Category Archives: Energy policy

The World Economy Is Becoming Unglued; Models Miss Real-World Behavior

Posted on June 30, 2023 by Gail Tverberg

A common belief is that if the world does not have adequate energy, the result will be high prices. These high prices will allow more fossil fuels to be extracted or will allow renewables to substitute for fossil fuels.

In my view, the real issue is quite different: Inadequate energy supply of the types the economy requires can be expected to affect the economy in a way that causes it to become “unglued.” The economy will gradually fall apart as infighting becomes more of a problem. Goods won’t necessarily be high-priced; many simply won’t be available at any price. Political parties will fragment. Conflict within countries, such as the recent Wagner conflict with the military leadership in Russia, will become more common. Continue reading →

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The economy is moving from a tailwind pushing it along to a headwind holding it back

Posted on December 16, 2022 by Gail Tverberg

When the Crisis Stage occurs, there are fewer goods and service per capita to go around, so some members of the world economy must come out behind. Conflict of all kinds becomes more likely. Political leaders, if they happen to discover the predicament the world economy is in, have little interest in making the predicament known to voters, since doing so would likely lead them to lose the next election.

Instead, the way the physics-based self-organizing economic system works is that alternative narratives that frame the situation in a less frightening way gain popularity. Political leaders may not even be aware of how dependent today’s economy is on fossil fuels. Researchers may not be aware that their “scientific” models are misleading because they look at too small a portion of the overall system and make unwarranted assumptions. Continue reading →

Posted in Alternatives to Oil, Energy policy, Financial Implications | Tagged , , , , | 3,874 Comments

Today’s Energy Crisis Is Very Different from the Energy Crisis of 2005

Posted on November 17, 2022 by Gail Tverberg

Back in 2005, the world economy was “humming along.” World growth in energy consumption per capita was rising at 2.3% per year in the 2001 to 2005 period. China had been added to the World Trade Organization in December 2001, … Continue reading →

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Why financial approaches won’t fix the world’s economic problems this time

Posted on October 18, 2022 by Gail Tverberg

Time and time again, financial approaches have worked to fix economic problems. Raising interest rates has acted to slow the economy and lowering them has acted to speed up the economy. Governments overspending their incomes also acts to push the economy ahead; doing the reverse seems to slow economies down.

What could possibly go wrong? The issue is a physics problem. The economy doesn’t run simply on money and debt. It operates on resources of many kinds, including energy-related resources. As the population grows, the need for energy-related resources grows. The bottleneck that occurs is something that is hard to see in advance; it is an affordability bottleneck.

For a very long time, financial manipulations have been able to adjust affordability in a way that is optimal for most players. At some point, resources, especially energy resources, get stretched too thin, relative to the rising population and all the commitments that have been made, such as pension commitments. As a result, there is no way for the quantity of goods and services produced to grow sufficiently to match the promises that the financial system has made. This is the real bottleneck that the world economy reaches. Continue reading →

Posted in Energy policy, Financial Implications, News Related Post, oil shortages | Tagged , , , | 3,503 Comments

Ramping Up Renewables Can’t Provide Enough Heat Energy in Winter

Posted on September 20, 2022 by Gail Tverberg

We usually don’t think about the wonderful service fossil fuels provide in terms of being a store of heat energy for winter, the time when there is a greater need for heat energy. Figure 1 shows dramatically how, in the US, the residential usage of heating fuels spikes during the winter months. Solar energy is most abundantly available in the May-June-July period, making it a poor candidate for fixing the problem of the need for winter heat. Continue reading →

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