An Economic Theory of Limited Oil Supply

We seem to hear two versions of the story of limited oil supply:

1. The economists’ view, saying that the issue is a simple problem of supply and demand. Substitution, higher prices, demand destruction, greater efficiency, and increased production of oil at higher prices will save the day.

2. A version of Hubbert’s peak oil theory, saying that world oil production will rise and at some point reach a plateau and begin to decline, because of geological depletion. The common belief is that the rate of decline will be determined by geological considerations, and will roughly match the rate at which production increased.

In my view, neither of these views is correct. My view is a third view:

3. An adequate supply of cheap ($20 or $30 barrel) oil is no longer available, because most of the “easy to extract” oil is gone. The cost of extracting oil keeps rising, but the ability of oil-importing economies to pay for this oil does not. There are no good low-cost substitutes for oil, so substitution is very limited and will continue to be very limited. The big oil-importing economies are already finding themselves in poor financial condition, as higher oil prices lead to cutbacks in discretionary spending and layoffs in discretionary industries.

The government is caught up in this, as layoffs lead to more need for stimulus funds and for payments to unemployed workers, at the same time that tax revenue is reduced. There can be a temporary drop in oil prices (as there was in late 2008), as recession worsens, but eventually demand rises again, oil prices rise again, and the pattern of layoffs and increased governments financial problems occurs again.

Without substitutes at a price that the economy can afford, economies will adapt to lower amounts of oil they can afford by worsening recession, debt defaults, and reduced international trade. There may be tendency for international alliances (such as the Euro) to fall apart, and for countries to break into smaller units (Catalonia secede from Spain, or countries break up the way the Soviet Union and Yugoslavia did).

At some point, probably not too many years in the future, the amount of oil extracted from the ground will drop, reflecting a combination of geological and economic factors. The fall may very well be quite steep. While we can’t expect to extract more than geology will allow, there is nothing to say that political and economic factors will allow extraction of this amount. If civil war breaks out in an oil producer, production may drop quickly. Or if oil prices drop because of severe recession, drilling of new fields and wells may drop off quickly, leading to lower production as existing wells deplete, and not enough new supply as added. There may also be disruption in international sales of oil.

What the Economists’ View Misses

The economists’ view misses the fact that it is external energy that makes the economy operate the way it does. (See my earlier posts, here, here and here.) If energy products are higher priced, energy importers can afford less of them, and there is a tendency of their economies to shrink back to what their economies can afford—fewer employed workers and fewer government programs. I talk about the connection between employed workers and energy consumption in The Close Tie Between Energy Consumption, Employment and Recession.

Figure 1. World GDP, oil consumption and energy consumption growth rates, based on data of USDA, Angus Maddison, and BP’s 2012 Statistical Review of World Energy data.

As the growth rate in energy supplies decreases (oil by itself, or in total), the economy tends to shrink back.  Initially (in the 1970s and 1980s), the economy shrinking back looked like it was slowing down – no longer undertaking big new initiatives like interstate highway systems and major electrical grid expansions, and adding new initiatives for taking care of the poor. Then the economy shrinking back morphed into a bigger emphasis on debt financing; less concern about keeping up infrastructure the way it had in the past; and switching from manufacturing of goods to production of services, to keep energy needs lower.

Another way of keeping down energy use was by keeping wages down. Since wages translate to purchase of things that energy can make, lower wages allow an economy to “get by” with less energy consumption. In the US, the quest for lower wages has manifested itself in many ways—the failure of men’s median wages to rise after the mid 1970s, the increasing use of women (at lower average wages) in the workforce, and later outsourcing of jobs to countries overseas with lower wages (and thus less energy consumption by workers).

Figure 2. Per capita oil consumption in countries with recent bank bailouts, based on data of the US Energy Information Administration.

Eventually, the economy shrinking back has become more disruptive. It looks more like recession, with job layoffs, debt defaults, and serious government funding problems. Governments find themselves going deeper and deeper into debt, as tax revenue lags, and there is more need for stimulus funding and benefits for unemployed workers. In such an atmosphere, government stability is at risk. This seems to be where quite a few of the European countries are right now. The United States is not far away either, with many of its problems hidden by deficit spending, “quantitative easing,” ultra low interest rates, and the fiscal cliff.

The Myth of Substitution

A big part of the economists’ problem in figuring out the problem with limited cheap oil supply is their assumption that energy is not very important. It doesn’t cost very much, so why worry about it? Certainly, there should be substitutes. For example, if we can’t afford to make goods, we should be able to switch to the production of services, since these don’t require as much energy to produce. This might be a method of substitution.

But think about this. In our own life, our own energy comes from food. If someone told you that we were having a problem with food supply, but the economists said not to worry, we would find a substitute, how convinced would you be that economists really knew what they were talking about? Do you feel less hungry after a haircut, or a trip to get a loan at a bank (two standard types of services)? Perhaps they were underestimating the importance of food.

Something like that happens with other forms of energy as well. It is virtually impossible to substitute away. There is a little substitution over time of one form of energy for another, just as there is substitution of wheat for corn. But in general, each type of energy has its own uses, and it is hard to substitute one type for another. A car runs on gasoline. It is possible to substitute up to 10% or 15% corn ethanol in the gasoline, but unless significant changes are made, it is not possible to run the car on natural gas or on coal.

A big part of economists’ problem with overestimating the role of substitution is their missing the adverse impact of high oil prices (or other high energy prices) on the economy. As I have explained previously, when oil prices rise, both the cost of food and cost of commuting tend to rise. Workers cut back on discretionary spending, so as to have enough money for commuting and food expenses, leading to layoffs in discretionary industries. Housing prices stagnate or drop, as people cut back their expectations of moving to a higher priced home. Governments find themselves in increasingly poor financial condition, trying to fix these problems, with lagging tax revenue. All of this creates substantial economic problems, which cannot be overlooked.

The comment a person often hears is, “As soon as the price of oil rises high enough, _______ will substitute for it.” This doesn’t work for a couple of reasons: (1) By the time the price rises that high, the economy will be “in the tank” anyhow; a high-priced substitute doesn’t fix the problem. (See my post High-Priced Fuel Syndrome) (2) Substitutes generally use oil in their production, either directly or indirectly, so when the price of oil rises, the price of the substitutes tends to rise as well, although probably not as much as the oil price rise.

Substitution to date is not taking place very quickly. On a worldwide basis, 87% of current energy use comes from fossil fuels, based on BP’s 2012 Statistical Review of World Energy Data. The remainder is divided as follows, in the year 2011:

▪               Nuclear amounted to 5% of the total;

▪               Hydroelectric amounted to 6% of the total, and

▪               Renewables (including wind, solar, biofuels, wood, waste, geothermal, and others) come to a total of 2% of world energy supply.

There has been some substitution away from oil for a long time, because oil is high priced. Often, this occurs through electrification of various processes. The electricity used in this process is today mostly from natural gas and coal, with lesser amounts from nuclear, hydroelectric, and other renewables.

The speed with which substitution of electricity for oil is taking place varies, with stationary applications working best, and transportation being slow to change. According to the US Energy Information Administration, in 2011, only 0.3% of US transportation fuel was electricity. The rest of transportation was divided as follows: Oil, 92.7%; Biofuels, 4.3%; Natural Gas, 2.7%.

Another application which is a significant user of oil, but for which little substitution toward electricity is readily available, is in food production. Oil is used in operating farm machinery, in making herbicides and insecticides, and in transporting food to market. This is a reason why many people are interested in local food production, using techniques that use less oil.

What the Peak Oilers Missed

If a person goes back and looks at M. King Hubbert’s 1956 paper, Nuclear Energy and the Fossil Fuels, they will discover that Hubbert talks about a very optimistic scenario: the use of nuclear energy rising, before the use of oil and other fossil fuels begins to decline. See my post, Will the decline in world oil supply be fast or slow?

Figure 3. Figure from Hubbert’s 1956 paper, Nuclear Energy and the Fossil Fuels.

Elaborating further on this idea, Hubbert, in his 1962 paper, Energy Resources – A Report to the Committee on Natural Resources, writes about the possibility of having so much cheap energy that it would be possible to essentially reverse combustion–combine lots of energy, plus carbon dioxide and water, to produce new types of fuel plus water. If we could do this, we could solve many of the world’s problems–fix our high CO2 levels, produce lots of fuel for our current vehicles, and even desalinate water, without fossil fuels.

The problem that arises if we don’t have such a substitute for fossil fuels is a severe one. How do we keep our current economy operating, if oil prices, or fossil fuels in general, become high priced, and start interfering with the economy? At some point, the interference will become so great that recession will set in, in many major oil importing nations. Oil prices will drop, and oil producers will not be able to extract oil at those prices. There may be major financial impacts as well—governments dropping out of the Euro, the US government facing a financial cliff, and other countries (Japan, Britain, and China, for example) facing difficulties as well.

In my view, the shape of down slope in oil production is likely to be steeper than the pattern by which oil supply increases. Geology determines the maximum amount of extraction, but it doesn’t determine how much will actually be extracted.  Economic conditions need to be right for the extractions to take place. Low oil prices by themselves could cause political upheaval in some oil exporting nations. If there are huge international trade problems, this could reduce demand as well.

Why International Trade Can Be Expected to Contract

Huge economic growth since World War II has been enabled by increased international cooperation and increased globalization. It is now possible to make many high-tech goods using trained specialists who travel around the world and raw materials imported from countries that will put up with high levels of pollution. These high-tech goods can be very cheap, if they are assembled in a country such as China with cheap labor.

Once countries start operating in a mode of “not enough energy to go around,” the model of global cooperation starts disintegrating. If unemployment becomes an increasing problem, then countries are no longer be willing to let in cheap labor from lesser-developed countries. We can see this happening in the United States, with respect to workers from Mexico.

If oil is becoming a problem, we will see more spats, of the type recently occurring between Japan and China, leading to lower trade. There may even be more resource wars. Large countries encountering financial problems will see individual units wanting to go their own way, with the parts that are doing better economically wanting to disassociate themselves from the have-nots.

Figure 4. Oil as a percent of total 2006 energy consumption for European countries, based on BP’s 2012 Statistical Review of World Energy

High oil prices are likely to lead to more defaults on loans. In fact, Figure 4 shows that the countries most at risk of defaulting tend to be the ones that imported the largest percent of their energy from oil in 2006, before the recent crisis begin. As the world encounters more and more loan defaults, this too can be expected to erode interest in foreign trade. Such trade will likely not disappear, but may be carried on to a greater degree between trusted partners, or on more of a barter basis. For example, a certain quantity of oil may be traded for goods that the oil-producing country can use.

Businesses, Governments and Consumers form a Networked System

The way the world operates today, each business is added to the existing web of governments, businesses and consumers that exists today. Some businesses succeed, while others fail. Success or failure depends the laws that are in effect, the resources that are available, what competition there is, and the purchasing power of customers.

If energy is in short supply, more and more governments and businesses will fail, and increasing numbers of consumers will find themselves without jobs in the traditional economy. Banks may be overwhelmed by debt defaults. At some point, supply chains will become so disrupted that it will be hard for anything other than small local businesses to succeed.

This will correspond to what Joseph Tainter talks about as moving to a state of lower complexity. We don’t know exactly when or how this will happen, but it appears that we are already moving in this direction. The next years seem likely to be challenging ones!

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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156 Responses to An Economic Theory of Limited Oil Supply

  1. Don Stewart says:

    It seems to me that some current comments by intelligent, well-meaning people outline some of the important questions.
    (1) Numerous people think that life is going to be awful and there is nothing to be done about it. There will be mass starvation, epidemics of disease, violence, etc.

    If I believed this, I don’t know what I would do–perhaps drink a lot.

    (2) Lester Brown’s current article on wind power is a good example of those who think we can transition pretty seamlessly to renewables:

    If I believed Lester, I would join the crusade for industrial strength renewables.

    (3) Sharon Astyk, in Making Home (page 14) states ‘Now consider the reality. In fact, our carbon problem is very simple. We can’t burn all the carbon we do have, and we don’t have enough to build our way out of burning it. We have to use less….Climate change will not come equitably to every place, but it will come everywhere. Energy depletion too will come unevenly, but it will come, and so will the financial consequences of both. The ways to mitigate them are the exact opposite of running away to discover what we should have known already–we need to appreciate what we have here, and slow down further.’

    If I believed Sharon, then I would get about making my home as resilient and pleasant as possible and pay a lot of attention to personal relationships with people in the neighborhood. If I were extremely optimistic, I might try to persuade my neighbors to enroll in the Voluntary Simplicity movement. The subtitle to Sharon’s book is ‘How Settling for Less can Mean Having More’.

    (4) Albert Bates writes about his pleasant experience in Mexico living a month without electricity:

    If I believed Albert, I might very well look for some place where, as a friend put it, ‘entropy is less advanced than it is in the U.S.’ Albert certainly didn’t suffer down there in Yucatan living on a tiny fraction of the energy that Americans take for granted. I will also note that 40 years ago Albert moved from NYC to The Farm in Tennessee and found ‘home’.

    (5) Sharon Astyk writing about Wendell Berry (pg 17): ‘how many of them were prepared to live with about half as much electricity? Some undoubtedly were. Wendell Berry, for example, has tried for decades to convince Americans that the pre-electric past was not hell.’

    If I believed Wendell and Albert, I would make some local arrangements for living with a combination of non-grid tied electricity and non-fossil fuel generation of light and heat. I wouldn’t put much faith in the industrial solutions favored by Lester Brown. Nor would I wait for Government to offer me solutions.

    (6) Sharon Astyk writing about Dmitry Orlov (pg 214): ‘I was struck by Dmitry Orlov’s observation…about the way the people of Russia responded to the collapse of the Soviet Union. In a crisis, he says, education isn’t less important but more. You may end up digging ditches, but if you also know poetry or music and have a head full of ideas, you can live in your mind while your body works.’

    If I believed Dmitry, then I would continue my own liberal education and do my best to spread the idea of liberal education in a world awash in narrowly focused goals. A local craft school established in the 1920s thought that their ideal student would ‘sing behind the plow’. I might try to become a better story teller–my singing is hopeless.

    As I sort through the issues, it seems to me that a few jump out:
    (A) Is Sharon correct that we have enough fossil fuels to roast us but not enough to escape roasting?
    (B) Given that each of us needs daily support from neighbors, how can we maximize the chance of getting this support?
    (C) How can each of us increase our self-reliance and decrease our dependence?
    (D) How can each of us and our neighbors enjoy an expanding cultural horizon in a world of shrinking physical horizons?
    (E) What energy sources are realistic in a time frame of one decade? two decades? three decades? five decades? What, exactly, do we need to do to utilize those energy sources?

    Some of these questions are primarily quantitative, some are primarily qualitative, but most contain some mixture. Given that we are dealing with a complex system and complex systems tend to resist forecasts, I doubt that we will ever come to universal agreement. It seems to me that question A is foundational. I think that Gail believes that we will not have enough fossil fuels to roast ourselves, that Sharon believes what I have stated, and that Lester Brown believes we have enough time and resources to change. If we, as a society, are going to make any progress at all, I think we have to get a better quantitative understanding of question A.

    Don Stewart

    • Chris Harries says:

      Don, that’s a really great summary.

      Not enough people have the perceptiveness to put all of those factors into a matrix like that. And that’s I think why Gail’s site is so invaluable, in that it tries to bring together all of those elusive factors, and make meaning of the whole.

      I spend my life in green circles and find most of my colleagues think of the future in too simplistic terms, nearly all focus on electricity, as if solar panels and wind turbines were some sort of fix all, and a fairly easy one at that. There’s not enough appreciation of the extent to which liquid fuels are solidly imbedded in our infrastructure and production of essential goods and services.

      That said, there are good people out there pushing each of those lines of inquiry that you mention and although each on has its severe limitations it is people like yourself that can help to bring about a higher level of maturity regarding the choices and possible futures that can come out of the matrix of thought processes.

    • Mel Tisdale says:

      It is very complacent to believe that we will not have enough fossil fuel to roast ourselves. The planet moved from ice-age to interglacial without any fossil fuel extraction industry whatsoever. If we pass a tipping point, and some scientists believe that it might already be too late, then it will not matter if we stop buring fossil fuels immediately, the temperature will simply climb to a new stable state. It is not certain that that state will support human life or not. I am surprised that Gail should be so unaware of positive feedback mechanisms and their attendant dangers.

    • You are right–I think resource issues will cause huge disruption very soon, especially in the financial area. This will make it very difficult to “build our way out” of our problems. I don’t think we can know in advance exactly how this will all play out, but I expect that in various ways, supply lines will break, so it will be more difficult to build our way out of today’s situation. I think Lester Brown is badly mistaken as to what is possible.

