Our fossil fuel energy predicament, including why the correct story is rarely told

There is more to the fossil fuel energy predicament than we usually hear about.

Strangely enough, a big part of the confusion regarding the nature of our energy problem comes from the fact that virtually everyone wants to hear good news, even when the news isn’t very good. We end up seeing information in the Mainstream Media mostly from the perspective of what people want to hear, rather than from the perspective of what the story really is. In this post, I explain why this situation tends to occur. I also explain why our current energy situation is starting to look more and more like an energy shortage situation that could lead to economic collapse.

This post is a write-up of a presentation I gave recently. A PDF of my talk can be found at this link. An mp4 video of my talk can be found at this link: Gail Tverberg’s Nov. 9 presentation–Our Fossil Fuel Energy Predicament.

Slide 1
Slide 2

Most people attending my talk reported that they had mostly heard about the issue on the right end of Slide 2: the problem of using too much fossil fuel and related climate change.

I think the real issue is the one shown on the left side of Slide 2. This is a physics issue. Without fossil fuels, we would find it necessary to go back to using older renewables, such as oxen or horses for plowing, burned wood and other biomass for heat, and wind-powered sail boats for international transport.

Needless to say, these older renewables are only available in tiny quantities today, if they are available at all. They wouldn’t provide many jobs other than those depending on manual labor, such as subsistence agriculture. Nuclear and modern renewables would not be available because they depend on fossil fuels for their production, maintenance and long distance transmission lines.

Slide 3
Slide 4

On Slide 4, note that M. King Hubbert was a physicist. This seems to be the academic specialty that finds holes in other people’s wishful thinking.

Another thing to note is Hubbert’s willingness to speculate about the future of nuclear energy. He seemed to believe that nuclear energy could take over, when other energy fails. Needless to say, this hasn’t happened. Today, nuclear energy comprises only 4% of the world’s total energy supply.

Slide 5

The transcript of the entire talk by Rear Admiral Hyman Rickover is worth reading. I have excerpted a few sentences from his talk. His talk took place only a year after Hubbert published his research.

Rickover clearly understood the important role that fossil fuels played in the economy. At that early date, it looked as if fossil fuels would become too expensive to extract between 2000 and 2050. A doubling of unit costs for energy may not sound like much, but it is, if a person thinks about how much poor people in poor countries spend on food and other energy products. If the price of these goods rises from 25% of their income to 50% of their income, there is not enough left over for other goods and services.

Slide 6

Regarding Slide 6, the book The Limits to Growth by Donella Meadows and others provided early computer modeling of how population growth and extraction of resources might play out. The base model seemed to indicate that economic decline would start about now. Various other scenarios were considered, including a doubling of the resources. Without very unrealistic assumptions, the economy always headed downward before 2100.

Slide 7

Another way of approaching the problem is to analyze historical civilizations that have collapsed. Peter Turchin and Sergey Nefedov analyzed eight economies that collapsed in their book Secular Cycles. There have been many examples of economies encountering a new source of energy (conquering a new land, or developing a new way of producing more energy), growing for a time, reaching a time where growth is more limited, and finally discovering that the economy that had been built up could no longer be supported by the resources available. Both population and production of goods and services tended to crash.

We can think of the current economy, based on the use of fossil fuels, as likely following a similar path. Coal began to be used in quantity about 200 years ago, in 1820. The economy grew, as oil and natural gas production was added. We seem to have hit a period of “Stagflation,” about 1970, which is 50 years ago. The timing might be right to enter the “Crisis” period, about now.

We don’t know how long such a Crisis Period might last this time. Early economies were very different from today’s economy. They didn’t depend on electricity, international trade or international finance in the same way that today’s world economy does. It is possible (in fact, fairly likely) that the downslope might occur more rapidly this time.

Past Crisis Periods seem to feature a high level of conflict because rising population leads to a situation where there are no longer enough goods and services to go around. According to Turchin and Nefedov, some features of the Crisis Periods included increased wage disparity, collapsing or overturned governments, debt defaults, inadequate tax revenue and epidemics. Economists tell us that there is a physics reason for the rich to get richer and the poor to get poorer during Crisis Periods; in some sense, the poor get “frozen out” and the wealth rises to the top, like steam.

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Slide 9

Slide 9 is a chart I prepared several years ago, showing the growth in the world production of fuels of various types. What little wind and solar was available at that time was included in the biofuels section at the bottom. Early biofuels consisted largely of wood and charcoal used for heat.

Slide 10

Slide 10 shows average annual increases for 10-year periods corresponding to the periods shown on Slide 9. This chart goes to 2020, so it covers a full 200-year period. Note that the increases in energy consumption shown are especially high in the 1951-1960 and 1961-1970 periods. These periods occurred after World War II when the economy was growing especially rapidly.

Slide 11

Slide 11 is similar to Slide 10, except I divide the bars into two pieces. The bottom, blue part corresponds to the amount that population grew, on average, during this ten-year period. Whatever is left over I have referred to as the amount available to increase the standard of living, shown in red. A person can see that when the overall growth in energy consumption is high, population tends to rise rapidly. With more energy, it is possible to feed and clothe larger families.

Slide 12

Slide 12 is like Slide 11, except that it is an area chart. I have also added some notes regarding what went wrong when energy consumption growth was low or negative. An early dip occurred at the time of the US Civil War. There was a very long, low period later that corresponded to the period of World War I, World War II and the Depression. The collapse of the central government of the Soviet Union occurred in 1991, so it is part of the 10-year period ended 2000. Most recently, we have encountered COVID shutdowns.

The peaks, on the other hand, tended to be good times. The period leading up to 1910 corresponded to the time of early electrification. The period after World War II was a period of growth and rebuilding. Most recently, China and its large coal resources helped pull the world economy forward. China’s coal supply stopped growing about 2013. I have written that we can no longer depend on China’s economy to pull the world economy forward. With recent rolling blackouts in China (mentioned in the next section), this is becoming more evident.

Without enough energy, the current period is beginning to look more and more like the period that included World War I and II and the Great Depression. Strange outcomes can occur when there basically are not enough resources to go around.

Slide 13
Slide 14

Slide 14 shows recent energy production. A person can see from this slide that wind and solar aren’t really ramping up very much. A major problem is caused by the fact that wind and solar are given the subsidy of “going first” and prices paid to other electricity producers are adjusted downward, to reflect the fact that their electricity is no longer needed by the grid. This approach tends to drive nuclear out of business because wholesale electricity rates tend to fall to very low levels, or become negative, when unneeded wind and solar are added. Nuclear power plants cannot easily shut down. Instead, the low prices tend to drive the nuclear power plants out of business. This is sad, because electricity from nuclear is far more stable, and thus more helpful to the grid, than electricity from wind or solar.

Slide 15

Fossil fuel producers need quite high energy prices for a variety of reasons. One of these reasons is simply because the easiest-to-extract resources were removed first. In recent years, producers have needed to move on to resources with a higher cost of extraction, thus raising their required selling prices. Wages of ordinary citizens haven’t kept up, making it hard for selling prices to rise sufficiently to cover the new higher costs.

Another issue is that fossil fuel energy prices need to cover far more than the cost of drilling the current well. Producers need to start to develop new areas to drill, years in advance of actually getting production from those sites. They need extra funds to work on these new sites.

Also, oil companies, especially, have historically paid high taxes. Besides regular income taxes, oil companies pay state taxes and royalty taxes. These taxes are a way of passing the “surplus energy” that is produced back to the rest of the economy, in the form of taxes. This is exactly the opposite of wind and solar that need subsidies of many kinds, especially the subsidy of “going first,” that drives other electricity providers out of business.

Prices for oil, coal and natural gas have been far lower than producers need, for a long time. The COVID shutdowns in 2020 made the problem worse. Now, with producers quitting at the same time the economy is trying to reopen, it is not surprising that some prices are spiking.

Slide 16

Most local US papers don’t tell much about world energy prices, but these are increasingly becoming a big problem. Natural gas is expensive to ship and store, so prices vary greatly around the world. US natural gas prices have roughly doubled from a year ago, but this is a far lower increase than many other parts of the world are experiencing. In fact, the bills that most US natural gas residential customers will receive will increase by far less than 100% because at the historic low price, over half of the price for residential service is distribution expenses, and such expenses don’t change very much.

Slide 17

Slide 17 shows another way of looking at data that is similar to that in Slide 14. This slide shows amounts on a per capita basis, with groupings I have chosen. I think of coal and oil as being pretty much the only energy resources that can “stand on their own.” The recent peak year for combined coal and oil, on a per capita basis, was 2008.

Natural gas, nuclear, and hydroelectric were the first add-ons. If a person looks closely, it can be seen that the growth rate of this group has slowed, at least in part because of the pricing problems caused by wind and solar.

The “green” sources at the bottom are growing, but from a very low base. The main reason for their growth is the subsidies they receive. If fossil fuels falter in any major way, it will adversely affect the growth of wind and solar. Already, there are articles about supply chain problems for the big wind turbines. Any cutback in subsidies is also harmful to their production.

Slide 18

US papers don’t tell us much about these problems, but they are getting to be very serious problems in other parts of the world. The countries with the biggest problems are the ones trying to import natural gas or coal. If an exporting country finds its own production falling short, it is likely to make certain that its own citizens are adequately supplied first, before providing exports to others. Thus, importing countries may find very high prices, or supplies simply not available.

Slide 19
Slide 20

This slide got a lot of laughs. The university does have some sort of agricultural plot, but teaching subsistence farming is not its goal.

Slide 21
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Slide 24

My point about “scientists who are not pressured by the need for research grants or acceptance of written papers are the ones trying to tell the whole truth” got quite a few laughs. As a practical matter, this means that retired scientists tend to be disproportionately involved in trying to discern the truth.

