IEA Investment Report – What is Right; What is Wrong

Recently, the IEA published  a “Special Report” called World Energy Investment Outlook. Lets’s start with things I agree with:

1. World needs $48 trillion in investment to meet its energy needs to 2035. This is certainly true, if we assume, as the IEA assumes, that world economic growth will actually improve a bit, from 3.3% per year in the 1990 to 2011 period to 3.6% per year in the 2011 to 2035 period. It is likely that the growth in investment needs will be even higher than the IEA indicates.

In my view, this is a CYA report. The IEA sees trouble ahead. There is no way that investment of the needed amount (which is likely far more than $48 trillion) can be met. With the publication of this report, the IEA can say, “We told you so. You didn’t invest enough. That is why energy supply ran into huge problems.”

2. Without reform to power markets, the reliability of Europe’s electricity supply is under threat. The current pricing model, in which wind and solar PV get feed in tariffs and electricity prices for other fuels is set using merit order pricing, produces huge market distortions.

In my view, the problem is even worse than the writers of the report understand. The value of wind and solar PV are inherently difficult to determine, because they produce intermittent supply, and this is not comparable to other types of electricity. Furthermore, a big chunk of costs relate to transmission and distribution–42% of electricity investment costs in the New Policies Scenario. Many well-meaning researchers looked at wind and solar PV and thought they were a solution, but they tended to look at the situation too narrowly.

To look at the situation properly, one really needs to look at the total system cost of generating electricity with intermittent renewables (of a given amount) compared to the total system cost of generating electricity without intermittent renewables. Proper pricing needs to include all of the additional costs involved, including the additional cost for storage, the additional cost for long distance transmission, and the additional costs encountered by fossil fuel providers in ramping up and down their generation to match changing output from intermittent renewables.

A study by Weissbach et al.(here or here) suggested that wind and solar PV were “an order of magnitude” less effective than fossil fuels, hydroelectric or nuclear, when full costs were considered. Broader analysis also raises questions as to whether there is any real carbon savings from wind and solar PV–did the belief they were helpful just come from underestimating true system costs?

I would raise the question as to whether competitive markets for electricity even make sense. Regulated markets allow the various players to make an adequate return, and allow utilities to collect adequate fees for infrastructure. The overseer can increase or reduce investment of a particular kind, based on the needs of the particular system. I notice a recent Bloomberg article says, Europe Faces Green Power Curbs to Stop Grids Overloading. The current system is clearly working badly.

3. Tight oil from shale deposits will need significant supplementation from other sources, if it is to be sufficient to meet our needs to 2035. This is the chart I made from data provided by the IEA in its November 2012 World Energy Outlook, with respect to its New Policies Scenario.

FIgure 1. My interpretation of IEA Forecast of Future US Oil Production under "New Policies" Scenario, based on information provided in IEA's 2012 World Energy Outlook.

FIgure 1. My interpretation of IEA Forecast of Future US Oil Production under “New Policies” Scenario, based on information provided in IEA’s 2012 World Energy Outlook.

The current report is not intended to be a report regarding future oil production, but one highlight is, “Meeting long-term oil demand growth depends increasingly on the Middle East, once the current rise in non-OPEC supply starts to run out of steam in the 2020s.” This implies that not only is US tight oil not going to solve our problems, neither will tight oil elsewhere. Instead IEA is back to its old plan of “calling on OPEC”–hoping that the Middle East is there to help, if no one else is around. This is wishful thinking–something I will discuss later.

4. IEA’s investment report is one documenting diminishing returns, even though it never uses that term. Diminishing returns take place if society is becoming less and less efficient at producing energy products. For oil, the issue is that the easy to extract resources were pulled out first; we must now move on to more difficult to extract resources. For electricity, the issue is that the old resources produced too much carbon; we must now move on to higher-priced approaches that (hopefully) produce less carbon.

We can see diminishing returns many places in the report. The major point of the report is that investment costs are expected to rise faster than either the amount of oil or the amount of electricity produced. There are other more specific statements, too. In US tight oil, “High production rates mean that resources are rapidly depleted, with a corresponding rise in costs per barrel as operators move out of the sweetspots to areas where the recovery per well is lower”(page 65). EU will need prices higher than today’s prices for LNG transported from America (page 76). In refineries, the drive is toward more complex and expensive technologies (page 77). There is a steady upward trajectory of the oil prices in the New Policies Scenario (page 81). Offshore wind is expected to move farther offshore, with higher expected costs (page 104).

The point that the IEA does not seem to understand is that diminishing returns affects buyers’ ability to pay higher prices for products. The IEA assumes that buyers will be able to pay higher prices (than the general rise in inflation) for energy products, without it adversely affecting the economy. This clearly isn’t true because salaries do not rise to match the higher cost of energy products. Buyers will cut back on discretionary goods, when energy prices rise. This leads to layoffs in discretionary sectors and quite possibly recession. It also leads to higher default risk.

In fact, wages tend to drop from diminishing returns, because workers are becoming, in some sense, less efficient and thus producing less goods per hour of work. Joseph Tainter in The Collapse of Complex Societies says that diminishing returns were what led to the collapse of ancient civilizations.

Points of Disagreement

1. Many OPEC countries which hold the largest, lowest-cost reserves are deliberately limiting their production rates so as to keep reserves for the longer term.  This is common misbelief, repeated by the IEA, but it not true.

The true cost of production in the Middle East is not just the cost of pulling the oil out of the ground. Instead, one has to look at the full cost of the entire system needed for the extraction, including whatever costs are needed to pacify the people in the area, plus whatever costs are needed for additional infrastructure. Even if Iraq can in theory ramp up oil production, this does not automatically happen. Even if Libya can in theory ramp up production, we shouldn’t expect fighting to stop tomorrow. With these costs, the cost per barrel is up close to, or above, today’s oil cost.

Saudi Arabia publishes high reserve numbers, but there is no indication that Saudi could, if they wanted to, greatly ramp up production. Saudi’s big recent addition was 500,000 barrels a day of refinery capacity in 2013, so that it could make use of heavy, polluted oil from Manifa field, that was supposedly part of its “spare capacity.” An additional 400,000 barrels a day at the same facility is supposed to come on line in 2014. There are declines going on elsewhere, so it is not clear that even these additions will actually add to its total oil production. Saudi Arabia’s total output was slightly lower in 2013 than in 2012, according to the EIA.

The Saudi “proven oil reserves” are unaudited numbers. Its big oil field is Ghawar, producing something like 5 million barrels a day. We don’t know how long it can continue producing. We know that horizontal wells can keep production from declining for a while, but that if a drop-off comes, it is likely to be more severe than with vertical wells. If Ghawar production starts declining significantly, world oil production is likely to drop.

We know that Saudi Arabia has some heavy oil it can in theory develop, not that different from Canadian oil sands or Venezuelan Oronoco belt heavy oil. Such oil would require large front-end investment and flow very slowly. According to the Wall Street Journal, “That the Saudis are even considering such a project shows how difficult and costly it is becoming to slake the world’s thirst for oil. It also suggests that even the Saudis may not be able to boost production quickly in the future if demand rises unexpectedly.”

2. It makes sense to find new sources of investment that will provide funds at lower rates for energy project finance. The report talks trying to find new sources of investment for energy projects other than the traditional source. In particular, it mentions the possibility of tapping funds held by institutional investors (pension funds, insurers, sovereign wealth funds and so on). Pensions and insurance companies are of course currently involved by holding stocks and bonds of oil and other energy companies.

The reason why new sources of lending are needed (besides the problem with high costs) is that the fact that prior sources are getting burned out at the same time huge amounts of new lending are needed. Governments used to be sources of funds, but can no longer be taken for granted (page 38). Changes in Basel III rules make it harder for banks to make long-term energy loans, without charging higher rates (page 39). Quite a bit of the lending in the future will relate to developing countries (see Figure 2 below). Many who have lent to developing countries in the past have suffered losses (page 39). With respect to oil projects, there are many examples where oil companies have made big investments, with virtually no return, such as Kazakhstan oil (page 81).

Figure 2. Energy investment required by part of the world--IEA exhibit.

Figure 2. Energy investment required by part of the world–IEA exhibit.

Perhaps sovereign wealth funds, if they feel that the risk is appropriate, can lend in situations where past experience suggests prudence is needed. But with a background in the insurance industry, I am not sure that makes sense for insurance companies and pension funds to get into financing ports in Iraq, refineries in India, or long distance transmission lines to offshore wind turbines. If they do, it needs to be as part of program where adequate risk premiums are included in the interest rates, and the risk is distributed over a large number of participants using bonds or securitization of some form.  It seems like an intermediary such as a bank would need to be involved.

The big interest in those writing the report is getting costs down for the borrowers. If risk is going up, it is not at all clear that interest rates should be going down. Furthermore, developing an undeveloped country using $100 barrel oil is far more difficult than developing an undeveloped country using $20 barrel oil. This is a big reason that financing debt in undeveloped countries doesn’t work well.

Comment

What the IEA has inadvertently stumbled upon is the reason why oil limits are a problem, and in fact, the reason why energy limits in general are a problem. It looks like there are plenty of resources available and plenty of ways to reduce energy use through mitigation. In fact, it becomes to impossible to finance everything that needs to be done.

An energy-providing device, or an energy-saving mitigation, requires up front payment. This payment reflects the fact that oil and other scarce resources (high priced metals, for example) need to be used in creating these devices. Oil and other scarce resources need to be used in developing new oil, gas and coal fields and power plants as well. This puts pressure on both debt markets and on scarce resources. At some point, the use of scarce resources becomes too great, and debt needs become too high. The projects with high up-front costs are among the worst contributors.

The plan to keep adding more and more debt doesn’t work. The economy is growing too slowly. People’s salaries are not rising to match the higher costs involved. The locations where the debt is needed are not in the part of the world with adequate banking services. It is the inability to finance all of the investment that is needed that will bring the system down. Resource scarcity will be behind the scenes, playing a role as well, but its problems will be hidden behind the problems of financing the needed energy investments.

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.
This entry was posted in Financial Implications, News Related Post and tagged , , . Bookmark the permalink.

709 Responses to IEA Investment Report – What is Right; What is Wrong

  1. VPK says:

    This one is for Paul
    The Federal reserve has more “MAGIC” up its sleeve!
    http://www.nytimes.com/2014/06/20/business/economy/federal-reserves-bond-buying-fades-but-stimulus-doesnt-end-there.html?_r=0

    fficials also have come to accept the bond holdings as a fact of life. In 2011, when the Fed first described its exit plans — which at the time it expected to enact much more quickly — officials believed that reducing the Fed’s bond holdings was a necessary step to maintain control of inflation. They now insist other tools will serve the purpose, and that the size of the balance sheet doesn’t really matter.

    John Williams, president of the Federal Reserve Bank of San Francisco, said at a news conference last month that the reinvestment issue was simply “not that important” and that changing the policy would just create a distraction.

    “My view is that we want to keep the communication as clear as possible,” he said.

    Indeed, some officials argue that raising short-term interest rates may be a more important measure to prepare for future downturns than reducing the Fed’s bond holdings.

    Already, the current recovery has run longer than the average period of growth between recessions since the Great Depression. And with short-term rates near zero, the Fed has little ability to respond if the economy falters.

    RECOVERY?

    • Well, not really recovery. Thanks for posting this link.

    • Paul says:

      I suspect we have no even begun to see the truly desperate tactics — I think the end game approaches when cash held in bank accounts is confiscated … it seems governments have a list of things they can do — and they are walking us down it as necessary…. They know there will be no recovery so they drip feed ‘solutions’ into the market that delay the collapse

    • ordinaryjoe says:

      Interesting. The article claims USA less exposed to oil shock than 2007 due to percentage of household income spent on gas. So libya oil production has fallen off a cliff with no recovery in sight. Saudi is making up the difference? If Iraq production falls thats two majors they will have to cover for? How long can they push those fields, they must be awfully tired. Im confused (no sarcasm I dont understand). I thought shia Iran/ Russia was the “bad guys”. Sunni ISIS Saudi/USA equipped is the “bad guys” too? So the shia Iraq government is “bad” the ISIS is “bad” Iran is “bad”. Who is the media saying is the good team or does there not have to be one anymore? Or is Iran the “good” team now? Could someone explain who the “good” team is – no TV. Or is it no longer possible to portray the good bad dichotomy because all parties are hostile to the USA?
      It feels to me that the three state Iraq is here to stay, territories marked by by sectarian lines. Kurds arnt going to give up their autonomy gained. Iran backed shia south Iraq aint going anywhere. ISIS runs the ship in the sunni areas. This seems more stable to me than the imaginary created non sectarian coalition government. They cant get along so they divide the land/oil and proceed with business. Am I wrong?

      • timl2k11 says:

        Any state or other entity that is perceived as a threat to the global power of the US is the “bad guy”. So at various times it’s been Russia, Iraq, Iran, China, Snowden, Assange, even Europe. I remember there were grumblings about Europe’s GPS system from our defense dept, and earlier about the Euro from various corners of our bureaucracy.

      • You hit on the reason why there can be no US intervention this time. We are on both sides of the dispute. So a three state Iraqi state may be here to stay.

        The question is what that does to oil production. Will ISIS cut off production, or be content with a cut of the total?

  2. Don Stewart says:

    Dear All
    A brief report from Charles Hugh Smith’s weekend letter to his subscribers.

    He refers to the two articles listed below. Charles believes that we have to reinvent society and the economy. He is working on that, and asks that we stay tuned. If you would like to follow such an effort, you might make Charles one of the people you pay attention to.

    Also, he references the third article below, written by Gail.
    Don Stewart

    http://www.theguardian.com/commentisfree/2014/may/27/if-we-cant-change-economic-system-our-number-is-up

    http://www.theguardian.com/environment/earth-insight/2014/jun/19/open-source-revolution-conquer-one-percent-cia-spy

    http://thedailyjournalist.com/the-financier/the-connection-between-oil-prices-debt-levels-and-interest-rates/

    • VPK says:

      I, of course, have read Gail’s article here, but the first Guardian piece “It’s simple, if we can’t change our economic system, our number’s up”, fits perfectly with “Our Finite World’s” message and what Gail is trying to get across.
      I encourage everyone to read it

    • It is always amazing the many places my posts show up.

  3. Jeremy says:

    This article was based on BP’s World Energy Report 2014 and it shows the real progress of “alternative energy” since 1999:

    http://www.vox.com/2014/6/19/5821250/these-5-charts-show-why-the-world-is-still-failing-on-climate-change

    “There’s a fair bit of optimism in green circles that fossil fuels are dying and renewables like wind and solar are set to take over. Al Gore has a hopeful new essay in Rolling Stone along these lines, arguing that “a powerful, largely unnoticed shift is taking place.”

    IN 2013, FOSSIL FUELS PROVIDED 87% OF THE WORLD’S ENERGY — THAT HASN’T CHANGED SINCE 1999

    One problem? It’s hard to see this shift in the numbers — at least so far. Yes, solar panels are getting cheaperand coal is on the wane in the United States. But the growth of fossil fuels in Asia is still swamping those clean-energy trends. The result: more carbon-dioxide emissions and more global warming.

    Here’s a simple way to see this: In 2013, coal, oil, and natural gas provided 87 percent of the world’s energy. That fraction hasn’t changed since 1999. The world has basically made zero progress in moving away from fossil fuels over the last 15 years. If we want to slow the pace of climate change, that has to shift very drastically.

    Those numbers come from BP’s new Statistical Review of World Energy 2014, which is worth a careful read for anyone interested in the global energy system. I’ve put some of their data in chart form to tell the story below:”

    But avoiding a 2°C rise in global temperatures — the ostensible goal of most countries — would require reducing worldwide emissions 40 to 70 percent by mid-century. That’s a huge shift. To get things started, the International Energy Agency has argued that such a cut would require $24 trillion in clean energy investments between now and 2020 (and more thereafter). That would include:

    Each year, on average, 15 power plants and industrial facilities would have to be fitted with technology to capture carbon emissions and store it underground rather than emit it into the atmosphere. (This technology, known as CCS, is still in its infancy.)
    On average, 32 new nuclear plants and 17,500 wind turbines would need to be built each year to provide carbon-free electricity.
    The world would need to make its transportation sector much more efficient between now and 2020. That means lighter vehicles, putting 20 million electric cars on the road, and more efficient airplanes. Buildings and factories would also need to become dramatically more efficient at using energy.

    • Thanks! What happens is that the new renewable energy gets added to the fossil fuel energy. Nothing replaces anything else. In fact, it takes quite a bit of fossil fuels, very often coal, to make “renewables” Wind and solar PV from China are generally made using coal.

    • Stilgar Wilcox says:

      “Here’s a simple way to see this: In 2013, coal, oil, and natural gas provided 87 percent of the world’s energy. That fraction hasn’t changed since 1999. The world has basically made zero progress in moving away from fossil fuels over the last 15 years.”

      This substantiates what I’ve been arguing for some time now, whatever renewables that get produced are simply ‘added’ to the energy mix. As we can see from the above quoted data, on a global scale they do not replace FF. The reason why is because humankind’s mantra is GROWTH, which requires ever more energy input. So renewables simply help create more growth. Now there may be some improvements here and there, but globally overall there is no transition. 87% FF usage in 1999 is still the same % in 2013.

