Islam are minor personal/organisational issues by comparison.
              Anyway, let us suppose that “they” really do understand that the system is heading to a titanic scenario. Who are the “they” anyway? Just the president and “his men”? Has Hillary been told? The warning information is not being kept secret. There don’t appear to be any “whistleblowers” defying threats against speaking out. And there’s an obvious reason for such lack of evidence of a cover-up, namely that it’s anyway dauntingly difficult to get people to believe in energy peak even if you try hard to tell them. That’s because of (a) paradigm shift resistance and (b) emotional unpalatability.
              So, at this point, is it reasonable to reckon that “they” (politicians, background elites, etc-who-else?) would be any less subject to those two resistance factors of paradigm-shift resistance and emotional unpalatability? On the contrary they would be all the more subject to those denial-inducing factors. They would have the most to lose whereas oppressed hopeless people would have most to hope (that the oppressing system would collapse).

              And then let’s suppose that some of “they” do indeed see the reality but reckon to keep it undercover. What would they do? An organisation is hard to run on a basis that we think this but are telling everyone that instead. If you deliberately confine the info and understanding then you can’t present the case to for instance promote fracking. And it’s only a matter of time before some whistleblower exposes that cover-up.

              I have previously explained why politicians and powerful people in general (with degrees in “ruler” subjects such as econ and pol) live under a 100% delusion that money and politics control physics and chemistry and biology (worked at by people with degrees in “servant” subjects such as phys, chem, maths). Got a physical problem? Just spend more money and give more orders. This “elite” are never original thinkers but instead are the slaves of defunct “intellectuals”. Consequently these are the last people who will see the light. I have been looking at the recent publications of the “think-tank” Civitas. Its “distinguished” “thinkers” continue to be obsessed with how to restore “proper” growth. This is as clever as the “elite” gets in my opinion. See in Toynbee Study of History “the illusion of immortality” and the dominace by grossly incompetent “elites” in a decadent society. I rest my case. Here endeth the old world order.

            • I am afraid we are dealing with a wide range of individuals, with no one really in charge. Some may understand a little, some a lot, some none at all. If people want to fit in, they need to express publicly sort of standard views. They don’t make waves, because they don’t really understand the situation very well–just trying to fit in with current views. I don’t think there is any real plan to express a different view than leaders believe, except that everyone in a leadership role wants to project the view that the economy will be fine. There is no big problem. And this gets in the way of thinking about the situation very carefully.

            • Lizzy says:

              Robin, thanks for your thoughts here. I’ve been wondering a lot about who “they” are, trying to figure out who is behind a lot of the things happening. That they “live under a 100% delusion that money and politics control physics and chemistry and biology”. Brilliant. I would add they believe they control “emotions” and “beliefs” as well, though you could say that emotions and beliefs are chemical.
              If you look at fanatical, violent religions, you could say that the men in charge live under the delusion that “fear and power” control physics and chemistry and biology.
              I like your points too about us being duped into believing as fact things that aren’t facts. Yes, Islam as a religion of peace, good example.
              Harry said before “The global economy may be man-made but man does not have dominion over it.” Who does?

              I heard on the radio people being asked about what are British values. Many said “respect for the rule of law” and “politeness”. I am dead against fracking but it nevertheless goes against my instinct to support protesters taking direct action. You see, they’re breaking the law! They’re using foul language! (and they have tattoos and dreadlocks…). So our values might need to change too. Come the revolution…

            • the mayor of London has just bought water cannons

            • Robin Clarke says:

              “the mayor of London has just bought water cannons”
              Or more accurately has requested approval to buy some going cheap.

              http://www.theguardian.com/uk-news/2014/jun/10/boris-johnson-london-mayor-water-cannon-metropolitan-police

              and it’s highly controversial:

              http://www.theguardian.com/politics/2014/jun/11/cameron-may-boris-johnson-water-cannons

              , and 98% of Londoners oppose.

            • Robin Clarke says:

              Furthermore I personally met one of “them” in the garden of my local pub in 2005, and when I mentioned my view that cars were not going to be part of the future, he started to explain to me about oil peaking (of which I’d never heard). He founded the “all party parliamentary group on peak oil” and later published an article in our city’s newspaper which fell on deaf ears. So yes, this one of “them” was far from keeping hush and indeed was the first person I learnt of it from myself!

            • Daddio7 says:

              I remember the president coming on television and solemnly telling us the good times were over and to get used to gas lines and cold homes. That was Jimmy Carter, he seems to have been wrong. Are they right this time?

            • Whatever any president tells us is likely to be wrong, with respect to energy issues. We are living with a system with discontinuous changes. The discontinuous changes may occur in the places we expect them least–for example, in the financial sector.

            • kesar says:

              I read the comments here regarding the politicians / government reaction and plan. Does anyone believe in this scenario, where some brave politician enters the stage and says:
              1. no growth in near future, heavy degrowth rather instead,
              2. start adapting to lower standard of living, I mean really low in comparison to XXI century western style;
              3. we need to decrease the global population to say 2 billion people on the planet in 30-50 years;
              4. we close the banks, stock exchanges and forget the credit – the financial elites loose their fortunes, because we introduce new currency and restructure/forgive heavily past debts;
              5. start leaving the cities, we have no energy/resources/transportation/security means to feed you, heat your homes, provide basic security and supply other things – start moving to rural areas when you can grow your own food and take care of yourself;
              Really? Anyone?
              As Tainter once said: there was no single example in human history, where society voluntarily decided to lower consumption.
              Sorry, won’t happen this time either.

            • Kesar,

              You are right. Societies don’t voluntarily decide to lower their consumption. I think it is part of the physics underlying the situation.

          • xabier says:

            Robin

            There is, I think, if you read the government announcements carefully. Of course, most people in the UK are entirely unaware of the true predicament. I am talking about the governmental level.

            All sorts of infrastructure plans are of course being made -this has been the standard government solution to economic stimulus needs since the 1940’s, and seems to promise GDP ‘growth’. It is irrational and has no future.

            We should remember, government ‘planning’ very often does not join up, or align very well with reality – look at the mess they make of nearly everything they touch!

          • momist says:

            The other headline here is that the National Grid are preparing to PAY industry to reduce consumption during peak times this winter – because they can’t keep up with demand. Yes, I’d say there is fear in the air, and as Gail says, it is only among the subset who can see the big picture.
            UK national.

            • Robin Clarke says:

              “to PAY industry to reduce consumption during peak times this winter”
              which is not about reducing energy consumption or shortage of supply but rather about avoiding overload at peak demand. Again, no evidence of desperation there. In UK there has for decades been the economy-7 system to give cheaper off-peak electricity. I have it here.

        • Robin Clarke says:

          And the frackers getting free rein is nothing to do with “fear in the air” and everything to do with the trash political and judicial systems we have here which are entirely at the whim of big money such as fracking investment.

          • xabier says:

            Robin

            I think the judicial system in Britain is actually fairly robust: that is exactly why the government wish to subvert it with new legislation and guidelines, removing all effective obstacles to frackers.

            And they are doing that because they can see how fragile UK energy supplies are likely to be in the near future.

            • Harry says:

              I live in the heart of the so-called Jurassic Weald, which the government is hoping to turn into a UK Bakken: https://www.gov.uk/government/publications/bgs-weald-basin-jurassic-shale-reports
              Given the level of public opposition to the single test-site at Balcombe, the government must be aware that the multiple drill-sites required for accessing tight oil and gas in this pretty and densely populated part of the world, will be unbelievably unpopular. It doesn’t make any sense politically unless desperation underlies it. Of course there is also greed at play. The report is not very confident about the accessibility of much of these reserves, so some parties are clearly trying to drum up a speculation boom, like a gold-rush wherein the only people who get rich are those selling the picks and shovels.

            • Robin Clarke says:

              Harry, I think you overestimate the power of public opposition and underestimate the dominance of greed and money in our society. Two million marched in London against the Iraq invasion and yet it was still voted for and went ahead. There have been huge protests against many other things that just got similarly waved away. Are any of the political parties opposing the Jurassic Weald developments?. Thought not – because we have a greedocracy not a democracy.

          • Harry says:

            This is a whole different ball-game. Yes, two million marched against the war in Iraq but eventually most went home. Fracking in The Weald would mean that people’s homes and immediate communities are threatened with noise, heavy traffic and pollution. The levels of anger would be unprecedented.and it would create a situation of ongoing unrest.

            • Robin Clarke says:

              Ongoing unrest – but only in the countryside. People power unrest can have political consequences in a city but can be safely ignored in fields and villages if the controlling political parties of the greedocracy stand together (which they will). So I still don’t see the approval of fracking as strongly evidencing of desperation among some unspecified “them”. When drilling rigs arrive in Brixton and Tottenham (or Kensington and Mayfair) I’ll believe it.

            • Harry says:

              Robin, I think our governement, which is very closely intertwined with fossil fuel interests including Cuadrilla, understands very well that the UK is facing a major energy problem. It is an issue of national security. I suppose only time will tell just how much political heft the bumpkins of Kent, Sussex, Surrey and Hampshire can generate.

              I am the last person on this forum to argue for the existence of an unspecified “them” btw. I am highly sceptical of string-pulling elites, so called. This quote from Alan Moore pretty much sums up my feelings on the matter: “The main thing that I learned about conspiracy theory, is that conspiracy theorists believe in a conspiracy because that is more comforting. The truth of the world is that it is actually chaotic. The truth is that it is not The Iluminati, or The Jewish Banking Conspiracy, or the Gray Alien Theory. The truth is far more frightening. Nobody is in control. The world is rudderless…” The global economy is essentially self-organising. We are but fleas on a suicidal dog.

            • The global economy is essentially self-organising.

              We humans think we created the economy, but we are tools working inside of a physics constrained world. There are severe limits on what we can do.

            • Robin Clarke says:

              Harry, my experience is that in just about any field of ideas, there are both wacky and sensible. Medical thinking for instance includes both the folly of homeopathy and acupuncture, and the hardheaded sanity of vitamin science.
              Likewise in respect of “conspiracy theories” there are both the loony wing and the hard-headed realities. Anyone who has spent much time actually personally involving in political/social campaigning or medical research soon realises that politics consists almost entirely of conspiracies, tricks to fool the public or to wrong-foot the opposition go on all the time. But these are not a grand global conspiracy, not least as they are not a unified “them” conspiring against everyone else. Meanwhile there IS the military-industrial complex exposed by Pres Eisenhower(?), which loves to start wars because the arms trade wins in ALL wars and needs them like a vampire needs blood. The arms trade conspiracy tried to start yet another globalised war in Syria but failed with Peace Laureate (why???) Saint Obama tripping ludicrously on his red line. Meanwhile they have been well-documented to be investing Billions in seeking to destabilise Ukraine and start another war there. Excellent account of the reality here: https://www.youtube.com/watch?v=dfzMnP3ilcI (enable English captions unless you can understand the Russian). The lie that it is Russia that wants to destablise Ukraine is stupid. Makes no more sense than the UK want to destabilise France or the Washington regime want to destabilise Canada and Mexico.
              Meanwhile the MainStream Media are part of the corporate establishment (of which the Military-industrial complex is the biggest fish) so not only do they do the propaganda deceits about Ukraine etc, but they also promote the meta-propaganda by making out the reality of conspiracy to be mere ridiculous “conspiracy theories”. They are helped in that by the number of fools who believe such drivel as chemtrails, HAARP, Illuminati, etc. As for Bilderberg, sure those meetings exist but so what. The real problem is not that some leaders do talk with one another but rather that so many leaders do NOT talk with one another.

            • Peter S says:

              To Harry
              “This quote from Alan Moore pretty much sums up my feelings on the matter: “The main thing that I learned about conspiracy theory, is that conspiracy theorists believe in a conspiracy because that is more comforting. The truth of the world is that it is actually chaotic.”

              I had no idea someone else had been saying exactly what I’ve always been thinking about “conspiracy theories”. I completely agree. It’s so easy – literally, you need zero evidence – to blame a conspiracy of “them”, when the real responsibility is us and the society in which we live. It really is mainly for comfort, because reality is very very uncomfortable – chaos and being part of the problem ourselves. We’re the ones using up all the oil and polluting the environment.

            • Interguru says:

              Even a stopped clock is correct twice a day.

            • Paul says:

              And your point is?

              Just because one cannot find proof of a conspiracy (a conspiracy by nature is of course secret so finding definitive evidence is difficult) does not mean that every single ‘conspiracy theory’ is nonsense (although many of course are).

              I have for years claimed that all our communications are monitored — because I knew a partner in a major mobile telecom company in Asia who told me never to say anything compromising on a phone call because they are forced to install monitoring software as a condition of licensing.

              Many many people who I discussed with this thought I was nuts — they said there is no possible way…

              Then of course Ed Snowden went public with full disclosure.

              Where there is smoke there is often (but not always) fire.

              Of course you will say ‘how can anyone keep such things secret – surely it would leak’

              And what I would say is how many people does the NSA employ – 50,000? 100,000? I have no idea — but I do know that everyone in that organization would know that they have been committing violations of the constitution — and have been doing so for years…

              Yet nobody said anything – not a peep….

              It is actually very easy to keep something secret – pay people well who are in on the secret — and completely destroy the lives of any whistle blowers.

              Ask yourself this — if you were Ed Snowden – would you have revealed all?

              And that is why he is one of the greatest heroes of all time.

            • Interguru says:

              When I wen to a protest a time ago, there were many tables set up by groups that thought the truth about 9/11 was being covered up, and they had their story. When I asked each one why their story was correct, and all the others were incorrect, they were tongue tied, they only could explain why the official version was incorrect. When I see dozens of differing conspiracy theories about the same thing, my BS meter goes up. I get the same reaction with the “Shakespeare didn’t write Shakespeare” claimants. They cannot agree among themselves who actually wrote Shakespeare.

              What Snowden revealed just confirmed and added details to common knowledge. The huge NSA installations were not there the create pound cake recipes. If someone pre-Snowden claimed there was no surveillance they were walking around deliberately blind.

              I have know idea how many people work for NSA, but at least in the US where public transportation and car-pooling are almost non-existent, you can count cars in the parking lots from satellite photos. I just did a Google Map search on “NSA Utah Data Center, Bluffdale, UT” ( which I am sure NSA noted ). The parking lot were empty ( I think the building is still under construction ). Still by sizing the lots you can get a good idea of how many people the building is designed for.

            • Paul says:

              I disagree that what snowden revealed was common knowledge. If one were to suggest that our every communication was being monitored most people would have immediately labeled you a conspiracy theorist.