With the military understanding the need to work around energy limits, one change has been to move away from preparation for “hot wars” to more interest in biological weapons, such as viruses. Thus, governments of many countries, including the United States, Canada, France, Italy, Australia and China, have funded research on making viruses more virulent. The vaccine-making industry also supported this effort because it might enhance the industry’s ability to make and sell more vaccines. It was believed that there might even be new techniques that would develop from this new technology that would increase the overall revenue generated by the healthcare industry.

Questions came up, both during the talk and later, about what other changes have taken place because of the need for much of the audience to hear a story with a happily ever after ending, and because of the known likely decline of the economy for physics reasons. Clearly one thing that happens is successful entrepreneurs, such as Elon Musk, aim their production in areas where subsidies will be available. With fossil fuel production not making money, fossil fuel producers are even willing to undertake renewable projects if subsidies seem to be high enough. The issue isn’t really, “What is sustainable?” It is much more, “Where will the profits be, given where subsidies will be, and what people are being taught about how to perceive today’s problems?”

Slide 25
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Slide 27
Slide 28

In fact, what has been happening in recent years is that a great deal of debt has been added to the world economy. Mostly, this added debt seems to be creating added inflation. It definitely is not leading to the rapid extraction of a great deal more fossil fuels, which is what really would allow the production of more goods and services. If inflation leads to higher interest rates, this, by itself, could destabilize the financial system.

Slide 29

I tried to explain, as I have in the past, how a self-organizing economy works. New citizens are born, and old ones pass away. New businesses are formed, and they add new products, keeping in mind what products citizens want and can afford. Governments add laws and taxes, as situations change. Energy is needed at every step in production, so availability of inexpensive energy is important in the operation of the economy, as well. There are equivalences, such as employees tend also to be customers. If the wages of employees are high, they can afford to buy many goods and services; if wages are low, employees will be very restricted in what they can afford.

In some sense, the economy is hollow inside, because the economy will stop manufacturing unneeded products. If an economy starts making cars, for example, it will phase out products associated with transportation using horse and buggy.

Slide 30

A self-organizing economy clearly does not operate in the simple way economists seem to model the economy. Low prices can be just as big a problem as high prices, for example.

Another issue is that the energy needs of an economy seem to depend on its population and how far it has already been built up. For example, roads, bridges, water distribution pipelines and electricity transmission infrastructure must all be maintained, even if the population falls. We know humans need something like 2000 calories a day of food. Economies seem to have a similar constant need for energy, based on both the number of people in the economy and the amount of infrastructure that has been built up. There is no way to cut back very much, without the economy collapsing.

Slide 31

I am not exactly certain when the first discussion of the economy as a dissipative structure (self-organizing system powered by energy) started. When I prepared this slide, I was thinking that perhaps it was in 1996, when Yoshinori Shizoawa wrote a paper called Economy as a Dissipative Structure. However, when I did a search today, I encountered an earlier paper by Robert Ayres, written in 1988, also discussing the economy as a dissipative structure. So, the idea has been around for a very long time. But getting ideas from one part of academia to other parts of academia seems to be a very slow process.

Debt cannot grow indefinitely, either, because there needs to be a way for it to be paid back in a way that produces real goods and services. Without adequate energy supplies, it becomes impossible to produce the goods and services that consumers need.

Slide 32

Attendees asked about earlier posts that might be helpful in understanding our current predicament. This is the list I provided:

Humans Left Sustainability Behind as Hunter Gatherers  – Dec. 2, 2020
How the World’s Energy Problem Has Been Hidden – June 21, 2021
Energy Is the Economy; Shrinkage in Energy Supply Leads to Conflict – Nov. 9, 2020
Why a Great Reset Based on Green Energy Isn’t Possible – July 17, 2020
The “Wind and Solar Will Save Us” Delusion – Jan. 30, 2017

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Spike in energy prices suggests that sharp changes are ahead

An analysis of what is going terribly wrong in the world economy

The world economy requires stability. People living in the world economy need stability, as well. They need food every day and a place to live. Children need a home situation that they can count on.

Back in the 1950 to 1979 era, when energy supplies of many kinds were growing rapidly, it was possible to build stability into the economic system: Jobs with a company were often long-time careers; pensions after retirement were offered; electricity was sold through regulated “utilities” that charged prices that wrapped in long-term maintenance of the electric grid and the cost of fuel, among other things.

But as high energy prices hit in the 1970s, the system became more and more strained. The mood changed. Margaret Thatcher became the Prime Minister of the UK in 1979, and Ronald Reagan became President of the United States in 1981. Under their leadership, debt was increasingly used to cover longer-term costs, and competition was encouraged. A person might say that a move toward greater complexity, but less stability, of the economic system had begun.

Now, through several iterations, the economy has become increasingly complex, with less and less redundancy to provide stability. The energy price spike that is being experienced today is a warning that something is very, very wrong. As I see the situation, the trend toward complexity has gone too far; the economic system is starting to break down. Sharp changes appear to be ahead. The world economy is shifting into contraction mode, with more and more parts of the system failing.

In this post, I will discuss some of the issues involved. It turns out that energy modelers haven’t understood how detrimental intermittency really is. They modeled intermittent electricity from renewables (wind, water and solar) as far more helpful than it really is. This has been confusing to everyone. The sharp changes that the title of this post refers to represent an early stage of economic collapse.

[1] If energy supplies are inexpensive and widely available, it is easy to build an economy.

I have written in the past about the need for energy supplies to keep the economy functioning properly being analogous to the need for food, to keep humans functioning properly.

The economy doesn’t operate on a single type of energy, any more than a human lives on a single type of food. The economy uses a portfolio of energy types. These include human labor, energy directly from sunlight, and energy from burning various types of fuels, including biomass and fossil fuels.

As long as energy sources are inexpensive and readily available, an economy can grow and provide goods and services for an increasing number of citizens. We can think of this as being analogous to, “As long as buying and preparing food takes little of our wages (or time, if we are growing it ourselves), then there are plenty of wages (or time) left over for other activities.”

But once energy prices start spiking, it looks like there is not enough to go around. In the absence of ways to hide the problem, citizens need to cut back on non-essentials, pushing the economy into recession. Or businesses stop making essential products that require natural gas or coal, such as fertilizer or fuel additives to hold emissions down. The lack of such products can, by itself, be very disruptive to an economy.

[2] Once energy supplies become constrained, energy prices tend to spike. In the early stages of these price spikes, adding complexity allows the economy to better tolerate higher energy costs.

There are many ways to work around the problem of rising energy prices, at least temporarily. For example:

  • Build vehicles, such as cars, that are smaller and more fuel efficient.
  • Extend fossil fuel supplies by building nuclear power plants, hydroelectric generating plants, wind turbines, solar panels, and geothermal electricity generation.
  • Make factories more efficient.
  • Add insulation to buildings; eliminate any cracks that might allow outside air into buildings.
  • Instead of pre-funding capital costs, use debt to transfer these costs to later purchasers of energy products.
  • Encourage competition in providing different parts of electricity production and distribution.
  • Develop time-of-day pricing for electricity, so as to keep prices down to the marginal cost of production, even though this does not, in total, repay all costs of production and distribution.
  • Cut back on routine maintenance of electricity transmission systems.
  • Purchase coal and natural gas imports using spot pricing, rather than long term contracts, as long as these seem to be lower-priced than long-term commitments.
  • Throughout the economy, take advantage of economies of scale and mechanization. Build huge companies. Replace human labor wherever possible.
  • Stimulate the economy by increasing debt availability and lowering interest rates. This is helpful because a more rapidly growing economy can withstand higher energy prices.
  • Use global supply chains to source as large a share of manufacturing inputs as possible from countries with low wages and low energy costs.
  • Build very “lean” just-in-time supply chains.
  • Create complex financial systems, with debt resold and repackaged in different ways, futures contracts, and exchange traded funds.

Together, these approaches comprise “complexity.” They tend to make the economic system less resilient. At least temporarily, they pass fewer of the higher costs of energy products through to current citizens. As a result, the economy can temporarily withstand a higher price of energy. But the system tends to become brittle and prone to failure.

[3] There are limits to added complexity. In fact, complexity limits are what are likely to make the economic system fail.

Joseph Tainter, in The Collapse of Complex Societies, makes the point that there are diminishing returns to added complexity. For example, the changes that result in the biggest gains in fuel savings for vehicles are the ones added first.

Another drawback of added complexity is the extreme wage disparity that tends to result. Instead of everyone earning close to the same amount, those at the top of the hierarchy get a disproportionate share of the wages. This is what leads to many of the problems we are seeing today. Would-be workers don’t want to apply for jobs, even when they seem to be available. Citizens become unhappy and rebellious. Lower-paid workers may not eat well, so that pandemics spread more easily.

The underlying problem is that population tends to rise, but it becomes harder and harder to produce food and other necessities with the arable land and energy resources available. Ugo Bardi uses Figure 1 to show the shape of the expected decline in goods and services produced in such a situation:

Figure 1. Seneca Cliff by Ugo Bardi.

According to Bardi, Seneca in the title refers to a statement written by Lucius Annaeus Seneca in 91 CE, “It would be of some consolation for the feebleness of ourselves and our works if all things should perish as slowly as they come into being. As it is, increases are of sluggish growth, but the way to ruin is rapid.” In fact, this shape seems to approximate the type of cycle Turchin and Nefedov observed when analyzing several agricultural civilizations that collapsed in their book Secular Cycles.

[4] An increasing amount of complexity has been added since 1981 to help compensate for rising oil and other energy prices.

