Energy Leveraging: An Explanation for China’s Success and the World’s Unemployment

If an employer wants to maximize profits, it will want to leverage its use of high-priced energy sources.  From an employer’s point of view, there are basically three kinds of energy, from most to least expensive:

  1. Human energy
  2. Petroleum energy
  3. Everything else

If an employer wants to keep its costs low, it needs to minimize its use of expensive energy sources. The primary way it does this is by leveraging expensive energy sources with cheaper energy sources that help keep overall energy costs in line with what competitors (including overseas competitors) are paying. Thus, employers will want to use as little human and petroleum energy as possible, instead using cheap energy to substitute.

Human Energy

Human energy is the most expensive form of energy. It is very expensive because an employer needs to pay the employee enough to live on. This amount includes the cost of energy to fulfill the human’s needs, plus enough extra to cover taxes to cover the cost of energy for those who for some reason cannot work, plus taxes for maintenance of public infrastructure. An employer can keep his cost of human energy low by

  1. Substituting mechanical or electrical energy, which is usually cheaper.
  2. Hiring humans whose wage costs are low. Usually this means is humans who use little energy in their personal lives, and what energy is used, is cheap energy.
  3. Hiring in areas where taxes are low, usually reflecting a lack of benefits to employees.

Petroleum Energy

Petroleum is a second form of energy. It is the second most expensive form of energy, after human energy. Its supply on a world basis is constrained (Figure 1, below). Crude oil supply is only growing at a rate of about 0.3% per year on a worldwide basis.  While the growth in extraction in the US temporarily higher than the world average, it is not of sufficient in quantity to offset big declines elsewhere, such as in Europe.

Figure 1. World Crude and Condensate production since 1994, with fitted trend lines, based on US Energy Information Administration data.

Figure 1. World Crude and Condensate production since 1994, with fitted trend lines, based on US Energy Information Administration data.

America’s recent oil-drilling success relates primarily to shale oil (sometimes called tight oil). There is no guarantee that America’s success with shale oil will continue. The Bakken is today’s biggest source of shale oil, with some claims that Bakken will be able to provide over 1 million barrels a day of oil for many years. It seems strange then that recently ONEOK Partners was not able to find subscribers for a 200,000 barrel a day crude pipeline for Bakken oil. The number of drilling rigs active in North Dakota is now down about 13% from its high in June, according to Baker Hughes–something else a person wouldn’t expect in an area where future production is expect to grow rapidly.

Because world oil supply is growing less rapidly than either population or GDP, businesses and consumers find that they need to use less of it, each year. In addition, the rising cost of oil is a problem. This occurs because we extracted the cheapest to extract oil first, and now the “easy to extract” oil is gone. We see many news items supporting the need for higher oil prices. For example, Brazil’s offshore oil is supposed to be one of the sources of rising future oil production, but reports now say:

The company [Petrobas] hopes to sell $14.8 billion of assets this year as soaring costs, falling production and rising fuel imports have crimped Petrobras’s ability to pay for a $237 billion five-year expansion plan, the world’s largest corporate investment program, Reuters reported.

As another example, Credit Suisse estimates that BP needs a Brent price of $121 barrel in 2013 in order to have sufficient cash flow to cover both investment expenses and dividends.

Oil has many very specific uses, and when used in these ways, substitution is very difficult. Oil is used to power the vast majority of automobiles, trucks, and ships in operation today, and all of the world’s airplanes. It is used for pumping water and generating electricity in areas where electricity is unavailable, either temporarily or long-term. It is used as the feedstock for pharmaceuticals, herbicides, and pesticides. It is used for lubricating machinery of all types.

There are literally trillions of dollars of built infrastructure that depend on oil, supporting all of the above uses, plus others. We don’t have a non-oil replacement for most of our oil-dependent infrastructure. Even if we did, we couldn’t afford a full replacement until current infrastructure wears out. Because of the cost issue, a transition away from oil will likely require very long time, up to 50 years.

Other Kinds of Energy, Besides Human and Petroleum

There are many kinds of energy besides human and petroleum. Biomass has been a source of energy  for over 1 million years. Animal energy, such as dogs for hunting or animals for riding or plowing is another source of energy. Other types of energy include  coal, natural gas, nuclear, wind power, water power, heat from the sun, solar PV, geothermal, peat moss, and man-made substitutes such as ethanol.

From the point of view of a business wanting to produce some type of goods or service,  the most important characteristic of the energy product used is cheap relative to the services performed, assuming the business wants to be competitive with other businesses.  At this point, coal seems to be the winner in the “cheap” category, especially if a country has local supply and is willing to overlook the need for good scrubbers.

In the US recently, natural gas has been selling very cheaply as well. The low price of natural gas seems to be a temporary, local situation, however, because very little of the natural gas can actually be produced for the price it is currently being sold for. Many shale gas companies have had to write off reserves. Either the sales price of natural gas will need to increase significantly from the current U. S. level, or many players will have to drop out. If the price rises by several dollars per Mcf, we can expect considerable electrical-generation switching from natural gas back to coal.

Some companies may prefer higher-priced fuels for environmental reasons, but unless there is a tax on imports of goods and services produced with coal, goods produced with higher priced fuels are at a competitive disadvantage. The competitive disadvantage runs to labor costs as well, since using cheap coal (especially without proper environmental protection), helps keep the cost of living down through cheap prices on home heating and local transport.

Looking at Energy Services from a Citizen’s Point of View

The naive view would be that humans don’t need external energy. In order for this belief to be true, we would need to live like other animals.  Humans could live without external energy if we could live without clothing or shelter, and if we could eat all of our food raw, without chewing for literally half the day.

Humans discovered how to control fire over 1 million years ago. We have now adapted to the availability of external energy sources in many ways. As we learned to cook part of our food, the size of our teeth, jaws, and digestive system shrank, leaving more energy for  brain development. With better brains and clothing (made using embedded energy) we were able to move to less hospitable areas of the world, increasing our total numbers.

The amount of external energy each person needs today varies. In particularly hospitable areas, a few people can live as hunter gatherers, burning twigs or dung for fuel. But in general, the vast majority of people will need some additional external energy. They will also need some means of either buying food (which is a form of energy) or growing it on a plot of land that has been provided. They will also need other essentials, including clean water and protection from the elements. If humans do not have a job in today’s economy, they will need financial support to purchase the goods and services they require to live.

The more cheaply the necessary services can be provided to citizens (generally meaning the lower the energy costs), the lower the salary employees need to earn to provide a comfortable way of life. An employee who lives in a tropical area where he can walk to work will probably not need a very high salary to be comfortable; an employee in a very cold area may need heat for a home, besides needing clothing and a warm vehicle. If the employee uses expensive oil products for his vehicle, he will require a higher salary than if similar services are provided with, say, an electric bicycle, or walking.

How China Beats the United States at Energy Leveraging

If we look at China’s energy leveraging, we see that it uses very little oil and much coal. China joined the World Trade Organization in December 2001, and ramped up its coal usage shortly thereafter.

Figure 5. China's energy consumption by source, based on BP's Statistical Review of World Energy data.

Figure 2. China’s energy consumption by source, based on BP’s Statistical Review of World Energy data.

The percentage of people in the US with jobs started decreasing at about the same time that China ramped up its coal usage.

Figure 11. US Number Employed / Population, where US Number Employed is Total Non_Farm Workers from Current Employment Statistics of the Bureau of Labor Statistics and Population is US Resident Population from the US Census.  2012 is partial year estimate.

Figure 3. US Number Employed / Population, where US Number Employed is Total Non_Farm Workers from Current Employment Statistics of the Bureau of Labor Statistics and Population is US Resident Population from the US Census. 2012 is partial year estimate.

While we can’t prove there is a connection, we know that several other Asian countries, including India and Bangladesh, also ramped up international trade about the same time. The combination of lower salaries in Asian countries and low energy costs made Chinese costs of production much cheaper than that of developed countries. The cost of services, such as computer technical support in India, also became very inexpensive, and with greater trade, more available to companies seeking to reduce coasts.

Toward the beginning of the period shown on Figure 3 (above), there were more US farmers, and more women staying at home with children (on the farm and otherwise) than there are today As the birthrate in the US dropped in the 1960s and 1970s, more women joined the work force. Many households were able to add a second wage-earner. So prior to 2000, there was a long-term rise in the percentage of the US population with jobs–a trend then many economists seem to have overlooked in analyzing long-term economic growth. Now the trend has reversed, during a time when the US is having increased financial problems.

Higher oil prices are also tied to the reduction in the proportion of US citizens with jobs, because high oil prices tend to cause a reduction in discretionary expenditures, and a loss of jobs in discretionary sectors. The combination leads to government financial problems, as I explained in my recent post about the Fiscal Cliff. Countries like China and India which leverage their oil use to a greater extent with more coal use are less affected by a rise in oil prices. This is another reason why jobs are moving to China and India, and away from the US.

In China, demographics seem to be keeping the cost of maintaining a household low. At this point, Chinese households have relatively few children and elderly to take care of. In some instances, multiple generations live in one household, further lowering required per-person income needed to maintain a household.

Lack of pension programs in China can also be a boon for Chinese businesses because without such a program, there is likely to be increased private savings and thus more funds for investment. This is especially the case with one-child families, because citizens realize that with small families, they cannot depend on offspring for support, leading to a greater need to save for retirement.

The Path Ahead  – Fewer and Fewer Fossil Fuel Supported Jobs

What is concerning is where the current path leads us. With the miracles of computers and mechanization in general, fewer and fewer employes are needed to produce goods and services. The employees that companies choose to hire often live in parts of the world where labor is cheap because the standard of living is low. With expensive petroleum expected to stretch farther and farther, more potential users (who might start a new company or sell a new service) are priced out of the market.

In a competitive world economy, there is little role for people who need high wages because they live petroleum dependent lifestyles. The major exceptions are (a) a few management employees and (b) employees in sheltered areas of the economy, such as health care and higher education. It is not clear that these sheltered areas can continue very long because it is increasingly difficult for other workers to afford their high cost.

It is possible to leverage human labor using non-fossil fuel energy, but generally the leveraging isn’t very good. For example, a person can raise a horse, if he or she has an extra ten acres to graze the horse on, and reasonable rainfall. The horse can then be used for transportation and perhaps pulling a plow. A windmill made from local materials can perhaps be used to pump water for the horse, and a water wheel can be used to grind grain.

In 1800, with little fossil fuel use, the world supported about 1 billion people. It is not clear how many people the world could support now if fossil fuel use were discontinued. Fossil fuels are needed to make concrete and to make metals in the quantity used today. Because of this, without fossil fuels we would likely lose our ability to make new “renewable” energy products, such as hydroelectric dams and wind turbines, as well as supporting products such as new electrical transmission line.

Should There Be More Taxes on Businesses?

There are a couple of kinds of taxes that are needed in our current situation. One type of tax is to pay for transfer payments to all of the unemployed individuals, as our current system requires fewer workers. These taxes are now being paid mostly by employees, either through federal taxes or through local taxes. If the cause of this unemployment is actions by employers, perhaps these taxes should be paid by employers. The ones particularly at fault are those who choose to hire workers from lower wage areas and those who subcontract with companies from low-wage areas.

Another kind of tax that is needed is a tax to support the increasingly high cost of maintaining infrastructure, because upkeep of infrastructure is usually oil-dependent. (I suppose this could be called an “entropy tax.”) Even if individuals are priced out of having their own vehicles, businesses are still likely to expect to use roads for shipment. These roads need to be maintained, because freezing and thawing will cause the roads to deteriorate, even if few use them. Similarly, hurricanes and windstorms will bring down power lines, regardless of how little electricity is used. We will also need to maintain oil and natural gas pipelines and water and sewer pipelines, if we expect to use these services at all.

At the present time, the cost of maintaining this infrastructure is either paid by the companies selling the product or by taxes on  individual citizens. As fewer people are employed, it will be difficult for US utilities to continue to collect as much revenue from individual subscribers. If businesses want to continue to receive these services, perhaps a change in funding is needed, with businesses bearing a disproportionate share of these costs. Of course, this will further increase costs in countries with lots of built-infrastructure, compared with low-income countries, adding to the competitive disadvantage of developed countries.

Does it really make sense to continue on the path to increasing globalization? We will need to quit a some point, either because of a choice to move away from fossil fuels, or because oil supply becomes even more constrained, and the ensuing financial problems cause us to cut back.

Policymakers and economists assume that the only path forward is increased globalization, and have not really examined any other path. In a world with limited resources, the path away from globalization is more sustainable one. The big concern is  how much population it can support.

