Update on US natural gas, coal, nuclear, and renewables

On August 6, I wrote a post called Making Sense of the US Oil Story, in which I looked at US oil. In this post, I would like to look at other sources of US energy. Of course, the energy source we hear most about is natural gas. We continue to be a net natural gas importer, even as our own production rises.

Figure 1. US natural gas production and consumption, based on EIA data.

Figure 1. US natural gas production and consumption, based on EIA data.

US natural gas production leveled off in 2013, because of the low level of US natural gas prices. In 2013, there was growth in gas production in Pennsylvania in the Marcellus, but many other states, including Texas, saw decreases in production. In early 2014, natural gas prices have been higher, so natural gas production is rising again, roughly at a 4% annual rate.

The US-Canada-Mexican natural gas system is more or less a closed system (at least until LNG exports come online in the next few years) so whatever natural gas is produced, is used. Because of this, natural gas prices rise or fall so that demand matches supply. Natural gas producers have found this pricing situation objectionable because natural gas prices tend to settle at a low level, relative to the cost of production. This is the reason for the big push for natural gas exports. The hope, from producers’ point of view, is that exports will push US natural gas prices higher, making more natural gas production economic.

The Coal / Natural Gas Switch

If natural gas is cheap and plentiful, it tends to switch with coal for electricity production. We can see this in electricity consumption–natural gas was particularly cheap in 2012:

Figure 2. Selected Fuels Share of US Electricity - Coal, Natural Gas, and the sum of Coal plus Natural Gas

Figure 2. Selected Fuels Share of US Electricity Production – Coal, Natural Gas, and the sum of Coal plus Natural Gas, based on EIA data.

Coal use increased further in early 2014, because of the cold winter and higher natural gas prices. In Figure 2, there is a slight downward trend in the sum of coal and natural gas’s share of electricity, as renewables add their (rather small) effect.

If we look at total consumption of coal and natural gas (Figure 3), we find it also tends to be quite stable. Increases in natural gas consumption more or less correspond to decreases in coal consumption. New natural gas power plants should be more efficient than old coal power plants in producing electricity, putting downward pressure on total coal plus natural gas consumption. Also, we are using more efficient lighting, refrigerators, and monitors for computers, holding down electricity usage, and thus both coal and gas usage. Better insulation is also helpful in reducing home heating needs (whether by electricity or natural gas).

Figure 3. Layered US consumption of coal and natural gas, based on EIA data.

Figure 3. Layered US consumption of coal and natural gas, based on EIA data.

Another factor in the lower electricity usage (and thus lower coal and natural gas usage) is fewer household formations since 2007. Young people who continue to live with their parents don’t add as much electricity usage as ones who set up their own households do. Low household formations are related to a lack of good-paying jobs.

Coal Production / Consumption

US coal production hit its maximum level in 1998, with production tending to decline since then. US coal consumption has been dropping faster than production, so that exports (difference between production and consumption) have been rising (Figure 4).

Figure 4. US coal production and consumption based on EIA data.

Figure 4. US coal production and consumption based on EIA data.

In 2012, about 16% of coal produced was exported. This percentage dropped to about 10% in 2013, with greater US coal usage.

Coal tends to cause pollution of several types, including higher carbon dioxide levels. It also tends to be less expensive that most other fuels, so world demand remains high. Worldwide, coal use continues to grow.

Nuclear and Hydroelectric

Hydroelectric is the original extender of fossil fuels. Hydroelectricity using concrete and metals became feasible in the 1800s, when we began using coal to provide the heat necessary to make metals and concrete in quantity. The first hydroelectric power plants were put in place in the US in the 1880s.  As recently as 1940, hydroelectric provided 40% of the United States’ electrical generation.

Nuclear electric power was the next major extender of fossil fuels. The first nuclear power was added to the US energy mix in 1957, according to EIA data. The big ramp up in nuclear began in the 1970s and 1980s. Similar to hydroelectricity, nuclear requires fossil fuels to build and maintain its plants making electricity.

If we look at the US distribution of fuels, we see that in recent years, nuclear has been a much bigger source of energy than hydroelectricity.

Figure 5. US Energy Consumption, showing the various fossil fuel extenders separately from fossil fuels, based on BP data.

Figure 5. US Energy Consumption, showing the various fossil fuel extenders separately from fossil fuels, based on BP data.

The above comparison includes all types of energy, not just electricity. The grouping GeoBiomass is a BP grouping including geothermal and various forms of wood and other biomass energy, including sources such as landfill gas and other energy from waste. Note that GeoBiomass, Biofuels, and Solar+Wind are hard to see on Figure 5, because of their small quantities.

If we look at hydro and nuclear separately for recent years (Figure 6, below), we see that nuclear has tended to grow, while hydro has tended to fall, although both now seem to be  on close to a plateau. Hydro tends to be more variable than nuclear because it depends on rainfall and snow pack, things that vary from year to year and month to month.

Figure 6. Comparison of US nuclear and hydroelectric consumption, based on EIA data.

Figure 6. Comparison of US nuclear and hydroelectric consumption, based on EIA data.

The reason why hydro has tended to decrease in quantity over time is that it takes maintenance (using fossil fuels) to keep the aging power plants in operation and silt removed from near the dams. Most of the good locations for dams are already taken, so not much new capacity has been added.

Nuclear power plant electricity production has grown even since the 1986 Chernobyl accident because the United States has continued to expand the capacity of existing nuclear facilities. I do not expect this trend to continue, for a variety of reasons. Not all such capacity expansions have worked out well. The capacity expansion of the San Onofre plant in California in 2010 experienced premature wear and is now being decommissioned. Many of the nuclear plants built in the 1970s are reaching  the ends of their useful lives. Unless we add a large number of new nuclear plants in the next few years, it seems likely that US generation of nuclear electricity will be falling over the next 20 years.

Other Energy Types

It is easier to see other energy types if we look at them as a percentage of US total energy consumption. The following is a graph of “renewables” as a percentage of US energy consumption, using EIA data:

Figure 7. Renewables are percentage of US energy consumption, using EIA data (but groupings used by BP).

Figure 7. Renewables are percentage of US energy consumption, using EIA data (but groupings used by BP).

A person can see that over the long haul, hydroelectric has tended to shrink as a percentage of energy consumption, as energy needs grew and hydroelectric failed to keep up.

The GeoBiomass category is BP’s catch-all category, mentioned above.1 It (theoretically) includes everything from the wood we burn in our fireplaces to the charcoal briquettes we use to cook food outdoors, to home heating with wood or briquettes to the burning of sawdust or wood pieces in power plants. It also includes geothermal, which is about 6% as large as hydroelectric, and is increasing gradually over time. Based on EIA data, biomass isn’t growing either in absolute amount or as a percentage of total energy consumed.

Biofuels are liquid fuels made from biomass used to extend oil consumption. In the US, the major biofuel is ethanol, made from corn. It is used to extend gasoline, generally up to 10%.  A chart of production and consumption shows that US biofuel production “topped out,” once it hit the 10% of gasoline “blendwall”.

Figure 8. US biofuel production and consumption, based on EIA data.

Figure 8. US biofuel production and consumption, based on EIA data.

Biofuels now amount to 5.7% of US petroleum (crude oil plus natural gas liquids) consumption. In recent years, the US is a slight exporter of biofuels.

Corn ethanol currently takes about 40% of US corn production, according to the USDA (Figure 9). Greater corn plantings would put pressure on land usage for other crops.

USDA corn use, from USDA site.

Figure 9. USDA corn use, from USDA site.

If someone figures out how to make cellulosic ethanol cheaply (perhaps from wood), it presumably will cut into the market for corn ethanol, unless the blend wall is raised to 15%. Without additional ethanol coming from a source such as cellulosic ethanol, such an increase in the maximum blending percentage would likely be problematic.

Wind and Solar PV

Wind and Solar PV are sources of US electricity, so really need to be compared in that context. If we compare nuclear, hydroelectric, and all renewable electricity other than hydro (including electricity from wood, sawdust, and waste, and from geothermal, in addition to wind and solar) we see that in total, all other renewables are approximately equal to hydro electricity in quantity:

Figure 10:  Hydroelectric, other renewables, and nuclear as a percentage of US electricity supply, based on EIA data.

Figure 10: Hydroelectric, other renewables, and nuclear as a percentage of US electricity supply, based on EIA data.

If we look at the pieces of other renewables separately, we see the following:

Figure 11. Wind, solar/PV and other renewables as a percentage of US electricity, based on EIA data.

Figure 11. Wind, solar/PV and other renewables as a percentage of US electricity, based on EIA data.

Wind energy has indeed grown in quantity. Solar/PV is growing, but from a very small base. The remainder, which includes geothermal, wood and various waste products, is growing a bit.

A major issue with wind and solar is that we badly need a “solution” to our energy problem, so these are “pushed,” whether they are really helpful or not. Some issues involved:

(a) Cost effectiveness. Studies (such as by Brookings Institution, Weissbach et al., Graham Palmer) show that wind and solar PV are not cost-effective for reducing carbon emissions. If we want to reduce carbon emissions, conservation or switching from coal to natural gas would be more cost effective.

(b) Peak supply or peak affordability (demand in economists’ language)? The peak oil “story” often seems to be that because of inadequate supply, oil and other fossil fuel prices will rise, and substitutes will suddenly become competitive. This story is used to support a switch to wind and solar PV and high priced biofuels, since the expected high prices of fossil fuels will supposedly support the high cost of renewables.

Unfortunately, the story is wrong. High prices of any fuel tend to lead to recession because wages don’t rise to match the high prices. Also, a country using the high-priced fuel tends to become less competitive compared to countries that don’t use the high-priced fuel. The net effect is that prices don’t rise very much. Instead, manufacturing moves to countries that use less-expensive fuels. Oil prices may fall so low (relative to the cost of oil production) that oil producers sell their land and increase dividends to shareholders instead; in fact, this seems to be happening already.

(c) Hoped for long-term life. If fossil fuels have problems, can “renewables” have long life-spans in spite of those problems? Not that I can see. It takes fossil fuels to maintain the electric grid and to produce any modern renewable, such as wind, or solar PV or wave energy. Wind turbines need frequent replacement of parts, and solar PV needs new “inverters.” Wood and biomass will have long lives, if not overused, but these won’t keep the electric grid operating.

(d) Apples to oranges cost comparisons. There are a few situations where wind and solar PV are used to substitute for oil–for example, on islands, where oil is used to operate electricity generation. In these cases, wind and solar PV are likely already competitive, without subsidies. In these situations, per capita use of electricity can be expected to be very low, because exports made with such high-priced electricity will be non-competitive in the world market-place.

The confusion comes elsewhere, where substitution is for natural gas, coal, or nuclear energy. Here, the savings to an electric company is primarily a savings in fuel cost, that is, the cost of the natural gas, or coal or uranium. The plant’s manpower needs and its cost of electric grid maintenance will be the same (or higher). There may be costs associated with monitoring the new sources of electricity added to the grid or additional balancing costs, and these need to be considered as well.

If we want to maintain the electric grid so we can continue to have electricity for a variety of purposes, the “correct” credit for intermittent renewables is the savings to the power companies–which is likely to be close to the savings in fuel costs, or about 3 cents per kWh on the mainland United States. This is far less than the “net metering” benefit (offering a benefit equal to the retail cost of electricity) that is often used for grid-tied solar PV. It is also generally less than the “wholesale time of day” cost of electricity, often used for wind.

Germany is known for its encouragement of wind and solar PV, using liberal funding for the renewables. This approach has adverse ramifications, including high electricity costs, less grid stability, closure of some traditional natural gas power plants, and rising carbon dioxide emissions. A recent article called Germany’s Electricity Market Out of Balance by the Institute for Energy Research summarizes these issues.