The prices of commodities, including oil, tend to be extremely variable because storage is very limited, relative to the large quantities used every day. There needs to be a very close match between supply and demand, or prices will rise very high or fall very low.

Oil is exceptionally important because it is the single largest source of energy for the world economy. It is heavily used in food production and in the extraction of minerals of all types. If the price of oil increases, the price of food tends to rise, as does the price of metals of many types. Oil is also important as a transportation fuel.

In the early days, before depletion led to higher extraction costs, oil prices remained stable and low (Figure 2), as a result of utility-type pricing by the Texas Railroad Commission. Oil prices started to spike, once depletion became more of a problem.

Figure 2. Brent-equivalent oil prices in 2020 US$. Based on data from BP’s 2021 Statistical Review of World Energy.

Economists tell us that oil and other commodity prices depend on “supply and demand.” When we look at turning points for oil prices, it becomes clear that financial manipulations play a significant role in determining oil demand. Such manipulations lead to prices that have practically nothing to do with the underlying cost of producing commodities. The huge changes in prices seem to reflect actions by central bankers to encourage or discourage lending (QE on Figure 3).

Figure 3. Monthly Brent oil prices with dates of US beginning and ending Quantitative Easing. Later Quantitative Easing did not bring oil prices back up to their prior level.

Quantitative easing (QE) makes it cheaper to borrow money. Adding QE tends to raise oil prices; deleting QE seems to reduce oil prices. These prices have little direct connection with the cost of extracting oil from the ground. Instead, prices are closely related to the amount of complexity being added to the system and whether it is having its intended impact on energy prices.

At the time of the 1973-1974 oil crisis, many people thought that the world was truly running out of oil. The petroleum industry did, indeed, succeed in extracting more. The 2005 to 2008 period was another period of concern that the world might be running out of oil. Then, in 2014, when oil prices suddenly fell, the dominant story suddenly became, “There is plenty of oil. The world’s biggest problem is climate change.”

In fact, there was no real reason to believe that the shortage situation had changed. US oil from shale had a brief run-up in production in the 2007 to 2019 period, but this production was unprofitable for producers, especially after oil prices dropped in 2014 (Figures 2 and 3). Producers of oil from shale are no longer investing very much in new production. With the sweet spots of fields depleted and this low level of investment, it will not be surprising if oil production from shale continues to fall.

Figure 4. US crude and condensate oil production for the 48 states, Alaska, and for shale basins, based on data of the US Energy Information Administration.

The real story is that the supply of oil, coal and natural gas is limited by the extent to which additional complexity can be added to the economy, to keep selling prices so that they are both:

  • High enough for producers of these products, so that they can both pay adequate taxes and make adequate reinvestment.
  • Low enough for consumers, especially for the many consumers around the world with very low wages.

Many people have missed the point that, at least since 2014, financial manipulations have not kept prices for fossil fuels high enough for producers. Low prices are driving them out of business. This is the case for oil, coal and natural gas. In fact, low prices caused by giving wind and solar priority on the electric grid are driving producers of nuclear electricity out of business, as well.

Oil producers require a price of $120 a barrel or more to cover all of their costs. Without a much higher price than available today (even with oil prices over $80 per barrel), shale oil production can be expected to fall. In fact, OPEC and its affiliates won’t ramp up production by very large amounts either because they, too, need much higher prices to cover all their costs.

[5] Economists and analysts of many types put together models that give misleading results because they missed several important points.

After oil prices fell in late 2014, it became fashionable to believe that vast amounts of fossil fuels are available for extraction, and that our biggest problem in the future would be climate change. Besides low prices, one reason for this concern was the high level of fossil fuel proven reserves reported by many countries around the world.

Figure 5. Ratio of reported proven reserves at December 31, 2020, to reported production in 2020 based on data from BP’s 2021 Statistical Review of World Energy.

Even fossil fuel companies started to invest in renewables because of the poor returns experienced from fossil fuel investments. It looked to them as if investment in renewables would be more profitable than continued investment in fossil fuel production. Of course, the profits of renewables were largely the result of government subsidies, particularly the subsidy of “going first.” Giving wind and solar first access when they happen to be available tends to lead to very low, and even negative, wholesale prices for other electricity producers. This drives these other producers of electricity out of business, even though they are really needed to correct for the intermittency of renewables.

There were many things that hardly anyone understood:

  • Energy prices in today’s financially manipulated economy bear little relationship to the true cost of production.
  • Fossil fuel producers need to be guaranteed long-term high prices, if there is to be any chance of ramping up production.
  • Intermittent renewables (including wind, solar, and hydroelectric) have little value in a modern economy unless they are backed up with a great deal of fossil fuels and nuclear electricity.
  • Our real problem with fossil fuels is a shortage problem. Price signals are very misleading.
  • The models of economists are mostly wrong. The use of carbon pricing and intermittent renewables will simply disadvantage the countries adopting them.

The reason why geologists and fossil fuel producers give misleading information about the amount of oil, coal and natural gas available to be extracted is because it is not something they can be expected to know. In a sense, the question is, “How much complexity can the economy withstand before it becomes too brittle to handle a temporary shock, such as a pandemic shutdown?” It isn’t the amount of fossil fuels in the ground that matters; it is the follow-on effects of the high level of complexity on the rest of the economy that matters.

[6] At this point, ramping up fossil fuel production would be very difficult because of the long-term low prices for fossil fuels. Unfortunately, the economy cannot get along with only today’s small quantity of renewables.

Figure 6. World energy supply by type, based on data from BP’s 2021 Statistical Review of World Energy.

Most people don’t realize just how slowly renewables have been ramping up as a share of world energy supplies. For 2020, wind and solar together amounted to only 5% of world energy supplies and hydroelectric amounted to 7% of world energy supplies. The world economy cannot function on 12% (or perhaps 20%, if more items are included) of its current energy supply any more than a person’s body can function on 12% or 20% of its current calorie intake.

Also, the world’s reaction to the pandemic acted, in many ways, like oil rationing. Figure 6 shows that consumption was reduced for oil, coal and natural gas. An even bigger impact was on the prices of these fuels. Prices fell, even though the cost of production was not falling. (See, for example, Figure 2 for the fall in oil prices.)

These lower prices left fossil fuel providers even worse off financially than they were previously. Some providers went out of business. They certainly do not have reserve funds set aside to develop the new fields that they would need to develop, if they were to ramp up production for oil, coal and natural gas now. Because of this, it is virtually impossible to ramp up fossil fuel production now. A lead time of at least several years is needed, besides a clear way of funding the higher production.

[7] Every plant and animal and, in fact, every growing thing, needs to win the battle against intermittency.

As mentioned in the introduction, humans need to eat on a regular basis. Hunter-gatherers solved the problem of intermittency of harvests by moving from area to area, so that their own location would match the location of food availability. Early agriculture and cities became possible when the growing of grain was perfected. Grain was both storable and portable, so it could be used year around. It could also be brought to cities, allowing people to live in a different location from where the crops were stored.

We can think of any number of adaptations in the plant and animal kingdom to intermittency. Some birds migrate. Bears hibernate. Deciduous trees lose their leaves each fall and grow them back again each spring.

Our supply of any of our energy products is in some sense intermittent. Oil wells deplete, so new ones need to be drilled. Biomass burned for fuel grows for a while, before it is cut down (or falls down) and is burned for fuel. Solar energy is available only until a cloud comes in front of the sun. In winter, solar energy is mostly absent.

[8] Any modeling of the cost of energy needs to take into account the full system needed to “bridge the intermittency gap.”

As far as I can see, the only pricing system that generates enough funds is one that takes into account the full system needs, including the need to overcome intermittency and the need for transportation of the energy to the user. In fact, I would argue that even more than this needs to be included. Good roads are generally required if the system is to be kept in good repair. Good schools are needed for would-be workers in the energy system. Any costs associated with pollution should be wrapped into the required price. Thus, the true cost of energy generation really should include a fairly substantial load for taxes for all of the governmental services that the system requires. And, of course, all parts of the system should pay their workers a living wage.

This high level of pricing can only be provided by utility type pricing of fossil fuels and electricity. The use of long-term contracts to purchase fossil fuels, uranium or electricity can also build in most of these costs. The alternative approach, buying fuels using spot contracts or pricing based on time of day electricity supply, looks appealing when costs are low. But such systems don’t build in sufficient funding for replacement of depleted fields or the full cost of a 24/7/365 electrical system.

Modelers didn’t understand that the “low prices now, higher prices later” approaches that were being advocated don’t really work for the long term. As limits are approached, prices tend to spike badly. Modelers had assumed that the economic system could handle such spikes in prices, and that the spikes in prices would quickly lead to new supply or adaptation. In fact, huge spikes in prices are very disruptive to the system. New supply is what is really needed, but providers tend to be too damaged by previous long periods of artificially low prices to provide this supply. The approach looks great in academic papers, but it leads to rolling blackouts and unfilled natural gas reservoirs for winter.

[9] Major changes for the worse seem to be ahead for the world economy.

At this point, it seems as if complexity has gone too far. The pandemic moved the world economy in the direction of contraction but prices of fossil fuels tend to spike as the economy opens up.

Figure 7. Chart by BBC/Bloomberg. Source: BBC

The recent spikes in prices are highly unlikely to produce the natural gas, coal and oil that is required. They are more likely to cause recession. Fossil fuel suppliers need high prices guaranteed for the long term. Even if such guarantees could be provided, it would still take several years to ramp up production to the level needed.

The general trend of the economy is likely to be in the direction of the Seneca Cliff (Figure 1). Everything won’t collapse all at once, but big “chunks” may start breaking away.