A Note on The Role of Biofuels

Biofuels can act as a partial substitute for oil, in some cases, and thus extend supply. If their cost is no higher than that of oil, they can make it possible to produce more goods and services, especially if the use of biofuels leads to more petroleum availability in the industrial/commercial sector.

Adding biofuels to the personal sector is of questionable benefit. Increasing biofuel production leads to burning coal and gas more quickly, since it adds to oil supply, rather than substituting for it.  Increasing personal biofuel use tends to keep citizens’ use of oil products higher than they otherwise would be, leading to a need for higher wages, and thus a less competitive position in the world economy.


I think anyone who reads this far will feel like screaming, “This is not a system that works!” It isn’t, and it is frustrating. But it is hard to see a way to change the system in a way that makes the system work better for all 7 billion humans alive today. Perhaps the best we can do is work toward a less globalized system, even if not everyone can be helped by it.

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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116 Responses to Energy Leveraging: An Explanation for China’s Success and the World’s Unemployment

  1. Pingback: Why World Coal Consumption Keeps Rising; What Economists Missed | Our Finite World

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  3. Just to Clarify here Gail, I am curious as to where you place yourself in the Doomer Pantheon we identify on the Diner..

    4 Choices

    Cornucopian-We’ll resolve the problems with new sources of energy
    Doom Lite-Economic Crash but we’ll recover in 20 years or so after moderate die of
    Full Doom- Homo Sapiens will contract to a small number but still survive
    Uber Doom-Extinction for Homo Sapiens


    • nature invariably culls every species that breeds in excess of its sustainable environment
      there are no exceptions no matter what ‘new technologies’ we dream up

      • Ikonoclast says:

        Essentially this is correct. I like to say technology can appear to “stretch” the natural limits but it cannot repeal them. The natural laws will assert themselves in the end. Just as in physical nature, if you stretch an elastic material (or system) two possibilities are available to release the tension promptly. There can be snap-back or the material or sytem can break. Both events can be nasty if the forces involved are great.

        The third possibility is contolled release of the dangerous tension. That is you stop stretching the system and quickly but cautiously release the tension. We need to do this third action but the momentum of the whole human population-technological system we have set in motion appears to be against us.

        • Ikonoclast says:

          But (just to add a point) we should not give up and adopt the BAU fossil burning position by default. (The attitude of having a good time burning it until the party is over.) We should attempt the switch-over to renewables immediately and salvage as much as we humanly can. The switchover has to happen anyway.

    • Probably pretty low on the list, but we don’t know how the timing will work out. The contraction could work out over a very long period.

  4. Ikonoclast says:

    I have lost patience with the anti-scientific, blinkered and Luddite thinking of renewable energy opponents. Renewable energy opponents come in three flavours. These flavours are;
    1. The Cornucopian Infinites who hold that fossil fuels on earth are infinite in quantity and the earth’s capacity to absorb pollution is also infinite.
    2. The Collapsists who hanker for a collapse to happen and think some sort of bucolic and idealised medieval idyll will result (or else think that the Rapture will occur).
    3. The BAU Fatalists who know Business as Usual is disastrous but say there are no alternatives.

    Each style of thinking is specious as follows;
    1. The earth is not infinite
    2. A collapse will be horrific and not ideal.
    3. There are alternatives to BAU.

    I won’t deal with options one and two as most posters on this blog are realistic enough to know the earth is finite and that a global civilizational collapse will be horrendous.

    This leaves BAU fatalism which in many ways is the most insidious and dangerous form of defeatism to fall into. It ultimately might be true that there is no alternative (though on balance I do not think so) or it might be true that the alternative is still technically possible but no longer politically and socially possible given our current position. This latter is a real danger. However, giving up and chucking the towel in is defeatism of the very worst kind and it gives succour to the Cornucopian Infinites. You basically become de facto recruits for the Cornucopian Infinites and increase the chances of collapse becoming a self-fulfilling prophecy.

    It is well known that the fossil fuel industry is funding a number of campaigns to discredit both climate science and renewable energy possibilities. Their finely targeted tactics involve both crude efforts to promote blatantly cornucopian and anti-scientific ideas and more sophisticated efforts to induce defeatism or passive compliance in more intelligent opponents. A prime way to do this is to convince those who see faults in the current system that no other system is possible i.e. not politically possible, not economically possible and even not energetically possible. Those intelligent and educated persons who uncritically and credulously accept this subtle propaganda do their own intelligence and their society’s ever dwindling hopes a great disservice.

    The review of “Green Illusions: The Limits of Alternative Energy” I will take to be a reasonably accurate review and summation of the original book. The book is clearly specious at so many levels of argument that it deserves to be dealt with in a detailed refutation. The reviewer is more balanced than the book but I will address the book.
    1. The title of “Green Illusions: The Limits of Alternative Energy” needs to be critiqued first up. A full and fair exposition of illusions would first mention that on finite earth Cornucopianism and BAU are both unsustainable illusions. This would establish the imperative to find a sustainable alternative, a real alternative. As Cornucopianism and BAU are both empirically provable to be illusions then we need a real alternative. Green sustainability is a proposed alternative. Leaving aside whether it is real or not we now have 2 options. Cornucopianism/ BAU which is a proven delusion or Green sustainability which is a possible but not proven solution at this point in the argument.

    2. “Zehner not only argues that green energy has technological, environmental and economic limits, but also that without an appropriate policy context, some forms of alternative energy could do more harm than good.”

    For sure green energy has technological, environmental and economic limits. Fossil fuel energy also has technological, environmental and economic limits. All forms of energy use on earth (for useful work) have technological, environmental and economic limits. This is like arguing that “the sky is blue” or “water is wet”. It is also a straw man argument. No scientifically literate green energy proponent claims renewable energy is limitless.

    For sure, SOME forms (emphasis added) of alternative energy WILL do more harm than good. We don’t even need to add the rider “without an appropriate policy context”. It is absolutely clear energetically speaking and in terms of food security that devoting agricultural resources to convert foods or food-growing lands to the generation of biofuels will do much more harm than good. No scientifically literate and humane Green will ever agree with such perverse policy. In fact, these perverse policies are pushed for by vested BAU interests in places like the USA and Brazil. These vested interests lobby for and receive huge government subsidies for these perverse and very anti-Green policies.

    3. “Carbon isn’t the whole story. When you count toxic sludge from making solar panels, noise from windmills placed too close to residential areas, or changes in land use patterns from cultivating biofuels crops, you find that alternative energy has negative externalities of its own that offset its low-carbon benefits at least in part, and sometimes entirely.”

    No true Green needs to be told that carbon pollution (atmospheric emissions of CO2) is not the whole story. The very fact that the carping and reactionary mainstream is now properly aware of pollution and negative externality risks is due to scientific, environmental and Green research and consequent education in the public and political debate. The hypocritical mainstream cared nothing for negative externalities or negative externality arguments in the past until forced to the bar of legal argument or the lab bench of scientific argument. Now at the 11th hour, the mainstream wants to pull out the negative externalities argument when it is basically 95% at fault and the opponent 5% at fault.

    4. “Energy not only has to be produced, it has to be delivered when and where it is needed. Solar and wind power work fine in niche applications, but if you think about scaling them up to supply 20 percent or more of our energy needs, as some hope to do, you run into problems integrating these intermittent energy sources with our antiquated national electric grid.”

    “Energy not only has to be produced, it has to be delivered when and where it is needed.” This is true of any energy source, not just renewable energy, so why raise the point at all? All energy generation has at least two significant competing economic parameters. One is situation as near as possible to the primary fuel or energy source and the other is situation as near as possible to the energy consumption locality. Renewable energy is not special or unusual in this regard and suffers no more than other energy sources from this problem. In the state where I live, coal power stations are sited a long distance from major cities but close to the thermal coal fields.

    “… if you think about scaling them (wind and solar) up to supply 20 percent or more of our energy needs, as some hope to do, you run into problems integrating these intermittent energy sources with our antiquated national electric grid.”

    Well, this begs the questions “Why is the national electric grid antiquated?” and “Why is that somehow renewable energy’s fault?” An antiquated national electricity grid needs upgrading in any case. Modern practice is to link large areas like mid and eastern continental Australia or eastern continental North America into a single integrated grid to allow regional and local export and import of electricity. There are efficiencies and benefits to this even with fossil and/or nuclear generation. So it is not a renewable energy caused problem and it is not specifically or not only renewable energy generation which demands it for efficiency and effectiveness. Thus it is fallacious to single out renewable energy as “demanding” or “mandating” upgrading and integration of the grid.

    In South Australia, wind energy already provides 20% to 25% of annual electricity needs. On windy days, it provides up to 50% of S.A. needs and exports to the Victorian grid. On low wind days they can import from the Eastern grid. This is an established and effective procedure and South Australia has a reliable and robust energy supply. South Australia still has two operative coal fired power stations and several gas fired power stations. The gas fired stations can be powered up and powered down quickly for dispatchable power. In addition, they have a grid of weather stations and anemometers which provide wind speed data for wind power prediction up to 12 hours ahead. This grid is linked and computerised for constant real time prediction. Predictions are made for future times at short intervals up to 12 hours ahead. Probabilities and error ranges can be calculated for these predictions thus providing ample warning on the need to power up or power down dispatchable power.

    This level of sophistication is real and it is here now. In general, critics of renewable power have no idea of the scientific and control advances that have been made in this arena.

    5. “If you include the needed costs of upgrading the grid and providing backups, solar and wind start to look a lot more expensive.”

    If you include the particular costs and disadvantages of any power generation method and exclude its particular cost and practical advantages, of course you will get a skewed picture of its expensiveness. We have already established that our grids needed upgrading and integration at the large feeder level irrespective of the advent of renewable energy. Renewable energy may well require upgrades at the local level. Suburban transformers and even sometimes substations will need upgrades after more than about 15% to 20% of houses get solar PV. Intermittency also mandates energy storage and back-up power which also add to costs. On the other hand once solar and wind are installed all the fuel is free. Although, the up-front embedded energy in capital equipment is not free of course.

    6. Intermittency and storage are not the insurmountable problems they are made out to be by opponents of renewable energy. I am particularly amused by proponents of nuclear fission energy and even future fusion energy making out that the engineering and safety problems of nuclear energy research, prototyping and generation are going to be somehow easier than the challenges of scalability, intermittency and storage for renewable energy.

    The claim that intermittency presents major problems does not stand up to empirical analysis. Firstly, night-time power will not be a problem. Wind blows by night as well as by day albeit intermittently in both cases. Some forms of solar power and/or storage can allow electricity generation 24/7. Solar convection towers can generate power 24/7. The temperature differential between surface and tower top at 500m to 1000m (which causes the convection flow) increases at night. Air turbines are placed at the air intakes around the base of the tower. At any one time, one inlet can be closed to allow maintenance or replacement of an air turbine. This can occur on a rotation basis and the convection tower power station never needs to shut down.

    Heat energy storage is already a proven technology in use at solar concentrating thermal power stations in Spain for example. These stations concentrate more solar energy than they need for daylight hours power generation. The excess energy is stored in tanks with molten salt and rock aggregate for latent heat storage. This heat energy is then used at night for power generation. The energy loss of storage is just 3%. These tanks and the attendant engineering challenges are no more complex nor dangerous nor pressurised than other standard high temperature and pressure engineering applications like boilers or even refineries. The notion that these facilities encounter special new engineering problems outside the range of current knowledge and techniques is entirely fallacious.

    7. “Beware of promises based on performance of alternative energy under ideal conditions.” Once again this warning applies to all energy generation and all operating machinery. Claims usually relate to ideal conditions or laboratory bench test conditions. Anyone with any nous knows that “nameplate” performance is never reached in practical conditions. Then it becomes a matter of assessing likely working life performance under the expected range of real conditions. This is not difficult in an engineering or scientific measurement sense.
    8. There is also the issue of EROEI. I have cited data before in this blog to illustrate that EROEI for wind especially and now solar is not great but is above what is needed to run a modern civilization if that civilization cuts out most energy squandering. That is, it is in the range of 10 to 1 (solar) to 20 to 1 (wind). Of course, opponents of all hope (for that is renewable energy opponents are) want to deny this and use performance figures which are up to 10 years and sometimes 20 years out of date.

    9. As I said way above, the reviewer is more balanced. And of course clean coal is a fraud and fracking is bad whether or not flaming faucets are real. In any case, coal and gas are not renewable and will cause climate change irreversible in the next 1,000 years. So why would they figure in any discussion on renewable or safe energy?

    Can this blog rise to the challenge of assessing renewable energy objectively, scientifically and quantitatively? Or will posters endlessly repeat unsubstantiated assertions that “It will never work” along with outdated EROEI data and unquantified and exaggerated claims about embedded energy?