              As for 911 – there is an association of engineers and architects who are claiming that there is something not right about how those buildings came down. Surely if anyone would know they would know.

              Then of course you have something that was labeled conspiracy theory but which turned out to be absolutely true – that TPTB had planned terrorist acts on US citizens in the past:

              http://abcnews.go.com/US/story?id=92662&page=1&singlePage=true

              http://www2.gwu.edu/~nsarchiv/news/20010430/northwoods.pdf

              At the end of the day there is no question that the US government commits crimes — and that it goes to enormous lengths to cover these crimes up.

              Take WMD – there is absolutely no way in hell they thought there were WMD in Iraq — yet they committed a crime against humanity in that country. Of course nobody can absolute prove this — because they very smartly cover their bases — this remains veiled behind conspiracy theory yet again and nobody will ever be punished for this.

              Did you ever consider that TPTB have tried to cover their tracks by:

              1. Having their PR people invent the term conspiracy theory and labeling anyone who does not toe the official line as a conspiracy crackpot

              2. Disseminating all sorts of tin hat conspiracy theories that are clearly nonsense – in order to allow them to say whenever anyone questions anything ‘hey buddy you are a conspiracy nut — give it a rest’

              TPTB in the US do not care about you — they would have no problem whatsoever murdering you — if it served their purposes. You are expendable – as am I – you are ‘collateral damage’

              As Jon Pilger so eloquently puts it – the US is a soft totalitarian state — I would add that the people are controlled by PR spin — when that stops working TPTB will most definitely bare their teeth — recall what happened with the Occupy movements… pepper spraying and brutalizing peaceful protestors…

              Can you imagine what would have happened if the protestors came out in numbers and remained resolute? I guarantee you the lead would have been flying.

              If you can get over that hump then that opens a whole new realm of possibilities.

              My default position when it comes to the US government is – they are capable of anything.

              I will leave you with one last ‘conspiracy theory’ – perhaps the greatest investigative journalist in America has been silenced — because he has evidence that last year’s chemical attacks on women and children in Syria could NOT have been initiated by Assad — they MUST have been launched from rebel territory …

              As we know the CIA arms the rebels — so you can understand why Hersch is being silenced…

              http://www.zerohedge.com/news/2014-04-13/obama-red-line-and-rat-line

              But then of course the US has a history of mass murder https://www.youtube.com/watch?v=x4PgpbQfxgo

              It’s all about connecting dots — irrefutable evidence is hard to come by — but logical conclusions can be reached by looking at what is available… therefore I do not dismiss things I cannot prove (although I will agree many people take the conspiracy thing too far and see conspiracy behind every action)

            • interguru says:

              Before Snowden I would have argued that the NSA not was monitoring everything. Not because they did not want to, but because they did not have the technical capability to do so. I was wrong, but not because I dismissed any theories.

            • Paul says:

              So you are saying you did believe in the conspiracy theory re the NSA — or not? I am not clear…

              I actually don’t like the phrase conspiracy theory — it sounds like something the government spin doctors came up with

              I prefer ‘where there is enough smoke there is fire’ — if there is overwhelming evidence of something — yet no absolute proof… one should not dismiss it….

              What about my comments on the Cheap Oil ‘conspiracy theory’ — any thoughts on that?

              I put that one in the heavy smoke category — plenty of evidence for it — but most people still are not buying.

              Now if we want to talk about Lady Di and the conspiracies surrounding that — I will come onside — that is a cart load of horse sh&t.

            • Interguru says:

              I did not call the theory that NSA was monitoring everything a conspiracy theory because everyone who followed the issue “knew” it but had no absolute confirmation.

            • Peter S says:

              There are conspiracy theories all the time. Top secret government plans are conspiracy theories. If I tell my friend a plan and don’t tell you – that’s a conspiracy theory. But that’s not the type of “conspiracy theory” you are referring to.

              But all-powerful organizations? Much more logical is that we are part of the problem, and as a society we have to take responsibility for it

    • I don’t know a whole lot about Canada, except that their tax rates on mineral extraction are a whole lot lower than in the United States (and practically anywhere else). So producers in Canada can make a profit on “fracked” oil, even when the US can’t.

  4. In parallel with the looming energy problem, we seem to be stuck with the insistence that energy sources are fungible, that if we cannot deliver sufficient power from oil, then all we have to do is invest trillions in electricity infrastructure and our problems will be solved.
    Only last week, there was a half page article in the London Times, saying as much, that 100 sq miles of the Sahara covered in solar panels would solve Europe’s energy problem. No mention of the fact that one good sandstorm would stop it working, or of political instability right across Africa.
    Unrest in every power producing nation is kicked off by resentment that energy is being sold to support the lifestyle of the developed west, and profits creamed off by a priveleged elite.
    the Saudi princes are watching Libya, Syria and Iraq, all too aware that their heads will stay attached to their shoulders only so long as the oil keeps flowing and they can buy off their idle young men, and keep the Americans on side to police the strait of Hormuz.

    • Harry says:

      And talking of solar panels, the fact that this ‘solar road’ idea has received news coverage, let alone investment, is an indication of how delusional prevailing attitudes are in this area: http://www.marketoracle.co.uk/Article45936.html

      • interguru says:

        While I have not followed the solar road proposals closely, it addresses one issue. Most of the cost of a solar installation is the supporting structure, not the PV panels. In a solar road, we already have an existing structure in place.

        • I beg to differ on that.
          To install a solar road, every road has to be dug up and remade to suit the new system (imagine it) all involving use of oil and machinery.
          Also the amount of sun-energy falling on every sq yard of road surface in optimum conditions is fixed –I think about 100w per sq yd–or one light bulbs worth. If a passenger vehicle weighing a ton, covers, say 12 sq yards, then that is the energy available to drive it. I know–I know, there will be yards of empty road, but other vehicles will pass over it, demanding their share of that 100w per sq yard. (even on cloudy days)
          But OK–that might be sorted by cleverer folks than me
          However, the other, truly colossal, piece of infrastructure we most certainly do not have in place is the billion or so vehicles needing to be replaced, none of which can be manufactured using solar power.
          To replace the vehicles to run on this wacky idea—do we expect to sell the replacement cars/trucks? Or do we give them away?
          Because if we sell them, then somebody has to buy them, and buying them means generating income. And what is the ultimate source of income? oops, fossil fuels, Dayyum!!!

          • An if the trade in value of the old car drops, or the cost of the new car is high, there is a real problem in affording the new cars.

            • possibly an even more critical factor in this line of discussion is the persistent delusion (on here and numerous other places) that our continued future prosperity somehow depends entirely on the availability and use of motorised transport

            • hebertmw says:

              I was a used car buyer the last year and a half and believe me when I say the value of used cars has crashed. In June 2012 I was walking away from 8% of the used cars I was sent out to bid on, this after screening by my home office. In Jan. 2014 I was walking away from over 80%, people wanted too much for their cars and we couldn’t make any money on their unreasonable price expectations.

            • Interesting. You think people can’t afford the used cars now? Too many loans for other purposes, perhaps.

            • hebertmw says:

              Gail,

              This should go after your comment to my earlier one on used cars.

              We found that most people who could buy new cars, did at zero percent financing. So that killed demand for used. The cars we were being sent to were mostly rebuilds. For used buyers and resellers, like my former employer, you really have to get good, low prices to make any money on rebuilt wrecks. Also anything over 125000 can’t be covered for 90 days by auctions which is where we sold our cars. And most sellers had cash targets to pay certain bills and such and so wouldn’t settle for our offers. I’d say most of my walk-aways by the end of last year would have ended up either salvage or the seller had too much invested in repair or modifications and was expecting higher resale value. You can pour $3000 into an $1800 car, but it still is an $1800 car. Prettying it up can’t get rid of CarFax listed accidents, trashed upholstery or high mileage.

            • Daddio7 says:

              Except for certain GM models, high mileage American made autos are a good buy. Seven years ago I bought my 16 year old son a 1999 Pontiac Grand Prix for $3000. It had 150000 miles on it. I replaced the AC blower motor and the fan belt tensioner and had a CV joint replaced. It has 200000 miles on it now, uses no oil and the AC still blows cold air. My 99 Mercury Grand Marquis has 150000 as does my 98 Silverado.
              All those no money down cars are starting to show up on dealers lots. I am seeing more nice looking cars for $3000. I’m a good mechanic and have more time than money.

            • Jan Steinman says:

              I won’t purchase a vehicle that isn’t of legal drinking age!

              I won’t purchase a vehicle whose operation is dependent on a computer.

              My ’91 Dodge Cummins will be running as long as I can grow or obtain vegoil, and as long as I can get or fabricate parts. (Can’t really fabricate a fuel injection computer.)

        • I suppose we even have plans in place to use snow plows to clear it off, when needed, as well!

        • edpell says:

          I did the calculation for New York State covering its two major thruways (400 miles each) with PV it amounted to 40 MW continuous (24 hours a day). New York uses 30,000 MW continuously. These brittle panels would need to be mounted so that 20 ton trunks going 65 miles per hour will not crack them. They will have to withstand snowplows with large steel blades weighing 2 tons. The road bedding will have to not frost heave it would break the rigid PV tile.

          • If one breaks, I expect it will need to be replaced with an identical one. And there are inverters to think about as well.

          • Jarle B says:

            edpell,
            didn’t you see the part about “heating elements to stay snow/ice free”?

            • edpell says:

              I think it was written by someone who lives in a place without snow. How much heat and how fast to melt 3 feet of snow?

            • Maybe they wait until spring. Also, the last I heard, heating causes expansion, and very often cracking of roadways.

              I presume the temperature would be constantly monitored, so that the heat could come on at an appropriate time near the freezing point. Leaving the heat on all the time would be a terrible waste.

            • Toby Thaler says:

              The whole concept is ludicrous.

            • I suppose these heating elements work with batteries. I wonder how much of the total production is lost in the cost/operation of this system.

      • Good point! A huge amount of solar panels requiring above-average upkeep, all producing electricity at the same time. The utility either has way too much, or none at all.

        • edpell says:

          Gail, if we truly try to use solar we will need to install five times what is needed on a sunny day so that on not sunny days we get what we need. Of course on rainy days we will not get much and need wind, nuclear, storage, coal, or just shutdown the factories and most usage until it gets sunny again. With five times what we need on sunny days 4/5th of the PV will have to be disconnected from the gird. That is simple and no issue.

          • That is probably the simplest way of fixing the problem. There of course is also the issue of winter with many short days, and quite a few cloudy ones. But if one plans on just using the solar PV for a little supplement, at odd times, that is OK. Of course, any cost benefit analysis comes out miserably.

            • David Gower says:

              “Cost benefit analysis” – Compare with some other investments versus other means of generating electricity. Risk is to invest too much or produce more than can be used or stored.

            • A big risk is that the system won’t last very long, because some necessary input is lacking, or because it can’t be used as planned.

              Also, if it is high cost, the risk is that it will make the country so uncompetitive in the world market that revenues will not materialize as planned.

            • edpell says:

              Solar in cloudy NY is a silly idea. Much better, but still only day time, solar in southern Nevada and BIG transmission lines.

      • Jarle B says:

        This way we can get all the energy we need for a lot less then IEAs $48 trillion estimate, don’t you think?

        With the abundance of energy ideas like “The Venus Project” (http://www.thevenusproject.com) will soon be reality, too!

        Yeah!

        • I am afraid I couldn’t figure this out in a few minutes of looking at the website. It looks bizarrely impossible, to me.

          • Jarle B says:

            “Bizarrely impossible” it is! Lots of energy consumption, but no mention of where all this energy is supposed to come from…

      • Peter S says:

        Those solar panel roads look completely ridiculous to me. Solar panels need special glass to let the maximum amount of light possible through. That and a lot of other special requirements, to even begin to compete with the energy return of fossil fuels.

        The first thing that came to my mind was: you have cars constantly blocking the solar panels, scratching the glass, covering it with dirt, destroying the glass – blocking or constantly reducing the light getting through. I can think of a dozen other problems off the top of my head. There must be more, because I’m no professional engineer.

        But the comments I see on all the webpages promoting or mentioning it are bizarre. They love it because it’s a new and shiny idea, it’s a “startup”. Supported by people who have no idea about engineering or energy returns, but it makes them feel good about wasting energy the rest of the time, I think.

        • Paul says:

          Solar – After Trillions of Subsidies and R&D and this is what we get?

          The German Solar Disaster: 21 Billion Euros Burned

          http://www.thegwpf.org/german-solar-disaster-21-billion-euros-burned/

          Spain’s disastrous attempt to replace fossil fuels with Solar Photovoltaics

          http://energyskeptic.com/2013/tilting-at-windmills-spains-solar-pv/

          Ten Reasons Intermittent Renewables (Wind and Solar PV) are a Problem

          http://ourfiniteworld.com/2014/01/21/ten-reasons-intermittent-renewables-wind-and-solar-pv-are-a-problem/

          • Peter S says:

            This guy gives a greater rebuttal to the solar roadway travesty than I ever could. He’s 100% correct about how illogical and unfeasible it is.

            But if you continue to read the comments, people still want to build them. It feels like as a society we are starting to crawl out of denial into bargaining – bargaining with physics.

            • Paul says:

              The thing people fail to recognize with ‘green’ technologies such as solar 0 — or fuel efficient autos …. is that massive amount of energy that goes into the manufacturing process — from mining and smelting rare earths to distributing them to market.

              When they see a solar panel they simply think hey – that looks like a clean energy source that was easy to make — they fail to see the lignite fired plants in China that were involved in making these panels.

              That’s where the disconnect is. And of course greenies vote — so politicians continue to subsidize these wasteful projects

            • Peter S says:

              It depresses me (seriously) how little most people know about even basic economics or how money works. They don’t even want to know.

              In my experience of trying to (gently) introduce some people over the years to “peak oil” (or as Gail more accurately puts it, “the limits of growth”), virtually everyone gets this glassy look in their eyes. In my experience 90% of people don’t know anything about the economic or energy crisis and don’t want to know. Maybe 9% have a vague, general idea, that something is going wrong in our system – maybe they know about the dangers of quantitative easing, or how natural resources are becoming scarce, or an oil or energy crisis is coming – but they don’t join the dots and it stays this vague, uneasy subject for them. Maybe 1% of the people I talk to, know that we’re coming to some serious, serious problems.