      I also think that those who have built climate models are badly mistaken as to what is possible. In the future, supply lines will be broken (through international trade problems, banking problems, lack of long distance air flights, etc), and these broken supply lines will mean that a lot of what looks like extractable fossil fuels today will not be extracted. (We may already be past some tipping point with respect to climate anyhow, so perhaps this is irrelevant.) I am not convinced that there is a whole lot we can do, one way another, to affect climate. The Maximum Power Principle of H. T. Odum basically says that if there is energy available (including fossil fuel energy), organisms will figure out a way to use it, as efficiently as possible. If you and I decide not to use some of the available fossil fuel energy, there will be others in the system who will choose to use it instead. Thus, the fact that you and I decide not to use some of the fossil fuels does not leave the fossil fuels in the earth forever; it just transfers the availability of those fossil fuels to someone else. The critical point is really the breaking of supply lines that makes fossil fuel extraction possible, and we don’t have much control over when the system breaks. I expect the breakage of those supply lines will happen mostly in the next few years. Even with the breakage of supply lines, there may still be some coal near the surface that can be mined without modern techniques, and this extraction will continue. The amount of coal extracted without the benefit of modern techniques and transportation will likely be tiny compared to today, however.

      There are different ways of dealing with the downslope, and you have mentioned some folks with good ideas in this regard. Certainly, most of us can get along with less than we have today, and this is part of any solution. If we look around the world, there are a lot of people living without electricity, in homes they have built from local materials. Many of them are quite happy with their circumstances. We don’t think we could live that way, but throughout history, that is the way most people have lived.

      Workers in India harvesting rice

      Another part of the solution is that we all have some “stuff,” and it won’t evaporate immediately. These things would include clothes, a place to live, books, and various types of tools–shovels, pencils, pens, paper, books, etc. Our problems will get worse, as these things start to wear out, if we haven’t figured out how to make replacements with local materials. There will be unneeded things we can recycle, and that will help for some years as well.

      You say,

      (1) Numerous people think that life is going to be awful and there is nothing to be done about it. There will be mass starvation, epidemics of disease, violence, etc.

      If I believed this, I don’t know what I would do–perhaps drink a lot.

      Even if that does turn out to be true, I am not sure that drinking is a good solution. If nothing else, even if it is true, the extent to which it is true is likely to vary greatly by location, so we don’t know that it will be true for ourselves. All we can do is take one day at a time, and see how things work out.

      There are many people who are in hospice, or otherwise know the ends of their lives are approaching. Most of us are healthy, so have advantages over them. Often, the people in hospice use the time they have available to visit again with family, and do other simple things that give them pleasure. Even if we expect things will be terrible in the future, we can do thing now that give us pleasure, and build relationships with others. Also, if we change our focus so “stuff” isn’t so important, whether or not someone steals things from us is less of a problem. Even if things get bad, we have some control over our lives–our thoughts, if nothing else.

      • Don Stewart says:

        Dear Gail
        Thanks for the detailed response. Perhaps I have been inattentive–I think I now understand better your concern with supply lines.

        If I might add a few words along those lines. Chris Martenson sent out a note today (it is proprietary, so I won’t quote it) expressing a lot of pessimism about the political situation and the financial situation and the backdrop of resource depletion. In addition, he sees social dysfunction in the US–quoting with approval some words of Matt Taibbi:

        ‘So all this freaking out and vicious invective-trading looks nuts from the outside: it looks like we’re making up reasons to hate and fear each other, summoning the language of violent civil unrest with a hedonistic zeal that only people who haven’t experienced the real thing could possibly enjoy.’

        So what some very smart people see is that the system is stretched like a rubber band and any little thing can snap it and finance fails (as it did in 2008, but from a now much worse initial condition) and global trade fails so that supply lines fail and our ability to physically produce an awful lot of stuff fails.

        Consequently, debating whether we run out of fossil fuels first due to depletion or run out of environment first due to unbearable climate change is likely to be irrelevant. The system will have failed before either happens.

        I wonder if I could buy the grass shack Albert Bates uses for his writing?

        Don Stewart
        PS I am reconsidering the drinking plan. Instead, I plan to get a gypsy to read some tea leaves and tell me exactly when the sky will fall. Then I will order lots of goodies on the credit card so that they get here before the crash. But then, the following week, the post office will stop delivering bills and I will never have to pay. Of course…all that stuff might make me a target for bandits?

  2. Don Stewart says:

    A few thoughts about what Sandy should teach us.

    (1) The notion that Our World is Finite is absolutely true. Wealth, once destroyed, is just gone. The Keynesian/Cornucopian notion that wealth is disposable because we can always just create some more is revealed to be quite hollow. Yet the illusion persists that ‘if its good for GDP, then it’s good for the USA’.
    (2) Turning seacoasts into suburbs has been a huge misallocation of resources. I don’t know if the Fiscal Cliff provides for the termination of federal flood insurance. If it does, it might be worth while. More broadly, going through a Fiscal Cliff experience might be the wake-up call we need to decide what we want to be when we grow up.
    (3) Sharon Astyk’s new book Making Home is hot off the press. I haven’t read it all as yet. But what I have scanned I have liked. For example, one of the people she talks to says ‘other people see limbs down from storm damage, I see firewood’.
    (4) Sharon includes some profiles of people she has met and admired. One is Michelle, in Chicago. ‘Few people have done as much to convince me that cities have a sustainable future as Michelle, who made a passionate case in their favor. Now I was seeing Chicago’s future through Michelle’s eyes. In her mid-fifties, Michelle looks a decade younger. She is an immigrant from South Africa…she showed me the gardens of her neighbors, immigrants from a dozen countries, and the community garden she and others are building in their area and how it fits into a larger picture of food security for the city…I saw the beauty of an urban homestead, from the solar panels on her roof to the beehives on her second-floor balcony…makes use of every inch of space’. Everyone should hang around with some immigrants–they see opportunity everywhere.
    (5) Sharon identifies the ability to work with others on common needs as one of the bottleneck skills we have to develop. While the TV may be showing fist-fights in New Jersey at the gas stations, what I am hearing from neighbors who have children in NY/NJ is overwhelmingly neighbors helping neighbors. Wall Street has not yet beaten the cooperative impulse out of everyone…as yet.
    (6) Climate change is having effects that we did not suspect a decade ago. Doubtless we have more surprises in store Sharon’s advise to stay home more and use less fossil fuels is right on target. As a bonus, maybe you can contribute to greatly reducing Rex Tillerson’s bonus.

    Don Stewart

    • Just a couple of comments. I think insurance of all kinds has contributed to a lot of bad decision making. Part of it is the give-away Federal Flood Program. But even “wind insurance’, which are written by private insurers (and state like Florida try to make as underpriced as possible) lead to a lot of bad decision making. Health insurance seems to lead people to believe that doctors can fix anything–there is no need for personal responsibility in preventing disease. Also, health insurance has helped support the huge share of GDP currently being spent on medical care in the US–with poorer health outcomes than in many other countries.

      Sharon often has a lot of good ideas. Maybe I can find a chance to look at her new book.

    • Danny Hosey says:

      Huppert’s theory has gone the way of Malthus, and anyone who doesn’t know that must be living under a rock. The one thing this crowd (and sadly, you too Don), is that you don’t know everything. We aren’t all staving now as Malthus predicted because smart people invented tractors, fertilizer, and hybrid seeds. We won’t run out of oil because smart people invented 4D geologic mapping and ways to dril horizontally 10,000 feet below the surface. And folk will still be swimming at the Jersey Shore 100 years from now, because by then, we’ll have a fix for whatever is needed to make sure of it. The only thing finite in this world is your imaginations!

  3. Leo Smith says:

    First of all a fervent hope that all those based on the US East Coast are still there, if in some cases unable to comment here presently.

    Every cloud, however has a silver lining, and when the dust – or the water – has settled on Sandy, it will be instructive to revisit the effects on a modern city, of widespread loss of power and loss of fuel.

    And indicate to those who feel that they, personally could do without both, just how dependent the majority (urban) population is dependent on the RELIABLE delivery of fuel and electricity in order to maintain their existence, let alone cope with any random extreme event.

    Common decency compels me to not press the point at this time, but I hope it will not be lost in the general confusion of the aftermath of a storm and a Presidential election.

    • a point well put Leo
      I’ve been banging on about this for a long time, particularly to the ‘downsizers’ who seem to live in the Alice in Wonderland world of naivety that offers the self assurance that our post-industrial wind down will be easy gentle and slow.We have to imagine the aftermath of hurricane Sandy with no outside backup to fix things.
      Cities hang on a thread of hydrocarbon energy input, without it they die. Sandy showed just how fast that death will be when the power goes off. Even without the damage, the shutoff was instantaneous, and millions were left scuttling around in the dark.
      This time the power is coming back on, but these incidents are set to hit again and again in the coming decades. Each hit burns up fuel resources to put right, eventually there will be nothing left to burn.

    • I was thinking that I should write a post on a similar subject–not sure that I will though.

      People don’t understand how dependent we are on reliable delivery of gasoline and electricity.

      One thing that struck me in visiting India is how people reorganize their lives to live with only intermittent electricity. Light sometimes comes from holes in the ceiling, or from panes of glass in the ceiling, or from windows. Cooking fuel comes from sources other than electricity (wood, dung, kerosene, or LPG). People tend not to have refrigerators, which require electricity all of the time, and people have learned to get along without. Businesses use hand-written logs, rather than (or in addition to) computerized systems that might go down. Schools and businesses use blackboards to display information that will change over time.

      One appliance people with intermittent electricity have is a television set, since this is something a person can turn on and off. Portable phones are also popular.

      • I think the difference between places like India and the developed cities of the west is that they have never had our sophisticated gizmos, so developed their culture along parallel. but different, lines.
        We are several generations removed from what I call the ‘naked flame’ society, so just would not know what to do without instant power.

        • I think you are right.

          Until I saw a hole in the ceiling to light a recycling plant, it would never have occurred to me that this would be an approach. I saw glass panels in the roof (unsophisticated sky lights) used in a school for lighting. A home I visited and several businesses just used windows (without glass) for light. In some cases, they had shutters to shut out rain, if needed.

          I understand the tea Indians drink consists of boiled milk, with tea and spices added. In a country with little pasteurization and refrigeration, this would be a reasonable way of seeing that the milk was sterilized.

          In some cases, workers just slept on the floor where they worked. This would certainly cut down on commuting time and energy costs.

          I understand younger children went to school in the morning, and older ones in the afternoon. A country would need only half as many school buildings with this arrangement. If teachers could be talked into working both shifts, there would only need to be half as many teachers as well.

          We probably would never think of these approaches.

          • You pretty much described London in a 18th/19th century
            workers often slept where they could, cellars, cupboards etc, commuting was impossible
            London had what were known as rookeries–tenements crammed with people– because it took too long to get to and from places of work
            only commuter trains changed all that (cheap energy again)

  4. Gail,
    your posts are always worth reading.
    Nonetheless I can not agree on your skepticism over Nat Gas as a far-reaching substitution fuel for car transportation. Therefore I provide some figures I guess you’ll mumble over.

    Italy’s cash-strapped plunging car market has seen again soar the slice of cars fueled either with methane or LPG in OCtober:
    -14,786 LPG-fueled cars were sold in October i.e. 190.43pc more YoY
    5,068 methane-fueled cars were sold i.e. 48.71pc more YoY
    -Jan-Oct 106,596 LPG cars were sold, +131.66pc YoY
    -Jan-Oct 45,063 Methane cars sold, +42,63 YoY

    You can compare this to 36,405 gasoline-fueled cars sold in October minus 29.11pc YoY, the Jan-Oct percentage drop is similar

    Source for all data is UNRAE, Italy’s trade association of car importers


    • I agree that that natural gas does work in vehicles. If I had to rank it next to battery operated cars, and hydrogen powered cars, I would definitely put natural gas first. But I am not convinced that it will do enough to make a difference with respect to our world-wide oil problem.

      We probably will also build some gas-to-liquid plants. These would have the advantage of using our current vehicles and refueling infrastructure.

  5. John Eagan says:

    Reblogged this on Brain Noise and commented:
    A few words on oil and the economy from Gail Tverberg

  6. Ikonoclast says:

    Apparently Mel Tisdale knows more than most of the University Physics and Engineering Departments of the world. Here is one basic description of the collapse.

    Mel’s frame of reference “refutation” is misapplied notwithstanding the fact that his car examples were valid and correct in terms of Newtonian mechanics. The horizontal and vertical frames of reference are not equateable in the pancake collapse scenario and more especially the “falling up” reference frame is not equateable with the “falling down” frame of reference. The reason is gravity or more particularly the acceleration caused by gravity. Misapplying the frame of reference in this way removes the accelarative force of gravity from the model (but not from reality of course).

    Of course, Mel won’t believe empirical facts. He would rather believe a crank conspiracy theory. A conspiracy did occur but it occured post 9/11 when the US and UK combined to falsify WMD evidence against Iraq. Now that was a real conspiracy.

    • Mel Tisdale says:

      I am more than happy to concede Ikonclast’s point regarding the particular science concerning frames of reference. It is true that I did not mention that even if we took Alpha Centauri as the focus of our frame of reference so that all velocities would be relative to that body, the earth would still be in the frame of reference and have a gravitational attraction on the WTC. I did not mention that the Moon and the Sun would also provide some gravitational influence either. Neither in my reference to cars colliding did I mention that for the damage of the collision to be the same, the closing speed of that collision also needs to be the same. In engineering it is called stating the blindingly obvious, or words to that effect depending on just how blindingly obvious it is. I only took the frame of reference route in order to point out that some events and their outcomes can be counterintuitive. Perhaps I should have used the fact that if all of Greenland’s ice were to suddenly melt, sea level around Greenland would drop by 100 meters as an example of counterintuitive outcomes, but that would not have involved bodies colliding.

      What is noticeable, however, is that Ikonclast completely fails to address the main thrust of my argument that the official line regarding the collapses of the north and south towers contravenes Newton’s third law of motion. He or she completely fails to address the fact that the official line on the south tower’s collapse contravenes the law of the conservation of angular moment and he or she also fails to address the fact that the presence of molten steel pouring from the south tower immediately prior to its collapse, and subsequently found solidified in the rubble, contravenes the second law of thermodynamics, unless some other source of energy was present. (An office fire, even a jet fuel assisted one, is physically incapable of melting iron/steel.)

      Ikonoclast replied to my initial comment on the matter by demanding that I have a Phd in physics with the implication that if I didn’t, then anything that I said on the matter was null and void. That, of course, is nonsense. However, if he won’t listen to me, then I must repeat my recommendation that he go to Architects and Engineers for 911 Truth website and watch the video ‘Experts Speak Out’. There he will find a whole body of opinion, from fully qualified people within the construction industry, including demolition experts, CEOs and lead architects and engineers, who, having looked at the 9/11 event, are convinced that the official line just does not add up and a new investigation is needed. These are not Alex Jones types!

      If Ikonclast will not listen to expert opinion, even though he demands it of others, then there is not a lot more that can be said on the WTC collapses. One must assume that he is in the category ‘Don’t confuse me with the facts, my mind is made up.’

      I will however challenge Ikonoclast, and any others who also believe that I “would rather believe a crank conspiracy theory” to counter the logic in the following argument:
      The National Transportation Safety Board (NTSB) has analysed the flight data recorder (FDR) from flight 77 (Pentagon aircraft) and it shows the aircraft to be accelerating and descending rapidly as it approached the Pentagon. It also shows it to be passing the Navy Annex with it on its starboard side. (See Pilots for 911 truth website.)

      The video( released by the FBI, I think) of flight 77 supposedly approaching the Pentagon shows it flying straight and level. (It is important to note that the video includes the impact and resulting explosion. I.e. it did not suddenly climb and fly over the building.)

      The fight path of whatever knocked over the lampposts (lamppoles AmE) shows that it had to have passed the Navy Annex with it on its port side or it would have missed them completely.

      It follows that because flight 77 was known from the FDR to be descending and the other aircraft in the video was flying straight and level that either two aircraft hit the Pentagon or flight 77 did not hit it. This point is reinforced by the evidence, again from the FDR and from the location of the lampposts, that were knocked over that two aircraft were involved and that they were on very different flight paths, though not necessarily in the actual impact on the Pentagon. This latter point is supported by the analysis carried out by Pilots for 911 Truth of the FDR Excel file provided by the NTSB which casts doubt on the altitude of flight 77. (There are grounds to believe it was too high to hit the Pentagon – again, this is on their website. The absense of any photographic evidence of the impact a 757 would create taken after the impact and before the roof collapse also corroborates such a view. A five tonne jet engine travelling at over 400 mph would leave more than a scratch on any wall it hit, including the walls of the Pentagon, and there were two of them.)

      Seeing as no other aircraft was hi-jacked that day and that no other aircraft within range of the Pentagon were reported missing or stolen, it has to follow that the only aircraft (of any type – cruise missile, drone, UAV) that could have been involved with incident in addition to flight 77 would have to have been a military one (or one owned by some other government department –black ops?).

      In conclusion, seeing as it would have been impossible for Osama bin Laden to have arranged for that aircraft to have flown into the Pentagon, the only other conclusion is that 9/11 was an inside job.

      In view of the number killed on 9/11 and the loss of freedoms that have resulted, perhaps Ikonclast might like to treat the debate with the seriousness it deserves. As for “crank” conspiracy theories, what could possibly be more “crank” than to believe that a bunch of terrorists, led by someone operating out of a cave in some dim and distant land, managed to breach the defences of the most heavily defended nation on the planet? I have no doubt that Osama bin Laden and his merry men were involved, but as only as patsies. I imagine most (and possibly all) of them did not know that they were going to die. There exists a group of people that masterminded what has come to be known simply as 911 and were in control on the day. They still walk free and will will evermore do so while the likes of Ikonoclast can be so easily duped. Crank conspiracy theory indeed!