      There are smart people and we generally know what we should be doing, but what we ‘actually’ do is push the pedal to the metal, driving the economy as hard as possible for as much growth as we can muster. There is no overall global plan to make a sensible transition because everybody’s primary goal is chasing the mighty dollar in various denominations.

      • Stilgar Wilcox says:

        Sorry Gail, from the 5 minute difference in posting times it appears we were both working on our posts simultaneously. Apparently though we are both of the same opinion that renewables simply gets added to the energy mix.

      • I think that it is really part of the laws of physics. Humans are dissipative structures. We use up as much energy as we can before we die.

  4. VPK says:

    This is more for an illustration of the disconnect our “leaders: have of the actual situation regarding the world we live in today:

    http://www.cnn.com/2014/06/19/opinion/waldman-cheney-iraq/

    Dick Cheney’s amazing chutzpah on Iraq
    By Paul Waldma

    “Of all the former Bush administration officials who have emerged in the last few days to blame the deteriorating situation in Iraq on Barack Obama, one might think Cheney would be among the last.
    It’s one thing to turn on your TV and hear that Obama is a dangerous weakling from people like Paul Wolfowitz and William Kristol, the ones who told us that war with Iraq would be cheap and easy, then bring a wave of peace and democracy across the Middle East.
    But Cheney?”

    Cheney and his “partners have done very well indeed

    Halliburton Stock January 2003…..8.32
    Halliburton stock today…………….. 70.24

  5. Stilgar Wilcox says:

    http://brucewilds.blogspot.com/2013/10/myth-of-economic-recovery.html

    ‘Myth Of An Economic Recovery’

    “The economic recovery that the media and talking heads have been bantering around does not exist and is just a myth. A manipulated stock market distorted by recent economic policy hides and mask the real truth, in many ways it is ground zero in the war to convince us all is well. The American people and Main Street will tell you they are far from convinced that it is smooth sailing ahead. Huge weakness in the economy has been shown by numbers that barely get by even after record amounts of stimulus. Fact is if QE or the massive government deficit spending that props up our economy is removed it will fold like a cheap umbrella.

    Recent changes in how the GDP is figured , which boosted growth thus reducing the debt to growth ratio, and attempts to spin poor numbers regarding employment have been met with skepticism. Auto and new home sales have recovered a bit from the levels hit during the crises mainly as a result of QE and massive government deficits coupled with low interest rates that make both mush less expensive to finance, but we are still in an economic morass. Poor job creation and stagnate wages have left millions in a protracted state of financial weakness. We are not in recovery we are dead n the water.”

    • Don Stewart posted this link to an article by David Stockman saying that it looks like the GDP numbers include numbers with lowballed inflation numbers, so that economic growth looks better than it really is, and so that growth in worker productivity looks better than it really is.
      http://davidstockmanscontracorner.com/part-1-the-zirp-economy-unmasked-zero-growth-in-private-labor-hours-since-1998/

      • Stilgar Wilcox says:

        The extent of fudged numbers at the government level is really unfortunate for those not doing well, as I am sure they look at certain stats and wonder why they aren’t doing better. “Look Honey, unemployment is down, inflation is minimal, GDP is up, growth is steady, but we just keep falling behind. What’s wrong with us?”

        There should be a disclaimer by the government:
        These falsified numbers have been manipulated (not to be vindictive to the masses falling behind), but instead to fool ‘The People’ into thinking things are better than they really are, to spur as much growth as possible (with this diminished level of net energy input).

        • VPK says:

          Senator Kay Hagen of North Carolina is being attacked for “lack of growth” and high unemployment in a PAC commercial showing a young college graduate headed for her menial looking restaurant job complaining about her situation with a college degree, no job opportunity and being “forced” to buy health insurance, she can not afford.

          https://www.youtube.com/watch?v=On1PR4Wb9gk

          The problem…”spending”. OY

      • VPK says:

        Listen to Dave Stockman;s interview…He tells it like it IS:
        Unbelieveable…BUBBLES EVERyWHERE around the world…only a matter of time before a PANIC
        http://www.cnbc.com/id/101230045

  6. Paul says:

    This Debt Is Explosive, And it Sits on the Shelf Everywhere, Waiting to go off

    http://www.testosteronepit.com/home/2014/6/16/this-debt-is-explosive-and-it-sits-on-the-shelf-everywhere-w.html

    • VPK says:

      Great piece. Do you think these guys are have side bets going as far as on high the debt can go before it blows up? The key is interest rates…..

    • All the world needs is to have a rise in interest rates to have a big problem.

  7. Don Stewart says:

    Dear All
    I have written many times about the advantages of lightweight solar electric fences to enforce rotational grazing. Some of you may not have any idea what I am talking about. See this very short video:
    http://polyfacehenhouse.com/2014/06/greeting-from-the-cows-at-polyface/
    At the beginning, the fencing has been disconnected from the PV system and the man (Joel Salatin?) is winding it on a reel The cows know exactly what is going on, wait rather impatiently for him to finish, then trot enthusiastically to the fresh grass. You will note that the grass in the field they were in is grazed and trampled and manured and urined. The cows hooves push organic matter into the soil. As the cows leave, a host of critters will attack the field and turn the detritus into carbon rich soil. The cows will not be back in this field for some months.

    Don Stewart

    • Paul says:

      I have great admiration for Joel Salatin…

      • Dave Ranning says:

        I see you are not a food fascist.
        They really harsh my mellow.

        • Interguru says:

          L have read about Joel’s Polyface Farm, and admire him. He does a wonderful job recyling the nutrients from his animals’ waste. It brings up a question to me. Let us suppose we all switched to permaculture like Joel uses. Polyface is almost self-sufficient in fertilizer and feed – great!!

          My question is; where would vegetable and grain farmers get their fertilizer, since livestock farms like Polyface re-use all of theirs. This is a serious question, not a troll.

          • Don Stewart says:

            Dear Interguru
            The answers to your question are varied. The first thing to note is that Joel DOES export fertility. He has about 600 members of his ‘buying club’. Any food delivered to those people takes nutrients out of his soil and moves therm into town. Absent a method to get the nutrients back to the farm, the nutrients will probably end up in a landfill or sewage plant.

            The Asians were notable recyclers of nutrients from the towns back to the countryside. Their methods were quite laborious. The biggest methods used today in the US are commercial recyclers (such as former commenter here, Jody Tishmack) and recycling from sewage plants. There would be problems with both methods if fossil fuels disappeared.

            There is a small but continuous resupply of nutrients from the weathering of rock. Skillful gardeners can live with the ‘weathering budget’. For example, see Emilia Hazelip’s You Tube describing her gardening practices. Or look at Masonobu Fukuoka’s methods. Neither ever used commercial fertilizers or mineral supplements. There are examples of grain farmers who live within the weathering budget.

            One of the key dynamics is that living within the weathering budget requires that one not use NPK fertilizers and plowing. These fertilizers and plowing disrupt the normal ‘nutrient seeking and delivery system’ of the soil food web. A healthy soil food web yields fewer weeds and stronger plants. One of the best current books on that subject for a lay audience is, I think, Dan Barber’s book The Third Plate: Field Notes on the Future of Food. Dan is the executive chef at Stone Barns in the Hudson Valley. Dan tackles not only the production of food, he also tackles the remainder of the process through how we prepare the food and what we choose to eat.

            I would summarize by saying that the current system is doomed, that adapting will require great changes, that many people will not or can’t adapt, that adapting while there are massive subsidies and political gifts to the current system is hard, and that the notion of recycling nutrients will require just as big a change of mindset as the notion of adapting to interruptible supplies of electricity and limited ability to transport goods.

            You should also note that the three biggest nutrients required are carbon, nitrogen, and water. All are free gifts of Nature, but the art and science of using them is evolving rapidly in a variety of biological farming and gardening movements.

            Don Stewart

          • Jan Steinman says:

            “where would vegetable and grain farmers get their fertilizer, since livestock farms like Polyface re-use all of theirs.”

            The answer is to stop growing annual crops! Grow perennial food crops in complementary groups (“guilds”) and they will largely self-fertilize.

            That, and return your borrowed nutrients to the earth, rather than to a sewage treatment centre.

            It’s not easy in an urban setting, but fertigation via urine collection is dead simple — humanure is only a bit more challenging, mostly due to the socially-induced “ick” factor.

          • Good point. Where does all of the humanure go? Is it too laced with chemicals to go anywhere?

            • Jan Steinman says:

              “Where does all of the humanure go? Is it too laced with chemicals to go anywhere?”

              I am not a proponent of sewage sludge, which is not approved for organic crops. People dump all sorts of crap (worse than actual crap!) into their toilets: used motor oil, old paint, expired medications, old household chemicals and cleaners, etc.

              When I write about “humanure,” I mean personal waste from those tending the food crops. In my opinion, that is the only way to ensure it is fit for use.

              As I mentioned, urine collection is dead simple: just pee in your handiest, most convenient receptacle, then mix 1:10 with water. This is easier for men, but we all can do it, sister! The only thing stopping you is the “yuk factor” — just get over it!

              I use two litre plastic honey containers. They have a tight-fitting lid and a handle! My understanding from the fairer sex is they make a good target. Dead simple! One could also use a 20 litre bucket with a regular toilet seat atop.

              At farm scale, we dump these into 200 litre (55 gallon) plastic drums, then pump 100 litres into a 1,000 litre “tote,” add an equal amount of wood ash slurry (see below), top off the tote with clear water, then pump through a disk filter into our greenhouse dripline irrigation. You should see plants shoot up overnight after two 30-minute applications of that wonderful stuff!

              If you heat with wood, the next step up would be to collect the soluble nutrients from your wood ash. Use a 20 litre bucket half-full of wood ash, fill with water, stir thoroughly, let it sit for a few days, carefully decant the solution off the top, mix 1:1:8 with urine and water to come up with a balanced 1:1:1 fertilizer. Simply apply with a sprayer. And it’s free!

              No, let’s not spread stuff from our industrial sewer system onto our industrial farm lands. Let’s take charge of our own food supply, and do personal waste recycling right.

            • interguru says:

              “People dump all sorts of crap (worse than actual crap!) into their toilets: used motor oil, old paint, expired medications, old household chemicals and cleaners, etc”

              Even without the dumping of nasty chemicals human waste ( including urine ) is contaminated with endocrine disrupter chemicals both from contamination from plastics, and from pills we deliberately take such as birth control pills. In the Shenandoah river (VA), which does not drain large urban areas, the fish are transexual because of these chemicals.

            • interguru says:

              Before harvesting bird guano and then industrial fertilizer, in spite of all the recycling that was done using animal and human manure, there was a real shortage of fertilizer. Chinese farmers put highly decorated outhouses along the road to entice travelers to leave something behind. Land was left fallow every few years, reducing production.

              Do we know something, that was not known to traditional farmers, on how to grow with limited fertilizer?

            • Jan Steinman says:

              “Do we know something, that was not known to traditional farmers, on how to grow with limited fertilizer?”

              Stop depending on annual plants!

              Annual plants evolved to thrive in disturbed soils, like landslides or recent fires. We’ve essentially turned most of our food-producing land into landslides and fire sites! And we wonder why we have to keep applying fertilizer.

              Perennial plants in guilds, or mutually-supporting plant communities, don’t really need any fertilizer — beyond putting back what we take away, of course.

            • That same question has crossed my mind. I think now we have a huge number of animals, all producing manure. If all that manure continued, there would be no shortage. But as a practical matter, diets that are mostly plant-based can be planted in a smaller area than grains for a huge number of animals–so we may not be able to keep up all of the animals. If this is the case, I wonder if you may be correct.

  8. Christian says:

    Do I get it wrong or Kiev did stopped attacking separtists as a consequence of Putin’s gas cutting?

  9. Christian says:

    A little question. “Trade-off” is supposed to mean “a situation that involves losing one quality or aspect of something in return for gaining another quality or aspect”, and within economics it is equalled to “oportunity cost”. How does it fit with Korowicz’s use of the expression?

  10. Christian says:

    “Global refugee figure passes 50m for first time since second world war UNHCR report says more than half of those displaced are children, with aid organisations reaching breaking point”

    “If displaced people had their own country it would be the 24th most populous in the world”

    http://www.theguardian.com/world/2014/jun/20/global-refugee-figure-passes-50-million-unhcr-report

  11. Pingback: Crisis Energética – Vientos de Cambio | La Búsqueda

  12. Paul says:

    25 Shocking Facts About The Earth’s Dwindling Water Resources

    http://www.zerohedge.com/news/2014-06-19/25-shocking-facts-about-earths-dwindling-water-resources

    Black swan potential? Water might be a quicker tipping point than oil…

  13. Paul says:

    Following the initial de-dollarization meeting, there has been a slew of anti-dollar moves around the world (including Gazprom’s shift of 90% of its clients to non-dollar payments). However, on the heels of the “anti-dollar alliance” discussions yesterday, DW reports that China would start direct trade between the renminbi and the British pound on Thursday. China’s Foreign Exchange Trade System (CFETS) confirmed Sterling and yuan would be directly swapped without using the US dollar as an intermediary.

    http://www.dw.de/china-to-start-direct-trade-between-yuan-and-british-pound/a-17717188

    • VPK says:

      Paul, thank you again
      Think about it. If they cripple the United States that would leave free vast amounts of resources such as oil and minerals and metals.
      What, the US has 5% of the world’s population and consumes 20-25% of its resources.
      Well, do the math, The Chinese realize there is only one planet and the only way to expand “market share” is to encroach on the the other guys territory.
      Looking at Iraq today, it seems the United States strategy has failed.
      The Chinese have Africa all locked up and have gained a foothold in South America.
      It is amazing what the United States has allowed to happen by giving away its lunch for short term profit.

      • Paul says:

        Around 2008 — I think it was Kyle Bass – but I could be wrong… said:

        There is this big fat guy who doesn’t do much — and thousands of starving people are working their butts off to feed the big fat pig — at some point these starving thousands are going to come to their senses and say ‘hey why are we feeding this big fat pig — while we starve’….

        The time has come… the world no longer fears the big fat pig… because the big fat pig — after years of gluttony —- is riddled with heart disease, diabetes, cancer — and is riding about on a motorized scooter…. the big fat pig has become a bit of a joke …. his days are numbered.

        • VPK says:

          The only thing the big fat pig has are big guns pointing at everyone hoping that will keep them in line.

    • My impression is that there is a steady erosion in the US dollar as the world’s reserve currency. A person wonders whether it is possible to do without any particular currency as reserve currency, with today’s ability to interchange currencies.

  14. Simply Simon says:

    My great grandmother lived in a village (Waverley) in South Taranaki in New Zealand’s North Island. She remembered how electricity came to the town around 100 – 120 years ago – they had their own hydroelectricity plant for something less than 2,000 people. Everyone loved the LUXURY of having electricity on for three hours a day – 5pm to 8pm.
    I hope we can hold on to that kind of luxury in the upcoming avalanche of the over-extended towers and spires, both metaphorical and physical, of civilisation crashing down.
    By 2100 it seems to me that we have a variety of futures in front of us, modified in the light of modern approaches to low tech (e.g. passive solar). I cannot see any high-tech future as being anything other than a pipe dream (no, not a nanotube!) :
    1. Best case scenario: 1900 as per my great grandmother’s time. Low level international trade.
    2. Mid-19th century “European”; some steam boats and trains, telegraph. Limited international trade. “Industrial” machinery = wind-powered wooden windmills, watermills.
    3. Medieval “European”. Local wind and water power, very limited international trade. Limited travel within landmasses; horse-drawn carriages etc. Agriculture dependent upon horse and oxen power.
    4. Bronze Age
    5. Stone Age
    It is HARD work to maintain anything beyond Stone Age – and that is no Sunday school picnic either.
    I appreciate the posts here where people suggest ways of survival in their scenarios; I am attempting to get specific about what we can realistically aim for long term in our local scenario – which I believe to be somewhere between 2 and 3 above.

    • Don Stewart says:

      Dear Simple Simon
      I think you will be interested in looking at these two talks by Dan Gilbert, the psychologist:

      http://www.ted.com/talks/dan_gilbert_asks_why_are_we_happy

      http://www.ted.com/talks/dan_gilbert_you_are_always_changing?utm_source=newsletter_weekly_2014-06-07&utm_campaign=newsletter_weekly&utm_medium=email&utm_content=talk_of_the_week_image
      In the first talk, Gilbert demonstrates that if people accept that they have no choice, they can be happy in almost any situation. In the second talk, he demonstrates that people consistently underestimate their tendency to change…they do not correctly anticipate the people that they will become.

      Your comments about electricity 3 hours per day are completely understandable to me. Most of the people who write here consider ‘intermittent power’ to be a completely awful situation. I’ve lived with intermittent electricity and been quite happy…perhaps because, as Gilbert points out, I had no choice in the matter.