              The same with these solar roadways. I can’t think of a more ludicrous plan to fix our energy crisis. Yet even after hearing a nuclear physicist explain – in very layman’s English – why it WILL NOT WORK, they still continue their fantasy. They don’t know and don’t want to know. We’re driving over a cliff, and all I hear is “human ingenuity will save us,” “I prefer to be positive,” “we just need more windfarms” (and solar panel roadways of course!), “I believe we can have a sustainable society AND keep all our plastic toys, unhealthy lifestyle and continue wasting resources,” or “it’s the ‘powers that be’! it’s all their fault!”

              It’s US, all of us. It’s the society we live in that is its own worst enemy, and I’m beginning to think there is nothing we can do. Most people just don’t care we are going to destroy civilization.

            • Paul says:

              On the contrary … might I suggest that civilization is what is going to destroy itself…. after all… civilization as we know it — demands eternal growth…. steady state does not work….

              Reminds me of that quote from the officer in Vietnam: in order to save it we must destroy it…

            • People have a built-in need to keep up with their friends in energy consumption. If they save energy (really money) in one way, they are likely to use it in another. The physics of the situation works against fixing it. We are drawn up in something like a cyclone, which we really can’t fix, even if a handful of us can cut our own consumption (partly by not working, so we are not earning salaries).

            • Paul says:

              Keeping down with the Jones’ …. the $22,000 house http://https//www.youtube.com/watch?v=RSzgh3D7-Q0

    • Good points! I need to write about the fungibility issue as well. Also the fact that the downslope doesn’t work for the oil exporters, unless the price is rising rapidly to keep their total revenue up. Of course, they may still have problems with high-priced food imports, and the vast majority of the population not being able to afford them.

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  6. David Gower says:

    Another great piece Gail.

    I don’t know if you hit on it exactly but in #2 paragraph 3, I would add…”plus add additional cost of sufficient generating capacity since storage is not perfected yet.” One can’t ramp up what doesn’t exist. I think this will bite us sooner rather than later. I believe that current managers are hiding their heads in the sand and falling in lockstep with public discourse on the matter. I believe this is already a problem and will only get worse (even if DG becomes more widespread and common) without some black swan event to jolt us back to our senses.

    On another note, have you ever done a study on what is out-there in “untouchable” situations such as ANWAR and the time to bring on-line in case the powers that be change their minds at some future point in time?

    • You are right that I am missing (at least one) piece. I think what needed to be added is “loss of electricity that occurs because of the use of storage.” We do have storage of various kinds, but no kind is anywhere near 100% efficient. So it takes more electricity, when we have to use storage. There is an alternate approach, which is to simply “spill” the excess wind/solar when it isn’t needed. This means the returns for wind and solar are a lot lower than originally contemplated, because quite a bit never gets used.

      My mind is blank on the ANWAR situation–I know I have looked into it before. It seems like the oil there doesn’t really seem to exist. Also, it is necessary to keep the pipeline from the North Slope of Alaska fairly full, or it freezes up. If ANWAR really had oil, people would be chasing after it now, to try to help keep the pipeline above the minimum operating level. (Alternatively, they could heat it–a big expense.)

      I don’t see dribs and drabs of oil as very helpful, because there are so many “minimum operating levels” involved. You can’t run a pipeline 10% full. You can’t operate a refinery 10% of the time. You can’t hire workers 10% of the time. You can’t keep schools for petroleum engineers open, if no one can get a full time job.

      • There seems to be a denial of the ‘energy storage’ situation, in that if you put 50 gallons of liquid fuel in your tank, you get 50 gallons worth of energy out when you need it, even after months of storage if its properly sealed etc
        If you store the equivalent energy value of electricity in a battery, say, you do not get the same amount of energy out. After several months, there is likely to be no power there at all.
        This is the reality of ‘alternative energy sources’

        • Ann says:

          This wouldn’t work everywhere, but if you use wind and/or solar to pump water back up into a reservoir behind a dam, the kinetic energy is there for quite a while. Minus evaporation, of course. Use the water to create electricity as it flows through the dam, then pump it back up above the dam to be used again. Doesn’t matter if it’s intermittently pumping or not, as long as the average rate puts back as much water as was used.

          • Dave Ranning says:

            The Second Law will always win on that one.

          • ordinaryjoe says:

            A lot of people have looked at that including me round my way for storing both wind and PV power. Trouble is it get cold where we live so it would only work with H2O half the year. If you buried the holding tanks so the top was about 6 feet below the surface you might be ok. Septic tanks precast or homespun are fairly cheap. Usually however those that contemplate this have steep terrain and heavy equipment may or may not make it up that terrain. Ever dug a septic tank hole with a shovel? Me neither. You could probably get the portland and materials for a homespun tank up the hill with a ATV. The infra structure required to turn the water momentum energy back into juice is not an easy proposition and requires maintenance. Doable but not easy. At least gravity being a constant, the system could be designed so physically electric output would be constant and usable straight of the windings. If you lived in a temperate climate. where it was warm and mangos and papya grew everywhere served by women in grass skirts it might work to get a bit of juice. By the time you add up the $ and effort in a non temperate climate its a huge clusterF and it still aint going to get you to work at 9am any better than your mountain bike. Hard to maintain a micro hydroelectric wind plant when all your time is spent trying to obtain the calories needed to live. My perspective is everyone needs to lower expectations about a thousand notches. I know I sound like a debbie downer broken record. Can you make fire? Can you insulate your body? Where is your water source? These are not insubstantial problems and take time and effort to work out. Can you maintain your body temperature? Got water? Nope, game over.

          • a perpetual motion machine—I like it!!
            Tell me how to invest and I’ll send the cash immediately

          • Jan Steinman says:

            Pumped storage systems are no more than about 35% efficient.

            But they are cheaper than chemical batteries, which can be over 90% efficient.

      • In the Cheap Seats says:

        The Arctic National Wildlife Refuge (ANWR or Arctic Refuge) is a national wildlife refuge in northeastern Alaska, United States.

        ‘ANWR’, not ‘ANWAR’

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

      • David Gower says:

        re North Slope Pipeline – That is being addressed now onshore. And there are renewed efforts offshore (to feed pipeline) notably by Shell with much difficulty and problems. Renewed effort too by government to thwart Shell and others.
        re ANWAR – There is oil there but it has been off limits for some time in the public discussion. (KeystoneXL Pipeline has taken it’s place in the public discussion.)
        re Costs of conventional generation to “backup” renewables – The higher the % of renewables within the cost structure of a grid the larger the “fixed cost” of unproductive conventional standby capacity which has to be paid for by someone. On a unit basis, this standby capacity cost goes through the roof as the % of renewables increases. Managers are getting too comfortable planning on using DG and load shedding to make up the difference when a shortfall occurs. Also look how these costs are distributed to consumers and taxpayers over the three ownership types (private, public, combination). Also depends whether the grid generators are paid by capacity or production such as on our Texas ERCOT grid. Recent EPA ruling will bring this issue up asap regarding the 40% generating capacity of coal plants. We have skirted by the last few years with the combination of the reduced economy, efficiency gains and renewable additions. What happens when/if the economy gets back on track? You have a better engineering chance of pushing a 10% load in a pipeline than you do of “pushing” out 90% of a grids needs. It is 100% or possibly nothing if loads can’t be shed fast enough.
        re Grid “peak demand” – If you have gas heat and a forced air system, you are still up the creek without a paddle if the electricity goes off.

      • InAlaska says:

        I know quite a bit about ANWR, perhaps better referred to as the Arctic National Wildlife Refuge. For 13 years I lived near it and worked and played in it. Coincidentally, next week my family and I are spending 10 days running the Ivishak River in ANWR, it flows into the Arctic Ocean just east of Prudhoe Bay. Yes there is oil there, probably a lot, some of it offshore, but lots onshore too. The reason it hasn’t been gotten to yet, is that it is protected by a dedicated band of environmental groups, conservationists, and democrats in Congress. For one, its the largest wildlife refuge in North America. Its home to the international Porcupine caribou herd, endangered polar bears, wolves, muskox, etc. Offshore, the marine environment is teeming with whales and seals and more. It is also a battle ground between the Inupiat Eskimo people who favor development based on the wealth it will generate for them, and the G’wichin Athabascan Indians who oppose development. fearful of the effect it will have on their subsistence hunting and fishing. Things will have to get very bad indeed before ANWR is breached. If they can’t even get the Keystone Pipeline approved, ANWR is several orders of magnitude harder to approve. Just across from ANWR is the National Petroleum Reserve which is also huge and filled with many many little pockets of oil. Chevron, ConocoPhillips and BP are busy bees over there now, building roads to support the thousands of miles of feeder pipe to keep the Trans-Alaska full enough for it to run without gumming up with parafin.

        • David Gower says:

          Yes, ANWR not ANWAR. Thanks. My concern is that should a dire situation cause “us” to change our mind about tapping ANWR how long would it take (summer work seasons) to get things going. Big problems that require big solutions have a long time horizon. The very small area of ANWR that has been indicated to be the footprint of any O & G development might be a reasonable conservative approach. It takes leadership to see possible future problems and leadership to propose possible solutions even if currently unpopular. Forward thinkers (like Gail) need to keep us aware of situations like ANWR where leadership should focus their attention. We readers here are of all different ages and the time horizons of all things discussed are pertinent to each of us differently. To tie all concepts together in a reasonable workable time-line for all is the challenge. There is the “end game” and events leading up to the “end game”. IMO, more needs to be done and discussed about some of those events.

          • ANWR oil will be a lot more accessible if the Trans-Alaska pipeline is still running than if it is not. Keeping the oil in the pipeline above the minimum operating level so it will flow is important. We don’t know amounts, so we don’t know if ANWR oil would by itself be enough to hit the minimum operating level. If it is not, we may be out of luck, except to send boats up to the north shore at the right time of year, if someone later decides we really need the oil.

        • I looked up the post I remembered. This is the report Dave Summers wrote for The Oil Drum back in 2011. http://bittooth.blogspot.com/2011/09/ogpss-npra-and-anwr-will-they-help-taps.html In that report, Dave mentions a recent report by the USGS about NPRA and ANWR. With respect to NPRA (not ANWR), Dave says:

          . . . the exploration wells showed is that a lot of what was thought to be oil in the reserve is actually gas. Further that the reservoir quality is worse than originally estimated. When the two are combined the estimate of the likely oil to be found and recoverable fell from 10.6 billion barrels of oil (bbo) to 895 million barrels of oil (mbo), of which some 500 mbo are likely to be economically recoverable.

          The poor results in NPRA somewhat increase the chances that some of what looks to be present in ANWR won’t really be oil, or won’t be accessible, but we really don’t know without drilling the area.

  7. vaengineer says:

    Gail, you are correct that we don’t have the capital to invest in the necessary infrastructure for renewable energy. If you look at it, we have invested our ‘seed corn’ in McMansions, two wars, an incredibly overpriced college system, a medical system that will spend whatever it takes to keep a person alive an extra day, and an unsustainable retirement system.

    • edpell says:

      Two wars? Libya, Egypt, Israel, Syria, Yemen, Iraq, Afghanistan, Ukraine, South/North Korea, China (cold), Russia (cold), Nigeria. 12?

    • Right. We are reaching diminishing returns in many ways. We invest a huge amount in education, even though the jobs that require a college degree don’t really exist in the numbers needed to employ all of the students. The medical cost per day of healthy life produced has gone to absurd levels. The retirement system can’t really work, because the fossil fuels we depend on won’t be there in reasonable quantities.

      I suppose we invest in what people can make money in. Somehow, people building houses convince people that they would be happier in a bigger house, with a granite countertop and marble floors, than they would be a plain old ordinary living space. They convince people that they will be happier if they earn more money. Employers start requiring a college degree to flip hamburgers. The system doesn’t really work.

  8. edpell says:

    I would like to see the spectrum of EROEI for the different energy source; coal, oil, nat gas, frack nat gas, solar PV, solar concentrated, wind onshore, wind offshore, geothermal, hydro, etc. Both with and without externalized costs (i.e. mercury diminished IQ from coal mercury, …).

    At some point FF MAY fall below RE in terms of EROEI.

    I am very happy with your item #2 the real cost of intermittent power sources.

    • EROEI is not the right model, in my mind. It doesn’t measure the right things (except perhaps if you are trying to show that it takes more effort/energy to extract oil now than it did 100 years ago). It measures tips of icebergs, when the part below the surface is very different depending on the fuel. It gives the impression that one fuel is interchangeable with another, when they are not. It doesn’t look at timing, or the cost of interchange. It is useful for writing academic papers, but it doesn’t tell us much about what we need to do now, IMO.

      • philsharris says:

        Gail
        Like you, I am not sure myself what to make of EROEI. except in the most general way: economic growth is easier with cheap oil, and cheap oil is more easily obtained from old-fashioned wells discharging at full pressure with enough oil to fill a pipeline!
        Diminishing returns can likewise be an elusive metric for a whole industrial / techno-based society even when it is clear that major recent half-century expansion has been based on (relied on) using more and more petroleum each year.

        It occurs to me that one way of illustrating dimishing returns is to say that replacing previous crude oil supplies in the US with tight-oil and tar-sands oil makes the average cost of oil in the US increasingly expensive. Hitherto the US has seen advantage, profit and economic expansion, from importing what was still ‘cheap-enough’ oil from round the world. Those days appear over. I think we are looking at diminishing returns and at economic retraction rather than expansion, which is I think, your message?

        This applies also to my own country Britain, but is probably best illustrated just now in the energy / economic trap of much of southern Europe and is reflected in their finance.
        It does not yet apply to China and perhaps elsewhere, even where China for example must net-import primary energy including oil, but has vastly expanded its own coal supply (supplemented with some imports) to the extent of consuming half the world’s current coal production.
        best
        Phil

        • You talk about Britain and southern Europe. I think the thing people miss is the fact that rising cost of extraction, without adequate prices, hits oil exporters first. The problem becomes oil exporters that fail–Iraq, Venezuela, Syria, eventually even Norway. If lots of money per barrel is available it can be used to pay workers, build infrastructure, and pacify the people. Once revenues fall, big problems arise. If a country has debt (Venezuela, Norwegian citizens) this becomes increasingly difficult to pay. It may very well be the failure of governments of oil exporters that brings the system down.

          This kind of thing is missed by pure EROEI analyses.

        • I think the thing people miss is the fact that rising cost of extraction, without adequate prices, hits the oil exporters first. The problem becomes oil exporters that fail–Iraq, Venezuela, Syria, eventually even Norway. If lots of money per barrel is available it can be used to pay workers, build infrastructure, and pacify the people. Once revenues fall, big problems arise. If a country has debt (Venezuela, Norwegian citizens) this becomes increasingly difficult to pay. It may very well be the failure of governments of oil exporters that brings the system down.