    • Mel Tisdale says:

      Having replied specifically, I feel that Ikonoclast’s comment also demands a broader, shorter reply:

      It is wrong to accuse me of not believing empirical facts when it is I who have directed you, Ikonoclast, to video evidence of real life examples of building demolition that supports my case (in the form of Verinage demolition videos on Youtube). Just how empirical do you need to get? Of course, for you to actually comment on the empirical evidence itself is too much to hope for.

      As for the sarcastic remark “Mel Tisdale knows more than most of the University Physics and Engineering Departments of the world” all I can say is that so effective has been the spin put on conspiracy theories that no university department is going to willingly admit to seeing merit in any notion that contradicts the official line on 911 and also hope to retain a sizeable portion of its funding. And no individual within any of those same university departments is going to step out of line without taking a risk with their career. One has only to look at the case of Professor Steven E. Jones, of Brigham Young University. He published a paper on the nano-thermite (an explosive/incendiary material) found throughout the dust at the site of the WTC and suddenly he becomes Professor Emeritus, without the option. At least they had the decency to give him the Emeritus part.

      Come on Ikonoclast, you can clearly see through the fossil fuel industry’s spin on climate change. Why not on 911?

  7. Skimming through the reactions to the concept of ‘limited fuel supply. It seems that most commenters have missed the point.
    Think of what we have used hydrocarbon energy for, down the millennia. (Forget our current problems for a moment). We use it to stave off the forces of chaos. Our use of fire scared away big animals that would have reduced our bodies to chaos. (by eating us). Fire gave us sharp tools to chop down trees (hydrocarbons) with which to build shelters and clear spaces in which to grow food (energy). They became ever more sophisticated dwellings but the ultimate purpose remained the same—to keep out the chaos of weather and unpleasant people inclined to do us harm.
    We were using energy to hold off chaos.
    Our buildings and infrastructure may have become more sophisticated, but their function remains the same, we must burn fuel to keep the rain out and starvation at bay.
    Any ‘theories’ about the economics of oil depletion has to take that into account. Post hurricane Sandy, it’s going to take $50bn to fix things. That means $50bn in energy-spending. You can’t rebuild without colossal amounts of gasoline and its attendant machinery.
    I’ve even seen really crackpot ideas that it will boost the construction jobs market….so why not move people out, burn down entire neighborhoods and start over? But I digress.
    This time the nation can afford it. But next time? Or the time after that? We are faced with the economics of diminishing oil supply/rising cost, while nature has no such constraints. Her powers are literally unlimited while we try to find more and more fuel to fight the results of chaos. As the sea levels rise and the storms get stronger it is inevitable that whatever nature knocks down is going to stay down.

    • Chris Harries says:

      Very good, Medieval. I have a theory that the abolition of slavery actually had more to do with the fact that fossil fuels became available to do work than any altruistic motive of wishing our fellow human beings equality. The altruistic motive was there too, of course, but I would argue that slavery would be still be flourishing in the near absence of hydrocarbon energy. In places in the world where energy is unaffordable or scarce slavery and child labour and sweat shops are the order of the day. This may become a really big problem everywhere after the oil crash.

      • I reached that conclusion too, the first commercial oilwells came on stream just as slavery was ending, which was also the period when the steam engine was beginning to make its power available across the developed world, particularly the USA.
        In areas of the world when machines are less available, or not at all, as you say slavery never really went away.
        After the oil crash, people without food must inevitably find themselves working for those with food in order to stay alive. This will be the reality of the ‘downsizing’ nonsense.

        • Don Stewart says:

          I think you guys are missing the choice we face. I will refer to Joe Romm’s recent book Language Intelligence and Peter Bane’s book Garden Farming for Town and Country.

          First to Romm’s story about Lincoln. Lincoln ran for the Senate representing Illinois on the basis of ending slavery because it was immoral. He lost. Then he reformulated his arguments against slavery and presented them for the first time a few years later in a speech at the Cooper Union in NYC. He showed in a meticulous piece of research that the founding fathers never intended that the federal government NOT be able to control the spread of slavery to the West. Why was this important? Because the Supreme Court, then as now, was in thrall to the moneyed interests. The Southern Aristocracy believed that its survival was dependent on expansion to the West (the staple crops grown on plantations rapidly exhausted the soil). The Supreme Court had held, in the Dred Scott case, that slaves were not humans…just property. And did not the Constitution guarantee the rights of property to be taken with one when one moved West?

          From the standpoint of the free small farmer, competition from slave based plantations was a threat to survival. The free small farmers wanted the West to be reserved for free small farmers. When Lincoln made this connection at Cooper Union, he won the Presidency. And in 1863, freed of the influence of the Southern Aristocracy, Congress passed the Homestead Act making free land available to small farmers in the West.

          Moving to the 21st century,. Peter Bane’s book is a detailed description of how one can become ‘self reliant’ with a small acreage in town and in country. A similar book just published is Bioshelter Market Garden by Darrell Frey. Bane shows that a family can rely mostly upon themselves for food, fuel, water, and shelter. I would add to that list that a family can become essentially free of chronic disease if they follow the prescription in Super Immunity by Joel Fuhrman, MD. So it’s not about becoming a ‘self-sufficient island’, its about not being reliant on corporations or a Landed Aristocracy for one’s basic needs. Reliance on family and neighbors is built into our genes and is essential to survival.

          The US CAN go the route of wage serfdom and a Landed Aristocracy–but it doesn’t need to. We DO need another Lincoln to get people to connect the dots.

          Don Stewart

          • the driving forces behind slavery have always been the opportunity to turn energy (from human muscle output) into wealth (by selling the output of that energy as sugar, tobacco, cotton and so on).
            The Afro-American slave system ran on a triangle. British industry put energy into metal working, basically weapons; these were then sold to Africans who used them to capture and sell fellow Africans who were then shipped to America, using muscle energy to produce stuff to ship back to Britain. That made people extremely rich and any threat to end slavery was therefore seen as a threat to prosperity. Nevertheless the Brits stopped it in 1837, but trade with slave using nations carried on.
            Fast forward to today, and although we have machines to do our work for us, cheap human muscle is still needed to perform basic tasks. Which is why people get paid the absolute minimum and are unable to climb out of poverty. It is a form of slavery with wages that we are all locked into.
            As for the ‘self reliance’ bit, it is almost too ludicrous for any kind of response. First, the average adult would starve to death before he acquired sufficient knowledge to keep himself alive by domestic agriculture. Second, Finding a ‘small acreage’ in towns is laughable (no tower farms please!!!!) Third: much of our good health is derived from a safe environment, Clean water, sewage systems etc. In a post energy environment, these will be the first to stop. (check high rise apartments after hurricane Sandy if you don’t get the picture, imagine that after the first month without power). If you get a raging infection from a scratch from a dirty garden tool, and no antibiotics are available—let me know how you get on with ‘super immunity’.
            As energy goes into depletion, it is inevitable that those wishing to eat will have to work for food, by any other name that is serfdom.

            • Don Stewart says:

              Dear Medieval Future
              I have no doubt that the stubborn and the delusional will starve to death. Likewise, those who fail to heed the Super Immunity message will die of infectious disease long before they die of chronic disease. Both will be personal tragedies for those involved, and both are avoidable.

              In terms of humanity, those who take care now have a reasonable chance of making it into whatever comes next and living a pretty good life.

              Don Stewart

          • I’d still like to know where ‘small acreage in towns’ is likely to come from.
            and you cannot have ‘super immunity’
            if you were to drink the water of say, a medieval Londoner, you would probably be dead in a week. whereas he would have immunity to the pathogens in it passed down through generations of survival of his forebears. Not that that would be complete of course..
            When cholera arrived in UK in the 1830s, it wiped out thousands, survival was down to chance, not immunity. Same with the black death in 1348, chance again.
            Yet with the flu pandemic of 1917, some immunity was given to people over 30 who had been exposed to a previous epidemic in the 1880s. thats why the flu killed younger people.
            Immunity is not a conscious decision.
            I have made a conscious decision not to have accident in my car, unfortunately I am not immune to other idiots on the road. I have no doubt they think the same.
            As to the future, I have taken such precautions as are feasible, but I have little doubt of their ultimate futility.

            • Don Stewart says:

              Dear Medieval Future
              You will have to read Peter Bane’s book or look for his YouTube appearances to find out where he found his small acreage in town.

              And as for the power of the immune system when it is properly fed, you will have to read Dr. Fuhrman’s book. I will only note that if you look in Wikipedia for glutathione s transferase, you might get a clue.
              Don Stewart

      • I would agree with you that abolition of slavery had a lot to do with availability of fossil fuels. As little as we like to think about it, there would seem to be a real possibility of very long working hours coming back, and even some things we would today call slavery.

    • Yes its rather interesting to see people just think of this hurricane as just “another case of bad weather”, while its rather clear that our civilisation has not been formed to these “special cases” as being the norm. There are currently many settlements close to the sea. That wouldn’t be the case if both tsunamis and hurricanes would rip these to shreds every 10 years or so. It takes at least a couple hundred years between these events for people to “forget” – especially with the regard to natural disasters like earthquakes and their tsunamis.

      But the human created disasters from the heating of the planet from CO2 is something we have no “short term memory” about – since they are only surfacing now. Mother nature will indeed remind us that we are just trying to shelter ourselves from the chaos forces, and I believe we as a species has done quite a bit to anger it. Many settlements which normally only got wiped out from natural disasters out of our control will be ripped to pieces from natural disasters that is under our control to some regard. Until people in the public understands that their house was torn down by something that could have been under their control, noone is going to change any of their behaviour or take action into changing our ways. This continues as long as the majority of people still don’t believe that CO2 is a greenhouse gas, and neither believe that our contribution of CO2 to the atmosphere (and sea) is changing weather patterns and the state of the biosphere possibly to unrecoverable states. I mean, who can look at CO2 level measurements, seeing its 100 ppm higher than it has been for hundred of thousands of years (as long back as we are able to measure previous concentration), and not think its affecting our biosphere? Its clear that the majority of people really don’t understand the consequences this have on the planet.

      Most people I show charts of CO2 levels generally say that I am a doomer and that I have watched too much “an inconvenient truth” – and besides wasnt that dude debunked after all? Its unfortunate that the primary message is again lost to people – that the scientific measurements of the state of the planet really should be brought to our attention all over the planet. Really hoping someone is able to do this within my lifetime, although it really should happen the next 5 years or so for it to have any effect.

    • I agree. At some point we are not going to be able to pick up what nature knocks down. We have a number of institutions that are supposed to help in this regard (government, insurance companies, utility companies, and churches and other charitable relief agencies), but at some point they become overwhelmed as well. People end up having to move to less damaged areas, or “make do” with a lower level of housing. In this country we use FEMA trailers, but in many countries, homes are built very simply out of local biomass or mud. We may have to move that way as well.

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  9. Pingback: An Economic Theory of Limited Oil Supply | Doomstead Diner

  10. Bill Simpson says:

    The Telegraph had an article a few days ago about the local councils in the UK starting to shut off or dim street lights to cut carbon emissions and save money.
    I wonder when the airline industry will collapse? I’ll guess, sometime during the first half of the next decade.
    Remember that nearly all cars we drive today are VASTLY overpowered for the purpose of moving our body between two places. After we peak out, you will see a whole class of tiny little electric, and natural gas powered personal transport vehicles become very popular. They will be made from aluminum, or plastic, or maybe even wood pulp glued together with waterproof resin. Trust me, walking will be a last resort. Tires might be a problem. Can they be made without oil? Probably.
    You are right about trade. Everything that can be, will be made close to large population centers. I wonder if railroads will use towed LNG cars to power their locomotives, or go with overhead electric lines. Overhead would cost a fortune to construct, and a lot of existing routes would probably be abandoned.
    I wonder if coal powered ships will return? They work. Or will ocean trade be so small that expensive oil will still be used to transport high value items? Most trains and ships ran on coal until the 1930’s. Since I’m a mile from the Norfolk Southern track into New Orleans, I doubt the smoke will be too bad. Steam locomotives used to run at nearly 90 miles an hour in places.
    The 18 wheelers left will be running on LNG until the roads can no longer be maintained.
    It will be interesting to see when the rationing will start and how they will implement it. Farming will get first cut. Rubber and chemicals will be up there. You can’t do much without tires. You need oil to make roofing shingles too.

    • Chris Harries says:

      Good reflections, Bill, but I don’t agree with: “Trust me, walking will be a last resort.”

      With our lack of fitness and access to cheap fuel a significant part of motoring is short trips of less than 5 kilometres. Many people jump into their vehicles to travel just 400 metres. This component of travel will change dramatically.

      For longer trips we are already seeing statistics that people are choosing to travel less. In both the USA and Britain statistics show that, per capita, kilometres driven per year is decreasing. Some of this trend is no doubt caused by planetary concern though I suspect the rising cost of fuel is the major factor. But this is just early days.

      That said, our marriage with the motor car is a very strong one and we will do almost anything than to foresake that luxury, we will just travel much less and move heaven and earth to maintain our motoring independence for when we really think we need it.

    • Chris Harries says:

      Another reflection on our transport future, US energy analyst Robert Hirsch gave food for thought recently with his calculation that there is by now 100 trillion dollars (that’s $100,000,000,000,000) worth of infrastructure installed on the planet that runs on oil… and the number of decades it would take to change that infrastructure investment, just in available dollar terms, even with the best will in the world.

      Time is an essential ingredient and we don’t have a lot of flexibility there.

      Financial liquidity to make that conversion is a bigger question mark. As Gail has been surmising in these columns, the global economy is not cashed up enough to make any such conversion… though it won’t stop us from desperately trying to do so.

    • Roads are one part of the system that I see as a problem, even fairly early on. In cold parts of the world, they need to be repaired pretty much every year, with or without traffic. I am afraid they will ultimately be the weak link in keeping automotive/truck travel going.

      It seems to me that in order to make small electric and natural gas personal transport vehicles, one would need supply chains from around the world. It would be necessary to make new metals, and to make batteries. I am not sure how much of this could be done. Animal transport would be much easier–but would require sufficient space for needed food production.

      Perhaps coal operated devices could be made with shorter supply chains–I am not certain. A train of the type we had one hundred years ago would likely be easier to maintain than one with high-tech doors, windows, and other parts. If people could be persuaded not to include all of the “bells and whistles”, it seems like it would be easier to be able to keep making devices which could be repaired for quite some time.

      • Chris Harries says:

        Gail, some 35 years ago Ivan Illich (now deceased) wrote a treatise on transport including his notion that small, slow three-wheeled vehicles were the best transport solution for poor nations that had little infrastructure. Consider that it is nearly impossible to make a four legged table sit steady on a surface that is not flat whereas a three legged table will sit steady on any undulating surface and then we can understand the wisdom of his thought process.

        The long and the short of it is that Illich had the foresight to realize that imposing fast transport requiring sealed roads on poor nations would not serve them well, and would cost more money than they could ever hope to have or ever up keep.

        Well, I think he was correct. The vehicles of the future that can move us and freight around with minimal energy will be those that travel at little more than walking speed and will work effectively on very basic ‘roads’ that require low energy and effort to keep serviceable.

        That will be the end point of all our striving, no matter how much we may dream of slick gas or electric powered replacements for our future mobility.

        • You have a good point there. Outside of Mumbai, the roads of India are said to be terrible, and the few roads I saw weren’t very good. It is going to be difficult for any country to keep up its roads, as asphalt and cement become less available for that purpose.

          I hadn’t thought about three wheeled vehicles being better on non-flat roads. Not only were many of the cars I saw three-wheeled, but there were a lot of small three-wheeled trucks as well.

          I was under the impression that to prevent sinking into muddy roads, large wheels that would keep the car far off the ground would be better. THis was the type used on the early Model A Ford. But perhaps if muddiness in not generally a problem, the smaller wheels of an auto-rickshow would work better. This is a photo of an auto-rckshaw that I took, outside of Mumbai. As the photo shows, they weren’t necessarily in A-1 condition.

          Photo of auto-rickshaw in city near Mumbai.

      • Mel Tisdale says:

        How very true, Gail. I currently live in Poland, which can be quite cold in winter, and that’s an understatement. The local government has teams of road repairers, each equipped with a tank of hot tarmac on the back of a lorry, which they use to repair holes in the roads as soon as they appear (a stitch in time … etc.), which happens all too frequently. The result is a patchwork of repairs to repairs of repairs of repairs – you get the picture. You get used to it, but even that low level technology will eventually cease as society slowly heads south.