      Looking at Gilbert’s examples, there is some comfort in knowing that paraplegics are happy people…and I imagine that very few of them spent much time agonizing about what they would do if they ever became paraplegic. On the other hand, I think that giving some thought about how one would survive in the absence of an industrial economy can certainly smooth the transition, and perhaps make it more likely that one will survive to find happiness another day.

      Don Stewart

      • Jan Steinman says:

        I’m a big fan of Gilbert. Everyone tends to assume that “happiness” is something totally emotional, totally non-scientific. Then this guy comes along and shows (with double-blind precision) how we can make ourselves happy.

        I work to limit my choices at every opportunity. Making less money is a huge one! Yea, I miss doing certain things that require money, but if they’re important enough, I go out and make some more money, or save up. Less money, less cheap plastic crap from China, more human interaction, more happiness! Try it!

  15. Paul says:

    The doctrine of ‘might is right’ has been espoused in various forms on this site — it has been implied that only the naive would suggest that we should strive for a better and fail world — and that only fools would stand in opposition to this doctrine.

    However this document reminds us that the big stick approach works so long as one carries the big stick…. when it’s lost there can be grave repercussions under international law for those who violate the rules

    America may have a big stick now — as the Germans did in WW2 — but if it gets knocked from their hand the bully can quickly become the one with the rope around HIS neck.

    The whole point of these rules is to try to convince people to behave — those who would beat their chests get a reminder of that — what comes around can go around…

    How wonderful it be to see Dick Cheney, Don Rumsfeld, and George Bush — as well as others from the Deep State — swinging from nooses…

    Perhaps we could schedule this for the half time show of the next Super Bowl. Sign me up as a sponsor!

    Iraq: The US Sponsored Sectarian “Civil War” is a “War of Aggression”, The “Supreme International Crime”

    http://www.globalresearch.ca/iraq-the-us-sponsored-sectarian-civil-war-is-a-war-of-aggression-the-supreme-international-crime/5387472

  16. Christian says:

    Hey somebody, what could be a fine overview on actual financial madness to give to a lay person, condensing somewhat all actual crazyness?

    • Paul says:

      How about this:

      High energy prices = less consumption because everything including the fuel in your tank costs more = layoffs = less tax revenue = government cutbacks, layoffs and debt increases = less consumption = more layoffs = less taxes ===== economic death spiral.

      Compounding the problem is the fact that a weak labour market means real wages drop – as they are across the world right now – that means everything is more expensive and your buying power is dropping at the same time.

      Governments recognize this and are trying to offset with debt, easy lending (they are purposely inflating bubbles), lower interest rates and money printing.

      This all started in 2002 when oil went from $12 a barrel to nearly $40 (and of course has never looked back)

      Of course they will fail – because the disease is expensive oil. And there is no substitute

      The economic death spiral will accelerate when the QE and ZIRP no longer have any effect and the confidence game collapses.

      This moment will be known as the end of the industrial revolution by the few who survive.

      This is not a Hollywood movie where the hero saves the day. This is the reality we are facing.

      HIGH PRICED OIL DESTROYS GROWTH
      According to the OECD Economics Department and the International Monetary Fund Research Department, a sustained $10 per barrel increase in oil prices from $25 to $35 would result in the OECD as a whole losing 0.4% of GDP in the first and second years of higher prices. http://www.iea.org/textbase/npsum/high_oil04sum.pdf

      Then because most people think that technology will be the hero… you might toss this to them as well:

      Solar – After Trillions of Subsidies and R&D and this is what we get?
      http://reneweconomy.com.au/wp-content/uploads/2014/04/bernstein-energy-supply.jpg

      The German Solar Disaster: 21 Billion Euros Burned
      http://www.thegwpf.org/german-solar-disaster-21-billion-euros-burned/

      Spain’s disastrous attempt to replace fossil fuels with Solar Photovoltaics
      http://energyskeptic.com/2013/tilting-at-windmills-spains-solar-pv/

      Ten Reasons Intermittent Renewables (Wind and Solar PV) are a Problem
      http://ourfiniteworld.com/2014/01/21/ten-reasons-intermittent-renewables-wind-and-solar-pv-are-a-problem/

      If they don’t understand what we are facing after reading all of the above — it is because they don’t want to.

    • ordinaryjoe says:

      I like the Jodie Foss “currency issues” interview on doomsteaddiner podcasts but theres no accounting for taste. 🙂

      • Christian says:

        Thanks guys. I’ve finally sent Korowicz’s Trade-Off and told the interessed person to get an economist or ask me if he doesn’t get something. Currency Issues is also good, will use it if needed

  17. Christian says:

    “World oil production increased by just 560,000 b/d in 2013, less than half the growth of global consumption”

    From the last BP statistical review

    http://www.bp.com/en/global/corporate/about-bp/energy-economics/statistical-review-of-world-energy/review-by-energy-type/oil/oil-production.html

  18. edpell says:

    First crack in the stonewall from the New York State electric industry.

    “Natural gas dependency is making wholesale electricity prices more reflective of rising, volatile natural gas prices.”

    Don’t blame us blame the natural gas industry. Rising prices? Aren’t we going to supply EU and Ukraine with abundant natural gas?

    from http://www.utilitydive.com/news/ny-iso-highlights-need-for-collaboration-as-it-prepares-for-challenges-ahea/276648/?utm_medium=email&utm_campaign=Utility+Dive+Newsletter+created+2014-06-19+103827262978&utm_content=Utility+Dive+Newsletter+created+2014-06-19+103827262978+CID_a3a4b61eb2e734f229d92cdb947d5fa2&utm_source=campaignmonitor&utm_term=NY-ISO%20highlights%20need%20for%20collaboration%20as%20it%20prepares%20for%20challenges%20ahead

    • There is an interesting report from the New York ISO (Grid folks) linked in the post you mentioned.

      One of the points that the report mentions is the increasing divergence between “average load” and “peak load”. Average load is very much affected by more efficient light bulbs and the substitution of smaller devices for desktop computers, (as well as the use of LED screens). Peak load is dominated by electric heating and air conditioning. My interpretation is that electric heat and cooling aren’t really being affected by efficiency in the same way. In fact, if natural gas prices have been down recently, people may have been more willing to turn on their air conditioners during heat waves (they may even be influenced by the fact that they have saved money on their “off peak” monthly bills thanks to light bulbs and tablet computers). So peak demand continues to grow.

      Growing peak demand requires more building of various types–particularly (1) more fossil fuel power plants that will be used very little and (2) improvements to the electrical grid, both of which cost quite a bit of money. With average electrical consumption growing very little, this means that average electrical rates need to rise, to accommodate all this building, and to give “peaking plants” an adequate return to justify their existence.

      Thus, what seems to happen with increased energy efficiency is that grid costs don’t drop anywhere near proportionately. So prices per kilowatt hour need to rise, (independently of rising fuel costs).

      Offloading some of the electrical demand because of solar panels has pretty much the same effect. It tends to raise average costs on the remaining electricity.

      All of this is a little frustrating.

      • edpell says:

        All, peaking is a big issue under free market deregulation. No for profit capitalist wants to build a plant that receive income only five days per year at the air conditioning peak.

        We just had two new gas fired plants (1000MW and 660MW) approved by the public service commission (PSC). They both presented themselves as the most efficient, cheapest, guaranteed to under cut the competition. The week after they were approved they both said “We have no customers. We can not get a bank loan to build without customer. So the governor must order the New York Power Authority (NYPA) to buy all our electricity so we can build.” The governor has already done this with a 660MW line for NJ to Manhattan. NYPA is loosing 50 million dollars per year on that one and in Jamestown NY but that is more about political patronage (i.e. it is the only business in Jamestown and everyone there lives off the municipal power company). The governor has figured out no one pays attention to the NYPA and he is using it as his billion dollar piggy bank to makes “friends”.

        NY PSC has just started “Reconfiguring the Energy Vision”. They had a conference. One speaker proposed that “basic” electric would be at the base rate but if you want “premium” service that includes reliability that would be at a premium price. This is just like two tier internet. One level for the proles and one level for people with money. There seems to be a growing need to shed unprofitable people from the system.

        • ordinaryjoe says:

          Your post came while I was writing mine. Bravo! Bring on the tiers.
          “One level for the proles and one level for people with money.”
          I see. Or maybe I dont. Do you percieve tiers as unfair? Is it more fair to operate without tiers so that the people without money can not afford any electricity because tier 3 cheap juice is not available? What do you propose?

        • ordinaryjoe says:

          “One speaker proposed that “basic” electric would be at the base rate but if you want “premium” service that includes reliability that would be at a premium price.”
          Sign me up for basic! Every time the power goes off I learn something. One day its going to go off and not come back on. The basic users will do whatever they did many times before. The premium users will get finger cramps working the light switch.

        • ordinaryjoe says:

          One ton of gravel is $35. In the summer at night you use the tier 3 juice to move the heat stored in the rock outside via convection. Moving air does not require much of the tier 1 energy- say a huge 50 watt fan or squirrel cage. If the air outside is not cool enough for intake you use heat transfer technology ala the much larger energy signature of “air conditioning” to cool the rock- once again moving the heat outside with tier 3 juice. During the day you move the heat acumalating in the building into the rock via low energy signature convection.
          In the winter you heat the rock at night with tier 3 juice and move it out into the building during the day via 50 watt air convection.
          Worst case scenario you need a small water pump to give a edge to the heat transfer ala swamp cooler or reverse swamp cooler.
          Presupposing peak operation tier 3 juice is in fact the magical “free energy ” due to poor efficiency of fossil fuel powerplant ramps. Why waste it?
          Pricing mechanism is the only effective conservation method at this time.

          • The pricing mechanism may have to be different from different hourly rates at different times–it is not possible to set the high price rates high enough. Instead, electricity will need to become interruptible, unless you pay a very high price. When electricity is interrupted, you won’t get heat when it is cold, and you won’t get air conditioning when it is hot. Both of these could be detrimental. Pipes may freeze in the cold. Older people may die in the heat. Our homes and offices are not built for lack of air conditioning.

            • timl2k11 says:

              Here is my local utilities solution: http://www.tampaelectric.com/residential/saveenergy/energyplanner/ basically they can gouge you for electricity at any time. It may not work well for shedding load, but could maybe over the long run shape consumer behavior in a way that’s beneficial for the utility and raises enough capital for peak demand. For now it is optional.

            • Don Stewart says:

              Dear Gail and timl2k11
              Back in 1992 I moved into a house which was provided electricity by a rural cooperative. Most of the co-op’s electricity was generated by hydro, which was strictly limited. If the co-op used more electricity than the hydro produced, they had to buy it on the open market, paying perhaps 3 times as much money. So a condition of service, for all the residential customers, was the requirement that the co-op be able to cycle the major appliances in your house. On very hot days or very cold days, the electricity to the appliances would be cut, but you would still have lights. After 10 or 15 minutes, the power to the appliances would come back on. Your house might warm up 5 degrees or cool down 5 degrees, but it really wasn’t a big deal.

              About that time, I did a brief consulting job with Georgia Power. They were singing the blues about their peak load problems. I described the system that my co-op was using. They stonily denied that such a thing could ever work.

              But every year at our annual meeting the co-op reviewed how much money we were saving by not having to buy open market electricity. I don’t think anyone in the co-op ever complained.

              Don Stewart

            • It depends on what you get used to. Part of the problem today is people assume that things will get better and better. Going “backward” is hard to imagine. Thus new train service has to be bullet trains. New electric has to be better too.

              Now we have a bigger diversity of appliances, and refrigerators have been changed to use less. That may make the situation harder to fix now–I don’t know. Heating and air condition will still be the biggest ones.

            • That may be a reasonably good way of doing it. The high periods are determined by time of year. Of course, Florida is different from much of the United States, in not having very cold weather. So it doesn’t have as big peaks as some places, I expect.

              I notice the critical periods are not defined in advance. They are most likely in the “high” periods.

        • Businesses based on “time of day pricing” can’t work. Somehow, there needs to be a regulated system that is not just patronage. The old utility model is as close as we will get, I am afraid.

      • ordinaryjoe says:

        A logical step would be to have three rates ultra peak, peak and off peak.. The meters nowadays can tell you when your clock radio came on. No not all of the peak load can be shifted to off peak but that which can would be. Its a change of attitude. Is it a absaloute must that there be unlimited electrical energy to consume 24-7? Let the consumer decide. Those willing to conserve should not have to pay for those unwilling.

        • The issue isn’t so much time of day, as time of year. How many folks are willing to have their pipes freeze on the coldest day in winter? How many are willing to go without air conditioning on the warmest day of summer?

          Part of the issue is the fact that the same gas pipelines are feeding electricity companies as are feeding homes and offices that are heated with natural gas. There tends not to be enough natural gas to go around when the weather gets cold (inadequate pipeline capacity). So businesses end up closing down, so pipes don’t freeze in homes and so gas furnaces don’t have to be relit.

          A person wonders what happens when cars use natural gas as well. Does everything come to a halt in December to February?

          • ordinaryjoe says:

            “The issue isn’t so much time of day, as time of year.” My bad. It looks like the peaks are a couple hot weeks in the summer and a couple cold weeks in the winter so my daily rock storage idea wouldnt work.

            “How many folks are willing to have their pipes freeze on the coldest day in winter? How many are willing to go without air conditioning on the warmest day of summer?”
            Gail with respect your question is extremist. With tools and methods conservation becomes a lot less bleak. A more appropriate question is what would it take to get people to conserve. The answer is giving them a choice conserve or bear the cost of the peak infrastructure. From my viewpoint it is imperitive to develop one superinsulated room in the house. That room takes very little energy to keep at 65F in the winter. The rest of the house can drop -no not below freezing but the energy requirement to keep a house at 40 is a lot less than to keep it at 65 or 75. I have heated only a small room to comfort levels in the winter and enjoy not wasting a bunch of energy. A lot of people though certainly not all do this in the rural areas. Even my well off neighbors spent a summer rechinking their huge log home to get it better insulated. Why? Even with their level of income the pain of wasted energy /dollars motivated them. The same superinsulated room can be kept cool in the summer likely with the reduced energy needs of a swamp cooler although a cooling backup in case of power failure is more problematic than heating backup. NY is proceeding along the premise that they must supply all power needed during the peaks roughly double. I am still clinging probably bullheadly to the premise that if peak power is the problem charging more for peak power is the solution. Charge more for the peak weeks- a lot more- provide the tools and information the people need to find solutions and conserve- peak usage will drop and the infra structure needs to provide that peak will dropalso . I repeat; with tools and methods conservation becomes a lot less bleak. I dont think im the only joe on the planet who wants to take some control of my destiny. The people must take ownership of their energy usage on a individual level and I believe they will do so if they are provided with the tools and the financial incentive is there. Will it solve our problems – no- but I find it preferable to demanding con ed keep my butt warm in the winter and complaining about the price. We will come to terms with the finite nature of energy whether those terms are more or less favorable is our choice. A culture of conservation is not out of our reach give the people the tools and the incentive. Should we not even try? NY might not be the best place to test this premise 🙂 maybe Spokane…

            • Paul says:

              Cutting back will not work — in fact it will send the snowball down the hill even faster.

              Consider this:

              Let’s say everyone decided to buy less stuff and drive less — what would happen?

              The job market would get smashed because less people would be required to manufacture things — that would result in layoffs — which would mean less taxes are collected meaning governments would have problems providing services — also all the laid off people would require more assistance (food stamps, welfare, unemployment benefits) —- compounding the burden on govts.

              All these laid off people would of course not buy much stuff — they certainly would not buy homes in fact anyone who owned a home would lose it as they could not make mortgage payments

              This would lead to a crash in housing prices as millions of foreclosed homes hit the market….

              New housing numbers would crash resulting in retail laying off people — building trades laying off people — mining would get crushed as there would be less demand for copper wiring steel etc…

              Shipping would get smashed as well…

              Oil prices would collapse as demand dropped — which would result in oil companies going bankrupt because they could not make money with oil under 80 bucks a barrel — which would lead very quickly to an oil crisis as oil would remain in the ground because it would not be profitable to extract it…

              Effectively your strategy would result in the mother of all deflationary collapses.

              Be careful what you wish for.

            • Jan Steinman says:

              “Let’s say everyone decided to buy less stuff and drive less — what would happen?”

              Let’s find out! Starve the beast!

            • Paul says:

              Jan – as much as I dislike this modern consumerist society …. I am pretty certain what the result will be if we ‘starve the beast’

              I could do it but I am not overly keen to live out my last years without a dentist… without antibiotics to cure an infected scratch… to have to scratch the ground for my food … to have witness epic starvation and suffering… and to face the possibility of an extinction event caused by our inability to service the nuclear beast we have birthed.

              This isn’t going to be like an episode of Little House on the Prairie… this is going to be a living hell…. of that I am very much certain

            • Jobs are the beast that get starved, unfortunately.

            • Daddio7 says:

              I see it this way. All those Chinese factory workers will go back to the subsistence farms they grew up on. Unemployed American workers would go back to work in the factories they were laid off from. The US has a half trillion dollar trade imbalance. We could cut our military budget in half and let the rest of the soon not to be free world take care of itself. Cut out farm subsidies and let people see how much food does cost to produce. When Middle East oil producers can no longer payoff the masses with American money things could get interesting.