    Finally, are people aware of the danger of providing de facto aid and succour to the enemy (the fossil fuel industry) by adopting the seductive and selfish view that “we might as well burn it all and have a good time now as the future is hopeless anyway”?

    • Ed Dolan says:

      Thank you for your review of my review (longer than the original). You didn’t get to my main point (and one of Zehner’s main points): Renewable energy will do more good if we change the policy context by raising the prices of energy from all sources. Do you agree?

      • Ikonoclast says:

        I agree that negative externality costs (and insurance costs etc.) must be raised to acturially and economocally realistic levels for all forms of power generation. In practice this will certainly raise the costs of many, and probably all forms of energy generation, albeit at differntial rates. Thus some forms of energy will gain a new competitive advantage from “comprehensive pricing”. So I strongly agree but in this well-defined sense.

        In addition there is the issue of past free-riding. Until the advent of carbon taxes set at the full necessary rate, fossil fuels have had and still have a free ride and have done “free damage”. Should they now be sued by the government on behalf of all the people for damages to the biosphere? Perhaps they should be. To take an extreme example, a food company that poisoned people (causing many injuries and fatalities) could be sued as a class action and if that class action resulted in damages which bankrupted the company and put it out of business then that outcome would be permissable and in many ways desirable and just. The caveats would be that (a) there be other companies able to provide the foodstuffs (no significant shortages) and (b) that non-culpable workers and managers in the bankrupted company were at least assisted welfare-wise and in obtaining alternative employment.

        In the case of fossil fuel companies they could be sued as outlined above for full damages to the biosphere. It would be a difficult case and they might have legal defences although perhaps the government could foreclose some defences by legislation and then sue. The courts views on this would be interesting to say the least. If the action was successful the government would take over all the assets of fossil fuel generation in lieu of payment. Of course, it might be easier to just nationalise it but nationalisation would never fly in the US.

        Once under government control, fossil fuel power generation and fossil fuel extraction industries could be closed down at a rate commensurate with the most rapid shift to renewable energies possible. This emergency action is warranted as it now appears from the latest climate news that 4 to 6 degrees C of mean temperature rise will be built in by just a few more years of fossils BAU (Business As Usual). Nothing less than the survival or extinction of humanity is at stake.

      • Raising prices on other fuels would be right, if you could get everyone in the world to do it. As it is, what tends to happen is that prices are raised in one part of the world, but not in the parts of the world that use a lot of coal. Oil production is constrained on a world-wide basis. The raising of prices in one part of the world tends to push oil consumption to the parts of the world that do not tax fossil fuels. These countries use the oil in a way that leverages up their coal usage, and raises employment. Employment tends to decline in the country with the taxes. We end up with a lot of unintended consequences.

    • Bicycle Dave says:

      Hi Ikonoclast,

      As usual, I applaud your knowledge and persistence in explaining key points about alternative energy. In this post, you didn’t mention sustainable population levels. But, I assume from your other comments that you agree that we can’t sustain current population levels and still provide a satisfying life per Maslow’s Hierarchy – and certainly not at current resource consumption levels in places like the US. I assume that you feel as I do that the sole purpose of planet earth is not to provide for the absolute maximum number of humans to be alive at any given moment.

      If this is true, that you agree we need to work towards achieving a lower population level of humans who individually consume less planetary resources, in order for alternative energy sources to provide a sufficient amount of energy for a post hunter-gatherer existence (enjoying many of the benefits of science); then I submit that there is a huge problem that needs to be solved before your technical energy solutions can be implemented successfully to sustain humans for the long haul. Of course, if you don’t agree with this assumption then that’s a different matter.

      IMO, the real problem that needs to be solved is how to get a critical mass of people on the planet to understand the basics of the issues we discuss here every day. As it stands, the technologies you advocate (which sound very good to me) don’t have much probability of being implemented in a time and scale that will prevent some pretty nasty consequences of current human behavior. How to move beyond the ignorance, doubt, apathy and denial of today is the fundamental impediment to your solutions – especially with the urgency required to prevent ugly stuff from happening.

      Just as you are frustrated with the lack of belief in the viability of alternative energy strategies, I feel the same way about the docile fashion in which most humans accept as “true” the memes they have been indoctrinated with in early childhood by groups of people with highly vested interests in keeping control of public sentiment. The political, religious and economic ideologies that govern most people’s behaviors are generally considered off-limits in the public discourse (and I must take care what I say even on this little blog). The real catch-22 is that these indoctrinations would have to be stopped in the family and classroom settings for very young children – and, of course, the people who could make these changes are already blinded to the realities of our predicament and see no reason to make changes – to the contrary, many of them want to be more fundamentalist in their “beliefs”. It is exactly these false beliefs that prevent us from taking meaningful action.

      As much as I believe most of what you explain, I remain pessimistic about meaningful change in a relevant time frame for future generations to have a reasonable existence.

    • I am not sold on “renewable” energy*, largely because I don’t think it is renewable. It is, at best, a fossil fuel extender. Without fossil fuels, we cannot even repair the “renewable” energy already in place, or the electric grid that is needed to carry it from location to location.

      I am seriously worried that intermittent wind and solar PV will shorten the life of the electric grid, because they make the grid increasingly difficult to control. If this is the case, then they will have precisely the opposite impact of what they are intended to have. If some people want to use solar PV and wind off-grid, I think that is their business, and is perfectly fine, but society should not be subsidizing the cost. There is no possibility that a very high percentage of the world’s population will benefit from off grid solar PV and wind (except perhaps small wind, used to pump water). Some inputs are very polluting, and are only produced in China.

      With respect to biofuels, they have many negative feedbacks. Growing them degrades the soil and competes with food. Growing them often uses excessive amounts of fresh water. Growing them leads to deforestation and use of more marginal farm land. They help extend oil supplies (not substitute for them) by burning oil and gas quicker, so do not really reduce CO2. There is a negative feed back loop when they are used, because world oil supply is constrained. The availability of biofuels increases the liquid fuels in the world market, giving China, India, and the rest more (because the biofuel users are using relatively less). The lesser developed countries need oil in their fuel mix. Having more oil helps them leverage up their coal use to a greater extent. This is one contributor to growing CO2 in recent years, in my view.

      Electric cars are interesting, but again, in a world with constrained world oil supply and international trade, they simply send the “extra” oil to China and India, where they can help leverage up coal use. Perhaps it is free trade that is the problem, but without free trade, we wouldn’t have the electric cars, either. They theoretically do have the possibility of adding to America’s ability to ride around longer, if we can keep the grid going. There is again the pollution issue, both with respect to rare earth mining and battery disposal.

      I see EROEI as being helpful in comparing one wind turbine against another, or in looking at how oil extraction has changed over the years. I don’t see it as being particularly helpful in deciding which technologies to use. It is not a broad-based enough indicator.

      *There are some exceptions. Solar thermal is fine. Geothermal may be OK in some locations. Some water power is OK, but large water power is not sustainable over the very long term without fossil fuels, because of limits on dredging and on high quality metals without fossil fuels.

    • Flores says:

      It seems Germany is going “all in” on renewables aiming at 100% of electricity in 2030. Also, I think they want to get at something like 20% electric cars (which leaves still a lot of oil consumption, by the way). So, although being a kind of exception (for its economic power), this country could serve as the biggest real world experiment to the question if it really works to scale renewables up. We would have to suspend the discussion until then.

      But then I think – how are they paying for all of this investment? By exporting millions of normal cars, machinery, hightech… And they are at the pinnacle of their economic development, albeit their government (like the rest of countries) heavily in debt. And they still seem to encounter many difficulties right from the beginning, even for building just in the new grids linking the north sea wind to their industrial south. The offshore wind parks seem to be extremely prone to damage and difficult to maintain. The german population seems quite unhappy with the way their government is allocating capital to the renewable sectors. And almost NOBODY buying electric cars even in this rich “progressive” society.

  5. Reblogged this on evolvESustain.

  6. Ed Dolan says:

    I think there is a missing ingredient in the economics behind this post–the possibility of “leveraging” energy by substituting capital. I don’t mean financial capital as in hedge funds, but real capital, as in structures, machinery, and so forth. We can “leverage” or economize on energy by creating capital. How? Here are some common examples:

    –Invest more capital in a house by insulating it better. House costs more to build but uses less energy.
    –Invest more capital in vehicles to make them more efficeint. A Model A was cheap, so was a good ol’ V-8 1950 Ford, both were low-capital, low-mileage cars. Today’s cars have more capital embodied in them and get better mileage

    Thousands of more examples.

    US has a higher standard of living than China and uses less energy (of all kinds) per dollar of goods and services produced in part because it uses more capital.

    This is not the whole answer to environmental issues–no one concept is–but it needs to be part of the mix.

    • Ramping up front end spending makes sense when there is a very good payback, and when there are plenty of resources available for doing this–especially if investment is for an energy saving purpose. But it is easy to come up with examples when ramping up front-end spending doesn’t make sense, especially when this spending is masked by subsidies. You gave the example of solar PV being equivalent to gold-plated weather stripping in this link you sent me. (A book review you wrote called Green Illusions: The Limits of Alternative Energy –very good, by the way.)

  7. GermanStacker says:

    Regarding human energy, you say that this energy source is the most expensive one today. But am I right to think that in a situation with many people unemployed, who need to be supported by the state anyway, it might become economically reasonable to make them work in simple tasks replacing FF energy at a very low wage? I.e. kind of what the asian economies are (or have been) doing? Or do you think the cultural step back to simple physical work on a larger scale would be so enormous that we would rather see a Madmax scenario with everything decaying and people got nothing to do? You would only need a system that allows workers (wouldn’t even necessarily call them slaves) cheap survival: small apartments near the work place, subsidized food staples and basic healthcare. For all those without good jobs (i.e. the majority of young people all over the world) it might be even a good thing, because happiness depends a lot on comparing yourself to the social norm, and today they seem to be kind of excluded from “prosperity”.

    • The problem I see is that “productive” jobs require fossil fuel inputs, and thus are hard to generate. It is possible to make a lot of jobs that are fairly unproductive, but it is hard to justify paying the recipients a very high wage for doing them.

      This is one kind of fairly unproductive job I saw in India–a woman making rope.

      Woman making rope near Mumbai, India

      It is hard to justify paying her any more than what it would cost to make rope with a machine, which is not very much. Other non-productive jobs I saw included cutting rice by hand with sickles, and workers providing many extra security check steps in the airport (way beyond US levels). A person can think of some other jobs that don’t use much energy, that we could have, like playing with small children after school, before their mothers came to pick them up after school, or cleaning streets with brooms. Even planting flowers near roads, or vegetables near roads, doesn’t add much to revenue. Salaries of these workers has to be extremely low, or taxes on other workers become ridiculous.

      It does keep people busy, but it is hard to pay the recipients enough to feel like they are on a par with other workers. If taxes are high enough, I suppose everyone can be knocked down to the same low level–not an ideal solution, though.

  8. Bicycle Dave says:

    Hi Sailor Don,

    The current position of the Roman Catholic Church–that the soul enters the body at the moment of conception–is relatively recent.

    According to Nadya Yuguseva, a shaman from the Altai, “‘A woman has 40 souls; men have just one”

    Lots of female souls but not such a great afterlife:

    Valhalla is an afterlife destination where half of those who die in battle gather as einherjar, a retinue gathered for one sole purpose: to remain fit for battle in preparation for the last great battle, Ragnarök. In opposition to Hel’s realm, which was a subterranean realm of the dead, it appears that Valhalla was located somewhere in the heavens. Odin’s kingdom was primarily an abode for men, and the women who live there are the valkyries who gather the fallen warriors on the battle field and bring them to Odin’s hall where they pour mead for them.

    But, at least we have a pretty good idea about how many humans will survive the crash:

    Ragnarök is a series of future events, including a great battle foretold to ultimately result in the death of a number of major figures (including the gods Odin, Thor, Týr, Freyr, Heimdallr, and Loki), the occurrence of various natural disasters, and the subsequent submersion of the world in water. Afterward, the world will resurface anew and fertile, the surviving and returning gods will meet, and the world will be repopulated by two human survivors.

    • donsailorman says:

      I am a Jew. Under Jewish law the soul enters the body at the moment of birth and no earlier. Thus, even abortion during the nineth month of pregnancy is not a moral issue, according to my beliefs.