        Your point on mechanical complexity is also very valid. In the U.K. there is something called the A.A., which members can summon for assistance in the event of a breakdown. They will even tow your car to a garage for repairs and take you and your passengers home. In the old days, if you suffered a mechanical breakdown and were reasonably competent with your hands, you could usually effect a roadside repair and get home, so most of the time membership of the A.A. was not essential. Today, the modern car is a mystery, even to mechanics. If the engine stops working, all they do is lift the bonnet, plug in some diagnostic apparatus and then swap some black box or other for a new one, depending on the diagnosis. As society slowly crumbles and mechanics will be in short supply, and their diagnostic machines in even shorter supply, it will be a risk to travel further than walking distance from home in a vehichle that one could not attempt to repair, especially in winter in a cold climate, even in the knowledge that modern cars are orders of magnitude more reliable than their older bretheren, they are not completely so, Sod’s Law is bound to make it fail at the most inconvenient time. It is not simply a matter of economics that makes me drive an old car that I can hopefully do something with if it breaks down. (I live in the sticks and Poland does not have an A.A. type of repair service!)

        • Thanks for your insights on road repair. I took this photo of Indians working on the road. Hopefully, there would be a truck coming by later to put some more hot tarmac on. Without it, it doesn’t seem like those doing repairs would get very far.

          Men repairing road in India

  11. When contemplating our future problems with energy availability, we should perhaps consider the words of those who advise our leaders, and on whose advice future energy policies are thought out. Peter Huber, the author of ‘Hard green, saving the environment from the environmentalists’, holds a doctorate in mechanical engineering from MIT, and was associate professor there for six years. He is currently a senior fellow at the Manhattan Institute. In an article entitled The energy spiral (2002) he claims that the more energy we use, the more we will be able to produce. He offers the theory that millions of years of evolutionary biology demonstrate that nature finds new sources of energy to sustain its processes (of which we are a part obviously). Huber’s theory is that humanity functions in the same way because over millennia we have also always adapted our survival strategies to use new energy sources in ever increasing amounts. Huber calls this a ‘chain reaction process’, and worse, a ‘perpetual motion machine’ – that phrase should set alarm bells ringing. He states that we can never run out of energy, because the ‘more we capture and burn, the better we get at capturing still more’. (You read that right folks–a perpetual motion machine–from an MIT PhD). It reads like the sort of thing the loonytooners of the US Republican party would come up with, but Huber is a man of undoubted intellect.
    In other words, we can not only have our cake and eat it, but we will have more cake than when we started. This is the economics of a flat earth, where a species (ourselves that is) can go on absorbing more and more available energy into infinity. Huber is not alone; many learned thinkers of his intellectual stature eagerly offer their conclusions to those who base world economics and delusions of growth on the physics of ‘perpetual motion machines’.
    This sort of nonsense influences political thinking, and at the very least gives an excuse for inertia.

    • Bruce Carman says:

      MedievalFuture, in one sense, Huber is relating the tendency for the process of evolution to transfer energy from low- to high-entropy flows at increasing density and complexity towards the top of a hierarchy of flows, if you will.

      Regarding never “running out of energy”, of course, this is true in that the amount of energy in the universe (multi-verse) is well beyond anything we wee human apes will ever be capable of consuming (give us time, however); but the issue is the form, cost, rate of transfer of low-entropy fossil fuel (ancient solar), scale of net energy per capita, and at what sustainable exergetic equilibrium on our finite planet. It is currently a mathematical and biophysical/thermodynamic impossibility for even a small plurality of the 7 billion human apes on the planet to consume net fossil fuel energy per capita at anywhere remotely close to that of the West.

      When faced with this fact, it is no wonder why the vast majority of economists, CEOs, Wall Streeters, politicians, and mass-media influentials can’t entertain such a notion, at least not publicly.

      Coming clean about the implications of Peak Oil and peak oil exports, population overshoot, and falling net energy and real GDP per capita is akin to the POTUS going on network TV worldwide and proclaiming to the world that extraterrestrials have been visiting for millennia, and they have no plans to save us from ourselves; that Santa Claus, the Tooth Fairy, the Easter Bunny, and Judeo-Christian-Muslim tribal desert sky gods do not exist; Jesus done left Chicago, but he ain’t bound for New Orleans; that 9/11 was an inside job; and Elvis and Jim Morrison are still alive.

      • Mel Tisdale says:

        If 9/11 was not an inside job, Sir Isaac Newton got his third law of motion wrong. Have look at Verinage demolition on Youtube, which relies on Newton’s third law of motion for it to work, and compare it floor by floor with the collapse of the North tower. Unless a different physics is going on in the two situations, the North tower collapse should have run out of steam before it got to about the 80th floor. (The official line for the South tower’s collapse is even more problematic.) That can only mean that some other source of energy demolished the remaining 80 odd floors. (And boy did it demolish them; sending multi-ton structural steel members out sideways at over 60 odd mph for over 100 meters, blasting human bodies into fragments and depositing them on the roofs of nearby buildings and apparently causing debris to (gravitationally!) explode in mid-air and alter direction of flight by ‘equal and opposite reaction’ to the explosive ‘action’, again thanks to good old Newton and other debris to visibly descend at a significantly higher rate than that of gravity – albeit in a supposedly gravity driven collapse!))

        I don’t wish to take the discussion off topic, but it is a policy of mine to highlight the questions surrounding 9/11 whenever and wherever they crop up. It was an evil act and the truth has to come out eventually. The sooner the better is my view. As for the other items on your list, I think you are spot on!

        Of course, if you believe that the economics of limited oil supply is going to lead to unrest, and there is no reason why those that perpetrated the event should not have has such a view long before 9/11, then it is not off topic at all. In fact it can be seen as a means to an end by creating legal instruments (e.g. Patriot Act) and organisational bodies (e.g. Department of Homeland Security) in preparation for that unrest. As for FEMA camps, well, they are only for cheap holidays (for the 99%?) and couldn’t possibly be part of the same plan, could they?

        • Ikonoclast says:

          “the North tower collapse should have run out of steam before it got to about the 80th floor”.

          Where are your physical calculations for this assertion? Do you have a PhD or at least a BSc (Hons) in physics? Have you done the complex calculations yourself or have you run the collapse in a structural collapse simulator of some kind on a (very) large computer?

          How can a pancake collapse which has already commenced and has already collapsed several floors “run out of steam” as each collapsed floor adds its weight and gathering momentum and kintetic energy to the impact on the next floor below? Is this not an accelerating and accumlating process with increasing impact and stress forces inflicted on each subsequent floor as the collapse progresses? You are aware that falling masses on earth continually accelerate except for the effects of air resistance or other resisting forces? Notwithstanding subsequent floors being resisting forces, you are aware that if a floor cannot withstand the six floors above collapsing on it then the next floor, if of comparable strength, will not be able to withstand seven floors collapsing on it?

          You are aware that as brittle structural members break they can break explosively and initially accelerate some fragments faster than already falling debris? You are aware of the enormous kinetic energy that would have been accumulated by the time the major debris fall hit gound level and that this energy will dissipate in both deforming the foundations and in explosive shattering and ricochets propelling debris in all possible clear directions?

          My questions are rhetorical. Clearly, you are not aware of these facts.

          • Mel Tisdale says:

            So many questions, Ikonoclast, yet no common sense in any of them. Go and look at Verinage demolition on Youtube and see the demolition process that you theorise about in actual, real life operation and then simply apply it to the North tower collapse. You will see exactly how the North tower must have run out of steam by the time it reached the 80th floor. To lend some detail to this, look on Youtube to Jonathan H Cole’s experiment s.

            No, I have not done the actual calculations on the collapse, and quite obviously, neither have you. However, I don’t need to. After 26 years in the motor industry as an engineer, many of which in vehicle research, I do know something about what happens when two bodies collide without needing to get my calculator out.(it is rather important with passenger carrying vehicles, believe it or not). It is called nous, Ikonclast, and it comes with experience. When two bodies collide, the action of the one hitting the other is met by an equal and opposite reaction, or Newton is wrong. I can tell you from crash test experience that it matters not one jot whether they are both doing the same speed in opposite directions, one is stationary and one is moving or some combination of the two cases. Most importantly, it matter not which one you base your frame on, if both vehicles are identical, the damage will be identical, or, again, Newton is wrong, period.

            So, taking a frame of reference focused on the 12 intact floors of the North tower above the impact zone, we can imagine the lower 93 intact floors below the impact zone to be moving upwards into them. (It would be just as valid to take Alpha Centauri as the focus for our frame of reference and then we would have two bodies colliding at a closing speed of a few tens of mph while each doing many thousands of miles per hour in damn nearly the same direction as they travel around the galaxy relative to our neighbouring star. That is basic science and I do not need a PhD in physics to know that, even a basic secondary science education is good enough.) Given that frame of reference, you seem to believe that the 12 floors will remain intact all the while the 93 floors crash into them, demolishing themselves in the process. Then somehow, the upper 12 floors demolish themselves, too! That is plain daft and I don’t need a PhD in psychiatry either to know so.

            Being expected to believe the official line on the collapse of the North tower is the same as being expected to believe that an 8 person people carrier can crash into an inter-continental coach and fully demolish it. It is small wonder that so many qualified architects and engineers got together to register their disbelief of the official line on 911. The South tower’s collapse is even more problematic. Within a couple of seconds of the onset of collapse the intact 25 or so floor above the impact zone had rotated through 22 degrees in the vertical plane. There is no known mechanism that could have halted that rotation that relies on gravity alone. If you take the trouble to watch a video of it, you will see that it just disintegrates as it falls, in contravention of the law of the conservation of angular momentum. If you look closely at videos of the collapse (the David Chandler videos ‘South tower smoking guns’ are best for this purpose) you will see debris exploding. For something to explode, there has to be an explosive and believe it or not I don’t need a PhD in pyrotechnics to work that out either.

            Not only does the official line contradict Newton’s third law of motion and the law of conservation of angular momentum, the presence of molten iron pouring out of the South tower just before collapse contravenes the Second Law of Thermodynamics, seeing as office fires, even one fuelled by jet fuel cannot get even close to the melting point of iron/steel. Suspicion is strengthened by the fact that the fires took three months to extinguish themselves and all through the post event site demolition, the crews kept extracting red hot and dripping molten steel members from the rubble. And I haven’t mentioned the nano-thermite and their associated microspheres of iron that prove initiation.

            Open your eyes Ikonclast, you have been conned. Go and look at Architects and engineers for 911 truth web site before you reply to this and get the opinion of the experts. See what they have to say, and don’t miss the discussion on WTC7, which many see as the smoking gun. After you have done that, go and look at Pilots for 911 Truth website. See how a very experienced captain with actual hours on the aircraft used on 911 says about the credibility of the official line on the matter. (In particular, look at the flight 77 video that shows the NTSB’s FDR analysis. It shows that it could not possibly have knocked over the lamppoles/lampposts on its way into the Pentagon (so what did?) Also, look at the photos of the Pentagon’s facade taken after the impact but before the collapse. Ask yourself just how two 5 tonne compact jet engines managed to hit the outer wall at about 400 mph and not leave a mark! Ask how a massive 757 managed to squeeze into a 16 ft square hole. Ask why survivors, many with frontline experience, smelled cordite just after the impact. Ask why Cheney did nothing to evacuate the building. Ask why there were no intercepts when the most secure airspace on the face of the planet was breached. Ask why, while in that airspace, flight 77 did a massive descending turn through 330 degrees, leaving it vulnerable to intercept for an unnecessary further 2 minutes with military airfields only a few miles away, seemingly to hit the only spot in the Pentagon that had just been reinforced and was still only partially occupied. Ask yourself why that self same spot had the accounts that would have revealed what happened to a 2 trillion dollar hole in the defence budget and of course destroyed.

            Being retired now, I have had the time to explore 911 in a great deal of depth and am fully convinced that a new investigation is needed. This time one that is completely independent of government and one that the co-chairs are satisfied was not set up to fail as the co-chairs of the old 911 Commission believe there’s was. And why would anyone want it to fail? One reason just might be that death row would await the perpetrators if the investigation concluded that it was an inside job.

            There are too many questions that still need to be answered, and too many knowledgeable people asking them, to let the matter drop. British people were killed on 911 and I consider it an obligation to keep the matter prominent in the public’s mind for their sake. It would be nice to think that people from other nationalities that had victims on 911 felt the same and did not simply swallow the official storey, hook, line and sinker.

          • Bruce Carman says:

            The incident at Concord was said to have been the “shot heard ’round the world” that was just cause for the beginning of the American Revolutionary War; it wasn’t.

            The Mexican War was said to have been precipitated by the invasion by Mexico; it didn’t happen.

            The beginning of the Spanish-American War and Philippine-American War was said to have been the result of Spain blowing of the USS Maine; not likely.

            FDR knew about the plans by the Japanese to attack Pearl Harbor, but he allowed it to happen to justify US entrance into WW II to defend Great Britain after Wall St. and the City of London assisted Hitler to come to power, including grandpa Bush.

            9/11? Please. US, British, Israeli, and German intelligence created Saddam Hussein, the Mujahideen/Taliban/Al Qaeda, and infiltrated and co-opted the Muslim Brotherhood decades ago. Anglo-American empire needed a Pearl Harbor-like event to persuade the American public to support the larger strategic plan to invade Central Asia and Iraq in order to establish a military presence as a forward front to contain Iran, China, and Russia and to secure the oil supplies and shipping lanes of the Middle East. The Pentagon planners, State Dept., CIA, Wall St., and US, British, and Dutch oil and petrochemical companies have anticipated Peak Oil and the long-term structural economic and geopolitical implications for decades.

            The American public would not have supported an imperial invasion and never-ending war for oil without 9/11, which was just collateral damage as part of realpolitik and never-ending war for Anglo-American oil empire.

            The US is the successor to British Empire and is carrying on with where the British left off during the Afghan Wars of the Victorian era, the Boer Wars to WW I, and post-WW I occupation of Palestine following the decline of the Ottoman Empire. The never-ending war plan will extend to Iran, containment of nuclear Pakistan when it becomes a failed state, parts of Africa to secure oil supplies, and eventually war with China, or at a minimum blockades and embargoes of Chinese ships and interests in Africa and the western hemisphere.

            What will be required to justify war with Iran and China? Time will tell.

          • Mel Tisdale says:

            Having re-read my reply to Ikonclast, I realise that I perhaps should have provided some specific response to his pancake collapse theory. Initially I simply dismissed it because it has already been dismissed by the experts and also by its proposer. Facts which Ikonclast is apparently unaware and which shows a marked lack of investigation on his or her part. However, for the sake of completeness let us, too, dismiss it here.

            If the North tower had collapsed in pancake fashion, then careful analysis of the video evidence would show a jolt of reduced downward acceleration each time the falling stack of pancakes hit the next floor, sorry, pancake. The video evidence shows a smooth fall all the way down (even past the turtle and the elephants). Let us ignore that for the moment and accept that pancaking was taking place despite the evidence. In that case we would have the lowest floor of the falling stack not hitting each subsequent lower floor with sufficient strength to demolish it because had it done so, it too would have been demolished in the process according to Newton’s third law of motion. There is no way that the falling 12 floors could demolish any more than 12 of the lower floors, that is again thanks to good old Newton. So, assuming that the floors remain intact, where was the stack of 110 floors at ground level on 9/12?

            The pancake theory nonsense does not stop there. The vertical strength of the twin towers resided in small part to the exterior tube of structural members. The main strength, however, was provided by the central columns which contained the service shafts and passenger lifts. These columns were progressively stronger the nearer to ground level they were due to the fact that they had to bear more load above them with each extra floor added. They also had to be strong enough to resist side loads due to hurricanes (Sandy was not the first one to hit NY) and also resist impact from a fully laden Boeing 707, a four engine air craft that was the largest one at the time they were designed and about the same size as the 767s that did hit them on 9/11. In short, the interlinked central columns were massive in the twin towers were massive and immensely strong and can be regarded as one integrated unit in each tower

            So, we have a massive inner support column and an outer tube with the floors connected to them by the use of pins. Ignoring the nonsense that these pin connections are supposed to have failed, despite being designed to be stronger than the members to which they were connected and also that they had to have failed in unison, we will allow the pancake collapse to continue on its merry way, ignorant of the fact it is destroying a scientific law that has stood the test of over 300 years. What do we have left? A pile of pancaked floors 110 floors high AND one massive central column standing forlornly in the midst of the death and destruction, a monument to the evilness of man. But, as anyone reading this, other than perhaps Ikonoclast, will know, there was no central support column left standing, no pile of pancakes of any description and the evilness of man in search of a monument.

            More importantly, careful analysis of the video evidence of the TV mast on the roof of the North tower, located directly above the central column, shows it falling about three meters immediately prior to the explosive onset of the main collapse, entirely in line with controlled demolition practice. Continued careful analysis of the collapse shows the upper 12 floors disintegrating before they hit the lower 93 intact floors to the point where there is nothing left to actually fall onto those lower floors. And continuing with our careful examination of the video evidence we see waves of explosive ejections preceding the main collapse front as it descends the building, together with what controlled demolition experts describe as squibs, which are mistimed detonations.