It would be great if we had a solution for our non-oil energy issues, but we really don’t. The closest we can perhaps come is scaling up natural gas consumption some, and reducing coal’s current portion of the electricity mix. We currently have a large amount of coal consumption relative to natural gas consumption (Figure 3), so we ourselves have good use for rising natural gas production, if it should actually take place.

The “catch” in scaling up natural gas consumption is a price “catch.” If the price of natural gas price rises too high relative to coal, then electricity production starts switching back to coal. If, on the other hand, natural gas prices don’t rise very much, not much of an increase in production is likely to be available. Producers would like to export (a lot of) natural gas to Europe, as a way of jacking-up US natural gas prices. This seems like a pipe dream. See my article The Absurdity of US Natural Gas Exports.

Nuclear is a big question mark. If the United States starts taking much nuclear off line, it will leave a big hole in electricity generation, especially in the Eastern part of the US. Germany and recently Belgium are starting to experience the effect of taking nuclear off line. It is hard to see how wind and solar PV can play a very big role in offsetting the nuclear loss.

Politicians need to have a “solution” they can call an energy savior, but it is hard to see that renewables will play more than a small role. Biofuels seem to have “topped out” for now. Wind and solar PV are still growing, but it is hard to justify subsidies for them, as part of the electric grid system. Solar PV does have uses off grid, if citizens want their own source of electricity, with their own inverters and back-up batteries. There are also business uses of this type–for example, to operate equipment in a remote location.

I have not tried to cover all of the various smaller items. There may also be growth possibilities for items that I have not discussed, such as solar thermal for heating hot water, particularly in warm parts of the United States.


[1] I have used BP’s GeoBiomass grouping for convenience, but I am adding together EIA data amounts. What is included in the “biomass” portion of GeoBiomass seems to vary from agency to agency (BP, EIA, IEA), because of different definitions of what is included. For example, is animal dung burned as fuel included? Is fuel that is gathered by a family, rather than purchased, included? I am using EIA data for US renewables in Figure 7, since its long-term data series is probably as good as any for the US.

About Gail Tverberg

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

  1. Paul says:

    Gazprom is blatantly trading oil without using the USD now


  2. Don Stewart says:

    Dear Gail and All
    Since there has been quite a bit of discussion here about humanity’s money-grubbing ways, I thought it might be interesting to look up the parable of Jesus and the Rich Young Man and see where it led me. Most of us in the US are most certainly rich, by historical standards. Is there any hope some of us might sneak into Heaven?


    Don Stewart

    • nobody from in here thats for sure

    • edpell says:

      From an interview with John Crossan
      “Rome wasn’t a bad empire; we could do worse, and perhaps are doing worse today. The clearest distinction is in John’s Gospel, in the conversation between Jesus and Pilate. Jesus says, “My kingdom is not of this world. If it were, my companions would be in here fighting to get me out.” That’s crystal clear to me. Jesus is saying, “The difference, Pilate, between you and me, is that your kingdom is based on force and violence. Violence is your default principle. My default position is that God is not violent. God will not force you.””

      • Paul says:

        Ironically … how many wars have been fought using religion as the pretext since then….

        • tmsr says:

          Paul, at the end of his long book Crossan asks has Christianity given up too much when it was made the state religion of Rome? Is it time to re-think and return to the original Jesus movement?

          Crossan also makes the statement that the message of an egalitarian social structure is just as unacceptable today as it was 2000 years ago.

          • Paul says:

            Or we could just all convert to this http://en.wikipedia.org/wiki/Secular_humanism

            At the end of the day isn’t that what religion is all about?

            • humanity is cursed with gods of our own making
              As to empires, no empire is sustainable without a continual energy source
              The Roman empire used slave labour muscle, and armies to conquer adjacent territories and demand food (energy) tributes. Roman armies then pushed outwards and became self sustaining on conquered territories
              European nations (UK in particular) were first to harness fossil fuels, and used the energy in guns and steampower to conquer the rest of the world. Those empires, as such, have now gone because the forces that created them (cheap energy) are no longer available
              The USA is effectively an empire held together only with energy output. When those forces are no longer available, that empire will also collapse

          • xabier says:


            Interesting discussion!

            Another point of view is that it was the association of Christianity with Roman rule which meant that when the collapse came, the Church had a staff of highly civilised and educated people, with good social connections and used to exercising authority, who were thereby able to step into the place of the collapsing secular government and rule as bishops, abbots, abbesses, amid the barbarian chaos. This hierarchy was also able to absorb bright people from humble backgrounds and promote them. It’s a fascinating story.

            They in fact ensured that it was not as bad as it could have been, and preserved literacy, architecture, music, etc. Amazingly, some ‘Roman’ (actually romanised celts, etc) families kept going into the 10th century: one such dynasty in northern Spain, the ‘people of Cassius’ converted to Islam in the 8th century, kept all their lands and ruled as muslim princes until over-run by fanatics from Africa.

            I don’t rate egalitarianism very highly as a practical ideal: what matters is, surely, what will protect and save, and hierarchies are useful for that. After all, the torturers and murderers of Soviet Russia, or the French Revolution, were nominally equal to their victims weren’t they? Human dignity I do rate highly, but that is compatible with hierarchy.

            Our current hierarchy however, with bankers and great industrialists – who are inevitably the most pitiless, ammoral and inhuman of all people, – sitting at the top, is another matter!

          • An egalitarian social structure doesn’t work very well. I have seen enough examples myself. I had business dealings with Seventh Day Adventists who tried to be quite egalitarian, for example. Also, the communes of the 1970s and the various attempts by various groups since then at buying up land, and operating it in an egalitarian way have not worked well, as I understand the situation.

            The ideas of an egalitarian social structure is still needed as a counter to the natural tendency the opposite direction, however. It is more an issue of forces operating in opposite directions.

            There is a definite benefit from being freed from the need to grab the most of everything for myself. This can be true, even if an egalitarian social structure doesn’t work.

        • xabier says:

          There are Spanish volunteers fighting in Ukraine alongside the Russians for ‘socialist internationalist values’. We really are back in the 1930’s….. Fascinating time in which to live.

      • Don Stewart says:

        Dear edpell
        I think most of us tend to think of Rome as the epitome of violence…lions eating Christians, etc. Some time ago my wife and I were in southern France, visiting an old Roman settlement. There seas an arch with some words carved on it. It said that Rome had brought ‘peace to the barbarians’. I wonder how many of the ordinary people welcomed the Pax Romana as opposed to the continuous violence which had been the norm? Of course, the King of the Franks met a very bad end in Rome.

        Don Stewart

    • On the cross, Jesus said to the thief, “Truly, today you will be with me in Paradise.” A major theme of the gospels is forgiveness. So I am not convinced that the response to the Rich Young man should necessarily be taken literally.

      Jesus was trying to teach how to behave in a way differently than the world behaves. Timothy wrote, “. . .the love of money is the root of all kinds of evil. . .” A major issue is wanting to have more of everything–the things money can buy. Such wants can occur at any income level. I am sure there are quite a few permaculture adherents who want more “stuff,” even if they look poor.

      • Don Stewart says:

        From my experience, practicing permaculture is a very poor way to get rich. The people I know who practice it for a living are motivated by other things. There may be people who became rich doing something else who buy and estate and decide to use permaculture to manage it who are different. For example, very rich people have established what amount to medieval estates, which never make any money but give the owners some sort of pleasure.

        Don Stewart

        • I agree. Any small scale agriculture is not a path to get rich. It is hard to even feed yourself.

          • Don Stewart says:

            Relative to ‘it is hard to even feed yourself’.

            That conclusion needs to be analyzed carefully. How can one reconcile that conclusion with Geoff Lawton’s lament that he is working hard to bring change to the world, and sometimes thinks about becoming a ‘lazy farmer’ and just taking care of his own needs on his own land?

            One could write a book on the subject (which I don’t intend to do). But let me just suggest a couple of thoughts. First, many people writing here give an undue exclusionary emphasis to external sources of energy such as fossil fuels. There are, I believe, three main legs holding up any stool which actually produces something: knowledge about how to ‘garden’ with natural resources such as land, microbes, water, plants, animals and solar energy; access to non-solar energy such as fossil fuels and artifacts such as water powered gristmills and sawmills; and non-living raw materials such as ores. The industrial agricultural system heavily emphasizes the latter two factors. If Geoff becomes a ‘lazy gardener’, he will be heavily dependent on the first factor.

            If we look carefully at the first factor, we find that it consists of both knowledge embodied in the human brain and also muscle memory about how to do things…and also access to land and water and reasonably stable climate. Fossil fuels are not particularly important to a ‘lazy farmer’. Geoff frequently expresses distaste for big cities, so we might lump him together with Joel Salatin as creating their own entertainment from the living world (as was covered in the reference I gave you earlier about Joel’s talk worthy of a ‘brush arbor revival preacher’).

            The three critically short resources which prevent 7.2 billion people from becoming ‘lazy farmers’ are, I think, lack of knowledge and muscle memory, lack of access to land, and the delusion that consumerism is God.

            Don Stewart

            • Dave Ranning says:

              “Today’s overload of representation serves to underline the radical impoverishment of life in technological class society — technology is deprivation. The classical theory of representation held that meaning or truth preceded and prescribed the representations that communicated it. But we may now inhabit a postmodern culture where the image has become less the expression of an individual subject than the commodity of an anonymous consumerist technology. Ever more mediated, life in the Information Age is increasingly controlled by the manipulation of signs, symbols, marketing and testing data, etc. Our time, says Derrida, is “a time without nature.”

            • Part of the reason it is hard to feed oneself is lack of access to land–in particular, funds to pay for the plot of land. Another part of the problem is need to make enough “profit” to pay taxes so the land doesn’t get taken away from you. Another issue is soil quality/soil amendments. Unless you can afford a vehicle and fuel for that vehicle (and the government can maintain roads), it is hard to get the soil amendments you might want for the land. Somehow, you need enough “surplus” so all of these things get paid for.

              You can do without all inputs, but then your yield per acre goes down pretty quickly. Your ability to trade with others for the crops also goes down, because of the lack of roads and vehicles to go on the roads.

            • Don Stewart says:

              Regarding ‘your yields go down’.

              That is only true under certain circumstances. For example, if you are farming conventionally and selling your crops in town and there is no recycling of nutrients coming back to your farm.

              On the other hand, consider the hypothetical case where Geoff Lawton gets tired of trying to save the world and retires to his subsistence farm. Actually, his farm will support a community of 20 or 30 people. Geoff knows how to operate that farm with virtually zero inputs and every waste product is recycled. The cycling rate of the nutrients is very high (think of the analogy of the velocity of money). The land will get more and more productive. More minerals will be released from the bedrock.

              If a gardener is growing in a Deb Tolman raised bed with the organic waste bin in the middle, then a similar situation to Lawton’s farm happens. The bed gets richer and richer.

              Now, I am speaking for the temperate zone. Tropical regions have different circumstances. But there are very productive forest gardens in tropical areas which are gaining in productivity with virtually zero inputs.

              Both the Lawton farm and the tropical food forests are knowledge intensive rather than fossil fuel intensive, and both depend on quite a bit of human labor. Both, in my hypothetical, would be mostly about self-sufficiency as opposed to being market oriented. Similarly, a Deb Tolman raised bed is about an ordinary suburbanite becoming more self-sufficient, rather than making a financial killing at the farmer’s market.

              Don Stewart

            • maybe our fundamental problem was/is the concept that land (our ultimate energy source) can be owned by a few to the exclusion of the majority who do not

            • Don Stewart says:

              Dear End of More
              The wide ownership of land was, of course, the position of Thomas Jefferson and Abraham Lincoln. The Homestead Act could not pass the US Congress until the oligarchic slave states had seceded, and the ‘plantation’ vote was missing in Washington.

              It would be hard to find any high official in Washington now who held such a position. Now, the officials want everything, including land, concentrated in fewer and fewer hands in the name of ‘efficiency’ and also, I am sure, to enable direct control by Washington. Look at how easily the NSA controls the highly centralized media and computer world.