The debt system is a very vulnerable part. Debt is, in effect, a promise of goods or services made with energy in the future. If the energy isn’t there, the promised goods and services won’t be available. Governments may try to hide this problem with new debt, but governments can’t solve the underlying problem of missing goods and services.

Pension systems of all kinds are also vulnerable. If fewer goods and services are being made in total, they will need to be divided up differently. Pensioners are likely to get a reduced share, or nothing at all.

Importers of fossil fuels seem likely to be especially affected by price spikes because exporters have the ability to cut back in the quantity available for export, if total supply is inadequate. Europe is one part of the world that is especially dependent on oil, natural gas and coal imports.

Figure 8. Total energy production and consumption of Europe, based on data of BP’s 2021 Statistical Review of World Energy. The gap between consumption and production is filled by imports of oil, coal, natural gas and biofuels. Within Europe, countries also import electricity from each other.
Figure 9. Europe energy production by fuel based on data from BP’s 2021 Statistical Review of World Energy.

The combined production of hydroelectric, wind and solar and biofuels (in Figure 9) amounts to only 19% of Europe’s total energy consumption (shown in Figure 8). There is no possible way that Europe can get along only with renewable energy, at any foreseeable time in the future.

European economists should have told European citizens, “There is no way you can get along using renewables alone for many, many years. Treat the countries that are exporting fossil fuels to you very well. Sign long term contracts with them. If they want to use a new pipeline, raise no objection. Your bargaining power is very low.” Instead, European economists talked about saving the planet from carbon dioxide. It is an interesting idea, but the sad truth is that if Europe takes itself out of the contest for energy imports, it mostly leaves more fossil fuels for exporters to sell to others.

China stands out as well, as the world’s largest consumer of energy, and as the world’s largest importer of oil, coal and natural gas. It is already encountering electricity shortages that are leading to rolling blackouts. In fact, rolling blackouts in China started almost a year ago in late 2020. China is, of course, a major exporter of goods to the rest of the world. If China has major energy problems, the rest of the world will no longer be able to count on China’s exports. Lack of China’s exports, by itself, could be a huge problem for the rest of the world.

I could continue speculating on the changes ahead. The basic problem, as I see it, is that we have reached limits on oil, coal and natural gas extraction, pretty much simultaneously. The limits are really complexity limits. The renewables that we have today aren’t able to save us, regardless of what the models of Mark Jacobson and others might say.

In the next few years, I am afraid that we will find out how collapse actually proceeds in a very interconnected world economy.

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Could we be hitting natural gas limits already?

Many countries have assumed that natural gas imports will be available for balancing electricity produced by intermittent wind and solar, whenever they are needed. The high natural gas import prices recently being encountered in Europe, and especially in the UK, appear to be an indication of an underlying problem. Could the world already be hitting natural gas limits?

One reason few people expect a problem with natural gas is because of the immense quantities reported as proven reserves. For all countries combined, these reserves at December 31, 2020 were equal to 48.8 times world natural gas production in 2020. Thus, in theory, the world could continue to produce natural gas at the current rate for almost 50 years, without even trying to find more natural gas resources.

Ratios of natural gas reserves to production vary greatly by country, giving a hint that the indications may be unreliable. High reserves make an exporting country appear to be dependable for many years in the future, whether or not this is true.

Figure 1. Ratio of natural gas reserves at December 31, 2020, to natural gas production for the year 2020, based on trade data of BP’s 2021 Statistical Review of World Energy. Russia+ is the Commonwealth of Independent States. It includes Russia and the countries to the south of Russia that were included in the former Soviet Union.

As I see the issue, these reserves are unlikely to be produced unless world oil prices rise to a level close to double what they are today and stay at such a high level for several years. I say this because the health of the oil and gas industries are closely intertwined. Of the two, oil has historically been the major profit-maker, enabling adequate funds for reinvestment. Prices have been too low for oil producers for about eight years now, cutting back on investment in new fields and export capability. This low-price issue is what seems to be leading to limits to the natural gas supply, as well as a limit to the oil supply.

Figure 2. Inflation adjusted oil prices based on EIA monthly average Brent oil prices, adjusted by the CPI Urban. The chart shows price data through October 2020. The Brent oil price at September 24, 2021 is about $74 per barrel, which is still very low relative to what oil companies require to make adequate reinvestment.

In this post, I will try to explain some of the issues involved. In some ways, a dire situation already seems to be developing.

[1] Taking a superficial world view, natural gas seems to be doing fairly well. It is only when a person starts analyzing some of the pieces that problems start to become clear.

Figure 3. World oil, coal and natural gas supply based on data of BP’s 2021 Statistical Review of World Energy.

Figure 3 shows that natural gas supply has been rising, year after year. There was a brief dip in 2009, at the time of the Great Recession, and a slightly larger dip in 2020, related to COVID-19 restrictions. Overall, production has been growing at a steady rate. Compared to oil and coal, the recent growth pattern of natural gas has been more stable.

The quantity of exports of natural gas tends to be much more variable. Figure 4 compares inter-regional trade for coal and natural gas. Here, I have ignored local trade and only considered trade among fairly large blocks of countries, such as North America, Europe and Russia combined with its close affiliates.

Figure 4. Total inter-regional trade among fairly large groupings of countries (such as Europe and North America) based on trade data provided by BP’s 2021 Statistical Review of World Energy.

If a person looks closely at the growth of natural gas imports in Figure 4, it becomes clear that growth in natural gas is a feast or famine proposition, given to upward spurts, dips and flat periods. It is my understanding that in the early years, natural gas was typically traded under long-term contracts, on a “take or pay” basis. The price was often tied to the oil price. This generous pricing structure allowed natural gas exports to grow rapidly in the 2000 to 2008 period. The Great Recession cut back the need for natural gas imports and also led to downward pressure on the pricing of exports.

After the Great Recession, natural gas import prices tended to fall below oil prices (Figure 5) except in Japan, where stability of supply is very important. Another change was that an increasing share of exported natural gas was sold in the “spot” market. These prices fluctuate depending on changes in supply and demand, making them much more variable.

Figure 5. Comparison of annual average natural gas prices with corresponding Brent oil price, based on information from BP’s 2021 Statistical Review of World Energy. Natural gas prices per million Btus converted to barrel of oil equivalent prices by multiplying by 6.0.

Looking back at Figure 4, natural gas exports were close to flat between 2011 and 2016. Such flat exports, together with falling export prices in the 2013 to 2016 period (Figure 5), would have been a nightmare for oil and gas companies doing long-range planning for oil exports. Exports spurted upward in the 2016 to 2019 period, and then fell back in 2020 (Figure 4). All of the volatility in the growth rate of required new production, combined with uncertainty of the pricing of exports, reduced interest in planning for projects that would increase natural gas export capability.

[2] In 2021, quite a number of countries seem to be ramping up natural gas imports at the same time. This is likely one issue leading to the spiking spot prices in Europe for natural gas.

Now that the economy is recovering from the effects of COVID-19, Europe is trying to ramp up its natural gas imports, probably to a level above the import level in 2019. Figure shows that both China and Other Asia Pacific are also likely to be ramping up their imports, providing a great deal of competition for imports.

Figure 6. Areas with net natural gas imports, based on trade data of BP’s 2021 Statistical Review of World Energy. Other Asia Pacific excludes Japan, China and Australia.

It is no surprise that China’s natural gas imports are rising rapidly. With China’s rapid economic growth, it needs energy resources of whatever kinds it can obtain. Natural gas is cleaner-burning than coal. The CO2 emitted when burning natural gas is lower, as well. (These climate benefits may be partially or fully offset by methane lost in shipping natural gas as liquefied natural gas (LNG), however.)

In Figure 6, the sudden appearance and rapid rise of Other Asia Pacific imports can be explained by the fact that this figure shows the net indications for a combination of natural gas importers (including South Korea, India, and Taiwan) and exporters (including Malaysia and Indonesia). In recent years, natural gas import growth has greatly exceeded export growth. It would not be surprising if this rapid rise continues, since this part of the world is one that has been increasing its manufacturing in recent years.

If anyone had stepped back to analyze the situation in 2019, it would have been clear that, in the near future, natural gas exports would need to be rising extremely rapidly to meet the needs of all of the importers simultaneously. The dip in Europe’s natural gas imports due to COVID-19 restrictions in 2020 temporarily hid the problem. Now that Europe is trying to get back to normal, there doesn’t seem to be enough to go around.

[3] Apart from the United States, it is hard to find a part of the world where natural gas exports are rapidly rising.

Figure 7. Natural gas exports by area, based on trade data of BP’s 2021 Statistical Review of World Energy. Russia+ is the Commonwealth of Independent States. It includes Russia and the countries to the south of Russia that were included in the former Soviet Union.

Russia+ is by far the world’s largest exporter of natural gas. Even with Russia+’s immense exports, its total exports (about 10 exajoules a year, based on Figure 7) still fall short of Europe’s natural gas import needs (at least 12 exajoules a year, based on Figure 6). The dip in Russia+’s natural gas exports in 2020 no doubt reflects the fact that Europe’s imports fell in 2020 (Figure 6). Since these exports were mostly pipeline exports, there was no way that Russia+ could sell the unwanted natural gas elsewhere, lowering its total exports.

At this point, there seems to be little expectation for a major rise in natural gas exports from Russia+ because of a lack of capital to spend on such projects. Russia built the new Nord Stream 2 pipeline, but it doesn’t seem to have a huge amount of new natural gas exports to put into the pipeline. As much as anything, the Nord Stream 2 pipeline seems to be a way of bypassing Ukraine with its exports.