            Ikonoclast, you are obviously free to believe exactly what you wish to believe. For my part, I will do what I have always done, namely listen to the experts, especially those whose pay and indeed their very career is not dependent on following a particular government line. For a fine example of what I am referring to, follow the video evidence of NIST’s behaviour regarding the collapse of WTC7, the building that was not hit by any aircraft – though one of those grounded by the stop order issued by the FAA on 9/11had box cutter knives stuffed down the seats, so one can perhaps infer that it was planned to be attacked. There you see two senior engineers desperately trying to defend the indefensible. Today, the situation with WTC7 is that NIST say it collapsed in a unique fashion, yet refuse to release the computer modelling that tells them this on the grounds of national safety, even though the architects are demanding it so that it can inform their designs! Why do I listen to the experts? Because in engineering you can end up on a manslaughter charge if you don’t, especially if, like me, your work involves components whose failure could cause loss of life, which my field of passenger carrying motor vehicles, a.k.a. ‘cars’, tended to be capable of.

            9/11 was a very clever scheme devised by devious, perhaps even evil, minds. It failed in its detail execution as a massive amount of evidence shows to those open-minded enough to see it. Osama and his merry men were patsies who must have been very disappointed when they were not each greeted in the afterlife by 70 virgins. I don’t know about the rest of you, but I prefer women with experience, but perhaps that is an ‘age’ thing.

  12. Don Stewart says:

    In your role as an actuary, do you have any timely thoughts about Peak Disaster Insurance?

    Thanks…Don Stewart

    • There are really three kinds of disaster insurance:
      1. Insurance sold by companies.
      2. Insurance sold by governments.
      3. Insurance given away “free” by governments, in the way of programs after a disaster hits.

      Insurance sold by companies has not done too badly so far. It will run into problems if there are securities on insurance company balance sheets that default, but otherwise, I think it is pretty much OK.

      The ones that are hitting problems worst are the give-away programs by governments, and the programs that governments supposedly charge for (like flood insurance), that are still a form of give-aways, because they are set up to please tax payers, and tend to be inadequately funded. These seem like the ones that have to get cut way back or end, just because the government can’t keep printing money to pay for everything that comes along. (Or can it??)

      At some point, we reach the point where it is not possible to fund all of the breaks in the system because of natural disasters. For example, suppose that it becomes impossible to put major parts of the New York subway system back into service, without billions of dollars of payments. I am willing to bet that there is virtually no private insurance coverage for such a loss. At some point, the City of New York, the State of New York, and the Federal Government are going to have to say, “Sorry, we can’t fix this right now, or maybe ever.”

      I expect that that situation will come after some natural disaster. It may not be as soon as Hurricane Sandy, but it could very well be something similar, especially with the fiscal cliff around the corner.

  13. to paraphrase the book title, a good way ” to influence people and lose friends” is to bring up the subject of overpopulation, climate change, energy depletion and food shortage. A casual mention that you’ve got leprosy couldn’t clear the room faster.
    And that is a major part of our problem.
    Folks commenting on here and other similar sites are aware of what’s happening, but the majority are still in a state of denial. In a chat only the other day, with an intelligent man, the subject of energy (in the context of the way we live) came up. His reaction? “Do you really think energy is that important?” He runs a housing division of a municipal corporation, with an operating budget of £15m. That is typical.
    The universal answer to what we face seems to be “They” will come up with something. That is the most terrifying comment of all.

    • Hehe, I get rather blank stares when I show people e.g. charts about peak oil and depletion. Its like I made up the charts or something. Obviously for the majority of people, the food magically appears in the shops, petrol is conjured up in the petrol pump, electricity to charge the iPad is an endless source from the plug in the wall and “the weather has always been changing”. Very few people are really in touch with the world around us, and very few understand the foundation for our current civilisation – and noone dare consider that its a fragile dependency we have on the planets resources. As you say most think its science that creates the energy and stuff around us. Very few seem to grasp the notion of depletion of the raw materials in which stuff is made from, and neither that it costs a lot of energy – a type of energy which we are about to run out of.

      I have presented Rune Likverns charts about Norwegian oil production to friends and can show very clearly that it has been halved over the past 10 years. The same chart tell us that Norways oil adventure ends some time in 2040 – probably its stretched a bit with a few minor finds. That is within my lifetime, and when my kids want to perhaps buy their own car or something. I hardly get a raised eyebrow and certainly not any food for discussion around the theme. Perhaps a few comments about thorium power plants to save the day… although I dont see that happening within the timeframe we are talking about, and certainly not fast enough to move the whole car pool into an electric one (although Norway is far ahead in this actually due to smart tax rules).

      A lot of people like to complain that we also subsidise our farmers by way too much as well, and that its a waste of money. What they dont see is that way more should go into farming, as the days of cheap energy to get oranges from California and Grapes from South Africa is about to end. I understand why they think like this too, its because noone with real power and influence has come out to tell them the state of the game – the few who actually do are considered “activists” and “doomers”. The media is also not very good at making clear conclusions about things they report. They can do a lengthy article about the sad conditions for the polar bear, sitting alone on a tiny ice sheet, but fail totally to educate that its very likely that its caused by global warming due to high CO2 concentrations from our way of life. Media has backed out of this totally as its considered “bad news for the business” – and noone really want people to be realistic about their consumption and the damage we are doing to the planets ecosystem. Ignorance is bliss!

    • People, even those studying energy, seem to be unaware of the problems we are facing. It is amazing. I guess the problem is not quite out enough in the open for people to see what is happening. Either that, or the problem is so serious, that they can’t really face it, if they do understand it.

      • I’ve forgotten the source, but an oft quoted piece of wisdom goes something like: “Humans will always do the right thing but only after exhausting all possible alternatives”.

        Gail, I think that many people do see the problem, or dare to steal quick glimpses of it, but our first instinctive reaction is to believe that by tweaking a few things, like building lots of wind farms, the big monster of a problem confronting us may just magically dissolve, because… well because we earnestly want it to dissolve. And don’t we all!

        So we clutch at straws, then a deeper awareness grows and in time many thoughtful people will most certainly pass through this early phase of denial and wishful thinking, as many already have… but only after exhausting all possible alternatives… and with the very best of intention.

        We will make heroic and impressive attempts to do just that and I suspect this is what we will be witnessing, and reporting on, for the next decade or so. We have to accept human nature for what it is.

        • Mel Tisdale says:

           Description of page you’re linking to
          I wonder if we have the luxury of a decade in which to make the transition, Chris. The Arctic, as we know, is warming more rapidly than the rest of the planet and the permafrost is melting ever more rapidly as a result (re the recent example of a complete woolly mammoth that has just appeared as a result of its icy burial site having melted sufficiently to reveal it). The more the permafrost melts, the more methane it releases and thus the warmer the Arctic becomes and so melts the permafrost all the more. A fine example of positive feedback if ever there were one.

          We are playing a dangerous game of chicken. If the process becomes one of runaway positive feedback, there will be little that we will be able to do to stop it. It will be a buttocks clenching ride until the climate has flipped to another stable state. Whether that new state will support humans or not remains to be seen, I’m afraid. All I do know is that nearly all the predictions of the last IPCC report (no. 4) have been overshot or are only just within the upper error bars. Furthermore, there are dangers that have only just become apparent. It has now been discovered that the boundary between the atmosphere and the Arctic ocean is home to a biological process that releases methane trapped in the ocean into the atmosphere. This was discovered as a result of the ice loss in the Arctic (when ice is present, the process stops), which increased the amount released. With ever diminishing ice cover, this process has to increase pro rata and thus add to the positive feedback process.

          In the U.K. there used to be a radio programme aptly called The Goon Show. In one episode, Eccles, an idiot who would have done well in politics, has the job of being the lookout in the crows’ nest of a ship (I think it was actually a prison that was being taken to France to give the prisoners a holiday). Eccles shouts “Land ahead!” This is immediately followed by the sound of the ship/prison running aground. Eccles says “I should have said that sooner!” Perhaps we are all behaving like Eccles regarding how slowly we are reacting to the dangers presented by climate change.

          • Mel Tisdale says:

            Ignore the first line – finger trouble!

          • Chris Harries says:

            Sure, Mel. Totally agree. I’m not advocating patience on the grounds that we have time to be patient, we just can’t defy the laws of gravity, so to speak. The problem, as Paul Ehrlich described recently, is that human evolutionary history did not progam us to deal with distant threats, we were evolved to keep ourselves from harm’s way of immediate physical threats, like charging beasts.

            Maybe some bright psychologists out there know how to deal with human nature in a way that works. We do know that shock therapy sometimes works wonders, but then we are told that people don’t react productively to what is passed off as doomsday scaremongering. Not even repeated extreme weather events will knock us off our perch.

            • Mel Tisdale says:

              I know that you are right Chris. I am just keeping up the fight until I can see that it is lost. Old Mother Nature will have it her way, regardless of what we humans say. I just hope that there is some retribution for all those politicians and media folks when the ungazi really hits the fan.

      • Bruce Carman says:

        Most major mass-social movements require a generation to diffuse fully but only 3-5 years to achieve critical mass of mass-social awareness and recognition at the tipping-point threshold. We in the US are 27-42 years into the fall off of the plateau of peak domestic crude oil production and the subsequent 60% decline per capita since 1970.

        Yet, we are at a critical threshold of 3-4 years since the Jubilee threshold of debt growth and the subsequent meltdown, therefore, we are likely to see the multi-decade cumulative effects from declining oil production per capita and the financial meltdown manifest at an accelerated rate hereafter, probably as a consequence of the next global recession and stock bear market.

        However, the world is only 7 years into global peak oil production, a decline per capita of 10-11%, and approximately where the US was in the mid- to late 1970s. The US was able to import and burn oil at $10-$40/bbl and borrow $42 trillion over the past 25-40 years, but China-Asia and the rest of the world does not have that luxury with oil at $85-$100. I expect Peak Oil and population overshoot to cause a contraction in oil exports and real GDP per capita and manifest effects globally must faster than what happened after US peak crude production.

        Yet, we cannot get the vast majority of economists, politicians, CEOs, and financial media pundits to publicly even admit that the structural effects of Peak Oil and population overshoot are bearing down on us worldwide. Without a public affirmation of the causes, there is little chance that effective long-term solutions will be proposed or attempted.

  14. Ed Pell says:

    For me this is one of your best articles ever. You paint the big picture clearly with a minimum of distraction. Super job.

    Ed Pell

    p.s. You may want to edit this sentence
    “There may be tendency for international alliances (such as the Euro) to fall apart, for countries to break into smaller units (Catalonia secede from Spain, or countries break up the way the Soviet Union and Yugoslavia did).”

  15. Pingback: Guest Post: An Economic Theory of Limited Oil Supply »

  16. merci, Madame.

  17. What you do not really address here Gail is that the very same people who control access to Oil ALSO control the credit creation bizness. Money serves as proxy for energy, and as long as you have the ability to create credit, you can strip anyone else of all they own.

    You need to leave behind the conventional monetary analysis to see how this is being manipulated. When you look back historically, it becomes much more clear. Read Tall Tales of Paul Bunyan. I think you will see here how the Money and the Energy will collapse in tandem.


    • Back in the good old days, profits might be accumulated and used to fund future investment. Now, EROEI is so low, that profits tend to be few. Also, the nature of energy investments now is that more upfront funding is needed. Finding all of the funds needed for investment would be a problem, except for our amazing financial system, which seems to reward debt. At this point, interest rates tend to be artificially low as well.

      Now, cutting off credit availability causes a huge problem. We saw this in the latter part of 2008. Not only did the price of oil drop, and investment in new oil extraction, but also the price of coal, uranium, natural gas, and most minerals. Businesses in general cut back, as credit availability dried up.

      In a way, the credit creation business is now central to all production, energy and otherwise. It depends on trust that what is borrowed will be paid back. Once this starts to disappear, it seems like there will be a very big problem. I am not sure I would phrase the problem exactly as you do, but it is clear that many things are closely tied together.

      • Bruce Carman says:

        Gail, speaking of profits, the flattening yield curve at low to negative real net margins for banks (including after charge-offs) and same for insurers and other non-bank financial firms reduces profits and thus discourages growth of lending, apart from short-term loans against receivables and solid collateral of the largest cash-rich borrowers.

        Hereafter, uneconomic activity will be largely funded by the largest cash-rich firms from retained earnings, which reduces the trend growth of real GDP and means contraction per capita since the ’07-’08 peak. There will not be sufficient growth of uneconomic activity to provide the necessary rate of growth of profits and capital accumulation beyond depreciation/replacement to build out “alternative energy” or “renewables” at anywhere near the required scale.

        Moreover, in the context of the storm damage in the NE and Atlantic seaboard, drought conditions (perhaps a mega-drought in the Southwest), etc., the insurance industry that emerged after WW II did not exist as it is currently constituted in the previous two debt-deflationary regimes of the 1930s-40s and 1880s-90s. As with the yield curve effects for banks’ profits, insurers face a similar low- or no-return environment hereafter, reducing ROI and rendering most insurance products such as annuities and other “investments” unprofitable. Insurers can raise premia to poilcyholders only so much before the increasing costs in a slowly growing economy become prohibitive. The high replacement costs of the mature built out infrastructure for the developed world and the liabilities to insurers imply that the private insurance industry is no longer viable.

        • I would agree with you on pretty much all of these things.

          Don Stewart earlier asked me a question about catastrophe insurance. Catastrophe insurance is a very short-term type of coverage, so in some ways is the best type of coverage for an insurance company to write in a low-interest economy. If there start to be major defaults on an insurer’s portfolio, that becomes a problem, but low interest rates are not, because of the short-term nature of the coverage.

          When it comes to other insurance products and bank products, the low interest rates and flat yield curves become a major problems. Annuities don’t make sense if the interest rates are very low, because expenses become high relative to interest. Even investments that are supposed to follow the stock market are problem, because with stock markets are likely contract.

          I think the vast majority of the “insurance” of infrastructure is self-insurance or insurance through government programs (officially or otherwise). The high cost of replacement, relative to what was paid originally, will be a huge problem. I think this will be more of an issue for governments and self-insurers (for example, utilities or utility groups), than for insurance companies, per se. Insurance companies tend to gravitate toward “small” risks–homes, small businesses, automobiles. They also tend to limit their exposure through programs which leave more of the risk with the homeowner or business-owner, such as deductibles that are a percentage of the value of the insured property. The bigger risks tend to get moved into self-insurance and government programs. These seem to me to be the ones that will be hit hardest.

  18. Pingback: Economy in DEATH spiral - Page 1325 - Stormfront

  19. Mel Tisdale says:

    Having examined 9/11 in some considerable depth, I know there is more to the event than meets the eye. Take the fact that the NTSB analysis of the FDR from flight 77 shows it descending steeply into the Pentagon, having flown to the left of the Navy Annex. (Remember this NTSB analysis, not some weirdo with some political axe to grind.) Whatever knocked over the lampposts (lightpoles in AmE) had to have flown straight and level to the right of the Navy Annex, otherwise it would not have hit the lampposts. Many of the Pentagon employees were ex-frontline soldiers and some talked of smelling cordite immediately after the impact(s?).

    There are a considerable number of other features about the events of that day that beg questions that can only be answered by an independent fresh investigation (The Vice Chairs, Kean and Hamilton, of the 911 Commission wrote afterwards that they believed that the 911 Commission was set up to fail, and the time it took to set it up – over 400 days – Challenger and Titanic disasters, and the JFK assassination each around 10 days – certainly lends credibility to their view). The point that I am driving at is that 9/11 spawned a whole raft of legislation and so many new security bodies that one could be forgiven for thinking that it was all planned in order to ensure that come a period of turmoil, the U.S.A. was at least prepared for it and had the ability to impose some semblance of control by having the legislation and official bodies functioning beforehand. What other reason would Bush and Cheney have for insisting on attending the Commission hearing together, not under oath, with no written or taped record of what was said and in private?

    How this fits in to Bruce Carmen’s comment I am not sure, perhaps I need a few more dots to join up before it all comes clear. Perhaps others might be able to provide them, or this comment by me provide some dots for them to join up. All I know is that I don’t have the big picture – yet.

  20. A widely heralded view holds that nuclear power is experiencing a dramatic worldwide revival and vibrant growth, because it’s competitive, necessary, reliable, secure, and vital for fuel security and climate protection.
    That’s all false. In fact, nuclear power is continuing its decades-long collapse in the global marketplace because it’s grossly uncompetitive, unneeded, and obsolete—so hopelessly uneconomic that one needn’t debate whether it’s clean and safe; it weakens electric reliability and national security; and it worsens climate change compared with devoting the same money and time to more effective options. These are the conclusions published in an in-depth research about nuclear power published by the Rocky Mountain Institute.

    The full report can be downloaded here:

    • Mel Tisdale says:

      It is not possible to have any respect for a report on nuclear power generation that does not mention thorium, fluoride or LFTR and only mentions molten salt in relation to a so called renewable energy source.

      Quite frankly, climate change and the need to fight it is far too important for such airy fairy Green drivel. I’ll go with Professor James Lovelock anytime than I would any member of the Green brigade that I have had dealings with (a considerable number, having once sat on its U.K. division’s Defence Policy Working Group), or anything produced by something with ‘Rocky Mountain’ in its title for that matter, but that might just be bias on my part.