      • Bicycle Dave says:

        Hi Sailor Don,

        I’ve always felt that abortion laws were a bit odd. However, what you site is the most consistent with my understanding of the nature of US secular law. US laws only pertain to US citizens – we don’t draft laws that we intend to enforce in Russia. We don’t attempt to tell a Russian citizen what taxes to pay, what is legal tender, how to conduct a divorce, etc. In this country we make a pretty big fuss about who is a citizen and who is not – seems Obama got a lot attention over his actual birthplace and his status as a citizen of the USA. In the USA, you must be born on American soil or go through the immigration/naturalization process. As a fetus at any age is not a citizen nor can it apply for citizenship, it’s odd that we like to pass laws in this area. The current favorite proposed law in some states is the “Personhood Amendment” that would confer many citizenship rights at the moment of conception. Of course, if this became national law, then we could legally pass all kinds of laws for fertilized cells.

        • donsailorman says:

          IMO, we should modify our citizenship laws to discourage Mexicans from crossing the border to the U.S. to have babies. As ancient Athens did, I think we need to distinguish clearly between resident aliens and citizens. Only citizens should have the vote. Along with Socrates, Plato, and Aristotle, I think military or police service should be prerequisite to having voting rights. If one has not served as a soldier, sailor, airman, or Marine, how could one possibly understand warfare? In other words, the first George Bush was qualified to be President; he served and was shot down in WWII. The second George Bush evaded genuine military service and sloughed off with a minimal participation in the National Guard. Obama never served in the military. He is absolutely and completely incompetent in international affairs.

          • The proportion of women who have served in the military is very low, so your approach would tend to disproportionately cut out women.

            China requires licenses (or something similar) for people to move to its cities, so that the number in the cities does not dwarf available services, like schools and hospitals. Most other countries do not. The result can be a lot of people living in makeshift quarters need cities in lesser-developed areas, in an attempt to get higher paid jobs and more services.

            As time goes on, and there is less in the way of jobs and less in the way of service available, there is likely to be more argument as to who should receive these benefits.

            • donsailorman says:

              I think the most logical answer to the question of “Who is a citizen?” is found in Israel, where there is universal military training for both men and women. Plato, in “The Republic” advocated educating women exactly the way men are educated. He asserted that women could serve in any military position except strategos–which means commander in chief. He gave a practical reason for allowing only men to be a strategos, namely, that many male officers would flat out refuse to obey a woman. In my opinion, Plato was way way ahead of his time, especially in his advocacy of complete equality for women.

          • Bicycle Dave says:

            Hi Gail,

            The proportion of women who have served in the military is very low, so your approach would tend to disproportionately cut out women.

            I advocate universal draft at age 18 for a year or two – although this should follow a military model of boot camp, etc, the draft should be for more than just military purposes. There are many national needs that could still benefit from a CCC type of program. However, “universal” should be just that: universal with no exception other and extreme incapacitation. All women should be drafted. Women who have babies by the time they are 18 would not be exempt although there would need to be some minimal accommodation for this case. History is replete with examples of women with babies being mobilized with everyone else.

            When I was drafted into the army, a big problem was the “sucker complex” – somehow we were not smart enough to dodge the draft. I didn’t want to be drafted but illness/finances forced me to drop out of college for a year – so, I lost my deferment and was drafted to serve an 8 year obligation. However, my two year active duty part of my being in the military convinced me that there are numerous benefits for both the individual and our culture in general from this kind of exposure where everyone has to deal with life on the same footing – long discussion.

            Perhaps a universal draft would put a damper on our tendency to engage in wars – lots of mothers and grandmothers would be marching in the streets over a “discretionary war”. The so-called “voluntary” military (which could never honestly be called voluntary) strikes me as a dangerous paradigm – but, again, a much longer discussion.

  9. Allen says:

    Cogent writing as usual, Gail. The debate on whether we can expand fossil fuel production or not is missing one CRUCIAL element, which is the need for energy conservation and restructuring our model of inhabiting the land. Even if it’s realistic to extract as much shale oil and gas as some of the optimistic projections suggest, they will still at some point decline or become exhausted or become economically or environmentally not feasible. What then? Even if it doesn’t happen in our lifetime (unlikely), it will certainly happen in our children’s lifetime. Energy use restructuring is absolutely critical, probably one of the most dire imperatives in human history. In Germany we see PV panels on roofs everywhere — countryside, villages, towns, cities, farms. How many homes in the U.S. could’ve been outfitted with PV for the cost of the Iraq and Afghanistan wars? (Gail, you’re good with numbers 🙂

    The shale fossils may be the last chance for us to preserve the age of enlightenment, but I’m almost convinces that we’ll burn them up just as we burned up most of the easy-to-get hydrocarbons, a one-time geological gift of super-concentrated solar energy formed over billions of years — to be mindlessly burned up in a little over a century. It’s like cutting down the last trees on Easter Islands…

    • I am convinced we will use up pretty much everything that is made available to us. The problem with conservation is that it allows us to use less per unit, bringing the cost per unit down, so more people can afford the energy source. As long as there is a huge number of people in the world market for oil, they will take the entire supply. Making each unit use less, and thus cheaper, is usually a recipe to use more in total.

      And you are right that, at best, energy conservation only puts off the problem a little while.

      • Allen says:

        Yes, the Jevons paradox. But conservation does not need to result in “cheaper” energy.
        If we had a culture of political creativity and civic mindedness, we could determine the highest price of hydrocarbons at which the economy could function reasonably well, and then impose a fluctuating tax that, whenever the price of energy falls below that price due to market (supply/demand) forces, would up the price to consumers up to that level. The benefit would be a stable price of energy to end-users, the tax accumulation used as a subsidy whenever the market price exceeds the threshold price.

        True, the bottom line is we will keep burning it up until what’s left isn’t economically / environmentally feasible, but well managed conservation could delay that time until we could re-engineer the way we exist, or at least until I and my family aren’t around to experience the demise…:(

  10. I am not sure that you can define the Chinese as “”successful”, given they have one of the worst Population Overshoot probems in the world, exceeded oly perhaps by the Indians and Japanese on this scale of numbers.. If Successful is Digging a Bigger Grave for more people, then the Chinese are higly successful, on abotuall other measures they are magnificent failures.

    Beyond this, once again you promote your concept that external energy input is a NECESSARY facet of human existence:

    “The naive view would be that humans don’t need external energy. In order for this belief to be true, we would need to live like other animals. Humans could live without external energy if we could live without clothing or shelter, and if we could eat all of our food raw, without chewing for literally half the day.

    Humans discovered how to control fire over 1 million years ago. We have now adapted to the availability of external energy sources in many ways. As we learned to cook part of our food, the size of our teeth, jaws, and digestive system shrank, leaving more energy for brain development. With better brains and clothing (made using embedded energy) we were able to move to less hospitable areas of the world, increasing our total numbers”-Gail

    I am not going to go into detail debunking this preposterous idea again as I have in at least 3 other threads here already, suffice it to say that if this was TRUE, NOBODY could live in Nunavut, but people DO live there and have for millenia. Homo Sapiens doesn’t need any more energy input than any other mammal does. You can extend your territory with clothing, as the Inuit have done, but this certainly requires no fossil fuel input, since Inuit never had that. It is as Cold as it GETS up here, but primitive people made their way in that world, and no they did not burn up a whole lot of fuel to do it either. Your whole meme here is just UTTERLY WRONG Gail, and I am seriously getting tired of debunking it.

    Indeed, for 7B people to exist on this planet we need external energy input, but to make the case that we a EVOLVED to require this, “small jaws” and all is just ignoring the real anthropology. You don;t NEED powerful jaws to chew up food if you have Hands that can manipuate Rocks to grind up the food BEFORE it ever goes in your mouth at all.

    All Homo Sapiens needs for survival is adequate food and shelter and water, external energy besides is a BONUS, but NOT required. Any decent bushan can build shelter out of just about anything. In my younger days, I stacked leaves and branches to make a nest on on on survival test with the Explorers. Clothing most certainly does not reuire petroleum input, fiber exist everywhere from flax to hemp to cotton, and that is not even including the skins of other animals. Yo gotta have enough food to have energy to spin and weave for sure, but it is all quite possible to do as long as you got enough to EAT.

    You do not know anthropology Gail, and you CLEARLY have never spent much time in the Bush. What was the longst trip out in the bush you ever took, can I please ask that question? I suggest you stick to economic arguments. You look foolkish when you argue this stuff. You have no clue whatsoever of what you speak of.



    • THe Chinese are certainly are in overshoot. The one child policy came rather late in the story, and hasn’t really reduced population, partly because there were already so many children who would grow to be adults.

      If you look back through my posts, I have always talked about humans needing external energy, not fossil fuel energy. I would contend that the Innuits are like other people, in that they get embedded energy from things they make in the warm part of the years–tools that they use in hunting and fishing and clothing, for example. What I said is,

      With better brains and clothing (made using embedded energy) we were able to move to less hospitable areas of the world, increasing our total numbers.

      The people of Nunavut benefited from the evolution of people in warmer areas that gave them the better brain that they needed for this activity. When I look at the book, Uqalurait: An Oral History of Nunavut, I see many references to how they used fire throughout their history.

      • Indeed, Inuit use Fire, but not so much so fast that they burn down entire forests. Also, for extended periods on the Tundra, no fire is used because there simply is no material to burn.

        Burnable material doesn’t get consumed too fast from Cooking. So much wood grows so fast in locations like this you can’t burn it faster than it grows just for that purpose. If you strt to heat homes with it, THEN you could burn it all up, but conservative type of cultures like the Inuit did not do that.

        It seems to me you bounce back and forth here, the implication is that once the Fossil Fuels are burned, Homo Sapiens HAS to then burn up all the Renewable combustibles and when they are al gone, so are we too because we NEED “external energy input”.

        Every animal needs external energy input since we are not autotrophic. It’s just a question of whether you use what grows faster than it gets replenished. HOW we use external energy is different in that we have a Big Brain that enables us to Spin Fibers and Weave Cloth and preserve the skins of animals to make clothing, which extends our range of ecosystems we can live in. None of this however requires fossil fuels or even the burning of wood.

        The carrying capacity of the earth for Homo Sapiens most surely is limited and in the absence of fossil fuels, 7B is a ridiculous Overshoot problem. Knock back the population to 1B or so though, its probably a sustainable number with good conservative practices on energy use and collection.

        You just gotta get used to living in an unheated dwelling, and refrain from knocking down entire Forests to build Armadas of Ships and Bake Ceramics and Smelt Metal. When you start doing that, then you consume energy too rapidly to support the system overall.


        • donsailorman says:

          If memory serves, the Inuit polar eskimoes burn mostly whale blubber and seal blubber. Their iglooes are cozy and quite warm througout the polar winter with only a small blubber-fueled flame. And of course blubber is a main element in their diet.

          My father was an anthropologist during his final years, and I read all his books. IMO, in terms of surviving an uncertain future, there is no better field to study than cultural anthropology–especially ethnographies of “primitive” peoples who once lived near where oneself is residing.

          • I expect that the number of Inuits who could live in the area they inhabited was so small that it did not bump up against limits of whales and seals with blubber. If they had been in a more hospitable climate, they would have done like humans have done in many areas, and killed off the top predator species in an effort to have enough for themselves. If they could have done that, they would have needed another energy source, such as fossil fuels.

        • Maybe we are not saying anything too different.

          One issue you may be overlooking is the biological imperative to have multiple children, and the constant upward pressure on population, and thus resource needs. Everyone wants their children to live to maturity. They themselves also want to not die earlier than they need to. So the biological imperative is to use resources if they are available. This is basically H. T. Odum’s, “Maximum Power Principle.” Some small societies have managed to keep populations down through birth control, abortion, and infanticide, but it is hard to impose these ideas from the outside the society. This is exactly the same upward pressure on population that all other species–such as weeds in your garden–experience.

          Dave Cohen has a couple of posts on these topics in Decline of the Empire. Yesterday’s post is “a href=””>The Ecological Predicament of Mankind. Today’s post is Is the Earth F**cked?

          • donsailorman says:

            The traditional Inuit culture used infanticide as its main means of population control. Traditional Inuit culture has been almost totally destroyed by contact with white men and three items of material culture: alcohol, rifles, and snowmobiles.

            • It seems like infanticide has been a method of population control in many parts of the world, although it wasn’t always described as such. The spread of Christianity and healthcare (as well as fossil fuels that made it possible to provide food and healthcare) helped put an end to it.

          • As time goes by here, I expect Infanticide will be quite common as access to abortion is limited due to closing hospitals and lack of equipment to do safe abortions with. Similarly, when real hardship becomes common, parents will eat their children. The Bible recounts many storie of parents eating their children during times of famine and war.