            • I am afraid you are correct. It is lack of “demand” that will bring down the world economy. In practice, I expect it will be people not being able to afford things. But, in theory, voluntary cutbacks could produce the same result.

            • ordinaryjoe says:

              “Effectively your strategy would result in the mother of all deflationary collapses.”
              Later down you refer to the USA as a big fat pig but you argue against a reduction in consumption. Would you not wish for a skinny hard working pig?

              This question can not be just left. If you value the imaginary BAU world consume and max out your debt. If you value the natural world and think the human species should live in balance with it reduce consumption. We are killing other species because of our consumption. The extinction is real. “deflation: is a imagined term a abstract.

              Paul you endlessly condemn the USA but I notice you enjoy trips around the world and $30. beers. I enjoy your posts but from my standpoint the only thing that can be done to slim up the pig is reduce consumption. Deflation is inevitable at this point our growth spree is shown to be unatural and unsustainable. Deflation of a species that has consumed to the point that it threatens the natural world is desirable. What can be achieved is the start – the first few steps of the fat pig on the jogging path, to find balance with the natural world.

            • Jan Steinman says:

              “Paul you endlessly condemn the USA but I notice you enjoy trips around the world and $30 beers.”

              Thanks. I’m not the only one who has cognitive dissonance here.

            • ordinaryjoe says:

              “I could do it but I am not overly keen to live out my last years without a dentist… without antibiotics to cure an infected scratch… to have to scratch the ground for my food … to have witness epic starvation and suffering… and to face the possibility of an extinction event caused by our inability to service the nuclear beast we have birthed.”

              Paul have you ever considered that this fierce beast you have constructed in your mind enable your continued ethical consumption? Not that I dont consume, I do. But mostly on things that are going to enable a even more radical reduction in consumption. Thats how I look at myself in the mirror without sticking a gun up my nose. Less this week. Less this month. Less this year.

            • Jan Steinman says:

              “Less this week. Less this month. Less this year.”

              YAY!

              That’s the way I try to live, as well. “Live simply, that others might simply live!”

              Sometimes it goes up instead of down for a brief spell, but only if the momentary uptick buys me a simpler life overall.

              My cash income last year was under $2,000, but I work as a full-time volunteer for an organization that feeds and houses me.

            • Paul says:

              That’s a noble effort Jan – I think the next big leap would be to forgo all medical treatment — I think that would make a hell of a difference for most people — even young people — an infected scratch can mean the end…

            • Jan Steinman says:

              “I think the next big leap would be to forgo all medical treatment”

              I think you forgot the little smiley face, or you forgot to put it in [cynic] mode.

              And yet, there is a whole world of health care that is under utilized and disparaged by the industrial medical system.

              It’s nice to have good trauma care. But I’m willing to bet that most of our industrial medical care comes as a result of our industrial food system. A good deal of heart disease, cancer, diabetes and other auto-immune disorders, and certainly obesity come about as a direct result of the industrial food system.

              Plus, alternatives to allopathic medicine are generally as good as, or even better than conventional medicine when it comes to many common maladies.

              Natural medical care is a nearly-forgotten art that must be revived.

            • ordinaryjoe says:

              “I think the next big leap would be to forgo all medical treatment’
              Your primary model for consumption is wounded so you lash out with sarcasm but actually I kind of agree with you. Im old had a good life used more than my share of resources. Im uninsured I take responsibility for my own health I eat very healthy vegetarian and exercise. I dont forgo all medical, if i need stitches i get them pay cash, if i need antibiotics I get them pay cash. If its a big transplant or ICU well I just dont think I want to go that way. My choice. hopefully I will go with grace. A snake, cougar or lightning wouldnt be that bad. We all got it coming.

              Enjoy your time in the ICU paid for with fiat Paul. I hear they will be able to put transplant brains into clone bodies soon better allocate a couple maple leafs for that.

              I disagree with you Paul about young people but you are writing from pain not your heart or your head

              Infering that the reduction of consumption- caring about the planet – is somehow demonstrating negligence for ones health is a fairly typical response when the consumption model is wounded.
              Your intellect would reject such a ill conceived argument outright Paul but its amazing how the intellect gets tossed when the consumption model is wounded. I include myself my friends, my loved ones in that assessment not just you Paul.

              Paul you speak often about civil liberties. You know how I know Im a free man Paul? I choose not to participate in the cult of consumption. I can not be made to consume more than I choose to. My relationship to the planet can not be taken from me. I will not participate in the extinction of other species by consuming more than the basic needs of a human- perhaps even that is too much but thats the compromise Ive chosen.

              We have the choice whether to participate in the cult of consumption. The crisis of the species is upon us and we have free choice.

              Paul- Are your long rants and accusations bring you peace of mind? You know who the monster is Paul ,every human on the planet consuming to the extent that their fiat allows. Its not “them” its us. Just consider it roll it over in your heart a few times. Knowing what you know if its not clear to you that the only spiritual moral and ethical path is reduction of consumption and a simpler lifestyle I really dont know what to say to you brother.

            • I think the way we are made, we have a drive to consume more and more. Even when we save, it is with the idea of consuming later.

              A few people can find their way out of this pattern, sometimes through religious beliefs. But it still remains pretty unusual.

            • Pipes are wherever they are located. We lived in one house where they were in the outside walls-froze when it got cold outside, unless we kept the water dripping.

              Pipes are not in a nice location, in a super-insulated room. The building style in the US in recent years is very open, making the problem worse. Another issue is that a lot of US homes that are heated with electricity are apartments. The tenant pays the rent; the landlord makes any changes, like more insulation. So the tenant gets the benefit of insulation, but the landlord pays the costs.

      • Christian says:

        Here we have premium with no cuts and regular with cuts just for industrial NG: those companies wishing to never stop production buy premium and the others don’t.

        Peak electricity demand is a growing problem almost everywhere, always driven by AC and/or heating. To me, the easiest solution is to set a special tax for the selling of these devices. It just works for new devices, but is also a clear message to the people.

  19. Don Stewart says:

    Dear Gail and All
    I do not remember anyone posting about this subject….if already discussed, then I apologize for the duplication. Mark Cochrane writes a column for Chris Martenson. I do not believe it is behind a paywall:

    http://www.peakprosperity.com/forum/definitive-global-climate-change-aka-global-warming-thread-general-discussion-and-questions/71

    I haven’t read everything by a long shot, but what I did read I found interesting. For example, warmer nighttime temperatures will increase the dew exposure of plants and increase plant diseases. Also his comments about how the pine bark beetle has crossed the Canadian Rockies and is now set to perhaps cross the boreal forest in northern Canada. Interesting stuff.

    Don Stewart

    • ordinaryjoe says:

      There is a lot of contention about climate change. The topic has been politicized. All I know is this I have been going to the great forests for a long time. They are not healthy. The beetles have decimated the forests. Where its lodgepole its 80% ponderosa fairs better only 30% dead trees. With that much fuel fire is inevitable. After the fire the forest is gone. Natural cycles? perhaps. Perhaps my life is too short to see the rejuvenation. I have gone to a huge burn eight years later that was a beautiful forest. The new trees were about 10″ tall and sparse. The species of plants had totally changed. Miles of the burnt poles of the trees eroded soil and wild flowers/weeds. Not everything burned but where it burned no trees survived. People who dont go to the woods dont realize how bad it is. You can see it on google maps satelite- what was green is brown with streaks of green. The city parks still look great. Nowadays its hard to know what to believe so I base my opinion on what I observe. As such I am subject to the filters of my mind, memory and the limits of the time and space of my observation. I believe something is wrong, that this is not a natural cycle that what I am witnessing is symptomatic of our species being out of balance.

  20. Ann says:

    The First Nations of British Columbia are united in their opposition to the Northern Gateway pipeline that was approved yesterday by the federal government of Canada, with 209 conditions. The First Nations alliance has set up a website to collect signatures in support of their opposition. Please go and add your voice: http://www.holdthewall.ca

  21. Stilgar Wilcox says:

    Jan & Gail, the message board seems to reach a point each time there’s an article in which after a few hundred posts it becomes saturated, and any new message is not at the end of the thread but instead posts further up. Test it yourself on this thread. Hopefully that can be figured out at some point, so any new post simply adds on to the bottom (unless of course it is a reply to an earlier post).

    • Stilgar Wilcox says:

      E.g., I just added a new post above and as you can see it is further up the thread.

      • Christian says:

        I used to believe Gail did it on purpose, as when Paul’s comment “Till the bitter end” remained at the bottom, so it was more noticeable

      • Siobhan says:

        Hi Stilgar,
        When a comment is deleted any replies to the deleted comment are stranded and lose their indentation. That’s why your comment doesn’t appear at the end of the stream. The final comments are all replies to Jan who replied to the now deleted post. Reply to Jan Steinman @ June 16, 2014 at 3:44 pm to put your comment at the end of the page.
        I hope this makes sense 🙂

        • ordinaryjoe says:

          Yes – and if i could make a suggestion, When a inapropriate or OT comment is deleted just delete the replies too. The replies take on a different meaning without the context of the other post, like Jans below that spawned a new little unintended spin off discussion. This would also eliminate the “tail” of industructable replies from forming at the end out of sequence. IMHO

          • From the chronological screen I work from, that is not easy to do. Sometimes it is pretty obvious, when it is a new poster, with only one comment that is offensive. But if the offensive comment is from someone with several comments, only one of which is deleted, it becomes trickier.

            I can’t delete comments using the standard view, so I need to go back and forth from the chronological view to the standard view.

    • Jan Steinman says:

      “Jan & Gail, the message board seems to reach a point each time there’s an article in which after a few hundred posts it becomes saturated, and any new message is not at the end of the thread but instead posts further up.”

      That’s something I’d like to look into, but as a farmer, I can’t before winter.

    • I don’t think WordPress is designed to handle this many comments. There is also the issue of “how deep” comments can be stacked. I currently have the setting on “six”. The maximum is 10. I had the setting on 10 for a while (a long time ago), and readers complained that the comments were becoming too narrow to read. So I set the setting back to six. I expect that raising the setting would cause fewer misplaced comments.

      I have been reading comments on a separate screen I have that is in chronological order. This makes it hard to figure out what comment is being responded to. I sometimes go back to the other sorting, to figure that out what the reply is to. To make it easier both for me, and in the case of misplaced comments, it may be helpful to add a bit of context to what you are saying–say, quote a few words of the comment that is being replied to.

  22. I am pleased to announce that Jan Steinman will be helping moderate comments at Our Finite World. Because of this, it is possible that you will be hearing from him with respect to your comments.

    Jan’s help will be much appreciated!

    • Jan Steinman says:

      Thanks, Gail!

      As Gail and I discussed, we’re not intending any heavy-handed moderation. It’s more for quickly killing abusive and wildly off-topic postings.

      So play nice in the sandbox, and no one gets hurt. 🙂

    • ordinaryjoe says:

      I have often wondered how you found the time Gail. Your moderation ala pulling weeds from the garden is much appreciated. Thanks Gail And Thanks Jan!

    • Calista says:

      Thank you for volunteering. I’ve moderated elsewhere and it is often a thankless job. So I’m thanking you ahead of time before I have reason to complain. 😉

  23. Don Stewart says:

    Dear Gail and All
    Months ago I proposed that one could only interpret the actions of Obama relative to Ukraine as that of someone who wants Russian oil and gas. Possession could take the form of physically conquering Russia or, alternatively, forcing the Russians to take newly printed dollars for the oil. I opined that Obama would keep poking Putin in the chest until Putin lashed out, and then would execute his war plan.

    Now….the Russians have figured out the game…Don Stewart

    Putin Advisor Proposes “Anti-Dollar Alliance” To Halt US Aggression Abroad

    Putin’s economic aide and the mastermind behind the Eurasian Economic Union, argues that Washington is trying to provoke a Russian military intervention in Ukraine, using the junta in Kiev as bait. If fulfilled, the plan will give Washington a number of important benefits. Firstly, it will allow the US to introduce new sanctions against Russia,writing off Moscow’s portfolio of US Treasury bills. More important is that a new wave of sanctions will create a situation in which Russian companies won’t be able to service their debts to European banks. Glazyev’s set of countermeasures specifically targets the core strength of the US war machine, i.e. the Fed’s printing press. Putin’s advisor proposes the creation of a “broad anti-dollar alliance” of countries willing and able to drop the dollar from their international trade…. An anti-dollar coalition would be the first step for the creation of an anti-war coalition that can help stop the US’ aggression.

    • hebertmw says:

      Don,

      I believe this has been brewing for some time. Putin, being an ex-KGB Colonel and a Russian, is playing the long game or as his think tank advisor states; ‘non-linear warfare’. And the US and the West have never played that game in or out of the Cold War. This type of game is understood in China and the Middle East as well. One proof of this is misguided US State Dept. sanctions or ‘threats’ is the shutting out of Russia from the SWIFT system (Society for Worldwide Interbank Financial Telecommunication). This is used for making bank fund transfers by wire and to threaten to use it short of war really pushes Russia and others to make one of their own. How boneheaded do you have to get to tip your hand on this very vital financial tool when there was no good reason to?

    • Paul says:

      Obama (America) is like an old pit bull — whose teeth have rotted and fallen out.

      Russia is unloading US debt quickly — and has been buying gold. Essentially they see the writing on the wall and have written it off already — they are trying to cash out as much as possible before they are left with a pile of toilet paper

      Likewise China is not buying — the fact that they are trading energy with Russia in non USD means they understand their holdings of USD are worthless.

      Of course they were always mostly worthless — as in they could never have cashed them in without crashing the USD.

      Russia also has a huge trump card — they can cut off energy to Europe — they can also hold the world hostage because if they stopped oil shipments the price of oil goes through the roof and we collapse.

      The US can play brinksmanship all it wants — Russia holds all the cards — if the US wants to shoot itself in the head then I am sure Putin is saying go for it…. knowing they of course won’t

      As for invading Russia — I am sure Putin’s finger is on the launch button 24 hours a day…. and he has surely conveyed that to Obama….. Unlike Saddam who pulled the beast’s tail — Putin has a massive arsenal to back him up — and I have no doubt he will use it if pushed.

      The US is a cornered rat — the Deep State is bewildered – it is attempting to use its bullying tactics because that is all it knows — but China and Russia know that the US is over — and they will not be bullied by a has been.

      They laugh at America the one-toothed hag who is left gnawing on a bone….

    • Christian says:

      Don, I agree with Paul: it’s absolutely impossible to the US taking control of russian HC. Obama is dreaming, or he is just playing pour la galerie (meaning it is just a show for the masses, not a real attempt to do something). I understand also some kind of devaluation of the USD is also popular among western countries, especially France: Lagarde was already talking about enlarging IMF’s SDR basket to include the yuan while she was the head of the french central bank… Curiously, it was de Gaulle who started taking back his bullions from the US until Nixon leaved the gold standard. But now I don’t see Obama is in a position to deter Lagarde as Nixon did with de Gaulle. Must wait and see what happens in the next IMF SDR meeting, scheduled for the beggining of the next year…

    • B9K9 says:

      Since Paul isn’t a US citizen, he may lack perspective on current internal developments occurring stateside.

      Perhaps the easiest way to explain this concept is to use the age-old business dynamic of market share vs market growth. Now, for the deep state, the last 70 years since the end of WWII has been all about market growth ie expanding into different countries, influencing global events, controlling regional economies.

      But what about market share? In this context, market share could be thought of as power sharing; as long as the remnant of a prior age was still extant, the elite couldn’t effectively move to garner more power. But what if one could substitute a population on a wholesale basis for another, less educated, and more compliant group of “citizens”?

      What I’m referring to, of course, is the transformation of the USA into Mexico or any other 1% controlled Latin America country. From the perspective of the deep state, who cares if they have to retreat globally if the net-net is more control, more power and more wealth in the home country?

      • Don Stewart says:

        Dear Everyone Who Has Commented on Ukraine
        Chris Martenson had an interview with Jim Rickards a few weeks ago. Rickards had participated in a ‘war game’ sponsored by the Military. He was on the side of China and Russia. The tactic they chose was an attack on the currency. He did not say during the interview, but my impression is that they did pretty well in the war game.

        So…you are Obama and the European leaders and you see that, six years on, you have not been able to reignite growth, you have greatly increased debt, and your currencies look vulnerable to just the kind of attack that Rickards and his fellow gamesters launched. What do you do?

        Thinking back to WWII, there were several desperate gambits. First, the Germans launched the blitzkrieg which ended the ‘phony war’ on the western front. Second, the Japanese put everything into an attack on Pearl Harbor, in an attempt to break the US oil blockade. Third. Marshall Zhukov threw everything he had left against the German supply lines at Stalingrad. Fourth, the Germans threw everything they had left into the Battle of the Bulge. Fourth, Eisenhower refused to participate in the Battle of Berlin (for fear of excessive casualties) while Hitler and Stalin fought to the death (of Hitler).

        I think Obama is throwing everything he can at Russia in a WWII type gamble to escape the loss of reserve currency status and the inability to print money when the US needs oil. I do not believe that the CIA is dumber than Tom Whipple, and so understands that the ‘hundred years of oil and gas’ is just propaganda for public consumption (as Hitler understood the futility of propaganda during the Battle of Berlin and killed himself). Obama certainly does not believe what he says…but he says it quite soothingly.