      • Bruce Carman says:

        Mel, the cumulative effects of peak global crude oil production and oil exports, population overshoot, massive debt overhang and gov’t spending to GDP, falling net energy and real private GDP per capita, and fiscal constraints from the massive global Boomer demographic drag will overwhelm, if not exacerbate, any effects from atmospheric warming that has been occurring since the end of the Maunder Minimum and the last Little Ice Age (and confluence of the Gleissberg and Suess cycles) in the late 18th to early to mid-19th centuries. We can do next to nothing to prevent the cumulative effects of the former factors, which is to say that climate change is no less beyond our control to mitigate at this point. The best we can hope to do at this point is what the human ape species (and sub-species) has been doing for millions of years to date: adapt and evolve.

        Regrettably, population overshoot and evolution implies that most of us and our progeny won’t successfully adapt. If this is the mostly likely outcome hereafter for the next century, what is one to do today and in the immediate years ahead?

        • Mel Tisdale says:

          Bruce, if you have children, for their sake, please go and study climate change. I recommend, which is one of the top ‘go to’ sites on the subject. If you haven’t got children, then please do so for the sake of mine.

          The main forcing on climate is CO2, amplified by water vapour – over which we have little or no control. The warming that has occurred since the start of the Industrial Revolution is clearly inline with the increase in the production of CO2 that the Industrial Revolution set in motion. The only cycles of significance are the Milankowiec cycles that are mainly responsible for ice ages, but they are miniscule in effect compared to CO2. The rate of warming was steady up to about half-way through the last century but is clearly increasing. Current predictions are that we could be in for around 4 C rise by the end of this century. All the descriptions I have seen of what that will mean are simply horrendous and horrendous for my son in particular as far as I am concerned.

          I suppose I could adapt to losing a leg, but I would much prefer not to, quite frankly. We can learn to adapt to 4 C, but not in anything like the numbers that currently exist, and certainly not the numbers projected for the middle of this century. In short, Bruce, it is going to be hell. I know that those of us that believe in climate change are often seen as alarmists, but honestly one would have to be myopic not to see the changes already taking place and we have only had 0.8 C so far. From the known dynamics of the climate system we can be fairly certain that we are guaranteed at least 2 C warming even if we stopped producing CO2 instantaneously, which absent some cataclysmic event, is not going to happen.

          Heaven knows, the financial system is in a mess and how that is going to resolve itself is anybody’s guess. What better time to hit the reset button? If we carry on with business as usual, it will not simply be future generations that will have to cope, it will be us. We are already experiencing extreme weather events, which may possibly be due to climate change (the jury is still out). They certainly fit what the science says is likely to happen (a meandering jet stream that gets stuck in one location or other.) This summer it was America that mainly suffered from a drought and the U.K. that suffered from deluge. Both were long-lived because the jet stream got stuck in one place. Next year it might get stuck somewhere else. The point is, how can farmers plan when there is little predictability regarding the weather? What then for food supply (and prices)?

          Sorry Bruce, but I think we have to take a more responsible attitude to climate change than saying we will have to adapt, we owe it to the next generation, if not ourselves.

          • Bruce Carman says:

            Mel, all points well taken. What I meant to imply is that the cumulative effects are already entrained to such an extent that I doubt that anything short of “a reset” to a material standard of consumption for the West back to the 1880s-1930s will make little difference in terms of effect on the climate over the course of a generation or lifetime.

            Then again, I suspect that the effects of Peak Oil and population overshoot will send us eventually back to before the onset of the peak Fossil Fuel Age and the auto- and oil-based economic model of development. Population collapse = anthropogenic climate change solved.

            • Mel Tisdale says:

              Bruce, you would possibly be correct that population growth would solve the climate change situation if there were no such things as tipping points. These silent affairs slip past while no one notices. By the time we do, it will be too late. The positive feedbacks will have come into play (e.g the permafrost melts, releases more methane – a potent greenhouse gas – into the atmosphere, which causes more melting of the permafrost and thus more methane release). That process is happening now, but at a tolerable rate. It could so easily accelerate to a runaway condition. We do know from the science that we are awfully close to a situation where all we will be able to do is cling on and see where the ride takes us. So, if we wait for population growth to ‘solve’ the situation, we will have committed those that survive the privations brought on by that same population growth to a very dire existence. In short, time is a luxury that we cannot afford. Perhaps if we were discussing colonies of amoeba, then we could wait and see what happens, but we are not conducting a biology experiment, we are fighting for our own species, possibly even its survival, unless a having a massive die-off and horrendous living conditions for those that avoid taking the deep six holiday can be said to be survival.

              If we tackle climate change now, then we will be better able to cope with population growth. If we don’t, then it will almost certainly make population growth all the more difficult to cope with, which will then solve what remains of climate change according to your thesis. The one point that must not be forgotten is that CO2, the main culprit (water vapour, while the most potent greenhouse gas, is only an amplifier), remains in the atmosphere for 60 to 100 years, so in truth, waiting for population growth will actually do very little to combat climate change anyway because the harm will really have already been done.

              I don’t know about you Bruce, but I want much better prospects for my children and grandchildren than they clearly currently face, even if we stopped all greenhouse gas production now.

              As a rider, I would like to draw attention to the very clever manipulation of the situation that the denialati have practised, and the scientific community seem not to have not spotted. If you follow discussion on the issue of climate change, it is all too often the argument revolves around whether climate change is anthropogenic (The ‘A’ in AGW) or not. That is a pure diversion. It is like the captain of a cruise-liner, after seeing an iceberg dead ahead, deciding not to alter course or speed to avoid it because the iceberg is not anthropogenic in origin. It matters not what is causing the warming, it isn’t, but it could well be the sun at some other time. What we do know is that the greenhouse effect that in fact keeps us alive is over active. We also know that we pump greenhouse gasses into the atmosphere, so it makes sense to cut down on their production in an attempt to compensate before the situation gets out of hand. No matter how Christian a person or a nation claims to be, it is far from Christian behaviour to cite the need to generate wealth even though “money is the root of all evil” and that generation of wealth will commit countless numbers of the globe’s citizens to a terrible future, even many in that same nation.

          • I also have a feeling that there is little we can do to stop destructive CO2 emissions. There is just too much denial about it everywhere in the world and even if you get an educated west to change habits, there is quite a bit of coal and gas plants who still need to run in order to give us electricity. If you look at the charts of coal consumption, China has doubled its numbers over the past 10 years (about the same timespan we have had the biggest warming trends). The only way that number is going down is a complete economic collapse reducing the need for that much electricity around for manufacturing and all kinds of office buildings. Question is then what people will be spending their time on and in which regard they will still consume fossil fuels. A world without the intense “shopping mania habits” will at least cool down consumption of fossil fuels quite a bit I would think.

            A scenario that I think is more and more likely is that the economic downscaling will happen at the same time as the climate hits us pretty hard in ways that will make people think there is something wrong with the climate. But people have very short memories when it comes to things that isn’t good for them (a smoker quitting and beginning again) so it only takes a bit news headline like “global warming has stopped” (like a recent one we heard again) – and the latest one I read: “south poles ice cap is growing” (many think its earth equilibrium thing and we shouldn’t worry about north pole melting). So the question is really if governments will act on these changes and start listening to the big consensus of scientists ringing the alarm bells. If not that, we will still be forced to brace ourselves for several changes in the near future, some will be more prepared than others. But again I am afraid its the poor who will suffer first.

            • Mel Tisdale says:

              John Christian, first, please see my reply to Bruce Carman > (Bruce you would …)

              Regarding China’s coal fuelled power generation, there are several points that need to be made here:

              First, China claims, and let’s face it, has a right to claim, that we in the west are to blame for the current warming (re the 60 to 100 year longevity of atmospheric CO2). There position that we have no right to demand action on their part while the west does little. America, until recently the biggest producer of atmospheric CO2, has a very poor history of inaction on the matter. From a distance one gets the impression that America is full of people loudly claiming to be Christian while deliberately riding around in over-sized SUVs and shouting Yi Ha! In effect saying to hell with “Do unto others …” I suppose the truth is not quite that bad. It is difficult to take the moral high ground in those circumstances. One thing that must not be forgotten is the invisible hand of the fossil fuel industry and the profits it continues to make while we all play chicken with the climate. A tragedy of the commons if ever there were one. (If you have not seen it, please see CLIMATE OF DOUBT (PBS FRONTLINE) on Youtube. Note how many members of the denialati are funded by the fossil fuel industry.)

              Second, China is very active in making solar panels and has installed a large number of wind turbines, perhaps to no avail as it happens, but ‘good intentions’ all the same.

              Third, China is very active in developing thorium nuclear reactors. It is here that the west is really missing a trick. If it were not for the Greens and their knee-jerk ‘anything nuclear is automatically bad, regardless of the facts’ reaction to same, I am sure that we would have solved any technical difficulties with thorium reactors by now and so climate change would not be anything like the danger that those who spend their lives working on the issue (and are not funded by the fossil fuel industry) say it is. It is going to be China that will be selling the technology to the rest of us, instead of the other way round.

          • Well, I hope China is able to find good alternatives to the immense coal usage growth they have had during their economic boom. Its just that once a country becomes wealthy it seems power consumption just grows a lot, just like us here in the west have enjoyed for a long time. I am not so sure that these new power sources will replace coal but come in addition to coal for a long time. Also not so sure continued CO2 emissions the way we have seen these past 30 years is an experiment we want to run on the atmosphere… although little seems to be done with the matter as long as the average person still questions whether CO2 is really a greenhouse gas.

            • Mel Tisdale says:

              There is no helping anyone so ignorant of fundamental science that they dont believe that CO2 is a greenhouse gas. It is even worse not believing in the greenhouse effect, as some don’t.

    • Thanks for the link. I haven’t looked at enough of the report to see whether this is just an analysis of the “Western world” or if it considers China and India. My impression is that the view of nuclear is fairly different in different parts of the world. The West is backing away from nuclear, but perhaps not others. Also, Amory Lovins seems to be sure renewables will save the day, and this influences as least some of what he says. But the cost is indeed high in the US, especially if one includes full decommissioning and storage of spent fuel.

      • Bruce Carman says:

        Gail, Mel, and John, China has reached the so-called “middle-income trap” phase of development around $7,000 real GDP per capita (PPP terms) as did the US in the late 1920s and Japan in the late 1960s. The US and Japan enjoyed the luxury of having $10-$15 oil (2012 dollars) to fuel development, whereas China now faces permanent trade deficits for energy, food, and materials. China’s growth boom is over. Real GDP per capita historically is a linear function to population growth, whereas real GDP per capita is a biophysical log-linear function to population.

        With China having to import half of oil consumption of around 4% of GDP, with global oil production and exports having peaked, China’s GDP will decelerate to 2% or less in the years ahead in the best-case scenario. A decline of China’s FDI of just 1% equivalent of GDP risks a Great Depression-like contraction in the years ahead, given the multiplier to fixed investment, production, and exports.

        China (and India) is (are) 40-80 years too late to the oil- and auto-based uneconomic development model. As has been said, China will grow old before growing rich enough to become a world hegemon to challenge Anglo-American oil empire.

        • Mel Tisdale says:

          If you are right, Bruce, then there are going to be a lot of very disappointed Chinese people who have been fed the dream of living the way the West does. That can only lead to political upheaval, even within the Chinese undemocratic system. The question that should concern the West most is what the Chinese leadership will or can do about it. There are many scenarios, some are quite scary and have the potential to make our worrying about economic growth as trivial as worrying about the gas bill when the bailifs are in the process of evicting you. We live in troubled times.

          • Bruce Carman says:

            Yes, Mel, historically every 50-60 years (corresponding to capitalism’s Long Wave Trough depression phase) since the 17th century the Middle Kingdom experiences social upheaval, the last four periods coinciding with xenophobia and reaction against westerners and a turning inward by the Chinese to deal with domestic instability, including Mao’s revolution, Boxer Rebellion, Opium Wars, and the White Lotus Rebellion.

            Should the historical rhythm repeat, the end of the western-induced growth boom in China-Asia will be followed by economic, financial, social, and political crises, increasing internal social unrest, the PLA generals exerting more influence in Beijing (perhaps eventually taking over), deteriorating trade and diplomatic relations with the US/West, and an eventual breakdown of relations with the US/West, along with the end of globalization, i.e., Anglo-American imperial trade regime.

            Neither the US/West nor China can afford regional or world war for the remaining vital resources and shipping lanes of the planet, but the more desperate states’ elites become in fearing for loss of status, privilege, and power, the more likely they are to go to war with “other” to diffuse internal threats.

            • Mel Tisdale says:

              Anyone who has studied modern nuclear weapons (MX and Trident D5 – not the C4 version) will know that deterrence only applies to lowly equipped nuclear states. Certainly between Russia and the U.S.A. it all comes down to who fires first will win overwhelmingly. Failing that, nuclear armed terrorists are a scary concept. All options are remarkably cheap for the aggressor, so perhaps lack of affordability is not too much of a hindrance to having a war.

  21. Reblogged this on evolvESustain.

  22. Pingback: Two short articles on energy, economics and the future | Progressive Resource Portal

  23. Bill Bedford says:

    >Something like that happens with other forms of energy as well. It is virtually impossible to substitute away.

    Really? Mankind has changed it’s primary source of energy twice in the last 250 years, from wood to coal and from coal to oil. What is more the change of fuels was often done for societal or political rather than strictly economic reasons. For instance the change from horse drawn to internal combustion vehicle in the early years of the 20th century was, especially in cities, was brought about partly because motor vehicles were seen to be cleaner and more hygienic, in that they didn’t leave piles of dung in the streets, than they were greatly cheaper to run. Again, the change in US railroads from steam to diesel traction was precipitated by the railroads inability to deliver the required number of men to their signing up posts when the country mobilised in 1941.
    The speed of neither of these, or many other changes, had been predicted in the years before they happened. So I can confidently predict that in the next few decades the world will start to change it’s primary source of energy. The new energy source is one that exists today. The change will be precipitated by societal or political changes. But what ever the technology comes to the fore, its adoption will depend on some innovation in material science.

    • Ikonoclast says:

      Well, I am done arguing. I will wait for the experiment to play out. Twenty years will tell the story. Maybe even the next 10 years will tell.

    • PeteTheBee says:

      I think it’s pretty clear at this point the transition will be to natural gas.

      This “formerly waste product” (as Gail likes to call it) can overwhelm any other energy source. It is far cleaner than coal. Private landowners largely want gas drilling on their land, particularly for dry gas. The technology for shale gas extraction is maturing rapidly driving break-even costs down. The level of public acceptance is far higher than nuclear (which requires massive help from the government).

      Natural gas will have a solid 50 year run, not just in this country but the whole world.

      After that- probably synthesized methane from nuclear (or even solar or wind).

      • robert wilson says:

        Pete Here is the latest from Art Berman. You should go to TOD and straighten him out.

        I grew up in Amarillo. Natural gas was flared a few blocks from downtown Amarillo throughout my youth. It is still being flared 24/7 adjacent to Highway 1 between Santa Barbara and Ventura, adjacent to the World’s first offshore field.

        • PeteTheBee says:

          ” Natural gas was flared a few blocks from downtown Amarillo throughout my youth. It is still being flared 24/7 adjacent to Highway 1 between Santa Barbara and Ventura, adjacent to the World’s first offshore field.”

          Look, natural gas below $5 Henry Hub is reasonably priced energy. Not dirt cheap, but reasonable. Below $3 is dirt cheap.

          We’re talking $/BTU equivalent to $18 to $30 oil. This is a huge, huge deal for North America (the Mexican market should eventually normalize).

      • PeteTheBee says:

        Art Berman, cmon man! He’s been debunked so many times he has no bunks left.;siu-container

        “His well-by-well analysis found that total U.S. gas production has been on an “undulating plateau” since the beginning of 2009”

        Wait, what does the EIA say.

        Huh, there’s a big uptick starting right there at the beginning of 2009.

        Look, Art Berman flat out lies. Chris Nelder flat out lies. A few other guys, they’re just lying.

        Gail, at least when she makes a doozy of a bad prediction (like Bakken peaking at half it’s current level) at least she’ll admit it.

        • robert wilson says:

          If you had Gail’s courage you would go to TOD and tell him, not us. I will be watching to see if you have the cojones – and competence to confront him mano-a mano.

          • robert wilson says:

            Comments are in an early phase

          • PeteTheBee says:

            Did you read my post? You ask him why he lied about natural gas production just 8 months ago. The data is clear.

            It doesn’t take courage to roll around the mud, just a willingness to soil yourself.

          • PeteTheBee says:

            But to be clear, what Berman does is show you his elaborate computation and say “show me where I’m wrong”.

            It’s a funny debating style he has. If you think the EIA’s record of reporting past-production (not future predictions, but past production) is that far wrong then there is no point in discussing energy with you, it’s like someone who believes the moon landing was faked.

          • robert wilson says:

            I am pleased to see that you have soiled yourself. Actually it seems to be a reasonable, concise post – to the point. Later i may add a post to the string at TOD noting that per capita marketed production of natural gas in the US has decreased more than 20% since 1973 and that imports have more than tripled, in spite of the recession and outsourcing.Will first wait to see what others say and to check my math.

          • PeteTheBee says:

            Sure, per capita production is down 20%, but this is more than offset by literally a mountain of efficiency improvements downstream. (Better natural gas generators, more efficient refigerators and ACs, etc).