              I am sure there are discussions in Washington and London debating the merits of ordering Exxon and BP out of Russia, versus just starting a war with Russia and letting Exxon and BP inherit the oil and gas. In the first option, they try to bring Russia to its knees by economic pressure. The second option is the tried and true (actually, mostly failed) strategy.

              Don Stewart

      • edpell says:

        I am away from home so I can not look up the quote but Crossan says of Jesus something like in a world of client and patron, honor and shame, rigid class position he barely attacks it, mostly he just ignores it, instead he proclaim the completely egalitarian Kingdom of God. He called for a movement, a program to be lived, of shared eating and shared healing.

      • Stilgar Wilcox says:

        “Timothy wrote, “. . .the love of money is the root of all kinds of evil. . .”

        “There is enough to fill our needs, but not our greed.” Ghandi

  3. Interesting series of articles about the forthcoming adjusted global financial order. The author posits that there will be forced debt restructuring on the US (via 50% domestic inflation and trade tariffs), PMs won’t move much, in essence globalists will duct tape the rebooted hybrid fiat system for a while longer via debt writedowns and trade policy tricks.

    The spectrum of probable outcomes of the near term future “reset” is getting more crowded every day, now with this Collins chap. As always everybody provides some usefull bit and pieces, unique viewing angles, but the overall arching is not there yet imho. So many diverse authors to follow and contrast Rickards, Martenson, Maloney, PCRoberts, Orlov, JMGreer, and also the “official” sino-russian gov perspective (Glazyev et al), ..

    • A little strange. China buy the Federal Reserve?

      • It’s not about that, more in the blog articles. Anyway, that author sidesteps energy/oil as unimportant factor. Basically, he takes more or less legit and broadly agreed upon arguments for the financial system reset (good read) and then suddenly runs with it expecting centraly planned cornocupia emerging afterwards. Result, it smells like some disinfo channel on detailed inspection.

        • xabier says:


          The intellectual contortions are interesting: usually the form is a good well-reasoned assessment of the present (with of course certain gaps like ignoring energy limits, etc), and a plausible plan for reform, but which then leaps into a vision of Paradise on Earth with smiling, kind people wandering around being nice to one another and no more material problems. Essentially a Marxist pattern, or like a fairy tale. It must satisfy a basic psychological need?

  4. Jarle B says:

    Yesterday I had a dispute with some people about you know what. They kept telling me that electricity is energy, while oil is just an energy carrier – therefore electricity is far better than oil. We don’t need oil, electricity is the future. So here I sit, wondering what to do about all the hair I pulled out of my head during this conversation. The other thing I’m wondering about is what to say to people like this – any suggestions?

    • kesar says:

      My simple advice: don’t bother. There are endless discussions in comments below multiple posts on this blog regarding the propagation of awareness. Most of them ends with the conclusion mentioned above, AFAIK.

      • Jarle B says:


        but it’s so hard to let people believe that the earth is flat, when in fact it is cubic…

        • Stefeun says:

          Jarle, same line:
          Since electricity comes from the wall, let’s build up as many walls as necessary!
          Problem solved. Next?

    • in conversations about this, I have found that there is a universal belief that ‘they’ will come up with something, so we have no need to worry.
      The certainty that electricity will substitute for oil is pretty much universal too I’m afraid

      • Jarle B says:

        EoM wrote:
        “The certainty that electricity will substitute for oil is pretty much universal too I’m afraid”

        … and all the nonsense like “oil needs a lot of electricity to be refined, therefore oil is a energy sink” – soon all my hair will be gone.

      • xabier says:

        I suggest that repeated Green Party statements about the future have somehow sunk in subconciously among the mass of people: ie wind turbines, hydro, solar -electricity are the future, we just have to build them up and edge out nasty old oil and coal, and of course refine the technologies which are ‘in their infancy’. I read an article about electricity generation in Spain (23% renewables) only today which followed this line. All sounds plausible until you think about details.

        • Paul says:

          I refer to this as the ‘solar panels grow on trees’ phenomenon….

          It’s not that the green brigade actually believe this — what they fail to think through is exactly what is involved in the manufacture of a panel — mining, smelting, robotics, computers, training of engineers, driving the workers to the plants, building the plants, etc etc etc etc etc etc to infinity…

          They seem to think solar panels just materialize out of nowhere… that we can building millions of them … they don’t understand that the coal that China would have to burn to create those panels would asphyxiate the planet…

    • Stilgar Wilcox says:

      “The other thing I’m wondering about is what to say to people like this – any suggestions?”

      Jarle, ask them what generated the electricity? It might at least get them to wonder where it comes from. Most people have such a simpleton view of energy it isn’t worth wasting your time trying to educate them and certainly not worth pulling your hair out over. Let them find out the hard way when shtf, LOL.

    • In our existing infrastructure, we need a specific form of energy, whether it is an oil product or electricity or human energy. Swapping one from of energy can sometimes take place, but there is a cost involved–for example, create a device using electricity that can do the work of a human. Or create an electric car.

      In the short term, we need specific kinds of energy. Electricity comes from some source or other–hydroelectric, or coal, or nuclear, for example. Oil products come from crude oil. Humans would not have energy, if they didn’t eat food. The discussion about “energy carrier” or not is silly.

    • MG says:

      If there is no oil, we would have to produce it. The same way as we produce gasoline and other products from the oil as the replacement for electric cars (that appeared already in 1880s), as the oil and its products have shown to be very practical replacements for batteries.

      It is easy to pour gasoline into the fuel tank of the car. To pour electricity into the battery is not that easy.

      The electric car and all that stuff about electricity as replacement for oil still seems to me an attempt to go back in time, as we have not invented/found something better than oil and its products.

      We need something better than both electricity and oil in order to continue the growth.

    • InAlaska says:

      I would say “goodbye” because they aren’t worth talking with. Sorry about your hair, though.

      • Paul says:

        Life is too short to waste it trying to educate people on issues they are likely to never understand.

        • Daniel says:

          When I tell people about peak oil problems they say there is so much oil in the Baakan that we don’t have to worry in our lifetimes…it is the most educated that don’t are the most naive the more education a person has the more ignorant they are…..most rednecks are gearing up for collapse…I see a new evolutionary change in the future

  5. stinky says:

    There is widespread awareness growing of what is coming. While many still cling to the blame game and feel lifestyles can be maintaned after collapse either through “suppressed technologies” or a “honest currency” even some of these people are facing the possibility that no, utopia is not ahead. The important thing is people are willing to look at possibilities whether optimist or pessimist. There is one univeral. After facing the dark future most realize they are not willing to kill other than self defense or hide in a cave forever to live. Spiritual groth is occuring. relationships are forming. Are they ideal relationships?- no. However as people grasp what lies ahead they realize that prepping while useful is only a partial solution. What is important is people are starting to realize perhaps for the first time in their lives what other people mean to them. The childrens needs must come first.

  6. Christian says:

    Ideal Money is a theoretical notion promogulated by John Nash, to stabilize international currencies. It is a solution to the Triffin dilemma.

    “He proposed that international exchange rates be fixed by pegging the value of each currency to a standardized basket of commodities, called the industrial consumption price index. Such a policy would curtail the ability of central banks to make monetary policy.”

    • John Doyle says:

      Simpler that that, just stop banks issuing fiat based accounts. They have to only use their own reserves to fund mortgages etc. See here some excellent common sense:

      • while interesting–this video ignores the basic factor of human nature: that we are collectively and genetically programmed to acquire ‘more’ as a survival strategy.
        this has nothing to do with our current problems, it has everything to do with our primeval existence of previous millenia
        Our brains have not kept pace with our technology
        In evolutionary terms we are still in the Serengeti, where our survival, and that of or family/tribe depends on the next kill. So that is our immediate focus.
        When we’ve consumed that, we look for the next ‘kill’ and so on.
        In those terms, supermarkets are irrelevant. Our ‘kills’ have become new cars, bigger houses, payrises, corporate acquisitions, empire building. The drive is exactly the same.
        A billionaire has no need of a second billion, but his genetic forces leave him no choice but to go for it, simply because he can, and to prove superiority in tribal terms. If he didn’t he would be overwhelmed by others.
        The daydreamers in this video intend that everyone should voluntarily reduce themselves to a common mean
        Dream on!!

        • Jarle B says:

          EoM wrote:
          “The daydreamers in this video intend that everyone should voluntarily reduce themselves to a common mean. Dream on!!”

          Some might, but the masses…. noooo, neeever!

          • the number would be infinitesmally small
            The commenters on that vid wouldn’t look on their own kids, and say: sorry, but you’ve got to exist on a bowl of mealie porridge a day from now on, and no tv or even electric light.
            Aint gonna happen.

        • Spot on about the natural hardwiring for more..
          If you do a survey of “early jumped ship” billionairs, i.e. selling their empire or shares at their prime and going somewhere else like real charity, wild life protection, arts etc. Those guys are ultra rare, they are often somewhat accidental billionairs (out of foundational team of several corporate type members) etc.

          • which is precisely why I called my book ‘The End of More”—I tried to set out exactly why we are where we are, It’s not a conscious decision, more an inevitability over which we have no control in the long term. We have been told for so long that there will always be more, now there isn’t any. Only a tiny minority are prepared for what that means
            The rest insist that ‘they’ will fix things.
            I don’t have any answers, there are none

          • xabier says:


            I had the chance to put this question to a very rich man, ie ‘When you have more than anyone could possibly need in a hundred lifetimes, why do you want more, what’s driving you?’ Because it’s the next challenge!’ was the answer, with eyes shining…….

            (May I add, a very decent person who has set up funds to assist poor bright students to study – a fraction of his wealth, certainly, but still he did it, and intends to do more).

            At my humble level, why do I paint another picture? Because it’s the next challenge, my motivation is perhaps not very different from his. We are indeed hard-wired to make and accumulate.

            • Paul says:

              I had a similar conversation with a very good friend who owns a fairly significant business in Asia …. asked him what is the point to all of this charging ahead … what does one get out of it in the end… when does one determine one has enough?

              His response was — but you have one house — don’t you want more —- you have a nice car — don’t you want more nice cars? There is never enough….

              I suppose what he was saying was that this was an innate desire that we have…. human nature.

              He may be correct — I think this comes down to ego — as do most things — having more validates us in the eyes of others — like so many peacocks we prance about shouting look at me — look at me — I am better than you because I have a flash watch and a flash car….

              If you don’t show it then your credibility comes into question — they say so and so is successful but he drives a toyota … he wears a timex…. hmmmm… not so sure about that guy…

              Facebook and other social media have tapped into this — how many friends do YOU have — look at where I am having dinner — are you at home by yourself — too bad for you —- here I am on holiday with my awesome friends — what are you doing LOSER? It provides a platform to deride others subtly and without actually saying anything ….

              It takes a fair bit of self confidence to not buy into this bs…and to realize that one has enough…. peer pressure is intense — no?

            • Christian says:

              Good summary, Paul. Now, the only real challenges are to survive in case you are unemployed in the third world and to create new civilizations. I’ve worked out some figures and I’m surprised how cheap it is to convert an existing village to a Middle Ages one. For 500 USD per capita you have all needed animals and tools for at least three generations (while it’s not a short list of tools), as food for a year.

              Hard to imagine diesel, electricity and state will not disappear altogether. This day, everyone counting with what is required for a given village conversion will become it’s king. You can count on that. Or if the village manage to do it as a group it could become a kind of republic. Land ownership is likely to disappear that day, just as some billion people. Hope nukes staff will have reaction enough and push the shutdown button, while spent fuel is likely to melt the ground until the Earth’s core, as I think Epdell had said.

              That would be a moment to restart values.

        • SlowRider says:

          Unfortunately, part of our nature is also that we get used to anything, very quickly. Following this path of our conditioning unrestrictedly, our need for the next “kick” will always be rising, exponentially. Without an element of transcendency (religion, meditation, charity, friendship, art…) you will be stuck sooner or later. Sincere, humble people are likely more happy.