          This kind of thing is missed by pure EROEI analyses.

      • edpell says:

        Gail, you are right. Transportation requires liquid fuel or compressed nat gas. I guess I have been thinking a lot about electric recently for that use most fuels are OK. Though high temperature nuclear is double the electric turbine conversion efficiency of say burning wood.

        • Jan Steinman says:

          Compressed natgas is a loser.

          It has no more range than EV batteries, and unless expensive, sophisticated heat-recovery schemes are used, you lose about as much energy through heat of compression as there is in the gas.

          • Christian says:

            Jan, I’m not sure compressed NG works at a loss… There are perhaps millions of cars working on NG. The main problem with this solution is that storage needs more space than with gasoline. So, as you say, the same storage capacity gives a shorter range. Besides, as cars are produced without the NG tank this must be added ad hoc, usually in the trunk wich may go almost full with it. There are small trucks working on NG, and it’s far easier to accomodate the tank in those cases.

          • If a company is forced to “do something” with the co-produced natural gas that comes with the Bakken oil (other than flaring it), making Compressed Natural Gas out of it may be the best of bad options. Waiting for pipelines and processing centers for the natural gas may take months or years, and cut off the company’s ability to extract oil. If some wells don’t last long, then the pipeline will be a big expenditure for little real benefit. I think drilling rigs (and perhaps tracking equipment) can be run using different types of energy sources, including compressed natural gas. So using CNG may reduce the need for using diesel fuel or electricity. If the fuel savings is diesel fuel, there may be a real cost savings. If the savings is electricity, there may not be a cost savings, but there is at least the ability to keep extracting oil.

  9. Hickory says:

    This country could get by on a lot less energy. For example, say we lost access to foreign oil imports. We could
    -use coal and not worry about climate change (its probably going to steamroll us at some point anyway)
    -decrease our travel and goods transportation by eating more local foods and forgoing frivolous activities (we do a huge amount of that stuff in this country). You can make your own list or add to this one- nascar, firecrackers, ballgames,…..
    -eat further down the food chain. If this concept is unfamiliar to you- check out “Diet for a Small Planet’, published 3-4 decades ago but even more pertinent today. This can be a huge energy saver.
    -On a personal level- relocate closer to work, and your food source. Try to live where you don’t need so much fuel for heating and cooling. Don’t have kids, or have less kids. Turn off the TV. Buy less stuff.
    -Oh yeh, how about ending our role as global policeman. Our military consumption of fuel (direct and indirect) is massive.
    -Don’t live too long. Leave some stuff for the next generation, someone with fresh ideas, enthusiasm, and a degree of innocence.
    More ideas would be most helpful.

    .

    • Siobhan says:

      All of these may seem like good ideas. Unfortunately, they are no good at all if everyone does them. Here are a couple of Gail’s previous blog posts that are very helpful for understanding why this is the case:

      http://ourfiniteworld.com/2014/03/04/reasons-for-our-energy-predicament-an-overview/

      http://ourfiniteworld.com/2014/03/21/oil-limits-and-the-economy-one-story-not-two/

      • ordinaryjoe says:

        Oh no consuming less will crash the precious economy! Far better to consume every last bit of everthing then collapse. THAT was sacasm not humor.

        • Siobhan says:

          I do not know why my comment provoked your sarcasm.

          Hickory’s comment entailed more than conservation suggestions.
          I attempted to reply to the entirety of the comment, albeit tersely.
          My intention was to be helpful — not critical.

          You add a false dichotomy to snark. What was the intention behind your snide remark?

          • ordinaryjoe says:

            Let me pose my argument without sarcasm.

            A: we consume until we hit the wall
            B we stop consuming and crash ‘the economy”
            The ‘economy’ as everyone here now understands is a imaginary animal. It and fiat currency only exist because of the free energy in fossil fuels.
            If I see a child in the store throwing a temper tantrum because they dont get what they want should I praise him for supporting the “economy”?
            Knowing what we know isnt it clear that everyone able to read this has had more than their fair share of fossil fuel freebie and fiat buying power?
            Am I a hypocrite? yes. I still buy stuff even though most consider me a pauper. I get accused of being a “cheap scate’ . The only ethical solution would be to go live under the bridge and farm the land next to the freeway in rags.
            Nevertheless I grow tired of this “conservation is not the solution because it will crash the economy argument’. It is interesting Im glad I know it. Now; It is clear that the ethical choice is to conserve to consume less and to save somthing for future generations so when our situation is finally acted upon their might be some sliver of resources left for future generations. The most VITAL way to do this is reducing our population through voluntarily limiting the amount of children we spawn which is what Hickory proposed. More children= more growth= better economy. Siobhan you posted links from this very website- great articles- that detail why reducing consumption will crash the economy.
            I am a advocate of consuming less. Every week every month every year reduce consumption. I am a advocate of having no or one child voluntarily. What hickory suggested are real actions that are within our control that we can practice. Siobhan you posted links; I see the intent of your posting them to suggest that ‘the economy” is preferable to conservation a argument that basicly renders any level of consumption ethical. Was I incorrect?

            • Daddio7 says:

              Sarcasm is hard to pull off when your subject can’t see your body language are voice inflection. I was called out by a popular Conservative writer when he didn’t get it. As for over population, it’s always there are too many of them. (Sarc) Well actually, the White birthrate is below replacement levels. I’m 62 and have no grandchildren. I don’t know about the meek inheriting the Earth but the Brown are about to.

            • I don’t think it is all that surprising.

              The brown people are from the warm parts of the planet–the parts of the planet with more than their proportional share of the sun’s energy. It is perfectly logical that they should inherit the earth. As long as energy to supplement energy from food was very cheap, then white-skinned people in cold climates could compete. Once the price of energy products started to increase, white-skinned folks were at a disadvantage. Their salaries needed to be higher, to support their need for heating their homes and more-substantial transportation. They also needed bigger plots of land, because they could only grow one crop a year. Now with globalization, they cannot successfully compete against people from warm climates. Families from cold countries cut back on the number of children, often in recognition of the lack of job opportunities.

              Immigrants often follow the pattern of their prior country for a while after they move. That at least partially explains the reason the same effect occurs with brown-skinned people who have migrated to cold climates.

            • InAlaska says:

              Ordinary Joe, you are right on. Consuming less is the right path. Conservation is the only thing we should do, because it is the right thing to do. If we all agree that collapse is inevitable, than how we live is more important that how long we live. What we do with the time we have left is all that matters (whether its 5 years or 50 years). Living well with what is left of our biosphere, with grace and compassion, is the antidote to living like a gangster in a burning house or a rat in a trap.

            • Interguru says:

              It’s easy to say “consume less” but many of us are locked into houses, commuting, and mortgages which cannot be easily switched. There is one thing all of us can do at the drop of a hat. Eat less meat, especially red meat. For details see http://www.scientificamerican.com/article/the-greenhouse-hamburger/

              Most of us are aware that our cars, our coal-generated electric power and even our cement factories adversely affect the environment. Until recently, however, the foods we eat had gotten a pass in the discussion. Yet according to a 2006 report by the United Nations Food and Agriculture Organization (FAO), our diets and, specifically, the meat in them cause more greenhouse gases carbon dioxide (CO2), methane, nitrous oxide, and the like to spew into the atmosphere than either transportation or industry. (Greenhouse gases trap solar energy, thereby warming the earth’s surface. Because gases vary in greenhouse potency, every greenhouse gas is usually expressed as an amount of CO2 with the same global-warming potential.)

            • Jan Steinman says:

              “It’s easy to say “consume less” but many of us are locked into houses, commuting, and mortgages which cannot be easily switched.”

              Then you’d better get crackin’!

              Make every step you take a step toward getting by with less.

              Particularly if you are “under water” on a mortgage, walk away from it if you can. Housing prices may be at their post-2008 peak right now, but wait until the current “recovery” fizzles and pops, and you’ll be even worse off. Expect the bankers (and their President) to make it harder and harder to get out of a mortgage — which means “death pledge,” after all.

            • I think that there is a health reason for eating less meat as well. I eat very little meat myself–a little fish, mostly vegetables.

            • Harry says:

              The global economy is an entropic force, the function of which is to access and dissipate useful energy as rapidly as possible. If an individual within it chooses to consume less, other individuals will jump in and take over so that consumption for the group continues to rise. The group cannot make choices in the same way that the individual can. Different rules apply.

            • You are saying what I was trying to say.

            • Siobhan says:

              ordinaryjoe, I did not argue with Hickory’s premise, that “This country could get by on a lot less energy.” I did not read the post as a call for more conservation.

              The premise was followed by: “For example, say we lost access to foreign oil imports. We could…” Given that example, the rest of the comment evidenced an incomplete understanding of the situation–that would be created if “we lost access to foreign oil imports.”

              I recommended two primary readings. Perhaps, I should have added some of Gail’s other previous posts to address each idea, e.g., “Eight Energy Myths,” (“-use coal…”) “Oil Limits and Climate Change” (“Try to live where you don’t need so much fuel for heating and cooling”) et al. along with pointing to the discussion in the comments about digesting raw food (“-eat further down the food chain”).

              What is the distinction you see between A or B? Isn’t the outcome the same? What is the difference between “hit the wall” and “crash the economy”?

              Why are you asking me whether you should speak to someone else’s child in public? Were you unable to “pose your argument without sarcasm”?

              The economy isn’t imaginary to anyone in ICU or to anyone with a child in a NICU. Do you think you would you be as dismissive of the need for a “precious economy” if you were a dialysis patient? Or would you go with the, “Try not to live so long” option and forego dialysis?

              Overpopulation is the problem. Global economic collapse is our conundrum. If “we lost access to foreign oil imports” we would trigger cascading collapse or we would have “lost access” as a result of it… At that point, so much for practicing; it’s “Game On!”

            • Daddio7 says:

              Oh yes, medical cost. My mother in law has congestive heart failure, osteoporosis, diabetes, and is on dialysis. My wife today took her father to a nearby city to have him checked out after another mild heart attack. He has stents everywhere and two artificial knees. Mom has had both hips replaced and usually spends several months a year in intensive care. They are in their mid seventies. Their out of pocket drug cost are over $1500 a month despite Medicare and the best insurance plans.
              Then you have me and my parents. At 62 I have never spent a night in a hospital. My 84 year old dad has spent 3, and the last time my mom was in a hospital was in 1974 when she had her last baby. The live out in the country by themselves. My dad did farm work until 4 years ago and still uses a push mower to cut his small yard.
              Who will survive if the electricity supply stops or the US can’t borrow a trillion dollars a year anymore?

            • I am not sure we have as much control over the life of the economy as you would like to assume. If you consume less, does that just mean that someone else consumes more? In the case of limited resources, I think that a case can be made in that direction. The economy is more like a hurricane that we are swept up into, than it is something we control, I am afraid.

    • ordinaryjoe says:

      Everone of your ‘ideas” is excellent. Substitute “practice” for ideas and Im down with your post.

      Of your Ideas you control your own practices for most of them.

      “More ideas would be most helpful.”
      I afraid I disagree with you there. Not dissing you Hickory but there enough ideas out there from flying cars to training field mouse to operate generators to choke a hog.
      I really feel that the way we conceive ideas are a great mental illness brought on by free energy. What are we all Harry Potter we wave our wand and it happens? I told them MY IDEA but they didnt do poop, I wash my hands. An unimplemented Idea is like unfufilled potential- nothing. Not that every idea should consume the resources needed to implement-it far from it.

      More practice less ideas would be helpful.
      Consuming less would be helpful.
      I only have control over what I consume.
      You are not your ideas.
      You are what you practice.

      • Siobhan says:

        ordinaryjoe, Do you think that Hickory could have meant more conservation ideas are needed?

    • Jan Steinman says:

      “Don’t live too long.”

      That is going to be a hard sell to the boomer generation!

      • Siobhan says:

        Not only boomers, where I live, anyone who intentionally tries that is locked up for “trying not to live too long.” We have Hotlines–and an entire industry!–to prevent this. (I don’t think HIckory meant maintain a sedentary lifestyle overeating processed foods and die from the resulting malnutrition…)

  10. Jonathan Madden says:

    Thank you, Gail, for another very thoughtful post.

    Apropos the viability of renewable electricity generation, the cost of storage must be included so as to permit 24/7 base load generation.

    It would be useful to know the estimated cost of a molten salt storage unit that acts as a capacity buffer for wind/solar installations located within a reasonable distance, say 100 miles, to accommodate transmission losses.

    Making use of a CO2 directive (EU) decommissioned thermal coal plant would offer re-use of steam generation turbines, which are likely to have many years remaining life. By setting the liquid salt (Sodium Chloride/Nitrate etc.) composition to optimise steam temperature one should be able to come up with a suitably large facility that could be built within the confines of the old plant.

    Overall thermal generation efficiency would of course depend upon the usual factors – transmission losses, Carnot cycle generation efficiency factor, turbine efficiency, etc. I guess this might give you a plant output/source generation efficiency of 25%-30%. Even so with cheap solar arrays, generation cost may still be competitive. The scale of storage available with molten salt could be sufficient to run a power station for several days, thereby smoothing the intermittency of renewable electricity.

    Adventages are that salt and the associated electrical heaters are cheap, and there are few safety issues.

    But I have little idea how the economics of this would stack up.

    • Liquid sodium in a heat exchanger to make steam has to have perfect isolation, otherwise one experiences the liquid sodium – water reaction, which is double plus ungood.

      Solar energy is great, I’ve used it over two decades, but it’s not going to replace our current consumption (pun intended).

      • Jonathan Madden says:

        Mark, for the heat exchanger I presume standard liquid metal cooling would suffice. There are a number of possibilities – Sodium; Sodium Potassium; Lead; Tin – dependant upon the operating temperature range of the molten Sodium Chloride/Nitrate storage mass. This type of exchanger has been in use for many years in Nuclear submarines and generating plants.

        • Jan Steinman says:

          “This type of exchanger has been in use for many years in Nuclear submarines and generating plants.”

          No, not really.

          There were commercial liquid metal reactors 30+ years ago. Most of them suffered catastrophic melt-down. All were de-commissioned.

          There were a few subs with liquid metal reactors. They’ve all been decommissioned, to the best of my knowledge.

          A proposed “fourth generation” reactor design would use liquid metal. But it’s only on paper, without even any working prototypes.

          I, along with everyone I had ever met, was almost killed by a liquid metal reactor in 1966.

          The time for “possibilities” is past. If there isn’t at least a working prototype of something, it’s not going to be built on today’s ERoEI.

    • If it were really cheap, we can pretty well guess someone would have taken up the idea already.

