Eight Energy Myths Explained

Republicans, Democrats, and environmentalists all have favorite energy myths. Even Peak Oil believers have favorite energy myths. The following are a few common mis-beliefs,  coming from a variety of energy perspectives. I will start with a recent myth, and then discuss some longer-standing ones.

Myth 1. The fact that oil producers are talking about wanting to export crude oil means that the US has more than enough crude oil for its own needs.

The real story is that producers want to sell their crude oil at as high a price as possible. If they have a choice of refineries A, B, and C in this country to sell their crude oil to, the maximum amount they can receive for their oil is limited by the price these refineries are paying, less the cost of shipping the oil to these refineries.

If it suddenly becomes possible to sell crude oil to refineries elsewhere, the possibility arises that a higher price will be available in another country. Refineries are optimized for a particular type of crude. If, for example, refineries in Europe are short of light, sweet crude because such oil from Libya is mostly still unavailable, a European refinery might be willing to pay a higher price for crude oil from the Bakken (which also produces light sweet, crude) than a refinery in this country. Even with shipping costs, an oil producer might be able to make a bigger profit on its oil sold outside of the US than sold within the US.

The US consumed 18.9 million barrels a day of petroleum products during 2013. In order to meet its oil needs, the US imported 6.2 million barrels of oil a day in 2013 (netting exported oil products against imported crude oil). Thus, the US is, and will likely continue to be, a major oil crude oil importer.

If production and consumption remain at a constant level, adding crude oil exports would require adding crude oil imports as well. These crude oil imports might be of a different kind of oil than that that is exported–quite possibly sour, heavy crude instead of sweet, light crude. Or perhaps US refineries specializing in light, sweet crude will be forced to raise their purchase prices, to match world crude oil prices for that type of product.

The reason exports of crude oil make sense from an oil producer’s point of view is that they stand to make more money by exporting their crude to overseas refineries that will pay more. How this will work out in the end is unclear. If US refiners of light, sweet crude are forced to raise the prices they pay for oil, and the selling price of US oil products doesn’t rise to compensate, then more US refiners of light, sweet crude will go out of business, fixing a likely world oversupply of such refiners. Or perhaps prices of US finished products will rise, reflecting the fact that the US has to some extent in the past received a bargain (related to the gap between European Brent and US WTI oil prices), relative to world prices. In this case US consumers will end up paying more.

The one thing that is very clear is that the desire to ship crude oil abroad does not reflect too much total crude oil being produced in the United States. At most, what it means is an overabundance of refineries, worldwide, adapted to light, sweet crude. This happens because over the years, the world’s oil mix has been generally changing to heavier, sourer types of oil. Perhaps if there is more oil from shale formations, the mix will start to change back again. This is a very big “if,” however. The media tend to overplay the possibilities of such extraction as well.

Myth 2. The economy doesn’t really need very much energy.

We humans need food of the right type, to provide us with the energy we need to carry out our activities. The economy is very similar: it needs energy of the right types to carry out its activities.

One essential activity of the economy is growing and processing food. In developing countries in warm parts of the world, food production, storage, transport, and preparation accounts for the vast majority of economic activity (Pimental and Pimental, 2007). In traditional societies, much of the energy comes from human and animal labor and burning biomass.

If a developing country substitutes modern fuels for traditional energy sources in food production and preparation, the whole nature of the economy changes. We can see this starting to happen on a world-wide basis in the early 1800s, as energy other than biomass use ramped up.

Figure 1. World Energy Consumption by Source, Based on Vaclav Smil estimates from Energy Transitions: History, Requirements and Prospects and together with BP Statistical Data on 1965 and subsequent

Figure 1. World Energy Consumption by Source, Based on Vaclav Smil estimates from Energy Transitions: History, Requirements and Prospects and together with BP Statistical Data on 1965 and subsequent

The Industrial Revolution began in the late 1700s in Britain. It was enabled by coal usage, which made it possible to make metals, glass, and cement in much greater quantities than in the past. Without coal, deforestation had become a problem, especially near cold urban areas, such as London. With coal, it became possible to use industrial processes that required heat without the problem of deforestation. Processes using high levels of heat also became cheaper, because it was no longer necessary to cut down trees, make charcoal from the wood, and transport the charcoal long distances (because nearby wood had already been depleted).

The availability of coal allowed the use of new technology to be ramped up. For example, according to Wikipedia, the first steam engine was patented in 1608, and the first commercial steam engine was patented in 1712. In 1781, James Watt invented an improved version of the steam engine. But to actually implement the steam engine widely using metal trains running on metal tracks, coal was needed to make relatively inexpensive metal in quantity.

Concrete and metal could be used to make modern hydroelectric power plants, allowing electricity to be made in quantity. Devices such as light bulbs (using glass and metal) could be made in quantity, as well as wires used for transmitting electricity, allowing a longer work-day.

The use of coal also led to agriculture changes as well, cutting back on the need for farmers and ranchers. New devices such as steel plows and reapers and hay rakes were manufactured, which could be pulled by horses, transferring work from humans to animals. Barbed-wire fence allowed the western part of the US to become cropland, instead one large unfenced range. With fewer people needed in agriculture, more people became available to work in cities in factories.

Our economy is now very different from what it was back about 1820, because of increased energy use. We have large cities, with food and raw materials transported from a distance to population centers. Water and sewer treatments greatly reduce the risk of disease transmission of people living in such close proximity. Vehicles powered by oil or electricity eliminate the mess of animal-powered transport. Many more roads can be paved.

If we were to try to leave today’s high-energy system and go back to a system that uses biofuels (or only biofuels plus some additional devices that can be made with biofuels), it would require huge changes.

Myth 3. We can easily transition to renewables.

On Figure 1, above, the only renewables are hydroelectric and biofuels. While energy supply has risen rapidly, population has risen rapidly as well.

Figure 2. World Population, based on Angus Maddison estimates, interpolated where necessary.

Figure 2. World Population, based on Angus Maddison estimates, interpolated where necessary.

When we look at energy use on a per capita basis, the result is as shown in Figure 3, below.

Figure 3. Per capita world energy consumption, calculated by dividing world energy consumption (based on Vaclav Smil estimates from Energy Transitions: History, Requirements and Prospects together with BP Statistical Data for 1965 and subsequent) by population estimates, based on Angus Maddison data.

Figure 3. Per capita world energy consumption, calculated by dividing world energy consumption (based on Vaclav Smil estimates from Energy Transitions: History, Requirements and Prospects together with BP Statistical Data for 1965 and subsequent) by population estimates, based on Angus Maddison data.

The energy consumption level in 1820 would be at a basic level–only enough to grow and process food, heat homes, make clothing, and provide for some very basic industries. Based on Figure 3, even this required a little over 20 gigajoules of energy per capita. If we add together per capita biofuels and hydroelectric on Figure 3, they would come out to only about 11 gigajoules of energy per capita. To get to the 1820  level of per capita energy consumption, we would either need to add something else, such as coal, or wait a very, very long time until (perhaps) renewables including hydroelectric could be ramped up enough.

If we want to talk about renewables that can be made without fossil fuels, the amount would be smaller yet. As noted previously, modern hydroelectric power is enabled by coal, so we would need to exclude this. We would also need to exclude modern biofuels, such as ethanol made from corn and biodiesel made from rape seed, because they are greatly enabled by today’s farming and transportation equipment and indirectly by our ability to make metal in quantity.

I have included wind and solar in the “Biofuels” category for convenience. They are so small in quantity that they wouldn’t be visible as a separate categories, wind amounting to only 1.0% of world energy supply in 2012, and solar amounting to 0.2%, according to BP data. We would need to exclude them as well, because they too require fossil fuels to be produced and transported.

In total, the biofuels category without all of these modern additions might be close to the amount available in 1820. Population now is roughly seven times as large, suggesting only one-seventh as much energy per capita. Of course, in 1820 the amount of wood used led  to significant deforestation, so even this level of biofuel use was not ideal. And there would be the additional detail of transporting wood to markets. Back in 1820, we had horses for transport, but we would not have enough horses for this purpose today.

Myth 4. Population isn’t related to energy availability.

If we compare Figures 2 and 3, we see that the surge in population that took place immediately after World War II coincided with the period that per-capita energy use was ramping up rapidly. The increased affluence of the 1950s (fueled by low oil prices and increased ability to buy goods using oil) allowed parents to have more children. Better sanitation and innovations such as antibiotics (made possible by fossil fuels) also allowed more of these children to live to maturity.

Furthermore, the Green Revolution which took place during this time period is credited with saving over a billion people from starvation. It ramped up the use of irrigation, synthetic fertilizers and pesticides, hybrid seed, and the development of high yield grains. All of these techniques were enabled by availability of oil. Greater use of agricultural equipment, allowing seeds to be sowed closer together, also helped raise production. By this time, electricity reached farming communities, allowing use of equipment such as milking machines.

If we take a longer view of the situation, we find that a “bend” in the world population occurred about the time of Industrial Revolution, and the ramp up of coal use (Figure 4). Increased farming equipment made with metals increased food output, allowing greater world population.

Figure 4. World population based on data from "Atlas of World History," McEvedy and Jones, Penguin Reference Books, 1978  and Wikipedia-World Population.

Figure 4. World population based on data from “Atlas of World History,” McEvedy and Jones, Penguin Reference Books, 1978
and Wikipedia-World Population.

Furthermore, when we look at countries that have seen large drops in energy consumption, we tend to see population declines. For example, following the collapse of the Soviet Union, there were drops in energy consumption in a number of countries whose energy was affected (Figure 5).

Figure 6. Population as percent of 1985 population, for selected countries, based on EIA data.

Figure 6. Population as percent of 1985 population, for selected countries, based on EIA data.

Myth 5. It is easy to substitute one type of energy for another.

Any changeover from one type of energy to another is likely to be slow and expensive, if it can be accomplished at all.

One major issue is the fact that different types of energy have very different uses. When oil production was ramped up, during and following World War II, it added new capabilities, compared to coal. With only coal (and hydroelectric, enabled by coal), we could have battery-powered cars, with limited range. Or ethanol-powered cars, but ethanol required a huge amount of land to grow the necessary crops. We could have trains, but these didn’t go from door to door. With the availability of oil, we were able to have personal transportation vehicles that went from door to door, and trucks that delivered goods from where they were produced to the consumer, or to any other desired location.

We were also able to build airplanes. With airplanes, we were able to win World War II. Airplanes also made international business feasible on much greater scale, because it became possible for managers to visit operations abroad in a relatively short time-frame, and because it was possible to bring workers from one country to another for training, if needed. Without air transport, it is doubtful that the current number of internationally integrated businesses could be maintained.

The passage of time does not change the inherent differences between different types of fuels. Oil is still the fuel of preference for long-distance travel, because (a) it is energy dense so it fits in a relatively small tank, (b) it is a liquid, so it is easy to dispense at refueling stations, and (c) we are now set up for liquid fuel use, with a huge number of cars and trucks on the road which use oil and refueling stations to serve these vehicles. Also, oil works much better than electricity for air transport.

Changing to electricity for transportation is likely to be a slow and expensive process. One important point is that the cost of electric vehicles needs to be brought down to where they are affordable for buyers, if we do not want the changeover to have a hugely adverse effect on the economy. This is the case because salaries are not going to rise to pay for high-priced cars, and the government cannot afford large subsidies for everyone. Another issue is that the range of electric vehicles needs to be increased, if vehicle owners are to be able to continue to use their vehicles for long-distance driving.

No matter what type of changeover is made, the changeover needs to implemented slowly, over a period of 25 years or more, so that buyers do not lose the trade in value of their oil-powered vehicles. If the changeover is done too quickly, citizens will lose their trade in value of their oil-powered cars, and because of this, will not be able to afford the new vehicles.

If a changeover to electric transportation vehicles is to be made, many vehicles other than cars will need to be made electric, as well. These would include long haul trucks, busses, airplanes, construction equipment, and agricultural equipment, all of which would need to be made electric. Costs would need to be brought down, and necessary refueling equipment would need to be installed, further adding to the slowness of the changeover process.

Another issue is that even apart from energy uses, oil is used in many applications as a raw material. For example, it is used in making herbicides and pesticides, asphalt roads and asphalt shingles for roofs, medicines, cosmetics, building materials, dyes, and flavoring. There is no possibility that electricity could be adapted to these uses. Coal could perhaps be adapted for these uses, because it is also a fossil fuel.

Myth 6. Oil will “run out” because it is limited in supply and non-renewable.

This myth is actually closer to the truth than the other myths. The situation is a little different from “running out,” however. The real situation is that oil limits are likely to disrupt the economy in various ways. This economic disruption is likely to be what leads to an  abrupt drop in oil supply. One likely possibility is that a lack of debt availability and low wages will keep oil prices from rising to the level that oil producers need for extraction. Under this scenario, oil producers will see little point in investing in new production. There is evidence that this scenario is already starting to happen.

There is another version of this myth that is even more incorrect. According to this myth, the situation with oil supply (and other types of fossil fuel supply) is as follows:

Myth 7. Oil supply (and the supply of other fossil fuels) will start depleting when the supply is 50% exhausted. We can therefore expect a long, slow decline in fossil fuel use.

This myth is a favorite of peak oil believers. Indirectly, similar beliefs underly climate change models as well. It is based on what I believe is an incorrect reading of the writings of M. King Hubbert. Hubbert is a geologist and physicist who foretold a decline of US oil production, and eventually world production, in various documents, including Nuclear Energy and the Fossil Fuels, published in 1956. Hubbert observed that under certain circumstances, the production of various fossil fuels tends to follow a rather symmetric curve.

Figure 7. M. King Hubbert's 1956 image of expected world crude oil production, assuming ultimate recoverable oil of 1,250 billion barrels.

Figure 7. M. King Hubbert’s 1956 image of expected world crude oil production, assuming ultimate recoverable oil of 1,250 billion barrels.

A major reason that this type of forecast is wrong is because it is based on a scenario in which some other type of energy supply was able to be ramped up, before oil supply started to decline.

Figure 8. Figure from Hubbert's 1956 paper, Nuclear Energy and the Fossil Fuels.

Figure 8. Figure from Hubbert’s 1956 paper, Nuclear Energy and the Fossil Fuels.

With this ramp up in energy supply, the economy can continue as in the past without a major financial problem arising relating to the reduced oil supply. Without a ramp up in energy supply of some other type, there would be a problem with too high a population in relationship to the declining energy supply. Per-capita energy supply would drop rapidly, making it increasingly difficult to produce enough goods and services. In particular, maintaining government services is likely to become a problem. Needed taxes are likely to rise too high relative to what citizens can afford, leading to major problems, even collapse, based on the research of Turchin and Nefedov (2009).

Myth 8. Renewable energy is available in essentially unlimited supply.

The issue with all types of energy supply, from fossil fuels, to nuclear (based on uranium), to geothermal, to hydroelectric, to wind and solar, is diminishing returns. At some point, the cost of producing energy becomes less efficient, and because of this, the cost of production begins to rise. It is the fact wages do not rise to compensate for these higher costs and that cheaper substitutes do not become available that causes financial problems for the economic system.

In the case of oil, rising cost of extraction comes because the cheap-to-extract oil is extracted first, leaving only the expensive-to-extract oil. This is the problem we recently have been experiencing. Similar problems arise with natural gas and coal, but the sharp upturn in costs may come later because they are available in somewhat greater supply relative to demand.

Uranium and other metals experience the same problem with diminishing returns, as the cheapest to extract portions of these minerals is extracted first, and we must eventually move on to lower-grade ores.

Part of the problem with so-called renewables is that they are made of minerals, and these minerals are subject to the same depletion issues as other minerals. This may not be a problem if the minerals are very abundant, such as iron or aluminum. But if minerals are lesser supply, such as rare earth minerals and lithium, depletion may lead to rising costs of extraction, and ultimately higher costs of devices using the minerals.

Another issue is choice of sites. When hydroelectric plants are installed, the best locations tend to be chosen first. Gradually, less desirable locations are added. The same holds for wind turbines. Offshore wind turbines tend to be more expensive than onshore turbines. If abundant onshore locations, close to population centers, had been available for recent European construction, it seems likely that these would have been used instead of offshore turbines.

When it comes to wood, overuse and deforestation has been a constant problem throughout the ages. As population rises, and other energy resources become less available, the situation is likely to become even worse.

Finally, renewables, even if they use less oil, still tend to be dependent on oil. Oil is  important for operating mining equipment and for transporting devices from the location where they are made to the location where they are to be put in service. Helicopters (requiring oil) are used in maintenance of wind turbines, especially off shore, and in maintenance of electric transmission lines. Even if repairs can be made with trucks, operation of these trucks still generally requires oil. Maintenance of roads also requires oil. Even transporting wood to market requires oil.

If there is a true shortage of oil, there will be a huge drop-off in the production of renewables, and maintenance of existing renewables will become more difficult. Solar panels that are used apart from the electric grid may be long-lasting, but batteries, inverters, long distance electric transmission lines, and many other things we now take for granted are likely to disappear.

Thus, renewables are not available in unlimited supply. If oil supply is severely constrained, we may even discover that many existing renewables are not even very long lasting.


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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561 Responses to Eight Energy Myths Explained

  1. MG says:

    History of the energy use by the civilization is the history of collecting, preserving and storing the energy. Besides the roads, piping etc. we should not forget one very important thing: glass window. It is the most common device for keeping the heat inside the building and letting the light come into the building that we take for granted. Also keeping the building from entering animals, insects in warm areas.


    It is quite easy to destroy the civilization in colder areas (and also in warm areas): Break all the windows when replacing them is a problem (e.g. during a war or due to transportation problems)…

    That is why the energy decline after the energy peak of our civilization will be very fast when the world war starts. And the population decline, too.

  2. edpell says:

    On using PV to power society. Here in New York State with 70 sunny days per year we will not have 24/7 power from PV with reasonable EROEI, too high a cost for storage. Still PV would be useful to use when it is sunny. I would prefer a electric table saw to cut wood even if I have to wait for a sunny day. PV may not support the existing lifestyle but it would be better than hand tools for everything.

    When the transition is done there will be only two sources of energy solar and nuclear. I lump hydro and wind as a subtype of solar. Rather than considering the problem of maintaining the current system what can our low tech descendants build up over 40 generations? Low temperature concentrated solar for basic chemical processes, water wheel, wind mill old style, hydro electric? Even then it will come down to population density. If population were controlled I think humans could have a pleasant life with at least modest technology.

    • Paul says:

      A couple of things…. I think transition sugar coats things — collapse, chaos, disaster, die-off, mayhem, mad max… those are more appropriate descriptors…

      As for nuclear, solar, hydro, wind etc… we’ve done this topic fairly extensively and it has been demonstrated that none of these can exist without oil inputs.

      How do you mine the minerals that go into building and maintaining these very sophisticated systems without oil — surely many of the components of these massive installations are made from products that are made from oil — how do you substitute?

      Take your drill for instance — the wires are coated with plastic — made from oil — the trigger is made from plastic – made for oil — the metal was mined — using oil — it was delivered to the shop – using oil.

      When this thing tips over — you’ll want a hand drill I reckon.

    • InAlaska says:

      It won’t power the Grid, but you’ll sure be glad to have it locally. Pumps water, cuts wood, charges the batteries. All good.

    • Daddio7 says:

      All white populations are shrinking. China tried population control with mixed results. Who is going to force the Arab, African, Indian, and Hispanic peoples to stop having babies?

  3. Don Stewart says:

    Dear Gail and All Worried about Cooking

    Following are the results from a local chef who has been experimenting with passive solar cooking. She uses mason jars and the same physical phenomena that create global warming and some dark leafy greens…Don Stewart
    PS The Taster is her husband.

    Rabbit-Nest Sun Carrots cooked in a Fun-Panel Solar Oven
    Finding safe, dark cookware
    Many instructions for solar cooking insist on dark cookware or jars painted black. Paint can be toxic, fragile, and a mess. When I started experimenting with solar cookers, I asked my local hardware store for non-toxic, high-temperature paint. Once home, I was shocked to read in the fine print that the paint might cause birth defects and cause other health problems.

    I returned that paint and sought the help of my art-store guru. She recommended RAS acrylic color, which is rated ACMI non-toxic. But a quick google revealed this warning about ACMI non-toxic certification:

    Do not eat, drink or smoke while using art and craft materials. Wash up after use – Clean yourself and your supplies. Never use products for skin painting or food preparation unless indicated that the product is meant to be used in this way.
    Reading that and thinking about how the paint would get on my hands and in my lungs when I took the hot jar out of the roasting bag made me pause before painting.

    Thinking inside the jar
    Fortunately, my Taster is also a mechanical engineer. He said painting the jar black can help the jar get a little hotter in the sun, but not much. The hot jar passes heat on to the food, at least as much of it as can make it through the glass.

    Then my Taster asked the magic question:

    Why not use the sun to heat the food directly instead of heating the jar?
    He explained that when you let the short waves of visible sunlight go through the glass to heat up the food, the hot food will radiate longer infra-red waves. The infra-red waves can’t go through the glass, so they bounce around inside the jar and keep the food hot.

    I launched a series of tests with dark food inside a clear jar. The rabbit nest — dark green chard leaves lining a jar top to bottom — works like a charm. Other dark foods worked well too, as you’ll see in other recipes coming soon. Another test showed that putting a clear jar in a dark stocking actually lowered the temperature compared to the same food in a clear jar.

    Rabbit-Nest Sun Carrots with Rainbow Chard
    Active time: 8 minutes. Total time: 2 to 3 hours using a simple solar oven, depending on the weather. Yield: 2 cups or 4 servings.

    3 small leaves rainbow chard or ruby chard
    2 large carrots
    1 tablespoon Greek dressing
    Greek Dressing
    1 lemon or 2 tablespoons lemon juice
    1 small garlic clove, minced
    1/4 cup olive oil
    1/4 teaspoon mustard
    Line the inside of a 2 cup canning jar with chard leaves. Trim chard stems that stick up over the top of the jar and cut if needed so they fit into the jar.

    Line a canning jar with dark green chard with dark, colorful stems. Cook the stem trimmings with the carrots.

    Cut carrots lengthwise into quarters, then cut them to fit inside the jar. Gently put chard stems and carrots into the jar, avoiding tearing chard leaves if possible. Put a lid on the canning jar and barely tighten the ring. Cook in a solar oven until carrots are tender, about two or three hours.

    Lining a canning jar with dark green leaves helps capture solar energy.

    Make Greek dressing: juice lemon and mince garlic, put all ingredients in a small jar, and shake to combine.
    When carrots are done, slide vegetables onto a cutting board and chop into bite-sized pieces. Toss with Greek dressing and serve hot or at room temperature. The carrots and dressing keep refrigerated for about 5 days, although they are at their best the first day.
    Like this recipe? Get a free recipe & food news every week

    Reader Comments (1)
    Once again, you knock my socks off! I don’t have a solar oven, but the front of my house gets intense sun in the afternoons. I will try this on the first of our “hot enough to cook tofu on the sidewalk” days, which is probably not far off, by putting the jar out on my concrete front porch.

    Thanks for the engineer’s point of view, Taster Man!


    • xabier says:


      2 to 3 hours of hot sun?! Please stop taunting those of us who live at the ends of the Earth: here in Britain more heat would be generated by getting my bird dog to sit on the pot even in June.

      • InAlaska says:

        Don’t complain about British climate until you live where I live! There’s still snow on the bloody ground here…

        • Jarle B says:

          You’re lucky, in Norway you have to knock a hole in the ice if you want to take a bath on midsummer night…

          • xabier says:


            That’s why you Northmen managed to conquer the English in the 11th century…..