Figure 7 shows that the Middle East’s natural gas exports rose in the period 2000 to 2011, but they have since leveled off. A major use for Middle Eastern natural gas is to produce electricity to support the local economies. Before the Middle East ramped up its natural gas production, much of the electricity was obtained by burning oil. The sales price the Middle East can get for selling its natural gas is far below the price it can get for selling oil, especially when the high cost of shipping the natural gas is considered. Thus, it makes sense for Middle Eastern countries to use the natural gas themselves, saving the oil, since the sale of oil produces more export revenue.

Africa’s natural gas exports have fallen, in part because of depletion of the early natural gas fields in Algeria. In theory, Africa’s natural gas exports could rise to a substantial level, but it is doubtful this will happen quickly because of the large amount of capital required to build LNG export facilities. Furthermore, Africa is badly in need of fuel for itself. Local authorities may decide that if natural gas is available, it should be used for the benefit of the people in the area.

Australia’s natural gas exports have risen mostly as a result of the Gorgon LNG Project off the northwest coast of Australia. This project was expected to be high cost at $37 billion when it was approved in 2009. The actual cost soared to $54 billion, according to a 2017 cost estimate. The high (and uncertain) cost of large LNG projects makes investors cautious regarding new investments in LNG exports. S&P Global by Platts reported in June, 2021, “Australia’s own exports are expected to be relatively stable in the coming years.” This statement was made after saying that a project in Mozambique, Africa, is being cancelled because of stability issues.

The country with the largest increase in natural gas exports in recent years is the United States. The US is not shown separately in Figure 7, but it represents the largest portion of natural gas exported from North America. Prior to 2017, North America was a net importer of natural gas, including LNG from Trinidad and Tobago, Egypt, Algeria and elsewhere.

[4] The United States has a strange reason for wanting to export large quantities of natural gas overseas: Its natural gas prices have been too low for producers for a long time. Natural gas producers hope the exports will raise natural gas prices within the US.

Natural gas prices vary widely around the world because the fuel is expensive to ship and difficult to store. Figure 5 (above) shows that, at least since 2009, US natural gas prices have been unusually low.

The main reason why the price of natural gas dropped around 2009 seems to have been a ramp up in US shale oil production that started about this time. While the main objective of most of the shale drilling was oil, natural gas was a byproduct that came along. Oil producers were willing to almost give the natural gas away, if they could make money on the oil. However, they also had trouble making money on the oil extraction. That seems to be the reason why oil extraction from shale is now being reduced.

Figure 8 shows a chart prepared by the US Energy Administration showing US dry natural gas production, by type: non-shale, Appalachia shale and other shale.

Figure 8. Figure by EIA showing US natural gas production in three categories.

Based on Figure 8, the timing of the ramp up of natural gas from shale seems to correspond with the timing in the drop in natural gas prices. By 2008 (the first year shown on this chart), gas from shale formations had risen to well over 10% of US natural gas production. At this level, it would be expected to have an impact on prices. Adding natural gas to an already well-supplied market would be likely to reduce US natural gas prices because, with natural gas, the situation isn’t “build it, and demand will come.”

People don’t raise the temperature to which they heat their homes, at least not very much, simply because the natural gas price is lower. The use of natural gas as a transport fuel has not caught on because of all of the infrastructure that would be required to enable the transition. The one substitution that has tended to take place is the use of natural gas to replace coal, particularly in electricity generation. This likely means that a major shift back to coal use cannot really be done, although a smaller shift can be done, and, in fact, seems to already be taking place, based on EIA data.

[5] The reason that limits are a concern for natural gas is because the economy is very much more interconnected, and much more dependent on energy, than most people assume.

I think of the economy as being interconnected in much the same way as the many systems within a human being are interconnected. For example, humans have a circulatory system, or perhaps several such circulatory systems, for different fluids; economies have highway systems and road systems, as well as pipeline systems.

Humans require food at regular intervals. They have a digestive system to help them digest this food. The food has to be of the right kinds, not all sweets, for example. The economy needs energy of the right kinds, as well. It has many kinds of devices that use this energy. Intermittent electricity from wind or solar, by itself, doesn’t really work.

Human beings have kinds of alarms that go off to tell if there is something wrong. They feel hungry if they haven’t eaten in a while. They feel thirsty if they need water to drink. They may feel overheated if an infection gives them a fever. An economy has alarms that go off, as well. Prices rise too high for consumers. Or, companies go bankrupt from low market prices for their products. Or, widespread defaults on loans become a problem.

The symptoms we are seeing now with the UK economy relate to a natural gas import system that is showing signs of distress. It is pleasant to think that the central bankers or public officials can fix all problems, but they really cannot, just as we cannot fix all problems with our health.

[6] Inexpensive energy plays an essential role in the economy.

We all know that inexpensive food is far preferable to expensive food in powering our own personal economies. For example, if we need to spend 14 hours producing enough food to live on (either directly by farming, or indirectly by earning wages to buy the food), it is clear that we will not be able to afford much of anything other than food. On the other hand, if we can produce food to live on in 30 minutes a day (directly or indirectly), then we can spend the rest of the day earning money to buy other goods and services. We likely can afford many kinds of goods and services. Thus, a low price for food makes a big difference.

It is the same way with the overall economy. If energy costs are low, the cost of producing food is likely low because the cost of using tractors, fertilizers, weed killers and irrigation is low. From the point of view of any manufacturer using electricity, low price is important in being able to produce goods that are competitive in the global marketplace. From the point of view of a homeowner, a low electricity price is important in order to have enough funds left over after paying the electricity bill to be able to afford other goods and services.

Economists seem to believe that high energy prices can be acceptable, especially if the price of fossil fuels rises because of depletion. This is not true, without adversely affecting how the economy functions. We can understand this problem at our household level; if food prices suddenly rise, the rest of our budget must shrink back.

[7] If energy prices spike, these high prices tend to push the economy into recession.

A key issue with fossil fuels is depletion. The resources that are the least expensive to access and remove tend to be extracted first. In theory, there is a great deal more fossil fuel available, if the price rises high enough. The problem is that there is a balancing act between what the producer needs and what the consumer can afford. If energy prices rise very high, consumers are forced to cut back on their spending, pushing the economy into recession.

High oil prices were a major factor pushing the United States and other major users of oil into the Great Recession of 2007-2009. See my article in Energy, Oil Supply Limits and the Continuing Financial Crisis. In part, high oil prices made debt harder to repay, especially for low income workers with long commutes. It also made countries that used a significant share of oil in their energy mix less competitive in the world market.

The situation being encountered by some natural gas importers is indeed similar. Paying a very high price for imported natural gas is not a very acceptable situation. But not having electricity available or not being able to heat our homes is not very acceptable either.

[8] Conclusion. It is easy to be lulled into complacency by the huge natural gas reserves that seem to be available.

Unfortunately, it is necessary to build all of the infrastructure that is required to extract natural gas resources and deliver them to customers at a price that the customers can truly afford. At the same time, the price needs to be acceptable to the organization building the infrastructure.

Of course, more debt or money created out of thin air doesn’t solve the problem. Resources of many kinds need to be available to build the required infrastructure. At the same time, wages of workers need to be high enough that they can purchase the physical goods they require, including food, clothing, housing and basic transportation.

At this point, the problem with high prices is most noticeable in Europe, with its dependence on natural gas imports. Europe may just be the “canary in the coal mine.” The problem has the potential to spread to other natural gas prices and to other fossil fuel prices, pushing the world economy toward recession.

At a minimum, people planning the use of intermittent electricity from wind or solar should not assume that reasonably priced natural gas will always be available for balancing. One likely area for shortfall will be winter, as well as storing up reserves for winter (the problem affecting Europe now), since winter is when heating needs are the highest and solar resources are the lowest.

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The Afghanistan Fiasco (and Today’s High Level of Conflict) Reflect an Energy Problem

There is a saying, “Everything happens for a reason.” The fiasco in Afghanistan is no exception to this rule. Even though it is not obvious, the United States is up against energy limits. It needed to pull back from Afghanistan to try to have enough energy to continue in its other roles, such as providing benefits for its growing army of retirees, and building infrastructure to mitigate the COVID-19 downturn.

The fundamental problem is that governments can add debt and other indirect promises of resources that create goods and services, but they cannot actually create the low-cost energy, water and mineral resources needed to fulfill those promises.

The way energy limits play out is not at all intuitive. Most people assume that we will run out of oil, leading to a spike in oil prices. We will then transition to renewables. As I see it, this understanding is completely wrong. Limited energy supply first leads to a need for simplification: Stepping back from Afghanistan would be one such type of simplification. It would save energy supplies and reduce the need for greater tax revenue or added debt.

In this post, I will try to explain some pieces of the problem.

[1] Afghanistan was, and continues to be, in some sense, a “handicapped country.”

Everyone knows that the way a country can succeed in the world market is by providing needed goods or services to other economies at low cost. Afghanistan is a landlocked country. It also doesn’t have any big rivers it can use to transport goods out of the country. It isn’t a member of a trade alliance such as the EU to allow smooth transport of goods out of the country. The difficulty of transit into and out of the country adds a layer of costs that tends to make the country uncompetitive in the world market. No matter how much investment any country makes in Afghanistan, this handicap will still persist.

Also, Afghanistan has too high a population relative to its resources. We know that most wars are resource wars. The fact that Afghanistan has been involved in wars for many years hints at this problem. According to UN 2019 estimates, Afghanistan’s population was 7.8 million in 1950, 21.6 million in 2001, and 38.9 million in 2020, which is about five times the 1950 population. Water needs, in particular, tend to escalate as population rises.

[2] The US doesn’t know how to fight a guerrilla war.