            “I also will do this unto you… You shall sow your seed in vain, for your enemies shall eat it.” — Leviticus 26:16

            “And ye shall eat the flesh of your sons, and the flesh of your daughters shall ye eat.” — Leviticus 26:29

            “And thou shalt eat the fruit of thine own body, the flesh of thy sons and of thy daughters.” — Deuteronomy 28:53

            “And toward her young one that cometh out from between her feet, and toward her children which she shall bear: for she shall eat them.” — Deuteronomy 28:57

            “Through the wrath of the LORD of hosts is the land darkened, and the people shall be as the fuel of the fire: no man shall spare his brother. And he shall snatch on the right hand, and be hungry; and he shall eat on the left hand, and they shall not be satisfied: they shall eat every man the flesh of his own arm.” — Isaiah 9:19-20

            “And I will feed them that oppress thee with their own flesh; and they shall be drunken with their own blood, as with sweet wine.” — Isaiah 49:26

            “And I will cause them to eat the flesh of their sons and the flesh of their daughters, and they shall eat every one the flesh of his friend.” — Jeremiah 19:9

            “Therefore the fathers shall eat the sons in the midst of thee, and the sons shall eat their fathers.” — Ezekiel 5:10

            “I will not feed you: that that dieth, let it die; and that that is to be cut off, let it be cut off; and let the rest eat every one the flesh of another.” — Zechariah 11:9

            The likelihoods seem to point toward a fairly rapid population crash, in which case it is unlikely ther remaining small population of Homo Sapiens would overtax the energy supply of the environment. The main question on overall survival versus extinction depends mostly on how far climate change and ocean acidification go. Diminished available energy for Homo Sapiens doesn’t render the species extinct, just shrinks down the total numbers. An extinction level event would need to render the whole globe uninhabitable.


            • Clearly, each religious group that follows the Bible picks out which verses it wants to read. Reading a little more probably gives a truer picture of the range of things that went on back in those days. King Herod killing all the baby boys under age 2 probably wasn’t all that unusual.

              With respect to a population crash, any crash would certainly take place over a period of years. How many we really don’t know, but it could be quite some years, even hundreds or thousands of years. How many humans will be in the mix of species at the end of transition period is not clear. In order to fit in, it seems like our numbers would have to be quite small, perhaps similar to chimpanzees or gorillas, today (<1,000,000). If we fall back to a much large number, say one billion, and refuse to follow survival of the fittest, we will quickly be bumping against a ceiling of limited resources again. It seems like we will quickly run into ecological disaster again, if the first phase doesn't kill us off.

            • Don Stewart says:

              Dear Gail
              (and all the other smart commenters)
              I have been puzzling about climate change and the fate of humans. When the fossil fuel deposits were laid down by the plants, the earth was much warmer. Plants thrived. I believe cold blooded animals also thrived. It is my understanding that mammals were very small (the size of mice). I could have all this terribly wrong.

              Suppose the earth warms 6C. We are back to a very warm earth with abundant plant life. I suppose the cold blooded animals would still thrive. Is it necessarily true that mammals would be maladaped? Or is it that scientists think that civilized humans could not adapt to all the changes? Or that the changes will be so abrupt that the food and pollination chains will be so disrupted that mass extinctions will occur?

              I am, of course, aware that sea levels would rise–but that doesn’t sound like a total disaster. Why do scientists say that 6C might mean the end of humans?

              Don Stewart

            • I’m afraid I am not the one to answer this question. Clearly, our cities in their current locations, using current crops in their current locations would be a huge problem. It is easy to come to a conclusion of “no human life possible, if this is the only scenario one can consider.

              I don’t know if anyone has considered the general issue. Humans and prehumans have lived for a very long time (well over 1 million years) in a lot of climates.

            • donsailorman says:

              By far the most effective long-term method of population control is female infanticide. This practice is found in perhaps most cultures both primitive and modern, e.g. the modern Chinese society.

              Rather oddly, Aristotle in ancient Atherns opposed infanticide and suggestion abortion within the first sixty days of conception as an alternative–on the grounds that the soul certainly entered the embryo or fetus after the sixtieth day after conception. In the thirteenth century, St. Thomas Aquinas followed Aristotle in this recommendation, and for centuries the official position of the Roman Catholic Church was that the sould did not enter the body until after the sixtieth day following conception, and hence early abortion was not a moral issue. The current position of the Roman Catholic Church–that the soul enters the body at the moment of conception–is relatively recent.

            • I hadn’t heard that before. Interesting! It seems like the new interpretations come along when we have the fossil fuels to feed the extra mouths.

          • Bicycle Dave says:

            Hi Don Stewart:

            Why do scientists say that 6C might mean the end of humans?

            I read this book a few years ago (pub 2008) but I think it gives a pretty good answer to your question:


            This is a very interesting book on the same subject (also 2008):


          • “In order to fit in, it seems like our numbers would have to be quite small, perhaps similar to chimpanzees or gorillas, today (<1,000,000). "

            I doubt Homo Sapiens needs to fall back to such small populations as Chimps and Gorillas. We are much more adaptable to different environments because of our ability to produce clothing and shelter of vairous sorts, none dependent on Fossil Fuels. Our ability to use tools to grind up foodstuffs our Small Jaws cannot chew allows for a greater variety of foods to choose from. Our ability to run on two legs allows us to chase down game Chimps and Gorillas have no chance at killing. Our ability to build Boats Chimps and Gorillas cannot build allows us to access foodstuffs from the Oceans and Lakes they cannot.

            At an H-G level alone, assuming that Climate Change doesnt wreak havoc on the eocsystems, it's likely the Earth could support easily an order of magnitude greater number than Chimps and Gorillas, probably 2 orders of magnitude because so much more territory is available to us to live in. Add in conservative methods of horticulture and fish farming, another order of magnitude. Add in some basic energy collection techniques of Windmills and Hydro Mills for grinding up grains and so forth, another order of magnitude. So 1B isn't IMHO a bad estimate in absence of Fossil Fuels.


            • I think the issue is keeping the population down, something humans have not been at all good at.

              The reason I mentioned numbers similar to that of chimpanzees or gorillas, is because at that level, it is clear that survival of the fittest would be working, as with other animals. Our numbers would be in balance with other primates. As soon as you start giving humans advantages over other animals, it seems like those advantages negate survival of the fittest, and we would end up where we just left off in terms of exceeding what earth can deliver, pretty quickly. There is a huge temptation to cut down forests for charcoal to make metals, and to farm sides of mountains, to temporarily provide food for rising population. The practices temporarily support higher population, but lead to crashes as soil erodes, and the amount of food available drops. Irrigation has similar feedbacks.

          • “I think the issue is keeping the population down, something humans have not been at all good at. “-Gail

            Oh, I doubt that will be a problem for quite some time. We are likely to go from an Overshoot to an Undershoot of the carrying capacity for the planet as a result of this Die Off. Given the depleted state of much of the planet, it will be quite some time before we could multiply outrageously again. It takes a lot of available energy to do that. I suspect it takes at least 10K years if not 100K to repair much of the damaged ecosystems.

            By the time the next go round of “go forth and multiply” arrives, hopefully those who survive this apocalypse will have learned a few lessons about sustainability.


            • “Going forth and multiplying” is precisely what our biology has set humans and every other species to do. I am not sure that there is anything that we can do about this.

              The problem is that “survival of the fittest” is supposed to be part of the equation as well. Humans run into trouble when they add all kinds of fixes–health care; cooked food; clothing; trade so we can get along with neighbors and have more resources; embedded energy in tools of various sorts. It is these fixes that set humans on a yo-yo path that is increasingly destructive.

        • The issue with a 6 degree temp rise IMHO is what it does to ocean Chemistry. Gases like CO2 dissolve in water based on temp, and the lower the temp, the more the gases can dissolve. This is opposite to how inorganic salts dissolve.

          Anyhow, higher ocean temp would in theory cause the oceans to outgas the CO2 they sequester, causing further runaway Global Warming, end result a possible Venusian style Greenhouse effect.

          However, there are so many different feedback loops going on here that I don’t think any model adequately does justice to the reality of this system. Increasing Albedo Effects from more Water Vapor inthe atmosphere could cause rapid Global COOLING, at least on the atmospheric level.

          The Oceans definitely are the Driver for the atmospheric system not the other way round, so it is Ocean Heat Content you need to watch most carefully. Newz on this end is not good of course. You can read more about this in the Geotectonic Ocean Heat Transfer theory articles and discussion on the Diner.


          • simon says:

            Don Stewart,
            There are a number of theories of how petroleum formed when the world was 6C, or more, warmer than it is today.

            One came out about 15yrs, featured in Science and Scientific American and others at the time.
            It posits that a natural carbon cycle led to 1200ppm levels of carbon in the atmosphere, vs our 300-400ppm today. This increase caused such acidification and warming of the ocean that, in turn, broke down the Thermocline and Thermohaline circulation layers. Below these layers you have anaerobic lifeforms feeding on the hydrogen sulfide coming out of the ocean floor and secreting sulfuric acid as byproduct. With the Thermocline and Thermohaline layers broken down, you have all that secretion coming up to the surface, compounding things for the worst for the aerobic lifeforms above already going extinct due to the heating of the atmosphere. This dissolved the aerobic lifeforms, the atmosphere being oxygen-deprived and sulfur-saturated prevented normal decomposition, which in turn generated the oil reserves we have today.

            Interesting eh? Imagine how much growth was there in anaerobic lifeforms with such expanded sinks allowed by the breaking down of the Thermocline and Thermohaline layers? They must have thought it would go on forever. HAHA.

  11. dolph9 says:

    The world is in staggering decline and if you pay close attention, you’ll see it.

    Much of economic activity now is limited to fetish rather then genuine demand driven improvement…new, high performance or “efficient” cars that will break within 5 years, cell phones that can make pancakes (as George Carlin put it), endless repetition of established cultural practices like sports games and movies, and the empty promises of new energy sources like oil sands and shale that will supposedly deliver a bonanza.

    The Western world has been in subtle decline since the 70s/early 80s, as individualism and rampant greed destroyed community and purpose, debt replaced income, and the “advanced” peoples began to define themselves by the size of their investment accounts and how famous they are. Meanwhile, the rest of the world remains mired in poverty, with youth bulges in Latin America, Africa, and the Middle East signaling upcoming chaos and conflict.

    The internet, as amazing and disruptive as it is, is largely fetish as well. It siphons the creative energies of young males and diverts them into mundane practices like “programming” and distractions like gaming, gambling, and porn.

    Where is the Jetsons future? Where is the beef? Are humans living to 200 years old and being healthy and functioning for this time? Are we all millionaires (or, at the very least, does every last human on the planet have affordable food, shelter, and meaningful employment and leisure activities? Are we colonizing the moon and mars?

    If you watch the movies you’ll see science fiction “dystopias” in which people still somehow have wonderful technology and all the cities have skyscrapers to the sky, and flying cars. If you observe the world around you, the actual decay is all too obvious.

    • I mostly agree with you. We are getting some new inventions now, but we seem to focusing our efforts on how we can use less energy than we did before, to do the same thing. Many of the really amazing innovations, such as electricity and gasoline powered vehicles, came long ago.

      I think that part of what we are seeing, now, isn’t as much lack of innovation as lack of jobs for young people. Back in the “good old days,” young people were able to get part time jobs while they were in school, and good full time jobs when they got out, so that they could afford a car, and perhaps marriage, with all of the things are person needs with a new household. Now young people stay at home with their parents much longer and play video games. Young people have a huge amount of time to waste, using not too much energy.

  12. Bill Simpson says:

    And as things start to get really bad, I’m afraid a lot of social instability will set in. Never before have many people had a mass communication capability. We see the result of how that can change the social order in the Arab spring revolutions. The whole thing started with the abuse of one man. Social media did the rest. The smart phone proved stronger than the secret police.
    When social supports start getting cut here, and people start experiencing hunger for the first time in their lives, millions of people are going to start to say, “When are the rich going to start suffering like the rest of us?” We are starting to see it already, with calls to raise taxes on the wealthy. It is only the beginning.
    Before the Internet, cable TV, and the smart phone, people could be kept relatively ignorant and found it difficult, and ofter very dangerous, to organize against government power. In recent US history, only the civil rights movement organized major public protests of any scale. It is a tribute to their leadership and membership, that the organized protests remained peaceful.

    • Bicycle Dave says:

      And as things start to get really bad, I’m afraid a lot of social instability will set in.

      Many of us here in this little backwash of contemporary thinking enjoy assigning probabilities for the most likely scenario that will play out in our region of the planet (for me, North America). I’ll suggest that this august group mostly proffers rational analysis. However, in the real world beyond this virtual confine, most folks have ready-made ideologies for how things will play out for the rest of this century. We have cornucopians, BAU (with minor bumps), declinists, and doomers. We have the end-times folks, the militia survivalists, the greedy opportunists, the do-gooders, the don’t-know – don’t care folks, etc, etc.