        Who will win? I don’t know. I think each side has certain advantages and certain disadvantages. The Japanese fleet might have been discovered sailing across the ocean and been sunk at the beginning of US involvement in WWII. Zhukov’s thrust at the German supply lines might have failed and Russia might have fallen and the Germans might have gotten the oil in the Caucasus. Nothing is certain. The world might go up in a nuclear holocaust, or the Russians might tuck their tail and accept the role of colony. I don’t have a crystal ball.

        I distrust anyone who thinks they absolutely know the answer.

        Don Stewart

        • Christian says:

          “The world might go up in a nuclear holocaust, or the Russians might tuck their tail and accept the role of colony.” Or the standard of living in the USA may fall somewhat, which I believe is the most expectable outcome, even if it is not the most welcome among the readers here.

          I (also) distrust anyone who thinks they absolutely know the answer.

          • Paul says:

            Putin does not strike me as the type who tucks his tail and cowers…

            From what I see — Russia — and China —- have determined the US is finished…. the fact that they have agreed to trade energy in non USD is hard right to the face of a staggering America.

            They surely must feel that they hold the best cards now and they are calling America’s bluff.

            And Obama and his Deep State minders can do nothing – unless of course they want to be petulant and go nuclear. Unlikely they do that — even the Deep State guys know that’s cutting the nose to spite the face…

            Oh well — nothing lasts forever….

        • Thanks for your perspective. History is not my subject. We live in unusual times.

      • xabier says:

        Much the same may be said for Europe: once social conscience has eroded it matters not one whit to the elites if society degenerates, just so long as it functions so as to supply the surplus to fund their privileges and enhance them, (sinecures in Brussels, think-tanks, the financial world, index-linked politicians’ pensions, etc) benefit from dirt-cheap labour (Eastern Europeans, Asiatics and Europeans from the ‘periphery’ these days) and, of course, keep the masses at bay. When Ukraine starved, Stalin & Co. were a long, long way away: it works well.

        The decay of a whole society is of no practical importance, until it gets to the stage of South Africa, where the violence of the indigent can impose existence behind razor-wire and the construction steel anti-rape-cages so as to sleep securely.

        Europe is of course not at that stage yet, but consider recent changes in Spain: peaceful (if forceful) demonstrators against corruption are now not permitted to go with several hundred yards of the private residence of a politician, of whatever rank. Legislation recently enacted has given the private security guards of politicians the same authority as regular police. Protest against blatant corruption and abuse of office is deemed ‘interference with the elected representatives of a Democracy’: equated with terrorism, in other words…. Fines for the smallest infraction of ‘public order’ sufficient to bankrupt any ordinary person have been legislated for.

        • Christian says:

          Xabier, it’s incredible what you are telling about Spain’s new aparatchik protection measures! That’s really disgusting and those politicias are just digging their own grave.

          Here also the governement passed a law allowing to treat protesters (even environmentalists) as terrorists (thanks USA for your ideas, it’s the first law using this word). Anyway, law enforcement is rarely applied accordingly: 4000 protesters were already jailed before, and since the law was passed a lot of them were released! It’s a really crazy country. My party was helpful making the release to happen, hope we’ll not lose the path when things go reallly mad

          • xabier says:

            Christian

            And that’s happening within the European Union, perhaps the most astonishing fact of all.

            But it’s easy: pass the laws, wait for Brussels to catch up – if anyone there really cares….. civil liberties are easily removed, hard to regain.

            The extremely heavy fines are the biggest problem: would you take part knowing you could bankrupt your family, lose your home, etc, and get beaten up into the bargain?

            The use of agents provocateurs to provoke ‘crowd violence’ has also been proven and recorded on film.

            Sunny Spain: ‘It’s Different’, as the tourism slogan used to run…….

          • Jan Steinman says:

            “Here also the governement passed a law allowing to treat protesters (even environmentalists) as terrorists…”

            Here in Canada, Harper has recently introduced legislation that would create a two-tier citizenship system. If you have dual citizenship, Canada can strip your Canadian citizenship for breaking any law in a way that shows “disloyalty” to the government.

            I may get to find out if “disloyalty” includes laying down in front of bulldozers building the Northern Gateway Pipeline. Of course, I suppose in such a case, I could renounce my US Citizenship.

            • xabier says:

              Jan

              Interesting, is Canada now ruled by a mafia that it values ‘loyalty’ to the government, -not observation of the rule of law, – so much? Wasn’t that Hitler’s supreme virtue, too: ‘Himmler, most loyal of the loyal’, etc?

              Mind you, in Spain the most corrupt sleazebags around take great pride in starting legal action against those who call them out on their activities, for ‘impuning my integrity and honour, and dignity as a citizen’. Sensitive and dignified, one feels for them……

            • Paul says:

              The Deep State as well as being amoral is also extremely clever — they learn….

              Gandhi would not have stood a chance against these guys — you want to protest peacefully? You get a face full of pepper spray https://www.youtube.com/watch?v=6AdDLhPwpp4

              You want to organize protests? You get on the watch list as a potential terrorist — I saw Valerie Plame speak a few months ago and she was recounting how exactly this happened to some people handing out flyers supporting animal rights….

              And then we have the thousands of students and professors in US universities who are protesting the vile (and illegal) Israeli treatment of the Palestinians they are fired, expelled, threatened.

              The job market is bad enough — as a student would you risk your future by protesting and getting a black mark next to your name?

              Oh yes…. our masters are very clever indeed…. but not clever enough — because they have no answer to the end of cheap oil.

        • edpell says:

          Islands of safety in a sea of hunger. This has been the human pattern for thousands of years. The walled town/city/castle. What seems strange to me is that modern technology has not changed the balance allowing one or the other group to displace the other.

          • xabier says:

            edpell

            And inside the castle, the Governor is counting up the barrels of salted pork and wine, checking the water cisterns, totting up the arrows and spare bowstrings, ordering the blades to be honed. Just as his fathers did. Knowing they won’t necessarily save him, but that it’s his duty to do so. Knowing that one day he may have to shut the gates on innocent people just trying to escape.

            And wondering who the traitor might be who’ll sell the gates….. Wondering, in fact, if he can indeed trust that spoiled and shifty King.

            No, it never changes. But I rather think that this lends an element of legend and grandeur to what we face – it’s the old story, but not just to be read to children at bedtime – it’s our history as it was the history of our ancestors.

    • I don’t know. The world economy is fragile–no matter who is trying to cut the other one out, the results may turn out very badly. The US is certainly using more than its share of the world’s oil supply, thanks to the dollar being the world’s reserve currency. This seems to be part of the problem.

      • Don Stewart says:

        Dear Gail
        I offer up Charles Hugh Smith’s take on the BushII/Obama foreign policy nightmares:
        http://www.oftwominds.com/blogjune14/destructive-policies6-14.html

        Charles comes up with some rationalizations, which all involve delusions of one form or another. But remember that Charles doesn’t buy the notion that oil is a crucial reason why the Western economies are currently in the ICU ward. I believe that the US and probably several European countries are smart enough to know that you are right about Limits to Growth, and know that they can’t get the economy restarted unless oil prices fall. In short, they are probably about 90 percent as smart as you are.

        If you assume that the governments of the US and Europe know the truth, then it offers a stunningly simple explanation for most all of the foreign misadventures (as well as an explanation for all those countries we ignore). If you assume that the governments are deluded, then you get the muddle that Charles describes.

        In general, governments frequently know the right answers, but can’t figure out a way to win elections by telling the truth. So they come up with convoluted propaganda and the strict censorship of the media that Charles describes so well.

        I think we should give the simplest explantion some consideration. Not that anyone will ever say in public that Limits to Growth with a pivotal role for oil has anything to do with ‘building democracy in Ukraine and Syria’. Nor that Iran, China, and Russia are on our ‘enemies list’ because we desperately need to be able to print dollars to buy oil.

        Don Stewart

        • edpell says:

          Dick Chaney, clearly understood the problem. Maybe the thinking is the last nation standing (having access to the last fives years of oil) will be able to gain the most in the “new world order” what ever that order might be. They, like us do not have a long term solution for BAU, maintaining the existing population numbers, industrial society.

    • edpell says:

      Yes, the US federal government is a one trick pony. Provoke war, then use the military. If people will not cooperate and refuse to war then the US does not have any other ideas. It is comic. I hear Henry Kissinger is advising Putin as he has been China. Maybe is he worth his large consulting fee.

      • xabier says:

        Edpell

        What a whiff of brimstone and the infernal regions there is about that old sinner Kissinger.

  24. history thinker says:

    Gail! well read your article and thank you
    i agree with most of your thoughts, but while reading i found myself wondering what if we reset the financial system, and start over from the beginning. i mean we can always wipe out the current enormous debt without paying back, or depreciate the currency, or issue a new currency, to keep the system running or working as it was. don’t you think it is possible?

    and I would further appreciate if you write an article fully dedicated to nuclear energy which i am not sure can be an alternative to fossil fuel. i think you deal with not much of it in your previous articles unlike solar power, wind power, etc.

    thanks in advance

    • If we reset the financial system to zero, and wipe out all of the debt, I expect the price of oil, gas, and coal will drop so low that we will not be able to extract any more. The reason that happens is because it is the debt that we use to buy cars, homes, and other goods that indirectly holds prices up. See my post, The Connection Between Oil Prices, Debt Levels and Interest Rates. Also, debt that is wiped out is held by banks, and by retirees. So you may find your bank permanently closed, and your mother without income.

      If you search on “nuclear” in the “search box” on the front page of this site, you can find some older articles on nuclear energy. Use of nuclear energy has generally been decreasing in the US, Europe, and Japan, partly because of safety concerns, and partly because of the high cost of nuclear, with today’s safety requirements. Governments generally need to guarantee against nuclear problems, and the governments can’t afford these costs now. Nuclear is much cheaper in, say, China and India, but attention to safety may be less.

      Thanks for the idea about writing about the issue again.

  25. Eric Anonymous says:

    I am not as negative in the future as some of you. I know Gail would say that renewables will break. I say so what. Everything built my mankind breaks down. So what…

    The following are some reasons to be optimistic in the future:

    The world and Germany have managed an increasing percent of renewable electricity for its energy.

    http://cleantechnica.com/2014/05/29/germanys-energiewende-much-alive-track/
    At the same Schleswig-Holstein at over 90% for renewable energy.

    http://energeia.voila.net/electri2/allemagne_nucle_charbon.htm
    Increasing percent of renewable energy in the energy mix while decreasing coal and nuclear in Germany.

    http://cleantechnica.com/2014/06/05/renewable-sources-global-power-production/
    Increasing percent of renewable energy in the total global energy mix.

    Electrical cars are three to four times more efficient than ICE (internal combustion engine) vehicles, and distributed renewable energy (roof solar) is more efficient efficient than the current electrical grid when using coal or gas power plants (less heat losses) and lower distribution grid losses.

    Electrical cars are running on the equivalent of less than one gallon of gas for 100 miles. For instance, a Nissan Leaf can go close to 100 miles on 24-kWh.
    http://www.afdc.energy.gov/fuels/fuel_comparison_chart.pdf

    This gives you an idea of just how inefficient are ICE vehicles today. A Toyota Prius needs about 2-gallons of gas to do 100 miles.

    In addition, energy efficiency programs, like the EnergyStar program, have reduced energy consumption. This year, for instance, cloth dryers are being added to products followed, and the expected savings are significant.

    The average home in 1981 required over 3,500 kWh per year. Today less than 2,000 kWh are needed by the average home, and this could be further reduced today using the most efficient appliances.

    In addition, gas efficiency in the US has steadily increased from 20.8 mpg in 2008 to 25.6 mpg currently. More gas reductions are expected in the near- and mid-term as new regulations take place.

    Close to 10% of gas is currently coming from ethanol. These two measures (vehicles with better mpg and adding ethanol to the gas mix) are lowering national oil consumption much more than than all the oil being added from tight oil with a heck of a lot less destruction to the environment.

    A large portion of the $48 trillion dollars mentioned above for renewable energy may be coming from different plant replacements. For instance, if coal plants are not built or renewed, new wind turbines or new solar roof installations (using subsidies) may be built instead. These are examples of an economic substitution of a more efficient resource replacing a less efficient (and more polluting) resource.

    Doing something useful is better than doing nothing or doing something harmful.

    F.D.R. said it best: the “… only thing we have to fear is fear itself.”

    As an aside, if the world has managed in the last 14-years with a modest annual investment of currently less than a 0.25 trillion dollars per year to increase renewable energy to the current level, then what will happen as more money is invested?

    Consider that in the last 10-years global solar photovoltaic energy increased from 2.6 GW to 130 GW. This is in a period in which the cost of producing electricity from solar energy was more expensive than other forms of energy.

    This is no longer true today with the exception of some places with little solar resource. Electricity from solar energy is less expensive today than electricity from coal, natural gas, or nuclear energy.
    http://cleantechnica.com/2014/03/13/solar-sold-less-5¢kwh-austin-texas/

    What do you think is going to happen as more people discover that soar energy is less expensive than the energy sold to them by the electrical utiliities?

    What do you think is going to happen as people discover that they can do most of their driving for less than $3.50 per 100 miles?

    Substituting one technology for another will not decrease the quality of life.

    Moreover, Gail’s argument of the amount of energy required per ton of steel or ton of something else will be coming not from gas. Instead, it will be coming from wind, solar and hydro electric energy.

    The big steel furnaces can be changed from coal to gas or from gas to electricity. In this last case, they will not be as efficient, but they can work with intermittent solar and wind energy mixed with hydro energy. Just ask the Germans what they think about this.

  26. B9K9 says:

    Gail, since you a partially correct that a linear programming model that is not corrected for step functions will not accurately model optimal shortcomings, how about addressing individual, discrete step function components?

    By that, I mean red flag events ie in-your-face-cannot-deny-the-reality of specific legislative actions, ostensibly taken as representative of acting in the “best interests” of constituents, with respect to wholesale modification of well established land use regulations, customs & laws?

    I’m referring, of course, to the alteration of laws designed to protect environmental considerations in an effort to facilitate the last, mad dash for fossil fuels, whether it means mountain topping for coal, or fracking, shale, oil sand and other ‘non-conventional’ plays.

    Here in California, when the offshore drilling moratorium is finally overturned, and precious water is directed towards fracking the sh!t out of remaining petroleum reserves (who amongst billions knows that Calif was a leading oil producer in the 30s & 40s, and was in fact, the target of the only land attack on N. America (other than balloons) by the Japanese during WWII?), how will the sheep react when the irrefutable truth is finally staring them in the face.

    That’s what I find fascinating – how the herd will react when spooked. Nathaniel West wrote a famous book called called ‘Day of the Locust’ that describes in surrealistic detail the reaction of the mob @ a movie premier. How does one get ahead of the curve in anticipation of events, or even participate in precipitating certain events to make sure the sheep know there is no negotiating out of this one?

    So much material beyond the basics of, yes Victoria you cannot have infinite growth on a finite planet. LOL

  27. Christian says:

    Or prehaps we can drive the Tainterian analysis further:

    Population falling: no entered collapse yet, excepting a very few countries and in short numbers. Worst case (or is it the best?) as far as I know: Bulgaria -20% from peak

    Institutional Complexity loss: surely some in militarized areas such as Iraq, Syria, Egypt and East Ukraine, though possibly balanced with still growing complexity away

    Population heterogeneity loss: growing unemployement is the best token here, while more and more persons get the same label: unemployed

    We could put Chinese ghost cities along with the Mayan boom in monuments building just on the eve of their crash

  28. Paul says:

    Another attempt to prop up the share price of a major oil company….

    Shell to raise $5bn with Woodside stake sale FT.com

    Royal Dutch Shell is to raise $5bn from the sale of a 19 per cent stake in Australian energy company Woodside Petroleum, part of a two-year, $15bn divestment plan designed to improve its financial performance.

    Shell said on Tuesday it would retain a 4.5 per cent stake in Woodside, a company that the Australian government blocked it from taking control of in 2001.

    The disposal had been on the cards ever since Shell’s new chief executive, Ben van Beurden, indicated that, in its Australian business, the company would focus on assets it owned directly, such as the liquefied natural gas ventures Gorgon and Prelude.

    Shell has been progressively selling down its interest in Woodside: it once owned more than a third of the company, but the stake had dwindled to 23 per cent.

    Analysts welcomed the deal. Peter Hutton of RBC Capital Markets said it showed Mr van Beurden, who took over as CEO in January, was making progress on “improving [Shell’s] capital discipline”.

    Shell’s reputation has suffered in recent years amid falling profits, weakening returns and investor concerns about excessive spending. In January it made the first profit warning in its history.

    Mr van Beurden has tried to turn things around by reducing spending, upping disposals to improve cash flow and also jettisoning projects he considered too costly, such as a gas-to-liquids plant in the US. Shell has also retreated from plans to drill in the Arctic this summer.