          • Daddio7 says:

            North east Florida, it was almost 32 C today, which will be the average high until October. Parts of Florida got 50 centimeters of rain yesterday but that is a little extraordinary. OK, it was a record for one day.

        • xabier says:


          Sauna. Snow bath. Bottle of red wine. Of to bed. As a Finnish girl said to me: ‘It’s Heaven!’

          • InAlaska says:

            Paul, et. al. “The Windup Girl” another post-apocalyptic, peak oil novel takes place in Thailand in the late 21st century, also deals with the issue of foreigners. In this book, the Malayan Chinese are persecuted and mass murdered for the crime of being the wealthy capitalists. Great book. Highly recommended.

          • InAlaska says:


      • InAlaska says:

        For those favorably inclined toward J.R.R. Tolkien and the Lord of the Rings, I highly recommend the Archdruid Report’s latest post “Refusing the Call: A Tale Rewritten.”

    • InAlaska says:

      Wow, Don. You’re a lucky man. We’ll give it a try.

  4. timl2k11 says:

    I came across this interesting passage on the Wikipedia entry for Giant oil and gas fields. To wit: “Further analysis shows that giant oil fields typically reach their maximum production before 50% of the ultimate recoverable volume has been extracted.[11] A strong correlation between depletion and the rate of decline was also found in that study, indicating that much new technology has only been able to temporarily decrease depletion at the expense of rapid future decline. This is exactly the case in the Cantarell Field.”
    The source given is “Höök, M., Söderbergh, B., Jakobsson, K., Aleklett, K., The evolution of giant oil field production behaviour, Natural Resources Research, Volume 18, Number 1, March 2009, Pages 39-56”
    I can’t find the publication but if the Wikipedia summary is accurate it has some very interesting implications when applied globally. Technology can keep global production numbers up slightly or at least flat at the expense of increased future decline. In essence all that “new-fangled” oil drilling technology is doing is “pulling forward” future production. What is interesting is that this then yields the same sort of “Seneca cliff” that Gail shows in oil production even before considering the financial implications.

    Personally, I think an even more general conclusion can be drawn, all technology will ever do for us is maximize the rate of entropy, the rate of depletion and degradation, for the sake of extending BAU, at the cost of an ever more dramatic collapse when we hit hard limits that not even technology can overcome. Just my two cents.

    • I agree with your conclusion. We are in technological overshoot. That is we are using technology to borrow from the future to extend (and pretend) our artifically created ecosystem. The longer we do this, the higher we climb, the farther we push ourselves away from the natural world, the harder (and sooner) we will fall.

    • timl2k11 says:

      Here is a link to the PDF, Giant oil field decline rates and their influence on world oil production: http://www.postpeakliving.com/files/shared/Hook-GOF_decline_Article.pdf

      Lots of interesting charts and analysis. The forecast oil production in Figure 13 might look laughable (this was published using data up to 2008 – pre fracking boom), but note the qualification below the graph “The IEA forecast is reasonable in the near-term, but towards 2030, it seems optimistically biased.

    • B9K9 says:

      “at the cost of an ever more dramatic collapse”

      But isn’t this true of life in general? Think about the 1,000s of years of folk wisdom encapsulated in such homilies as “The bigger they are, the harder they fall”; or “What goes up must come down”; or “Burning a candle @ both ends”.

      The universe is ruled by the simple, yet elegant ‘unit x rate’ measure. These basic physical properties are found throughout nature, for both organic & inorganic substances. As a demonstration of this principle, we can compare two volcanoes, one sudden & violent (Mt St Helens), the other slow but of long duration (Hawaii Big Island). Or, explain why rock stars like Morrison, Joplin & Hendrix all died @ age 27. (The human body evolved over time to perhaps feast 2-3 times per month [upon a kill], not 24 hours every day.)

      This shit is just common sense, which is why Paul’s remarks regarding a lack of coordinated investment in alternative sources is so poignant: the jig is up and this train is heading for the wall at full maximum speed.

  5. Peter Strachan says:

    I think the issue with US oil price is that there is a prohibition on the export of US oil production. hence, the high quality WTI oil is in surplus and sells at a $15/bbl discount to the price it could fetch if sold in Europe. This is a deliberate policy to keep petrol prices low in the US in the face of rising production of light sweet crude, when as Gail says, refineries cannot process that much WTI as they are set up for a blend which uses more heavy oil imports.

  6. Jarle B says:

    This comment field needs a bit of humour. From the 1981 BBC TV-series “The Hitchhikers Guide to the Galaxy”, here’s a good description of mankind:


  7. P-O says:

    Some facts from Europe from the 2:nd biggest solar pv installation on earth in Spain:

    “Prieto and Hall conclude that the EROI of solar photovoltaic is only 2.45, very low despite Spain’s ideal sunny climate.”
    Review of the paper: http://energyskeptic.com/2013/tilting-at-windmills-spains-solar-pv/
    Original paper: http://tinyurl.com/lmfe4f7

    This is when all the used energy has been recorded, from the mining of raw material to the transports of the finished products. Calculated for a useful time span of 25 years in a place with ~300 days of sunlight. Prieto and Hall found that the PV itself is only 1/3 of the EROI, site construction maintenance transports etc is the largest part.

    • Paul says:

      Now that would explain why investment in solar and other renewables is crashing….

      I guess investors prefer to invest in things that actually generate a return — they usually don’t enjoy pouring money into bottomless pits.

    • That is in line with what I was expecting. Mining is hugely energy intensive and only getting more so. As mining consumes ever increasing amounts of energy, the EROI will become negative. Recycling only gets you so far before you have to go back underground and get more raw materials. I no longer think solar buys us more time. I now think solar is an energy sink that will hasten the collapse.

  8. p01 says:

    Myth 4. Population isn’t related to energy availability.
    Population is ALWAYS related to food availability. This should not be debatable.
    But in terms of energy, as a chicken and egg dilemma, it is more related to the availability of credit than actual energy. As in the credit available for food production, that is, not for toys. Food will always find places to grow population if it is not used locally, but exported instead.
    To sum this myth up: Population is a function of food availability. Always, without failure.

    Additionally, population health is a function of the quality of food available i.e: you can lower the quality of food and obtain an even greater population, but with the downside of many sick individuals, who cannot process the lower quality energy from food. An analogy is, of course, sweet ole’ crude vs sulphurous heavy crude (or whatever the experts call it).

  9. BC says:

    Exergy: http://gcep.stanford.edu/research/exergy/resourcechart.html
    Exergetics: exergy.se/ftp/exergetics.pdf‎

    Value-added GDP should be replaced with a system of national flows accounting of net exergetic balance per capita that fully accounts for ecological costs per capita, including “money” denominated similarly at no interest cost and at a velocity of 1:1 to a sustainable level of socially acceptable material consumption and well-being per capita.

    We would find that well over half of reported value-added national income is in the form of unserviceable rentier costs to labor, profits, and gov’t receipts, as well as colossal net exergetic waste of time, scarce resources, intellect, and human effort per capita.

    Thus, we do not have unemployment and underemployment (underutilization of labor) as much as we have have MASSIVE OVEREMPLOYMENT, WASTE, and obscene misallocation of resources, savings, credit, investment, production, time, and intellect.

    • Stefeun says:

      It requires a very high degree of cooperation and a common goal to have such a metric to work.
      And once settled, needs to be strengthened permanently in order to resist the attacks of more powerful systems.
      See e.g. Buthanese GNH (Gross National Happiness) that has hard times at the moment to face “the Business” to come in:
      “Bhutan is not all about happiness; it’s a country grappling with modernity
      The Kingdom’s gross national happiness approach to development has been successful, but it still faces challenges. A robust private sector can help”
      They will kill GNH, it’s just a matter of time.

  10. i1 says:

    US government debt instruments look like a fairly “risk free” investment at this point, as interest rates cannot rise substantially without the continuous input of cheap oil. I would also assume this holds for the EU countries as well (in relative terms).

    • Paul says:

      I don’t really see anything that is safe — or that is going to return any value when the SHTF.

      The US is going to default at some point — of course they are. But that is irrelevant — because that is a tempest in tea cup — the storm is the end of the global economy — the least of anyone’s worries will be the yield on a bond — or even if the bond exists.

      Food will be the issue.

      I could care less about investing or returns these days – whats the point?

      I do have some gold stashed away because if anything is going to hold up when the SHTF it will be what has always held up in times of chaos and strife.

      However I do suspect that when things go sideways — people would run past a pile of gold coins — if you piled up some cans of tuna and beans as well.

      • Colm Barry says:

        “The US is going to default at some point” – I’m sorry, but they already HAVE defaulted. They are giving the Chinese worthless paper to pay for all the gadgets they import, whether that paper is FED-electronically credits or paper dollars or government bonds. It is only that “credit” comes from “credere” (Latin to believe) that this Ponzi scheme is still working. But if a hypnotist can make a bailiff go away without garnishment that doesn’t mean the debtor has not objectively defaulted.

        • Paul says:

          I agree with that — china has been dumping treasuries — clearly they are writing off that ‘investment’ but don’t want to destroy it overnight by unloading a big chunk…. Russia has dumped a quarter of there’s…

          It looks as if some sort of tipping point re: the USD is approaching….

      • InAlaska says:

        Paul, as usual I agree with your assessment. I too, own a small amount of gold. The reason for that is simple. There will be an interim span of time in between the financial crash and the global trade implosion, when gold will skyrocket in value. I mean like up to $10,000 per ounce. It won’t last very long, but for a short time you will be able to leverage your new found wealth into buying lots of food, solar panels and farmland. You’ll have to stay on your toes and not get greedy because you are right, shortly thereafter, gold will be worthless and those cans of tuna that you bought with it will be priceless.

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  12. dashui says:

    This website made me aware of oil companies declining capex.
    To my surprise, many other companies are doing the same thing:
    , http://fabiusmaximus.com/2014/04/18/corporate-decline-capex-67412/

    • Thanks! Based on when the average age of capital goods started to increase, the big reduction in Capex starts about 2001, when China was admitted to the World Trade Organization. Why invest in the US, if there are other countries that you can invest in that produce goods more cheaply? The period corresponds to when US job growth turned to shrinkage, and companies started outsourcing of all kinds of production and services (computer programming, call centers) overseas.

  13. B9K9 says:

    Paul brings up his situation in Bali, which is the fulcrum of the debate in the USA and other Western nations on whether to stay or leave. There are many, many advantages to taking flight and finding a more suitable environment that will lend itself to possible survival as the global economy begins to feel the effects of our finite world.

    However, I am committed to remaining stateside, simply because I am perfectly adapted to my environment as a ‘Merican. I have traveled to every state except Alaska, I understand the regional dialects, food preferences, the issues behind national, regional & local politics (eg 2nd amendment), and I know our history (useful for interface and point of reference in introductions). But perhaps most importantly, I LOOK like a “normal”, educated, professional American. Good height, good shape, good hair, no weird ass tats or other distinguishing marks. In summary, I have never been discriminated against, no cop ever looks twice, and I pretty much get to do my thing.

    Now, who would leave such an advantage behind as global nations careen into a state of further decay? I I believe tribal allegiances, social conventions, perceived philosophies and belief systems are all assessed within seconds; in the kinds of situations we are heading, I think these few seconds will make large differences as to survivability.

    Of course, I could be completely mistaken, but that’s my position, so I’m riding the ship down right here by the beach.

    • Stefeun says:

      The “social link” is much more developed in SE-Asia than in US or even EU.
      It’s part of their culture and way of life to take care of each other; not like the devastating effects of individualism in our western countries.

      Now about welcoming foreigners, or not, it seems to be slightly different; see “A surprising map of the countries that are most and least welcoming to foreigners”
      (I assume the maps could be subject to endless -and worthless- discussions; I link it “for the fun”)

    • dashui says:

      Tall, in good shape with with nice hair? ARRGH!!!
      You’ll b the first person I’ll track down and kill out of spite!

      • xabier says:

        Funny, as it seems to me that it’s average-height, out-of-shape people who really fit in everywhere, often with hygiene problems. The clean-cut all-American should get some vices and not wash a bit to avoid standing out.

        During the Spanish Civil War, the middle classes were arrested and shot for having soft, clean hands…..

        • Jarle B says:

          What is safe appearance on the main street coffee shop of a western city today might be asking for trouble later on. Yes, hipsters sipping coffees with very long names while surfing the web on their MacBooks comes to mind.

    • InAlaska says:

      I believe that you are wise, here. Leaving the home field advantage is a poor choice unless you have some other connection upon which you can capitalize. Family ties, a common language, your last name is the name of some ancient hill town in Italy, something that connects you to the landscape or the culture. Even in ‘Merica, regional differences will be important: suthern’ axcents and skin color. I advise to go with what you know. Foreign minorities never fare well in times of chaos, and tribalism will rear its ugly head almost immediately. People look for someone to blame. Easy to blame the foreigners. Just look at the history of the Jewish people who have always been “foreign” in whatever nation state they find themselves in since the time of the diaspora. The German Jews of 1939, looked and felt as German as any one else, but it didn’t go their way. This was the reason for their passion to establish a Jewish state. In Israel, they are no longer foreigners. Well, unless you ask a Palestinian.

      • Paul says:

        A bit of clarification — I didn’t come to Bali because of the energy crisis — I was oblivious to what the true problem was until about 2 years ago — when I started to question the logic of progress and industrialization — I was already in Bali for 4 years by then wanting to escape the smog of Hong Kong where I’d lived for over a decade.

        Increasingly — and particularly after discovering this blog — I became convinced that the real problem was the end of cheap oil — only recently did we commence significant organic farming.

        Prior to this I knew something very bad was imminent — but I had thought — hold some gold and just wait for things to recover after a massive financial collapse.

        I know now that there will be no recovery —- that gold is probably a pointless hedge….

        The Indonesian government has many times designated the Chinese as the Jews of the country — and there have been many massacres of them over the years…

        Perhaps foreigners will be targeted — all I can say is that we have made best efforts within our village to demonstrate that we are not – as many expats are here — arrogant colonial types…

        We have sponsored an eye clinic for the village – 6 blind people had cataracts removed so could see again — everyone who needed medication or eyeglasses were given them free — we also try to purchase what we can from the villagers — and I personally work closely with the guys we hire from the village to help on the land — and we share the crops (we just distributed a crop of cucumbers with them)… we are also starting an organic seed bank for those who want free seeds and training

        When the SHTF I will rip up our entire landscape and starting planting a lot more food — I’d do it now but my wife prefers not to yet — we will contribute as much as we can to the community.

        Hopefully they will see us as equals — and valuable members of the community (ironically we know permaculture principals and they generally do not — I was hiking through an incredibly scenic area nearby this morning and lo and behold there’s a rice farming tossing handfuls of urea onto his crop!!!)

        Not much more one can do — in Bali or any community in which one chooses to live.

        • xabier says:


          One consideration might be not to lend money to people, however good the terms. Many people were murdered in the Spanish Civil War when their previously ‘grateful’ debtors got them into trouble in order to cancel the debt. Human nature.

          • Paul says:

            Good point — the Chinese in Indonesia are not so much liked specifically because of the point you mention — they are the merchants and bankers…. interest rates here are about 24% per year…. the debt slavery model is in effect — locals can by a coveted motorcycle with little money down — then they are saddled with that enormous burden while earning very small salaries…

            The banks get their pound of flesh — for now… but when the SHTF that may come back to bite them

            • Interguru says:

              This is not just a prediction:


              As many as 500,000 people, including ethnic Chinese,[c] were killed in the anti-communist purge which followed the failed coup d’état, suspected as being communist-led, on 30 September 1965


              The main victims of the violence were ethnic Chinese.
              It was estimated that more than a thousand people died in the riots.

            • Paul says:

              All of this instigated and directed by the CIA of course… Sukarno made the wrong choice — you are either with us or against us — you can’t be on the fence

            • xabier says:

              The murders to get clear of debt even happened within families. When social restraints are gone and the guns are out, and informers listened to, human nature certainly shows itself.

              The funniest thing (to me) about the Holy Inquisition was that it was never set up in Naples -the authorities knew that literally everyone would be lying and trying to get rid of their neighbours.

              Similarly, air-raid blackouts were given up in Baghdad during WW2, as the Arabs took the opportunity to stab their neighbours in the dark………..

  14. Colm Barry says:

    Yes, most of these “wisdoms” are uncorroborated myths. However, energy myths run even deeper still. While you line out how “conventional” sources of energy will likely be depleted and not replenished by substitution as all alternatives equally have their downsides or suffer from diminishing return, there is an even graver axiom at play: humankind cannot, on earth itself, consume (much) more energy, i.e. create much more entropy than what is defined by the so-called solar constant. Currently everyone, whether of the peak oil denomination or a staunch pro-fusion activist, seems to believe that “if only” we had another source of “cheap, clean and inexhaustible” energy we’d live in paradise for ever after. Not so. While it’s difficult to pinpoint exactly how much excess energy we can generate on earth as an additional fraction of what the sun provides, climate history and cycles suggest that even 1% extra energy already might have catastrophic consequences. So neither “free energy”, “zero point” nor fusion (if it ever becomes economically viable, which I personally doubt) are any panacea. They can never provide “unlimited” energy since any excess energy over and above what the sun irradiates into our biosphere will destroy that biosphere when it adds more than a tiny fraction to the already instable equilibrium.

  15. Paul says:

    Suggestion to Gail

    Print out hard copies of the blog and Limits to Growth — and place them in titanium bottles — and toss dozens of them into the oceans — so that someday if there is anyone remaining on the planet — they may come across one of these and understand that there were people who recognized the problem — and they were ridiculed and ignored — and civilization sailed merrily down the Rubicon — on a super yacht with two choppers — then piled into the rocks in a hurricane.

    • InAlaska says:

      I would like to suggest an alternative future where, as Gail earlier suggested, the global temperature rise due to the burning of fossil fuels, staves off the long overdue Ice Age cycle. Instead of tossing titanium bottles filled with our ramblings into the ocean, we recycle the titanium into the bodies of our new fusion-powered hyperdrives so that we can mine the asteroid belt for yet more fuel to stave off the ice. Our blog site will just be a footnote for another 10,000 years of civilization!

  16. Paul says:

    Was just reading an old post http://ourfiniteworld.com/2011/02/21/there-is-no-steady-state-economy-except-at-a-very-basic-level/ and had to chuckle when I came across the comments below … reminded me of those guys in Mad Max — cobbling together vehicles from scrap and fueling them with who knows what — but they kept them going well after the collapse 🙂

    I think it’s time to get back to Bluebeard on this rather wet night here in the mountains…. (I might add that Vonnegut ‘got it’ even way back in the 60’s!!!)

    As globalization dies of catabolic failure, I see a great deal of variation in this regard. Areas that get all their electricity from hydropower could continue for a long time.

    Also, the technology behind lead-acid batteries is simple and well-understood. A small city or large town could have the capability of re-manufacturing these without the support of global supply chains.

    That’s not to say that things can remain peachy-keen in some places, but that the inevitable decline will be slower and more measured, with more resilience.

    I do agree that solar panels are going to be in trouble soon, but batteries? My rule of thumb is that if it existed 150 years ago (pre-oil), some form of it may continue into the future — such as it is.

    gailtheactuary says:
    February 22, 2011 at 11:13 pm

    Perhaps so. We do have a lot of minerals already extracted, and if we can figure out a way to re-maunfacture batteries and other basic needs, we will be ahead. The problem I see is that you sill need to keep manufacturing the things the batteries and the solar panels make, too– for example light bulbs, and refrigerators, and washing machines. At some point, this will become too difficult.

    • dashui says:

      In Afghanistan during the early 1970s the american government built a hydroelectric dam. After the soviet invasion in 1979, the engineers left and the locals were in charge of keeping it up. By 2001 when America returned, the dam was still producing power, at about 10% of its capacity, so 20 years means a loss of 90% or so.

  17. jeremy890 says:

    When the retraction hits, a group of essential industries will have the resources diverted to function. Food growing, domestic police, and a rationing program will be attempted. Some regions will fare better than others. Doubt highly concentrated population centers will be manageable.
    Given Gail’s overview there is really no solution. As Gail likes to write..”.it is baked in the cake”.
    The real question is when and how slow or fast will this take place? Obviously, it has already started. Depends on the cooperation among various competing fractions in business, government(s) and cultural subgroups. Will we cooperate? Or is it going to be “every man (or woman) for himself (herself)”?

    • Paul says:

      In theory I could see small remote towns holding out against this — BUT — only if the entire town got on board in advance and prepared.

      I bought a piece of farmland in remote BC Canada thinking that would be a good refuge — near a town of 1000 —- but then as one thinks more deeply about the likely outcomes — one might conclude that it does come down to every family for themselves…

      Because in that town of 1000 — unless I convince everyone of what needs to be done (e.g. immediately start growing crops – seed saving – buying tools — putting a good stock of emergency food in storage etc…) then what use is it if me and my family are the only ones doing these things?

      I am headed to that property in June to do some hiking and mountain biking — and I could try to meet the mayor and city council to express my concerns — and suggest that they divert some of the towns tax money to a SHTF fund — and ask them to call a town meeting to introduce a to do list….

      Being a small town I can imagine within hours the entire town would be on the look-out for the crazy guy wandering the streets. Imagine the stares – and silence – as one walks into the coffee shop.

      So ya – people might try to band together in small groups — but food will be a massive issue.

      We’ll likely stick with the Bali plan — at least with the weather and good soil and the fact that it is an island — and we live in a remote mountain village — there is some chance of coming out the other end and farming away and reading through my substantial and growing book collection.

      • jeremy890 says:

        the city of Bloomington Indiana also has a “Transition Plan Paper” that was formulated several years ago by a diverse group of folks, including Peter Bane, editor of the “Permaculture Activist”. I read the proposals, and though they are worthwhile and needed, doubt very many were implemented. Seems “leadership” is waiting for the time when they HAVE to act.
        I Bloomington transition Peak Oil paper (2009) is still available:
        close to 290 pages!

      • xabier says:


        It would be very interesting to hear about their reaction to your warnings.

      • InAlaska says:

        Yeah, plus, your Bali brown skin will make you stick out in a town of pale, white Canadians. Better stick with the tropics. At least when the neighbors show up to eat your emergency food and fruit trees, it’ll be warm and sunny. I’ll likely be in BC this summer doing a bit of camping, myself. Would be cool to meet you.

        • InAlaska says:

          Paul, have you read “One Second After” by William Forstchen? Its about a small mountain town in the Carolinas trying to hold out after TSHTF. If you haven’t read it, I think you’d enjoy it and its pretty accurate in my mind how things would unfold. Better written than most of the genre.

  18. Don Stewart says:

    Dear Gail

    My problem with your analysis is the absence of a notion of market segments in terms of willingness-to-pay and different production options in terms of cost.

    Looking at the production costs first. This is similar to those graphs which compare the cost by companies for producing oil. Some are high on the chart, and some are low. They currently range from something like 60 dollars to 110 dollars. Imagine a distribution something like this:

    Price Barrels Produced in 2015/ 2020/ 2030
    75 100 90 70
    100 150 130 100
    125 175 140 110
    150 190 150 115
    175 200 160 120
    200 205 165 125
    (as we move forward, depletion takes its toll in terms of production at any given price, somewhat offset by technological improvements)

    Now imagine that you can segment the potential customers by their willingness (and ability) to pay:
    Price Barrels Demanded
    75 200
    100 175
    125 150
    150 125
    175 100
    200 75

    For the sake of discussion, assume that the demand and supply responses allow enough time for the physical rearrangements to happen. That is, we are talking about the long term and equilibrium.