      These ideologies (dare I say memes) are very powerful forces that will dictate a huge amount of behavior despite any obvious realities regarding war, famine, disease, population, resources, pollution, CC, etc. So, it seems that there are two very important dynamics at play: when/how scarcity will actually be apparent (speaking about N America) and how will all of these ideologically driven groups interact in response to scarcity? I doubt that the day will be ruled by the image of town hall meetings with the majority of people putting aside their differences to reason things out and make the sacrifices necessary for the common good.

      Bill envisions instability fueled by rapid communications resulting in a focus on inequality issues. Others might argue that authoritarian rule will dominate. Some see anarchy exacerbated by the enormous amount of firepower in the hands of civilians. Dissolution of the Union is high on the list of speculations. And, many other visions.

      Obviously, it is a fool’s errand to predict exactly what might happen. But, we all understand probabilities. My question is: what kind of really objective, reasonably bias free analysis can allow us to ascribe some probabilities to a handful of the most likely scenarios as these ideological forces collide in an environment of scarcity that is unprecedented for current generations of North Americans? Is anyone really modeling this like some do for climate change, war preparation, or the stock market? Are history lessons really germane or are they rendered moot given our totally unprecedented overshoot predicament?

      • Don Stewart says:

        Dear Bicycle Dave
        I can’t predict what I will decide to eat for lunch…so don’t count on me for pearls of wisdom. However, for the view from a sociologist about part of what is going on, this may be interesting to you:

        ‘When I mention this alternative economic culture, it’s a combination of two things. A number of people have been doing this for quite a while already because they don’t agree with the meaninglessness of their lives. Now there is something else – it’s the legion of consumers who cannot consume – they don’t have the money, they don’t have the credit, they don’t have anything – [so] they try at least to make sense of their lives doing something different. So, it’s because of needs and because of values – the two things together – that’s why it’s expanding.’

        Parenthetically, a local farmer just died. 40 years ago he was a pediatrician who was trying to get local tobacco farmers to stop growing tobacco. But he was also a Quaker and tried his best to practice his principles. When he looked at his own profession, he saw doctors poisoning children with antibiotics. So he either had to reform the medical profession or get out and do something productive. He decided that growing local, organic food would do more good than trying to reform the doctors. And so he bought 4 acres, helped establish the first real farmer’s market in this area, grew exotic things nobody had ever seen before such as red leaf lettuce, and was instrumental in writing the national organic standards. He was just one man, but he has touched an awful lot of people.

        One of my reasons for recommending that people try to balance a home economy and a cash job is that a flourishing home economy makes us better able to do ethical things in the world. If we are 99 percent dependent on a cash job, we are forced to do what maximizes the cash for both ourselves and a soulless corporation. IF things are going to change, people are going to have to become a lot more self-reliant, IMHO.

        Don Stewart

        • David F Collins says:

          Excellent observations! A half-century plus ago, my Dad quoted two 19th Century British politicos. The one he despised said, “Every man has his price.” The one Dad admired (somewhat) said, “Love makes cowards of us all.” Dad observed that both said the same thing, albeit differently.

          The VP of R&D for Rockwell-Standard (Troy, Michigan), where I worked in the mid-1960’s, told me publicly to stop all my racial-justice work or he would fire me and make sure I never found work again in the Midwest; and if I wanted to serve such people, I could volunteer at a public hospital and clean bedpans — with my tongue. (His name was Nelson Brownyer.)

          Inasmuch as I had a wife (of the swarthy persuasion), two kids and a mortgage to support, I chickened out; I knew he had the power to make good on his threat. Those Britishers were both right.

      • donsailorman says:

        History lessons are germane–but are inadequate to come up with a single most-likely scenario in the future. My own thinking is in terms of plausible scenarios of the future, and I assign subjective probabilities to the various paths and patterns the future is likely to hold. For example, I give the technology advances/cornucopian scenario a 15% chance of being correct, i.e. business as usual for the next hundred years or so. I give the apocolyptic ending of current civilization also about a 15% chance of being right, i.e. the doomers may be correct. IMHO the declinist view view is most likely to be correct, e.g. the scenario painted by John Michael Greer or the similar views of Leanan over on

        The main reason I think the fast-crash doomers are likely to be wrong is that most (but not all) civilizations collapsed slowly, as pointed out in in Jared Diamond’s most excellent book, “Collapse.”

        The main reason I think the technocornucopians (B.A.U.) are likely to be wrong is that they–including practically all economists–think that economic growth can be continued indefinitely. Clearly, this is wrong, because we live in a finite world. Also the cornucopians assert that fossil fuels are just like any other commodity, i.e. that we will create good substitutes for fossil fuels long before they run out. In my strong opinion, there are no good substitutes for fossil fuels.

        Some years ago I wrote two novels for young adults set in a near future where three consecutive years of extreme drought in the main grain growing regions of the world creates worldwide famine and cause the abrupt collapse of both civilization and population the world over. Those novels were and are good enough to be published, but unfortunately I have been unable to find an agent to market them to a publisher, and it is a waste of time sending manuscripts direct to publishers. Science fiction dystopian novels set in a near future have alwasy fascinated me. By far the best of all of these novels is “Earth Abides” by George R. Stewart.

        • Ed Pell says:

          Yes, “Earth Abides” is one of my favorite books also. I am surprised at how well it has aged. Except for looking for a radio instead of an internet connection at the beginning of the book it read as well today as 60 years ago.

          • donsailorman says:

            I used to date a librarian at the U.C. Berkeley Bancroft Library who helped George R. Stewart in his research for “Earth Abides.” IMO all of George R. Stewart’s novels are worth reading and rereading several times. I have given away more than a dozen copies of “Earth Abides,” and doubtless I shall give away more copies.

      • I am afraid the answer is unknowable regarding how things work out. There are too many players, and the decisions in one area affect other areas. It seems pretty likely that at some point in the future (100 years from now, 1000 years from now, or 10 years from now, opinions differ) humans will play a much smaller role on earth than they do now. Exactly how the reduction in population takes place is not clear (for example, inadequate fresh water, inadequate food, infections, international warfare, fights with nearby neighbors, decisions to have fewer children). It seems quite possible that problems may be fairly different in different parts of the world–Afghanistan may experience problems differently than New York City, for example. It amy be a combination of factors–people weakened by poor food supply fall ill to infections, for example.

        We can see some obvious problem areas–Los Vegas doesn’t look very sustainable, but neither does New York City or many other major cities.

        John Michael Greer and Andre Angelantoni both talk about collapse taking place in steps, and this seems likely. In talking to JMG, he seems to believe that many of these steps have already taken place. It is hard to base our view on previous collapses, because we are now more dependent that we were on technology and trade. If we suddenly lose access to electricity or if there is a big reduction in international trade, this could make things change rapidly for the worse, quickly.

      • I am afraid the answer is unknowable regarding how things work out. There are too many players, and the decisions in one area affect other areas. It seems pretty likely that at some point in the future (100 years from now, 1000 years from now, or 10 years from now, opinions differ) humans will play a much smaller role on earth than they do now. Exactly how the reduction in population takes place is not clear (for example, inadequate fresh water, inadequate food, infections, international warfare, fights with nearby neighbors, decisions to have fewer children). It seems quite possible that problems may be fairly different in different parts of the world–Afghanistan may experience problems differently than New York City, for example. It amy be a combination of factors–people weakened by poor food supply fall ill to infections, for example.

        We can see some obvious problem areas–Los Vegas doesn’t look very sustainable, but neither does New York City or many other major cities.

        John Michael Greer and Andre Angelantoni both talk about collapse taking place in steps, and this seems likely. In talking to JMG, he seems to believe that many of these steps have already taken place. It is hard to base our view on previous collapses, because we are now more dependent than we were in the past on technology and trade. If we suddenly lose access to electricity or if there is a big reduction in international trade, this could make things change rapidly for the worse, quickly.

    • davekimble2 says:

      > “… in the Arab spring revolutions. The whole thing started with the abuse of one man. Social media did the rest.”

      On the contrary, the US uses Facebook/Twitter/YouTube and so on to provoke unrest in countries it doesn’t like. It is well documented that they use software to create thousands, if not millions, of false personas to flood the social media networks with pro-US pro-Israel anti-enemy propaganda about Freedom and Democracy, while quite happily dealing with the most disgraceful dictatorships that are friendly client states, like Saudi Arabia, Bahrain, UAE, Qatar, etc.

      Pussy Riot was another of those Facebook propaganda coups. Do you seriously think that the world’s hottest topic was an overwhelming interest in the human rights of Pussy Rioters to play anti-Russian songs in a cathedral?

      Today they are working on destabilising Egypt, because President Morsi wants to take control of Prosecutor General’s office and the military, and prosecute the old guard and set a new foreign policy with respect to Israel. The US doesn’t care about Democracy and the rights of Egyptians, or else they wouldn’t have supported Mubarak for all those decades.

      They like Facebook etc because they are based in the US and can be censored or switched off all together in an emergency (for the US Government that is). You won’t see the US Revolution on Facebook, that’s for sure. “Iranian Cyber-Attack on Facebook” the MSM will say, and then it will go dead.

      Meanwhile every post on this forum goes into the NSA database, being scanned along the way for words like “revolution”, and political profiling of the posters continues.

      These people are not fools – they know Peak Oil, Peak Energy and Peak Globalisation are real, and are intent on handling it is the best way possible, for themselves.

    • That is a good point about smartphones for mass communication, and the spread of public protests. I think you are probably right about more protests ahead.

      China blocks a lot of social media. They block Facebook, and blogs that have “WordPress” in their name. When I was in China, I discovered that I could read “Our Finite World” because does not include the word “wordpress” in the domain name. I couldn’t put up new posts, though, because to put up a new post, I had to use a wordpress domain name, which was blocked. I expect that China wants to control what people read and what they tell to each other, partly to keep protests from forming. I understand there are some Chinese equivalents that have arisen now, though.

  13. Schalk says:

    As I see it the globalization movement is simply the global economy striving for equilibrium. Chinese wages are rocketing upwards at 13% pa while US wages are already back to levels last seen in the early nineties. The result is simply that China is rapidly increasing its consumption rate of expensive human energy (discretionary consumption) and pertroleum energy (autos).

    The day will come when expensive energy use in the US and China become sufficiently similar and outsourcing no longer makes economic sense. Question is just whether this rebalancing will be mostly due to increasing energy usage in China or decreasing energy usage in the US. When considering fixed planetary resource boundaries, it will probably be the latter…

    It will be very interesting to see how this plays out in the future though. As international trade diminishes, countries will no longer be able to tap into each others’ energy resources so lavishly. This could put densely populated countries like China and India at a great disadvantag and again start to build up global imbalances in per capita energy use.

    We certainly live in interesting times…

  14. Gail gives us all a cheery thought for Christmas.
    looks like Santa has given up on us
    Still, an insightful piece that needed saying, it’s unfortunate that it doesn’t have a wider audience.
    When we called our website ‘Medieval Future’ 3 years ago, it sounded ridiculous…now it doesn’t

    • robert wilson says:

      Headwinds – is economic growth over?

      • really useful reference stuff there–thanks Robert

      • Bicycle Dave says:

        Hi Robert,

        Thanks for the link. I read the entire paper and found much of it very interesting. However, IMO, the author omits some very significant “Headwinds”

        – Although he mentions the problem of climate change when discussing energy, he doesn’t deal with depleting supplies of FF.
        – He seems to ignore the issue of 7B -> 10B human global population and instead seems to suggest more immigration would be a good idea.
        – Although he talks about the economic effects of globalization, he never mentions how our political global standing could be significantly degraded and the impacts that would have on our ability to get the resources to keep our military machine in its dominant global role.
        – He doesn’t seem to consider that the US could easily suffer political and social instability if our ability to sustain our technological lifestyle is compromised by shortages.

        But, still a good paper – every kid in high school should have to do a book report on this paper …. uhm, do kids still do book reports?

      • Interesting reference!

  15. Humans are capital not energy in the economic world. Like a computer that uses electricity and can do many difficult jobs or tasks. Humans need energy to function but are not used as energy. Human capital can be expense and employers like to replace humans with lower cost machines(or chinese slave labor). The only time I can think of humans used as energy is in the movie Soylent Green a science fiction film in 1973. Now I’m starting to understand why you don’t agree with economist on the economic future.