  7. found this absolutely brilliant link for renewable energy and the origins of middle east warfare
    it really is a must watch

    • Paul says:

      Thanks for this… a few thoughts:

      “Inspired by this, American engineer and inventor Frank Shuman commissioned the first large-scale solar power generator in Maadi, near Cairo, in 1913. Schuman dreamt of a completely solar powered world. It was theoretically possible then, as indeed it is now.”

      1. Billions have been invested in R&D + subsidies trying to make solar work — yet this is what where we are http://reneweconomy.com.au/wp-content/uploads/2014/04/bernstein-energy-supply.jpg This indicates that solar is unlikely to ever be a significant source of energy.

      2. Even if solar were a more efficient energy source that would not matter — all it might do is extend our fossil fuels a few more decades — the world runs on oil — not solar energy/electricity: http://www-tc.pbs.org/independentlens/classroom/wwo/petroleum.pdf

      3. We all know what cheap energy did for population growth by looking at the massive spike in population that cheap fossil fuels caused. This has resulted in exponential plundering of the natural resources of the world from fish to metals to fresh water. If we had more cheap energy we would end up with even more people with many more living a western lifestyle which would only accelerate the death of the planet

      4. Most critically we started to feed our massive population using oil and gas based pesticides and fertilizers decades ago — the soil is dead without these — solar energy cannot help with that problem.

      At the end of the day, solar does not work — it never has — and likely never will

      And even if it did it would not be a solution to our problems — i would argue that it would accelerate BAU and the destruction of the planet.

      Also — even if we found the magical solution to make solar work — it would still require a functioning growing global economy — because solar panels and the batteries and other gear do not grow on trees — we need mines and smelters and computers and other machinery to make them….

      So solar energy is 100% dependent on a forever growing economy — something that is not possible.

      • unfortunately stuff still get widely published, that we can use renewable/solar power to drive an infrastructure only marginally less benevolent that the one we have now
        This was in “Resilience” this week: (who you might think would know better)

        I was ready the other day–a proposal that we can have a ‘circular economy’

        • Some of the funding for organizations like the Post Carbon Institute and World Watch Institute comes from groups that make money from “renewables.” Also, people who make their living selling solar the same ones drawn into boards of directors of organizations such as these. Furthermore, it is hard to run a website, unless the site has solutions to offer. So there tends to be a huge bias toward renewables as providing solutions.

        • When diminishing returns hits hard, it is very hard to have a circular economy. It takes more and more human labor/energy resource/other resources just to stay even. But it is a nice fantasy.

          • Don Stewart says:

            Dear Gail
            Regarding a ‘circular’ economy. Masonoubu Fukuoka probably came as close as anyone to that ideal. As described by Larry Korn, who knew him well, Masonobu just kept perfecting his skills and knowledge so that he did less and less until finally he was doing very little. While producing lots of food. Ghandi followed a somewhat similar path, getting simpler and simpler.

            Masonobu, according to some others I have heard who knew him, approached the growing of food from a religious perspective. This perspective made what he said almost unintelligible to most of his neighbors. It’s vaguely like a theoretical physicist who finds the universe to be made of energy, only some of which has congealed into matter, trying to have a discussion with a Peak Oiler who thinks that one particular kind of matter is all that matters, and is in critically short supply and we will all soon die.

            Don Stewart

            • producing ‘lots of food’ gives the lie to the circular economy
              if you produce lots of food, you have a net energy output
              that output can only derive from energy input to the soil itself.
              so it is not circular, it gets a continual kick from food energy

            • Don Stewart says:

              Dear End of More
              I violated one of my own rules and failed to note the daily contribution of the sun. Of course, every day Fukuoka’s farm got a vast amount of energy from the sun. The soil and air and rocks turned some of that energy into warmth, and the plants turned some of it into organic matter. The farm was cleverly organized such that no fossil fuels were used in the actual farming (I think he harvested by hand). I imagine he sold his grain crops and his citrus into an industrial system which definitely is dependent on fossil fuels.

              So let me rephrase my perception of what Fukuoka did:
              He used solar energy inside the farm to produce a surplus of energy (with components drawn mostly from the gases in the air by plants powered by photosynthesis). He sold the surplus to enable purchase of whatever farm implements he needed to buy and also any household supplies he needed to buy.

              Whether you want to call that circular or not is a question of taste. His book The One Straw Revolution (translated into English by Larry Korn) was all about circular principles of farming.

              I may be wrong about the ‘no fossil fuels on the farm’. It might turn out that he had a tractor and wagon that he used in his citrus harvest. The main point is the use of mostly the gasses in the air with energy supplied by photosynthesis and the continual recycling of soil nutrients and the building up of nitrogen in the soil through clever farming methods and never plowing and keeping the land almost continually covered. I’d call that circular.

              Don Stewart

          • Stilgar Wilcox says:

            Ya to that Gail. Diminishing returns is just as it sounds, less net energy. That means less profit, less tax revenue, stagnant wages in the face of higher prices, higher capex, lower oil price while a higher price is needed to spur exploration of hard to get oil, less marginal oil plays if profit is too low, lower growth, etc.

            It doesn’t diminish until a circular economy can initiate, it just keeps diminishing.

      • John Doyle says:

        Pretty sure you are correct, Paul

    • If solar had been non-intermittent and cheap, I expect that it would have been quickly revived after WWI. It had the same basic issues that it still has, however.

      • The problem was the WWI-WWII brought such an explosion of massproduced “tech solutions” which hushed up pretty much all the ready inventions in wings like low tech solar and early permaculture. Basically, the people in lust for instant “societal solutions” were not interested in low tech/low and small multiplier approaches. The stuff in vogue was simple “progressive” formula: get thousands of cheap labor, add few megatons of concrete/steel, voila you have e.g. hydrodam powering x-times more thousands manufacturing process and so on. Perhaps it was natural choice, get on that exponential growth hockey stick chart now and immediately reap the benefits/profits. We can debate this phenomenon, my bet is that people were simply not evolved enough to prey from the fossil energy abundance jar yet. So, it was unhealthfull fast development afterwards. Similarly, advancement in practical cheap cold fusion or any other shortcut now would only accelerate destruction. People as culture and species are not ready.

  8. Don Stewart says:

    Dear Gail and All
    For a talk worthy of a brush arbor revival preacher, listen to Joel Salatin:

    Scroll down to the embedded picture and click to get the audio. All about disconnecting from the toxic waste dump of the dominant culture and building an authentic life. About abundance, not lack. But includes denial that reliance on Netflix for your entertainment and taking the grandchildren for happy meals is productive, and thus quite counter to the dominant narrative.

    Also interesting story about a new city in China housing 250,000 people which is designed to produce as much food as the farmland where it was built.

    Don Stewart

  9. Patrick says:

    @ IER Analysis

    I am from germany and you have to know that “Günther Oettinger” is not our Energy Commissioner!
    He is the current EU-Energy Commissioner. And he is member of the right-conservative party….so you have to notice his statements in that context!
    De-industrialization? Until now I can’t see this and one reason why our electricity costs are very high is the subvention of a lot of “energy-intensive export-companies in high international competition”, meanwhile the price of electricity at the “Leipziger Power Exchange” is very low,
    but the private households can’t benefit from that low price because the “Energiewende” seems to be made mainly on the back of the average citizen.

    • It seems like putting the price of Energiewende on the back of the average citizens will lead to reduced spending by German citizens, and thus a cutback in demand for goods and services sold in Germany. I know the German government is trying to keep its companies competitive, but there will still be the loss of the local market for products. This cutback in demand will hurt manufacturing and service companies as well.

  10. Harry says:

    Ah, I see that our numerologist friend, Christine Lagarde, has just been placed under investigation for fraud. The plot thickens…


    • Evidently, there is a dificulty, lolz.

      This is clearly infighting inside the french elite and in relation to global elite using the powers of domestic burreaucracy, diging up some dirt on previous bunch Lagarde-Sarkozy. There was a time when the french were able to form somewhat limited form of international independence, the period peaked with deGaulle and ended in last tiny fumes with Mitterrand, perhaps Chirac. Escapades of poodles and noodles like Sarkozy&Hollande are very sad to watch indeed. That doesn’t mean some rebirth in future is possible, but most likely on very different groundplan without EUR/EU.

    • It seems like politicians have a problem with being charged with things, whether true or not. They probably operate a little bit “at the edge” to begin with, so it is easy to see places where they may have “stepped over the line.”

    • Paul says:

      The IMF and World Bank are gangster organizations so this is hardly surprising…

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  12. Rodster says:

    Gail, since you are asked to speak in different parts of the world on what cheap fuel means to the global economy and how they are interconnected. Do Nations see the writing on the wall with regards to a “collapse scenario”? I am really curious if they either have their head in the sand or they simply want to ignore it.

  13. World of the future? It could be relevant or not, but one the biggest global car companies goes “reverse growth” as they start producing 30yr old model, specifically Toyota Landrover 70series, which is a trusty offroader. Now they added some modern little details, but most of the tooling for the production is most likely dusted off from the original era, they just took it out of the warehouse. The crash tests and emissions would be horrible, but who cares it’s not for exports (yet) and it’s limited production run. It’s interesting as I speculated before, that “low tech” could be brought back at some point and here it makes sense, because in mass production this would sell mutliple times from todays overpriced models.

    • It could be just that an anniversary limited series or the Japanese are again years/decades ahead of the global trends and this very project is indeed on purpose testing the waters for cutting back on the technological rat race. Oops sorry it’s Land Cruiser not Land Rover lol.

    • It seems like if Toyota made the Land Cruiser 70 series “flex fuel,” only 15% of the fuel would count in their MPG ratings (because in theory, these vehicles can run on 85% ethanol). So Toyota would be close to home free on the milage issue, at least from the point of view of meeting government requirements. (Or has the government changed this–this is why many of today’s big vehicles are flex-fuel.) Buyers would still have to buy the fuel, but at least some could afford it.

  14. MG says:

    I have just found an article in Slovak from 1999 (i.e. 15 years ago) about how people in the Eastern Slovakia, which is the poorest part of the country with the highest unemployment rates, used cheaper and illegaly obtained gas condensates instead of gasoline as the fuel for cars.


    Here is the brief summary of the article:

    In connection with the fire in a residential block in Vojany, a village in Eeastern Slovakia, there was mentioned a fact that somebody had a canister with the gas condensates in the basement. There are some deposits of natural gas in that part of the country. Together with the natural gas also the gas condensates are being extracted. According to this article, these gas condensates were stolen and sold through the illegal (mafia) network. People used it as fuel in old cars with the two-stroke engine of former East Germany provenience (Wartburg and Trabant) or also in old cars with the four-stroke engine of brands like Skoda, Ziguli etc. in the mix with the gasoline and the anti-detonation additive. The article states that even the members of police used the gas condensates as fuel for cars at that time.

    • MG says:

      I have found that also in the US using “drip gas” as fuel for cars is nothing new:


      It is clear, that people still have some emergency ways how to somewhat continue using their cars and machines even after the extraction of the oil goes down.

    • I wonder if condensate was used as an “extender” to gasoline, similar to the way alcohol is used as an extender to gasoline today. If condensates were used 100%, I can see that they would need an anti-detonation additive.

      • Little follow up, so it appears this particular car or model line has been continuosly in production for decades, lately mostly towards the Oceania markets. However, the limited edition/anniversary model for Japan clearly features modern dashboard and airbags. So, the possibility this is some early pilot testing project for “regression manufacturing” is not confirmed yet not disapproved. PS this idiotic civilization is now axing true offroaders from the model line up across all the major brands, very telling.. it’s like proclaiming “we are all now metrosexuals even in the countryside” ..

      • MG says:

        One special drawback or sign that somebody is using gas condensates (or drip gas) as an extender to gasoline is the terrible smell of its exhausts:


        In the discussion to an article on a Slovak webpage I have found the following expressive description of this smell: “it stunk like three hundred polecats”. That is why the cars using gas condensates as fuel were called “skunks” or “polecats”.