            And let’s not even get into where production will go if gas goes to $5 mmbtu,

            But the point is Art Berman has a history as a fabulist. I’m guessing he will pretend this history does not exist, and so will everyone at TOD.

          • robert wilson says:

            It would have been better had you cited a primary reference

          • PeteTheBee says:

            “It would have been better had you cited a primary reference”

            For what, for natural gas electrical generators being quite a bit more efficient now than in the 70s? For refigerators, air conditioners, similarly being vastly more efficient?


            Fine, believe that a refrigerator now is within 20% efficiency as one from 1973. It’s nuts, but if believing it makes you happy, fine.

            Re: The Oil Drum – you see the problem? Berman won’t take responsibility for his blown graph, somebody else says a 15% increase is part of a plateau, etc.

            • Chris Harries says:

              Efficiency of refrigerators, air conditioners etc on average is definitely superior to same devices 20 years earlier, what has mostly changed is the size of them and the sheer numbers of them. Average size of modern refrigerator surpasses 600 litres nowadays as opposed to not much more than half that size a few decades ago. Houses have gone the same way. Nearly all gains in efficiency have been more than overtaken by consumer desires for bigness. But it’s not all bad news on that front, auto manufacturers have finally turned a corner on vehicle sizes. We seem to be on the cusp of social change, forced on us by circumstances rather than by altruistic choice, but it’s gradually happening, thank goodness!

        • robert wilson says:

          For the record, “primary reference” referred to your original citation of Nedler not Berman at TOD

          • PeteTheBee says:

            The chart says “sourced by Art Berman”.

          • PeteTheBee says:

            OK, that was kind of fun. I might drop in there from time to time, when there is a good opprotunity. This worked well, the comments were about my critique of Berman and not Berman’s thesis. Moreover, Berman scurried off as soon as I showed up. What did you say about cajones? Perhaps Berman needs a prosthetic pair.

          • robert wilson says:

            Yes, my Hemingway tact accomplished what was intended and more. You seem to have a need to always have the last word. As one poster suggested you should publish your own accurate article with correct graphs (or perhaps have a blog or start a new Yahoo group – expanding on the following – with predictions.)

            peteTheBee on October 31, 2012 – 4:00pm
            Peak oil is a myth. The US is transitioning to natural gas.

            [-] PVguy on October 31, 2012 – 9:45pm

            “Peak oil is a myth. The US is transitioning to natural gas.”

            If peak oil was a myth, there would be no need to transition to natural gas.

          • PeteTheBee says:

            ” You seem to have a need to always have the last word. ” I think that’s called responding.

            ” As one poster suggested you should publish your own accurate article with correct graphs”

            They have site for that. It’s called the EIA. That’s my point, Berman creates graphs that contradict the EIA but doesn’t have the guts to admit it, he just sows doubt.

            I ““Peak oil is a myth. The US is transitioning to natural gas.”

            If peak oil was a myth, there would be no need to transition to natural gas.”

            Yes there is truth to that. It is peak energy that is the myth. We can only argue about substitutions (and, sigh, perhaps debt) from here out as there is plenty of inexpensive natural gas in the USA and really the world.

    • One issue I see is that the financial system is now in such bad shape, that we are near the edge of a financial collapse, brought about by the difficulty in extracting resources, and the resulting higher prices, especially of oil. We can no longer grow, and that very much affects financial institutions. If they fail, it will be difficult (although arguably not impossible) for the “real” economy to continue to function, because of the role the financial institutions play. I expect major political changes at the same time.

      The other issue I see is that we have already run through most of the growth advantages that we got, first from the control of fire, over a million years ago; next from agriculture, starting about 10,000 years ago; and now from fossil fuels. There is perhaps farther for the fossil fuels to run, if we did not have the financial albatross bothering us.

      When we changed from wood to coal and coal to oil, in each case we had better-quality energy available, and even at that the transition took fifty years or so. Now we are lacking the time, and we have no better quality energy source “standing in the wings,” ready to go. There are some that could play minor role, or perhaps with tweaking work (thorium based nuclear), but having time to work this out and get it implemented would be a challenge.

      • PeteTheBee says:

        “We can no longer grow” — even though the American economy and the global economy are growing … the latter somewhat slowly, the former at a fairly robust clip.

        ” we had better-quality energy available” natural gas is a higher quality energy than oil in many ways. It is more pure, burns cleaner, and is easy to perform useful work with it’s potential energy.

        Oil (and oil based products) are easier to transport and store. But for stationary applications gas is superior, there is no doubt.

        For transportation – oil usage will be reduced mainly through more efficient vehicles.

  24. PeteTheBee says:

    The US economy is switching from oil to natural gas power right now. The global economy is switching more towards coal (which the US has in abundance and is well poised to export).

    Why pretend such a switch can’t happen when it is happening?

    Natural gas in the US could could be 50% more expensive than it is now and still be cheap, by your reckoning. (I.e. oil at $30 bl is BTU equivalent to natural gas at $5 mmBTU). The punchline is that a BTU of gas is actually more useful than a BTU of oil in many ways. (Runs engines more efficiently, generates heat more efficiently, burns cleaner, etc).

    • Marion R. Morrison says:


      Are there any more shilling jobs available at your fracking company? What do they pay? I can prepare a portfolio of the various blogs I’ve trolled in the past if required.

      Thanks in advance,
      Marion R. Morrison

      • PeteTheBee says:

        I’m sorry you’re unemployed. I don’t get paid to post (does anyone) but I do have a steady passive income (otherwise I wouldn’t have time for this).

        • robert wilson says:

          Pete, I recall that you don’t think much of the posters at The Oil Drum but:
          Only the drill bit knows?

          • PeteTheBee says:

            What happened to the Oil Drum was simply this — many posters (including Gail, Art Berman, etc) posted many extremely pessimistic articles about shale gas and shale oil. I think there was one post where Gail predicted the Bakken would peak at something like half it’s current production. (And the Bakken production numbers continue to climb, it’s showing no signs of peaking in terms of production, although Gail sometimes like to count rigs and not production numbers).

            At any rate, in an effort to re-establish some form of credibility the Oil Drum became a bit more reality based and decided to actually recognize that higher prices and/or better technology would lead to higher production from “unconventionals”. This editorial shift resulted in Gail switching to her own personal self-publishing.

            So I guess the Oil Drum might be more credible than Gail at this point, it’s hard to say. Once I realized how far, far off the mark the Oil Drum had been with unconventionals I decided it wasn’t worth the effort to track it’s many posts.

            Gail posts less frequently, and lots of her analysis is actually quite good (for example, she had a post a while back that clearly demonstrated how society had been switching away from oil for the last 3 decades). Sometimes she likes to sneak in little white lies (“the economy isn’t growing” or what not).

  25. Schalk says:

    Very interesting post, Gail. Thank you.

    I think it is highly likely that expensive oil will finally get the average developed world citizen to start living within his/her means again. The days of compensating for rising energy costs with modern-day slavery in developing nations paid for by dollars and euros freshly conjured into existence are now drawing to a close.

    But hey, one could even argue that we really need this to make a dent in the debilitating culture of consumerism and entitlement that seems to have taken over the developed world. Less material affluence might just restore natural health and happiness to our society. I just hope that we can manage the transition…

  26. robert wilson says:

    1.”The economists’ view, saying that the issue is a simple problem of supply and demand. Substitution, higher prices, demand destruction, greater efficiency, and increased production of oil at higher prices will save the day.”

    Demand destruction – from deprivation to a rising death rate – does not save the day in a wishful sense but has been natural phenomenon for eons. Is man not a part of nature? In The Next Million Years – Charles Galton Darwin postulates that our progeny may remain on earth
    semi-permanently but at a lower overall population density. The economist Nicholas Georgescu-Roagen reasoned that this would be progressively more difficult due to the dissipation of concentrated ores. We have seen demand destruction in action since 2008. There will likely be more to come

    • Bruce Carman says:

      Robert, see the charts at the links above. The greatest bubble in world history is not in stock, real estate, or commodities prices or credit; rather, it is in human population growth. Since the 1950s-60s, human population growth has accelerated to a doubling time of just 40 years, or a working lifetime, which is insufficient time for arable land, forests, watersheds, and fisheries to replenish themselves.

      Once bubble trajectories achieve a super-exponential rate, they burst and crash eventually back to the point at which the super-exponential rate commenced, and sometimes overshoot below. The super-exponential rate of human population began in the 18th century, after the Maunder Minimum and with onset of the Industrial Revolution and the Fossil Fuel Age.

      The rate of population growth is set to dramatically decelerate and then begin a decline no later than the 2030s. Were the so-called “anti-bubble” crash trajectory following the preceding super-exponential trajectory to conform to the typical pattern, human population will decline first 30% and then 70-90% by sometime late this century to early next century.

      While it is imperative that individuals, families, and communities begin to prepare to adapt to a steady, if not dramatic, decline in the standard of material consumption per capita to a much lower exergetic equilibrium hereafter for as long as it matters for most of us, virtually no economist, political or corporate leader, nor mass-media influential can dare tell us what we face for fear of losing credibility, legitimacy, and status, and suffering a case of career suicide.

      What we should endeavor to avoid, if at all possible, is a Hobbesian last-man-standing war of all against all for the remaining resources of the planet. But the Pentagon planners, CIA, NSA, State Dept., war contractors, and Anglo-American Power Elite and their select techno-scientific, intellectual, and managerial elites expect just such an outcome, and they have been planning for it for decades.

      We’re on our own.

      • Mel Tisdale says:

        Having examined 9/11 in some considerable depth, I know there is more to the event than meets the eye. Take the fact that the NTSB analysis of the FDR from flight 77 shows it descending steeply into the Pentagon, having flown to the left of the Navy Annex. (Remember this NTSB analysis, not some weirdo with some political axe to grind.) Whatever knocked over the lampposts (lightpoles in AmE) had to have flown straight and level to the right of the Navy Annex, otherwise it would not have hit the lampposts. Many of the Pentagon employees were ex-frontline soldiers and some talked of smelling cordite immediately after the impact(s?).

        There are a considerable number of other features about the events of that day that beg questions that can only be answered by an independent fresh investigation (The Vice Chairs, Kean and Hamilton, of the 911 Commission wrote afterwards that they believed that the 911 Commission was set up to fail, and the time it took to set it up – over 400 days – Challenger and Titanic disasters, and the JFK assassination each around 10 days – certainly lends credibility to their view). The point that I am driving at is that 9/11 spawned a whole raft of legislation and so many new security bodies that one could be forgiven for thinking that it was all planned in order to ensure that come a period of turmoil, the U.S.A. was at least prepared for it and had the ability to impose some semblance of control by having the legislation and official bodies functioning beforehand. What other reason would Bush and Cheney have for insisting on attending the Commission hearing together, not under oath, with no written or taped record of what was said and in private?

        How this fits in to Bruce Carmen’s comment I am not sure, perhaps I need a few more dots to join up before it all comes clear. Perhaps others might be able to provide them, or this comment by me provide some dots for them to join up. All I know is that I don’t have the big picture – yet.

      • robert wilson says:

        Bruce, I have been interested in population since the 50’s. Was involved with Population Reference Bureau, a Washington DC organization. Was an officer in ZPG (later Population Connection). Attended Garrett Hardin’s 1968 conference on abortion. Published and spoke on population and resources. (example below). On a personal level I had a vasectomy around 1970. From what I have read in recent years, immigration is now the engine of population growth in many countries, including the US

    • You are right. Demand destruction can be the solution, but not in the wishful sense.

      I notice Charles Galton Darwin talks about the tendency of any type of plant or animal to increase in population, and humans are no exception. The only way a finite world can deal with this issue is cycling to a new balance, with a different species (or multiple species) predominating. Presumably, the new top species would use CO2, so not see CO2 pollution as a problem.

  27. Bruce Carman says:

    Gail, et al.,

    Please see the charts at the links above confirming many of your insights and conclusions. With the constant-dollar price of oil above $30, growth of real GDP per capita is not possible.

    Since ’00-’01, the average trend rate of US real GDP has decelerated from the long-term average of 3.3% to 1.6%, reducing real GDP growth by a cumulative 20%. Real GDP per capita has decelerated from 2.1% to with the margin of error of 0%, whereas real private GDP per capita has contracted over the period.

    Note that this is remarkably similar to what has occurred in Japan since ’90. To date, Japan’s cumulatively loss of growth of real GDP from the long-term trend rate has been 47%. In other words, had Japan’s real GDP continued to grow at the pre-’90 trend rate, the Japanese economy would be 90% larger today.

    Were the US real GDP to continue to decelerate at the rate since ’00, by ’22 the US will have cumulatively lost more than 30% from long-term trend real GDP growth, and a loss of growth of more than 40% per capita.

    Total oil consumption as a share of private US GDP is at 6%. An increase in the price of oil by 10%, for example, is a net incremental hit to private GDP of 0.6%.

    Despite the claims that gov’t spending is out of control, since fiscal ’10 total gov’t spending growth has been 0%, which has resulted in a net reduction in nominal GDP of nearly 2%/year, reducing the trend nominal GDP from ’07-’08 to 2% from the 30-year average rate of 5% and the long-term rate of 6.3%. Were gov’t spending to be restrained hereafter, which appears more likely than not, the lack of growth of gov’t spending will become a structural constraint to nominal GDP, reducing the post-’00 trend rate of nominal GDP from 3.6% to 2% or less, and lowering the post-’07 trend to below 1%.

    Thus, the US faces not only a drag associated with high energy prices resulting from peak global crude oil production and exports but also a peak Boomer demographic and fiscal drag on real private GDP per capita hereafter.

    The structural drag effects imply little or no growth in bank lending, ongoing debt deleveraging/deflation, little or no top line corporate revenue and profit growth, slow or no growth of private investment, production, and employment, and a further decline in real estate and stock prices in the years ahead.

  28. Pingback: An Economic Theory of Limited Oil Supply | Sustain Our Earth |

  29. St. Roy says:

    A really excellent synthesis of what plays out in a world of declining net energy. One of your best posts!

  30. mmalmros says:

    I am very supportive of developing North American energy resources notwithstanding the concerns of environmentalists especially with regards to carbon dioxide emissions and global warming, Starvation versus rising oceans is – for me ideologically – an easy choice. Unfortunately, developing North American fossil fuel reserves, while lowering imports, will not solve the underlying economics of energy that you have clearly pointed out in this article. The economy is global to the extent it can avoid conflict. So each barrel of oil will be based on the global market price. And not all oil is the same. North American oil, however plentiful, takes a higher portion of its output to recover (EROI). And the cost of developing additional resources increases as the price of energy increases – disproportionately. (A intuitive understanding of the Second Law of Thermodynamics is useful in understanding these arguments!)
    Distortions occur in economic “calculations” when comparing capital and labor costs in production of either goods or services – because the cost of energy embedded in both terms (capital and labor) is generally ignored (compare the energy requirements of a Chinese worker with any other laborer for example) and not properly accounted for. Trade tariffs attempt to correct this “inconvenient” truth.

    We have the ability to overcome these structural distortions. What we lack is the political and social will power.

    • Mel Tisdale says:

      “Starvation versus rising oceans is – for me ideologically – an easy choice.”

      With global warming a.k.a. climate change it is not a case of ‘starvation vs rising oceans’, it is ‘starvation together with rising oceans’ and you don’t get to choose.

      • Leo Smith says:

        Actually with most of the worlds land masses away from the equator and towards the northern polar regions, global warming is a lot less scary than global cooling. Taking the wheat belt north into what is now Siberian and Canadian tundra would be very easy.

        As would growing Mediterranean foods in what is now Northern temperate zones.

        And tropical foods in what is now Mediterranean climates.

        And rising sea levels would take a thousand years plus to actually be a serious problem – the amount of energy needed to melt icecaps is not something that can suddenly become available.

        If global warming were to resume, lack of energy to deal with it and build new cities further north, is far and away a greater problem than a few percent of a few percent excess CO2.

        But in fact global warming is an irrelevance in this context. We have a global society built on cheap oil, and there is a need to transition that. Or it WILL collapse back to a quasi-mediaeval type lifestyle with attendant 90%+ population loss. Gail keeps gently reminding us that a ‘sustainable’ lifestyle is one at approximately one tenth of the (total) energy use that we now enjoy.

        And, since at least 70% of the energy we use, we do not use domestically, that means that having an ‘eco’ house is about as relevant as having a gold cup to drink wine from. Sure it lasts forever, but when you run out of wine, it’s as much use as a chocolate teapot.

        The stark equation is that we either maintain an excess of energy over renewable possibilities, or incur (massive) population loss. None of the proposed idealistic and qualitative solutions can help beyond a very small percentage. Believing that they can, is to guarantee a rapid collapse of population when they fail to work, and the infrastructure to construct an alternative is now inoperable.

        In this context , belief in so called ‘renewable energy’ is a far far greater threat to mankind, than global warming.

        We can’t actually guarantee to feed the world’s population without this excess of energy, never mind anything else.

        In fact when you drill down into the fundamental reasons why we fail to understand where we are, and the possibilities we have, to move on from here, the fundamental problem is that we are as a species, prone to believe in what we want to hear. We are not, it seems, reasonable beings. We are so manipulable by clever marketing of optimistic and pessimistic messages that we can be driven like sheep into whatever pen the people who wish to take advantage of us, want.