    In 2015, we would predict that the price would settle between 100 and 125 while the production will settle between 150 and 175.
    In 2020, we would predict that the price would settle around 150 while the production will settle around 150.
    In 2030, we would predict that the price will settle between 150 and 175 while the production will settle between 125 and 100.

    If we take current production as somewhere around 175, we would be looking at roughly a 40 percent reduction in production.

    My point here is that there are high value users who will pay the 200 dollars to get the 75 barrels. It might be the military that wants to power the planes and tanks and armored personnel carriers. It might be the very rich who want to fly their private jets. It may be that governments pay what it takes to get fuel for farmers and food transportation. It is not likely to be countries, or the aggregate of all citizens in the world who find themselves ‘unable to pay’. Many individual people will be unable to pay…but others WILL be able to pay. And within a particular household budget, some uses will be valuable enough to pay the high prices, while other uses will be sacrificed.

    What circumstances might make this decline scenario change to collapse? First would be such social unrest that societies collapse and so production collapses. The daily suicide bombs in Iraq seem to be efforts to make this social collapse happen…but they haven’t yet been successful. The second would be that the producing companies cannot meet their debt obligations, and cease to exist. Of course, the whole point of the bankruptcy courts is to keep the productive parts of financially bankrupt companies operating. So, if the bankruptcy laws work as we hope, debt holders may be stiffed but production will continue. We might also visualize massive unemployment as corporations shrink. The probable response is that more families will be forced to take subsistence work. And quite a few will probably die.

    IF the production and price scenario I outline above actually happens, then we are certainly looking at a painful adjustment, but not a catastrophic, instantaneous, collapse. I think it is a mistake to boldly state that ‘the world cannot afford one hundred dollar oil’. It may be true that ‘the world economy cannot grow with 100 dollar oil’, but societal collapse requires that the governments have no way to weasel out of their obligations. Just as with the bankruptcy courts, the political process will try to keep governments functioning even as the creditors and citizens are stiffed. The Soviet republics survived even as financial obligations were not met and many people drank themselves to death.

    The practical result of such a scenario is that families that can figure out how to survive with a lot less oil may be in as good a position as anyone could expect. Frugality may be rewarded. Just as family garden plots were rewarded in the Soviet collapse.

    Don Stewart

    • xabier says:

      Societies can certainly cohere in some form -maybe not a very pleasant or palatable one -with very high levels of poverty and extremely high death-rates and violence.

      Sick, immobile poor people just drop by the wayside without anyone really noticing.

      And without revolution.

      What Greer the druid calls the uncomfortable – and possibly more terrifying – slow descent scenario.

    • I don’t think that your model of what happens makes sense.

      Producers may have different production costs, 100% of the dollar that they now receive is being spent — some of it goes for taxes, some of it goes for dividends, some of it goes for new development costs, and some of it goes for the extraction of current oil supplies. (This is where EROEI calculations are wrong.) If the oil price is too low for producers, as it is now, they cut back on new development, so that there will be less oil produced in the future. If producers cut back on dividends, then we would have elderly people finding their income dropping. If oil companies cut down on tax payments (say, the government gave oil companies a break and taxed others instead), then we would find buyers of oil more handicapped going forward in their ability to purchase oil, because they (the eventual purchasers of oil) are the ones having to pay higher taxes.

      Buyers may have different willingness to cut back on other uses of their money, in order to purchase oil products. But if they cut back on one type of purchase (say, going out to restaurants, or charitable contributions), to pay more (for the same amount) of oil as they have bought in the past, then there will be shrinkage in the segments of the economy that are being cut back on. There will be layoffs in these segments. The government will collect fewer tax dollars, at the same time it needs to pay out more in unemployment benefits. There are also likely to be debt defaults, as some of those who are laid off from work default on their loans. Also, some of those who pay more for oil can no longer afford monthly payments that they have agreed to.

      The result then is collapse of financial institutions. Governments need to try to fix the whole mess–too much unemployment, failing banks. It is ultimately the governments that collapse. The collapse of governments leads to international trade problems. There is not much oil produced, and even less traded internationally, because the system falls apart. The amount of oil produced drops quickly, rather than slowly.

      There really isn’t segmentation of the type you talk about. Pipelines operate, or they don’t operate. Refineries operate or they don’t operate. Engineers are trained, or universities are no longer available to offer this program. The price now is probably not high enough to maintain oil production for very long. We will see if price bounces back up, and causes governments to fail. It is collapse of the system that causes problems, not some slow downturn, because

      • Don Stewart says:

        Dear Gail
        All your arguments are based on the notion that things have to continue working the way they work now. I don’t think that assumption holds during times of stress.

        For example, if you calculate the revenue that the oil producers would get in my toy model, you come out with something like this:
        2015 18,400
        2020 22,500
        2030 18,975

        These are not ‘falling off the cliff’ numbers for the oil companies. I agree that GDP will not flourish if oil supplies are diminishing. I agree that diminishing GDP will cause great hardship among some people. I agree that deaths will increase. But to take the next step and say that oil will be unavailable at any price is, I think, not necessarily true. If the hardships lead to more chaos than is currently being experienced in Iraq, then oil production might fall to zero…but Iraq is producing steadily more oil even in the midst of the chaos.

        It is true that pipelines either operate or they don’t, and refineries either operate or they don’t. But Europe has been steadily shutting down refineries, as they have adjusted to lower levels of demand. The small town I grew up in had two shut down refineries back in the early fifties. Big refineries have shut down in the Northeast of the US. And if you look at the revenues I calculate above, it’s hard to make a case that the whole industry will simply vanish due to financial stresses. One could interpret the current reduction in Capex as the recognition by the oil companies that they need to prepare for a future with lower production and higher prices.

        Here is another example of a shock to my system in terms of assuming that ‘things have to continue the way they are’. I read a comment by someone who said that renting electric automobiles makes sense in metropolitan areas. Rental automobiles have been a growth industry in many places, as people find they don’t really have to have a car parked in their very own garage. A rental company can have three kinds of vehicles for rent: an electric car for relatively short trips, a gasoline or diesel car for long highway trips, and a diesel truck for hauling stuff. These sorts of innovations may change pretty radically the choices we make…we aren’t necessarily chained to BAU. I do agree that commuting patterns and transit have to evolve…probably painfully. But looking at the Capex decisions, I would say that we have no choice.

        Don Stewart

        • InAlaska says:

          Don, I agree with you. Many of these predictions are based on maintaining things at current levels, which of course, will be impossible. However, once things start to get tight, people will get creative. As Capex declines, Governments will command resources into primary sectors. So instead of manufacturing plastic Christmas trees, etc. etc., we’ll be only manufacturing the essentials. The economy as we know it will cease to exist, but things will go on for quite awhile. GDP will be a meaningless term, and BAU will be anything but. Survival will continue, as it always have, based on fitness, positive attitude, preparation and luck.

          • I feel that if the economy as we know it ceases to exist then energy will as well. Billions of people will die. Our global “economy” is very complex at the current stage of industrialization. Everything we need for life support is based on economies of immense scale which we take for granted. For example, what are the odds that any random birth of a human being that person will have the brain capacity to design and build a diesel engine? Is it 1 in 10 births, 1 in 100 births 1 in 10000 births? Then think about the teachers that will teach this person the skills he needs. How many child births will it take to get teachers qualified to do that? The numbers start to climb very quickly. The economy then has to support all those new human beings from cradle to grave just for on person to become an engineer. Thats economies of scale. That is just one small peek into a huge well oiled (pun intended) machine. Feeback loops are a killer!

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  22. What will happen if new renewable capacities start to produce electricity cheaper than old non-renewable ones? Like for example the roof PV plus battery produces cheaper electricity than the grid.

    What will the market do when it has access to cheaper than coal, nucelar and gas electricity from renewables?

    EVs are already cheaper to run than ICE cars.

    • We use energy to keep ourselves alive. (that’s called eating)
      Unfortunately, no matter how much electricity we produce, we cannot eat it. Neither can we make an electric vehicle or wind turbine from it. Yet the delusion persists that energy is a fungible commodity: If we produce energy in one form, business can go on into infinity because we can convert it to something else.
      Over 90% of our infrastructure is based on hydrocarbon input in some form, and there are no substitutes, despite the promises of economists and politicians.
      Keeping lights on and wheels rolling does not sustain a civilisation, yet this is the general fixation about what we need to do to maintain our status quo. Endless references to keeping cars rolling by using electricity, the certainty that driving from A to B is what our existence is all about, if only we can keep mobile, everything is going to be fine.
      The ‘drive’ to work, the exchange of coloured bits of paper in exchange for that work, the drive home again, as if some perpetual motion machine is going to keep it going forever. There is a denial of reality, that ‘work’ means consuming energy from a finite source; we remain oblivious to the fact that drawing electricity from batteries or PV panels cannot add anything to that finite source, only become an additional drain upon it. (we make batteries and PV panels using hydrocarbons)
      Discussions about ‘cost’ of energy are irrelevant, the bottom line is that our level of civilisation cannot be sustained in its present form without an EROEI of at least 12 : 1, and probably closer to 20:1, maybe more.
      Wind turbines and battery driven cars are not going to stop mobs rioting because of food shortages, or nations falling apart because of energy shortages
      But don’t let all that stop you from plugging in your EV

      • EROEI of modern PV and modern wind farms is greater than 10:1 and closer to 20:1.

        For some PV it is more than 30:1

        And they make cheaper electricity than gas, coal and nuclear.

      • So your point being?

        • as the first line of my reply above—you can’t eat it.
          our modern infrastructure is essentially embedded hydrocarbon energy, not embedded electrical energy. Think of everything in your home that needs oil coal or gas to make it.
          We also make the mistake of confusing energy needed to sustain our home environment, (say 2 kw in UK) with the energy needed to sustain our living environment (about 120kw)
          a 20:1 windfarm cannot supply the energy needs of a 20:1 industrial infrastructure, but the delusion persists that it can

          • Paul says:

            Here’s a partial list of things made of oil http://www-tc.pbs.org/independentlens/classroom/wwo/petroleum.pdf

          • Well, I buy plastic cups 100 pieces for less than a dollar. I will buy them even for 5 dollars and it is the same with everything else plastic.

            So plastics market is elastic enough to support five even ten times more expensive oil – that is $500 – $1000 per barrel. We will NEVER run out of oil for $500/barrel.

            On the other hand transportation wont accept even $150/barrel and will switch to alternatives long before we reach $150-200/barrel.

            Outside transportation – electricity there is no difference between oil, gas, renewable, nuclear one – it is all the same.

            So 20:1 wind farm can not but will 30:1 windfarm or 40:1 or 50:1 photovoltaics?

            You clearly do not read how fast and how much renewable are progressing these days.

            • A lot of plastic type stuff is made from ethane, I believe. Ethane is part of “natural gas liquids” which are dumped in with oil, when “liquids” production is discussed. Ethane is so cheap, that it is sometimes burned for heat, with natural gas. It is not in the same pricing category as crude oil.

              There are other important applications for oil. Lubricating oil is very important. Even asphalt is something we have grown to depend on—otherwise we build a lot more concrete roads, or fewer in total, because roads become so expensive. Medicines, herbicides, and pesticides are made from oil.

              Transportation is definitely the most important applications for oil. Here I would include agriculture equipment, construction equipment, mining equipment, and other uses that are not quite transportation. Oil is even important for back-up generators, for irrigation where no electricity in availability,

      • edpell says:

        End of More, I must completely disagree. All energy is fungible. It is just a question of how much is lost in the conversion process. We can make liquid hydrocarbon fuels using electric as the energy source and air and water as the carbon/hydrogen source. It is just a question of how many joules of electric energy need to be used to make one joule of hydrocarbon fuel.

        • Its more than just one Joule of electric making one Joule of liquid fuel. You also have to add in extra “Joules” to maintain and replace the device generating the electricity. And, more “Joules” to maintain the electric grid. And, build and maintain all the mining equipment. And, at the same time also have “Joules” to spare for consumable electricity. And-and-and you could go on forever! It is one very big closed system (minus the sun). Taking a snapshot of a finished device (solar PV panel for instance) and even showing 100% efficiency converting electrcity to liquid fuel (Joule to Joule) your ignoring the embedded energy in the device (solar PV panel in this example).

          That is why I am having difficulty accepting that electricity (from “renewables”) can generate enough liquid hydrocarbon fuels and electricity to maintain even a semblence of our industrial world. And, at the same time, have the spare capacity to generate enough liquid fuels to replace and maintain themselves and our existing infrastructure for any length of time. Then add in diminishing returns with respect to mining operations, excuse me for feeling that it is impossible.

          • Paul says:

            Good points – generally people don’t consider or underestimate the amount of energy that goes into making of things…

            How much energy goes into making a smartphone for instance — it’s not just the manufacturing process — the energy intensive component would be the mining and smelting of the various metal components — then of course many people buy a new phone every year – including no doubt the vast majority of the hipster green brigaders.

            See this article:

            “The results surprised me,” he says. “Using United Nations projections of fertility, and projecting statistically through the lifespan of the mother’s line—some lineages being short-lived, others indefinitely long—an American child born today adds an average 10,407 tons of carbon dioxide to the carbon legacy of her mother. That’s almost six times more CO2 than the mother’s own lifetime emissions. Furthermore, the ecological costs of that child and her children far outweigh even the combined energy-saving choices from all a mother’s other good decisions, like buying a fuel-efficient car, recycling, using energy-saving appliances and lightbulbs. The carbon legacy of one American child and her offspring is 20 times greater than all those other sustainable maternal choices combined.” (See chart [“Little Bundle of Carbon”].)


        • If you have a huge amount of very cheap energy, you can in theory go backward from electricity to oil. Hubbert talked about this, in his plans for nuclear to save us from the fall in fossil fuels. But to keep the cost down, both the initial cost and the conversion cost must be low.

    • Define cheap! If you mean cheap as in costing less money then your point is moot. Money does not build solar PV panels, resources do. It takes fossil fuels to build solar PV panels and EV’s. Solar does not scale and it takes economies of scale to extract fossil fuels. Its like being stuck in a loop. People just don’t see the big picture ;-(

      • edpell says:

        IF a renewable has an EROEI of 15 we are all set. This assumes the calculation was COMPLETE and CORRECT. We can operate mining equipment directly with electric or indirectly with synthesized liquid fuels. The same for each step in the process. Whither anybody has ever done a COMPLETE EROEI is the question.

        It is surprising to me that modern PV is little to do with the silicon and mostly to do with the glass cover plate, aluminum frame and then with the cement and steel support structures. I offer no guess as to the EROEI of PV in a completely PV world.

        • In fact no one knows exactly what is the EROEI of modern PV is because we do not know what their lifespan is.

          Is it 20 years as the guarantee says? Is it 30, 40, 50 years? We have 30 years modules that have degraded less than 20% and probably will still produce electricity in 20-30 years. This means EROEI 20-30:1 and better.

          For wind it depends on the site, wind conditions and capacity factors. We have documented EROEI for wind as big as 40:1. As technology matures and we repower the old wind farms with new generators that are much better suited for this particular site because we now have 10-20 years of wind observations we probably can achieve 50:1 or bigger.

          • autap7 says:

            Solar panels require arsenic, bauxite, boron, cadmium, coal, copper, gallium, indium, iron ore, molybdenum, lead, phosphate, selenium, silica (Silicon dioxide), tellurium, and titanium dioxide. A lot of mining work with trucks like the komatsu 930E [http://www.jklm.cc/4/230685261.php?image=ad115219] and transport, both requiring OIL. Wind turbines use concrete, bauxite, cobalt, copper, iron ore, molybdenum and rare earth elements. A lot of mining work and transport, both requiring OIL. Bottom line: you cannot build and transport solar panels with the sun, and you cannot build, transport and maintain windmills with wind!

        • We can also recycle them so probably only the first 100 000 GWp will be problematic. Than we recycle 🙂

          Same with EVs – only the first 1 000 000 000 will need resources – than we recycle.

          • When you recycle you loose some of the original minerals and the purity goes down. In addition to that you need heat to melt and reform the metals and separate some of the elements. Not to mention there is also transport involved in hauling all the recyclable material around. So recycling (while worthwhile initially) is no panacea either. This process would have to be ongoing 24/7 due to the sheer number of windmills and solar panels that would be in use. So, in addition to supporting societies energy needs these “renewables” would need to be supplying all the energy to recycle themselves as well. I just don’t see this working especially after the 2nd or 3rd recycle where the amount of recoverable material and purity is simply too low.

        • “IF a renewable has an EROEI of 15 we are all set.” There is a difference between necessary and sufficient conditions.

          Charlie Hall and company can rule out some things that won’t work because of too low EROEI. They cannot tell you what will work–there are a lot of conditions required besides EROEI.

    • We are not going to be able to keep the electrical grid system together, for very long, because of its dependency on oil. So trying to support the grid with intermittent renewables is a lost cause, as far as I am concerned.

      If it is cheaper to use roof PV + batteries than the grid, we will have the situation we have in Hawaii, with a lot of homes off grid, using roof PV + batteries. At such a high cost of electricity, homes on the grid won’t use much electricity either. Industry will tend to go elsewhere, because the electricity costs is just too high to make goods that are competitive in a world economy.

      For solar to work for businesses that compete in a world economy, the cost has to get down to a point where the retail cost of electricity using solar (which includes a lot more than just the direct cost of solar production; it also includes the cost of keeping up the grid and of balancing) competes with the retail cost of electricity in other countries, particularly ones that use coal.

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  24. Stilgar Wilcox says:

    That’s a link to a very good video on the exponential curve of increased energy usage since the beginning of the industrial revolution. As he says in the video: “When we started using coal, did we use less wood? No. When we started using oil did we use less coal? No, because we use every bit of energy available to expand the economy. If we extract it, we use it. If it doesn’t get used in one place, it gets used in another.” As an example, he shows a graph showing US extraction/consumption of fossil fuels over the years. Now one would think coal use went down as we transitioned to using more NG for electrical generation, but instead extraction increased, because it gets exported and burned somewhere else in the world, proof positive of Jevon’s paradox, that even if an energy use becomes more efficient more is still used. GDP growth drives greater energy usage. Having more renewables seems like it would reduce FF use, but overall CO2 emissions continue to rise yoy in spite of adding solar, wind, geothermal and hydro.

    An analogy (which I thought up and is not in the video) is adding green energy is like going to the grocery store. All the stuff you buy can be thought of as FF, and the last minute stuff you get near the counter are the renewables. In other words, the renewables did not reduce the amount of regular food purchases, they just got added to them. We add whatever new energy sources we can to the mix to grow the economy to increase GDP to pay for the loans, and around we go to ever higher levels while depleting finite ever more expensive resources.

    So what he says we would have to do to avert the worst of climate change is to curtail our use of FF or have secure carbon capture systems. Since we probably won’t reduce carbon use, our best hope is the latter. But that requires new technology. It’s a pickle folks.

    • I watched quite a bit of the video. He makes a lot of good points, especially about the exponential curve and the fact that new production is just added to the old. I think that he makes a lot of mistakes as well.

      He doesn’t understand that the alleged proven reserves are not likely to really be used. Dave Rutledge talks about the coal reserves in this post called Coal and the IPCC. If we look back historically, the coal reserves invariably turn out to be too high, when coal companies figure out what can really be economically mined. He says,

      . . . for coal the pattern has been that countries produce only a small fraction of their early reserves, and then late in the production cycle the reserves drop to match the coal at the last working mines. This pattern is seen in the UK (cumulative production of 19% of early reserves), Pennsylvania anthracite (42%), the Ruhr Valley (14%), France and Belgium (23%), and Japan and South Korea (21%). This means that the reserves criteria have been too optimistic, but it also means that world coal reserves are a good upper bound on future production. An IPCC scenario that burns two times or seven times the reserves is utterly at odds with the historical experience.

      I would argue that we cannot expect more than a small portion of the coal reserves to be used, partly because the problems of the reserves not really working out (as represented in the examples above) and also because of the indirect result of collapse caused by the effect of oil limits on the economic system.

      Oil and gas reserves also are higher than we can expect to really be burned, because of the impact of oil limits on the economy.

      Furthermore, the big oil reserves are in the Middle East. Those reserves are not audited and amount to something like 100 years of production for several of the countries. All indications are is that they are very much overstated. But even if they are real, they represent amounts that perhaps could be burned if the world economy continues to function well for the next 100 or 200 years. If there are riots over food or religion, and countries have problems like Libya and Syria, the oil is not ever going to be extracted.

      He also has a lot more faith in carbon capture than I would have. We don’t have a good way of keeping the CO2 in the ground. If it escapes, it is heavier than air and will smother people. I wonder how many homeowners would agree to have CO2 pumped under their property, if it could escape and smother them? The method requires burning the coal we do have more quickly, besides other issues that lead to really high costs.

      I didn’t hear him talk about limiting population (but I did skip some of the video). If he ever expects energy use to decline, he needs lower population. Not a popular subject, though.

      • Stilgar Wilcox says:

        I just wrote a whole long response and after pushing post comment it lost somehow. Arghh! Anyway, I agree with your disagreements on the video, particularly if oil flow drops due to contraction or collapse so will coal use decline. I liked it though as far as his comments regarding if we extract it, we burn it. When we started burning coal, did we burn less wood? – no. When we started burning oil, did we burn less coal? No, because we use it to grow the economy. Renewables probably also falls into this Jevon’s paradox trap, that it is for the most part simply just added to the energy mix, rather than replacing FF. Ok, now I’ll try posting this again and cross my fingers.

  25. https://www.facebook.com/groups/172169062843817/
    I think you miss some important details, which, however, changed radically the picture .1 Technological developments in renewable energy. 2 The abundance of solar energy, especially in the southern countries. 3. Comes at a time cheaper and diverse methods for energy storage, including synthetic fuels. 4. The multiplying effect of large-scale production.

    • Paul says:

      You may want to review this post:

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

      Also – were you aware that investment into renewables dropped off by $35 billion dollars last year? If renewables were the saviour — given the dire situation — wouldn’t you expect investment in them to be skyrocketing?

      Investment is pouring into fracking — because fracking delivers oil and gas — these other things — well they are just pie in the sky….

      They are so insignificant that they may as well not exist http://reneweconomy.com.au/wp-content/uploads/2014/04/bernstein-energy-supply.jpg

      Might I suggest the only reason solar happens at all is because governments are pressured by the greenies (who live in a delusional world) who will vote for them if they make a token gesture towards renewables?

      0.17% is that token gesture — as indicated behind the link above

    • Renewable energy, to replace coal without messing up the economy, has to be able to compete directly with coal in cost. It is a long way off in this regard.

      Also, as I pointed out, even if you have the solar energy, there are issues with diminishing materials with respect to the materials going into the panels. The silicon comes from beach sand (not desert sand). I understand that beach sand is in increasingly short supply.

      The big issue with any from of electricity is the difficulty in trying to maintain the long-distance grid. If the solar energy is just to be used locally, without an electric grid, then it may last a long time. But that is not what most people are expecting.

      • Paul says:

        Let’s put the solar thingy to rest once and for all…

        Solar is 0.17% of total energy production at present – and investment into it (and other renewables is dropping) http://reneweconomy.com.au/wp-content/uploads/2014/04/bernstein-energy-supply.jpg

        If these were feasible then why the above?