    The pace of disposals has certainly picked up in recent months. In February, Shell sold an oil refinery and a petrol station business in Australia to Vitol, the world’s largest independent oil trader, for $2.6bn.

    It also recently sold a stake in an Australian LNG venture, Wheatstone, to its Kuwaiti partners, and a stake in a Brazilian offshore oilfield to Qatar.

    Under the deal with Woodside, the Australian company will buy back half of the 19 per cent shareholding being sold by Shell at A$36.49 a share. Another block of 78m shares owned by Shell will be sold to institutions at A$41.35 each in a transaction underwritten by Goldman Sachs and Citigroup.

    Trading in shares of Woodside, which closed at A$42.85 on Monday in Sydney, was halted on Tuesday. Shell said the deal would net the company $5bn after tax.

    The transaction is contingent on approval from 75 per cent of Woodside shareholders who vote on it, and a positive assessment from an independent expert. It is expected to complete in August.

    Mr van Beurden said Shell nevertheless remained committed to Australia.

    The sale “doesn’t change our view of Australia as an important player on the global energy stage, or Shell’s central role in the country’s energy industry”, he said.

    Woodside will fund the proposed share buyback with cash and debt. The deal follows Woodside’s decision last month not to proceed with a $2.7bn investment in Israel’s Leviathan offshore gas project.

    Mark Taylor, analyst with Morningstar, said the deal was positive for Woodside as it removed the overhang of Shell’s shareholding.

    “I’m pleased Woodside spent their money on a buyback, which is earnings accretive, rather than investing in the Leviathan gas project in Israel – a region where they have little experience. That could have been distracting,” he said.

    Standard & Poor’s affirmed its BBB+ credit rating on Woodside but lowered its outlook from positive to stable following news of the deal.

    “We have revised the outlook to stable from positive because we believe that Woodside’s credit metrics will not remain at current levels following the partly debt-funded buyback,” the rating agency said.

  29. interguru says:

    The Economist got half of it right.

    http://www.theguardian.com/money/2014/jun/15/us-economy-bubble-debt-financial-crisis-corporations?CMP=ema_565

    The US Congressional Budget Office is projecting a continued economic recovery. So why look down the road – say, to 2017 – and worry?

    Here’s why: because the debt held by American households is rising ominously. And unless our economic policies change, that debt balloon, powered by radical income inequality, is going to become the next bust.

  30. Paul says:

    Another take on the situation in Iraq (conspiracy theory of course since the MSM is not reporting it)

    The Engineered Destruction and Political Fragmentation of Iraq. Towards the Creation of a US Sponsored Islamist Caliphate

    http://www.globalresearch.ca/the-destruction-and-political-fragmentation-of-iraq-towards-the-creation-of-a-us-sponsored-islamist-caliphate/5386998

    Digging into my archives for a little smoke:

    Even the MSM DT agrees that the US arms and supports Al Qaedea Al Nusra in Syria:

    Syria: nearly half rebel fighters are jihadists or hardline Islamists, says IHS Jane’s report
    http://www.telegraph.co.uk/news/worldnews/middleeast/syria/10311007/Syria-nearly-half-rebel-fighters-are-jihadists-or-hardline-Islamists-says-IHS-Janes-report.html

    Turing again to the DT (again – I doubt anyone thinks the Saudi’s — the quintessential US puppet state — acts without the blessing of the CIA and US Deep State – also as we know there were two major terrorist incidents prior to the Olympics):

    As-Safir said Prince Bandar pledged to safeguard Russia’s naval base in Syria if the Assad regime is toppled, but he also hinted at Chechen terrorist attacks on Russia’s Winter Olympics in Sochi if there is no accord. “I can give you a guarantee to protect the Winter Olympics next year. The Chechen groups that threaten the security of the games are controlled by us,” he allegedly said.

    Prince Bandar went on to say that Chechens operating in Syria were a pressure tool that could be switched on an off. “These groups do not scare us. We use them in the face of the Syrian regime but they will have no role in Syria’s political future.”

    http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/10266957/Saudis-offer-Russia-secret-oil-deal-if-it-drops-Syria.html

    More smoke — MSM is blacking out the greatest investigative journalist of our time (My Lai… Abu Grhaib)

    US media blacks out Seymour Hersh exposé of Washington’s lies on sarin attack in Syria
    The American media has blacked out an account by Pulitzer Prize-winning investigative journalist Seymour Hersh demonstrating that President Barack Obama and the US government lied when they claimed to have proof that the Syrian government carried out a sarin gas attack last August on areas near Damascus held by US-backed “rebels.”

    Obama, Secretary of State John Kerry, US ambassador to the United Nations Samantha Power and other top officials declared categorically that the August 21 attack on Eastern Ghouta, which reportedly killed hundreds of people, had been carried out by the Syrian military. They, along with the leaders of Britain and France, sought to use the gas attack to stampede public opinion behind their plans to attack Syria, cripple the regime of President Bashar al-Assad, and install a puppet government.

    https://www.wsws.org/en/articles/2013/12/11/hers-d11.html

    Seymour Hersh exposes US government lies on Syrian sarin attack
    Pulitzer Prize-winning investigative journalist Seymour Hersh has published an article demonstrating that the US government and President Barack Obama knowingly lied when they claimed that the Syrian government had carried out a sarin gas attack on insurgent-held areas last August.

    Hersh’s detailed account, based on information provided by current and former US intelligence and military officials, was published Sunday in theLondon Review of Books. The article, entitled “Whose sarin?,” exposes as a calculated fraud the propaganda churned out day after day by the administration and uncritically repeated by the media for a period of several weeks to provide a pretext for a military attack on the regime of Syrian President Bashar al-Assad

    http://www.wsws.org/en/articles/2013/12/10/pers-d10.html

    Take aways from this:

    1. The desperation to keep the oil taps flowing means supporting and using terrorist groups (the Deep State will stop at nothing)

    2. The same terrorist groups who handled 911

    3. 911 was used as the excuse to roll back freedoms in the US (see ‘We need another Pearl Harbour http://en.wikipedia.org/wiki/Project_for_the_New_American_Century)

    Smoke — Fire — they usually go together.

    Further — gold is also being manipulated to prevent the collapse of the global economy — this was reported long ago on Zero Hedge (conspiracy theory) — and detailed by the great Grant Williams here http://www.mauldineconomics.com/ttmygh/what-if (still conspiracy theory)

    But then the FT and other MSM media broke the news (probably only because only people with IQs below 60 still believe gold was not manipulated in order to retain a bit of credibility) and the gold manipulation conspiracy theory became fact.

    My point being – with respect to the theme of this blog – is that anything goes when it comes to delaying the end of the world.

    The biggest conspiracy theory – that the end of Cheap Oil is the cause of our problems — will not be acknowledged by TPTB — because to do so would accelerate the collapse schedule.

    As we know with the Peak Cheap Oil conspiracy theory — it takes a whole lot of digging and thinking to get to the truth with these things…. but as we can see — even if you can’t prove it — sometimes conspiracy is simply a well kept secret that is difficult to prove.

    However even thought this is not a court of law — some things can be proven beyond a reasonable doubt by connecting various dots.

    • B9K9 says:

      Paul, it looks like you’re seeking is some kind of validation or assurance that you are correct. What are you going to do when you the truth of the matter really sinks in, and the topical subject of collapse is no longer interesting (or relevant)?

      I include relevant, because in many areas of the globe some people no longer get to enjoy a dilettante’s discussion; they are living the reality of resource constraints & the ensuing economic collapse, right here, right now.

      Perhaps when you come to the realization that there really isn’t much more (if any) to be said, then maybe you’ll begin to prepare in earnest. And I don’t mind tending to a garden plot, and/or paying attention to one’s physical health.

      No, I mean the mental process of facing the reality of what survival is going to require. In other words, if you cannot picture yourself as an MC of an ISIS video, then you will most likely find yourself as a featured “performer”.

      What I find astounding – and this isn’t directed at you personally – is the real manifestation of what it means by “no one reads any more”. There is a wide range of classic literature, including War & Peace, the Red Badge of Courage, Good-Bye to all That, All Quiet on the Western Front, etc, that explicitly describe both the transformation one undergoes, and the resulting laissez faire attitude adopted in dealing with incredible mayhem and death.

      If those still stuck in emoting cannot get off the pot, they’re going to be mere fodder for those who understand what is happening and what is required.

      • Paul says:

        No… if you are referring to collapse — I am not seeking reassurance.

        I am 1000% certain that I am correct — I am so certain that if there were a way to short this thing I’d put every last cent on that trade. There are ways to short this of course but a) BAU could go on longer than one expects and b) when the SHTF — the shorts won’t collect – nobody will collect.

        I am mentally prepared for what is to come — that is why I am in the mountains of BC mountain biking and now drinking ice cold beers in front a fire cooking up a bbq with my newly discovered ice road trucker/logger buddies — War and Peace will be a cakewalk compared to what is to come – I am on a major bucket list

        In fact I think I might syndicate my adventures and sell the rights to Fox News…. one of the boys is gonna show me his lawnmower/race kart tomorrow — that could be a good episode one I reckon.

        • Jan Steinman says:

          “I am on a major bucket list”

          This is my problem with doomer psychology — this defeatist attitude of “well, can’t be a part of the solution, might as well enjoy myself and be a part of the problem!”

          Yea, I’m on a “bucket list,” too. Only my list is mostly about living on Earth as though I intend to stay. It’s the attitude of, “Perhaps I can’t ‘save the world,’ but I can save one little part of it, at least for a little while.”

          Paul, do you not see any hypocrisy in your “living it up” while criticizing Martenson for daring to show a little optimism?

          Bottom line: it doesn’t matter if humans ultimately self-destruct. What matters is what each of us does, right now, to either contribute to, or detract from, that destruction.

          • Calista says:

            A musing. Just musing as it were. If we know what we know about how destructive we are to life, human and other, then the question becomes a definition of who we are by how we react to that knowledge. Do we attempt to live with less in every way possible thereby giving the Chinese the chance to outbid us and use those resources? Do we live with less in an attempt to do the right thing not caring that others may not make the same choice. They may not have the same knowledge, which I will put forth takes time and access to a wide variety of material on the internet and in the library. When you are poor or just beginning to raise children you may not have the time for this sort of information and may not know. 14 hour shifts in a Chinese factory tend to not leave much time for reading such as Gail’s site. However, those of us with that time and that knowledge, what do we choose to do with that knowledge? Do we attempt to make just a little bit more room for other life on this planet? Who are you when you look in the mirror, what do you care about?

            • Jan Steinman says:

              “Do we attempt to live with less in every way possible thereby giving the Chinese the chance to outbid us and use those resources?”

              I have no control over what others do. I only have control over what I do.

              But as Calista points out, I think we all bear a certain responsibility for education. There are many ways to influence others.

              I think of a jelly sandwich: “The more you spread it, the thinner it gets.” You can take the Martenson approach, trying to get the word far and wide, in the process being so inclusive that you piss off reactionaries who think there is only One True Way. Or, you can focus your efforts on a few friends and family with whom you have some influence, greatly increasing the odds of making a change in a small number of people.

              We try to use a hybrid approach, hosting young, impressionable people and conducting small, intimate workshops and seminars, trying for maximum influence on a few people, but also stuff like blog commenting, trying to have a little influence on a large number of people.

            • Don Stewart says:

              Dear Jan and Others
              Here are a few ideas for the proverbial city apartment dweller.
              1. Understand the carbon cycle and soil. Understand that the carbon storage capacity of soil far exceeds that of a forest. Have a general idea how one might go about putting more carbon into the soil. Understand how the carbon cycle interacts with the water cycle, the nutrient cycle, and biodiversity.
              Understand the role of wetlands in carbon storage.
              2. Use whatever political influence you have to change public policies to favor carbon in the soil.
              3. Buy food from carbon farmers.
              4. Invite your friends to Third Plate dinners….see book review at Amazon.
              5. Visit an urban garden. Use the visit as the impetus to form a connection with country farmers and market gardeners.
              6. Use some of your free time for agritourism.
              7. If you have any influence on common land, turn it away from ‘low maintenance and sterile’ toward ‘biologically active’. Use management companies who understand biology.
              8. Read some Wendell Berry and Aldo Leopold.

              Berry: ‘ Industrialism is a way of thought based on capital and technology, not nature. Industrialism is an economy first and foremost, and if it has any culture it is an accidental by-product of the ubiquitous efforts to sell unnecessary products for more than they are worth.’

              Spend your money on this which nourish the planet and its humans.

              Aldo Leopold: ‘One cannot divorce esthetics from utility, quality from quantity, present from future, either in deciding what is done to or for soil, or in educating the person delegated to do it. All land-uses and land-users are interdependent, and the forces which connect them follow channels still largely unknown’.

              Appreciate the esthetics of non-urban landscape, but also understand its bedrock importance in the functioning of the biosphere and growing food. Educate by example so that those who come in contact with you will also appreciate the beauty of useful land.

              Don Stewart

            • Jim King says:

              Calista, excellent musings… One of my personal reactions is to provide financial support to organizations that buy environmentally important lands. Remember the old real estate adage that if you like the view and want to keep it, buy it?

              The same principle applies to environmental services from natural areas. I donate to organizations that understand this and work with others to BUY IT.

              To answer the anticipated question, I support the

              Rocky Mountain Elk Foundation,
              Ducks Unlimited, and
              The Nature Conservancy.

              They aren’t perfect, but they buy, manage and protect some incredible landscapes that are important to me, and their efforts transcend national boundaries.

              With climate change and whatever else is inevitably coming to reduce human populations, I suspect these efforts are temporary, but they may help a few species survive the planet’s current over-infestation of certain carbon life forms. It isn’t much, but it gives me a little hope that some things besides humans will make it through the bottleneck.

              At least my financial contributions go into something real that won’t evaporate when the global economy has it’s next heart attack.

              JK

            • Jan Steinman says:

              “One of my personal reactions is to provide financial support to organizations that buy environmentally important lands… At least my financial contributions go into something real that won’t evaporate when the global economy has it’s next heart attack.”

              You are welcome to contribute as little as $1 ($10 or more covers our cost of setting up your account) to EcoReality Co-op, a not-for-profit Permaculture farm and sustainable living education centre on Salt Spring Island, BC, Canada.

              I don’t know that our lands are any more or less “environmentally important” than any other, but we do use them to produce low-energy organic food, and for conducting training on low-energy living.

            • interguru says:

              All this will evaporate when a truckload of Kalashnikov armed goons come to your homestead. One possible version of the future is playing out in the Middle East now, even as food is still available.

            • Jan Steinman says:

              What are you saying, that no one should try to act responsibly because someone else will always try to take it away?

              Sorry; I can’t live like that.

              We are purposely a pretty small, out-of-the-way target. I expect ammunition will become unavailable before someone gets around to coming here.

            • Paul says:

              Maybe … maybe not.

              I was speaking to someone here in the BC interior — there are very few people in this region — and the people from the west are blocked by the Columbia River (Arrow Lakes) and on the east by the Rocky Mountains.

              One of the logging truckers I met was telling me how his family buys almost no food — they hunt — and they farm. They are tough independent people — I suspect people like this will do just fine.

              And if any city warriors were to make it across those two barriers they’d run into an ornery bunch out here who would likely make short work of them.

            • Thanks for a different approach to a partial solution!

    • edpell says:

      Paul, I see west Asia as getting all Arabs to fight each other and kill each other. The remaining stock are more docile and timid. This is what serves the interests of Israel. I view it a long term breeding program.

  31. Christian says:

    In case we are bored turning around the same topics we could set up some contest in order to spend our time… Why not the best prose? While most of us have good paragraphs, I can’t decide to give the golden pen to Don or to Xabier for consistently holding a high standard

    • Paul says:

      I only know how to right in jagged thoughts interspersed with ———– ….. so I am out of the running 🙁

    • xabier says:

      Too flattering, but thank you! But as many of us are not writing in our native tongues, maybe ‘depth of information’ would be a better criterion? Or for ‘posting from the most surprising angle’?

  32. Paul says:

    Speaking of conspiracies (and desperation) ….

    Another conspiracy “theory” becomes conspiracy “fact” as The FT reports “a cluster of central banking investors has become major players on world equity markets.”

    The report, to be published this week by the Official Monetary and Financial Institutions Forum (OMFIF), confirms $29.1tn in market investments, held by 400 public sector institutions in 162 countries, which “could potentially contribute to overheated asset prices.” China’s State Administration of Foreign Exchange has become “the world’s largest public sector holder of equities”, according to officials, and we suspect the Fed is close behind (courtesy of more levered positions at Citadel), as the world’s banks try to diversify themselves and “counters the monopoly power of the dollar.” Which leaves us wondering where are the central bank 13Fs?

    More http://www.zerohedge.com/news/2014-06-15/cluster-central-banks-have-secretly-invested-29-trillion-market

    • VPK says:

      Paul, thank you, the top trading nations are unhooking from the dollar. I don’t blame them at all, out deficits of BILLIONS are so far in the future there is no end in sight!