  15. CTG says:

    I am writing on something that Gail has been pressing on for a while – low oil prices. If you look at this from the other way round, the key is PROFIT. Our world, the capitalistic world where we live in is very much profit-oriented. Our salary is based on profits of the company. Everything we do is for profit. Other than government employees (which indirectly is taxed from the profits of people/company), we are so conditioned, for the last 100-200 years, that without profit, we will not do it. Some people will take commissions, markup on product and services or have service or professional charges. Without profit, nothing moves on earth.

    We have examples of bare shelves in USSR in the 1990s and1980s and the disasters of collective farming where people are forced to work for the community and profit is not in the mind of communists. Humans, by nature are greedy. Even at young age, humans have shown that they will grab more than what they can eat or need. Rarely do you see any kids not taking a lion share of the chocolate from the bowl, only to have the adult shouting at them to share among the siblings. Ever heard of anyone saying “I have too much money”?

    300-400 years ago, the concept of profit is not that prevalent. People would just work at their fields and their main objective is to survive. Now, with consumerism, we “want more”. Thus, profit is something that is very important. more profit, more year-end bonus, more money, more vacation, more gadgets, etc. The idea what we work to live a life is gone. We work to enjoy what we can buy.

    This has a huge impact on the society as most of the things we work now as very little impact on human survival. No offense to those working in the industry but what has tourism, fashion designers, home builders, gadget designers/builders has to do with human survival. Less than 1% of the people are directly involved in food production now as compared to 50 or 100 years ago. This entire group of people is “not relevant” to human survival in that sense. They definitely do not have the skills or knowledge to survive. Turn back the clock 1000-2000 years and look at the Egpytians, Aztecs, Sumerians or any agricultural-based society. They have priests, artisans and other “non-survival” related people. These people are “made available” as they have excess food to support them. Without food, these people would not exist. PROFITS are definately in the minds of these people. Survival is – when is the next harvest and we have to make sure the priests bring rain.

    Coming back to profits in our modern civilization. Projects or work will not be carried out if there are NO profits to be made. In this case, our civilization or economy may be “digital” – yes/no or go/no go. Many projects may not be carried out just because it is not profitable. Supply chain again may be in jeopardy. With so much complexity in our society, I am not sure if you can force people to work for free or for the “good of the community”. Building a pyramid is a big task but I doubt the complexity of doing it is bigger than building a large modern skyscraper. Getting the blue prints done, software used, materials sourced from everywhere, the permits, the approvals, safety and a host of other complex processes (wiring, engineering, heating, coiling, green energy, etc) are some of the tasks that the Egyptians never do.

    The concept of profits, consumerism and “more of something” that is so engrained in our society cannot be removed within days. BAU will go on until it hits the wall. No one will stand up and say hey, we should reduce consumption, reduce this and that for the better of people in the world. No profit to be made, nothing will be done. It will stop.

    Let us discuss this. See if I miss out any critical points.

    • The Chinese economy (at least temporarily) is run on a different concept than profit. Huge debt is being used to fund all kinds of things, whether or not that debt is really repayable. They have been able to undercut costs of most Western companies.

      To some extent, “Profit” is just an accounting that what I do for my work produces adequate results (in terms of food, or remuneration to purchase food). This concept has occurred pretty much forever. Slaves wouldn’t have been kept, if they didn’t produce work for their masters, over and above what was needed to “pay for” their upkeep. Built into the equation, even back then, was energy from burned biomass, which was used to cook food and to make charcoal which was used to heat metals to smelt them. With metal tools (generally not available until quite a bit later), it was much easier to work the land, and the results were much more productive.

    • stephen boyles says:


      You covered all the points quite well as you always do. As profits disappear the global supply chain will freeze up.

    • Stefeun says:

      I’d distinguish 2 slightly different concepts: first is surplus, the excedent of production, which can be called “profit” only once someone takes over it and declares it’s his ownership.
      Almost every process (ie matter transformed by energy) generates surplus, while the concept of profit is typical to our human societies. I expect different “uses” of the surpluses (shared or not, tax-levels, definition of private property, etc…) to lead to very different social structures and speeds of growth and complexification and energy use, due to different strengths of the feedback loops.
      Until critical limits are hit and then collapse happens ; like for living creatures, there’s no way backwards for societies/civilizations.
      My opinion only.

      • CTG says:


        What I am trying to say is that when it comes to “doing work”, A large majority of modern humans will only do it for “profit”. Without profit, no one will do anything. So, as the pie shrinks, profits gets lower, thus, many projects will be stopped or abandoned. Civilization will not be “linear” where people like to imagine a linear graph where it intersects zero. It will not. When project stops, be it energy or food related projects, it just stops and all other interconnected parties will stop too. The graph will not intersect at the axis (y=0, or x=0), it will just drop off.

        Just like JEff Brown’s Export Land Model (ELM) where many people think that oil will continue to flow from exporting countries and according to the graph by 2030, this country will have zero for export. That will not happen. When things go bad, project stops, even if oil flows, the leaders of the country will stop oil export even though there is still a surplus oil for export. They will say “we will save this oil for future use).

        ELM is applicable to all sectors, not just oil. It can be a food related project or health care. When some even happens that saps profits, the project will just be abandoned. So, when people extrapolate and say by certain number of years into future, it will be gone, that is something I don’t really think it will work.

        • Stefeun says:

          I agree, CTG,
          it just stops. As any structure, our economy and any of its components at whichever scale seems to follow the pattern Gail often describes:
          – growth (not always full speed, but mandatory)
          – overshoot (hit some limit, some of which can have been lowered by changed environment),
          – collapse (many possible scenarii, but down enough so that the cycle can start over again, from the surviving “germs” and depending on new environmental conditions).

          WRT our golbalized supply-chains, we’re already witnessing today more and more local hubs coming to a halt, bringing down with them a part of the economy. It’s only a matter of time, due to global reduction of available energy, for we see a strategic key-hub to fall, initiating collapse of the entire system. Which one is a big questionmark, many candidates.
          I’d consider the ELM you describe (countries deciding to anticipate shortages and suddenly cutting down their exports) as an accelerating factor, but that doesn’t change the whole pattern (unless it’s big enough, imagine China doing that!).
          However, I don’t think the unraveling will be initiated by any conscious decision, but rather by some unexpected financial trick.

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  17. CTG says:

    Paul, you may want to have a lookout for helicopters dropping cash in your yard (but not in Bali though …)


    Generally, think tanks like CFR (Council on Foreign Relations) are testing waters on people’s reaction to new policies. They may in the end influence the decision to make it happen. The point that I want to stress is that – “they actually think about doing it !” I guess they ran out of rabbits in the hat already. This “dropping of cash” is a sure-fire way to hyperinflation. A hyperinflation in US or Europe or Japan has a devastating effect on the world’s economy as trust evaporates. It will spread quickly and mercilessly as people in other countries may think it will happen at their country. Supply chain will break and “food on the table” will be a big question mark !

    • Paul says:

      Perhaps in Ben’s ivory tower the helicopter idea sounded good — but as you say — in the real world it is likely to be disastrous… but I suppose when you are at the end of your rope you try anything to stay alive a few moments longer.

      To a certain extent they are already flinging cash out of choppers — see subprime loans … see QE ZIRP …. see anyone with a pulse gets a student loan… also massive numbers on disability who are not really disabled…

      I am still waiting for the actual choppers to hover over our hill top in the jungle and shove pallets of 100 bills out the door…

      • xabier says:


        Carefully compressed they could make quite good briquettes for cooking, as in Britain during WW2.

    • InAlaska says:

      Well, I think a bout of hyperinflation would be just what the doctor ordered, and far preferable to a deflationary spiral. If I had to pick between the two. Hyperinflation will at least cause the price of commodities to rise which will once again allow oil producers to make a profit. Deflationary spirals just lead to economic death. With hyperinflation, those with physical gold will be the new rich. With deflation, everyone is poor.

      • Hyperinflation is loss of trust in currency/gov regime not related to high inflation. In todays world probably inflation and deflation go hand in hand, each prevailing in different sectors, it’s a fluid situation. Almost like a buildup towards tectonic plate collision. It’s hard bordering on impossible to have total loss of con-fidence in world’s reserve currency or payment system. Lets see the next few years, if China and Russia doesn’t collapse/throw a towel till the end of this decade then it’s game over for the old hegemon. Otherwise brace yourself up against more tricks and schemes how they duct tape the system all over again.

        PS who will be the next winner is hard to tell, firstly define the “the new rich” in 10, 25,50,100 years time, different answers

      • If there are hardly any goods to be had, the question becomes, “Who gets the goods?” Presumably those who produce them get the first dibs on the goods produced. Bank account balances and other financial assets are not likely to be worth a lot, whether the government simply takes them away from us, the pixels that recorded the amounts disappear, selected securities and banks default and close (thus causing deflation), or the recorded balances buy practically nothing, and we call the result hyperinflation.

        Whether or not physical gold is used to distribute goods available remains to be seen. It might be that people who have created goods of one kind can trade with others for goods of another kind, but those who are without goods to trade are sort of out of luck. This could happen through something like a general store, where trades are transacted. The “owner” of the store might run tabs for individual customers. If they bring in goods of one kind, they could be converted to common units (bushels of wheat, or US$), and traded for other goods.

        • InAlaska says:

          This is why Chinese elites and many others are buying up as much farmland as they can get their hands on. See link below.

          • Stefeun says:

            According to this top 10 of land-grabbing countries, China (HK incl.) is far from being Nr 1:

            • Very strange! This seems to be land for farming. But the buyers don’t seem reasonable.

            • Stefeun says:

              on this site you can create lists and sort by type of use (not only farming), by region, etc..
              (short video on the homepage to explain how to use the website as well)

              They claim they’re independant; I haven’t investigated to find out; look serious, though.
              List of partners at bottom of this page:

            • Sorting by intention of investment, agriculture predominates, followed by “forestry”.

              When I sort by crops, a large number of “deals” are for “Oil Palm” – A biofuel. Rubber seems to be a distant #2, followed by Corn #3 (food or biofuel?), Jatropha #4 (also used for biofuels), and Soya Beans #5. Others in the high in the list include Sugar Cane #6 (for ethanol?), Wheat #7, and Rice #8.

              By target region, the biggest targets seem to be Southeast Asia (#1 in terms of contracts), Eastern Africa #2, South America #3, and West Africa #4.

              Sorted by investor region, the biggest investors in terms of contracts are Southeast Asia #1, Eastern Asia #2, Northern Europe #3, North America #4, and Western Europe #5.

              My deductions, based on a little looking at the data.
              (1) Some investors are trying to get rich off the biofuels craze, and buying up land in neighboring countries.
              (2) Other investors (particularly from Europe) are trying directly to get land for biofuels. North America has its own biofuel growing business–doesn’t need to be buying up land elsewhere.
              (3) There is also interest in rubber, food crops, and in forestry (for biofuels, too?). In total, food crop contracts are quite high. Some of these may be investments to make money; others to supply food crops for their own country. By bringing in modern equipment and fertilizer, investors expect to be able to raise output per acre.

            • Stefeun says:

              Thanks lot for your insightful comment. I’m a bit surprised that you consider palm-oil as a biofuel; I thought it was used only by the food industry (far too much, as was recently discussed in France, at least).

            • Palm oil is definitely being used for biodiesel. This article talks about it being used as a biofuel in Indonesia (so it won’t have to import so much oil).

              Palm oil export growth stalling in Indonesia on biofuel jump

              A Post Carbon Institute article: How Palm Oil in Everything From Food to Fuel Is Killing Orangutans and Exacerbating Climate Change

              This Biofuels Status Update says:

              Most of the major biodiesel producers consumed what they produced. China, on the other hand, is a significant consumer of biodiesel, but satisfies most of its demand by importing biodiesel from Southeast Asian countries like Malaysia and Indonesia. In fact, I visited Malaysia several years ago and asked a palm oil producer if the EU’s concerns about the sustainability of palm oil (production of which has caused deforestation in Malaysia and Indonesia) might slow their growth. I was told that China had no such concerns and would buy every drop they could produce.