        Let’s ice this cake with an anecdote …

        A few years ago I looked into solar for our house here in Bali — nice warm sunny Bali — and the sales guy said ‘you need to understand the limits here — unless you want to spend minimum 100k USD you will not be running any energy intense appliances such as ACs, washers etc…. you can run a pool pump — and if you get batteries some LED lights and a few other low impact appliances — of course the batteries are expensive and need to be replaced’

        Needless to say that reality check put an end to my dreams of green.

        The point here is that solar is absolutely not going to save the day — billions of dollars in research have resulted in failure — solar cannot power this world – period.

        Sure get a couple of panels and some batteries to power a light or two — or a pump — for a few years after the SHTF — but that’s about the extent of the benefits….

        I have stated before and will state again — the only reason money gets spent on solar — and the only reason governments subsidize panels in some countries — is because they want the green vote. So they make a token investment in something they know is completely futile.

        Hey but if this delusion helps the greenies maintain their matrix feel free to ignore these comments — shift into cognitive dissonance mode and head off to Whole Foods in your Prius…

        And have a great weekend!

      • Electricity from new solar and new wind is far more cheaper than that from new coal, new gas and new nuclear.

        This is a fact. And they become cheaper and cheaper and cheaper unlike gas, coal and nuclear.

        With stricter pollution control (better private property protection) coal becomes uncompetitive – no one wants coal anymore. Even China.

        So in fact – with cost in mind – if you want to build new stuff when the old one retires you have only one choice – renewables.

        Even US EIA have admitted this and their numbers for renewables are inflated. There are PPAs at the moment in USA that are far less than these LCOEs:

        Latest LCOEs from ANNUAL ENERGY OUTLOOK 2014


        • Paul says:

          So we can expect solar to be more than just a sliver here in the next year or so — since it is so cheap to produce — should I be buying solar panel company shares?


          • Difficult question.

            It is a massacre in the PV supply side at the moment. M&A have not really started yet so probably 80% of the companies from the supply side will not exist in 5-10 years.

            On the demand side probably companies like SunRun, SolarCity etc are good bet but yet the sector is so dynamic that you may find other areas for investment better.

            Dont forget that 0.17% is just 10 doublings till 100%. With installed PV capacities double every 3-4 years its just around 25-30 years to 50% 😉

            • Paul says:

              Uh hum… the question was of course rhetorical…. see Solyndra, Spain…. etc etc etc… without government subsidies the solar industry would not exist…. even with them it ain’t exactly a great idea as an investment…

              In any even, solar will vapourize when the SHTF — so one might as well invest in a plot of farmland… tools… permaculture training…. maybe a bit of gold…. some canned food…. maybe a few solar panels and a pump to run a pond to the garden…

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  27. BC says:

    A global currency reset is the only hope mankind has from what I hear it may be coming soon then everyone”s carbon footprint will be brought into alignment effecting a sort of worldwide rationing system of what your money can buy.There will only be two classes the rich{ .01 % } and the poor {99.99 %}. They are in control, there will be no collapse just a new world order.

    • yup—it’s called serfdom

    • The problem I see is the transition period from where we are now (extreme complexity, billions living like kings of yore) to basically a elite/serf society. Billions must die for this to work. The sheer number of dead bodies reeks of plague and disease to me. Plague and disease do not discriminate based on class.

    • Mansoor H. Khan says:


      Can you please elaborate on “how would a currency reset work” and how does it-kind-a-saves-humanity’s butt?

      Everybody talks about how much we (USA) get from the outside world due to the petrodollar and reserve currency status blah, blah, blah.

      But our trade deficit is only 3% of our GDP. The means (I think) if foreigners stop accumulating our currency (USD) right now our standard of living will only fall by 3%. Right?

      Yeah. If the dollars floating globally start returning that would be a big problem as these dollars will probably attempt to buy something of value. But even this can be managed by some kind of consumption tax, capital controls, etc.

      Mansoor H. Khan

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  29. Paul says:

    Just thinking — conventional oil supply has been dropping since 2005:

    Aging giant fields produce more than half of global oil supply and are already declining as group, Cobb writes. Research suggests that their annual production decline rates are likely to accelerate. http://www.csmonitor.com/Environment/Energy-Voices/2013/0412/The-decline-of-the-world-s-major-oil-fields

    Fracking stepped in to save the day adding around 8M barrels a day to the global supply (albeit at a growth crushing cost)…. so we have been barely increasing supply for nearly a decade…

    Conventional oil fields continue to be exhausted:

    The Saudis have also made public plans to start injecting carbon dioxide into the world’s largest oil field, Ghawar, no later than 2013. CO2 injection is what you do when an oil field starts yielding progressively less oil. It gooses the output…for a little while) http://www.forbes.com/sites/greatspeculations/2011/03/04/the-truth-behind-saudi-arabias-spare-capacity/

    Capex is being cut so if we haven’t found any big new fields with all those billions spent in recent years — we are not likely to find more with less exploration cash:

    Peak Oil Is Catching up to Big Oil: The problem is that the price of oil cannot rise without killing the economy — so their margins will continue to get squeezed…. Capex will continue to decrease…. I think the bang moment could hit fairly quickly— and without warning — supply since 2005 is already stagnant so it would take much…http://www.fool.com/investing/general/2014/04/23/total-sa-peak-oil-is-catching-up-to-big-oil.aspx

    Fracking is likely to peak by 2016 – no later than 2020 from what I am seeing — so that means in the very near future we get a nett negative supply of oil….

    That means oil prices through the roof….. that means total economic collapse….

    My best guess is 2016 is the year the ship sinks.

    • Stilgar Wilcox says:

      Paul, 8M from fracking? I didn’t realize there was such a big increase from fracking. Does that include NG?

      If I recall correctly, Mexico stabilized Cantarell with CO2 injections albeit at a much lower oil flow rate, so it should be interesting to see if the same occurs at Ghawar. Geez, that’s going to be one heck of a lot of CO2 to fill the biggest field ever. Anyway, the SA also did a lot of in field drilling in Ghawar but maybe they’ve tapped out on that strategy.

      The tale of the tape really does rest with the aging giant fields, because small fields can come and go, but the giants are what holds this flimsy façade up.

      • Paul says:

        Sorry it looks like 8M is total production — not sure how much fracking contributes


      • Paul says:

        Ah here we go… so it’s only 3.2M barrels… I guess every drop counts at this point — but I am surprised at that number — one would think it not enough to make much of a difference.

        Only the U.S., Canada and Russia produce tight oil commercially, the EIA reports, but the U.S. is by far the globe’s top producer. Whereas Canada and Russia produce only a few hundred thousand barrels of tight oil per day, the U.S. produced more than 3.2 million barrels of tight oil each day during the fourth quarter of 2013, amounting to more than 40 percent of total U.S. oil production and 4.3 percent of total global oil production. U.S. crude oil is now 10.4 percent of the total global oil supply.


        • My figures might need a catchup—but they are roughly correct:
          The USA imports about 7m barrels of oil a day, Russia exports 7 m barrels of oil a day. (So that blows away any long term ‘sanctions’)
          The USA uses around 530000 oilwells to produce its total output, Saudi uses about 3000 wells to produce roughly the same amount, which demonstrates that the USA is having to run faster and faster just to stand still

        • Stilgar Wilcox says:

          Well, 3.2 is still something for a country that imports about 7 mbd. Interesting though how that increase has gotten some politicians so jacked up they think we can now start exporting oil. LOL.

          • Paul says:

            Yes that is amazing isn’t it — the MSM would have us believe US is producing about the same amount of oil as the Saudis — from fracking alone — they generally fail to mention that the majority of US produced oil comes from conventional wells.

    • Not very far away, however things work out.

  30. Ikonoclast says:

    Gail’s previous post showed a dramatic energy Seneca Cliff from 2015. Gail gives me the impression she expects the collapse to be global, more or less uniform and rapid from 2015. This is possible but I don’t think it probable. The more probable path for collapse is that it will have marked regional characteristics. I expect globalisation to reverse and initially regionalism will reassert its dominance politically and economically.

    Regions may well become semi-autarkic. A key determinant of regional performance will be self-sufficiency, or lack thereof, in key resources. Just as the export-land model shows oil producers ceasing to export when domestic demand requires all oil, so will regions cease exports or much reduce exports in a time of general resource shortage. The drivers of regionalism will be the regional hegemons; powerful enough to command resources from their own region but not powerful enough, in most cases, to draw rescources from other regions.

    Current regional hegemons or near-hegemons are USA, EU, China, Russia, India, Brazil and two limited, dubious candidate hegemons of a small South-Asian / Oceania region namely Indonesia and Australia. Africa is the one continent without a clear candidate hegemon though South Africa and Nigeria might qualify in their sub-continental areas. Resource analysis and ecological footprint analysis shows that some regional hegemons or candidate regional hegemons have already over-shot their resource base. These are USA, EU, China, India, Nigeria and probably Indonesia.

    Of these, the USA is a special case because it is a global hegemon now, albeit one likely to slip to hemispheric hegemonic status relatively soon in historical terms. However, even being an hemispheric hegemon will make it a greater regional (actually multi-regional) power than any other. We must couple this to fact that the USA still has significant domestic resources and can benefit from the low population, high resource country along its northern land border, namely Canada. These special characteristics will buffer the USA from encountering serious shortages as early as other resource-deficit nations.

    Large regions destined to suffer greatly from regional collapse (due to a large overshoot of resource capacities) are the EU, China, S.E. Asia (including Korea and Japan), India and Africa. Conversely, the regions likely to collapse slowest are USA/Canada, Brazil, Russia and Australia. Collapse will be most rapid and early in Africa and the Middle East followed by the Indian subcontinent and then China and S.E. Asia and the EU about the same time.

    Country by country, the collapse of Africa and the Middle East has already begun. A clear crisis will occur when it becomes obvious that India, China are collapsing and that the EU will collapse as well. It’s hard to say how things will play out after that. If massive wars do not occur and the remaining regional hegemons remain intact then the USA, Brazil and Russia could suffer not a rapid collapse but a slow, grinding 50 year decline and then maybe find some level of sustainability. Australia might survive like this too but faces a lot of dangers from India, Indonesia and China when they become desperate. In this scenario, Australia will be more dependent than ever on the US as an ally.

    • Joe Clarkson says:

      I agree that your concept of regional collapse is plausible, but only if financial collapse is averted. We are used to the self-organizing character of markets providing the structure to our economies. If de-growth causes severe financial pressures, which I believe it will, then it may not be possible to rely on those markets to organize the economies of the “regional hegemons”.

      I think that this is the reason for Gail’s prediction of rapid collapse everywhere. All the resources in the world won’t help you if the players in the supply chain from the mine to the department store can’t operate their businesses because they doubt the solvency of everyone they deal with.

      Countries with resources might be able to extract enough of them to keep a semblance of the economy going, but only by command. If the US had to resort to martial law and severe rationing as a last resort, it might be made to work for a while, but I think that living standards would also decline greatly, probably to the point where many people become at risk of famine.

      • In addition to famine I feel there will be a sharp rise in death from disease as well. Martial Law will not cause a scattering of the people but, more likely, a concentration of people which lends itself well to the spread of infectious disease. Couple that with the ever increasing severity of infections going forward is a deadly combination. Our bodies are accostomed to the hyper-clean world we live in, taking that away I feel will be the death of millions.

    • Stefeun says:

      Some start to think that US (deep state) is planning to wreck down EU-economy so that decline in oil supply to US would be delayed for a while.

      I also start hearing about creation of a new axis, so-called “silk-road”, consisting in trade-agreements between China, Russia and Germany, mainly.
      This would mean the end of the EU, and likely creation of a new reserve currency.

      I don’t know if relevant, but the idea looks far from stupid, and a very strong concept.
      Some articles that don’t describe that exactly, but seem to go into these directions:

      – Brussels fears European ‘industrial massacre’ sparked by energy costs
      Europe’s industry is being ravaged by exorbitant energy costs and an over-valued euro, blighting efforts to reverse years of global manufacturing decline. (by Ambrose Evan-Pritchard, The Telegraph, Sept.08, 2013)

      – Reserve Currency: Is the Yuan Tearing Down the US Dollar? (by David Llewellyn-Smith, April 9, 2014, The 4th Media)

      – Russia Will Decouple Trade From Dollar (by Peter Koenig, April 9, 2014, The 4th Media)
      China Will Reopen the Old Silk Road as a New Trading Route Linking Germany, Russia & China.
      Russia has just dropped another bombshell, announcing not only the de-coupling of its trade from the dollar, but also that its hydrocarbon trade will in the future be carried out in rubles and local currencies of its trading partners – no longer in dollars – see Voice of Russia.

      • Interesting! I hadn’t heard about the Germany being linked with Russia and China. I know that they are pretty dependent on Russian gas and I expect oil as well.

        I looked up who the 4th media really is. http://russiancouncil.ru/en/blogs/4thmedia/?do_4=profile

        According to the article

        The April Media, the mother of the 4th Media, is an independent media organization based in Beijing, China.

        . . .

        Our platform translates relevant information, news analyses from both mainstream and progressive independent foreign media outlets to the Chinese speaking audience and vice-versa.

        • Stefeun says:

          Thanks Gail,
          I didn’t know them either. It’s an “Anti-CNN” Chinese website created in 2008:

          “Anti-cnn.com[1] (since 2009, April Media[2]) is a website established by Rao Jin, who was a 23-year-old Chinese student at the time, in response to what he identified as “the lies and distortions of facts from the Western media” concerning the 2008 Tibetan unrest and the People’s Republic of China’s national unity. The anti-cnn site states its purpose as “collect, classify, and exhibit the misbehavior of Western media”.[3] According to the website, the phrase “anti-cnn” does not exclusively indicate its objection to the American company CNN, but also to many other Western media sources, including the BBC, Der Spiegel, La Repubblica, n-tv, Bild, Fox News Channel and RTL. The website also states, “We are not against the western media, but against the lies and fabricated stories in the media. We are not against the western people, but against the prejudice from the western society.”
          “The site now claims about 500,000 visits per day, 60% of which are from China”
          from: http://en.wikipedia.org/wiki/Anti-cnn

    • Paul says:

      Because food is the critical element (or perhaps maintaining thousands of cooling ponds full of nuclear materials – but let’s not go there) — and most of the world relies on chemical inputs for farming — I cannot see how this collapse is regional — I think the entire world unravels at the same time — chaos will strike quickly.

      For the most part the only places I would think immune to the food issue would be places that are extremely remote and not in any way tied into the global economy — places like Irian Jaya where in the remote villages they don’t even have a single jar in many households… they grow a meager crop of potatoes on the hillsides and raise a few pigs.

      Such people would not doubt survive.

      I am up here in an Indonesian village farming away and piling up equipment but who am I kidding — they use chemicals to farm here as well on a major scale — most people will go hungry… There are a lot of fruit trees and wild vegetables that might — just might — help people stay alive

      But who am I kidding — my efforts will likely be completely overwhelmed by the scale of what is to come.

      7.2 billion starving people — I think this turns ugly quickly virtually everywhere.

      • icarus62 says:

        Cuba is often cited as an example of what can be achieved in food production when oil becomes much less available. From what I’ve read, they had the advantage of a great deal of academic expertise and research which was fortunately ready to be rolled out when the politicians/leaders suddenly realised that it was needed. Ordinary humans aren’t necessarily smart or knowledgeable enough to do this sort of thing on their own.

        • Paul says:

          Correct me if I am wrong but Cuba was never farmed using oil and gas fertilizers and pesticides — because they were cut off before those sorts of things became pervasive…

          So for the country to be self-sufficient in food was not a big deal — they didn’t have to deal with ag land that was dead for years due to chemical farming methods.

          Again — correct me if I am wrong….

          • Exactly, Cuba was already in a very basic state with people hardened from years of hard labor. There was no transition required there. Billions of people worldwide rely completely on industrial agriculture to survive. Industrial ag depends on the global ecomony to function. When the global economy collapses so goes industrial ag. When billions start to starve, disease won’t be far behind. In contrast to the laborers in Cuba, the overall robustness of people living off of industrial ag is very low. I agree it will get ugly very quickly.

            • xabier says:


              I’m sure things can turn very quickly indeed when people are very hungry and things become chaotic. In this nice, fairly wealthy English village, we have recently seen a gang of professional criminals surveying exactly what we have, walking around during the day with pit bulls, one to each man. That’s in time of peace! Whatever the mass of people feel forced to do, the professional criminals will certainly be very quick off the mark in raiding stores, houses, and seizing food, etc. These people naturally have easy access to firearms which are hard for the law-abiding to hold in Britain.

          • dashui says:

            I did a fairly intensive study of Cuban agriculture they went full speed into the Green Revolution with soviet help. Heavy use of chemical inputs and high yield strains to produce sugar to export for oil and machinery in the soviet bloc. After Russian oil began to decline over a 5 year period the Cuban gov. launched a campaign of agricultural market liberalization , parking lot farms, farmers markets, production of food to b eaten locally, etc. impressive as it sounds, cuba still heavily relied on UN food aid, and Venezuela subsidized oil. If not for these factors there would be mass starvation. My father went to cuba 10 years ago and he said there was about 3 hours of electricity a day, which is difficult for refrigeration, as he said it was HOT.
            Somewhere on the internet a reporter last year went to cuba and tried to live on their basic wage plus rationing for a week, he found it to b insufficient to support someone. In other words, don’t plan on moving to cuba.

            • Paul says:

              Thanks for educating me on this — I suppose the issue would be that the UN will not be there with food aid when the attempt is made to transition off of industrial farming and back to permaculture…..

              Now perhaps our masters could start the ball rolling on this now — the fact that they do not causes me some concern — what do they know that is leading to total inaction on a most critical issue?

            • InAlaska says:

              xabier, I think that is why Nicole Foss left the UK and moved to Canada. She figured: crowded island, crime, lots of guns, not much in the way of manufacturing, oil, or farming. Best to get out while she could still sell her house for a profit.

            • What you say seems to agree with what I have been able to piece together. Cuba’s oil supply actually dropped relatively little, compared to countries like Ukraine and North Korea. There was a lot of publicity about the gardens, but the gardens amounted to only a small fraction of the total food supply. Also, the impression I got was that the gardens may not really be sustainable–pumping out fresh water under Havana, eventually leading to salt water encroachments. I suppose there may be issues of adding salt to the soil from irrigation as well.

          • I think they did have some fertilizers and pesticides before they lost them–at least that is the version of the story I remember hearing.

        • Countries with the most to loose, will loose the most. Counties like Cuba have very basic economies so don’t have much to loose and will likely fare better that a country like the USA. I feel the unfettered growth and complexity (in the industrialized world) has clouded our vision as to what is natural and what is man-made. I like to think of our growth based industrial civilization like a carbon fiber jet aircraft exceeding its max operating velocity. It uses arrays of computers (aka. “The Fed”) to keep it in stable flight. And, countries like Cuba are like gliders that use no power. When the weakest component of the carbon fiber jet fails (and there is a lot to fail) the whole thing breaks apart into millions of pieces in a spectacular fashion. Whereas the Cuban glider lands in an open field intact viewing the puff of smoke in the distance.

          • xabier says:

            I rather like that analogy. My ‘lifestyle’ (I shall wash my fingers after typing that vile word) is like your glider – minimal in consumerist terms, but perfectly comfortable (much more so than Cuba from what one reads) in itself, indeed luxurious in historical terms.

            My business has taken a 50% hit in turnover since 2008, and is lurching down again – but as far as my personal comfort, etc, goes there is no appreciable change. Bigger, more complex, -and highly indebted – businesses can’t take even a fraction of such a loss.

            A simple life – of course lived within and benefitting from a complex oil-based economy, I am not deluded about having any real ‘independence’ – enables one to roll with the punches, to some degree.

            Guerilla armies survive when the glittering legions disintegrate. Of course, they too can starve to death….

            ‘He is rich, because he has no desires’ as some Greek said, is not the whole truth – one has to eat etc, but is a great part of the truth. I don’t terribly feel the lack of that latest i-phone.

          • Cuba imports the majority of its food (60%% to 80% depending on the source). I am not sure it will do all that well.

            • Paul says:

              The only place I have ever been that I could say with any level of confidence will ‘do well’ would be Irian Jaya — when you get to the more remote parts the people are 100% subsistence farmers — they do not participate in the oil economy at all — I didn’t see so much as a plastic bottle in the villages I passed through on a major trek there a couple of years ago.

              They probably will not even be aware that the world has collapsed when it does.

              They will go on planting their potatoes and raising their pigs as they have for thousands of years…

              No doubt there are a few other pockets around the world similar to this

        • They are importing a lot of food now though.http://www.miamiherald.com/2013/05/16/3401709/cuban-food-production-drops-despite.html Reports are that they import 80% of their food currently. Growing fruits and vegetables is helpful, but it doesn’t fix all problems.

      • InAlaska says:

        Paul, I just don’t see how it ends well when all the millions of Indonesians are eyeing all of the fruit and nut trees. How long will they last, defended or not?

        • Paul says:

          It probably ends badly …

          My faint glimmer of hope lies in :

          – we are an island
          – over half of the people here are ‘expats’ from Java — so as the economy tanks they hopefully will go back to Java
          – Bali has gone through a depression – Bali bombings destroyed the economy for years — people did not riot and rampage (this is a whole different ball game of course)
          – even though most land is farmed with chems — there are a lot of plots that are not farmed because they are not suitable for rice (its all about rice here)
          – most people have chickens and fruit trees
          – climate is conducive to surviving such a situation (year round growing)
          – communities are tightly knit
          – we have about 6 months canned/dried food etc stashed here to supplement the garden (everything will change when the grocery stores shut — we want to soften the initial blow)

          I don’t envision hordes of people coming to where we are — we are 30 minutes from the nearest significant town — we will share with our neighbours (we already do….) and see how that goes…

          If it goes badly however I would like to have an exit — haven’t really thought about that through — I would prefer not to have to deal with a situation that involves ‘mad max’ type people — an engineer friend here suggests the best thing to do when it all unravels is to book a nice hotel room — watch things come apart — then wash down a bottle of pills with a Bintang…

          He may have a point there.

          • InAlaska says:

            Well, you sound like you have as good a set up as anybody else whose preparing and I didn’t mean to sound so dire in my earlier observation. Chickens and bags of grain, I do have, but I wish I had your growing season and soils. I wish you the best of luck with it. If I’m going to wash the pills down with a drink, I’d rather do it at home, though. You can never trust the maids with the room service!

    • All countries are interlinked now. There may be some regional variations, but not as much as you think. No one country can make computers or cars or other high-tech goods with only their own resources and factories that are in place (China probably comes closest in this regard). Several oil Middle Eastern countries are having problems. As those problems spread, it will be hard to maintain world oil production.

      The countries that will do better are ones that don’t depend on the modern world as much. It is not clear that even this is possible. I know China and India depend on modern fertilizer to feed their high populations. Even Africa has greatly expanded its population in recent years, thanks to Western influence.

      My guess is that ten years is the maximum difference that might occur between regions.Some countries are already collapsing.

      USA/Canada have the benefit of low population and quite a bit of energy supply, but we are very dependent on international trade and on the financial system working. In particular, we need increasing debt to keep the system going. As growth slows, this is harder and harder to come by.

    • Stefeun says:

      Another point of view, from Global Europe Anticipation Bulletin.
      “LEAP/E2020 is funded through GEAB subscriptions only. LEAP/E2020 doesn’t receive any public or private, international, European or national money.”