  11. Ian says:

    Gail: Another very informative post! I was wondering, how do you see the nexus of increased automation and ease of running techno-fascist surveillance states (eg the NSA combined with Glass and drone surveillance) interacting with peak oil?

    It seems to me that a country facing a shrinking pie of resources would be increasingly tempted to respond by forcing its citizens into penury in order to shore up the cost of living of the people who control the machinery of the surveillance state. The EROEI of a system like Saudi Arabia becomes much higher when its rulers can stop bribing its subjects with mansions, and instead use techno-facism to force them into hovels. Automation, in turn, allows ruling classes to dispense with human labour altogether, reducing their reliance on the now hovel-dwelling 99%.

    I also draw heavily in my thinking on the great work of thinkers like Bruce Bueno de Mesquita (http://www.amazon.com/The-Dictators-Handbook-Behavior-Politics/dp/1610391845) regarding the minimum amount of political support that a leader needs to maintain control over an electorate.

    Would a forced reduction in the standard of living of the 99% provide much of a reprieve from technological collapse, and if so, for how long? What would be the political incentives facing future leaders, and what kind of world would these incentives create? How far would politicians and Silicon-Valley-types go to keep the world going?

    Certainly, if automation reduces the number of jobs available to citizens, and widespread, cheap surveillance makes it easier to pacify an unemployed population, leaders will be very tempted to keep the 99% surviving on poverty wages in order to allow the show to go on.

    Anyhow, I’m still trying to work it all out in my head, but it’s something that definitely needs to be taken into consideration when forecasting the near to medium future.

    • I hadn’t really thought about the question. There is certainly increased wealth disparity, and increasing the wealth disparity would allow the rulers to have a greater share of the pie. It may be that nature to some extent pushes economies in this direction, to keep an economy going as long as possible. Adding automation would add to the effect.

      It seems like the trend toward collapse would still be going on, though. The poor will increasingly revolt, or die off from disease. Revolution could be a problem. It is always Liebig’s law of the Minimum that rules.

  12. GreenHick says:

    As always, thoughtful post and comments. But in a comment on the limitations of EROEI as a measure, Gail noted that it doesn’t tell us much about what we should do. But as I’ve observed before, her posts and the blog’s commenters spend an inordinate amount of time rehearsing the arguments for why we cannot be saved, yet little to no time on what courses of action–trajectories of decomplexification–we might strive for, rather than circling back on “we can’t solve the problem, it can’t continue, we’re f**ked”. It reminds me of the Einsteinian adage that we can’t solve problems at the same level of thinking that brought them about. Whether or not this is the case, we seem to spend a lot of time on the radical fringes of conventional thought, in the problem diagnosis phase, but seem quite stuck in conventional neoliberal market logic, instrumentalism, and remain captive to a “tyranny of success” paradigm wherein if we can’t be guaranteed success, we cannot act.

    • Daddio7 says:

      You are quite right, esteemed scientist like Neil deGrasse Tyson tell us global warming is going to be bad, really bad, but at most say we need the will to change. Change how? What is going to happen to the victims of change. What will the actual economic cost be? Billions of people lives depend on our high energy use society. What will these people do to survive a return to the land economy. Pol Pot did that, it wasn’t pretty. I grew up on a small farm so I know how much work it is.

    • Interguru says:

      Unfortunately any solution, if it exists, is technically very difficult if not impossible, and definitely politically impossible. How can you tell billions of affluent people, you have to cut your standard of living drastically and even more billions of impoverished that you have no chance of raising yourself out of poverty.

      I have a grandchild on the way and I desperately want to see a smooth landing. My reading of technology ( I am a physicist ) and history does not point to one.

      • xabier says:

        Interguru

        I think many people would be capable of grasping a nettle and facing up to things. After all, many must have done so in the past or we would not be here.

        But so many people in times of stress are inclined to see plots: just this week I was chatting to an Hungarian waiter who seemed to attribute the terrible problems there to EU/ IMF/CIA/Monsanto treachery, and I remember a Turkish chauffeur last year who similarly thought Turkey was being manipulated by false friends to frustrate her obvious and deserved global greatness….. It’s all bubbling away in the comment sections on the internet for anyone to see – ‘all would be perfect but for x,y,z our enemies,and the traitors….etc.

        So, in all likelihood, give people the true situation, and they’ll distort it, mistrust you, probably -if really stressed – kill you: prophets are not honoured in their own country.

        I do still wonder whether the Japanese still have the culture to make mass sacrifices? Edo Mk II, Don?

        • interguru says:

          “After all, many must have done so in the past or we would not be here.”

          Only after catastrophe has struck. We are not wired to make immediate sacrifices for predicted, but not existing now, problem.

          When I read stories like this (http://www.policymic.com/articles/73111/why-thousands-of-young-japanese-men-are-locking-themselves-in-their-rooms) I cannot help but contrast these young Japanese men to their grandfathers, who would fight to the certain death rather than surrender.

          For the first piece in the series, we’ve selected the following strange story of the deeply bizarre Japanese phenomenon of young, mostly male shut-ins called hikikomori. What would compel so many Japanese young men to lock themselves in their rooms, skipping out on sex, friends, work, and even school, until they slowly deteriorate all social skills? This disturbing trend might hit closer to home than you’d think – it has a ring of millennial post-college daze. Though it’s particular to a culture that defines success and failure in different terms than we do in the United States, in these difficult economic times it’s hard not to read Maggie Jones’ story and think of your brother or best friend, back at home and out of work, playing video games long into the night. Very scary indeed.

          • xabier says:

            Interguru

            If I were an elderly Japanese, I wouldn’t step up to euthanasia for my country’s sake for the likes of those young people!

            But seriously, isn’t it reminiscent of the reaction of so many peoples when their traditional societies were crushed by western imperialism: withdrawal, collapse, depression? And the Russians who just hit the bottle even harder when the Union collapsed……

          • kesar says:

            In fact this is the exact type of behaviour predicted by John B. Calhoun’s experiment with mice/rats from the 1960’s.

            http://en.wikipedia.org/wiki/John_B._Calhoun

            It was here that his most famous experiment, the mouse universe, was created.[1] In July 1968 four pairs of mice were introduced into the Utopian universe. The universe was a 9-foot (2.7 m) square metal pen with 54-inch-high (1.4 m) sides. Each side had four groups of four vertical, wire mesh “tunnels”. The “tunnels” gave access to nesting boxes, food hoppers, and water dispensers. There was no shortage of food or water or nesting material. There were no predators. The only adversity was the limit on space.

            Initially the population grew rapidly, doubling every 55 days. The population reached 620 by day 315, after which the population growth dropped markedly. The last surviving birth was on day 600. This period between day 315 and day 600 saw a breakdown in social structure and in normal social behavior. Among the aberrations in behavior were the following: expulsion of young before weaning was complete, wounding of young, inability of dominant males to maintain the defense of their territory and females, aggressive behavior of females, passivity of non-dominant males with increased attacks on each other which were not defended against. After day 600, the social breakdown continued and the population declined toward extinction. During this period females ceased to reproduce. Their male counterparts withdrew completely, never engaging in courtship or fighting. They ate, drank, slept, and groomed themselves – all solitary pursuits. Sleek, healthy coats and an absence of scars characterized these males. They were dubbed “the beautiful ones”.

            The conclusions drawn from this experiment were that when all available space is taken and all social roles filled, competition and the stresses experienced by the individuals will result in a total breakdown in complex social behaviors, ultimately resulting in the demise of the population.

            Watch the “Critical Mass” movie

            http://criticalmassfilm.com/

            and you will see a lot of similarities in societal trends and behaviour comparing to mice closed in a cage. Strange and scary, isn’t it?
            Great movie btw.

      • Daddio7 says:

        45 years ago my father told me that that the world in the future was going to be horrible and no place for a child. My two children are near 40 and think life is great.

        • Paul says:

          Give it a year or two then come back and report on how that worked out.

          You are whistling past the graveyard my friend

      • Personally I don’t see the issue as one of technological answers but of psychology. For example entitlement.

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

        Even better is the description of narcissim

        http://en.wikipedia.org/wiki/Narcissistic_personality_disorder
        :-)

    • Don Stewart says:

      Dear GreenHick
      I suggest that you take a look at Dave (How To Save The World) Pollard’s current post:

      http://howtosavetheworld.ca/2014/06/08/links-of-the-month-sunday-june-8-2014/

      He gives you a very broad view of the people and ideas which are percolating.

      Don Stewart

      • GreenHick says:

        Dear Don Stewart,
        A well tempered and thoughtful response, as always. And a really fine collection of links. Didn’t know this site.
        Thank you.
        Your pesky servant…

    • Jan Steinman says:

      While it is certainly true that you can’t “save the world,” it may be possible to save one little corner of it, and some sustainable technology level that includes fire, primitive metal work, and lots of human and animal labour.

      We’re trying, but we could use some help!

      • MJ says:

        95% of the people here in these United States will expire with a steep drop in George Bush Sr.’s “American Way of Life”. and would rather perish than adapt, even IF they KNEW HOW. The reaction will undoubtedly be fueled by the talking heads on the mass media putting blame everywhere but the real cause of resource depletion. The remaining power structure will make good use of that tool to maintain their grip of control over the regions that can be governed.
        It would be amusing to hold a two week experiment of depleted fossil fuels in America.
        No food in the stores after 3 days, no gas in the car after 5-6 days, People FORCED to walk and actually get to speak tp their neighbors.
        Limited police protection, and the 24 hour “news” blasting about the “crisis” and the ensuing violence.
        Yep, those doomsday preppers are all having a laugh in their bug outs.
        My post was mostly for amusement only, thanks.
        Thank you, Gail for the follow up detail examination of the IEA announcement.
        Good point the CTA by stating what we we are expecting and needing in the furture As you stated, they than can back and say “We told you so!”
        Your follow up comment hit the nail on the head!

      • I agree that saving one corner of the world is a whole lot more likely than saving the whole world.

    • Fine. Let’s postulate that some subset of us can succeed as hunter-gatherers. How do we go about setting up such groups? What skills are needed? How do we decide who gets to join these groups, and who gets left out? Do we set up task force to work on this issue? How do we make sure that these new groups do not damage the environment as badly as early hunter-gatherers did (killing off whole species, burning down large areas in search of food)? How do we make certain the new hunter-gatherers keep their population down, so they don’t hit another bottleneck, and need to die back again?

      I am not certain our predicament is very amenable to solutions.

      • GreenHick says:

        Gail, Don,
        I’m not conflating the question of what to do with our about collapse with talk of solutions, if by solutions we mean some ultimate transcendence, the Answer, the New Paradigm. The little blue planet will grow cold, her brilliant 5-year-run as matrix of all known life in the universe will end, homo sapiens sapiens will eventually shuffle off the stage, as will each of our little lives–these are sometimes gestured towards as pretexts for displays of uncaring. This is not my intention, but the question remains–as it does for all mortals, but now in our unique context–how to live out our lives, what we might hope to leave behind, the suffering we might avoid and tend to. What kind of epitaph do we leave, how do we acquit ourselves. Will we drift–everywhere or only in some circumstances–into Hobbesian barbarization, will some communities wind themselves down with dignity, will some persist or a decade or century or millennium very much against their own expectations and ours?

        So, yes, we’ve called it. This too shall pass and go the way of all flesh, likelier sooner than later, but this conclusion is not the “end”–as if this were a video or war gaming exercise– it is prologue and six or seven billion human lives will likely play themselves out before we ring the curtain down. This is the question, as it always has been, yet never quite the same.

        • I don’t have an answer to how all this will play out. Hunter-gatherers would seem to have a better chance than those living in big cities.

          There are all kinds of ideas as to how some groups might buy themselves some more time by using today’s fossil fuels to make the soil more productive. Or they might make their lives better (or reduce demand on forests) by better use of solar power (solar ovens, solar hot water, solar PV). I am not an expert on which of these ideas is best, or on how long these will last. I know that the end comes through Liebig’s Law of the Minimum, something whose effect we have a hard time figuring out.

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  14. Rodster says:

    This confirms what Gail has been saying.

    “We Are Now On The Verge Of A Shocking Global Oil Shortage”

    http://www.kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/6/10_We_Are_Now_On_The_Verge_Of_A_Shocking_Global_Oil_Shortage.html

    • Steve Leeb also called for $200 oil. I think it would be more useful to be sceptical of these claims.
      Here are some peer review studies. You can do a search on peak oil.

      • ordinaryjoe says:

        I really like the folk over at KWN but they are hopeless shills for Gold and silver and the miners. They had a guy come on and say own only physical bullion no miner stock needless to say he never came back.Not that they are wrong (or right). Leeb is a interesting character I enjoy listening to him but make no mistake every one of the gang at KWN is selling something. I would guess they are honest individuals and believe what they say but two grains of salt. I tune into them quite often.

  15. Don Stewart says:

    Dear Gail and All Concerned About ‘What to Do?’

    One pesky commenter keeps pointing out that, as a group, we are full of diagnoses of doom, but short on solutions.

    David Holmgren and Nicole Foss are doing a tour in Australia with the emphasis on both understanding the problems and also on the solutions. A quote from David:

    ‘David’s updated presentation uses permaculture design principles to interpret the signs and show how getting out of debt, downsizing and rebooting our dormant household and community non-monetary economies are the best hedges that ordinary citizens can make. The idea that these household and community economies could achieve unprecedented growth rates if the monetary economy takes a serious dive is a good news story you won’t hear from mainstream media. The shift of metaphor from ‘retrofitting’ to ‘surfing’ suggests a stronger role for positive risk taking behaviour change without the need for expensive changes to the built environment that few will be able to afford. ‘

    You can find this material in the current blog by David. Search on ‘David Holmgren’. (Sorry, a new computer is breaking me in, and I am a slow learner and haven’t figured out how to copy from two different spots and paste it into Gail’s comment section. Tsk, tsp…old people are so inflexible!)

    Don Stewart’

  16. “One of the painful things about our time is that those who feel certainty are stupid, and those with any imagination and understanding are filled with doubt and indecision.”
    ― Bertrand Russell
    Some think we are certain to be doomed, I’m certain that I don’t know. While I lack the imagination, I’d like to think that we have the capacity to adapt more than some think is possible.

    • Paul says:

      I don’t give pay much attention to what Bertrand Russel said…when the certainty is backed by extensive research and is fact-based…. then it’s a whole new ball game.

      Unless someone can explain the way out of this — as in how do we deal with the end of cheap oil — then I am as certain that this civilization is over as I am that 1+1 =2.