  33. Don Stewart says:

    Dear Gail

    Here is a little different perspective on ‘stacking plants’ to maximize photosynthesis and crop and carbon production:

    http://www.permaculturevoices.com/podcast/grow-better-not-bigger-the-market-gardener-selling-140000-on-1-5-acres-pvp051/

    Listen at 1:07 for about 4 minutes. You will hear them talking about the French market gardeners from around 1850 who were able to grow an incredible amount of food in very small spaces…and they did not have modern advances such as drip irrigation or row covers. As the two guys say, ‘A lot of this knowledge was just forgotten with fossil fuels and the Green Revolution’.

    If you are growing 7 or 8 crops a year, as the French market gardeners achieved, you have to be there all the time. One of the things fossil fuels and pesticides and herbicides and fertilizers did was make life more pleasant for the farmers. They could follow really simple plans (corn and beans this year, beans and corn next heart) and not mess around with intellectually challenging French market gardening systems or the year round care required by animals.

    When I moved to the corn belt in 1970, most small farms had hogs. By the time I left the corn belt in 1980, the hogs had all moved to confined feeding operations in North Carolina. The farmers joked that they had replaced C, B, and H (corn, beans, and hogs) with C, B, and F (corn, beans, and Florida). The hogs, of course, were responsible for a tremendous amount of recycling right on the farm. Move them to North Carolina and they produced pollution, not valuable manure. While the change freed up farmers to live a leisurely life in the sun during the winter, it did tremendous damage to the ecology. And, as fossil fuels become scarce, it must change back to something like it was. The Australian farmer cannot take two months off during the winter, because he is grazing animals. If he has children nearby, he can leave for a week, but not two or three months. So the reversion to earlier practices will be necessary but painful.

    And, of course, it won’t be identical to what went before. The absence of plowing in cutting edge systems would astound a farmer from 1920. The elimination of fertilizers, pesticides, and herbicides destroys a lot of Big Ag. It will be a wrenching change politically.

    Over the longer terms, if we are unable to build or rebuild or repair with baling wire the harvesting equipment, we will have to use migrant labor. Did you see Richard Gere in Days of Heaven. He and his wife are working as migrant laborers harvesting grain by hand. It could happen again.

    Don Stewart

    • VPK says:

      I remember watching a program about ancient Egypt and the workers lived basicly on lentils, garlic, bread, onions and a meat ration. Doesn’t seem too difficult to grow that on a family plot. Rabbits and such would work as meat.
      What’s the big deal?

      • xabier says:

        The big deal was…….. the River Nile!

        • VPK says:

          True, but with rabbit and chicken poop, it might be just as good…and if it ain’t we add our own poop!

      • Jan Steinman says:

        “Doesn’t seem too difficult to grow that on a family plot.”

        How many of us have “family plots” these days? Do the people in apartments just starve, then?

        • VPK says:

          Oh, come on now. It wouldn’t be too hard to form some community gardens areas and folks during World War II had “Victory Gardens” and the people in the old Soviet Union supplied much of their food from their kitchen gardens. I think Don is getting over the top with his discourse and over thinking the problem. Now, please I enjoy reading Don’s comments and find them interesting and worthwhile, but the “average “six pack Joe” can handle only so much.

          • Daddio7 says:

            Do you post on the NYtimes website? Maybe Slashdot? We are not Joe
            Six-pack. I do have a family plot with a greenhouse plus a 40 acre field for a front yard. It takes an hour with a 42 in riding mower to cut my lawn. Come The Collapse Joe Sixpack is going to be screwed.

            • Calista says:

              So you call that the “south 40” ? right? Where I’m from we talk in sections, half sections and quarter sections. the south 40 is just that bit the kid gets to play with this summer. :^)

            • Dave Ranning says:

              I’m on 20, and can’t keep up.
              A lion just got 2 of the goats.
              And with this drought, I’m a bit worried about the main well.
              But everything is doing well, but I’m kind in transition between crops.
              Most of my friends down in “The Pit” couldn’t use a shovel.

        • Theft of food is a big issue in developing countries with food shortages, I understand. This is the reason for big fences around houses + gardens. There may even be guards.

          • VPK says:

            That is true. Here in the United States we have plenty of GUNS, and they will be used in case of a food shortage.

          • edpell says:

            There is a notable art film “The Ballad of Narayama” from Japan about 1880s(?) life in a small poor mountain village. In it one family steals immature produce from others gardens hoping it will go unnoticed. It does not. The community solution is to bury the whole family alive. This is not the focus of the film, the film is visually stunning and the major theme is touching.

            • VPK says:

              While I think of it, pick up a copy of George Orwell’s classic “Down and Out in Paris and London”. This book is based on his real experiences of his hobo existence in these cities during the depths of the depression. . A real eye opener as far as what we are to expect if there is a “soft landing”. Not something that I am looking forward to at all.
              I remember from the book the routine the unemployed men had to endure to play the system, what a waste of time. Also, seems that they would not do without a shave, and an educated man had a better go of it than one without something internal to dwell upon.
              I do not look on an economic collapse as a “good”, going hungry, praying for some coins to turn up to pay for food, and escaping from the landlord for rent. Does not sound like much fun.
              I am to old for such life event!

            • Paul says:

              I’ve read the book — and might I suggest that what he went through in that tale will seem like prosperous times — viewed from the shattered prism of what is to come?

              We are talking billions of people starving to death here…. there is no benchmark in global history for this — think of one of those Ethiopian famines — but encompassing the entire world — with no one to help.

              The magic formula is this:

              – 98% of all ag land is farming using oil and gas fertilizer and pesticide
              – the land is dead without them — and would take years to recover even with intensive organic inputs

            • IT is fortunate we don’t know how things will really turn out. Maybe there is something coming along that we are not aware of.

    • xabier says:

      Don

      Thanks: it’s interesting to note that the French carried market gardening to a great height, unlike the English who really didn’t care very much for vegetables in cooking until very recently (I was brought up on 18thc-style English cooking which was strong on meat and pastry, also fruit pies, and the rest very bland -with all respect to my lovely mother!) and concentrated the most effort on their beef herds.

      Fruit, on the other hand, was highly esteemed in Britain. Of course, there was a social element in this as the cultivation of fruits not native to Britain was another way to display wealth (and depended on coal-heated green-houses).

    • edpell says:

      Hi Don, I might receive a job offer in North Carolina. I think you live there? If so, can you tell me a little about NC? My email is edpell at optonline . net
      Thanks.

    • newyorker says:

      Don, i’m curious. Those vast lagoons of hog excrement we always hear about when they leak and kill off the fish in some watershed…is it actually wasted? Isn’t there any attempt to transform it into fertilizer, or is it not at the moment cost effective.

      If not when tshtf (literally) those lagoons will be gold mines instead of a noisome undesired byproduct.

      • Don Stewart says:

        Dear newyorker
        I’m not sure how many of them may be making compost right at this moment. During Hurricane Fran in 1997, a lot of these lagoons overflowed. It was a real mess.

        When the price of fertilizer goes up, interest in composting increases. Of course, a commercial composting operation is dependent on fossil fuels, while the hog waste on a farm was virtually fossil fuel free. A farmer friend of mine harvests his veggies from his garden, eats them in his kitchen, throws the scraps into the chicken pen, and periodically shovels the chicken poop into his garden. The only fossil fuels involved are propane for cooking. Contrast that with the complexities of making commercial compost.

        We are having a bio-fuels conference in early August. One of the optional tours takes you to a city landfill where methane is being harvested and combined with some oilseed crops grown right there on the landfill property. The making of the biodiesel is accomplished right on the property, also. It’s a commercial operation, more complicated than an on-farm operation, but it’s pretty neat as commercial ventures go.

        So…people do some things which make sense. Still, there is an awful lot of organic waste going into landfills and lagoons. As far as being goldmines, I am not a commercial composted. But nitrogen is a gas and pretty quickly escapes into the air. So ‘mining’ nitrogen doesn’t sound very practical to me. The hogs are fed ‘nutrient poor’ grains, so there are probably not a lot of trace elements, either.

        Another friend of mine thinks that hog farms belong on the outskirts of cities. That way, food waste can be collected and promptly fed to the hogs. He thinks that locating hog farms far from cities is a mistake.

        Don Stewart

        • Jan Steinman says:

          “a city landfill where methane is being harvested and combined with some oilseed crops grown right there on the landfill property. The making of the biodiesel is accomplished right on the property…”

          I suspect not entirely.

          They are harvesting methane from the landfill, whereas biodiesel production requires methanol.

          The latter is produced by steam reformation of methane, and to my understanding is not simple nor cheap, as it requires high pressures and temperatures.

          Don, if you have more info about how they go about this, I’d be interested — in particular, how they’re getting methanol from methane. I have looked into it, and found no simple “homestead” way of doing so.

          Also, the methanol component of biodiesel is only about 15% or so of the total, so most of the bulk of the fuel comes from the oilseed crops, which I imagine are annual crops like canola or camelina, both of which are produced industrially, using significant amounts of fossil sunlight for tractor fuel, etc.

          I don’t mean to be a nay-sayer, but the devil’s in the details, as they say!

  34. Paul says:

    I’d like to continue the conspiracy theory discussion…

    First up — the conspiracy theory that we all believe in — the one that says expensive oil is the cause of the never-ending financial crisis we are experiencing — that QE ZIRP and all the other financial shenanigans we are seeing are responses to the end of cheap oil.

    As with any good conspiracy theory those that believe in it moan and bitch about how nobody takes them seriously – how they are dismissed as tin headed whack jobs who are completely wrong.

    I’ve read endlessly how many of the participants complain that when they bring this up ‘peoples’ eyes glaze over’ — how they have no interest in discussing this topic and how often they dismiss it as conspiracy theory.

    In fact I had exactly this type of conversation with a very intelligent, open minded fellow over breakfast this morning — he simply would not go there when I suggested expensive energy was the cause of our problems… he’s probably gone away thinking I am a conspiracy nut.

    Of course the MSM offers up a deluge of stories claiming that peak oil is nonsense – that we have 100 years of oil left etc etc… effectively they are mocking we conspiracy theorists who claim the world is about to end.

    And what do we do? We retired to Finite World where we can find Gail’s awesome articles — which we believe in 100% — in spite of the fact that Gail has never worked a day in the oil industry.

    Of course there are a handful of others – Heinberg, Kuntsler, etc… none of them have worked in the oil industry either — no qualifications whatsoever — yet be lap up every word they write like the eager conspiracy theorists that we are…

    Of course there are few oil industry people who are on board — marginal players like Art Bermin… a few financial analysts… but the overwhelming majority of finance and industry people do not believe Peak Cheap Oil is the problem…

    Now let’s switch over to 911… a much more prominent conspiracy theory than the Peak Cheap Oil nonsense….

    Here we have 2000 architects and engineers who have signed off saying something is very wrong with the 911 picture:

    Despite their petition to Congress bearing the signature of over 2000 architectural and engineering professionals, the scientific and engineering community has generally rejected the position taken by the group,[6][7] and several NIST-independent analyses published in peer-reviewed scientific journals provide evidence arguing against the “blast hypothesis”

    http://en.wikipedia.org/wiki/Architects_%26_Engineers_for_9/11_Truth

    If I were a Martian landing on earth and I was asked what I thought of the two conspiracy theories… I think I’d give more credence to the 911 conspiracy — 2000 industry professionals signing off saying buildings do not fall in that manner…. vs a handful of amateur writers supported by a handful of industry people stating the world is about to end…. w

    Perhaps that explains why people look at you like you are crazy when you try to explain the energy issue….

    Just a short departing note — I do not mean to offend anyone particularly Gail and others who write on this topic — I firmly believe you are correct in your analysis….

    The purpose of writing this is of course to demonstrate that not all conspiracy theories are nonsense. Yes – I would suggest that most are (some people see a conspiracy behind just about everything) — just because there is no irrefutable evidence of something — or the MSM dismisses it as nonsense — does not mean it is so.

    • VPK says:

      Good discussion and I hear you. The position most have is they hope at least it will not exploded during their lifetimes. Also, individually there is actually very little one can do to change the outcome. Hey, T Boone Pickens just had an interview where he stated if the United States joined with Canada and Mexico as one energy zone without government borders all would be fine. So, there you go, one expert in the industry thinks we can manage. He also stated he did not discount the Middle East because of the world economy. He also said that the XL Pipeline is long overdue to be approved.
      So, the old guy really does not have a concern over global warming.
      T Boone knows the industry and how it is financed (he lost 2 BILLION in his gambles and gave away 1 Billion and has 1 Billion left). So, how it all plays out is still up in the air.
      Maybe the top dogs (superclass) can hold it all together for another 10-20 years or so. For myself at age 56, that would be nice. But if i were a betting man……

      • Paul says:

        I would very much like 10-20 more years of BAU…

        I am amazed that this has held together so long — particularly after seeing the FT report that central banks have hammered trillions into the stock market… which gives new meaning to ‘don’t fight the Fed’

        I struggle to understand how this unravels — if I were running institutional money — and I saw that bit of info — I’d pile even harder into the markets because:

        1. The Fed will keep driving the price higher

        2. I know this cannot go on forever but when it stops the economy will totally implode — so why not dance while the music plays and enjoy the bonuses.

        I also struggle how anyone — after reading that article — can think TPTB have this under control… 29 trillion into the stock market… if that is not an indication of total desperation then what is?

        Of course the sheeple will still believe recovery is around the corner….

        There will be no recovery — what is around the corner is a Big Bad Snarling Wolf —- and he’s going to feast on the sheeple…

        Of course I always take this back to the big picture — why in the christ would the central banks do this?

        Do they want to enrich the rich? When this blows the rich will not be rich — so surely that is not the answer.

        Are they stupid? Do they not understand the ramifications of these actions? Gimme a break — a moron could know this will end in tears.

        So why — of course we know — it is because we have run out of cheap energy – growth has stopped — and only the most desperate measures can delay a massive collapse — from which there will be no recovery.

        • xabier says:

          I had the chance to put some of these questions to someone who I suppose is part of the mythical and much-hated ‘1%’ over drinks last week (a polite expression for staying far too long in a nice old British pub!) I did so quite obliquely so as not to discredit myself as an End Of The World Nut….

          He isn’t making any special plans for Armageddon (although an even wealthier friend of his is apparently stocking up on canned food!); thinks that some taxes really ought to be raised to help social spending as they are concerned about the changes in society and increasing poverty; and is buying up assets – notably real estate – which he hopes will enable survival of a likely hyper-inflationary period and emergence with productive assets on the other side.

          The prospect of ‘revolution’ did seem to be impinging slightly on his consciousness as a vague possibility if things get really bad: I was asked if I could see any warning signs as I’d studied revolutions quite a bit. Incidentally, he has a great interest in and admiration for Lenin (fancy that in a banker!). But above all, trying not to worry and always looking for a good yield on investment.

          That’s about it: the same combination of hopefulness and wishful-thinking that we all get by on. Aware of some problems, slightly apprehensive, but on the whole feeling very comfortably cushioned by wealth. I would also add that they can certainly do the maths on anything.

        • Stilgar Wilcox says:

          Your last paragraph there Paul spells it out. It’s really pretty simple.

          I just keep wondering when it will all fall down. Right now I’m looking to see how things progress with QE taper. It’s still a lot of money, 45b a month (over 1/2 a trillion a year), and yet GDP is already dumping! I just got to think when it hits zero there will be an ah ha moment in which a realization of it’s not going to work without QE will hit, and not just for the Fed but anyone following peak oil events. The Fed will then be faced with either printing more stimulus for the wealthy (at the risk of hyper inflation and greater inequality) or letting things begin to unwind. Guess which one they will pick. Unfortunately, we all have to watch while every conceivable desperate fiscal effort is mustered to suspend the effects of higher transport energy costs right up until shtf . Once global stock & commodity markets dump it will be 08 dejavu all over again, and we all know what happened right after the matrix black cat passed twice – not good things.

          • edpell says:

            Back in 1999 I and friends thought the system had to fall apart soon. We were wrong. It is amazing how long TPTB can hold it together.

            Since I have kids and I hope they have kids and so on just kicking the can down the road is not good enough for me.

            Went to a conference this weekend in Manhattan “A World Without War”. Big on peace through development. They were big into fission and fusion power. They mentioned 5000 new fission reactors to tide us over until fusion. I am not sure they have thought about how to fuel 5000 fission reactors. Maybe they are thinking of fast breeder reactor in which case OK. Of course so far there are only three of these working in the world.

            • Paul says:

              I think the difference between now and 99 is that we are printing trillions of dollars — to me that signals the end game is near…. I can smell the breath of the grim reaper near….

        • Jan Steinman says:

          “I would very much like 10-20 more years of BAU…”

          … so we can finish the planet off properly?

          No thanks. Every single day of BAU is too many for me. Bring on the collapse! If not for your grandchildren, for all the non-human species we’re destroying every day.

          • Stilgar Wilcox says:

            I agree Jan. Shut it down immediately, then maybe in the aftermath there will still be wildlife and a remaining human population to live hopefully more in harmony with the planet. Otherwise, given time people will destroy this biosphere and then it will take millions of years to come back and 10’s of millions of years for exotic species to evolve again. As a species we are the worse case scenario of having evolved to be self aware, able to manipulate mass to design and build electro-mechanical machines to extract ore and energy from the crust, extremely aggressive, violent, greedy and narcissistic.