The weapons developed by the US are too complex to be used in a guerrilla war. They tend to break down and require replacement parts. Needless to say, these parts are not available in Afghanistan. Even if Afghan soldiers are trained to use these weapons, they may not be available or suitable when needed.

George W. Bush should have known from the outcome of the 20-year Vietnam conflict (1955-1975) that any guerrilla war was likely to have a bad ending. In Afghanistan, the plan was to train Afghan soldiers, thus keeping US citizens out of the battlefield. This strategy kept the Afghan conflict off the front page of US newspapers, but the overall result seems to be similar.

[3] When George W. Bush took office in 2001, he seems to have had access to more funds than he knew what to do with. Starting a war in Afghanistan probably seemed like a good use for these funds. He could perhaps build military bases, and perhaps raise the standard of living of the people there.

The price of oil was especially low in the 1998 to 2001 period. This allowed tax revenue to “go farther” in providing benefits to the economy, allowing a temporary budget surplus. With such a surplus, getting funds appropriated for any purpose would likely have been easy.

Figure 1. US Budget Deficits and Surpluses by Year. Chart by Steve Benen. Source.

Even more importantly, with a fairly young population, the Social Security system had been collecting funds in advance of when they were needed, with the plan of building up the plan’s Trust Fund for use when a bulge in retirements was expected, starting about 2010. Figure 2 shows one chart that roughly illustrates the overfunding and planned use for the funds. Unfortunately, Figure 2 doesn’t treat investment income in the way it is actually collected; it leaves out past investment income and uses discounted cash flow assumptions for the future, so a person cannot readily estimate net contributions to the Trust Fund balance by year from this chart.

Figure 2. Forecast of Social Security surpluses and deficits. Chart by Peter G. Peterson Foundation, based on Social Security Administration, The 2020 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Trust Funds. Source.

Figure 2 indicates that there was considerable overfunding starting in the late 1980s. The thing that actuaries (and others) didn’t consider is the fact that there is a real difference between debt and the physical resources that will be needed when these older people retire. Retirees will need food, water and energy to heat their homes. They will need medicine and long term care institutions. They should also be able to provide their share of the upkeep of roads and electricity transmission networks.

Debt is a promise of future funds to purchase goods and services, but it doesn’t make the resources required to create these goods and services materialize out of “thin air.” To keep these promises, oil needs to be extracted, refined, and delivered to farmers. There needs to be enough fresh water available to irrigate adequate farmland to produce the required food. There need to be supply lines that are working to deliver the required food. There need to be enough young people who are willing to work on farms and in care centers for the aged. The wages for these young workers need to be high enough so that they too can have food, shelter and other things that we consider necessities.

When the extra Social Security funds were collected, the officials who collected them figured out that as a practical matter, there was little that they could do with them besides spend them at the time they were collected. They couldn’t set up warehouses with food, clothing, building materials and energy resources to keep on hand for 30 or 40 years. If they invested the money in the stock market, the money would simply cause a bubble in stock prices. If they built new factories or nursing homes, they would be unfairly competing with existing businesses.

I am not sure that there is any good record of how these extra funds were spent. My understanding is that they provided a very large slush fund that allowed expanded military activities among other things. From an accounting point of view, non-marketable government debt was substituted for the funds that were spent. Thus, when an actuary looks at the Trust Fund, it is fully funded. It is just that it is funded with more US government debt.

The catch is that the non-marketable US government debt doesn’t actually correspond to any resources. Any food used in 2022 (or 2050) will need to be grown in that year, using resources available in that year. Most clothing used in a given year will need to be produced with resources available at that time. Putting together a model that assumes business as usual forever tends to give a rosy picture because it leaves out this detail.

The 2020 OSDAI Trustees Report provides actual income, outgo, and interest income through 2019. From this report, it can be concluded that the extra Social Security slush fund is rapidly disappearing. In fact, it seems to be turning to a hidden source of required year-by-year funding starting as soon as 2020 or 2021.

In some sense, the “real economy” operates on a “cash basis,” rather than an “accrual basis.” This has not been recognized in our accounting or our models. Ignoring the way the system really works likely leads to a hidden crunch, starting about 2021. We know that retirements were high in 2020, adding to the potential problem. I am certain that President Biden and his advisors are aware of this issue, even though it is never reported on the front pages of newspapers.

[4] There is really a two-sided energy price problem. Consumers can afford only low energy prices but, as the result of depletion and population growth in oil exporting countries, producers need high oil prices.

Figure 3 is a chart I prepared a few years ago. In it, there is a pattern of rapidly rising wages when oil prices were very low. Workers became more productive with new factory equipment and vehicles, produced with oil, and operated using oil products. As a result, their wages rose.

Figure 3. Average wages in 2017$ compared to Brent oil price, also in 2017$. Oil prices in 2017$ are from BP Statistical Review of World Energy 2018. Average wages are total wages based on BEA data adjusted by the GDP price deflator, divided by total population. Thus, they reflect changes in the proportion of the population employed as well as changes in wage levels.

On the other hand, when oil prices spiked, the prices of many goods, including food, airline tickets, and the fuel used for commuting to work, rose. People cut back on discretionary income, such as eating in restaurants and vacation travel. Businesses with fewer customers laid off workers. The workers who could find jobs often found lower-paid or part time jobs. The result was a dip in average wages, both in the 1970s and at the time of the Great Recession of 2007-2009.

We now live in a world with depleted resources. The oil and other types of energy that are available are high in cost, but the prices tend to stay too low for producers when all costs are included. Oil resources from the Middle East and Venezuela, especially, need a higher oil price because the governments of these countries need very high taxes on oil revenue to support their large populations. Even shale oil from the United States needs a higher price than is available today.

If we want OPEC to supply the rest of the world with more oil, the price will need to rise much higher than today’s Brent oil price of about $73. It likely will need to rise to at least $100 per barrel and show that it can stay at this high level. Otherwise, the supposed reserves of OPEC will mostly stay in the ground.

Even the US needs a higher oil price. Its oil, gas and coal production fell during the pandemic in 2020. Through May 2021 (and even later using weekly data, not shown), oil and natural gas production has not rebounded to the 2019 level.

Figure 4. US fossil fuel average daily production by month through May 2021, based on data from the US Energy Information Administration. NGPL means natural gas plant liquids. NGPL are extracted with natural gas but condensed out and sold as liquids.

Note that oil and gas production also dipped in 2016. Figure 3 shows that oil prices were also low then. If prices are too low, would-be producers leave them in the ground.

Adding in nuclear and renewables (hydroelectric, ethanol, wood, wind, solar and geothermal) still leaves a large dip in recent production.

Figure 5. US average daily production by type based on data of the US Energy Information Administration.

President Biden is no doubt aware of the fact that the US’s production of energy products, especially crude oil, is now low. In fact, earlier in August he asked OPEC and its allies to increase their oil production to try to keep prices from rising too much. Why would OPEC want to increase its production, if the US can’t increase its own production at the current price level? All of the producers need a higher price level; it is consumers who cannot afford the higher price level.

[5] The world seems to have already begun shifting to a falling energy consumption per capita situation.

The amount of energy required tends to rise with population because all of the people require food, housing and transportation. Energy, especially oil and coal, are needed for these.

Figure 6. Energy consumption per capita for all energy sources combined based on data from BP’s Statistical Review of Energy 2021.

Many countries, including the United States, have been able to hold down their internal energy consumption per capita by moving much of their industry to China and India.

Figure 7. US energy consumption per capita, divided between industrial and other, based on information of the US Energy Information Administration. Energy consumption includes both electricity and fuels such as oil, coal, natural gas, ethanol and wood burned for heat. All transportation fuels are in the “Ex. Industrial” portion.

Figure 7 shows that US industrial production reached its peak in 1973, which was shortly after US oil production started to turn down in 1971. This partly reflects auto manufacturing moving to Japan and Europe, where smaller, more fuel-efficient cars were already being sold. Home heating and electricity generation also shifted away from oil to other fuels.

The issue now is that “Ex. Industrial” consumption has been falling since the Great Recession. In some sense, the economy has been losing strength since 2008 and continues to lose strength. Fewer and fewer people can feel like they are really getting ahead. They are saddled with low wage jobs and too much debt.

Figure 8 shows similar patterns for the European Union and Japan. Energy consumption per capita was rising until a few years before the Great Recession, and then it plateaued. It has been declining since.

Figure 8. Energy consumption per capita for the European Union and Japan from BP’s 2021 Statistical Review of World Energy.

The pattern shown on Figure 8 suggests that energy prices are still too high for consumers, even though they are, at the same time, too low for producers. Travel restrictions imposed by governments may also be contributing to this pattern.

GDP data indications are prepared on an accrual basis. In other words, they reflect the impact of added debt. If missing energy can be replaced with a promise of debt to pay for more goods and services in the future, made with future energy, then perhaps all will be well. The quantity of debt that is required, relative to the GDP impact, keeps rising, suggesting this substitution is not working very well.

Figure 9. Dollars of additional debt required to add $1 dollar of GDP growth (including inflation), based on data of the US Bureau of Economic Analysis.

With the addition of growing amounts of debt, GDP increases are reported to be much larger than expected growth, based only on the growth in energy consumption.

Figure 10. Average annual increase in energy consumption for the period shown based on EIA data versus average increase in real (inflation-adjusted) GDP for the period shown, based on data of the US Bureau of Economic Analysis.

[6] We now seem to be reaching the end of the line with respect to what can be done with added debt to make the economy seem like it is performing adequately well.

Interest rates show a very distinct pattern. They rise until about 1981, and then they decline.

Figure 11. US 10-year and 3-month interest rates through July 2021, in a chart prepared by FRED.