      Quote from GEAB n°83 (March 16, 2014):
      “Global systemic crisis-escalation in the US reaction for survival: trigger a cold war to make it easier to annex Europe.
      Layout of the full article:

      Quote from GEAB n°84 (April 17, 2014):
      “Europe dragged into a division of the world between debtors and creditors: the United States’ desperate solutions for not sinking alone
      In the present confrontation between Russia and the West over the Ukrainian crisis, the image of the Cold War inevitably comes to mind and the media are obviously fond of it. However, contrary to what it gives us to understand, it’s not Russia that seeks the return of an iron curtain but really the US. An iron curtain separating the old powers and emerging nations; the world before and the world afterwards; debtors and creditors…”

      • Paul says:

        Thanks for that analysis — of course there is a bigger picture with regards to the Ukraine — the US would not go head to head with Russia unless what is at stake is very very high….

        This info supports that premise — and also provides a worthy explanation of why what is happening is happening

        • Stefeun says:

          “(…) Thus the pivoting to Cold War 2.0 proceeds unabated, as in Washington working hard to build an iron curtain between Berlin and Moscow – preventing further trade integration across Eurasia – via instigation of a civil war in Ukraine. German Chancellor Angela Merkel remains on the spot: it’s either Atlantic high-fidelity or her Ostpolitik – and that’s exactly where Washington wants her.
          (…) How’s Beijing reacting to all this hysteria? Simple: by reaping dividends. Beijing wins with the US offensive trying to alienate Moscow from Western markets by getting a better pricing deal on the supply of Eastern Siberian gas. Beijing wins from the European Union’s fear of losing trade with Russia by negotiating a free-trade agreement with its largest trading partner, which happens to the be the EU.”

          Quotes from “US ‘pivots’, China reaps dividends”, by Pepe Escobar in Asia Times, Apr.24, 2014:

          I also found another -much older- article of his interesting: “Why Putin is driving Washington nuts” Mar.09, 2012:

  31. CTG says:

    I would like to touch on a few topics that no one has touched before, namely the psychology and the emotions attached to being “aware”. This topic (energy myth) like climate change will generate intense and emotional response as each has their own views. Ourfiniteworld.com is probably the one and only blog or platform in which serious and constructive discussion can take place. My posts are far apart as I am still working in a high tech semiconductor-manufacturing factory in South East Asia. I am Asian by ethnicity and being in the factory allows me to have a different perspective on the supply chain.

    I have been reading a lot of materials online and from this blog since the demise of theoildrum.com. In essence, I am probably like Paul who reads a lot (from zerohedge and other websites). I have seen the works of David Korowicz when it was just released to the web and from my experience, what David says fits into the real world.

    Gail, Paul, Peter S, Stefeun, Xabier, Jan, Stilgar, EOM, edpell, inAlaska and many other regulars to this site, do consider yourself blessed (or cursed if you are a pessimist) with the ability to “look at a much bigger picture” than the rest of the people. We can see way way beyond what other people see and thus, we will always get a blank stare from others when you tell them about peak resources. We are not pessimists but realists who can see things differently.

    Out of the 7.2 billion people on earth, I am not surprised if only 72 people can see the very big picture. Those who are “aware” may have searched the web and he/she will likely find Gail’s blog and be part of the community at this blog. So, I have to say that we may be the few people on earth who congregate here to share our thoughts.

    Some may know peak oil, some may know that the earth’s climate is going haywire, some may know how critical and fragile the financial systems is but I think we are the only ones who can link all of them together. When you talk to someone about sudden skyrocketing gasoline/petrol prices, they will reply that they will use a bicycle or travel less. They don’t see to see the economy will be crippled immediately and their job may even be at stake, It goes the same for those who says that we will replace with a new currency like Yuan or Ruble if the Petrodollar collapses. Care to think if US will let it go easily or if the hotels in Bali/Vietnam can easily re-price their hotels in Yuan? How about the contracts and service/parts that are quoted in USD? Are those going to wait while negotiating a new currency replacement? The supply chain would collapse even if the Yuan/Euro/Dollar/Yen collapses.

    Ask someone what will happen is someone comes out with a transporter (ala Star Trek) where at a blink of an eye, we are at the other side of the world. they would say “Wow that is great ! I can stay in Canada and work in South America or Europe. Travel would be a breeze. What would I think – the world would collapse, arms/guns will transfer immediately. Transportation would disappear. How about those guys working in the lubricant factory or the lady who collects the rubber latex that is used in tyres? Out of jobs? Multiply this scenario for the entire “transportation” supply chain that will disappears immediately, you will have a big crash. I believe, no one will tell you that. Even if they were to tell you that, it will be in a casual tone – this scenario will be resolved !

    Bottom line is that people who know one problem may not relate it to other problem. Peak oil has no impact financially and we will have substitutes. If the financial world collapses (too much debts), it is still ok and will not impact the supply chain and the shale extraction in US will still continue. No one is putting in the effort to see very big picture.

    Give to illustrate the point, I will give you 2 examples :

    1. MH370 – the plane disappeared at precisely at the “handover” place between Malaysia and Vietnam. The Gulf of Thailand is <200m (some places <80m) deep and it is a rich fishing ground with many fishing boats. It takes no more than one day to discover a wreckage. On the second day of the “search and rescue”, I have told many friends and relatives that based on the existing facts, there is a lot more than a crash. Nobody believes until weeks later. I am not surprised at all that the people are taken in by MSM and nobody bothers to think beyond what they see or hear

    2. In the factory, I told many that there will be a lot equipment bring down and quality will drop and scraps will increase dramatically. Those guys working in the factory will look at you with a blank stare and thinking I am crazy. Why? Just look at how the management is doing things and treating people, it is no wonder that people will just “pay lip service” when it comes to repairing the machines. Therefore, scraps will increase and quality will drop. After many high profile cases of scraps, they come to me and ask why I know, Am I Nostradamus? They could not see that it is management that causes this and they could not piece together the cause and the effect.

    No doubt this topic on energy myths will generate a lot of positive and negative comments and apart from the “old timers like Paul, Gail, inAlaska, Xabier et al, posters will generally have a narrow view like what I have mentioned in the previous paragraphs. They will probably look into this from the perspective of “three blind man describing an elephant” where none of them are wrong and all you need is to piece of all them together to know how the elephant looks like.

    I was wondering if paid trolls in blogs will ever change their point of view. Let us say that one is made a paid troll to Gail's blog, after reading all the many posts, do you think that person might change his mind of view? I doubt so if he has a closed mind and would not like to see things differently. If he has the ability to see things on the macro perspective, he would not have been a paid troll.

    It takes a lot of courage to take the red pill and face reality.

    • B9K9 says:

      I have argued against the implied suggestion of superior insight for years. It takes arrogance to assume that it is only us, the chosen few, are so smart that only we can perceive the total, big picture.

      On the contrary, I think there are many thousands, perhaps millions, who have a very good idea of what is happening. In fact, I would assert there’s not single person within the upper echelons of any government, be it the USA, Greece or Upper Volta, who doesn’t know exactly what the fuck is going on.

      What you are seeing in the form of disinformation, feigned ignorance or outright denial are the actions of rear-guard units, designed to confuse pursuing forces, so that leaders and their respective attaches can make good their escape(s).

      Only, in this case, there isn’t anywhere in which to actually physically escape, so one must escape through pleasure, diversion and fantasy. Hence, the Caligula level debauchery taking place on Wall Street & DC as fresh new money is printed with wild abandon, only to be spent by those who receive it first on lavish home estates, parties and expensive toys.

      In my estimation, it takes an IQ above 125 to know something is going on, 135 to thoroughly understand all the various issues, and 145+ to actually be in a position to effect policy eg Ben Bernanke. Gail is the statistics expert, so she can tell us the the std dev for each classification and the resulting (gross) numbers within respective populations.

      • CTG says:

        B9K9, I do agree with you that the elites like Ben Bernake knows all about this and that he is printing money to delay the inevitable. Paul has been writing in this blogs in many threads about this. However, to me, there is an big difference between “knowing” and “understanding”.

        My son is currently in Primary 6, last year, I had by chance had a look at his exam questions (normally wife will handle that) and one of the questions was on peak oil. I was very surprised to see the increasing-and-then-declining oil production graph. The question asks for the observation, conclusion (the answer would be that our oil is declining) and the remedy (The answer will be to use renewables). Gosh Primary 5 and they are learning peak oil and have the wrong answer for the remedial (!!)

        There are plenty of people who knows about peak oil but do they understand the implication? Do they understand the link between low interest rate and the extraction of shale? Do they understand that if the financial house of card falls, so goes the production of oil and the collapse of supply chain and the end of our food production?

        It is the link between the various issues (peak oil, peak resources, peak water, financial, derivatives, climate change) that is the Achilles heel. If one goes, the rest follows. 50 years ago, the link is not tight (and not global) and thus what happens in US will not impact Indonesia or China. Now, just the food supply chain alone (crops, machines, spare parts, chemicals, seeds, research, finances, etc) are scattered throughout the whole world and if one part fails, the whole thing collapses (no resilience).

        Let me know your opinion ! It is always great to have a great discussion here.

      • I agree that there are a lot of people who understand that there is a problem. They don’t necessarily understand what the nature of the problem is, though. We have academics saying things that are untrue, and others believing them. For example, a popular belief among academics is that we can have a steady state economy. Unfortunately, a steady state economy would use an increasing amount of resources because of diminishing returns–something that is not really possible. And even if we did keep a steady state going, we wouldn’t be able to repay all of the interest on outstanding debt, so we would still be facing financial collapse.

      • dashui says:

        IQ Above 125? Well that leaves me out, I think Ill go watch some MMA fights…

    • Thanks for your insights. It is hard to see the big picture, especially when the financial incentives are all in the direction of not telling us the truth. No one wants to suggest that fewer cars will be sold, or that the financial system will be a problem. The government gives out lots of research grants, all in the direction of providing a “solution” to some part of the problem. Regardless of how far-fetched the solution, researchers go along with the plan, and figure out a paper to cover some tiny piece of what is asked for. No one asks hard questions, or says, “This research is ridiculous.” No one looks at costs realistically, and figures out that we cannot afford to pay huge amounts more for energy without vastly disrupting the system.

    • Sylvia says:

      Thank you CTG, I do appreciate you very insightful post

    • xabier says:


      It’s one of the weaknesses of the Archdruid Greer that he fails to take the global supply-chain aspect seriously enough. His general stance, that people should do something and try to make themselves more resilient is valuable and at least he is a positive-minded commentator, but on this point he has a blind-spot, as on financial complexity. Well, thinking about it is enough to make a strong man reach for a stronger drink!

      Corners are clearly being cut in manufacturing. On a very basic level, I’ve even noticed that matches are getting thinner -they often break in one’s fingers, and I’ve compared old boxes to new ones – they are down to the bare minimum thickness now. And the old-size box that contains 2/3 of the former quantity is now very common in food retailing, all happening over the last year or two. That’s a straw in the wind: pressure on costs, declining quality, hugely increased prices for essentials…….

      Heads down for crash? Or enjoy what one still can see from the windows?

      • Paul says:

        As expected — when 50 million are on food stamps – many millions more on disability — students are drowning in debt when they graduate and have few job prospects — and average salaries are down 10% — the housing ‘recovery’ — which of course was all about Bernanke directing 45 billion to the likes of Black Rock — at ZIRP — and which of course was unsustainable…. looks like it might again collapse — as expected…

        Housing in U.S. Cools as Rate Rise Hits Sales: Mortgages

        After a roller-coaster decade of boom-bust-boom, the U.S. housing market is going downhill just when many economists thought annual sales would be heading up.


        If this blows up (or when…) do we get 2007 all over again … http://www.zerohedge.com/news/2014-04-24/exactly-7-years-ago-2014-turning-out-be-eerily-similar-2007

        With the Fed out of ammo…

      • CTG says:


        Thanks for your comments. Catabolic collapse (as proposed by Greer) can happen if we are not tied to the hip (through globalization). Maybe from 1950s to 1990s, we may still have catabolic collapse if there is a pandemic. Communications were not that advanced and thus response time and its effect were also slower. People in Japan/Singapore may not know what is happening in US or London until may hours or days later. Any market (stocks, commodities, etc) crash with some of them are operating like 24 hours will impact other countries in a matter of seconds and the whole house of cards can collapse almost immediately. This is not the redundancy or resilience that I am hoping for.

        I read about the Transition Towns and how they are preparing the town for a post carbon world. It is a fantastic idea especially for those close knit communities. The farming and other ideas are great but there is one thing that they did not factor in – they need other people’s support in order to make it work. You can use less energy fuel but who is trucking in the oil? Anyone knows how to weave woollen garments? Anyone knows how to make a nail, hammer or even a toothbrush? In 1940s or 1950s, you may still have people who has the knowledge of doing that or even local industries (making shoes, etc) but with globalization, even a box of matches has to come all the way from China or Indonesia.

        • Paul says:

          Interesting comments re Transition Towns.

          We take an immense number of things for granted because it is difficult to think through the reasons why most commonplace items will not exist — your example of something as simple as a tooth brush is excellent — plastics made from oil would be the major component so forget about getting more of these when the SHTF…

          It is a difficult mental exercise to try to walk a day in the shoes of someone post- collapse… to consider now what one might accumulate that will not be available then — so as to lessen the suffering.

          Amusingly I have accumulated a collection of nearly 200 toothbrushes and a great deal of toothpaste and floss — forget about going to the dentist when this hits… we’ll be going back to the string and door method of curing a tooth ache!

          As one cannot foresee everything — having useful items to barter will be invaluable — toothbrushes are cheap — and will be in demand….

          • Stefeun says:

            The tooth-brush reminds me of a documentary recently made by a French journalist who tried to live 100% made in France during a year.
            A 2 min. trailer in this article:

            His film was really interesting, making us realize how difficult it has become to consume local.
            As examples, he didn’t find any fridge (we used to have big elec household apps industry still 15 years ago, but now all gone abroad), and found only 1 remaining French company manufacturing (tooth-)brushes.
            His conclusion was that OK, it’s almost possible, but it requires constant effort, and leads to lifestyle quite different from main stream; kind of activist behaviour…

            • CTG says:

              You just cannot find anything local anymore. Even if it is locally produced, the raw materials and machines that are used in the production are not local. Long ago (probably 40 years ago), the machines may be locally made or the products may be hand-made but now, with everyone eyeing profits only, the machines are now for “mass production” and the spares parts are probably from China or Vietnam and the spare parts are probably sourced from other places too.

              Nothing, even toothpicks are made in China and ship to my local store. Just walk around any supermarket and see how many things you can buy that is locally made, really locally without any external inputs…..

              In all the threads that I have talked on, it is the supply chain that will be the issue (though not many people outside this blog understands). I agree with Gail that we may never face peak resource but rather financial collapse. Recalling your mother or grandmother’s time (I am about 40 only), they save a lot of money for rainy days. They don’t take huge loans and they are thrifty in their spending. Restaurants are only for certain occasions like birthdays. They will have bank runs.

              Now, every one has housing loans, car loans, personal loans and their commitments are so high that they are up to the neck on loans. When the trust between banks collapse worldwide (ala Lehman Bros), there may not be a lot bank runs as there will not be many people with money in the banks. How many of those you know have so much money in the bank that they will line up and take all the money out? I think most urban yuppies are cash poor. They rely on credit cards and pays them off when they get their salaries. So, when the bank shuts down, they will not have the money to buy food and that is when the problem starts and snowballs. With credit card not working, it will be a total disaster !

              Forget about where the money will come from for fracking, food and water will be most important. If key people like those working in power plants (nuclear , yikes!), hospitals and transportation dead, then the infrastructure will collapse. We are too specialized. We may know how to drive a large truck but not very well. If the key people on a hydro-electric plant gone, will anyone in town know how to operate and run the power plant. Let us not talk about replacing spare parts of the said hydroelectric plant.

              We have so many hotspots or problem area – Japan, China, EU, UK, Canada, US, Mid East and practically every country has either a huge asset bubble somewhere (like real estate), “fantastic” debt position or political tension like in Thailand and Ukraine. Remember that Thailand was one of the triggers for the 1997 Asian Financial Crisis. Thus, any single event, no matter how small, can be the cause of total global economic collapse. It will literally be the last straw that broke the camel’s back (or the snow flake that caused the huge avalanche).

            • Stefeun says:

              I fully agree with your vision.
              May I precise that “made in France” means that “min.50% of the added value is created on French territory”; forget about 100%, or even 2/3…
              And, as you say, it’s even worst if you consider the production tools, maintenance parts, and all the infrastructure of the supply chains, and of course, the fuels to run all that (neither hydrocarbons nor uranium in France).
              Our crops are fertilized with Russian (or Norvegian or Algerian) natgas and our sheep are fed with South-American GMO soja.
              Going backwards -on a large scale- has become just impossible, as we need to sustain growth.

        • xabier says:


          A very clear-eyed view of things. Intense globalism has crept up on all of us almost without our realising it in the last few decades.

    • Interguru says:

      I just got back from a funeral where we buried my beloved aunt, the last of her generation.. It was not too sad, she was 89, and healthy to the end.

      I made a point not to say a word about “Tvergbergism” as no one would comprehend or believe it.

  32. Daddio7 says:

    Over a billion people live on $1.50 a day, how? There is enough for everyone, but unfortunately most will be poor and poor people are good at making more poor people. Soon there will not be enough for everyone. Also most rich people have trouble sharing.

    • All types of plants and animals reproduce in much greater numbers than needed to replace their parents. Natural selection decides how many will survive. Poor people aren’t any different. Unless people are educated (takes energy) and have access to contraception (takes energy), they are not likely to do much to limit family size. Pensions are another big issue–they require a future energy supply to provide. Without a pension, children in effect are a family’s plan for its later years.

  33. Mark H. says:


    I know you get this all the time but, “I really love your blog and mostly agree..” but (here I go) the one thing that is absent in many of your articles is the failure to point out that current agribusiness/petroleum based farming model actually produces food that destroys health. I know you don’t ever get into that area but you don’t knock agribusiness (for use of a better word) either or call them to account for their part in the decline in health in this country. I have yet to see this as a factor in the decline or collapse of civilization in any of your writings. Let alone call it a myth. Don is right in pointing out this error in agribusiness = green revolution = a very good thing, by ignoring how pesticides and modified seeds produce worthless nutrition and unsustainable agriculture. As an actuary this is something you must have crossed paths with at some time in your career? Maybe not.

    I think the historical example of the Romans doing something similar is very apt. They ravaged the Mediterranean costal agriculture by replacing native crops with cash crops and over producing beyond the ability of the available water to sustain it. In so doing denuded the North African, Palestine and Sicilian farm lands in a similar way. Much of those places are sill waste lands to this very day.

    Human bodies are not designed to repair and heal themselves with the kind of food agribusiness produces. The nervous system can not replace worn out cells, tissues and organs with worthless calories that it must now use. Demineralized soil cannot provide crops with essential minerals for thousands of biochemical processes the body needs to produce to remain healthy. Petroleum based fertilizer cannot produce food with adequate nor essential nutrients. Toxic pesticides cannot be easily eliminated by the body and often become sites for diseases. Something has to break.

    But you are right, it all does come down to oil for our civilization. Literally we are sowing the seeds of our own destruction in more ways than one with the reliance on oil production.

    • wayne31r says:

      Great points, Mark.

      Fossil fuels (and renewables constructed with fossil fuels) will run out if we continue doing what we have been doing for the last 60 years: driving everywhere, buying trinkets and TVs from China, killing soil and propping it up with ag chemicals, spending less on food so that we can spend more on health care, insisting that economic growth is the only choice, etc.

      If we were smart, we would start right now establishing low-energy homes and communities, creating permaculture systems in every locality, abandoning mindless consumerism, and providing inexpensive or free family planning tools so that the human population could contract gradually and humanely.

      If we did all this, there would be plenty of fossil fuels left that we could use to manufacture critical tools, materials, medicines, and renewable energy devices.

      If you found yourself driving a speeding car towards a cliff, you could either apply the brakes or insist that slowing down would be too much of a change from the status quo. Does humankind have the wisdom to make this choice?

      • Daddio7 says:

        In 1945 the US had the power to suppress the rest of the world. Instead we sent food and materials to rebuild Europe. Latter we sent millions of tons of food to Africa. Then we bought trillions of dollars of manufactured goods from Japan, India, and China. Now they are all burning coal and oil like there is no tomorrow, and it’s all our (America’s) fault.

        • Paul says:


          I always thought that the rampant consumer society had as its epicenter America — and that this vile way of life —- along with Paris Hilton, the Kartrashians, Miley Cyrus, drones, waterboarding, Facebook, Twitter, endless wars to steal resources and install murderous dictators and pretty much everything else that is wrong with the world — was spread like a disease that has polluted the rest of the planet.

          That’s for correcting my mis-thinking on this …. it would be appropriate for the fat lady to give us a song — http://www.youtube.com/watch?v=rEJo7x9y3D4

        • dolph says:

          Point by point rebuttal:
          1) In 1945, right after it had bombed Germany and Japan into the stone age, the U.S. turned around and decided, wait a second, maybe that wasn’t such a good idea! And financed their reconstruction to bring them into the American orbit opposed to communist Soviet Union and China. Pure geopolitics. I’m sure the burnt corpses of Dresden and Hiroshima understand.
          2) “Feeding” Africa is not about doing good (that comes from condoms, education, and internal development of the rule of the law). Feeding Africa is about profits for banks, big agribusiness, and making white people feel better about themselves, even as the problem grows and grows as it inevitably does in all situations related to aid
          3) Yeah, you bought a bunch of stuff you didn’t need, payed for it by debt, and now find you are bankrupt and have to print trillions of new dollars and create terminal inflation and fight endless wars to keep the game going. Heckuva job.
          4) America is, by some distance, the country responsible for the most development and depletion of fossil fuels both internally and abroad. Yes, this is changing, but the people of the world will do what it takes to support themselves. All is fair.

          Sorry, nobody is buying your America the good and grand story anymore. I will refute it every chance I get.

          • Paul says:

            Here’s a short doco on the good and kind America — I love how the ex-CIA operative has a good laugh about how they murdered a democratically elected leader — because he refused to hand of the country’s resources…


            John Perkins has a rather interesting story to tell as well http://www.youtube.com/watch?v=yTbdnNgqfs8

            If anyone is going to come here spewing New York Times style propaganda about how America supports democracy around the world — how America stands for good — how John Wayne was an American hero — be prepared for confrontation.

            America stands for one thing and one thing only — stealing the world’s resources by any means possible.

            They have a long track record of installing mass murderers around the world — when you deal with the devil you must be willing to sell out your country’s resources — torture and murder anyone in your country who disagrees with you — accept that in return for vast personal wealth that the devil could at any time — because he feels someone else is more suitable than you — or because the masses have had enough of you — throw you to the wolves — and designate a new proxy monster.

          • Daddio7 says:

            That’s what I meant, I sorry we rebuilt Europe. If my history books are correct the US did not start WWII. Remember Pearl Harbor? When Japan surrendered, we stopped bombing. You are right, the American government should never allowed it’s citizens to buy Chinese and Indian goods. I am all so sorry for slavery, introducing Africans to the Americas was one of histories biggest mistakes.

            • Paul says:

              Let’s be more clear on the wording…

              Japan surrendered after America stopped dropping nuclear bombs onto the heads of innocent women and children in two major population centres in Japan.