        You only need to look at the emotional responses keyed into people with respect to

        – Global warming
        – Renewable energy
        – Nuclear power

        To see that these issues are not judged on facts, but on deliberately instilled emotional narratives. They are being sold – or blocked – by the same techniques developed to sell soap powder. And the results of the marketing campaigns are being checked by opinion polls. Someone is prepared to spend more money on opinion polls to discover what people BELIEVE about these issues than to actually establish the facts.

        As an example, you only have to see how much effort and money is going into marketing renewable energy, and how little into actually developing transport strategies that would rely on electricity rather than fossil fuel. Or even such basic things as electrical storage that would actually make renewable energy reliable and useful..

        The only conclusion is that the policies and strategies are irrational, they are not designed to solve a problem, they are designed to sell product alone. The solving of a problem is as illusory as selling body butter to fix ageing wrinkles.

        *shrug* the conclusion seems inevitable.. democracies, in the end manipulated by unfeeling marketeers towards solutions that are emotionally appealing but which don’t work, will collapse, and, if there is anything left worth having in them, be overrun by people who are more concerned with what actually works, than what a voting electorate wishes would work.

        • Mel Tisdale says:

          Leo, you talk of people being misled by marketing and the like, yet I as far as global warming is concerned, you seem to have been just as easily misled. Take for instance your comment: ‘If global warming were to resume.’ This, I assume, is based on a recent Mail group paper’s article on the subject. If so, please take the trouble to visit:

          and: which covers their follow-up article.

          I should also point out that the associated comments on both are well worth reading.

          I recommend anyone who has been misled by the Mail’s article to search Youtube for ‘Global warming has stopped? again ??’ that was uploaded by Potholer 54. It is only six minutes long and surely the planet is worth spending that much time on.

          If I am wrong about the article being the source of your comment, Leo, I would really like to know why you assume that global warming has stopped (Could it be the GWPF’s article by David Whitehouse?). Until then, I will continue to believe the peer-reviewed papers (in respected journals) on the subject. From these it is clear that global warming has not stopped. Indeed, if we consider the actual heating of the whole planet, rather than simply taking atmospheric temperature as the metric, it is clear that global warming is continuing at a pace. As for any chance of global cooling, that is very difficult to believe being in the least likely, so, pregnant with expectation, I await your forthcoming paper, which I hope you will get peer-reviewed this time.

           Regarding renewables, Leo, I have read your paper on the subject (new readers start here:
          a few times now and it is clear that if you are correct in your calculations, there is a case that the renewable industry should answer. Had your paper been peer-reviewed, it would have been a much stronger case. I am at present trying to get through the WWF’s paper ‘The Energy Report’ (Truth to tell, I have taken one look at the size of it and my horse of endeavour refused the jump, but I will try for a second attempt soon.) Do you have any pointers as where they might be in error? They certainly reach a different conclusion to the one you draw. I did try and draw attention to your paper on the blog, but met with a rather negative response. They have a renewables section under the drop down menu on their home page under ‘resources.’ I suggest that if you wish to make progress with your position on the topic, you would do well to present your views to that community of scientists. The web-site is now well recognised for its impartiality (to tell the science, the whole science, and nothing but the science). It is clear that you know your subject and if you could persuade them to see your point of view, it would be an excellent way to promote what is really the only sensible alternative to fossil fuels, namely nuclear power, which, even if you happen to be wrong about renewables, is still the better option of the two and would not ruin the countryside the way those damn wind turbines do. However, until I see some resolution of the discrepancy between your position and what I assume drives policy on renewables, I, and I assume quite a few others like me, will remain in something of a dilemma. I would like you to be right, if for no other reason than to turn our back on nuclear power the way we are now, especially considering that it forms an ideal solution to the carbon emission problem associated with climate change, is plain daft. That it stems from the blinkered view of things the Greens have on the matter, it is all the more galling. (I used to be one, though never lived in a tepee, so was not too addicted. Sad really, because many of their ideas are very good, but mention “nuclear” to them and they go all funny.)

        • One issue that may make a difference in terms of moving north is the quality of the soil. Some soil is very much better than other soil, from the point of view of producing the foods we are used to eating. Also, the thickness of the topsoil is very important. It is my understanding that quite a bit of the soil in Canada and Siberia is of poor quality, so moving north may not be all that easy.

          I am in India now, seeing what a lower energy life-style looks like in today’s world. But it theoretically could be adopted elsewhere. Instead of going for bigger heavier cars, we could be using a few gasoline or CNG powered auto-rickshaws.

          There are quite a few three-wheeled trucks as well. Even this wouldn’t last, for long, though.

          I have seen quite a few people pulling wooden platforms with goods on them down the street. The platforms have only two wheels on them. Sometimes, there are one or two people at the back, helping with the weight.

          I have also seen quite a few people with big baskets of goods on top of their heads, walking down the street.

          This is not what most people have in mind for a low-energy future.

        • Mel Tisdale says:

          Leo, I think this might be of interest you, it is about Germany’s wind turbines:

          In fact, I think it should be of interest to us all, especially the Green brigade!

    • I agree. Economists have led us to believe that free trade can solve all problems, but it really can’t.

  31. Bill Bedford says:

    >but unless significant changes are made, it is not possible to run the car on natural gas or on coal.

    Estimates are that over 16 million vehicles are fueled by propane gas worldwide.

    • Michael Lloyd says:

      or about 1.6% of all vehicles run on LPG. Conversion costs £750-950 per car. So it would cost around a trillion pounds to convert all vehicles, plus infrastructure costs. I’d say that would be a significant change.

      I know this is a ‘back of the envelope calculation’ but it does give an idea of the scale needed.

      • Isnt powering an an electrical motor more energy efficient than burning the gas in the car including the electricity transportation from a gas plant to the car? Its certainly the case with petrol based transportation today. You need some heck of an infrastructure to get the gas to the car in most cases.

        I would rather see more people switching to electricity than gas – besides big transport which needs longer range (in which case they could “fill the tanks” at a few select locations). It would also prepare people for a more electrically powered world than a fossil fuel one – even as the fossil fuels of the power stations dwindle. Naturally more rail based electrical public transit would be ideal (perhaps even replacing current road systems and personal cars). The roads would most likely require less maintenance in a rail based transportation instead. If personal transport is still required it could be also simpler to automate on a rail system than the silly Google automatic driving car dreams we see on Discovery and such places every year now.

        • Michael Lloyd says:

          You are raising a lot of issues here and we risk going off topic.

          Maybe we can come back to this if Gail does a post on transportation.

        • Denver F. Gray III says:

          Rails aren’t really feasible if you look at most of America’s population density its just not as practice as in Europe.

          On a side not if Gail wants any info on autonomous car’s I work for a company that builds them and competes with google so I’d be willing to offer to dig around for information on the direction our industry is looking and how that might affect oil consumption. Though I’ve done the rough math and fully automating vehicles and taking out the stop and go elements of human control even with a program designed to run within highest achievable zone of efficiency recall wouldn’t give you much more than maybe a 15% better fuel economy in traffic or city conditions. No to mention the goal of having traffic all work together as a hive mind so that stop and go traffic become a thing of the past would have a huge effect on urban transits average fuel economy IMO.

          Also John just a thought but I don’t think rail would be a direction we could push the country in from the position of how we can fix our energy consumption tomorrow maybe in a few decades but the idea of stripping automobiles from the American dream isn’t going to fly with the majority of the general populous. I know plenty of people suffering still driving SUV’s simply because that’s what they want to do and its going to take an act from god or allot more suffering to push many Americans out of their cars and into trains not even to mention the economic implication of doubling or tripling the amount of railways in the country to compensate for the huge changes that would be required to make that even feasible. If the only governments I know that will pay for infrastructure designed for more than the next ten years in the world are Germany and Switzerland it hard to imagine places like America buying into the idea that if we spend a couple TRILLION now we’ll be better off from an energy stand point in the future given its hard to get the state of Louisiana to build a road that will last more than five to ten years despite having the technology to do so and the knowledge that its cheaper in the long run. Why does this happen…? Because no politician wants that initial cost on their coat tails come re-election time.

          • Bill Bedford says:

            Autonomous cars and their control systems may or may not become common in the next decades, but the real economic impact of this technology will be with autonomous trucks. Given trucks that can drive for 24 hours a day without time restrictions or comfort breaks and we will see up to 3 million US truck drivers made redundant.

          • Mel Tisdale says:

            We can forget fully autonomous production road vehicles. Come the first sensor failure that causes someone to die, so too will come the legislation that bans them. That is not to say that we won’t come close, and certainly as far as this post is concerned, road vehicles will soon not allow the driver to drive in other way than the most economical. The technology already exists, all that is lacking is the political will to apply it.

          • My thoughts are the same as Mel’s here. The fact is that autonomous cars the way Google does it still requires the driver to sit in front of the wheel and be alert in case the system fails. So it really doesn’t benefit the average driver much besides perhaps having the system assisting the driver which is a better way to go in my opinion. Its a dream that these things will be commonplace for the future, its also one that is advocating BAU with regards to energy efficiency which will soon come and hit us hard.

            I know that autonomous rail based (or closed lane-based) cars can be way more effective as you can strip away a lot of the security “deadweight” that most cars carry around today just in case of an accident. You could most likely reduce the cars weight to 1/3 or less while still giving the same comfort for the passenger. A railbased system can also use variable sized batteries and cars to reduce weight further and increase transport efficiency as most trips will be very short ones by most users. It will also enable automated single passenger public transit making people less likely to want to own their own “car”. I know this all sounds like science fiction, and an important barrier is that the system would have to be closed, which is where the real costly development would have to be done, as you cant have people or animals strolling in and out of the lanes. Basically the transport lanes would have to be some sort of tube with stops where people could go on and off these things much like a subway today.

            Ofc the problem is building any such system, and how to make it coexist with standard cars – it will quite probably be impossible except for certain large highways where you could swap out a lane in each direction for such a system. It would take a dictators decision to create such a system in any country anyway so not likely to happen in my lifetime anyway. 🙁

            Think about all the energy we have and will be wasting on just driving our own cars around? Its quite staggering really. Ofc the most likely outcome of the future if we are to have any “transition” to one with less energy is to move closer to each other and make smaller communities where you dont have to travel around longer than you can do by foot or bicycle. I know I would have loved to be able to work max 1km from where I live – I’d sell my car any day then. Unfortunately my job lies 12 km away from where I live and with kids to school and kindergarden its a ratrace that surely makes the car ever so tempting to use. Especially since I have to squeeze a full 8 hour workday + transportation time in the debt society we have created. 🙁 – Somewhere we went wrong, and I believe it was when we thought our lives would improve with high debt to buy all this stuff. As I am becoming older I see that this is really not the case, and its really just a rat-race that is ruining our planet as a consequence.

            Sorry for offtopicing on the car thing. 🙂

        • Powering an electric motor is more energy efficient than burning gasoline in the car. (I would presume also than burning natural gas.) The front-end energy (and pollution) costs are higher with an electric car than with an internal combustion engine. I am doubtful that production of either of these types of cars is particularly sustainable.

          With either natural gas or electricity, we are trying to find ways around inadequate oil supply. Since oil supply has little elasticity of supply, even if cars get converted to natural gas or electricity, we will likely use 100% of the oil that is extracted in a given year (to the extent the economy can afford the price). Natural gas cars will tend to encourage more extraction of natural gas. Electric cars will tend to encourage more extraction of whatever fuels are used in the electric supply. If the electricity is natural gas, then you would presumably be right about electric being a better choice than natural gas directly. It is not quite as obvious if the additional electricity is from coal, because of the CO2 difference of coal over natural gas.

          • Well, I believe that we need to seriously downscale our use of fossil fuels and we need to offset much of our transportation to electricity, whether it be public transit or personal. I further believe that if we are given a “quota” of use, we can adapt our transportation needs in better ways than today where the size of your wallet really decides what kind of transportation you use and how often you use it. Its plain silly that one person can travel by airplane once every week to meet up with someone in an office in another town, while another is happy bicycling to work. While our “democracy” gives us this freedom, it really is a very costly one for the society and the planet. Some choices are simply not suited for the individual, since we are by nature extremely self centered egoistic people.

            Quota systems are unfortunately the same as a socialism, and there are just too many people around with socialism anxiety comparing it to dictatorships, North Korea and old Soviet. Its like your democratic right to eat all the food you want until you die from obesity, and its your democratic right to drive around in that fat SUV (with no regard to the imbalance of survivability rights when you crash with an old Lada on the road). The world will never move on unless the government is allowed to “govern” people in to make the right choices or simply limit them by law (smoking). Energy use would be a good one to do some serious governing on in my opinion…

          • Schuyler Hupp says:

            I’ve often wondered, if the transportation fleet were converted to electrics at a very large scale, how long might it be before physical shortages and cost of minerals essential for batteries might become a major inhibiting factor? I’ve heard similar concerns about scaling up wind generators. Ultimately, any mineral resource will have economic and physical limits, but I do wonder if advocates of technology aren’t underestimating the problems associated with scale, both in terms of resources and demand.

            • I think cost will become a problem before physical shortage of minerals. If nothing else, the combination of high price of oil and declining resource quality makes it hard to keep price levels reasonable. Thus, I expect battery operated cars will become too expensive, before we run short of essential minerals.

              We are running into limits on many finite world issues simultaneously (limited cheap oil, limited good quality coal, limited fresh water, limits on soil, climate change, too many people, limited minerals of many types). I still vote for finance and trade being the areas that show the big impacts first. Also, there may be political changes, as people see the current system isn’t working.

            • Mel Tisdale says:

              I think that you have hit on the head there Gail. It seems to me that a large number of financial blogs are concerned that the whole financial system is about to collapse. Indeed, one blogger has a section devoted to survival strategies, such as bee-keeping, chicken management and that sort of thing. I think that when we look back, many things that might be puzzling at present will be seen as part of a larger plan that is being enacted by those who can see just how inevitable societal collapse is, even if the finances were o.k., the list of things in short supply (minerals, water etc) or over supply (population) are almost certain to impede any progress towards increasing economic growth. I just wish the politicians could be more honest with us.

              Have fun in India and be careful not to get Delhi belly!

            • Thanks! Two more days here, and then I will be flying home.

        • yt75 says:

          It’s just way too late now anyway.
          Had the US not been fed the myth “first oil shock= Arab embargo”, when the reality was simply “first oil shock=US 1971 production peak” (together with dropping of Bretton Woods, $ devaluation, start of the debt bubble, and the embargo almost a complete non event in terms or real market, that is number of barrels), maybe things would have been a bit different.

          • Much like most people today think that the Economic Crisis in EU is a financial one and will be fixed by financial means. Problem is that even Europe’s population is too big for the amount of work around, and as Kunstler say, we have created this world in the west where we could create jobs creating and selling digital content to eachother and buy our cheap plastic products from China. When people stop consuming the stuff we produce ourselves there is not much for the average European to to do, and perhaps we have reached a point where our computer systems are “good enough” (who wants Windows 8 anyway?). Along with expensive energy in the form of petroleum, I cant see this changing anytime soon unless people go back to core essentials like working on farms or making hand crafted things – but a the same time seriously downscale their expectations about their own economic freedom (who really needs to travel to the other side of the globe once a year). Western civilization has been “sold” a view of the perfect life that involves high consume and self indulgence in every way we can. Its about time to let go of that balloon and come down to earth, finding lives that truly matter for the planet and our fellow man.

      • Bill Bedford says:

        In the UK LPG is a niche market, OTOH in Turkey 37% of vehicles use LPG and in Poland the proportion is only slightly less. Most major car manufacturers offer LPG versions models. All it would need in most countries to get the majority of people to switch from petrol to LPG car would be a change in taxes on the two fuels.

    • Yes, but the US does not have fueling infrastructure for very many, and the cars we own generally don’t run on natural gas. Our laws are such that the cost of converting at US car is quite high, as well. I agree that changes can be made, but it takes work to get there.

  32. philsharris says:

    You say
    “… it appears we are already moving in this direction.”

    Congressional Research Service April 2012
    I recently found a useful Figure 1 from an April 2012 Congress Research Service Report. What is striking is the build up to 2005 in USA imports of crude oil to an all time (very) high 60% of US oil consumption. The significant drop in US imports since then has a lot to do with the general economy, much as it had in the mid 1980s, but to resume the upward trend that was the old ‘normal’ would require the US to compete more successfully for a share of total world exports. (The latter is not to be confused with total world oil production! Alternatively US home oil production from unconventional oil must increase to make up for both continuing decline in US conventional oil sources and a decline in the share of world exports, As you say, even if that substitution were achieved for a while, real costs make a real economic difference. See also below.)
    The report also says
    “However, oil total (or aggregate) import costs have increased due to rising prices, which more
    than offset the savings from lower import volumes.”

    Also, I find, according to World Bank–XS?disp
    Gross United States National Income (‘GNI’)per capita/per person hardly changed at all overall 2008 to 2011, having dipped in 2009. (US population is still growing @ 0.7 to 0.9% per year).

    I would like to have posted that ‘Fig. 1’ here, but do not know if it is possible.

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