    • donsailorman says:

      Humans are still used as energy in both the few remaining hunting and gathering societies and also in horticultural societies. In the early eighteen hundreds in the U.S. wives were used as draft animals, pulling the plow, while the man worked behind the plow. There was a great scarcity of draft animals in the U.S. up to roughly 1840 when mules, oxen, and plow horses became widely available.

      Up until recently, a lot of human energy went into activities such as milking cows.

      Over the next one hundred years I think we will depend more and more on human energy. I also expect the return of slavery or serfdom and very likely plantation economies.

      • “Humans are capital not energy in the economic world”

        I will stand by my statement. Your car is capital. It gets you from here to there, but you don’t view your car as energy. Yes you could burn the seats to keep yourself warm for a few minutes. There is some stored energy in the battery and fuel tank. There is also heat energy in the vehicle. But the fossil fuel is the energy used in the car that gets you from here to there.

        So the next time you want to use your wife as a draft animal to plow your back yard. Just remember if you don’t feed her. She will run out of fuel and stop working because economily she is not energy, she is your capital equipment.

        • Economists have a lot of trouble understanding our current economy, because they do not take seriously the role of energy. The fact that they choose to call something “Capital” doesn’t mean that its function can’t be viewed in a quite different light.

          Economists keep talking about improvement of “labor productivity”. A large share of this is just better leveraging of human labor with machines operated using either electricity or oil. Instead of paying a human wages, business owners are able to feed the machines oil or electricity. The cost of the oil or electricity is much lower than the salaries of humans. If humans were slaves (and perhaps they are), then the parallel would be clearer.

      • I think all of us use human energy in some way in a job, if only to type on a keyboard. Our thinking capability counts for something too.

        A person working at MacDonaald’s provides physical labor. They are taking orders, making fries etc, assembling orders, handing orders to the client, taking money, and making change. If MacDoanald’s could figure out a way to do all these things with robots or computers, I expect they would.

        I wouldn’t be surprised if you are right about slavery or serfdom. Given a choice between starving, and a job working as a slave or serf, a lot of people would choose the slave/serf job.

  16. Jeff Berner says:

    Hi Gail
    Much of your posting reminds of what Dana Meadows wrote in the update to “Limits to Growth”. Specifically, she mentioned that critics of the work failed to understand a key point that it was an incorrect price signal which was the cause of overshoot.

    So with the price signal indicating that wealth is to be made in ever scarcer fossil fuels, we are over-investing in massive deep water drilling rigs or tight gas and oil plays. And conversely under investing in efficiency, alternatives and rail/mass transit

    I have a different perspective on the issues of pensions and social security. In my view, pension systems are solely a means of allocating society’s physical wealth, i.e. food, housing, etc. In the absence of a robust pension system, a functional society as a whole will still find a means to ensure that the elderly are fed and housed.

    • Hi Jeff,
      I have a different prespective too. As an Insurance agent for the last 20 years and maybe over 5000 clients. What I have learned is a very large percent of adults out there can’t plan or take care of themselfs. If the system didn’t take a little bit of their income and put it away in a pension plan or social security. A lot of adults today would piss that savings away and we would have today a much higher level of poverty than we do.
      Employers, capitalist, managers, Republicans, businessperson, owners, the rich or whatever you want to call this group would love to stop paying their half into that Social Security system for their needed labor. It’s why they do every thing in their political power to destroy that safety net. What’s sad is that alot of younger adults don’t even realize their need for the system that keeps them out of poverty. Defined benefit plans for labor will rest with the dinosaurs before we run out of oil.

  17. donsailorman says:

    As usual, I agree with you 100%. Let me recommend my favorite book on energy, as usual, available cheap on MAN, ENERGY, SOCIETY by Earl Cook, 1976. The books published during the seventies on energy and the environment I find, by and large, to be better written and more compelling than books written during the twenty-first century. Another book I strongly recommend is by Barkley and Secker, ECONOMIC GROWTH: The Solution Becomes the problem. I used to use that book as one of my texts in my Environmental Economics class. The two other texts were one by Herman Dayly and also the most excellent book on the population problem ever written (IMO) : EXPLORING NEW ETHICS FOR SURVIVAL: The Voyage of the Spaceship Beagle by Garrett Hardin.

  18. davekimble2 says:

    If anyone has any doubt about how low wages can be driven by merciless capitalists, they only have to look to Asia, Africa and S. America. The gains won for the workers by trade unions in Europe and N. America are constantly being eroded by the capitalists, and globalisation, with the off-shoring of jobs, is their way of driving wages down to the lowest common denominator.

    Being rich, they are also politically powerful, and have bought the democratic system that we are all taught to have faith in. TweedleDum and TweedleDee parties vie for their turn at being in charge, but the outcome is always the same – the rich get richer and poor get poorer. Freedom is the freedom of the rich to do as they like, while the prisons fill up with the rest of us.

    If you express the opinion that Capitalism, Freedom and Democracy is a failure, you are branded an extremist and subjected to government spying, leading to worse. The only hope is that The Collapse comes soon and is total, taking us back to pre-Industrial Revolution days, which were tough but not as bad as living like the average Indian today.

    • Wealth is true freedom and the surfs get to go to their jobs early in the morning in a “right to work state”. Amen Bajesus.

    • I am not sure I would put it quite that way, but having visited India recently, I would agree that there is no way that the average American could live the way the average Indian does. The Indian government goes out of its way to create jobs for people, but they are $1 a day (or perhaps $2 day) jobs. I saw barefoot women sweeping the pavement with homemade brooms, as their job. (Certainly low external energy input!) This is a photo I took of workers harvesting rice with sickles. (There is embedded energy in the metal sickles–not much else.)

      Workers harvesting rice in India with sickles

    • with an average life expectancy of around 40?
      I can’t wait

  19. Ikonoclast says:

    There is a bit of a seeming paradox here. Energy is a crucial input to all human and economic processes (and all biological processes). It is the KEY resource. Energy is the one resource that is needed to exploit all other resources. Water comes a close second. Water is needed, in one way or another for most processes which obtain or use other resources. Indeed water (as well as input energy) is needed to obtain more energy; pumping water in to pressurise old oils and using it in fracking for example.

    The seeming paradox is this. Energy is essential but it is not always ostensibly the most expensive input in economic terms. However, that last sentence might need to be qualfied depending on how we do the energy accounting. One argument would have it that human input to work is not all raw or basic energy but that there are also qualititative aspects like knowledge, skill, coordination and intelligent direction of effort. Then there is machinery, technology, invention, innovation, discovery and so on. Another argument would hold, even here, that (biochemical) energy is always involved, even in thinking. Thus the issues of knowledge, skill, coordination, intelligent direction, invention and innovation actually involve investments of energy too. It’s just that this type of energy input when done well has a multiplier effect on output. That is to say;

    Output is proportional to Raw Energy Input times Process Efficiency.

    Thus energy investment in improving process efficiency could, in some cases, have a multiplier effect on output. For example, a further 10% investment of energy in developing processing efficiency (over and above the raw energy used in the processes) could result in a doubling of output.

    Thus energy is not to be equivalently costed or valued economically speaking. Raw energy from a barrel of oil or a hundred weight of coal or the human bicep has one value range. The energy for intelligent direction (for want of a better term) has a different and much higher price range. Thus the actuary who works all day in the acturial office and (let us assume) burns off serious calories as a hard recreational exerciser might well use the same calories (food energy) as an unskilled labourer. Yet the energy of the actuary input into work needs to be costed much higher if (and its a big if) we want to consider an energy theory of value.

    This is only one aspect of what I am arguing about. In the the costs of any project, the ostensible energy costs might be only say 20%. Another 40% might be human physical and intellectual labour costs and the final 40% might be materials costs.

    The question and conundrum is this. Do rising energy prices affect only the energy input costs? The answer would seem to be no. However, whereas rising energy costs affect energy input costs in a 1 to 1 relationship, they do not affect material or intellectual inputs in the same ratio. The price of a material will reflect many input components but one of these components is clearly not “energy” or an energy component no matter how far we examine the matter in recursion. One of these components is an “ownership premium” at least under the capitalist mixed economy system of both public and private ownership spheres.

    It might be that the sovereign state as owner of all minerals of the nation extracts royalty payments which the miner must pay for the mineral rights or right to extract minerals. It might be that a private owner of mineral rights is extracting a premium. The Beverley Hills High School (admittedly a public school) receives or should have received royalties and maybe compensation (or the equivalent US terms) for oil extracted on its campus. Strange but true! You can check it out in Wikpedia.

    However, back to the argument. This premium alone indicates that energy is not the only economic input cost to materials, even oil as a recovered material before it is burnt or put to other uses like lubrication or chemical feedstock. With intellectual inputs, an actuary or an architect could face rising food (energy input) costs and not take account of this at all for a very long time. Food would be a relatively low living cost compared to all other living costs. Thus food energy costs could rise and that component of the intellectual worker’s energy costs would not rise at all although accounting for other energy cost rises might well occur as in commuting and office energy costs.

    Thus energy costs and by implication energy leverging are important but not all-important in the economic cost and competition equation. This is true even though energy is a necessity for every process. Thus there is a kind of partial disconnect between productivity outputs and energy inputs. But I am not arguing in any way that this disconnect is total. It is proportional and it can improve, flatten out or even decline depending on a host of other factors.

    • I think that the part that is missing in your story in the issue of embedded energy, and also the time lag involved for embedded energy.

      Quite a bit of energy goes into embedded energy. A spear is an early example of embedded energy. Roads and pipelines are other examples. These are constantly degrading, and we need to keep using additional energy to upgrade them again.

      Another way embedded energy is used is in educating highly educated people. A society has to have a high amount of energy in it, in order that not everyone is involved in basic necessities like food production and gathering water. If there is enough energy, some people can set aside enough time from basic energy gathering tasks to write books and to become teachers. If a society is truly rich in energy, it can spare significant numbers of people from the workforce for long periods, to study in higher education and to work as teachers.

      The “emergy” branch of energy researchers (following H T Odum) have looked at this issue, and put numbers together of embedded energy for education. Hopefully this link works.

      Emergy of Education

      The embedded energy of education lasts for a while, but not forever. The knowledge could be come obsolete, if we need to go back to old ways, and the recent learning can no longer be applied. Obviously, individual people who have had the benefit of education will die as well. And there is a forgetting process, if we can’t keep adding to what we know with current information, as from the Internet.

      I tried to touch on a bit of this issue back in this post, but obviously need to do more.

      • Ikonoclast says:

        I have included the issue of embedded energy by implication.

        I wrote; “The price of a material will reflect many input components but one of these components is clearly not “energy” or an energy component no matter how far we examine the matter in recursion.”

        The statement “no matter how far we examine the matter in recursion” contains the implied recognition that embedded energy exists. Discovery of the full quantity of “embedded energy” is a recursive process. One must iteratively go back (recursion) calculating the energy embedded at each manufacture or process step. One must also account for the embedded energy in each human and piece of equipment uses in a manufacture process.

        Embedded energy is implicitly recognised in my analysis.

        • strav7 says:

          I don’t think anyone would disagree. I don’t know how many times I have wished that manufacturers would have to account for embedded energy in their products. It won’t happen during this rise and fall, though.

          • Ed Dolan says:

            Here is a question about imbedded energy: If all energy was priced at its full cost (including production costs plus all externalities, climate change, pollution ,etc.), would it not then be true that the prices of all products would correctly reflect the value of “embedded energy,” just as they now reflect “embedded labor” through both direct labor costs and labor cost components of inputs, capital, etc.? In other words, if we priced energy correctly, why would we need to keep track of embedded energy through some separate physical accounting method?

            • donsailorman says:

              You are entirely correct. For more than half a century mainstream economic literature has grappled with the problem in internalizing externalities through a system of taxes and subsidies. The theoretical and many of the practical issues in how high to tax or how much to subsidize have largely become solved problems. However, the huge stumbling block is politics.

              Democratic governments fail in at least three fatal ways:
              1. The rational ignorance effect, because why should a voter bother to inform herself when one vote is unlikely to decide a major election.
              2. The special-interest effect, whereby special-interest groups (especially vested interest groups) contribute to the election campaigns of politicians. We used to call this graft. Now it is standard operating procedure.
              3. The shortsightedness effect, which refers to the powerful force that acts on politicians to ignore consequences that will not happen until after the next election.

              Aristotle identified a fourth fatal flaw of pure democracy: The large majority of people are relatively poor, but by responding to demagogues who promise to tax the rich and to increase welfare benefits democracy inevitably becomes perverted into mob rule. From mob rule you typically find a transformation to a single tyrant or an oligarchy such as the infamous thirty tyrants of ancient Athens.

              Aristotle emphasized that all pure forms of government tend to self destruct. Hence he advocated a mixed kind of government which he called “polity.”