              A skeptic might refer to these acts as the biggest terrorist acts in the history of the world…

              A skeptic might suggest that if you want to win a war that you instead drop your atomic bombs on a military target such as a major naval base.

              Surely after seeing the devastation that would cause if unleashed in a major city — would be enough to ensure the raising of a white flag.

              Oh but no – let’s murder hundreds of thousands of women and children — that’s a much better message.

              And likewise, in Iraq — starve half a million babies… http://www.youtube.com/watch?v=R0WDCYcUJ4o

              And we accuse Muslims of being barbaric. (as many reach for the Cognitive Dissonance Button)

            • Daddio7 says:

              What would be the way to control an out of control despot? Should he have been allowed conquest of Kuwait, with the other oil states next. Would Saddam in control all middle east oil been good for Europe? How do we control bad actors? Putin wants the Ukraine, let him have it? How much land for piece are you willing to give?

            • Paul says:

              I don’t debate with people who believe that CNN, BBC, New York times, The Economist and other MSM are anything other than western versions of Pravda – as the saying goes that would make me a fool.

              If this doesn’t breakthrough the matrix — I am afraid nothing will http://www.youtube.com/watch?v=R0WDCYcUJ4o

              NSA! NSA! NSA! …..

            • Daddio7 says:

              I think Pol Pot managed something like that without CIA help. You seen to be a fan of warning attacks like Pearl Harbor and the twin towers and gasp “how have we offended these people and how can we placate them?
              There are bad people in the world and most of them do not work for the US.

            • Paul says:

              So you are drawing parallels between the American leaderships’ policy of mass murder of 500,000 children in Iraq to Pol Pot’s massacre in Cambodia.

              That is a splendid line of reasoning – I could not agree more!

              See – we can have a debate without having a debate — so I am excused from being labelled a fool.

              You win.

            • Daddio7 says:

              What are we doing about Putin’s invasion of the Ukraine? Sanctions! What are we doing about North Korea and Iran? Sanctions! What would your policy be to contain these despots? Should we ignore Iran’s support of terrorism and nuclear bomb program and just say, ” Here, take this gold and grain, we want more of your oil”?

            • Paul says:

              You keep on watching CNN and believing Putin is the bad guy … if that makes you feel better.

              Now quickly — before you read this — hit your Cognitive Dissonance button — it is located behind your left ear…

              All set? Let’s continue….

              This reads like the Hall of Fame of mass murderers and the Who’s Who list of Greatest Torturers of all time.

              Where’s Madelaine on the list – surely murdering 500,000 babies should get her an honourable mention?

              United States support of authoritarian regimes

              Over the last century, the United States government has often provided, and continues to provide today, financial assistance, arms, and technical support to numerous authoritarian regimes across the world.

              Regimes supported


              Porfirio Díaz (Mexico) (1876–1911)[citation needed]
              Institutional Revolutionary Party (Mexico) (1929–2000)[10]
              Juan Vicente Gómez (Venezuela) (1908–35)[citation needed]
              Manuel Estrada Cabrera (Guatemala) (1898–1920)[11]
              Jorge Ubico (Guatemala) (1931–44)[11]
              Fulgencio Batista (Cuba) (1952–59)[12]
              Rafael Trujillo (Dominican Republic) (1930–61)[citation needed]
              Efrain Rios Montt and the rest of the military junta in Guatemala[13]
              Revolutionary Government Junta of El Salvador (1979–82)[14]
              Hugo Banzer (Bolivia) (1971–78, 1997–2001)[citation needed]
              National Reorganization Process (Argentina) (1976–83)[15]
              Brazilian military government (1964–84)[citation needed]
              Somoza family (Nicaragua) (1938–79)[16]
              François Duvalier (Haiti) (1957–71)[17]
              Jean-Claude Duvalier (Haiti) (1971–86)[17]
              Omar Torrijos (Panama) (1968–81)[18]
              Manuel Noriega (Panama) (1983–89)[19]
              Alfredo Stroessner (Paraguay) (1954–89)[citation needed]
              Augusto Pinochet (Chile) (1973–90)[20]


              Chiang Kai-shek (China/Taiwan) (1928–1975)[citation needed]
              Syngman Rhee (South Korea) (1948–60)[citation needed]
              Park Chung-hee (South Korea) (1961–79)[citation needed]
              Chun Doo-Hwan (South Korea) (1979-88)[21]
              Ngo Dinh Diem (South Vietnam) (1955–63)[22]
              Lon Nol (Cambodia) (1970–75)[23]
              Mohammad Reza Pahlavi (Iran) (1941–79)[24]
              Ayub Khan (Pakistan) (1958–69)[citation needed]
              Ferdinand Marcos (Philippines) (1965–86)[25][26]
              Muhammad Zia-ul-Haq (Pakistan) (1978–88)[citation needed]
              Saddam Hussein (Iraq) (1982–90)[citation needed]
              Suharto (Indonesia) (1967–98)[citation needed]
              Truong Tan Sang (Vietnam) (2011–present)[27]
              Ali Abdullah Saleh (North Yemen/Yemen) (1978–2012)[citation needed]
              Hamad bin Isa Al Khalifa (Bahrain) (1999–present)[citation needed]
              House of Saud (Saudi Arabia) (1744–present)[citation needed]
              Ilham Aliyev (Azerbaijan) (2003–present)[citation needed]
              Islam Karimov (Uzbekistan) (1990–present)[27]
              Pervez Musharraf (Pakistan) (1998–2008)[citation needed]
              Emomalii Rahmon (Tajikistan) (1994–present)[27]
              Saparmurat Niyazov (Turkmenistan) (1990–2006)[citation needed]
              Gurbanguly Berdimuhamedow (Turkmenistan) (2006–present)[27]


              Apartheid South Africa (1948–94)[28]
              Nigerian military juntas of 1966–79 and 1983–98[citation needed]
              Haile Selassie I (Ethiopia) (1930–74)[citation needed]
              Meles Zenawi (Ethiopia) (1991–2012)[27]
              Teodoro Obiang Nguema Mbasogo (Equatorial Guinea) (1979–present)[27]
              Mobutu Sese Seko (Democratic Republic of the Congo) (1965–97)[citation needed]
              Félix Houphouët-Boigny (Ivory Coast) (1960–93)[citation needed]
              Hissène Habré (Chad) (1982–90)[citation needed]
              Idriss Déby (Chad) (1990–present)[29]
              Gaafar Nimeiry (Sudan) (1969–85)[citation needed]
              Hosni Mubarak (Egypt) (1981–2011)[citation needed]
              Zine El Abidine Ben Ali (Tunisia) (1987–2011)[citation needed]
              Samuel Doe (Liberia) (1980–90)[citation needed]
              Charles Taylor (Liberia) (1997–2003)[citation needed]
              Yoweri Museveni (Uganda) (1986–present)[citation needed]
              Paul Kagame (Rwanda) (2000–present)[citation needed]


              António de Oliveira Salazar (Portugal) (1932–68)[citation needed]
              Francisco Franco (Spain) (1938–75)[citation needed]
              Greek military junta of 1967–74[citation needed]
              Franjo Tuđman (Croatia) (1990–99)[30]


      • We are at the edge of what we can pull out, regardless of what we do. It is necessary to keep the economy together. So I don’t agree with you with respect to

        If we did all this, there would be plenty of fossil fuels left that we could use to manufacture critical tools, materials, medicines, and renewable energy devices.

        It is the financial system that crashes. We need to get along without the fossil fuels, regardless of what we do, I am afraid.

    • I have stayed away from the topic, partly because I didn’t think it fit with the energy problem, but it very much does.

      In fact, I got interested in food/health related issues 20 years ago. I discovered the human body is not designed to eat “finely ground” grains and refined sugars–the sugar gets into the blood stream much too fast. There are also issues with the amounts of meats we are eating, and all of the “stuff” that animals are fed. We worry about the effects of chemicals on aquatic creatures when there is an oil spill, but fill our own food supply with food colors, flavors, and other additives that are often oil based products (or even worse). There has been no long-term testing of these chemicals on the human body in the quantities they are eaten.

      I am sure that these issues are behind a lot of the health problems we are seeing today. I probably do need to write a post on this issue. It is a hard issue for young people to escape. They want to be popular with their friends, and eat like their friends do. Bad food also tends to be cheap. A person has to work really hard to avoid eating the bad stuff that is filling our food system.

      • Paul says:

        Add to that even if one wants to eat healthily — Monsanto has made sure you can’t by fighting against GMO labeling of foods – at least in America

        My goals is to eat as little as possible that is not produced on our small farm – that means a simple bowl of vegetables for most meals — not so bad 🙂

        • Daddio7 says:

          I respect your opinions. Why couldn’t there be a voluntary no-GMOs label? Not a strict “organic” label, just a GMO free. Surely that can’t be legislated against. I owned a farm and have been around farming all my life. Many farms are multigenerational family farms and they wouldn’t do anything to jeopardize the future of the farm. Unfortunately there are corporate entities that are only concerned with this quarter’s profit so we do need skeptical people keeping an eye on them.

          • Paul says:

            And the reason would be that big ag — particularly Monsanto — bribe (uh-hum contribute money to elected officials through legal channels such as registered lobbyists — out of the kindness of their hearts with no expectations) —- actually no – let’s go with the word bribe…

            So Monsanto bribes elected officials to enact laws that make it illegal to attach a non-GMO sticker to a food product that does not contain Frankenstein ingredients.

            And look at what Monsanto does when the few people who are not brain dead Facebooking, Tweeting and watching re-runs of American Idol try to stop them:


            I saw Valerie Plame (former CIA) speak a couple of weeks ago and she mentioned how some people who were organizing a petition against animal cruelty were added to the black list by Homeland Security.

            With Monsanto’s Deep State connections one could imagine the organizers of this protest could be swayed to tone things down a little — after all you don’t want to get your name on THAT list…

            Jon Pilger coined the term Soft Totalitarianism to describe America … I completely agree — and when people wake up to what has happened there the Deep State will have multiple rounds for anyone who opposes the new normal:

            1.6 Billion Rounds Of Ammo For Homeland Security? It’s Time For A National Conversation

            Davide Bowie has good reason to be http://www.youtube.com/watch?v=slKNd22GGaQ

      • Stefeun says:

        Food system is a good partner for pharmaceutical industry, which is among the most profitable business on earth. Their goal is ever-growing profits.

        They have absolutely no interest in having wealthy populations; on the contrary, they can favor or invent (for some psychic ones) illnesses, against which they surprisingly can sell you the appropriate medicine; it’ll cure you (or not) and will preferably have secundary effects, for which they will sell you another drug, etc, etc… so that you are locked in and become a guaranteed income.
        Works much better in rich countries; no time to lose in Africa, for example.

        If we really wanted the system to be efficient, we should pay when we’re in good health, and not pay when we’re sick (I think I heard it was geared this way in China some time ago).

        There are thousands of examples of abuses; let me just link you to the only serious and independant professional review we have in France, which publishes lists of drugs that should be avoided, because inefficient or even dangerous:

        • Paul says:

          A close friend of mine was country marketing manager for a French pharma company and he suggested that I get onto one of their products that reduces cholesterol.

          I said — but why would I take that — I don’t have a cholesterol problem — am not overweight — and just had a full health check indicating the engine is all good… and I was feeling very much fine.

          His response was that even though it’s normal it’s always better if you reduce the bad cholesterol.

          Typical of the medical fraternity — a pill for every ill – real, imagined, or non-existent.

          Of course it was recently reveals that these cholesterol drugs have some nasty side-effects…

      • Mark H. says:

        Gail, all this interest in commenting about health was sparked by the intro comments about eliminating the ‘surplus population’ of over 60 year olds. Since I just turned 61 in Feb. and I am in good health I would object to that.

        As to the young, they can get away nutritional abuse due to the fact that their bodies replace worn out cells faster than they can use them up. But they run up against peak health, to coin a term, at age 42. That is the top of the curve (the body replaces every cell by the end of 7 years, that is how long it takes to replace bone tissue).

        Unfortunately, in any collapse scenario, the weak will die first so no need to choose over 60 year olds. Western societies can’t stand anyone dying and seem to support health care systems that prolong life but not the quality of life. That is a huge waste of resources right there in extending lifespans beyond their natural limits. So there is a limit to growth in health that the establishment doesn’t like to face. The over weight, the immobile who need motorized chairs or walkers and those who ‘must’ have medications will die off first due to the breakdown or lack of modern medicine. Really, sanitation and hygiene has been the one, single benefactor to modern health and when that goes there goes a huge portion of the population that are not so compromised.

        In the here and now, the top four diseases in the US all have nutritional sources. The basic plan from the nutritionists I go to is to stay away from the aisles and keep to edges in markets when grocery shopping. Then upgrade quality by finding local health food stores or farms that sell direct. Get exercise and sunlight. Then use whole food supplements to repair worn out or weak body parts, detox as needed. The nervous system has the capability of regenerating a liver that is 80% destroyed, let alone other organs and tissues, if given the correct replacement parts in the form of nutritious food. I found that as I got ‘healthier’ I couldn’t eat ANY dairy products, sugar, grains, nuts, beans and other foods without an adverse physical reaction. So my body told me what not to eat and I listened.

        But in a collapse I will have trouble maintaining my current level of health without now starting on a garden. How I am going to do that in the Tampa Bay area (Pinellas peninsula) where I live I do not know, all the soil is virtually sand. Even stored food for a year won’t get me through the following year. After reading Comandante: Hugo Chávez’s Venezuela by Rory Carroll I may not be allowed to grow my own food if the collapse is drawn out and a lunatic government outlaws it (not that he did but I wouldn’t bet against it). That was a book one can only read once, it is not a happy read. And I don’t do well on government food handouts. Just last Feb. had my kidneys decide to start eliminating stones after a winter and spring on such fare. Luckily I been working again and could afford better food and my supplements and didn’t have to go to a hospital (One $18 bottle of Standard Process Phosfood Liquid and no pain, no blood, all dissolved over 3 weeks). What happens when I can’t?

        I guess I and others will have to pick up the pieces and make a go of it like mankind has done in the past. But this is a story that has been told before, how the most advanced civilization on Earth at that time had collapsed.

        • Daddio7 says:

          I’m across the state near St. Augustine. I have a 40 acre field of potatoes on the other side of my driveway and the farmer himself lives 200 yds the other direction with a large barn and greenhouse between us. At my age I really don’t want to do without electricity or my prescription acid reducers.

        • I eat mostly vegetable products and fish. I have followed this pattern for about 20 years, and it seems to be helpful. I have started eating more yogurt and cheese in recent years, because of the risk of osteoporosis. I eat a lot of fruits as well as vegetables, quite a few nuts, and try to drink a glass of red wine a day. I eat rice and oatmeal, but not much food with wheat flour, sugar, or corn syrup in it. I don’t buy many processed foods, except single ingredient foods (coffee, canned beans, etc.).

          My health seems to be much above average, with this approach.

          • Paul says:

            My wife and I were sitting at a cafe in Paris yesterday playing a game — who can spot a fat person first — it took a very long time for someone to win the game….

            As we already know there are very few fast food outlets in this country — people tend to eat a lot less processed garbage — which is laced with fructose, sugar, and other harmful additives…

            Avoiding processed foods is the first step on the road to reasonable health.

            • Interguru says:

              “Avoiding processed foods is the first step on the road to reasonable health.”

              My wife, age 70, has three debilitating conditions, Parkinson’s, spinal stenosis and chronic fatigue. none of which has a known lifestyle cause. I, two years older, have two heart conditions, at least one of which ( valve failure –inherited from my father ) is purely genetic.

              Life is a crap-shoot. With good lifestyle you can load the dice, but it still is a crap-shoot.

            • Daddio7 says:

              My 75 year old mother in law has diabetes, congestive heart failure, is on dialysis, and has osteoporosis. The venn diagram of what she can’t eat excludes almost everything. My wife has spent a lot of time caring for her and has become a good nutritionist. My wife does not want to end up like her mother and has lost 75 lbs and I have maintained my working weight into retirement. With careful shopping eating healthy is no more costly than eating junk food. My parents are in their eighties and are in perfect health so that bodes well for me.

  34. Paul says:

    Total SA: Peak Oil Is Catching up to Big Oil

    Free cash flow is like the canary in the coal mine. Earnings can be massaged with accounting magic, but it is more difficult to massage free cash flow. Total (NYSE: TOT), along with its fellow big oil brethren, has seen its free cash flow fall significantly in 2013. Now is the time to examine the fundamentals and see just what sort of unique risks and challenges big oil faces.

    Sometimes, falling free cash flow is a short-term issue. Such was the case after the 2008 oil crash. Oil prices fell, and as a result free cash flow fell as well.

    The current downturn is different. Oil prices have remained relatively stable and yet free cash flow is falling. The reason for this change is simple. Capital expenditures (capex) are rising at a rate far above revenue, thus cutting free cash flow.

    It’s not hard to see why capex is rising. Big oil deposits are hard to find, and many are even more difficult to develop. Just look at the Kashagan field. The field has estimated future peak production of 1.66 million barrels per day (mmbpd), and yet after spending $50 billion and 13 years of work the field is still mired in problems. There are reports that two 55-mile pipelines will have to be replaced with an expensive nickel-based alloy to counteract naturally occurring hydrogen sulfide.

    The partners Total, ExxonMobil (NYSE: XOM), Royal Dutch Shell (NYSE: RDS-A), and others have already been slapped with a $737 million fine by the Kazakhstan government for the large number of delays. This fine is small compared to the bigger picture, however. The project may not come online until 2016 while posting $45 million per day in lost revenue, making for total lost revenue around $27.6 billion.

    Is this peak oil?
    The most extreme peak oil pundits conjure up the idea that in one instant the world will run out of oil and earth will grind to a halt, returning humanity to the collective technological capability of a caveman. While this could theoretically occur, it is more likely that a post-cheap oil world will come about in a gradual fashion.

    The more tempered peak oil view is that once the easy-to-find deposits are extracted, costs will rise significantly as the industry goes after marginal supplies. This looks eerily similar to today’s world. In 2004, Mexico’s Cantarell field produced more than 2 mmbpd, a significant amount considering that North Dakota at its current peak is producing around 1 mmbpd. As of March 2014, Cantarell’s production fell to 0.353 mmbpd and Pemex continues to struggle to replace lost output.

    Big upstream firms are the companies that really suffer in this situation. Medium-sized drillers can find small deposits, grow, and turn a profit even if world oil production doesn’t grow. Big oil has such a large production base that it needs to bring major fields online or face falling output.

    More http://www.fool.com/investing/general/2014/04/23/total-sa-peak-oil-is-catching-up-to-big-oil.aspx

    • B9K9 says:

      Five years ago, my original posts @ ZH pointed out that peak oil itself wasn’t the core problem. Rather, it was the lack of growth in production/consumption necessary to cover the interest charges due to the Ponzi.

      Which, of course is why we got ZIRP + QE: flat production necessitates flat capital charges. But, as we enter true declines in total production/consumption, even ZIRP/QE will not be able to cover the deflationary effects.

      That’s why I believe the Russian play is not only about hoping, on a wing & prayer, that the US/NATO can effect “regime change” a la Iraq & Libya in order to peacefully enslave the people and grab their natural resources, but also about instituting war time measures to cover the coming devaluation necessary to re-balance Western economies, perhaps something on the scale of 10:1.

      War time measures allow rationing, price controls, dissent suppression, forced patriotism, the whole gamut as explained by Bourne back in 1918: http://www.antiwar.com/bourne.php

      Keep you eyes on Russia – in the last 200 years, two empires have died on those steppes.

      • We have not been very successful in enslaving people and grabbing natural resources in Iraq and Libya. Russia holds many energy “cards” in Europe, with respect to both oil and gas. It is also selling coal to China, I believe.I expect we are kidding ourselves with respect to our power over Russia.

    • More folks catching on to the problem, at least somewhat. The author still thinks prices will rise, and the system will stay “connected together.” Another common myth–sort of part of the Peak Oil myth.

      • Paul says:

        Recall 2007 and the fabulous Goldman Sachs was touting 200 buck oil.

        No mention of the fact that such a thing would destroy the economy of course…. look at 147 did…

        • Creedon says:

          Mark Twain said that history doesn’t repeat, but that it rhymes. The next crises will probably not be the same as the last. If gas got to 147 per barrel and then the stock market was to crash it would be pretty much an exact replay to the 2008 crises. The 2008 crises took out the house building part of our economy. What if the next crises took out the industrial food system, just a thought, nobody is expecting that. All the forces operating will surly increase inflation and the number of the poor. Predicting the exact nature of the crises ahead always seems nearly impossible.

          • Paul says:

            I think the next crash will be incredibly different than the 2008 crash because our masters will have no power to do anything about it — they know that — that is why they are doing everything within their means including ditching the fundamental rules of economics — in trying to delay this next crash for as long as possible.

            The gun is running on empty next time around.

  35. dolph says:

    I suspect an interesting thing started to happen around the middle of the twentieth century or thereabouts. Maybe a little earlier, maybe a little later.

    You see, humans evolved a sort of dual characteristic over time. We are optimistic, but we are also planners…savers. You could say that humans are “optimistic savers.” We simply like to accumulate stuff. This is sort of the natural balance in which we are meant to exist, and there is always a tension between the two.

    But starting in the later phases of the industrial era, the debtors began to take control. The debtors are the banks and big corporations. Banks take a loan from the savers, and in return loan out to corporations and profit from the spread. And interest rates were lowered and lowered to further help the debtors, and as a last resort they will destroy the currencies.

    Humans were never meant to live like this! It is a complete menace for debtors who have no intention of paying back anything to have absolute and total control over humans who have a natural tendency to just build and accumulate. Vast capital destruction is taking place before our very eyes and there’s nothing we can do.

    There is no way that our present system can be called capitalism, because it isn’t that. Truly I tell you that the globe exists under a centrally planned system, with the central planning done by the banking institutions that control the exchange value of the dollar and thereby the price of everything under the sun.

    What does this have to do with energy? It has everything to do with energy. Our economic system is centrally planned to destroy energy as quickly as possible. You have to really understand the implications of this to understand how hopeless the situation is.

    • I am not sure that there need to be central planners to decide to destroy energy. The tendency seems to be part of the physics of the situation. Just like “Nature Abhors a Vacuum,” we have a situation where “Nature Abhors Unspent Energy.”

    • Paul says:

      After I critiqued our economic system a banker asked me the usual question – so if capitalism is no good then what would you suggest replace it – socialism — capitalism (quite amusing considering I am a capitalist pig…)

      My response was that the only difference between capitalism and the other two systems is the speed and efficiency in which they plow through the earth’s limited resources — capitalism and its debt based economics gets the hamster running much faster than the other two.

      All however are predicated on eternal growth – so all have the same end game.

      I didn’t get a response to that….

    • Jarle B says:

      The idea of such a central plan seems unbelievable to me. Man’s fondness of comfort and shiny things are the main drivers. Biology or cultural construct? Doesn’t really matter, seems uncurable anyhow.

      • dolph says:

        What else do you call the Federal Reserve repeatedly lowering interest rates at the slightest sign of slowdown, until they reach zero bound, and then pushing a few buttons and creating trillions of units of fake currency units to sweep unpayable debts to keep the game going?

        Honestly…if that is not central planning, then what is it?

        • Paul says:

          Interestingly I had a similar conversation with a retired US exec the other day — I suggested that QE ZIRP was all about the end of growth caused by the end of cheap oil — that the housing bubble and the current multi-bubble was purposely engineered to keep the economy moving along….