            • VPK says:

              I kinda agree, but look at the very young toddlers and feel sadness. Really, if there was justice the ONES REALLY RESPONSIBLE should expire first, and afraid I”m looking at one in my mirror. So, I hope for another 10-20 years and hope we turn around the sip.

          • edpell says:

            YES! I agree with Jan.

            • Paul says:

              I suspect the Rubicon has been well and truly passed — if anyone survives this their lives will be hellish keeping in mind the nuclear plants and spent fuel rods that litter the world.

              We might as well run the engine without oil for as long as we can and just burn this right out – the end result will likely be the same – nasty short brutish

    • Dave Ranning says:

      The uncomfortable fact is no one is in control.
      (not saying a group of sociopaths don’t “conspire” for their own benefit, but they don’t control anything)
      Conspiracies give people a simple story to hang onto, some reference in a groundless and freighting world.
      That is what really scared people about Darwin— no one calling the shots.

      • Jan Steinman says:

        “The uncomfortable fact is no one is in control.”

        Yes! You got it, Dave.

        There are no “conspiracies” worth worrying about.

        The “uncomfortable fact” is actually much worse: independent actors, acting in what they perceive as their own best interest. There’s really no need to “conspire.”

      • Paul says:

        The Fed is most certainly in control of many things — and they conspire to control them.

        They are conspiring to control the bond market — the housing market — the gold market — and just the other day the FT announced that they are directly putting trillions into the equity markets.

        If you go big picture they are conspiring to delay the impact of the end of cheap oil — after all — that is what all these manipulations are all about

        If nobody was in control then we’d be eating dog food warmed over plastic bag fueled fires by now wouldn’t we?

        Of course we can always go to the biggest conspiracy in the history of man — the one about the man in the sky….. he is supposedly in control… (yet he needs money — he needs us to bend on knee to worship him… what a funny man he is)

      • Lizzy says:

        I think I agree. Chaos Theory in practice.

        • Simply Simon says:

          Hi Lizzy,
          Chaos theory is close to, but not quite the same as the Complex Adaptive systems (often shortened to Complexity Theory) that Gail has occasionally referred to.
          One take on complex adaptive systems is that they have islands of stability in a “sea” of fluidity. Too much stability = rigidity and ultimate inability to adapt to external circumstance whereas too much fluidity = chaos and the system simply dissipates to become part of its surroundings.

          Ilya Prigogine did the original work on dissipative structures on which complexity theory ultimately rests, which (big shortcut here!) kind of leads to the present situation where we have an increasingly complex world which is trying to be managed by increasingly complex responses which create increasing complexity of the system which leads to need for increasingly complex management which leads to …. and all of this attempt at management has its own energy cost. This is why various academic writers (e.g. reported in New Scientist) have said that civilisation contains the seeds of its own destruction – a Red Queen scenario).

          To me, the only questions that remain are:
          when will the collapse happen?
          how quickly?
          how bad?
          how to rebuild something TRULY sustainable?

          Gail has referred to the last question a number of times.
          I must admit I would like the debate here to focus on this point; this issue frames everything else. I think the best way for humanity to ultimately survive is to have multiple attempts at solutions to this long term question, so that the “survival of the power down” is best managed to set up the future.

          • Perhaps little “experiments” depending as little as possible on outside inputs. Some might include existing hunter gatherers. Some might involve simple agricultural societies, using hand tools and water from streams or captured and held in cisterns.

  35. Pingback: Pavel Kraus: Jak získat neexistující zdroje za neexistující peníze | Energetika v souvislostech

  36. Leo Smith says:

    5-10 years of increasing crisis before the penny finally drops and its seen to be dark age or nuclear power.

    Oh well.

    Change comes at its own pace, and stupidity doesn’t disappear overnight.

    And its taking time to realise just how guilty are the people we trusted…

    • you can’t trust people to replace all the oil we voluntarily chose to make use of. Or to be responsible for what happened because we chose to set fire to 200m years worth of stored sunlight.
      Given lightbulbs—nobody refused to use them except the amish, and despite their denial, they too live on the back of industrial society
      stupidity and ignorance is the prerogative of all of us

      • xabier says:

        End

        Actually quite a lot of old-fashioned Victorian and Edwardian people really hated electric light and refused to use it when they had a choice: it might seem incredible to us now, but so it was.

        There was also a social and aesthetic aspect to the use of light sources: for example, when gas and oil lights came in, they were initially reserved for the basement working quarters of the staff in a big house – the family areas would usually be lit by wax candles only, then oil lamps and candles but not gas.

        Eventually, only the great dining room was lit solely by candles, as both flattering to the ladies in their jewels and gowns, and serving to emphasise the social distinctions of the time. The last remnant of this in England was probably at Oxford and Cambridge Universities where dinner in the Great Hall for students and professors of a college would be lit by candles in the late 20th century. Cheap meals and the romance of candle-light, what could be better?!

        Of course, candles and oil lamps imply lots of cheap domestic labour to manage them, so the triumph of electricity was inevitable after WW1 when the old social arrangements really began to crumble (in fact beginning pre-1914 when the wealthy started to find grand houses too much to keep up).

  37. Pingback: Another Week in the Ecological Crisis, June 15, 2014 – A Few Things Ill Considered

  38. Christian says:

    IEA’s worst side is their forecast for Conventional New. Is it some information about the latest conventional fields having started production?

  39. VPK says:

    T Boone Pickens has it ALL figured out! Imagine that!

    http://www.cnbc.com/id/101758339

  40. We just recorded our Anniversary Show on the Collapse Cafe with guests Gail Tverberg and Ugo Bardi. It is now UP as the Feature Video on Doomstead Diner TV.

    http://www.doomsteaddiner.net/blog/2012/02/20/diner-tv/

    RE

  41. interguru says:

    Lights, traffic and Los Angeles. Check this out. We should put this into a time capsule . As a precaution in case no one would be able to play it, we should print it out as a flip book.

    Its a great encapsulation of our civilization’s use of energy. This video is worth 10,000 words.

    http://dish.andrewsullivan.com/2014/06/15/mental-health-break-557/

  42. xabier says:

    Lizzy

    Yes I agree, some very good programmes from the BBC which reflect earlier ideals regarding television. You can even learn bookbinding from one of those – how could you miss that out?!

  43. The West is collapsing this much is clear. The US OPEC petrodollar system is under clear direct attack with Russia/China aligning followed closely by Brazil/India/Africa. US/EU is getting increasingly desperate for oil. I wont even bother including the UK anymore, they’re toast. Bush attempted to secure oil by force knowing Peak Oil was on the horizon. Obama’s failed attempts to take oil by appeasing Islam, sacrificing Israel on the altar will have disastrous consequences. Israel’s strategic policy is now shifting towards BRICS alignment giving the little nation increasing confidence.

    http://thediplomat.com/2014/04/as-china-turns-toward-middle-east-china-and-israel-seek-closer-ties/

    3 Jewish boys, 16, 16 & 19 were kidnapped recently by Hamas terrorists with clear links to ISIS. Israel hasn’t taken too kindly to the fact that Obama/Kerry recently endorsed Hamas as part of their greater Islamic oil appeasment strategy. Israel will now seek to crack down on the West Bank & Gaza in a way that would shock oil Islamic appeasing Western liberals.

    We know Russia is blocking Western attempts to secure the Ukraine
    We know China is gearing up to block Western attempts to “pivot” East
    We know Brazil is gearing up to block Western attempts to secure LA resources
    We know Africa is aligning Eastwards and will be backed by Russia/China
    We know India under Modi refuses to even step foot in the US unless it’s UN related business.

    Basically we’re gearing up for some kind of great conflict over declining resources. War is the most likely outcome as the ME implodes even further.

    This was warned about and IS happening.

    • VPK says:

      World War II never ended and still is an ongoing venture in a modified format.
      1st. Cold War
      2nd. War against Saddam Gulf War #1
      3rd. War against terrorism
      4th War against Afgan
      5th War against Saddam Part 2 Gulf War 2
      6th War against all the above and than some.

      • If a country has a large industry making war munitions and also has a large army it needs to keep occupied, there would seem to be motivation to stir up problems. Having wars also increases the need for debt, helping (it is hoped) to drive economic growth.

    • xabier says:

      Agritech

      The Bible prepared us for Apocalypse in the grand style: Vials of Wrath poured out on the Earth, Four Horsemen, Angels, Anti-Christs, Great Whores, etc.

      This sounds more like urchins – Brazil, India, Russia, China, Africa, – fighting in the gutter over who gets to eat the rat. Maybe the winners get to move into all those empty apartments in China?

      Not a bang but a whimper, in the end……

      Well, we’ll see. What fine seats we have for the show.

      • Some people view Revelation as a veiled discussion of the fall of Jerusalem. (Nothing to do with the end of the world)

        http://religion.blogs.cnn.com/2012/03/31/four-big-myths-about-the-book-of-revelation/

        For some of the earliest Jewish followers of Jesus, the destruction of Jerusalem was incomprehensible. They had expected Jesus to return “with power” and conquer Rome before inaugurating a new age. But Rome had conquered Jesus’ homeland instead.

        The author of Revelation was trying to encourage the followers of Jesus at a time when their world seemed doomed. Think of the Winston Churchill radio broadcasts delivered to the British during the darkest days of World War II.

        Revelation was an anti-Roman tract and a piece of war propaganda wrapped in one. The message: God would return and destroy the Romans who had destroyed Jerusalem.

    • Not very good news! When resources are short, the tendency is to fight over them. The one possibly saving grace is inadequate funds for major war.

      • gerryhiles says:

        “They” will ‘print’/put it on the Fed tab to go to war methinks and hang the consequences, because there’s nothing left to lose.

        The Fed and it’s owner-banks are insolvent, with trillions of notional dollars in fake ‘securities’, derivatives, CDOs and so many other exotic financial products which can never be marked to market, e.g. collateralized and rehypothecated mortgages and car and student loans.

        In short: it is a Ponzi scheme on a scale which Madoff could only dream of, so the only way forward for “they” is to keep going to the bitter end.

        On a somewhat side note:

        I saw through “alternatives” at least 30 years ago, though I did not have your data Gail … just my technical knowledge and grasp of basic physics.

        For many years it has amused me that so many people are obsessed with producing electricity via wind, solar, hydro, tidal and whatever … all requiring major inputs of “easy oil”.

        There seems to be a common belief that electricity is a “form of energy” on a par with coal and oil, but it is NOT … it is a product of burning coal and oil to produce high pressure steam to drive turbines’

        The Steam, Age never ended, it is just more out of sight and mind than when steam locomotives hauled trains.

        There is no alternative to coal, oil, gas and nuclear for boiling water to produce electricity.

        Even if wind, solar, hydro, etc, could produce most of the electricity supply, the facts are that nothing can be made FROM electricity, which only drives the machines and processes used in the production of such products as plastics and fertilizers, which derive from oil and/or gas.

        I have known all this for over thirty years and so I sit easy with your analyses Gail.

        Thanks for your particular line of approach. Mine has been more technical.

        • Calista says:

          Someone I know used to work on those steam locomotives and then the diesels and then he got into the electronics and the signaling, recording of problems etc. One of the major railroads owns a whole pile of patents on stuff he came up with including one of the original “black boxes” for trouble shooting when something went wrong out on the line. He will tell you that if he were to choose he would have stuck with steam. Why? Well for him it was both more fun and you could fix the problem in the middle of the run on that line, you just had to climb aboard with a few tools. If it were disastrous it would be hauled back to the roundhouse and something would be pounded into shape or ground down and they’d have what they needed as a replacement part. He was proud of how easily he could or he and one other engineer could fix “anything on that whole locomotive” He complained of the change to diesel, that it was dirty, parts weren’t as easy to fabricate, it took more than a bit of baling wire and gum, etc. etc. The stories he told, well, he lived and worked a job that he loved and his long view of things was that the other way was cheaper and we got more done, you just needed to train a few good guys. I think of that sometimes as he said that to me probably 30 years ago. Some of the old timers know which way the wind is blowing but aren’t in a position to change the wind as he’d say.

          • Hate to disillusion you–but a coal fired steam engine took several hours of preparation, by several men, to prepare for a day’s work.
            Ask those guys whether a steam engine was dirty or not

            • Calista says:

              You make assumptions about illusions that I might harbor. I would politely request that you do not project your assumptions upon me. I was stating a piece of history that I was reminded of, no more, no less.

            • MJ says:

              I remember watching a program about those very steam locomotives in our world today.
              Would you believe that such steam engines are being used today? In countries, such as, South Africa and Peru, these machines built in the late 1800’s/early 1900’s are still in service (at least when i saw the TV program some 20 years ago). They did require a large force of workers to keep things in working order, but both nations have able bodied men to at cheap rates to undertake those tasks.
              These were steam engines…I believe I watched a National Geographic special and it may be on youtube.

          • That’s the whole point MJ, if you have cheap labour you can get around the energy problem to a limited extent for a sort time.
            Problem is, You can only have cheap labour if you have cheap food/housing etc. Once that gets expensive, people demand higher wages, and so eventually price themselves out of a job. If a steam loco needs 5 workers just to service it, and a driver and fireman to run it, thats when the economics of cost begin to bite.

          • xabier says:

            Calista

            Interesting. Which also raises the very important point that most of our vital machines now simply can’t be fixed or bodged by a clever chap with a hammer and spanner. Even the diagnosis of the problem requires a computer.

            • Jan Steinman says:

              “most of our vital machines now simply can’t be fixed or bodged by a clever chap with a hammer and spanner”

              That’s why I look for old stuff. I won’t have an engine with a computer in it. I’ve been through FOUR hot-water pots in 5-6 years — the little plastic bits in them keep melting!

              Gimme that ol’ time teknologgy.. 🙂

            • Calista says:

              You know that brings up a funny point. Bringing on that old time technology is a great idea. You end up using muscles and learning technique that will help you in the long run. I attempt and sometimes fail, at teaching those around me gardening, food preservation, storage, cooking. It is a gateway to other concepts like building ferrocement rainwater tanks of a decent size, etc. etc. (yes, I know dependent upon cement, or lime if you are willing to do the work) but one recommendation that used to always get me and it indicates the sad state of our world. The modern ie last 40 years of gardening advice says to stay away from the cheap tools and get the “well made” tools. The authors rarely, if ever, define what you would look for in a cheap versus well made tool. Price is not usually a solid indicator of this these days. A similar issue exists in older cooking or home making books that assume you know how to skin and part out any animal that comes into your kitchen. I will, forever, be enormously thankful for my parents raising me without much except I was expected to help with every bit of the garden, house building, cooking, prepping animals for the freezer, etc. To meet others of my generation with such experience is rare and usually means they came from a third world country. So there are these huge knowledge gaps, and they are all small things, nothing that will ruin someone, but they are there and growing and the growing part is what scares me the most which is probably why I try to teach as it gives me hope, however false that hope may be, it gives me hope. So the difference in tools, look for a fully forged tool. So the hoe blade is not tacked on with a bit of spot welding, you will see the spot but is instead “pounded” or forged out into the full blade. Also, carbon steel wears faster than stainless but is, in the field, easier to sharpen and keep a working edge on. So some choices there in tool acquisition. However, the saddest bit for me in teaching is how few students are ready to learn, they are interested in some “cans of food” not “this is how you set a snare for a rabbit and how you make sure they have a clean death and how you skin them so you can re-use the skin” But yes, that inability to care for the tools we take for granted is going to mean a difficult and massive step down in expectations.

            • Paul says:

              “which is probably why I try to teach as it gives me hope, however false that hope may be, it gives me hope”

              Agree completely — it may prove futile — but better than resignation and despair.

            • There is certainly a huge amount to learn–not clear how many good teachers around either.

          • Lizzy says:

            Good one, Calista. To me, that is a perfect example of how the world’s been worsened by over-complication and using modern technology to replace people. In my dreams we could zip back to 1980, and just stop. Of course it wasn’t ideal for everyone, but it was pretty good for me and my like! There was plenty of oil, no global warming, no mad mullahs, very low unemployment (in NZ), free universities… Sigh…
            And there was good dental care and health care.

            • hebertmw says:

              Lizzy,

              I’ll disagree with you on the dental care. Since I have been getting rid of my amalgam fillings I have a healthier mouth and body. Mercury does not agree with my body.

            • I got rid of amalgam fillings years ago. Not sure about the effect. I am healthy now.

        • Most analyses tend to be way too narrow. Wind and solar don’t need to just pay back their energy cost; they need to pay back all of their other costs, including financing, salaries, cost of maintaining electric transmission lines, plus whatever costs are associated with energy balancing (or more long distance transmission, etc.)

          Furthermore, oil tends to be a big subsidizer of government finances; intermittent renewables tend to need subsidies. Somehow this needs to be taken into account in any comparison as well. Governments operate on the surpluses of an economy. Intermittent renewables don’t seem to produce surpluses.

  44. Pingback: IEA Investment Report – What is Right; What is Wrong |

  45. Pingback: IEA Investment Report - What is Right; What is ...

Comments are closed.