            • Ed Dolan says:

              Amen. Not much left to say after that.

            • It is possible that we are passing, or have passed, “peak democracy”. Even where democracy is in place, special interests seem to have increasing influence.

  20. Don Stewart says:

    I gather from the tone of this post that you didn’t hear anything positive about the prospects for oil in Austin?
    thanks…Don Stewart

    • Actually, ASPO-USA does have some speakers come and give their view of why oil and gas production could increase, but you are right, they are outnumbered by the “decrease” speakers.

      Steve Kopits gave a very good talk about why demand from Asia may continue to grow very rapidly, so regardless of oil growth, it would be hard to keep up with demand. He also calculated the oil price at which demand starts falling in various parts of the world, and made a graph of how this has changed over time. I got permission from him to write up his talk up as a post, but there is likely to be a time lag. It would be helpful to have the video and slides available, but neither is available yet.

      There were a number of other interesting points made at the conference. Mark Lewis of Deutche Banke put up a slide in which he said that the Brent oil price Russia needs for budget purposes is $115.9/barrel.

      Jason Schenker of Prestige Economics debated Charlie Hall. One point that Schenker made is that how high the dollar is floating relative to other currencies is very important in the price we pay for oil, and the price Europe pays. There is significant upside risk in the US price of oil, if the value of the dollar should suddenly drop. This could happen very quickly. He did not see any other currencies that could easily step in to fill the gap, if the dollar should suddenly lose its current role.

      With respect the needed price for US natural gas to ramp up, the consensus of several speakers was between $7 and $8 per Mcf. At that price, the US price would high enough that there would no longer be the needed price gap to support exporting natural gas to Europe. Bill Powers expects a natural gas crisis in the 2013 to 2015 time period, with prices rising to $12.50 to $15.00 Mcf range. The issue I see though is energy switching back to coal above say $4 Mcf. I am not sure that the natural gas price can rise very much without falling US demand, especially for electricity.

      Kjell Aleklett observed that the best shale gas resources in Europe are under Paris. He doesn’t ever expect to see drilling there.

      Tad Patzek of the University of Texas in Austin will be the new ASPO-USA President. He will succeed Jim Baldauf, who has been president for several years. Tad Patzek is the fellow on the left in the photo below. The fellow on the right is Kjell Aleklett, the researcher from Upsalla University in Sweden and ASPO International (which I think of as European) president. The graphic is one that Kjell brought.

      Tad Patzek and Kjell Aleklett

      Charlie Hall received an award for Excellence in Education. He will be retiring from teaching at SUNY-ESF in Syracuse, NY at the end of the school year. This is a picture of Jan Mueller (ASPO-USA Executive Director = paid staff person) reading the award to Charlie Hall. After Jan read the award, Jan said whoops, Tad was supposed to make this presentation, and the rest of the ceremony went on with Tad. But I didn’t get the later picture. This is the one with Jan and Charlie.

      Jan Mueller reading award to Charles Hall

      • donsailorman says:

        I think a sudden and drastic drop in the value of the dollar is highly unlikely. To the best of my recollection, there are only three times that the dollar has quickly lost its value: the Revolutionary War, the War of 1812, and the Civil War.

        Prior to 1913, inflations were followed by deflations, and the dollar returned to its original value as defined in terms of silver, which (if memory serves) was before the Revolutionary War. What I think is most likely to happen is a gradual ratcheting up of inflation as happened during the great stagflation of the 1970s and early 1980s. Unless the unemployment rate rises above 25% I do not think the Fed will permit a rate of inflation of more than 10%. Note that inflation eases the burden of debt greatly while it steals the wealth of creditors. A 10% rate of inflation will cut the value of the dollar in half over a period of 7.2 years. A 7% rate of inflation will cut the value of the dollar in half in roughly ten years.

  21. One could think about Americans slowly getting more energy efficient in structural ways:
    – online secondary education: no buses, abandoning buildings that used energy, “dense packing” teachers (they have cubicles in what look like call centers). Huge growth in PA, zero growth in Virginia, we’ll have some compare and contrasts fairly soon.
    – local food: forget the plane rides for lobsters, and refrigerated cars for oranges, i eat the seasons and region, i don’t expect 12 different kinds of lettuces in January in the Northeast
    – online post-secondary education: already happening in various geographical and vertical niches, similar to secondary but also includes removing dorm rooms
    – abandoning roads: solid to gravel, doesn’t get plowed after 6pm, etc… if your in Detroit, it is completely gone, you have grass
    – work to rule on food imports: chinese food imports (and many others) are a disaster if tested against USDA and FDA regs, but they simply aren’t tested. I’ll bet we could remove 90% of those imports forcing national and local solutions.
    – abandonment of remote suburbs: already happening in some geographies, gas costs too much to commute

    Many of these things aren’t even policy decisions, they come from loss of income which we have been enjoying for many years. Rolling back to the 60s won’t kill us, especially if we retain the socio progress of Woman’s rights, Minority rights etc.

    • Interesting points. I know my husband is now teaching a university course where the students only get to view the lectures (which he gives to a different group of students) on line. It would seem like the students would get a price break for this arrangement, but I understand that they are paying the full price. In some cases, there even seems to be a surcharge for online courses.

      Some of the energy cutbacks can have some negative consequences. The use of Charter Schools for elementary and secondary education in Georgia allows schools to operate without bus systems and (I believe) hot lunch programs. This means that the schools only appeal to higher income parents, who don’t require these services. The better students are siphoned off from the public school system, at lower energy cost to the tax payers. The state pays the lower cost for the Charter Schools, so saves money. I doubt that there is lower energy cost overall, though. The high-income parents drive their children to school, and cook their children’s lunches. (Fewer cooks commute to school, though.) The buses to public schools still run their full route, and the poorer students get pushed together to a greater extent than before.

      • David F Collins says:

        What you say of Georgia (primary & secondary education) applies to Chicago. Here, though, there are special public schools, not just charter and private (including sectarian) schools for the children of people who deserve a good education for their children. But one benefit is that this means increasing numbers of people who are still wannabe 1%ers live in the city.

        Also, the underfunding of the prestigious flagship universities of the Midwest helps assure a better future for the children of people who deserve a good future for their children.

        It is right and proper that the Eloi should be kept apart from the Morlocks. (In periods of being occupationally challenged, I have worked as a substitute teacher in schools for Morlocks. I would not want my grandchildren in them!)

    • GermanStacker says:

      structural efficiency “going local” = economic contraction = debt collapse = big depression.
      Example: I stop taking tennis lessons on the way home to my 25 mile away suburb (because working home office now), tennis teachers loose their job, the big sports center goes bankrupt, etc.

    • GermanStacker says:

      It’s just not our model. Not how we (i.e. 90% of society) define ourself. Won’t be. Look at emerging markets, everyone hoping for the western growth model. The system favours complexity. Big social rewards in all cultures: going for the action, have that house, kids, 2 cars, maybe a boat, holiday cottage, going to places, travel… Nobody wants to be that first generation to give up the old progress dream. It’s about your parents, your friends, your children judging you, you want to present the success story they expect from you. Needs a big crash to stop it.

      • yt75 says:

        Not really, all of the above always bored me, although I have all the degrees to get them 🙂

        • This is a huge part of our problem, any discussion that outlines what will affect the collective ‘we’ is invariably countered with an argument from someone unable to see beyond the singular ‘I’
          we have all ridden on the progressive rollercoaster, no matter how much boredom we affect to show about it

          • yt75 says:

            There are also different traditions, critics of technological progess or the will to maintain the difference between science and technoscience (or technology) is very strong in French litterature for instance, or in German one with Nietzsche and others.
            What problem are you refering to exactly ? I sometime feel than British people are totally (or more than others) unable to reason besides “problems” and “solutions” with this kind of mandatory “positive thinking and need for usefulness” or switching back to total moodiness.
            If there is a “solution” it is primarily in taxing fuels or raw materials in general much more than work for instance, overall there is no problem and no solution.

        • Arthur Robey says:

          I hope you are using your degrees to get us out of this gravity well. It sucks down here. And this is as good as it gets.
          Many factors make me an Uberdoomer. I wont bore you with the details. But our survival depends on us getting out of the gravity well. (By “our” I mean Gaia’s survival)
          There is a lot of space in the 3rd dimension. And we are trapped in two and running out of the 4th.
          There are hints on how to survive in Colossal Carbon Nanotubes, artificial intelligence, Quantum computing, Genetic engineering, Lattice Assisted Nuclear Reactions, Gerard K O’Neill’s space habitats.
          Dive right in. Don’t just stand there.
          I have made up one scenario in my science fiction novelette, The Breeding. (Lots of Sex, you will like it.)

  22. PeteTheBee says:

    Gail loves to hate on the Bakken. I wonder whether she will make a prediction re: it’s production? She did so here and missed it, by a lot.

    ” it seems unlikely that total Bakken production will exceed 2x to 3x current rate of 75,000 BOPD.”

    Here you have ND producing 662,428 BOPD, or around triple Gail’s ceiling. 75K per day was not even a speed bump.

    As to the pipeline that wasn’t built… there is a well known glut of oil in Cushing, the destination of the pipeline. The railroad’s can give better prices by delivering to locations that aren’t already over-supplied. The KXL pipeline will also pass close enough to allow for a Bakken spur.

    I wouldn’t read too much into one pipeline. But if you want to predict a Bakken production ceiling, let’s hear it.

    • The post you linked to was a guest post. I didn’t write it. Not everyone gets their forecasts right.

      The pipeline situation is changing rapidly. There is a rush to build pipelines now to the Gulf Coast (reverse Seaway pipeline, at 150,000 bpd on May 17, 2012; 400,000 per day by early 2013; 850,000 barrels per day mid 2014. Also southern leg of Keystone pipeline by by . By the new Bakken pipeline would be built.) So the glut issue because of pipeline capacity to the Gulf would not be much of a problem, by the time the pipeline gets built.

      Of course, the refineries at the coast are pretty close to full-up right now, and Bakken oil doesn’t really need the expensive cracking capability Gulf coast refineries. I think the real issue is that with the higher price available for Brent crude on the East Coast, producers would really prefer using East Coast refineries, as long as the WTI/ Brent differential holds up. Of course if these refineries go broke (because they cannot get a high enough crack spread on high priced Brent oil) or if the differential goes away, then Bakken producers will be looking for a different place to refine their oil.

      I think the real issue in the Bakken is how long the companies operating in the Bakken can continue to get enough financing to keep increasing their operations. The drop in number of drilling rigs suggests they have already started leveling off or cutting back. I am not one who follows individual stocks, but I understand that a number of Bakken oil companies are not doing very well in the stock market (including Northern Oil & Gas, Continental Resources, Newfield Exploration Company). The game becomes one of trying to sell out to some new company, perhaps with deeper pockets, who can finance more drilling and fracking.

      • PeteTheBee says:

        Right, I guess you’re too careful not to make a prediction.

        Predictions are often wrong, but the peak oil people have been spectacularly wrong about the Bakken.

        In a couple years, the Eagle Ford will over take the Bakken, then we’ll hear horrendous predictions about that play.

        • donsailorman says:

          With all due respect, you are 100% all wet. The depletion rate of the Bakken is extremely high, and the decline rate will also be extraordinarily high. For more information, study, and especially the comments of their petroleum engineers and petroleum geologists re the Bakken.

          • PeteTheBee says:

            right the oildrum… did you see the oil drum link above, where they predicted the Bakken should have peaked at half it’s current production?

            the peak oil people don’t understand the economics or the mechanics of shale energy, they are “fightting the last war”. The US has an almost endless supply of oil at $80 bl, and similarly gas at $5 mmbtu. Those thresholds are moving down, not up, as the technology improves. Eagle Ford has a lot of oil that’s profitable at $40 bl.

            If theoildrum was correct, the US would not be producing fossil fuel energy at an all time higher.

            • donsailorman says:

              You are still 100% all wet concerning the Bakken. Have you noticed the declining number of oil rigs there? The Bakken is a Red Queen’s Race, and within a year or two production will almost certainly be declining.

              Major commentators on such as westexas and Darwinian are quite right, and their numbers are right.

              Once again, with all due respect, may I inquire as to your credentials in petroleum geology or petroleum engineering?

            • The Oil Drum is not always correct. High prices do stimulate more production, I will agree. We will have to see how this plays out.

              I could see a pretty steep drop in oil prices, if we go into recession with higher taxes / lower benefits after the first of the year. Our huge deficit spending and artificially low interest rates are hiding a multitude of problems. $80 oil prices may disappear into the rear-view window, and substantially slow Bakken development.

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