          His comment was — I find this hard to believe — so who is actually making this call — who is actually implementing such a complex policy?

          Uh — the Fed — other Central Banks — anyone who thinks the market economy is in any respect free is dreaming — the market is massively controlled — subsidies to various industries — keynesian stimulus — fixing gold — and bonds — on and on and on….

          To think that the Fed would NOT intervene in a situation where growth had stopped — and collapse was imminent — is absolutely as naive as it gets.

          Free market economies… oxymoron.

          • Jarle B says:

            dolph and Paul,

            I see the moves of central banks. Of course there is no free market (it wouldn’t work anyhow). But dolphs sentence “Truly I tell you that the globe exists under a centrally planned system” gave me the feeling you’re thinking of “one central planning department to rule them all”, and *that* I don’t believe in.

            Anyway: Back to human nature, the real problem. If man hadn’t this sick craving for comfort and shiny things, the world wouldn’t have ended up were we are now, fast approaching all kinds of overuse and overshoot.

            • xabier says:

              That Man the Maker (and Consumer) brings about his own doom is probably just in the nature of things. Like the fine hunting dog that got killed by a deer here recently: the dog had a great sense of smell, was fast and couldn’t help chasing what it found, and the deer couldn’t help kicking back in flight, so smashing the dog’s brain……

  36. Ikonoclast says:

    We can transition to renewables but it won’t be easy and the “we” will not be all of us. The realistic proposition is this. Some fraction of the world’s population, if homo sapiens survives at all, will eventually transition to all renewables. Non-renewables by definition will all be used up. Renewables will be all that is left. Personally, I feel a great deal of uncertainty about how many people the ecologically damaged and resource depleted earth will be able to support. It could anything from 5 billion down to 500 million at a rough guess.

    I think modern wind power and solar power can work. I think they can even work without being propped up by the oil economy (apart from lubricating oils). Their modern EROEI is indeed adequate to sustain some sort of civilizational system though maybe not our current standard. Other looming shortages have me more worried. Water shortages, food shortages and key mineral shortages that limit renewable power deployment may well be the Liebig’s Law factors.

    • Paul says:

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


    • I still have a hard time making a distinction between renewables and non-renewables, in terms of sustainability. Over-using wood and other biomass is likely to be a huge problem,for example.

      My mother tells me that when she was young and lived on a farm, they had one light bulb in each room, wired to a battery in a shed outside. I suppose that adding a solar panel to such a system would be an upgrade to the system. The system would only last as long as the light bulb lasts (hopefully an LED) or the battery lasts, I expect.

      I don’t see that we have option A, B, and C with respect to civilizations, regardless of EROEI. If we don’t have the right kinds of cheap energy to support our current system, it will likely collapse. We then have to start from there.

  37. Bill says:

    Gail,l this article has been up an hour on Zero Hedge and you haven’t been flamed yet. Where are the usual pinhead deniers over there? 🙂

    • Somehow, people seem to like lists of things.

    • Coast Watcher says:

      Actually I’ve been impressed lately by the non-pinhead comments at ZH concerning energy issues. Not to say that pinheads are in short supply — like the poor, they are always with us — but Gail has some vociferous defenders there these days.

  38. Pingback: Eight Energy Myths Explained | Our Finite World | Olduvaiblog

  39. Another great post, Gail! There are so many competing narratives out there it’s sometimes difficult to sort the wheat from the chaff. For me, it’s as simple as combining exponential population growth on a finite planet. I defer to the late Dr. Albert Bartlett for his emphasis on this (http://www.albartlett.org/presentations/arithmetic_population_energy_transcript_english.html).

    I think another myth that needs debunking is the one that believes technology will save us and we will be able to continue on in our highly energy-dependent ways, so there’s no need to worry. It’s the one that has us remaining in the Titanic’s ballroom enjoying the music while all around is chaos because humans can overcome nature and its limitations.

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  43. Ghung says:

    Mark Kent said: The “cost” of doing anything – or nothing at all – increases each day.”

    The human predicament isn’t merely energy availability. It’s human behavior enabled by energy. The fossil fueled industrial age has led to overshoot and environmental degradation on an enormous scale. More nuclear energy or viable development of fusion won’t fix our collective lack of wisdom and restraint any more than giving a teenager a Tesla to save on his fuel bill will get said teenager to slow down and drive responsibly.

  44. Don says:

    Excellent post, as usual Gail.

    I have set myself up for energy use as seen in the 1800s but with the knowledge of permaculture to avoid the grind of food production. We are lucky to live in an area that has a mild climate and does not get your winters. Also climate predictions (so far) do not show an impossible change (I have seen your response to permaculture but from experience disagree)

    While it may seem to be hair splitting, the term you used, “high yield” would more accurately be high response. I have seen the green revolution bankrupt small farmers in the Philippines because without the use of synthetic fertilizers and pesticides, which were a new expense, the new seeds would not produce as much as the traditional seeds saved from the previous harvest. Added to the expense of synthetic fertilizers and pesticides they had to buy the new seed.

    • I am not sure what you are objecting to. I have commented that I have observed some fairly fossil fuel dependent practices in what I was told were organic and permaculture settings.

      I have a garden myself, and some of what I am doing depends too heavily on my driving to the local nursery and buying “stuff”–part of the issue I saw others having as well.

      • Don says:

        Hi Gail.
        I’m not objecting to your feelings about permaculture. It works for me and that’s what is important. And yes I too use my car too much but mainly to visit family and meet with others practicing permaculture. Also I have used oil in the earthworks construction. These things will change when oil is no longer available. But when the crunch comes all that I have set up will work with a similar energy input to the 1800s and without oil.

        Can I refer you to a permaculture site that has some videos, most of which are very good. Geoff does use a lot of oil to set up the permaculture sites but they mostly continue, once established, with out any further input of energy apart from the sun.


        • Incitador says:

          «Geoff does use a lot of oil to set up the permaculture sites»

          That’s true but I think it is a very good use of a resource still available. That’s a very good use for oil, in my opinion. Should he, instead, take his family to disneyland (by airplane)? I don´t think so.

  45. Mark Kent says:

    Robert M. Solow, in his New Republic Review of Thomas Piketty’s “Capital in the Twenty_first Century” (http://www.newrepublic.com/article/117429/capital-twenty-first-century-thomas-piketty-reviewed) states:

    “We know how to calculate the wealth of a person or an institution: you add up the value of all its assets and subtract the total of debts. (The values are market prices or, in their absence, some approximation.) The result is net worth or wealth. In English at least, this is often called a person’s or institution’s capital. But “capital” has another, not quite equivalent, meaning: it is a “factor of production,” an essential input into the production process, in the form of factories, machinery, computers, office buildings, or houses (that produce “housing services”). This meaning can diverge from “wealth.” “

    In the context of Gail’s thesis, this “capital” – as a factor of production – is limited entirely by the energy it requires to be productive.

    This is the fourth review of Piketty’s new opus I’ve read (and on that basis I doubt I’ll bother to actually read Piketty) which is seemingly embraced by the progressive minded among us as an excuse to tax the “rich” and re-distribute the wealth. As with most economic theories, it totally ignores the elephant in the room.

    Gail has been criticized by some as a “collapse nik” for her cogent analysis. But it doesn’t take much of a thought study to realize that without energy – lots and lots of easy to obtain cheap energy – we are in for an interesting transition.

    In a comment to Gail’s previous post responding to the idea that we develop atomic energy, to stave off the pending economic dystopia, that such a project would be too expensive and not feasible. My question is: in comparison to what? The “cost” of doing anything – or nothing at all – increases each day.

    • We are seeing the consequences of the success of our economy, not its failure. Much more economic success will be the end of us all.

      The consequences of the failure of our economy comes later.

    • Thanks for your comments about capital and Piketty’s new book. Economists certainly find a lot of things to write about, without looking very closely at what is really happening.

      Yes, energy is essential for creating capital goods. Hunters and gatherers didn’t have a lot of capital goods–mostly stone knives and axes and tools (such as needles) made out of bone. Human labor is always one source of energy, so capital goods don’t go completely to zero.

      Sharing equally seems to be a common theme. Andrew Bejan and Peter Zane’s book “Design in Nature” talk about the need for balance. The whole earth is an engine and brakes system, with friction and friction-like forces providing a balance to the tendency of objects driven by work to accelerate forever and spin out of control. It seems to me that the call for sharing is an attempt at balance. A similar call to balance is brought by religions and by European governments. The view seems to be that if we can’t fix the underlying problem (or don’t understand it), perhaps we can fix the symptoms.

      Regarding how inequality comes into being, not having an energy resources makes it impossible for new entrants to the job market to have enough capital to support their jobs. Thus, later entrants to the job market (such as our children) find themselves in low-paying service jobs.

      Regarding atomic energy, this is definitely a difficult issue. Nuclear energy certainly worked (and continues to work) better than intermittent renewables. But there are definite concerns about safety, especially if we cannot decommission the plants properly. Also, external electricity may cease to work, leading to Fukushima type accidents.

      Furthermore, if we build a huge number of nuclear power plants using current technology, we quickly reach the point where we run short of uranium (especially if we do not have oil for mining) in not many years–before the lifetime of the plants is up. In theory, reprocessing plants could be built to postpone the uranium supply problem, but this has its difficulties as well. Working on new technology that uses thorium (or another material) delays the project further.

      • Mark Kent says:

        Gail and others, please take a few minutes to read the following:

        This very 2010 paper started the Chinese on a program to bring an LFTR on line by 2020.

        One of a number of well written, fact based articles by Bernard Cohen.

        We willing expose ourselves to far more “radiation” that anyone would ever receive from atomic energy generation; from diagnostic and therapeutic medicines to air travel and granite counter tops. Burning coal generates a greater radiation hazard.

        Many many more people have died in the last month on a boat (S. Korean ferry) and and airplane (MH370(?)) than have died from radiation exposure at 3 Mile Island, Chernobyl, and Fukushima.

        LFTRs (Liquid Fluoride Thorium Reactor) produce less than 5% of the waste of current uranium based reactors, and can utilize all of our current nuclear waste as fuel.

        LFTRs can be used to replace liquid based fuels for transportation and agriculture. .

        There is enough easy to mine ( with a shovel) thorium in the US to provide our energy needs for 10,000 years.

        In reply to Ghung:

        “The human predicament isn’t merely energy availability. It’s human behavior enabled by energy. The fossil fueled industrial age has led to overshoot and environmental degradation on an enormous scale. More nuclear energy or viable development of fusion won’t fix our collective lack of wisdom and restraint any more than giving a teenager a Tesla to save on his fuel bill will get said teenager to slow down and drive responsibly.”

        I can’t disagree. But I shudder to think of our behavior without energy.

        • Paul says:

          Mark – I’ve been hearing about how ‘any day now we will replace fossil fuels with ____’ I think every president since Nixon has said ‘we need to end this fossil fuel addiction’

          So forgive me if I am the eternal skeptic….

          I’ve gotten to the point where I have been disappointed oh so many times by various claims that I am feeling like a groom jilted at that altar over and over again…

          So I am to the point where I won’t even bother to read about some new miracle until it is launched as a commercially feasible business that completely replaces oil and gas.

          Oil and gas are critical in virtually everything in our market economy — thorium reactors can provide electricity only — assuming they were actually feasible —- this article explains in great detail why that is a problem — so I will leave it to you to re-read what Gail has posted above

          • Stefeun says:

            40 years ago…

            The Oil Crisis: This Time the Wolf Is Here
            By James E. Akins – April 1973
            Oil experts, economists and government officials who have attempted in recent years to predict future demand and prices for oil have had only marginally better success than those who foretell the advent of earthquakes or the second coming of the Messiah. The recent records of those who have told us we were running out of petroleum and gas are an example. Oil shortages were predicted in the 1920s, again in the late thirties, and after the Second World War. None occurred, and supply forecasters went to the other extreme: past predictions of shortages had been wrong, they reasoned, therefore all such future predictions must be wrong and we could count on an ample supply of oil for as long as we would need it.

            • Paul says:

              The wolf made his grand entrance when oil hit 147 bucks — and yet the sheep remain docile and unfazed —- while the wolf sharpens his teeth and gets ready to feast.

            • Jarle B says:

              One thing is certain: Those saying that the oil age will end will get it right in the end.

        • Yes, but we don’t have thorium reactors now. And they only replace electricity, not oil. Our real problem is oil.

          The rush to renewables is based on the view that we need to replace electricity because of climate change issues. Even if that happens, it does nothing about oil.

          • Mark Kent says:

            Molten Salt reactors including thorium LFTRs can replace oil. And do so economically. The classic Fischer-Tropsch process (http://en.wikipedia.org/wiki/Fischer-Tropsch_process) will do just fine. A very interesting overview of this can be found here -(http://bravenewclimate.com/2013/01/16/zero-emission-synfuel-from-seawater/). The technology exists. Lacking is the will.

            • Paul says:

              How do you lubricate a giant pump with thorium? How do you make plastic — and pesticides – and fertilizer — and all these other things from thorium? http://www-tc.pbs.org/independentlens/classroom/wwo/petroleum.pdf

              I would draw attention to the fact that we are in the mother of all crises as a direct result of the end of cheap oil — we needed a solution when oil started to climb steeply starting in 2001 — we are in the 8th inning now — and I am not seeing thorium here http://reneweconomy.com.au/wp-content/uploads/2014/04/bernstein-energy-supply.jpg

              Governments have invested trillions in the form of subsidies for solar — and that has failed… if they thought thorium was feasible surely we would see trillions being invested to subsidize R&D in thorium no?

              It’s nice to have hope — but for anyone who thinks an alternative energy source is going to save the day — ask yourself — if someone had a technology that might be able to replace oil (or even something that could provide even limited amounts of cheap energy) — do you not think they would do as they have done with solar — and provided enormous amounts of incentives to encourage scientists, entrepreneurs and corporations to pursue these holy grails?

              Sorry to bust your bubble but I am not buying any of this – because it fails the test of applied logic.

      • Jarle B says:

        Still, a nuclear plant makes electricity equal to *a lot* of wind turbines or solar panels. Given the human nature, don’t you think a lot of effort will be put into building simple nuclear plants if the alternative is living with less/no power?

        • Stefeun says:

          it’s too late and too expensive.
          We should have started years ago, and on a very high rythm (300 MW/year..?) to catch up with oil depletion; let aside problems of substituting electricity for oil.
          Nuclear plants are very expensive, and we have a big problem with the debt; the financial hurdle seems too high for something “serious” to happen.
          Not to mention the other well-known problems: security, decomissioning, etc…

          Moreover, the technology for the new generation (EPR) looks far from completely finalized yet:
          – google translation of French web-newspaper Mediapart Feb.28, 2014: SCOOP – The EPR reactor in Finland is being abandoned by Areva withdraws its employees …
          The crash of the French nuclear industry precedes that of the entire industry …

          – from Bellona (for example): Apr.02, 2014 Paper: Construction cost overruns of Olkiluoto reactor rival skyscrapers, Pyramids and Taj Mahal – Areva objects
          Woes continue to mount around the construction of Finland’s Olkiluoto 3, the new generation European Pressurized Reactor (EPR), as new cost estimates for its completion have reached new heights, hitting the $11 billion dollar mark, Helsingen Sanomat reported, outpacing expenditures on ultra-luxury hotels and paying for the reconstruction of the World Trade Center three times over.

          The French EPR in Flamanville is meeting quite a lot of problems as well.

          • Paul says:

            Jarle – I am not an English teacher but I don’t think you can use the words nuclear and simple in the same sentence – there’s some kind of rule about that

            • Jarle B says:

              I have never heard of simple nuclear plants, think I just wanted to be optimistic for a sentence or two…

          • Jarle B says:

            I wasn’t thinking about catching up with oil depletion, more like a little more power is more power.

            I’m aware that big nuclear plants are expensive things to build, but what about nuclear reactors like the ones they put in submarines?

            please read me right: I think Gail is dead on in her analyses, I’m just trying to picture what man might try out to tackle life after The Party.

          • It seems like the low cost nuclear reactors are in China or India.

            • edpell says:

              I think we have not seen nothin’ yet in terms of cheap nuclear. IF one is desperate enough you can build a nuclear reactor very cheaply. On cooling circuit, no containment building. As long as nothing fails things are great. Might even be a motivator to pay close attention and make sure nothing fails.

            • edpell says:

              that is ONE cooling circuit

        • We need to keep the whole system going. It takes more than a lot of effort. There are questions abut the safety of nuclear, plus heavy upfront costs and liability guarantees needed. And nuclear doesn’t fix our oil problem. It in theory could help with out CO2 problem, but that is a whole different issue.

          • edpell says:

            Liability guarantees existing in a world filled with lawyers and politicians. In a world full of starving and cold people the luxury of liability guarantees will be long gone.

      • autap7 says:

        Gail, I naively thought that nuclear plants could be switched off easily. But I recently read something like homo disparitus and learned that if electricity stops, after a few weeks half of the 450+ nuclear plants on our planet will melt and the other half will burn. Is that correct? Anyway many thanks for the numerous points covered on your blog!

        • Paul says:

          Good question. Let’s not forget the spent fuel ponds that need cooling.

          My gut says that because the elites are doing absolutely nothing to try to prepare us for what is coming (no subtle prods to start gardens for example — maybe Tom Cruise starring in ‘The Organic Gardener’ might influence the masses …. ) they have determined that this is an extinction event we are facing.

          Thousands of fool ponds and hundreds of reactors melting down surely would result in the end of days.

          This would make one hell of a hollywood blockbuster —- Apocalypse Now and the Titanic all rolled into one!!!

        • edpell says:

          I am not as freaked out about spent fuel as most. Worst case throw them in the ocean. The water level will never fall. Yes, we need to run cooling on the core for a year before we can transport the fuel rods to the ocean. Otherwise they melt like Fukushima. It would be far better if Fukushima were bulldozed into the ocean. The idea of leaving it like a tea bag to have water from the hill above continuously percolate through it is the worst disposition.

          • edpell says:

            or a near by lake

            • Paul says:

              Somehow the thought of doing that (assuming it could be one in a world where chaos ruled) makes me cringe… I imagine boiling salt water hot spots all over the world….for hundreds of years….

              I can’t imagine there would not be massive toxic side-effects that would kill everything that lives in the ocean… I have to assume that if we kill the oceans the entire world would end — surely one cannot wipe out a massive ecosystem without dire consequences to the land ecosystems.

      • ravinathan says:

        Ironically, greater sharing will increase global consumption given that the marginal propensity to consume of the poor is greater than the rich. The result will be a faster drawdown of all energy resources and higher emissions rates. The dauntless faith that some show toward permaculture is also questionable since it presupposes a functional climate. In a world of greater weather whiplash and climate extremes, such faith may be misplaced. I have also noticed to my disappointment that permaculturists ignore the need for population control. In fact most of their leaders breed merrily reflecting their own ideological faith in utopia.

        • Incitador says:

          My guess is that the population control will be solved by the problem concerning antimicrobial resistance. http://apps.who.int/iris/bitstream/10665/112642/1/9789241564748_eng.pdf?ua=1

          «The dauntless faith that some show toward permaculture is also questionable since it presupposes a functional climate.»
          Permaculture has solutions for a very wide range of climates. I don’t think that the unsustainable industrial agriculture will be a better option. Every year, I see how fagile monocultures are even without big climate changes.

  46. Stilgar Wilcox says:

    After reading that only 20% of Americans ‘believe’ the Big Bang some 13.7 billion years ago was the initiation of this Universe, first time or just another oscillation, says volumes about how myths can easily come into play. For one thing I cannot stand the word ‘believe’, because science isn’t based on belief, but on proving information. Sure there are theories in science, but that differs from the Big Bang in which there are a multitude of ways that were used to substantiate that beginning, from the astronomical ‘Red Shift’ to the microwave echo to evidence of the heat signature when it occurred. No belief is required, just a willingness to read the scientific information.

    This also revealed how easy it is to lead people to wrong conclusions, as MSM does all the time to quell the masses into a state of collective optimism, in spite of the 8 myths listed being wrong. “Look folks, don’t look behind the curtain at the latest online article at Our Finite World. Keep borrowing and using revolving credit. Leverage yourself far into the future, because everythings going to be all right.”

    • Our schools do not do a very good job of teaching what is happening. There is a great deal of order to the universe. We keep finding out more about interrelationships.

      One thing I would point out is that the big bang theory does not rule out a god being behind the big bang, and all of the order that goes with the universe. This is one thing we have no way of proving either true or false. We do know, however, that the world did not come into being in seven earthly days.

      • Paul says:

        I suppose if one were confident in an afterlife then one would not be concerned about the situation we are facing.

        The beautiful thing is that pretty much everyone you know will be following you to the fluffy clouds when the SHTF — and whomever survives will probably wish they did not — so it’s not like you’d be missing anyone or anything on the earth platform 🙂

        • Lizzy says:

          Life’s but a walking shadow, a poor player,
          That struts and frets his hour upon the stage,
          And then is heard no more. It is a tale
          Told by an idiot, full of sound and fury,
          Signifying nothing.

          • Paul says:

            And a human is not really any different than a parasite latched onto the skin of a feral dog…. or a rat running through the sewers of London …. I suppose the only difference is that each of us thinks we are different from either of those.

            As evidenced by the fact that people laugh at photos of animals dressed up like humans.

            All rather amusing on a certain level.

          • xabier says:

            As the Archdruid would say Lizzy, you get the gold star for apt poetry quotation!

      • Mansoor H. Khan says:


        According to the Quran the universe was instantiated when Allah said BE! (Kun in Arabic). Just one word.

        Please see my comment earlier (above) about Pakistan, India and Bangladesh. Based on that comment I believe it IS possible for most of us to survive

        Also, I think “religion” will comeback with a vengeance (inshallah) when we return to a life of much, much, much, much less resource consumption.

        Here is more:


        Mansoor H. Khan

        • Mansoor H. Khan says:

          In fact. I think “faith” will become a survival advantage in the world to come soon. “Faith” will help humans endure the very extreme hardship that is coming to us all (inshallah).

          Mansoor H. Khan

          • dashui says:

            Im with you Mr.Khan.
            Even those that believe they have no religion,have one. Marx for example, just rewrote the bible so that heaven will be on earth, not after death. Workers are the chosen people,etc
            PS. I reallly like your great granddad, Genghis.

          • xabier says:

            Religion can provide an etiquette which makes it possible for groups to form when social and political structures fail, from very disparate kinds of people: and groups are the tool for survival.

            • Mansoor H. Khan says:

              It can also provide the spiritual strength to endure hardship! That is why I am serious when I say “Faith/Belief in afterlife will become survival advantage”

              Much more than just group support.

    • Paul says:

      The last thing we want is too many people to visit Finite World…. because then they might stop shopping and running up Visa bills… and that would accelerate us towards the end game.

      They must remain in the matrix for as long as possible — or at least until my 50 banana and papaya trees that were planted the past couple of months have fruit 🙂

      • icarus62 says:

        I like your style. And your thinking.

      • Interguru says:

        I hope you planted a blight resistant variety of bananas. Snarks aside, no one is talking about epidemics of both our food supplies and ourselves. Even with our supply chains intact, we can barely keep ahead of diseases such as SARS and Ebola. All seven billion of us are a huge petri dish, especially in the fetid slums of our megacities.

        • Paul says:

          I suspect the hungry 4 million people that will likely overrun us here will be a bigger problem than plant disease

          I am under no illusions — banana trees and veg gardens are a long shot — but it feels better to at least do something as a hedge.