When the US economy was growing rapidly, it could withstand high and rising interest rates. Since 1981, the general pattern has been one of falling interest rates, making a larger quantity of debt affordable. Indirectly, these falling interest rates also helped prop up asset prices, such as those of homes and shares of stock. In recent years, interest rates have fallen about as far as they can go. To some extent, these lower rates were made possible by Quantitative Easing (QE). But at some point, QE needs to be stopped.

Today, interest rates are approximately at the level they were during the Great Depression of the 1930s. This makes sense; interest rates to some extent reflect the return an investor can expect to make. Right now, without a lot of government support programs, “Main Street” businesses around the world are struggling. This indicates that the economy is doing very poorly. There are too many people who cannot afford even basic goods and services. Indirectly, this feeds back to commodity prices that are not high enough for producers of energy products.

Recently, governments of many countries have tried a different approach. Instead of loans, they are providing something closer to giveaways. Renters are allowed to stay rent-free in their apartments. Or, checks are given to all citizens earning below some specified amount. What we seem to be finding is that these giveaways produce inflation in the price of goods that poor people buy most frequently, such as food and used cars.

The giveaways don’t actually produce more of the required goods and services, however. Instead, would-be workers decide that they really don’t want to take a low-paid job if the giveaways provide nearly as much income. The loss of workers then acts to reduce production. With lower production of goods and services, a smaller quantity of oil is required, so the oil price tends to fall. The price certainly does not rise to the level needed by oil producers.

[7] In a finite world, longer-term models need to take into account the fact that resources deplete and the population keeps rising.

Any modeler who tries to take into account the fact that resources deplete and the overall population keeps rising will quickly come to the conclusion that, at some point, every economy will have to collapse. This has been known for a very long time. Back in 1957, Admiral Hyman Rickover of the US Navy said,

Surplus energy provides the material foundation for civilized living – a comfortable and tasteful home instead of a bare shelter; attractive clothing instead of mere covering to keep warm; appetizing food instead of anything that suffices to appease hunger. . .

For it is an unpleasant fact that according to our best estimates, total fossil fuel reserves recoverable at not over twice today’s unit cost, are likely to run out at some time between the years 2000 and 2050, if present standards of living and population growth rates are taken into account.

Now, in 2021, it looks as if this problem is starting to hit us. But no one (since Jimmy Carter, who was not re-elected) has dared tell the general public. Instead, accrual accounting with more and more debt is used in financial statements, including GDP statements. Actuaries put together Social Security funding estimates as if the resources to provide the promised benefits will really be there. Climate change models are prepared as if business as usual can go on for the next hundred years. Everything published by the mainstream media is based on the underlying assumption that we will have no problems other than climate change for the next 100 years.

[8] About all that can be done now is to start cutting back on the less necessary parts of the economy.

President Biden’s abrupt pullout from Afghanistan reflects a reality that increasingly has to take place in the world. The US needs to start pulling back because there are too many people and not enough inexpensive to extract resources to fulfill all of the commitments that the US has made. As mentioned earlier, there are a number of obstacles to success in Afghanistan. Thus, it is a good place to start.

With the need to pull back, there is a much higher level of conflict, both within and between countries. The big issue becomes who, or what, is going to be “voted off the island” next. Is it the elderly or the poor; the military or the oversized US medical establishment; university education for a large share of students or classroom teaching for young children?

We don’t seem to have a good way out of our current predicament. This seems to be what is behind all of the recent internet censorship. Renewables and nuclear require fossil fuel energy for their production and maintenance. The powers that be don’t want anyone to know that nearly all of the “happily ever after using renewables” stories we hear are based on wishful thinking.

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COVID-19 Vaccines Don’t Really Work as Hoped

Last week, the CDC announced a surprising finding: “Delta infection resulted in similarly high SARS-CoV-2 viral loads in vaccinated and unvaccinated people.” Public officials had known from the early days of vaccine development that vaccinated people could catch COVID-19, but the assumption had been made that they were not going to be spreaders of COVID-19.

It turns out that the delta variant is sufficiently different from the original Wuhan version of the virus that the vaccines work much less well. The CDC performed an analysis of COVID-19 cases arising from one public gathering in Massachusetts. They found that the gathering led to 469 COVID-19 Delta cases among Massachusetts residents, with 74% of these cases in fully vaccinated attendees. Massachusetts is a highly vaccinated state, with approximately 64% of the population fully vaccinated.

There are other issues coming up as well. How long does the vaccine really last? Is the vaccine itself part of the reason that the virus is mutating as rapidly as it is? Are we making problems for ourselves by creating an army of people with very light cases of COVID-19 who can spread the virus to both the vaccinated and the unvaccinated without realizing that they have more than a cold? Aren’t we inadvertently killing off the least able of the virus mutations and allowing the most virulent to multiply?

My training is as an actuary, so I am familiar with modeling. I am also a “systems thinker.” I know that it is important to look at longer term impacts as well as short-term impacts. If a person works in the healthcare field, it is easy to consider only the obvious short-term benefits. It takes some analysis to figure out that today’s vaccines may lead to stronger variants (such as Delta) and more overall spread of COVID-19.

In this post, I will explain some of the issues involved.

[1] Today’s vaccines provide only a fraction of the true level of protection required. Their actions are in many ways similar to applying weed killer at half the strength needed to kill the weeds or providing antibiotics at half the dose required to stop the spread of bacteria.

All of our lives, we have been told, “Be sure to complete the full course of the antibiotics. It is necessary to kill all of the bacteria. Otherwise, it will be easier for a few of the stronger bacteria not to be affected. If you stop too early, the bacteria that are least affected by the antibiotic will survive and reproduce, while the others will die. Stopping the drug too soon is a great way to achieve antibiotic resistance, quickly.”

Unfortunately, COVID-19 vaccine makers seem to have overlooked this issue. The respected BMJ published an editorial entitled, Will covid-19 vaccines save lives? Current trials aren’t designed to tell us. It makes the point:

Peter Hotez, dean of the National School of Tropical Medicine at Baylor College of Medicine in Houston, said, “Ideally, you want an antiviral vaccine to do two things . . . first, reduce the likelihood you will get severely ill and go to the hospital, and two, prevent infection and therefore interrupt disease transmission.”

Yet the current phase III trials are not actually set up to prove either.

We were told that the new COVID-19 vaccines are “95% effective in preventing symptomatic disease,” but it turns out that this is far less adequate than what most people would assume. The vaccine is “leaky.” A big issue is that the virus mutates, and the vaccine works much less well against the mutations. The world can never reach herd immunity if immunized people keep catching new variants of COVID-19 and keep passing them on, as the evidence now suggests.

[2] In a way, getting sick from a virus is helpful. It tells us to stay at home, away from others. It is the fact that humans experience symptoms from viruses that tends to limit their spread.

If a virus has severe symptoms, those infected with the virus will not feel well enough to continue their usual activities. They will tend to stay at home.

If the symptoms are mild, as is the case with the common cold, people will likely go about their activities as usual. This is especially the case if people need to work to feed their families. Thus, viruses with mild symptoms often spread easily.

But, if citizens feel that they are protected by a vaccine, they will likely continue to go about their activities as usual. Most of them will not realize that they might be spreaders of Delta, and perhaps other new COVID-19 variants. Symptoms are likely to be mild or non-existent.

[3] It is becoming clear that people immunized with today’s vaccines can both catch the delta variant and spread it to others.

As I mentioned above, the CDC concluded from looking at its analysis of 469 delta cases that the infection resulted in similarly high SARS-CoV-2 viral loads in vaccinated and unvaccinated individuals.

We have independent corroboration of the ability of vaccinated individuals to spread delta COVID-19 in a new analysis from Singapore. This article reports, “PCR cycle threshold (Ct) values were similar between both vaccinated and unvaccinated groups at diagnosis.” This is precisely the information that the CDC was relying on in Massachusetts when they reported that there were similarly high SARS-CoV-2 viral loads in vaccinated and unvaccinated people. While this analysis has not yet been peer reviewed, it reaches precisely the same conclusion with respect to early viral load as the Massachusetts analysis.

The data from this same Singapore study indicates that there are about 3 times as many asymptomatic cases in the vaccinated (28.2%) as the unvaccinated (9.2%). The median number of symptoms reported by the vaccinated was 1, compared to 2 in the unvaccinated. Among the vaccinated, the most frequent symptoms were fever (40.9%), runny nose (38%) and cough (38%). One of these symptoms, especially if it occurred only briefly, could easily be overlooked as a sign of COVID-19.

[4] With nearly all of the current vaccines, the immune system is trained to look for the spike protein from the original Wuhan virus. This narrow focus makes it relatively easy for the virus to mutate in ways that outsmart the vaccine.

A “History of Vaccines” website indicates that there are several ways vaccines are being made, including weakened (“attenuated”) viruses, killed viruses, and segments of the pathogen. In the new COVID-19 vaccines, a particularly limited part of the virus is used, the spike protein. In fact, in the newer vaccines, only an mRNA code is injected, and the body is instructed to make the spike protein itself.

Using a very narrow target has made it easier for viruses to evade the effects of the vaccine. Delta is one variant of the original virus from Wuhan that is evading vaccines through its mutations. Another such variant is Lambda, which caused serious problems in Chile in the spring of 2021, despite vaccine usage as high as 60%. The virus underlying all of these variants is called SARS-CoV-2, reflecting the fact that this virus is closely related to the virus which caused the 2003 SARS epidemic.

Since vaccination began about December 15, 2020, we have so far encountered two variants that are poorly controlled by vaccines. This is not a promising sign for the long-term success of COVID-19 vaccines. As more time goes on, we can expect more such variants. These variants do not necessarily stay around for more than a few months, making it difficult to create and distribute new specially targeted vaccines.