            • Stefeun says:

              Tanks for your informative (and updated!) links about palm-oil and biofuels.
              My flawed view comes from that French Wikipedia article (http://fr.m.wikipedia.org/wiki/Huile_de_palme#) states that palm-oil uses are 80% food, 19% industry and only 1% biofuels (see in “Sommaire”, Table of contents). Looks like this distribution dates back to 2007-2008, and today the share of biofuels is likely to be much higher.
              If I got it correctly, this increase in biofuel production from palm-oil would be thanks to a new process of hydrogenation, started on a large scale by Neste-Oil (FI) in its Singapore plant in 2010.

            • Stefeun says:

              Landmatrix observatory seems to be a serious organisation, as I found it cited in many websites about land-grabbing, such as this one:

              However, I also found they would (surprisingly?) report figures for the last 10 years only:

              Whatever the exact figures are, the issue is becoming really concerning:
              “The past decade has seen an enormous rush to acquire land, a phenomenon that some have dubbed a “global land grab.” These acquisitions are motivated by rising food and fuel prices, anticipated commodity and resource scarcities, new incentives for financial speculation, and concerns over dwindling spaces for “nature.” As reports of a “global food crisis,” peak oil, global climate change and ecological devastation multiply, the hunt for land and access to its riches similarly intensifies.”
              Quote from: http://www.cornell-landproject.org/

              We have a big problem IMHO with definition(s) of ownership and property rights ; not only with respect to the land, but the land (together with its water and underground minerals) is becoming a major issue as we’re reaching the limits.

            • If investors are buying up land to feed the biofuel craze (especially for Europe, that can’t grow much of its own) this is a problem. Even buying up land to grow crops is an issue, if doing so cuts off the local folks from raising and buying crops.

              I am sure that investors plan to bring in modern equipment and fertilizer and grow more per acre. But this is not likely to be a method for long-term success, with world oil and financial problems.

            • InAlaska says:

              If you are a very wealthy person, and you have a brain, and you realize that the upheavals to come are going to cause all of your paper wealth to become meaningless, there is only one thing to do to protect your wealth: convert part or all of it to hard assets. Some people think art works, but that presumes we have a civilization that appreciates or needs art. Ditto for gold and other precious metals. So that only really leaves land. Land, particularly arable land, has always been the source of all of our wealth. If you own farmland in the coming century you will be wealthy.

            • kesar says:

              Ownership as a right might be preserved only by force in form of your own (or your community) military skills or – like today – by state. In world of anarchy, which is inevitable sooner or later, land also must be defended from “free riders”. I doubt there are any valuable future assets except food and tools, which can be kept hidden.

            • Stefeun says:

              it’s quite hard to figure out the whole picture because of the diversity of the situations and secrecy of the deals. However, I suspect that investments intended for pure storage of wealth (speculation) is only a small part of this business ; my impression is that most of it is due to big corporations (agro-holdings et al) aiming to reduce their costs and secure their supplies.
              Just BAU reaching limits in “developed” countries. From this point of view, farmland is a resource; in early times there’s a rush on the most profitable ones, and then..?

              The big problem is for small farmers who are evicted off their land and thus lose their mean of survival; they just go grow population of nearest big city. Not many people seem to care about that; let alone the various negative impacts on the environment (water, forests and all this traditional landscape converted into agro-industrial production). We’re talking of a total surface as big as Spain, today; and there’s no reason for this rush to stop, given the diminishing returns and increasing pressure on prices (not only food prices). This phenomenon is also a big accelerator of the concentration of wealth.

              Post-collapse, as Kesar says, the situation is likely to be very different, as the “set of rules” could be more of the feudal style, and one might be able to defend only the piece of land he lives on. I’ve hard time trying to imagine what all those huge surfaces of depleted soil will become (this remark is also valid -perhaps even more- for most of the older fields in colder OECD countries).

            • Land ownership is especially helpful if the government who gives you ownership of that land continues to exist, and doesn’t change the rules. Otherwise, I am afraid that you could run into someone challenging your right to the land. Even if you continue to own the land, you will still need to pay annual taxes or lose it.

            • Stefeun says:

              Since, after all, this landgrabbing issue is about energy (biofuels for engines, food for our bodies), about limits and about financial implications, let me place a last link to a very short but very telling text:

              Press Release: World Bank Accused of Destroying Traditional Farming to Support Corporate Land Grabs – Monday, March 31, 2014

            • John Doyle says:

              IMO, The World Bank and IMF are criminal organisations, doing the bidding of the 0.1% at the expense of the world’s citizens.

            • Paul says:

              Most definitely – but they masquerade as do-gooders…

            • The article is about the World Bank being behind all of this land grabbing–encouraging changes in laws to allow big corporations to come in and build biofuel plantations or other agriculture where previously small farmers lived. Sad!

            • Christian says:

              World Bank and the like are trying to kill the few people still able to go on without industrialism. Hope some will escape.

              Gail: you missed soja beans as biofuels. That’s where our biodiesel comes from

  18. edpell says:

    Paul, six more years who is it good for? Yes for us who are well enough off and would be happy with six more years of well enough off sure kick the can. But there is a growing group of people who are unhappy some willing to play Russian Roulette (1 in 10 chance my life gets better, 9 in 10 chance I die). Of course there will have to be a large fraction before they band together and start taking. Which does us no good so keep kicking Ben/Yellen/whoeverwitz

    • Paul says:

      Billions are suffering and desperate — but even for those people — when the SHTF — they will look back on these years fondly….

      I don’t think people quite get how bad this is going to be…

      • MJx says:

        Spoken by a human of course. What is the term used ,ethnocentric view point.
        Doubt the elephants (among many other species) would agree with your wish that humans continue to exist,
        Ivory-seeking poachers have killed 100,000 African elephants in just three years, according to a new study that provides the first reliable continent-wide estimates of illegal kills.
        I imagine they would feel otherwise

        • Dan says:

          How many elephants do you think people will kill as the ship sinks?How many elephants did Ugandan dictator Idi Ameen have killed as his supremacy was failing and he was on the ropes.
          People will devour and kill everything in their path for a one more tomorrow.
          It won’t be pretty and those that survive will be too shell shocked to participate in anything resembling “humanity” as we know it today.
          People are animals through and through at the end of the day and a dangerous one at that.

          • Paul says:

            Agree Dan – I suspect everything that moves will be killed and eaten.

            • MJ says:

              Well, Paul if you are correct and the event is fast they may duck the total die off.
              If BAU they are 100% certain to be killed off totally.
              I am with you I hope the die off of humans is fast and compete

  19. Stilgar Wilcox says:

    The following may at first seem off topic, however while we seek ever more remote and difficult to extract oil resources, at the same time emissions continue to rise per the link below. Another article recently pointed to a hiatus in warming due to the Atlantic absorbing much of the recent added energy, but apparently that will only be temporary.

    Science group says climate change worsening, dangerous

    Warming of the climate system is unequivocal, and since the 1950s, many of the observed changes are unprecedented over decades to millennia,” the report says. “The atmosphere and ocean have warmed, the amounts of snow and ice have diminished, and sea level has risen.”

    The report states that the cause of this climate change is man-made emissions of greenhouse gases, which are “the highest in history” and probably “unprecedented in at least the last 800,000 years.”

    The report says that if carbon dioxide and other greenhouse gases continue to be emitted at the current rate, it’s likely that by 2050, temperatures will rise by about 3.6 degrees Fahrenheit, when compared with the temperatures from 1986 to 2005. By 2100, temperatures could be about 6.7 degrees warmer.

    • Paul says:

      Thanks for the link.

      The difficulty here is that we cannot know what the truth is — if the MSM was compliant in lying about Fukushima from day 1… so surely they are not telling us the true story re global warming… it could be that we are on the precipice with methane bubbling out of the Arctic… impossible to know

      • MJx says:

        100% certain they are not telling the truth. Next month a “People’s Climate March” headed by Bill McKibben and 350.org to be held during a world meeting, Sept 20 and 21st in NYC, regarding the next “cut back” agreement of emissions. The only way that cutback will happen is during the next “financial crisis”. Other than that these conferences are all for show.

        • Paul says:

          The thing is…. we cannot stop climate change… without collapsing the economy … which will result in a multi-billion person die-off….

          Damned if we do – damned if we don’t.

          Discussion of climate change is moot — there is no way anyone is going to do anything to stop what is happening.

      • edpell says:

        Bubbling methane energy too cheap to meter just collect it. 🙂

        • MJx says:

          Plug me in! There is a serious effort to do just that Eddie….maybe that will buy us a few more years of record growth of 15-20% of the stock market…I feel richer already!

        • Paul says:

          If I were delusional — I would suggest we mine asteroids for minerals… and invent a giant vacuum cleaner to suck up the methane and pipe it south…

          How to pay for it? Print more money — of course…

          • edpell says:

            Once we get those asteroids into earth orbit we build solar power satellites. Once we have huge amounts of electric we capture CO2 out of the air and turn it into some solid store-able form. Then with the massive growth in wealth from the large amounts of cheap energy we pay back the bonds. We build a global system of moderate speed train service. Say 300 mph, NYC to LA over night, 12 hours. With the cheap energy we can fill Canada with condos and shopping malls and rail service from Alaska to Bali. Paul can summer on the great Ukabaka river (means salmon in Lakaahkian) and InAlaska can winter on the beach in Bali.

            • Paul says:

              That would be so cool! Could do house swaps

            • InAlaska says:

              edpell, I’ve always said you were a genius! Why hasn’t someone already thought of this? See, it just takes a little effort and we can solve all of these silly little issues. I’m going to sleep well tonight.

    • I wonder if the report says, “If carbon dioxide and other greenhouse gases continue to be emitted at the current rate” or if it really says, “If carbon dioxide and other gasses continue to rise at the current rate.” There is a huge difference between those two statements. In one, fossil fuels would continue at their current rate, in the other they would continue to rise. Of course, the real story is that they will likely fall in use. There are other changes that will also take place from the loss of aerosols, and from excessive burning of wood. Someone would need to model the real situation.

      • Stilgar Wilcox says:

        The report states, “continue at current rate”, so we need to take them on their word that is what they intended. I suppose they are avoiding previous decades of continual rise, instead opting for the idea it will somehow level off due to a new climate agreement (yeah right). Fact is, it will continue to rise because the system is set up for growth, i.e. until like you mention Gail, it will likely fall (due to economic dislocation arising from diminishing returns).

        Per the post by Paul regarding the potential for methane releasing, there is an article that just came out a couple of days ago – sorry, no link, but in it there has been a discovery of methane releasing from a part of the Atlantic 1500 feet down! That is worrisome if that is in fact a new development.

        • Stilgar Wilcox says:

          Ah-ha, I found that link: http://news.sciencemag.org/climate/2014/08/numerous-methane-leaks-found-atlantic-sea-floor

          That is a very good follow up article to the first one in this thread. It also makes reference to some of the previous methane events in Earth’s history.

        • MJx says:

          Stilgar, Gail is a confirmed “skeptic” regarding the dangers of Global Warming. That seems to be our situation regarding the issue, 50% feel there is no real need to address the “predicament” and 50% feel there is (for whatever reason(s)).
          When the CEO of Exxon-Mobile, Rex Tillerson, makes a disclosure in a public forum that humans will adapt to climate change by “moving around crops” and “sea level rise” ,because we have always done so and there are “engineering solutions” to it (Rex is an engineer of course), you know we have a problem.
          Thanks Rex for covering your as!, We can’t say YOU didn’t warn us.