          • Bob says:

            try 40 million not 4 million…I don’t think I have to tell you how many people live in that country…are you Muslim? Maybe you should consider it…otherwise you don’t have a prayer my friend….

            • Paul says:

              Bob — actually the population of Indonesia is 250 million…

              Bali is an island province in Indonesia — with 4.2 million people.

              Bali, as you may know, is predominantly Hindu — but even if it were Muslim I would not feel any less secure — I have traveled extensively to many Muslim countries and I have always felt welcome…

              The vast majority of Muslims want what I want – peace, security, opportunity… the few that lash out at the west generally have good cause to do so — what would you do if Israel were established in your back yard and your home was seized? Of if your innocent family was wiped out by a drone strike?

              If you want to understand that issue more deeply I suggest you have a read of this https://www.goodreads.com/book/show/52142.The_Great_War_for_Civilisation Fisk has spent decades reporting in the Middle East…

              The formula for being accepted is — do not patronize people — respect them as equals — reject racism … allow people to live with dignity

              It helps if you are not from a country that regularly blows the living daylights out of mostly innocent people with drones and various WMD… steals their resources… installs murderous dictatorships who torture and imprison their own people

              If you are from a country like that (say Israel or America) ….if you want to be accepted I suggest you immediately distance yourself from those policies — that of course might be difficult if you actually support such policies — strange how people the world over can pick up if you are being sincere or not.

              Actually the worst place one could be when the SHTF is almost certainly the good ol bastion of Christianity — the USA….. By far the most violent country on the planet — with millions of guns floating around…

              And a hell of lot of people who are pissed off because they are taught to believe they should be living like Paris Hilton — but they have finished college, have no jobs, and are sitting in their parents basement Facebooking and watching re-runs of American Idol.

              Under no circumstances would I consider the US as a place of refuge — other than say Alaska or somewhere equally remote…

  47. B9K9 says:

    Here’s another myth: the US/NATO can subvert Russia to our will, enslaving the people and requisitioning their vast natural resources for our own internal purposes (necessary for economic growth in which to feed the Ponzi), without the use of nuclear weapons.

    At present, Western parties are merely going through a series of per-arranged dance steps established long ago that have proven extremely useful in securing strategic reserves in a variety of different times & places.

    It’s easy to recognize the longing to use these techniques once again to fruition, but I suspect even the deep state players know the jig is up. Since that’s the case, the real play is to study capital flows as non-state corporations begin to shift resources and operations to the next arenas that will provide steady supplies of precious juice, legal stability and a passive workforce willing to work like slaves.

    The Russian-Chinese axis is such a no-brainer equation, it should be obvious to all as the squeeze is put on in the West that capital flight will begin to accelerate searching for the next, last place to party.

    • I agree. Chinese is the world manufacturer. It makes sense that they become the world reserve currency. They can back their currency by their ability to manufacture everything the world need. Can this happen without a nuclear war ? They don’t need gold to become the reference currency they have their manufacturing base.

      • China is dependent upon dollar credit from Wall Street. Shrinking dollar credit flows are now unraveling China’s economy.

        China’s loan shark banks have forced $11 trillion worth of their own losses into the Chinese economy since 2008, (Charlene Chu) . As these losses are recognized, the dollar flow out of China will accelerate, the country’s RMB purchasing power will shrink and become negative (worthless). Losses are in the form of excess real estate- and industrial capacity.

        • B9K9 says:

          Steve, long time no see; unfortunately, I’m going to have to dispute your conclusion(s).

          To understand the deep capital cycle, one must merely answer this simple question: why do holders of Treasuries hold Treasuries? Answer: because any other “investments” are considered a hostile act by the US government.

          With $trillions held overseas by the Chinese, Japanese, Saudis, et al, how come (a) they didn’t repatriate their dollars upon receipt directly into equities of, say, Exxon, GE, IBM, DuPont, Microsoft, Apple, JPM, Northup, etc, etc, etc? Or, (b) once they held Treasuries, they don’t liquidate some/all, to purchase stock in, say, Exxon, GE, IBM, DuPont, Microsoft, Apple, JPM, Northrup, etc, etc, etc?

          I think you know the answer.

          Now try this thought experiment: instead of accepting boatloads of 0 value fiat for shipped finished goods, they instead held valuable exchange “tokens” that could be used to purchase, REAL physical assets, like petroleum, coal, nat gas, uranium, lumber, steel, etc, etc, etc. from their neighbor to the north.

          The bottom line is that N America is tapped out – equal to the vast Siberian land mass, we unfortunately “used our shit up”, leaving the Russians with the last great reserves of conventional natural resources. Us? Not so good – we can barely maintain flat production levels with expensive, capital intensive techniques that absolutely require QE & ZIRP to achieve even a modicum of economic payoff.

          And as for the Chinese? The first time I toured a number of manufacturing facilities 20 years ago, I was shocked by the Dickensian working conditions. I came back and told my clients to forget NAFTA – Mexico was a joke, while China represented the real deal. China’s workplaces resemble something from 1830 England or 1890 USA – no unions, no safety, appalling conditions, and millions (billions) of willing slaves to take the jobs of others who either perish, become disabled, or simply chose to die rather than work to live in such conditions.

          This is what we face: a nation that shot anyone who turned away from suicide charges to the tune of 25m dead (the Germans estimate 100:1 losses, but still couldn’t overcome the numbers) + a nation of 1.5b that can (and has) lived on water & grass.

          We couldn’t have taken either of them back in 1945, and we certainly cannot now. Just watch the capital flows; even easier, watch real estate values in Crimea. This is the sure tell of where the new millionaires are going to be buying villas.

          • jeremy890 says:

            Chainman Mao says “Many hands do light work”. Yep, under his leadership they were doing us a favor by living without unnecessary luxuries, wearing one set of cloths and hoping to save enough to buy a bike and maybe a small portable radio. Watch the movie Mao’s Last Dancer to see the conditions of the people the, I am sorry, if those conditions come here to the USA, most folks here will rather die.

        • Money does not matter. Money is a way to facilitate commence. China manufacture what the world need to survive such as cars part, vitamin and so on.
          Once oil would be rare, China could demand payment in oil instead of money. China could dictate what is the reference currency, it does not need to be money, it could be food or oil. Money is convenient because it a number that can be easily transfer from one computer screen to another. Do you still believe that all these fantasy economical theories will be valid once the world is starving for vitamin and electrical generator parts. The money rules can be changed easily, there were made by man. Debt can be hidden into another balance sheet and ignored. Bank are hiding their debt off balance sheet and noboby cares. They have been doing it for the last 7 years.

          • ordinaryjoe says:

            Debt is mandatory. What is Russias greatest sin? No debt. No IMF loan. The amount doesnt really matter as long as its unpayable ie eternal. Even worse they just forgave north Koreas debt! Unthinkable! To repudiate debt is to repudiate order- Anarchy. The politicians spend it, the people owe it, thus order is established. Being debt free undermines the very foundations of our great institutions. If Russia was to take a IMF 10T Euro loan the talk of war would dissolve and Russia could begin its participation in a civilized society.

            • My impression is that the lack of debt extends through to the Russian population as a whole. Under communism, there was not the push for debt, and thus not the push for growth. But even since, I don’t hunk debt has been as available as it is here. When my husband and I visited Russia a couple of years ago, we visited a family who had built a home, very slowly with their own labor, because debt was not available for financing the home. Others on our tour visited other families who had done the same. Both the husband and wife were professionals with good jobs who would easily have qualified for loans here.

          • dolph says:

            Let me generally agree with the idea that money/debt doesn’t matter, even as I recognize the point that steve is trying to make.

            It’s all about game theory in the end. When push comes to shove (eat or starve), we know that the great mass of people in Europe, stretching eastward to Russia, south into M.E. and India, and further into China, will not accept starvation. If using the dollar based credit system means endless economic deprivation (and this is where things are headed), they will finally at some point say screw you, we do not transact in dollars, period. We will make our own currency/energy exchanges to feed our people. And with that, there goes the petrodollar/bullion banking system. No amount of Anglo-American elite privilege can change the equation at that point.

            So yes, dollar based credit means something now, but it doesn’t necessarily have to. The world can, and does, change!

        • The Chinese economic situation is indeed a worry.

        • Steve, do not worry about the Chinese. They survived after the communism of Mao. Worry about the Great Depression, which again will come upon. The probability of this happening yet 2015 is very high.http://www.bbc.com/news/blogs-echochambers-27074746

      • Paul says:

        China has massive problems as well:

        How China Fooled the World http://www.bbc.co.uk/programmes/b03w7gxt

        The $15 trillion shadow over Chinese banks http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10611931/The-15-trillion-shadow-over-Chinese-banks.html

        China’s Runaway Train Is Running Out of Track http://www.bloombergview.com/articles/2014-01-02/china-s-runaway-train-is-running-out-of-track

        The ECB is preparing to ramp up the printing presses — each of these increasingly desperate policies puts us a step closer to the ultimate end game.

    • You are right. Russia holds the trump cards this time, with all of its oil and gas exports to Europe. We are kidding ourselves if we think we can get Russia to do our will, claiming that we sometime will have natural gas to provide.

      Originally, I thought of writing something on the Russia situation, but it really deserves a separate post.

      • Paul says:

        The Deep State is finding out that they cannot bully Russia like they do other countries — destroying democracy and installing client dictators.

        Russia of course has a massive nuclear arsenal — and I have no doubt that if pushed they would use it.

        I believe that is the message Putin is putting across — he has drawn his line in Ukraine — and he will absolutely not back down.

        As he shouldn’t

        • Lizzy says:

          I agree with you, Paul. It’s plain to see why Iran wants a nuclear bomb. Iraq didn’t have one, and look what the US et al did there. Compare this to North Korea.

          • Paul says:

            If the nuclear powers do not want others to obtain nuclear weapons then they should immediately agree to destroy all of their nuclear weapons.

            Of course the US is the only state to commit terrorism using nuclear weapons — after all they dropped two of them on civilian targets….

            Surely if they wanted to demonstrate the destructive power they could have dropped one on the Emperor’s head — of a military base — so the US should go first.

        • xabier says:

          Putin’s popularity ratings were also very poor before all this started. This has solved so many problems for him.

      • Bob says:

        Russia is no better than any other country; you are misleading by just throwing out assumptions. How much time have you spent in Russia? It is a very crooked country too and all countries are tied together…..you won’t have one standing alone…Look I am sick of western countries policies too but please keep your objectivity…Russia is not an lsland and supply chains are just as long there….

    • yt75 says:

      Yes, very clear, and the current Propaganda to raise the case “let’s do a Saddam to Putin” is really profoundly outrageous.
      U.S. kind of over-optimism mixed with hyper cynicism is really something.
      Another quite impressive thing, Cheney accusing Russians to use oil and gas as a weapon below (through supply manipulations), at 1h:10 :
      Especially knowing that the last blow to the USSR was the U.S. pushing the Saudis to raise their prod so as to bring the USSR down, and it worked.

      And many thanks to Gail for yet another great synthesis !

      • OscarThreeKilo says:

        To your point, the Russian Gov’t and Chinese have agreed to trade in other than dollars for oil and goods exchange. Saddam tried to trade oil to Europe in Euros.


        Revaluation much lower would have led to the world financial centers dumping dollar denominated assets putting our fiat currency at much lower level in proportion to the amount of oil traded in currencies or barter values other than dollars.

        Obama is not able to negotiate from a position of strength this time around.

        • InAlaska says:

          Don’t you all be so sure you know what you’re talking about here. There are centuries of mistrust between the Rus and the Mongol Horde. Think of sparsely-populated and resource-rich Siberia just north of densely populated and resource poor China. Don’t think for a minute Russia trusts China. When a billion Chinese start moving north for lebensraum, the missles will be flying east not west. You need to factor in that both nations live in the most dangerous neighborhood on Earth. Who are their neigbhors? Nuclear armed Jihadist Pakistan, nuclear -armed and bat-shit crazy North Korea, nuclear-armed India (1 billion strong and growing), and wannabe nuclear-Iran. Shifting alliances and national interests are a hallmark of this region. Who is the counterweight to all of that potential horror: the US, Canada, Australia, Japan, Taiwan, the UK and Europe, all of them supporting a stable US dollar fiat currency. Do you think any of the Asian tigers (or anyone else, for that matter) trusts China and Russia enough to give up all of that stability for what: Chinese dominance? Don’t think so. At least the West has 200 years of democratic governance for credibility. The situation is far more complex than China conspiring with Russia to end western dominance. Russia tried that once in a non-aggression pact with Germany. It didn’t work out so well (unless 20 million dead Russians was the goal). Russia won’t trust so easily again. It is easy for us in the stable, peaceful, safeguarded West to assign machiavellian plans to China and Russia, but they’ve got a lot more geo strategic balancing than you think. Level of Difficult: Extreme, Chance of Success: Poor.

          • ordinaryjoe says:

          • dolph says:

            I’m afraid you’re wrong this time, Alaska. The world does change, face up to it.

            Peaceful, democratic West? You do realize America is the single largest war making state on this planet, and an oligarchy controlled by banking and corporate interests, don’t you?

            Even the UK and Japan will shift alliances once they figure out that their populations are being used and manipulated by Wall Street bankers.

            Europe is a slightly different and more complex situation. They face incredible difficulties either way, but it’s clear they set up the Euro as a means to firewall from the dollar, and they will probably align with Russia and make their own deals with the M.E. to survive.

            But if you disagree, you are welcome to lap up the mainstream propaganda that America is the “best country on earth” and not the decadent, bankrupt, overbuilt, multicultural wasteland that it is. But I’ve long stopped believing, and I’m gaining the confidence to say that to people like yourself, both online and elsewhere.

            • Paul says:

              I will attempt the cognitive dissonance of Americans who think they and their country are special — that they stand for freedom and democracy — I could point out perhaps a 100 instances where the US has fought against democracy and installed murderous thugs…. but I have something better — something that distills the very essence of what America stands for…. why America is the biggest gangster country on the planet:

              Lend me 23 seconds of your time to listen to what one of the minions of the Deep State said on 60 Minutes some years ago http://www.youtube.com/watch?v=x4PgpbQfxgo

              ‘We Think The price is worth it’

              When your leadership is willing to do that — and the vast majority of the people in a country support that leadership — then throw all the darts you want — this is what it is — pure evil.

            • InAlaska says:

              Dolph, Wow, you sure read a lot more into my post as a “defense of the West” than I intended to write. How do you make such leaps of intuition? I am simply suggesting that when it comes to Russia and China, I wouldn’t be so fast to conclude that the rest of the world is going to flock to their banner. I mean come on, really? I certainly no longer look at it as the “best country on earth,” nor do I dispute that a lot of gangsterism doesn’t go on, but the West does have 200 years of a liberal, democratic, multicultural tradition. In fact, it started the whole democratic, liberal, tolerant, multicultural tradition. What I am saying is that when asked to choose between living under the boot of the Russians, the thumb of the Chinese or the hypocrisy of the West, which would you choose? Dark, Slavic-Gangsterism? Monolithic, Sino-Gangsterism? They can put all of the alternate reserve currencies together that they want to, but when it comes to sticking together, there is a whole lot of cultural, political, and historical cohesion holding the West together. Sorry, I was a history/political science major back at the U.

          • xabier says:

            It’s more like the Nazi-Soviet Pact before WW2: uneasy ‘alliance’ more propaganda than anything. At the moment.

            • InAlaska says:

              Paul, thanks for “We Think The Price is Worth It” video. Now my cognitive dissonance is all cleared up.

            • Paul says:

              While on this topic — the difference between say Russia, China and the US is that the former have not had much if any (particularly China) with democracy — nor do either rely on a myth that says ‘we are special and a beacon of light in a dark world’

              So their leaders are able to operate without the shroud of propaganda that is required in the US — not that they don’t use propaganda but they do not have to cloak their intentions in BS as the US does in order to get the public to support their foreign policy initiatives.

              Essentially if Putin and the Russian Deep State wants to put the hammer down he can just go ahead and do it — no need to tip toe around what his real intentions are.

              Whereas the US Deep State has to be more subtle — they have to bring along the people – see Edward Bernays role in this — and this opens them up of course to endless charges of hypocrisy.

              Russia can state they are going to war over oil — for instance — the US needs to make up a narrative that goes down with the majority of the electorate — if they said they were invading a country to get their oil I suspect most people would not be down with that…

              This does not of course excuse the behaviour of the US or any brute state — human nature and the age old struggle for resources ensure bad behaviours — which are tempered only by vigilant, aware, educated populations who fight to set limits on their masters.

              Ultimately the Deep States in all global powers comprise mostly men — with psychopathic tendencies (they would prefer the word realpolitik of course heheh) — who let off the leash (by a cowed or apathetic population) would behave like snarling vicious dogs thrown at each other.

              That is unfortunately the nature of many amongst us — the so-called alpha males — those are the traits that get one to the top in the business world and entry into positions within the Deep States of the world.

              We’ve all come across such people — very serious — stern — analytical — usually polished — absolutely dedicated to power and wealth —- psychopaths.

              These are our ultimate masters.

            • xabier says:

              In Alaska

              I agree, we are the heirs of great, if damaged and sullied, tradition, but people talk far too blithely about Russia and China. They are regions, like Brazil etc, where the rule of law, and security of property and liberty do not apply at all – at all! Nor does any concept of decency really exist – which one can still, just, encounter in the West.

              An example: a friend of mine in the City of London had a good case to sue the Govt. of China over a very substantial sum. At first the – western – lawyers said ‘No case, sorry’. Then when he went back to the matter, ‘OK, you do in fact have a very good case, but, cards on the table, if we as a firm participate in litigation against the Chinese, we will never be permitted to do business there again: so please go away’! End of story.

              So afraid were they, -perhaps even personally – that they were willing to lose very substantial fees. These places stink, they have no decent future. Which is not to say that one cannot do business with them, at great risk.

              An employee of my friend’s firm had very interesting tales to tell about political assassinations in his home country China. My friend was also approached by Russians to run substantial investments for them – he turned it down, as the danger of the downside was simply not worth it: in a body bag is not how he’d like to end his days. This is the reality.

              An excellent observation on Brazil: ‘It makes Mexico look like Switzerland’. Great for holidays, but otherwise beware. Again, one can do business, at risk, but there is not much hope for the future civility of these places: they are too corrupt, they have no better traditions, individual life is worth nothing.

              The European/US inheritance is a great one: unfortunately, we are losing control of our politicians and bankers and live in a sea of propaganda.

            • Paul says:

              The US murders innocent people every week with drone strikes… they assassinated JFK … they operate black sites around the world where their proxies torture suspected ‘terrorists’ … they spy on your every communication … etc etc….

              So I don’t see much difference between the US, China and Russia — all are run by ‘Deep States’ — if anything the US Deep State is the biggest villain of them all — but only because it has the means to be the cruelest…. if China or Russia were to usurp America as the world’s most wealthy and powerful state— they would likely be the leader in evil acts as well.

              The most we can do is attempt to harness the monsters at the top — by maintaining educated and active populations.

              We humans are a nasty lot.

        • Oil is traded in all currencies including those of the producers themselves.

          Currencies are traded freely on around-the-clock exchanges or by way of over-the-counter derivatives; any freely tradable currency is acceptable for oil purchases by any country including Iran, KSA, Mexico, Canada and-or Russia.

          The ‘reason’ for Dubai is its currency exchange and money-laundering facilities.

          Rouble and yuan-RMB are not freely-tradable in forex markets. Neither China nor Russia are credit providers; they rely on the credit of others, particularly Wall Street.

          Russian oil trade is largely in euros and sterling: it’s customers live in England and Europe. The US buys small amounts of Russian crude, otherwise there is very little dollar trade with Russia. Foreign currencies, particularly hard varieties are preferred because of the leverage opportunity these currencies offer: using the forex as collateral for the issuance of local currency = doubling one’s purchasing power.

          This is why all barter arguments here and elsewhere are faulty, there is no leverage to bartering, no chance for countries to ‘develop’ or ‘get rich quick’ by increasing their purchasing power.

          See: Economic Undertow “Debtonomics- Currency Crisis” (warning, technical).


          • Interguru says:

            Well said.

            in addition

            The Soviet Union with half of Europe as allies was a superpower. Russia is barely in the top 10 biggest economies of the world, they have 140 million men against 900 million in NATO. Their military technology and spending suffered during the reforms, by all means they’re powerful but they got no chance of pulling off a victory. Putin is gambling that nobody wants to pick a fight with Russia over a few areas in Ukraine,

            from Slashdot comment

            They are also total dependent on private investors, both their own and Wall Street. Both are heading for the exits. The ruble and their stock market are tanking.

            • Paul says:

              NATO’s fire, manpower and economic power is not relevant — because Russia has a massive arsenal of nuclear weapons — and I believe Putin — if the US/NATO continue to try to corner him — will not hesitate to use them

              Moving Closer To War

              The Obama regime, wallowing in hubris and arrogance, has recklessly escalated the Ukrainian crisis into a crisis with Russia. Whether intentionally or stupidly, Washington’s propagandistic lies are driving the crisis to war. Unwilling to listen to any more of Washington’s senseless threats, Moscow no longer accepts telephone calls from Obama and US top officials.

              Read more: http://www.paulcraigroberts.org/2014/04/26/moving-closer-war-paul-craig-roberts/

  48. edpell says:

    All over the web I read articles that say we are not happy, something is wrong economically. Then they try to explain the cause and solution. None of them even mentions the cost and availability of primary energy. It is great there is one place where this is discussed.

    On the nuclear front we could talk about breeder reactors that are able to use U238 the 99% of uranium that gets thrown away in current burner reactors.

    • One problem with nuclear fixes is that they only fix electricity. Another is that they take a long time. A third problem is that the radiation issue is a concern for a lot of people, especially if we cannot properly decommission nuclear power plants, because of lack of fossil fuel. Also, I expect we will still need spent fuel storage.

    • Paul says:

      As outlined above — the world as we know it cannot run on electricity – we MUST have oil.

      I think Gail as done an outstanding job of explaining why in this article —- I would add — that we are in a very desperate situation — I suspect that decision-makers have had think tanks explore every possible solution to this problem — and found all to be futile.

      Otherwise they would be pouring massive amounts of investment into developing a miracle cure.

      I think that they have concluded there is no miracle cure — and that is why many billions are pouring into initiatives that can produce oil and gas to keep the hamster running a little longer — fracking, tar sands, deep sea.

      Those are what stand between us and the end game — of that I am certain.

      We MUST keep the global economy growing — and that requires a growing energy supply at a reasonable price — with conventional sources in decline we are on the cusp of total disaster.

      • InAlaska says:

        Another home run, Gail (baseball terminology for all you limeys). Why is it that the Science of Economics has yet to recognize that oil is the “master resource,” without which all modern economic growth stops? How is it not recognized that energy and economics are intrinsically intertwined? How is it not yet understood that cheap oil is the deep pool from which we have created debt and future claims on wealth? Where are the PhD students writing books on this topic?

      • InAlaska says:

        In one sense it is logical that deep sea drilling may be the one big payoff. If you consider that the ocean covers 75% of the earth, if we can find one or two more Gahwar type fields, are problems are somewhat solved for the medium term. With the exception of a few places in the North Sea and Mexico, we have yet to examine 75% of the earth for more big fields. Granted there are accident and climate concerns, but in sheer terms of finding vast pools of new oil, isn’t deep sea the answer? Is there a flaw with this idea (rhetorical question)?