      It really is as simple as that – the most brilliant minds on the planet cannot fix this… so what does it matter what one philosopher says – irrelevant unless he can come back to life and point out how 1+1 is not 2

      • Harry says:

        I agree, Paul. Oil is the master-resource and utterly irreplaceable. Civilisation cannot function without it. And yet we find ourselves on the brink of a situation wherein the global economy is no longer strong enough to maintain an adequate rate of extraction. Ergo, civilisation is about to collapse. If there is a flaw in my logic then I would be very happy to have it pointed out!

      • Here’s some links to academics who have researched this problem extensively, believe PO is serious but are very wary about pin pointing when and exactly what will happen.

        http://rsta.royalsocietypublishing.org/content/suppl/2013/11/29/rsta.2013.0179.DC1

        or

        http://rsta.royalsocietypublishing.org/content/372/2006/20120317

        There’s plenty more but behind paywalls.

        I’ve been studying this area for over 10 years and even have a diploma in energy and environmental studies. Am I saying this as a appeal to expertise, definitely not, I’ve just heard the TEOTWAWKI called so many times its not worth mentioning. Did the world come close in 2007-8, yes, but why then didn’t it happen?

        Joseph Tainter and Dennis Meadows see collapse having over 1-2 generations on our current trajectory.

        The world energy system is a complex adaptive system, where there is no clear key leverage point and huge waste of energy in every form. There are a number of examples where countries have adapted to much lower oil inputs, I won’t say life was wonderful, but neither did it descend into Mad Max. Possible recession/depression economically, very likely.

        Can you name me anyone of the calibre of Colin Campbell, Richard Heinberg, Robert Rapier, Nate Hagens… who have said we have two years or less. And if its as simple as 1+1 = 2, can you indulge me and explain the mechanism of how this societal breakdown will take place, because clearly all the elements of this chain reaction will be in place.

        Is the present system unsustainable? Yes.
        But what transformation/change will look like when it comes is really unclear.

        • Daddio7 says:

          There doesn’t have to be a shortage of oil or food, just the ability to pay for it. One day the EBT system in our area went down. By the afternoon there were almost riots in the parking lot of the store my wife worked at. Imagine it down for a week. Food stamp recipients do not keep a weeks worth of food on hand. What if the entire credit system goes down. Do you have a months worth of food, gas, and cash on hand? I do, except for the cash, no cash at my house, no sir.

          • ordinaryjoe says:

            Make no mistake- peoples entitlement beliefs to food water and shelter are very very strong dwarfing any other beliefs like “ownership” “theft” and “violence”. Entitlement beliefs regarding food, water , and shelter span all socio economic classes. You have to witness this to believe the quickness and vehemence of yesterdays nice neighborhood to todays pack of jackals..

            • I totally agree with you. Psychologically our sense of entitlement is going to be tricky to get over. Governments are quite happy to send people into foreign countries and die to keep the energy flowing rather than a radical change in how we live our life.

            • Calista says:

              This is so true. It is a psychological block and difficulty more than anything else that will damage a great number of people. I think the one thing that can break this is a war-footing where rationing is applied to everyone, rich, poor, everyone. If everyone is subject to restricted consumption we tend to as humans play along very well. People will be happy and neighborly even when there is one pots of beans for dinner.

          • There are short-term shortages, and longer-term shortages. In short term situation, then the problem is one of allocation of available oil or food.

            If the problem continues, one gets follow-on problems. The problems are particularly severe in oil exporters that are not getting paid enough for their oil. They can’t afford programs to pacify their people. They can’t afford to subsidize food to the extent it is necessary. Governments may be overthrown, or fall apart. The central government of the Former Soviet Union collapsed after oil prices were low for a while. Syria and Egypt are having oil depletion problems, that add to their oil price problems. If oil prices were a whole lot higher, the extra cash would make the Iraq situation a whole lot more stable–more money to keep all of the warring groups pacified.

        • Harry says:

          Much of it is unclear and I certainly wouldn’t be brave or foolish enough to commit to a two-years-or-less timescale but Daddio7 is correct. It is financial limits that are the immediate threat. The global economy is debt-based so cannot function without growth. It cannot as a totality adjust to lower oil inputs without collapsing. It is also in some senses faith-based. For example, liabilities massively outweigh tangible assets, but this doesn’t matter if people have faith in the system. Likewise, companies operate on the assumption that letters of credit will be honoured. On a smaller scale, individuals have faith that they will be paid at the end of the month and that they will always be able to access their money from cashpoints.

          There is an abundance of evidence that the global economy is hitting the limits to growth right now as we bump up against the law of diminishing returns. QE, ZIRP (now NIRP in the EU) are just creating the temporary illusion of wealth, except for a lucky few, by blowing huge bubbles in stocks and property.

          At a certain, unknowable point there will be a default large enough to shatter the faith that people have in the system. This is my view. There are multiple potential candidates – China’s $25 trillion credit bubble, student loans in the US, Japan’s basket-case economy, Spain, Italy, or it could be one of the larger banks. In a sense it doesn’t matter. When that faith has gone, nothing will ever be the same again. When you really look hard at the nature of our supply-chains and our financial arrangements, there is no logical case to be made for a drawn out collapse over 1-2 generations. I suspect we will go very quickly from a world of well-stocked supermarkets and functioning electrical grids, cashpoints etc. to a world of great danger and uncertainty. Keeping a month’s worth of supplies at home is advisable.

          • timl2k11 says:

            That is a really good point about faith. Historians seem to have a hard time understanding the Great Depression. I see it as a crisis if faith. The stock market crash of 1929 spooked the entire “developed” world and things just snowballed from there. The outcome of WWII restored the collective faith and a baby boom ensued. There’s a quote in my head, I can’t remember if it’s a common one, nor can I recall it precisely, but it alludes to the fact that once people lose faith in their institutions society inevitably collapses.
            The Federal Reserve and governmet are currently acting together as a “Ministry of Faith” doing what they can (manipulating statistics, the monetary system and the collective narrative) to make the state of our society appear better off than it really is.

            • Also, (viewed from one perspective) World War II represented a tremendous opportunity to borrow money to jump-start the economy. This greatly increased the demand for fossil fuels and added jobs. The rebuilding of Europe and Japan after the war further added debt, and acted to jump start the economy. There was plenty of cheap oil to fuel the growth. Population grew too, as families became more prosperous.

              The 1929 stock market crash represented a debt crash. Somehow, more debt (and fossil fuels) were needed to get the economy going.

            • Jan Steinman says:

              “The 1929 stock market crash represented a debt crash.”

              In my opinion, the Great Depression was, like almost all other economic contractions in history, an energy crisis at its root, combined with subsequent ecological and financial aspects of the energy crisis.

              Remove three out of four trees in 3/4ths of an entire continental mountain chain, and what do you get? Human history is full of deforestation causing energy crash, but this one was different: it was caused by a fungus.

              The American Chestnut was the primary energy source for some ten to twenty million people in Appalachia. It fed their bellies; it fed their livestock; it was sold to outsiders for cash income; it’s wood was strong, easily worked, and more rot-resistant than cedar, and it was the preferred material for houses, barns, and fences.

              When the American Chestnut became substantially extinct, the mountain people moved to the big cities, looking for jobs. My research indicates that between 60% and 90% of Appalachia was depopulated in at the peak of the chestnut crash. The leather industry, which relied on American Chestnut for about 80% of its supply of tannin, went into severe decline. Ekman currents that bring water out of forests stopped flowing, and the dust bowl resulted, which is also often cited as a contributing factor in the Depression.

              I’ve done quite a bit of research on this. Now all I need is a nice grant to write it all up in some scholarly journal.

              Remember, you heard it here, first! :-)

            • Thanks! I hadn’t heard that one before. But decline of the American Chestnut could certainly have contributed to the problem.

        • The story really isn’t peak oil; the story is Limits to Growth. This happens for financial reasons, not because we have hit 50% of the oil that will ever be recovered. In fact, once we hit Limits to Growth, most of what looks like the other 50% of oil supply will stay in the ground, as will most of the natural gas and coal, regardless of where they seem to be on the production curve.

          In terms of what Dennis Meadows is saying, right now he is saying it is “Too Late” to fix the situation. Alice Freidmann reports that at the Age of Limits, his talk said Dennis Meadows Collapse Inevitable 2015-2020. I also spoke at the conference. I heard him speak, but didn’t take notes. I don’t remember the particular phrase “inevitable now 2015-2020,” but that was not very far off from what he was saying. I think you may be looking at old information, with respect to what he is saying.

          I don’t think Joseph Tainter is particularly “tuned in” to the current collapse situation–that is not his field of study.

          There are quite a few folks who even if they are concerned about a close at hand collapse would not say so. I know Nate Hagens, for example, is concerned that talking about a near-term collapse could lead to a run on banks. He thus would not say anything, no matter how certain he would be of an upcoming collapse. I expect there are others in the same situation.

          Richard Heinberg is talking about “The End of Growth,” very definitely in the near term. He differs from me in that he has more hope that conservation and substitution will prevent out and out collapse. Or else he just doesn’t want to talk about the bad outcomes.

          Collin Campbell has been warning about peak oil in the near term for a very long time. This is a link to a 2012 talk, in which he says Global Oil Production is Playing with Fire. In it, he talks about potential high prices. This is his view of what the effect of peak oil would be–it is not really the right effect, so he is warning of the wrong problem (just as Richard Heinberg is giving wrong solutions). But based on Campbell’s view of the situation, his warning is as clear as it can be.

          I would ask whether you can find anyone who has really looked at the situation who sees that our problems are still off in the distance. I doubt that you can.

          In terms of how things unfold, I did not say that complete collapse will happen within two years, just that we will have a big step down (which is what all of the others are saying–in their own way). I need to write a post explaining better how things happen–basically the issue is oil prices that are too low.In fact, natural gas and coal prices are getting to be too low as well. This relates to diminishing returns, and salaries that are not rising. Costs of extracting all kinds of things keep rising, but with salaries that are flat to falling, prices don’t go up as they need to, they go down. Also, debt doesn’t keep increasing, because with flat wages people cannot afford very many new houses and cars. The lack of wages and lack of increased debt keeps prices down.

          The effect of low oil, gas, and coal prices hits in many ways. Increased violence in the Middle East is a big one. This by itself is likely to reduce oil production. Big companies cut back on new oil projects and on other kinds of projects–natural gas and coal as well. The combination of these effects can have a much bigger impact than simple depletion.

          The current level of oil prices has been engineered by ultra low interest rates. If interest rates go up, prices for oil, natural gas, and coal will drop further, creating even worse problems. These ultra low interest rates have also allowed the production of tight oil from shale formations. These companies are reaching the limit of their borrowing capacity. Even without interest rates going up, they are headed for problems. If interest rates go up, they have definite problems.

          • Thanks Gail for you thoughtful comments.

            As you can read in my post too, I don’t believe things are sustainable either. Nevertheless, collapse is a very emotive term and I’m cautious in how it’s used and a time frame is needed. This is not a person falling over, this is a system breaking up, but a butterfly appears a mess in its transition stage too.

            I was listening to some climate science on radio ecoshock, it was a podcast talking about sea level rises of 10’s of metres plus, and the commentator gave the perception that it was going to happen within the next few years or decades. This is not the time frame scientists are talking about while is could be a couple of metres by the end of the century.

            My understanding of Joseph Tainter view is that like JMG there will be a step down approach. There is huge difficulty in forecasting the future and people come unstuck. On the financial front, I have been reading and listening to Nicole Foss for a long time, (a decade?) and she too has been way off in her timeline predictions and outcomes. Many of the references she gives are, like herself, commenter’s on economics. I think it needs to be remembered that it is a moral philosophy not a hard science.

            If I was to listen to one person in finance it would be Jim Rogers. He believes that the 2014-2016 window is significant but one strong thing about him is he doesn’t predicate anything, to paraphrase him, he’s terrible at timing but can see the trend. Jim Rogers thinks that QE will end badly and the top three countries in the firing line are Japan, UK and USA and that it will be a mess.

            What is happening in Iraqi is a possible trigger for an oil price spike. It has some very odd dynamics and allegiances.

            I think the most likely finance outcome will be a depression. Losing control of a significant supply of oil will create an oil spike again. But this event may not be a run to the hills event either. While this would not be like the 1930s, due to the size of the system and numbers involve, one of the insights from 1930’s was that people were better off in some type of employment.

            In a serious depression I believe governments would do the unthinkable and have some sort of global debt jubilee as Steve Keen has proposed. This may allow a stabilisation and reset of the system.

            Large systems can display intelligence far greater than individual units, well, that’s what I hoping. Consumerism has a huge amount of waste built in as a lifestyle choice. But simple ideas can transform that system too, for example a Zero Waste policy became mandatory.

            I think if finance is framed in terms of a Mad Max scenario, if I truly believed that it was the only possible outcome 1. I’d go out and have as much fun as possible 2. I stop looking at any other solutions. I don’t see how either is really a constructive response to the situation especially in the UK.

            • Daddio7 says:

              I don’t know. It’s a different world today. In the 1930’s half the population lived on a farm. With millions of horses and mules they could get plowing done without oil. Even city dwellers had low needs and expectations. Today’s connected, entitled, gunned up, urban population will not submit quietly. Most farms today have nothing to eat on them. I live next to a potato farm but the potatoes were for fresh market and are long gone. The 20 lbs I picked off the grader have been eaten and some of those rotted.

            • I went to a wine tasting today, and beforehand got a tour showing how the winery made wine. Quite a bit is computer controlled. If the electricity gets cut off, most of the processes stop. The folks there said that they have a big diesel generator for back up, and it has earned its value back in saved wine through power outages. The person in charge told us that in California, some of the wine in aged in caves, so it is not necessary to use electricity to refrigerate the room. Of course, oil is used in harvesting the grapes and brining them to the winery. If either oil were unavailable, or electricity were unavailable, the fancy set up wouldn’t work to produce wine.

            • Paul says:

              Likewise — my neighbour here in BC had a big hay bailing machine break down the other day — he was having trouble fixing this complicated machine…

              Now just imagine what will happen when the machine no longer has petrol…

              Our ability to produce the amount of food we do is primarily a result of gas guzzling monster machines… one day we will not have these machines… and starvation will be epic

              Of course we also won’t have pesticides and fertilizers…

              This will be a total utter and complete breakdown of the agricultural system – top to bottom

          • Dennis Meadows comments from the link-
            “1. Public discourse has difficulty with subtle, conditional messages.
            2. Growth advocates change the justification for their paradigm rather than changing the paradigm itself.
            3. The global system is now far above its carrying capacity.
            4. We act as if technological change can substitute for social change.
            5. The time horizon of our current system is too short.
            As a result, I will suggest that it is essential now to put more emphasis on raising the resilience of the system.”