          • Daniel says:

            I am with Gail on this one, a focus on climate change is very palatable to liberals; Peak oil is not for some reason…you can’t reason with them…..I went to see David Titley, Penn State expert on climate, give a talk on climate change and while he did discuss the facts he left out one very important fact….He said with populations increasing we need to produce 30 percent more food—–but interestingly he stopped there and made no mention of we have to find 30 percent more fuel to make 30 percent more food…I am not a conspiracy theorist but everywhere there seems to be a concerted effort not to talk about Peak oil…and I don’t know why that is…….He ended his talk with “we put a man on the moon! We can solve these problems!” I guess when you are on the speaking circuit you have to end on an upbeat note or you don’t get wined and dinned as much…

        • The reason I am skeptical about “continue at the current rate” is that that is not the assumption used in the IPCC “standard run” scenario. In fact, such an assumption is never made in any scenario. It sounds like a statement a naive journalist who didn’t understand the report might make.

          • VPK says:

            Gail, I can write with confidence that we are at the tipping point right now in regard to the climate change. As you like to write many times before, “It is already “baked in the cake”.
            We don’t NEED to ADD any more emissions…..Sorry but that is a FACT…
            What needs to be done to alter the situation will by good measure will not occur.
            You can remain as you wish. No matter to me at all. I can confess I locked horns with those in disagreement concerning this topic for many years, to no avail.
            Folks like to interpret “data” to their way of thinking. So be it.

            • MJx says:

              VPK, you are correct. The changes we are seeing already make it a moot point to “debate” about “models” and projections.
              Ocean ph chemistry change (40% of the coral reefs are already dead or dying) and the Arctic melt shows we are toast:

            • Jeremy says:

              Seems that one needs to understand the “language” of the IPCC to appreciate the consensus constraints and public announcements they face. Gwynne Dyer does a decent attempt at just that with this article


              (IPCC)review all 14,000 scientific papers on climate change published in the past five years. And they are doing this work at the behest of the world’s governments, not as some random pressure group; it is the Intergovernmental Panel on Climate Change.
              Scientists are very cautious people. They won’t go one millimetre beyond what the evidence makes indisputable, knowing that they will be attacked by rival scientists if they do. They are much more comfortable talking about probabilities rather than certainties. They are, in other words, a nightmare for journalists who have to transmit their findings to the world.
              Of the nearly 100 scientists I have interviewed on climate change over the past five years, not one doubted that global warming is a big and frightening problem. Indeed, there was often an undercurrent of panic in their remarks. But when it comes to writing official reports, they retreat into science-speak.
              So the Second Assessment of the IPCC, published in 1995, said that it was more than 50 percent likely that human emissions of greenhouse gases were contributing to global warming. The Third Assessment, in 2001, raised the likelihood to 66 percent. The Fourth, in 2007, upped the ante to 90 percent, and the Fifth, this week, says 95 percent.
              But how do you make a headline out of that? How much warming? How fast? And with what effects on human beings? The latest report will run, in its final version, to 3,000 pages, and the answers are buried among the statistics
              ….Without the feedbacks, we could go on burning fossil fuels and cutting down the forests, and the average global temperature would creep up gradually, but so slowly that most of the inhabited parts of the planet would stay livable for a long time. But if we trigger the feedbacks, the whole thing goes runaway.
              There are three main feedbacks.
              There is reason to believe that it’s already too late to avoid this one. The protective covering of floating ice that has shielded the Arctic Ocean from solar heating for so long is now going fast, and we will probably see an ice-free Arctic Ocean in the August-September period as early as the 2020s
              Warmer air and water in the Arctic then starts to melt the permanently frozen ground and coastal seabed (permafrost) his melting releases a huge amount of methane
              Finally the oceans, as they warm, release some of the vast quantities of carbon dioxide they absorbed in the past, simply because warmer water can contain less dissolved gas.
              Our own emissions would take a long time to get us up to really high average temperatures worldwide, but all we have to do is pull the trigger on the feedbacks

            • InAlaska says:

              Can’t speak for Gail, but I always thought that she understood the dangers of global warming just fine, but is suggesting that there will be other faster acting scenarios that will take place first. A collapsed networked economy is every bit as dangerous to the human race as global warming, and in fact, if it does collapse it might stave off the worse effects of climate change due to rapid and drastic decreases in emissions. Did I get that right, Gail?

            • Pretty much. Climate change is happening, but a steep drop in fossil fuel use would stave off the worst effects. A collapsed networked economy looks like it is coming very soon. It likely has severe enough effects that these are what our primary focus should be on. The current hysteria about climate change puts too much focus on one of many problems we are facing.

  20. Don Stewart says:

    More on the recycling of water. I have heard it said that if humans continue to deforest the Amazon, it may become a desert. How is that possible, since the trade-winds will continue to bring moisture in from the Atlantic? And the answer is that the rainforest recycles water many times before it flows out the mouth of the Amazon into the Atlantic. The trees are a key element in the recycling. Destroy the trees, and you cripple the recycling. Which leads to desertification.

    In Nature, scarce elements are recycled more assiduously. For example, phosphorus is recycled about 40 times before it is lost to the ocean.

    Don Stewart

    • edpell says:

      Don, thanks. I see your point there is much room for improvement in farming and I would guess in industry. So the question is more nuanced. Under China’s current operating processes what fraction of rain water enters the segments segments farm, industry, human, nature and what fraction is recovered and what fraction is dumped into the sea. It seems farm, industry and human have lots of opportunity for increasing the recycled fraction. The question is how much will it cost to up the recycle rate. In the looooooooong term we have to get to 100% recycle. Or with 55% of rivers gone maybe not so long.

      • edpell says:

        Of course they can just buy water from the great lakes because the Americans are too stupid.

      • Don Stewart says:

        Dear edpell
        One of the differences is that human recycling is usually quite inefficient. It is not uncommon for the recycling of glass bottles to actually cost energy. Mother Nature accomplishes recycling with enormous efficiency when it is important….as in elements such as phosphorus.

        Human societies exhibit the same drive toward efficiency, but in a rather clumsy way. Most iron, for example, is now recycled.. Not because there are regulations, but simply because the cost of mining new iron deposits has risen to a level that makes recycling attractive. But the notion of a human going out and peeing in the garden to recycle water and nutrients is still regarded as ‘peculiar’. In many cities, you could be arrested. I do it anyway….I will plead old age and geriatric insanity.

        Anyway, beware of false analogies.

        Don Stewart

    • Rodster says:

      Gail, i’ve been meaning to ask you since you are asked to speak on the subject of fuel and the economy in different parts of the world. Do Nations see the writing on the wall wrt a “collapse scenario”?

      • No, Nations don’t see the writing on the wall with respect to collapse scenarios. There are a few readers of this blog who are concerned about the issue (and invite me). But most audience members do not see the writing on the wall. And of course, audience members are not representative of the general population. They tend to be more academic, working in something related to energy to begin with. The group in India a couple of years ago were especially focused on how they could increase energy use (substitute fossil fuels for burning sticks and dung) for their population. They had no clue that this might not be possible, long term.

        • Harry says:

          This is at once amazing and unsurprising. Less than three years ago I was just Joe Blow with a passing interest in peak oil. Now I am convinced that a couple of decades hence, the vast bulk of humanity will have succumbed to starvation, violence and disease and the world will be one big nuclear exlusion-zone. No sane person would take such an assertion at face value. To reach and accept this conclusion has for me been a highly time-consuming and emotionally harrowing journey with ‘truth’ the only reward. I can well understand why few would wish to embark on such a journey and even fewer would complete it.

          • Jarle B says:


            likewise. I used to be a prisoner of the common thought regime, and had a blind faith in techmology (as a known western comedian calls it). The awakening has been long and hard, and it would not have happened if I hadn’t wanted it to happen. From my current standpoint I have no problem understanding that a typical person finds my way of seeing things as far out.

          • Paul says:

            Likewise… it has been a journey that started with a video about the problems with exponential growth — which lead to me questioning the narrative that progress is a good thing — that the industrial revolution was a good thing — which lead me to this blog which connected all the dots.

            If one is logical it is impossible not to reach the conclusion that you have — the current system cannot continue — even if as the green brigade suggest… we were to find an new energy source — that only makes other problems worse — even stopping population growth is no solution as it only collapses the global economy…

            There is no if — there is only when…

            I am not so sure we have decades of this left — I think the next bomb that hits the economy sets off an unstoppable crash — that is why the central banks are doing absolutely everything in their power to fight a deflationary spiral…

            Then of course there is something that they cannot control — which is peak oil — conventional is peaked — shale etc countering that … for now … when shale peaks (2 yrs max?) — unless there is another stop gap solution — then I think we are done.

            • Harry says:

              Paul, to be honest I only talk in terms of decades to cover myself, making concrete predictions about the timing of future events being such a fool’s errand. There are plenty of indicators out there, not least of all the burgeoning mismatch between oil costs and prices about which Gail writes so brilliantly, which suggest to me a very short time-frame indeed.

              Jarle, I got the Ali G reference! 🙂

        • Jarle B says:

          Gail wrote:
          “No, Nations don’t see the writing on the wall with respect to collapse scenarios.”

          This is so true. In spite of all the signs, politicians and businessmen in Norway are not worried, and say that in a few years everything will be fine.

          • I am wondering where Norway’s revenue will be coming from in a few years. The many investments Norway has made are likely to be much less productive than hoped for, as well.

  21. Paul says:

    I would agree — this is not much different than flinging cash out of helicopters to the masses in order to stimulate more consumption….

    See – the Fed is not out of ammo – yet! But they are getting increasingly more desperate:


  22. edpell says:

    Gail, wonderful post. On two point I would focus on the economic argument. 1) Islands already have expensive electric so they can switch to expensive renewables. They have no energy intensive industry now because of the high price and they will continue to have no energy intensive industry because of the high price. 2) It is expensive (due to capital equipment and losses in the process) to convert energy into different forms. Most energy can substitute for another in theory it is just a question of the cost. That is, tell an engineer it is not possible you will get an argument. Tell an engineer it will cost too much and they will happily agree.

    • You are right. All of these issues are cost issues. Cost issues get hidden, when a person starts talking amount of oil that is technically recoverable and other non-financial concepts.

      The idea of substitution needs to always consider cost of substitution–both capital cost, and ongoing cost.

  23. theedrich says:

    To confirm (source:  Tom Whipple) yet once again what Gail has been repeatedly pointing out:

    “A more recent development having serious long-term implications for the oil industry is the growing disparity between the cost of producing a new barrel of oil from the Canadian oil sands or deep below the ocean and the selling price of that oil.  A recent study points out that many planned oil production projects are simply not economical at today’s oil prices, which have been relatively stable for the past five years as costs continued to soar.  Oil companies are already cutting back on new drilling projects which will have little impact on current production, but will be very significant five years or so from now.”

    Notice the words “serious” and “growing.”  In other words, quite independently of actual extraction or political upheavals in MENA, the financial squeeze on the oil companies will require government support (if not takeover) by 2020.  We are coming down to the wire, which means that America’s wars will no longer be optional.

  24. tagio says:

    Sorry, @wadosy, about the name error. Just call me Tagoee or something.

    • wadosy says:

      i’m probably too stringy and gristly to eat… you know, if it comes to that

      but instead of a crossbow, i’ll go for a guitar…

      your reference to daryl and his crossbow… that’s a coincidence… lately i’ve been hung up on those youtube videos of “daryl’s house… i dont have a TV, so it’s been hours of discovering new talent on that show…

      and i’ve been thinking that for a while now…. if you play and sing good enough, they wont eat you


    • wadosy says:

      The arrow hit him squarely between the eyes.