[5] Given the likelihood of mutations away from the narrow target, it seems strange that the governments have set very high expectations for the new vaccines.

It seems to me that Pfizer and Moderna should have said, “We are producing new vaccines that will somewhat lessen symptoms. In a way, they will be like the annual influenza vaccines that various companies make each year. We will need to update the vaccines regularly, but we will likely miss. Hopefully, our guess regarding what will work will be ‘close enough,’ so the vaccine will provide some partial benefit for the upcoming variations.”

Such a statement would have provided a more realistic set of expectations, compared to what many people have been assuming. No one would expect that herd immunity would ever be reached. The vaccines would be perceived as fairly weak tools that need to be used alongside medications, if they are to be used at all.

[6] Leaky vaccines, if widely used, can encourage the virus to mutate toward more virulent (severe) forms. Ultimately, the problem becomes viruses that mutate to more virulent forms faster than the vaccine system can keep up.

If, as we are seeing today, vaccinated people can catch the variant and pass it on to both vaccinated and unvaccinated people, this extra boost can help the variant tremendously in its ability to spread. This extra boost is especially helpful for the variants that are very virulent, since in the normal situation, people who catch a virulent variant would recognize that they are sick and stay at home.

There would normally be a limit on how much the variant could spread based on its impact on the unvaccinated. This limit goes away if both the vaccinated and unvaccinated can catch and spread the illness. Without a vaccine, the variants might be either more or less virulent, with the more virulent tending to die out because the people who get them either die or stay at home because they are very ill. I would expect that this is the reason why quite a few viruses tend to become less severe (virulent) over time, when leaky vaccines are not available to artificially boost their virulence.

The article, Vaccines are Pushing Pathogens to Evolve, gives the example of how the vaccines for Marek’s disease in chickens have been failing, as the disease gradually evolves to become more virulent under pressure from the vaccines being used to keep this illness away. The first vaccine was introduced in 1970. A decade later, outbreaks of Marek’s disease began to be found in vaccinated flocks. A second vaccine was licensed in 1983, but it too began to fail. When the article was written in 2018 the industry was on its third vaccine, but it too was beginning to fail, as the disease became more deadly. But there was no new vaccine yet available.

A 2015 article in PLOS Biology is entitled, Imperfect Vaccination Can Enhance the Transmission of Highly Virulent Pathogens. A person would think everyone involved in vaccine technology would be very much aware of this issue.

The chase after new vaccines is precisely the problem we can expect to have with the vaccines for COVID-19. Only, our problem with the vaccine not really working correctly is coming after a few months, not 10 years. Trying to keep up with new vaccines for a virus that evolves away from us, this quickly, is likely to be an impossible task. It is not just the unvaccinated who have a problem; it is everyone, as the vaccines quickly lose their effectiveness.

[7] Another potential problem with COVID-19 vaccines is Antibody Dependent Enhancement (ADE). When this occurs, it worsens later infections by different variants.

ADE is a rather strange condition in which the antibodies against one variant gained from a first infection (or immunization) act to make some later infections by a different variant worse, rather than better. Dengue Fever is an example of an illness for which this is an issue.

Dr. Robert Malone thinks that ADE may be happening now for COVID-19. He sees the high virus levels in immunized individuals as evidence of possible ADE.

The large number of immunized patients in the hospital with COVID-19 in Israel (which has mostly Delta cases) is also given as possible evidence:

Figure 1. Image from Israel’s official COVID-19 website, showing new hospitalizations and new severe patients separately for fully vaccinated, partially vaccinated, and unvaccinated individuals.

The illness SARS is closely related to COVID-19. There is evidence that vaccinations against SARS tend to produce ADE. In fact, the National Institute of Health provided funding for a 2020 academic paper that reaches the following conclusion:

The specific and significant COVID-19 risk of ADE should have been and should be prominently and independently disclosed to research subjects currently in vaccine trials, as well as those being recruited for trials and future patients after vaccine approval, in order to meet the medical ethics standards for informed consent.

[8] Another problem with the current vaccines against COVID-19 is that immunity may not last very long.

The virus that causes COVID-19 is a coronavirus. The common cold is another illness caused by a coronavirus. We know the immunity of the common cold doesn’t last very long, perhaps a year. While we don’t have long-term experience with COVID-19 vaccine immunity, we shouldn’t be surprised if its immunity begins to wane within a few months, or in a year or two.

Israel, after analyzing its recent COVID-19 experience (almost all with the Delta variant), is now offering anyone over 60 who was vaccinated more than 5 months ago a booster shot. Third doses are also being given to those with weakened immune systems.

It should be noted that if immunity doesn’t last very long, any strategy of “flattening the curve” by stretching out COVID-19 cases becomes counterproductive because it runs the risk of moving the timeframe of the next cycle beyond the time when natural (and vaccine-induced) immunity is still operative.

[9] The public has been led to believe that vaccines are the only solution to COVID-19 when, in fact, they are at best a very poor and temporary band-aid.

Vaccines are a tempting solution because the benefits have been oversold and no one has explained how poorly today’s leaky vaccines really work.

We are already past the period when these vaccines were well matched with the viruses they were aimed at. Now we are in a situation in which the viruses are constantly mutating, and the vaccines need to be updated. The catch is that the variants stick around for such a short time period that by the time the vaccine is updated, there is likely to be yet another new variant that the new vaccine does not really match up with well.

Requirements that employees be vaccinated against COVID-19 cannot be expected to provide much benefit to employers because workers will still be out sick with COVID-19. This happens because they are likely to catch a variant such as Delta, which does not line up with the original vaccine. Perhaps they will be out for a shorter period, and their hospital bills will be lower. These types of benefits are what people have expected of influenza vaccines. There is no reason for them to expect more of the new COVID-19 vaccines.

Even with 100% vaccination herd immunity can never be reached because the vaccine encourages the virus to mutate into more virulent forms. Each new variant stays around for only a few months, making it hard for vaccine makers to keep up with the changing nature of the problem. Vaccine makers can expect to face a constant battle in having to run to stay even. Someone will have to convince citizens that each new vaccine makes sense, even though injuries reported to the US Vaccine Adverse Event Reporting System seem to be much more frequent than those reported for vaccines for other diseases.

An erroneous, one-sided story is being told to the general public, in part because the pharmaceutical lobby is incredibly powerful. It has the support of influential people, such as Anthony Fauci and Bill Gates. The pharmaceutical industry can make billions of dollars in income from the sale of vaccines, with little in the way of sales expenses. The industry has managed to convince people that it is OK to sell these vaccines, even though injury rates are very high compared to those for vaccines in general.

Vaccines are being pushed in large part because the pharmaceutical industry needs a money maker. It also wants to be seen as having cutting-edge technology, so young people will be attracted to the field. It cannot admit to anyone that technologies from decades ago would perhaps work better to solve the COVID-19 problem.

[10] The pharmaceutical industry has been telling the world that inexpensive drugs can’t fix our problem. However, there are several low-cost drugs that appear helpful.

One drug that is being overlooked is ivermectin, which was discovered in the late 1970s. It was originally introduced as a veterinary drug to cure parasitic infections in animals. In the U. S., ivermectin has been used since 1987 for eliminating parasites such as ringworm in humans. Ivermectin seems to cure COVID-19 in humans, but it needs a higher dosage than has been previously approved. Also, it would not be a money maker for the pharmaceutical industry.

The possible use of ivermectin to cure COVID-19 seems to have been intentionally hidden. At approximately 32:45 in this linked video, Dr. David Martin explains how Moderna announced ivermectin’s utility in treating SARS (which is closely related to SARS-CoV-2) in its 2016-2018 patent modification related to the SARS virus. It sounds as though Moderna (and others) have participated both in developing harmful viruses and in developing vaccines to cure very closely related viruses. They then work to prevent the sale of cheap drugs that might reduce their sales of vaccines. This seems unconscionable.

Vitamin D, in high enough doses, taken well before exposure to the virus that causes COVID-19, seems to lead to reduced severity of the disease, and may eliminate some cases completely.

Various steroid drugs are often used in the later stages of COVID-19, when conditions warrant it. The medical community seems to have no difficulty with these.

Monoclonal antibodies are also used in the treatment of COVID-19, but they are much more expensive.

[11] Conclusion. Governments, businesses, and citizens need to understand that today’s vaccines are not really solutions to our COVID-19 problem. At the same time, they need better solutions.

Current vaccines have been badly oversold. They can be expected to make the mutation problem worse, and they don’t stop the spread of variants. Instead, we need to start quickly to make ivermectin and other inexpensive drugs available through healthcare systems. People do need some sort of solution to the problem of COVID-19 illnesses; it just turns out that the current vaccines work so poorly that they probably should not be part of the solution.

The whole idea of vaccine passports is absurd. Even with the vaccine, people will catch the new COVID-19 variants, and they will pass them on to others. Perhaps they may get lighter symptoms, so that they will be off work for a shorter length of time, but there still will be disruption. If those who catch COVID-19 can instead take ivermectin at a high enough dose at the first sign of illness, many (or most) of them can get well in a few days and avoid hospitalization completely. Other medications may be helpful as well.

I am skeptical that masks can do any good with the high level of transmission of Delta. But at least masks aren’t very harmful. We probably need to go along with what is requested by officials.

It is becoming clear that today’s pharmaceutical industry is far too powerful. Investigations need to be made into the large number of allegations against it and its leaders. Why did members of the pharmaceutical industry find it necessary to patent viruses, and then later sell vaccines for a virus closely related to the viruses it had patented?

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