            “Once the peaks occur (between 2015 and 2020) all bets are off: past that point, the model’s predictive ability is not to be relied on because the assumptions on which it relies will no longer be valid.””

            Hi Gail, I realise you did not say two years but one or two commentators have said that. For me, that needs to be challenged because I don’t understand how that level of certainty can be arrived at and I would like to know. I believe bad decisions flow from fixed mind sets. For me, there will still be a future for people and it will still be shaped to some degree by what we think is possible either for our well-being or detriment.

  17. In the Cheap Seats says:

    Iran reduced its fertility rate:

    View story at Medium.com

    And the misguided people who purport to be in charge want to push woman toward the ‘ideal’ of having 12 children per family!

    http://www.economist.com/news/middle-east-and-africa/21603477-irans-leaders-are-worried-about-their-countrys-declining-population-make-more

    Japan and Russia are heading in the right direction…and certain people in those countries want to ‘turn the tide’ and stop the population decline.

    Japan had better hope it can get back to Edo population levels (or even somewhat lower) as expeditiously as possible without coercion/famine/war. The rest of the World would do well to emulate that idea. But people cannot embrace the simple idea of a 2.x replacement fertility rate (‘x’ is dependent on the population’s pre-childbearing years mortality rate). Humans are not ‘wired’/programmed for anything but very-short-term planning.

  18. w9v6jgq says:

    Adding to the discussion above, I cannot think of a major country that’s in worse shape than the U.K.

    It really does seem to be the perfect storm there…overcrowded from immigration, facing poverty, energy decline and the possible withdrawal of Scotland, subservient to America and helpless in Europe, deindustrialized and colonized by real estate and financial overlords, a culture marked by endless vapid entertainment, endemic corruption, political dysfunction and myths regarding what will save it (democratic institutions, trade with China, etc.)

    The whole Anglosphere (the U.K., Canada, and America) seems to be facing breakup although it may take longer in North America.

    • xabier says:

      W9

      Very true about the UK. Add potential serious water shortages into that list, pollution killing 20%, and diluted standards in the public education system.

      But on the bright side, the gloomy weather means there is only a very brief window of opportunity for serious rioting when there is a very hot summer – the urban criminal types won’t come out to play if the weather is not just right. Fortunately, one can usually count on a fair bit of rain, and I doubt the mayor of London will get to use his new toys the water cannon.

      • Harry says:

        To quote Nicole Foss, “the UK is a giant accident waiting to happen.” But for better or worse it is my home and I will not be relocating to the antipodes or South America in the hope of salvation.

        • xabier says:

          Harry

          Exactly: Blood and Soil. Still, the British aren’t at all what they were and this isn’t 1940, so one may legitimately make plans without feeling like a total rat. But where oh where? Perhaps the place with good ale is the place to be after all!

          • Harry says:

            The British certainly aren’t what they were – alas! It is a shame.

            New Zealand is tempting with only 4.5 million inhabitants – but actually the UK is not too bad re population density, given how much of the land is cultivable: http://en.wikipedia.org/wiki/List_of_countries_by_real_population_density_based_on_food_growing_capacity

            My feeling is that anywhere is going to be a gamble, especially with climate-change unfolding more swiftly than most predicted. The only concrete advice I feel qualified to offer anyone is to get out of the cities right now. They will be awful beyond imagining.

            We live in the countryside and are part of a small, resourceful and closely knit community. I think – I hope this will count for something.

            • xabier says:

              Harry

              I’d tend to agree, it’s best stick to a place where you know the people if it seems half-way decent. In this village, I certainly know who the criminals are, which is useful! It’s also small enough for strangers to really stand out, and I know every local car engine I think.

              Wandering the globe for safety like Nicole Fosse could go horribly wrong. I see after praising Canada she’s moved to New Zealand, which seems to have its attractions.

              Best of luck against the frackers!

            • Lizzy says:

              NZ is very tempting.

            • It seems to me that the comparison also needs to take into account number of crops per year available. Land which gives two or three crops a year is a lot more productive than land in say, northern Russia, where the growing season is pitifully short. Some years, crops may barely be possible.

            • Rolls with the Punches says:

              According to this article from The Guardian, the UK may be Europe’s largest economy by 2030 thanks to ‘positive demographics’ and favorable tax rates.

              http://www.theguardian.com/business/2013/dec/26/britain-europe-top-economy-by-2030

              Zippidy-doo-dah mention of Limits To Growth issues.

            • The one thing the article did get right is that big changes are ahead. But given the problems ahead, it is hard to believe any country will be doing very well.

  19. Gail remember we spoke about Oil Prices in your last post?

    I said to watch out for WTI & Brent Crude…well get ready for rising prices as Iraq falls

    http://www.arabianmoney.net/us-stocks/2014/06/12/125-oil-price-warning-as-iraq-dissolves-into-chaos-after-al-qeada-group-takes-second-largest-city/

    Today WTI has risen to $105
    Brent is also rising $111

    Expect Brent to settle around $120-$125. This will cause chaos on food prices leading to riots around the world.

    2007 again but this time there’s nothing left in the arsenal.

    • We will have to wait and see. You are right in that the world cannot withstand high oil prices. I am just not sure the world economy is even up to allowing them to rise very much. It is a good thing to watch, though.

  20. Stilgar Wilcox says:

    http://www.telegraph.co.uk/news/worldnews/middleeast/iraq/10892299/Iraq-crisis-al-Qaeda-militants-push-towards-Baghdad-in-sight-live.html

    ‘Iraq crisis: al-Qaeda militants push towards Baghdad in sight – live’

    Kurdish forces have control Thursday of the disputed Iraqi oil hub of Kirkuk, officials have told AFP.

    The decision of Paul Bremer, the head of the occupational authority in Iraq, to disband the 700,000-man Iraqi Army eleven years ago is the root cause of the crisis, Mr Zahawi, who was born in Iraq, said.

    ISIS has said it will now march on Baghdad, AFP reports.

    In a country with three factions; Sunni, Shiite and Kurds, the decision by the Bush Admin. to disband an army of seven hundred thousand soldiers has got to rank right up there with the worse decisions ever. How does that even begin to make any sense?

    Should be interesting to see how this plays out and affects oil exportation totals.

    • xabier says:

      Stilgar

      A very experienced English journalist for the BBC asserted that the very clever Ivy League people who drew up the plans for post-Saddam Iraq actually didn’t have much of a clue about the sectarian and racial divisions in Iraq, or discounted them as irrelevant. He wrote an entertaining account of this.

      I’m also inclined to think that they perhaps were too much influenced by the successful handling of Germany post 1945 – a far simpler scenario involving the end of a dictatorship.

      • Lizzy says:

        Actually, Xabier, I think goes further back — the carve-up of the Ottoman empire by the French and British post WW1. Sykes-Piquot with their straight lines, dividing ancient ethic groups, who seem to be now re-assembling.

        • xabier says:

          Lizzy

          Quite right: of course, the difference is that the old European empires understood the tribal and sectarian differences very well indeed, but just imposed their will by drawing lines on a map and relied on shooting/imprisoning anyone who disagreed – real empires do that after all.

          Whereas the US planners of the Iraq invasion to ‘build democracy’ were wilfully ignorant of such things (although the foreign department professionals were not, but were powerless to influence).

          The idea of the Caliphate negating ‘national’ boundaries invented only a few years ago rather blows up all western ideas. It’s as crazy as the what the US did in ‘invading for Democracy’ – trying to re-establish an ideal system of theocratic government which proved unsustainable hundreds of years ago: it can only come to grief.

        • Interguru says:

          A great book, “Lawrence in Arabia” by Scott Anderson describes how the while European great powers’ attention was diverted to fighting among themselves, that low level functionalities such as Sykes and T.E. Lawrence set the future of the Middle East

          from the publisher’s description

          The Arab Revolt against the Turks in World War I was, in the words of T. E. Lawrence, a sideshow of a sideshow. As a result, the conflict was shaped to a remarkable degree by a small handful of adventurers and low-level officers far removed from the corridors of power.

          Sykes was one of the low level officers

          From the NY Times review (
          http://www.nytimes.com/2013/09/09/books/scott-andersons-lawrence-in-arabia-revisits-legends.html?module=Search&mabReward=relbias%3Ar&_r=0 )

          “Lawrence was able to become ‘Lawrence of Arabia’ because no one was paying much attention.”

          The book was a national book rewards finalist and is a damn good read.

          • Paul says:

            Re: Middle East — we often hear the question ‘what were they thinking when the divided up the Middle East without taking into consideration religious and tribal loyalties’ i.e. they stuck people who were sure to be at each other throats in the same country.

            I would suggest they knew EXACTLY what they were doing — it’s all about divide and conquer — and it’s much easier to do that when you have two opposing groups in a country.

            • interguru says:

              Read the book. I am sure they wanted to divide and conquer, but were not paying attention at the time. The main players were total nonentities. It happened anyway, but not because of any planning.

              In the same way to Europeans were happy that old world diseases wiped out 90% of the American indians, but it did not happen because of any planning on the part of the colonial powers.

              Yes I know there were instances later where the Americans tried to spread smallpox among the indians, but that was centuries after the damage was done.

            • Paul says:

              The Americans purposely killed the bison herds in order to starve the Plains Indians…

            • xabier says:

              Paul

              Exactly, divisions help control – it’s why nationalists insurgent groups have to kill or neutralise all opposition, where divisions exist. Once united, by love or fear, so-called ‘national liberation’ can really get going.

              The Basque conflict, for instance, has mostly been a civil war among Basques (for 200 years or so). Talking to fanatics of this kind is one of the most blood-chilling experiences.

    • David Gower says:

      I would like to see an expose on the “brainiacs” involved with the Iraq situation. Untold story.

      • Don Stewart says:

        Dear David Gower
        Actually, at the time, people did point out the cluelessness of Paul Brenner. For example, he went to Iraq determined to impose a ‘flat tax’, which was a favorite Republican idea at the time. He had been appointed the ruler of Iraq and had no idea that they had no income tax whatsoever, flat or otherwise. (If I remember correctly, Colin Powell thought it a bad idea, but his opinion was not asked.) Many military people at the time also thought that disbanding the Iraqi army was irrational. Just before the US invasion, I remember reading a comment by Saddam that he was not worried, because ‘the Americans aren’t stupid enough to install a Shiite government’….he was wrong and paid with his life.

        Don Stewart

    • We definitely don’t need another country with a step-down in oil production.

  21. Stilgar Wilcox says:

    “The manipulated behaviour of the oil price confirms we are in a shortage situation, i.e. the demand is greater than the supply.”

    The above comment is from a post at peak oil dot com.

    I’d like to get Gail’s reply to this, but I’m wondering if instead of being manipulated, investors are savvy to demand at a higher oil price just not being there due to a weak global economy. The idea being if oil price did rise, reduced demand would level it back to the previous price point. In other words maybe we are at a price point ceiling, where supply & demand collide to cancel out a higher price. Supply cannot go much higher but neither can demand. A stalemate in which we simply have to live at that price point ceiling.

    However, as this situation moves forward, it may be a case of that ceiling price dropping due to a descending economy brought on by high oil prices in the first place. A negative feedback loop that will act to reduce supply as higher priced non-conventional sources become mothballed. This of course feeds into the notion of a shark fin descent from peak. If so, we may be near the cliff edge of that fin.

    • I am wondering if oil prices are now nearly as high as they can be, simply because of the weak world economy. Higher prices may simply cut back on world demand, as you say.

      I think that we are at this point in somewhat of an “overshoot” condition, with respect to oil supply. Companies drilling for oil thought that their success rate would be higher, or the oil prices would be higher, or both. As companies digest this information, they are gradually pull back on new drilling. This is part of what I mean by the overshoot–if companies realized current conditions in advance, they would not have recently been drilling. Thus, a pullback in oil production seems likely, at current prices.

      There is another aspect too. The not-quite-high-enough oil prices are having an adverse impact in the Middle East as well. With higher revenue, it would be possible to afford more programs for citizens, and it would be possible to afford putting in more infrastructure for export. Middle Eastern countries could even help each other out a little–aid for Egypt and Syria. With prices and production not doing all that well, the problems tend to feed into the discontent that feeds into uprisings. So to some extent, the problems in Iraq are exacerbated by the oil price situation. This and other uprisings also has the potential to reduce supply.

  22. Philip Backus says:

    My immediate concern is that of public perception of the various situations that are rapidly unfolding. It takes less than 10% of people filling extra gas cans to start a panic buying situation that can escalate quickly by observation or word of mouth. Mobs and individuals act on emotional perception rather than rational thinking. Thank God for bread and circuses and an inate desire of the public NOT to have to think too long or too deeply about current events. It is prudent at any time to have a cushion of both energy and food if for no other reason than personal calamaties that we all experience throughout our lives. In these times such prudence may mean the differrence between comfort and discomfort…or even life or death. I don’t beleive that we can accurately forcast the future so there is no way to prepare for any and every eventuality exept perhaps emotionally and spiritually if one is so inclined.Hope and panic are emotional reactions and though useful in some situations they are not a rational PLAN. When the gas lines return…and they will, this time they will likely be a regular feature of life Doubley so for food and water. Keep in mind that those who think themselves exceptional become highly discourtious and even violent when waitiing in line for hours for their’ ration of two gallons only to see the no gas sign go up and the realization that they were not so exceptioal after all, hits them….like a ton of bricks.

    • timl2k11 says:

      “It takes less than 10% of people filling extra gas cans to start a panic buying situation that can escalate quickly by observation or word of mouth.”
      Actually no gas cans needed. I forget which year and which hurricane, but gas prices spiked in my area and fears of reduced supply, but not *actual* reduced supply lead to people topping off their tanks and the gas stations could not keep up with the sudden rise in demand. It was eery to drive around and see so many stations with no gas. People would fill up (myself included if I recall correctly) even if they didn’t need to for fear that it might be there only chance for a little bit.

    • Daddio7 says:

      I remember the 1973 gas shortage. I drove I95 from St. Augustine to Jacksonville in the pre-dawn hours and only saw one other vehicle. Today it is three lanes each way almost bumper to bumper 24/7. Are all those trips really necessary?

    • Governments will make certain that fuel prices don’t go up, even if there are shortages. (I know that is what has happened in Atlanta, when we were at the end of the pipeline, and not getting enough oil from the gulf following hurricanes.) The result, then, as you say, will be lines.

      You may be right about shortages of food and water as well. Possibly electricity interruptions as well, especially if there is a storm, and it is difficult to repair the damage.

      To some extent, all kinds of shortages go together, if there are major energy shortage.

  23. Philip Backus says:

    My point exactly. Bau is still working in our society because of perception and nothing more other than some duct tape to hold the financial end of things together and make them “legal and solvent”. Much of this financial paper will be highly sought after one day for more mundane uses such as starting cooking fires. But try to imagine the envy of your friends as they visit your “early American” unheated outhouse and revel in the comfort of using what we currently use as currency for toilet paper. The images of the founding Fathers emblazoned on each sheet will add just the right “Colonial” touch to add to the Early American decor…for the discerning and fashion minded home(hovel)maker! After shedding a tear for what we have become as a nation I think he might be able to see the ironic humour in using his image to start his stoves and to end up on the dungheap.After reading much of his work over the years I feel safe to say that he would laugh.

  24. Don Stewart says:

    Dear Gail and All
    Most all of us agree that human behavior will have to change in the pretty near future. Pretty frequently, someone will refer to our genetic heritage as dooming us in one way or the other.

    At the risk of exposing my ignorance, I would like to suggest a more hopeful way to look at the potential for successful adaptation.

    First, listen to Uri Alon’s TED talk. At about 9 minutes he begins to talk about one of his group’s great discoveries…complex processes may consist of pretty simple patterns, called Network Motifs.

    Here is the wiki link to Network Motifs. Skip over the computational part, unless you are a scientist.

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

    Why does this matter? It seems likely that human behavior also exhibits Network Motifs. It also seems likely, as the Wiki article discusses in terms of gene expression, that the Network Motifs are a lot more flexible than the genetic code itself.

    For example, there is no doubt that the genetic code for humans contains the instructions to produce murderous rage and also the instructions for tolerance of difference. But, as Steven Pinker has shown with extensive statistics, as a group we now express the genes for tolerance more frequently and the genes for murderous rage less frequently. I suggest that our Network Motifs have changed. One could make a similar observation about tolerance of minority sexual practices, and other behavioral phenomena.

    Someone will frequently say ‘Americans would rather die than garden their own food’. That feeling is, I suggest, a Network Motif. The genetic capability to garden and the genetic capability to be abjectly dependent on industrial agriculture both exist in our genome, but which will be expressed is similar to the questions in the Wiki about gene expression in other contexts.

    As I interpret the project that David Holmgren and Nicole Foss have embarked on, it goes something like this:
    1. We want to foster the development of the ‘gardening’ Network Motif in a significant number of people right now.
    2. When things go horribly wrong, many more people will see that the ‘gardening’ Network Motif is working, and will copy it.
    3. Of course there will be problems with resources and skills and organization, but having seeded the Network Motif will be much preferable to not having seeded anything.

    Don Stewart

    • Don Stewart says:

      Dear All
      One more thing. Paul Wheaton today has an article about the abuse of the word ‘should’. I didn’t read it, but I suspect it goes along with complaints here about ‘we should do (blah, blah, blah) to save the world’.

      I would like to point out that, IF Nicole and David are doing what I suggested they are doing, they won’t spend a lot of time preaching to the majority. They will be seeking early adopters who will be swayed by the vision of increased resilience, as well as those people who respond well to ‘should’ (as in morality). As I read David’s words, they don’t expect the 99 percent to be swayed by visions of resilience or morality…but to be swayed by hard necessity plus available alternative models of behavior.

      I may be very wrong about their goals, of course…Don Stewart

    • Gardening seems to be a good conversation starter, even now. People are interested.

  25. following the thread of Iraq insurgency and gas emergencies, what we might be witnessing here is the signs of both converging.
    The balance of world fuel supply hangs on the stability of the middle east. Right now there is an acute danger of the so called clash of religion—Sunni and Shia or whatever, becoming so locked in combat that the oilwells can no longer produce. As always, the fighting is said to be religious, but in fact it is about access to resources. Look at the map of North Africa across to Iran–Pakistan. Saudi, the key player in the oil game sits in the middle of a swathe of unstable countries, each one plagued by rising population, chronic unemployment and a resentment that ‘muslim oil’ is being sold by a rich elite to fund the decadent lifestyles of the infidel.
    World oil will never dry up, what will happen is that fighting over it will prevent anyone getting hold of it. The Arabs aren’t stupid, they know perfectly well that when the oil has gone, the western powers will walk away and leave them to kill each other anyway, after which they will revert to being camel traders and goat herders.
    We would do well to remember that the extremist ‘caliphate’ as now sought by extremists, extends across the lands originally conquered by the prophet in the 7th century. That’s the land between Morocco and Pakistan. Bearing that in mind Libya is already fractured, Egypt is a basket case, Syria is wrecked, Iraq is following suit, Only Saudi is holding out, because the US fleet sits in the Persian gulf, and the Saudi wealth is used to buy off their legions of unemployable young men. Take that away and the entire region will be at each other’s throats. As with all theocracies, each is convinced that their god is on their side, All they have to do is slaughter the other godbotherers to earn his favour. . Fighting to achieve that will certainly stop the oilflow, and return all of us to the lifestyle of the 7th century. Convert now to avoid the rush!!!! tinyurl.com/oa854gt

    • justeunperdant says:

      People think that the collapse will likely be caused by debt. I am not sure of that. it can come from everywhere. Again conflict in the middle east stops oil production, china manufacturing stops, global supply chain collapses and die off of human specie. We are a witness of the collapse right now. The ones that will survive, will tell stories of the oil age that will become myths and legendd that tribe will tell around fire camp, if any human survive.

    • Adam says:

      Certainly the oil infrastructure is in danger, but it seems only a few hundred terrorists chased the Shia Iraqis out of Sunni Iraq. Expect the Shia to fight fiercely to protect the remainder of Iraq. If the Middle East splits into separate Sunni and Shia states, so be it. But however revolutionary the state, it will still need to sell its oil to placate its people. The true “Pol Pot” types are few and far between.

      This story could take a few turns yet. Remember “Azawad”? How long did that last?

      ——————————————————
      Excellent analysis and historical overview from the Daily Telegraph:

      http://www.telegraph.co.uk/news/worldnews/middleeast/10892615/A-powerful-and-merciless-force-has-emerged-on-the-world-stage.html

      • Very interesting article.

        Regarding ISIS:

        Some of its fighters (who bring formidable military capability) are former Ba’athist soldiers. Others learnt their trade with the so-called “Awakening fighting” groups created by the US to head off an all-out Iraqi civil war back in 2007.

        The Western campaign to dislodge President Assad of Syria was another contributing factor. While our leaders were ready to call for Assad to go, they were unwilling to intervene directly to dislodge him. Instead, mainly through allies such as Saudi Arabia and Qatar, the West supported militant rebel groups which have since mutated into Isis and other al‑Qaeda connected militias.

        Regarding Iran:

        With Egypt facing grave problems, Iran has emerged as the most stable and powerful country in the Middle East. . . . We have to choose new allies, and they must include Iran. If we carry on with our present deluded course, the threat to the West will only grow more dangerous.

        A person wonders why we didn’t try to go to the Middle East and try to make peace, instead of war? Redraw lines, so groups could be separate? Somehow, try to share resources equitably.

        • One of my treasured books is an old school atlas, dated 1900.
          When commenting on world affairs I often refer to it, because back then lots of lines hadn’t been drawn. The middle east is especially fascinating because the old Ottoman empire still existed, Iraq is just a remote part of it, no Israel or Saudi Arabia. And so on.
          Come WW1, we went in and drew lines on a map and gave the locals new addresses, and dumped an entire new state in the middle of them (Israel). Which pleased them not at all. The basic idea was that poor bedouins would be only too happy to be rid of their Turkish masters, and welcome new ones–the British and the French.
          We did the same in India, where a civil servant took just six weeks to separate out the states of east and west Pakistan.
          As with much else, we forget that our ability to draw accurate maps is only 200 years old, inflicting maps on peoples whose roots go back millenia is madness
          Drawing lines on maps is asking for trouble

          • xabier says:

            End

            And what nationalists tend forget, is that even if they get the lines re-drawn as they hope, their old masters won’t be ready to forget where they used to be. The weight of history is very great….

          • I expect even within the old Ottoman empire, a fair amount of moving around took place. Crops wouldn’t be good in an area, or vegetation wouldn’t be sufficient for grazing very many animals. Especially when it came to herding animals, it would be easy to move on to a different area. Groups would tend to move with their kin. But when new groups moved in to areas previously occupied by other groups, it would be inevitable that conflicts occurred. While the area with somewhat better climate might have enough vegetation for the original group, adding the new group would be a real problem. So there would be a mini-resource war.

            Adding oil to the mix added another resource to fight about. Each group wants a large share of the oil exports available.

        • Don Stewart says:

          Dear Gail and Others
          I think that The Telegraph article makes the same mistake as most all articles. It tries to make sense of the position of the US, Britain, and France by interpreting their actions in terms of the noble objectives of their press releases. And finds ineptitude. For example, giving ISIS weapons in Syria and being shocked when ISIS uses them against the Iraq government.

          And what about Woodrow Wilson’s committment to self-determination, written into the UN Charter and supposedly an American value dating back to 1776. But then what about eastern Ukraine?

          Are the leaders of the West simply stupid and inept, or are they pursuing a strategy that is best not discussed in public? I believe it is the latter. Iran made it onto G.W. Bush’s ‘Axis of Evil’ list shortly after it began pursuing the ability to export oil without using the dollar, the reserve currency. Obama now refers to Russia and China as ‘the enemy’ and both are moving toward the end of dollars as the reserve currency. So the first piece of the puzzle is a determination to preserve the dollar as a reserve currency so that we can simply print dollars when we need oil.

          The second piece of the puzzle is facilitating the flow of oil from the surplus countries to the
          West through regime change. That is why I believe Obama will keep poking Putin in the chest until war starts. Obama must be convinced he can win a war with Russia. Russia is the largest exporter of oil plus gas in the world. Syria is inconveniently located on some potential pipeline routes, and Assad is not malleable enough…so get rid of him with whatever it takes. I think Obama attacked Afghanistan mostly to complete a ring of air bases around Russia.

          As I observe the actions coming out of DC, London, and Paris, I see a fair amount of simple ineptitude, but more than that, I see some clear objectives which have spanned administrations and are never really talked about in public. Oil underlies those objectives.

          Don Stewart

          • You are probably right that oil underlies a lot of actions, and that simple ineptitude is an issue. Politics is not an area I have followed closely.

      • xabier says:

        Adam

        I agree. Their model society will include the banning of immodest dress, music, books except the Koran and all fun of any kind, while keeping the oil pumping (and maybe some whisky in the back room out of sight) and the elite of whatever movement it is cashing in on the oil revenues. One just has to hope that hostilities remain contained – this is all small-scale stuff, gunmen chasing gunmen as far as one can tell. Even Islamists know which side their bread is buttered on.

    • The situation sort of adds to the irony of the IEA Investment report–we will all be saved by Middle Eastern oil. Are the authors even half-way awake?

      By the way, Yemen is another smaller player that is in terrible shape as well.

    • xabier says:

      End

      And, as you no doubt know, they want Spain as well – having invaded it in the 8th century it is automatically part of Islam to be regained. Well, if I have to go Crusading so be it………

      • Oh—I left that bit out,
        A movement–invasion force—cult–whatever, is only stopped by a force stronger than itself. The goes right back through history. The muslim ideology is no different, but this time they think like the rest of us and fantasise that they can go on forever. Much like the 1000 year Reich, with whom they tried to ally themselves in the early 40s against the British and French.
        Interesting idea that—if Germany had won WW2, by now the muslims would be fighting Germans—over oil.

        On my previous reference to borders, I see in today’s paper that they have started bulldozing the Sykes Picot border between Iraq and Syria
        Don’t we live in interesting times?

  26. Philip Backus says:

    BTW my point was that TP has been known to become scarce very quickly as well. Sorry for the rant.

  27. interguru says:

    Has anyone looked at crude prices lately? ( http://www.bloomberg.com/energy/ ). Brent ( which is the world price ) is over $112/bbl. (WTI, West Texas Intermediate ) is $106. This number is often quoted in financial pages. It is lower the Brent because pipelines shortages that make it hard to get out Brent is more indicative.

    • Yes. Prices are up on Iraq situation. We will need to watch the situation.

      • Stilgar Wilcox says:

        In kind of a sick way, it’s getting to be fun to watch the overall global economic system in it’s attempts to mitigate diminishing returns, with each event occurring (like this latest sectarian violence in Iraq) adding just a tad more pressure, I feel like Willy Wonka as he enjoys the anticipation of pressure building up below Gustav stuck in the milk chocolate tube.

        • Stilgar Wilcox says:

          Change that to Augustus (from Gustav). See how memory changes things.

          • Harry says:

            I agree, Stilgar. It is fascinating! The global economy is an adaptive and cunning entity. The manner in which it reacted to peak, conventional oil by reorganising its financial arrangements to make the large-scale extraction of tight oil possible was remarkable. It does make you wonder what other tricks it has up its sleeve.

  28. Theedrich Yeat says:

    Peakists are often criticized for being only “negative” and offering no “solutions.”  In other words, the mere fact of pointing out our looming self-destruction is interpreted as somehow self-falsifying.  Those who criticize “alarmists” in this way are convinced there must be some way to suspend Tainteresque history and continue the joy ride.  Maybe extraterrestrials will save us.And our politicians cater to convictions of this nature.Such critics are petri-dish organisms — BAU people blissfully ignorant of petroleum and finitude generally.  In their view, using sweet reason with, say, the oily Russians or the Mohammedan beheaders now overunning MENA will make things all better.  Telling the Chindians to use only bicycles — not “our” oil — for transportation will solve the problem of depletion.  Importing serfs from the Third World will solve our inability to run our domestic business profitably.  Etc.Yes, Virginia, there is a Santa Claus.  Sustainable development by magic is the future, just as our government, our media, large corporations and Wall Street tell us.  The dreamy American hallucination is real.

  29. notaneoliberal says:

    Jan; I think you got the pumped hydro vs batteries more or less backward. Pumped hydro is about 75% to 80%. efficient and if there is a battery that beats 35% it’s news to me.

    • Jan Steinman says:

      “Pumped hydro is about 75% to 80%. efficient and if there is a battery that beats 35% it’s news to me.”

      Since you published the original figure, can you provide a reference for that?

      Tesla Motors claims 85% to 90% charging efficiency.

      Show me your references, and I’ll show you mine.

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