      “Eat! Eat! Eat!” the Pope’s child cried.
      crippled as a kid by “A Canticle For Leibowitz”

  25. tagio says:

    @wadowski, I assume you are being facetious in wondering how a billionaire is prepping to insure the survival of his entitled offspring for the next Feudal Age. I don’t know about billionaires, but none of the millionaires I work with as a corporate attorney in the NYC metro area give any sign of ever considering the possibility of TEOTWAWKI based on resource constraints, financial collapse and supply chain contagion, or 400+ possible Fukushimas. They’ll talk about climate change because that is comfortably distant, but I’ve never heard them speak of the things that are talked about on Gail’s site. Since the 2008 crisis, they’ve essentially doubled down, working/trying even harder to make more money and making their kids work harder at climbing ladder of success. “Reality” for these people, IN GENERAL, is far more driven by, and related to, the social reality of the class to which they aspire than what we in the lower orders might call actual reality, which still has some connection with the physical world. They need to eat at the right restaurants, own the right cars, travel to the right vacation spots, send their kids to the right schools, etc., think the same thoughts, as signaled primarily by the NYT and other establishment mouthpieces, etc., so as to evince to others their proper place in the social order – or more accurately, the place that in that order that they aspire to. They are less prepared emotionally for the possibility of TEOTWAWKI than the television-addled members of the former middle class, who are at least are doing some meager form of mental preparation for complete societal breakdown by watching shows like The Walking Dead, and thinking about getting one of those cool crossbows like Daryl has.

    • xabier says:


      Spot on! Less prepared in their materialism for profound change, in fact, than the late Roman aristocrats – more powerful than your clients in their direct power over others – at least those who took seriously the Christian themes of the world as a Vale of Tears, Apocalypse, renunciation of wealth, etc.

      • Paul says:

        Interesting comments….

        From my experience the wealthier highly educated people I know tend to be far less receptive to the end of BAU discussion than many of the intelligent — though not so educated nor wealthy people I know.

        I was having a conversation with a log cabin builder and one of his comments was — no sense in saving since this is all going to be over soon — pursuing this further I inquired why he thought this way — as he said we are like a bacteria consuming the earth — we have used up the easy oil and other resources etc etc ….

        I suppose the reasons for this are a) the highly educated tend to be part of a BAU cult — BAU solves everything according to their mantra and b) when you are worth tens or hundreds of millions of dollars you cannot envision every being poor — the thought is so abhorrent to people who spend their weekends strolling about the Hamptons with sweaters tied around their necks and feeling oh so pleased with themselves… that they must dismiss it.

        Meanwhile the log cabin craftsman lives pretty close to the ground hunting and fishing and chopping wood for heat… and making a few extra bucks working on small construction projects during the summer…. the fall would not be so far literally

        And perhaps more importantly — psychologically….

        A friend’s daughter teaches in a high end private school that caters to the banker god crowd… when Lehamn busted their game wide open her daughter was telling her how many students were coming in traumatized and in tears in the following days — because their parents were traumatized and in tears because they thought they would no longer be able to stroll with their sweaters around their necks through the Hamptons any longer…. I suppose they also envisioned having to do the dishes for themselves — oh heaven forbid….

        Now if that gets then reaching for the triple strength Xanax… what would happen if they found themselves in a situation where they had to claw at the ground to try to grow their own food…

        I can imagine they’d choose to down the entire family sized jar of Xanax hoping to put an end to things then and there…

        • InAlaska says:

          Paul, I think you are spot on with this assessment. The elite, some of whom I am related to, have no desire to look this beast in the eye. The cognitive dissonance is to severe and what they have to lose is too great. The log cabin builder, on the other hand, sees on a daily basis how the world is put together and intuitively knows how wrong the whole system is.

    • edpell says:

      Tagio, you should see the beautiful backup farms your clients have in Northern Dutchess County and Columbia County. Not to mention providing their table in Manhattan with clean safe meat right now.

    • Sorry to burst your bubble, but that niveau you are describing just consist of relative paupers.. Those are the hired midrange service elite at best, few notches down from the true systemic ownership elite, which is definately diversified among economic sectors and continents and is preping.

      • MJx says:

        As the Godfather pointed it, this class of millionaires are “buffers” the for the super class. Basically act as high priests in ancient Egypt, that what lawyers role today in society really is now a days.

    • dolph09 says:

      Tagio, if that’s the case, they are not part of the super elite.

      A friend of mine I grew up with was valedictorian of our very large high school class, one of the smartest guys I know, worked for Microsoft for awhile, got a double masters from Harvard, and now works at a hedge fund in NYC.

      And he’s nowhere near the elite. They have to commute from a suburb because they find Manhattan too expensive and unlivable.

      But if you have a billion dollars and a corporate empire, you can bet alot of those guys are prepping in their own ways. Buying farmland, islands, resource companies, fine art, gold, anything real they can get their hands on. I bet you many of them know the score.

      The upper middle class is clueless.

      • InAlaska says:

        dolph09, I think you are right. Just because they are super rich elites doesn’t mean all of them are stupid. In fact, many of them are extremely intelligent and they know the score and are preparing for it just as much as some of us lumpen proletariate are doing. Their biggest disadvantage is that they don’t know how to do much for themselves.

    • tagio
      Not sure if you’re into podcasts but JMG gives a really interesting talk on the c-realm about our current level of denial.
      I know some don’t like him, but I find him very articulate on the subject.

      And if you want some interesting comments by a Nobel Prize winner there’s Daniel Daniel Kahneman at the Long Now. He’s very pessimistic about our ability to recognise and change and this is a comment built on decades of research.
      The comment comes towards the end of the talk in the Q and A.

    • edpell says:

      I would add the Integral Fast Reactor.
      “[Research] continues at a low level in studies and programs of the US Department of Energy and in programs around the world today, due to its ability to provide a truly inexhaustible energy technology for entire nations.”

      • InAlaska says:

        Where do I buy the stock?

        • Dan says:

          I lived in the Alaskan Bush for quite awhile. I can tell you as you probably well know it is a hard life (and fun) but one that I can only fathom in my nightmares without fuel (gas, diesel, oil, stove oil, and coal). That 500 lbs of moose meat doesn’t carry itself.

          • InAlaska says:

            Hello Dan. No, you’re right that life in bush Alaska without machines can be a challenge, but one year we used our dog team to pull the quarters out on our dogsled. It works just fine over tundra. Another year we back-packed one out. Once I shot a moose and it died next to the house. If you don’t have an ATV or can’t afford the gas, you better have a bunch of strong boys to help you carry the load. I have two chainsaws, but I also have a 2-man crosscut saw. I have a fuel oil stove, but also have two wood burners. When we lived above the arctic, I once took the boys skiing up on the north slope. I had them ski toward a small herd of caribou and they spooked over to where I was lying down in the snow, and we had a perfect ambush. Then we loaded up our sleds and skiied it all back to the road. We still use a lot of gas, though.

  26. Rodster says:

    “China Has Lost 55% Of Its Most Valuable Resource…WATER”

    roughly 60% of California right now is suffering “extreme drought” conditions. 30% of the state is in “severe drought”. And 10% of the state is only under “drought”. In other words, roughly the entire state – the 8th largest economy in the world – is facing a severe shortage of water.

    But if you think that’s bad, China is about to take over the spotlight yet again.

    A study by China’s Ministry of Water Resources found that approximately 55% of China’s 50,000 rivers that existed in the 1990s have disappeared. Moreover, China is over-exploiting its groundwater by 22 billion cubic meters per year; yet its per-capita water consumption is less than one third of the global average. This is astounding data. More than 400 major cities in China are short of water, with some 110 facing “serious scarcity”.

    • edpell says:

      I have seen people do calculations about what fraction of the food grown on the land people use. I guess we need to do the same calculation for what fraction of the rain fall in a nation is needed for human use (including industry and farming).

      • Don Stewart says:

        Dear edpell
        Water is more complex in that nature can recycle it many times. Indeed, even when it reaches the ocean it is recycled as rainwater back on land. Permaculturists sometimes talk about how many times a molecule of water is used before it is lost to evaporation or runoff. Clever designs can keep the molecule circulating in a field for quite a while.

        So it is true that the amount of water that can be withdrawn from the Colorado River or the Ogallala formation is limited. The ability to use that volume of water to produce crops is not a simple function…it depends on the design of the agricultural system.

        To take a very simple example, a gallon of the water may be directed to drinking water, which is reused as gray water, which grows a plant which transpires the water which condenses on an over story leaf, which falls to the ground and is taken up by roots, which is transpired again, which is again condensed, and so forth.

        Don Stewart

      • edpell,

        Check the post below. I think you will find it interesting.

        Walter Haugen Says:

        Check out Joseph Tainter’s “The Collapse of Complex Societies” or my book “The Laws of Physics Are On My Side.” Tainter introduces marginal returns as the basis of his argument and it is relevant to your own. If the marginal returns fall below 1:1, it doesn’t matter if you have a high throughput (American empire today) or a relatively low throughput (Rome circa 100 AD). It is still relative to your input/output.

        Per my book, what we are doing now is replacing cultural behavior with massive doses of fossil fuel energy. Once we run short of cheap oil energy (either by price or supply) we have to constrict our energy use. If we don’t we get dieoff.

        Your solar business is still dependent on cheap oil, whether in the embedded energy of the infrastructure or just getting the workers to the jobsite and factory. My farming is also slightly dependent on fossil fuel energy, as I use 10 gallons of gasoline and my labor to grow 10,000 pounds of food per year. However, in my case I am 25-35 times more efficient than industrial agriculture, measured by input/output analysis.

        I am no fan of Greer, as I find him arrogant and wordy. However, he did hit on a winner with catabolic collapse. As for Diamond, he is the only one I have heard who understands the role of the 1st and 2nd derivative in plotting the inflection point where marginal returns change sign.

        Tainter alludes to this but doesn’t even use the term “inflection point” in his analysis. As for Kunstler, he has looked at the problem in depth and his “World Made by Hand” books look at the sociological effects – and are a good read too.


    • Paul says:

      Why not just print fresh water? 🙂

      • MJx says:

        It might buy us six more years! LOL

      • edpell says:

        InAlaska, there must be big rivers in Alaska that drain into the sea. The U.S. government can sell that water to the Chinese for taking more fed debt product. Federal budget balanced.

        • InAlaska says:

          yes, indeed, that is a brilliant idea. I live by the shore of one particularly massive river, fed by an enormous glacier that will still be here in 500 years come hell or global warming. I may have to go into water business. Perhaps a trans-Pacific water pipeline….

  27. yoananda says:

    Sorry to bother again with my “pic oil is dead” question again.
    What about this one that said : worldwide oil spending in % of GDP is very low, compared to the 80’s : http://oilprice.com/Energy/Oil-Prices/How-cheap-is-cheap-oil.html
    Especially : https://oilprice.com/images/tinymce/Staff1/rand4.png

    • A lot of things have changed since the 80s. Wages as a percentage of GDP are also lower now. Debt is higher now. We clearly weren’t doing well when oil prices were high before either, but at least we had available solutions then–something we don’t have now.

      One part of our problem is that US, Europe, and Japan use relatively more oil than the rest of the world. The rest of the world has grown in competitiveness now. The rest of the world can “eat our lunch” now when oil prices are high. We are at a competitive disadvantage with countries relying on coal, something that was not a big problem in the 1980a.

    • edpell says:

      I think this is misleading. The global GDP is way up due to economies fueled by coal.

  28. wadosy says:

    i need some help, here… i’m stumped

    say i i’ve been a very successful looter, stacked up $20 billion, but it’s tied up now mostly in stuff that’s not gonna be worth a plugged nickel once TSHTF… or so it seems to me…

    my goal is: i want to preserve my precious genes, which means i got to have acess to women who will make kids and i have to have a plance where those kids can live and have their own kids, and so on and on forever

    what do i do with my loot?

    pre-SHTF, can i buy land and hire protection and labor, establish an enclave? … or will there be places of relative calm where i can buy refuge? …but most of all, how do i preserve the wealth that will make … whatever… possible?

    did i joing the wrong clubs? …is there some global setup in place that will handle these problems, but i wasnt invited to tha party?

    please help me think this out

    • Paul says:

      You could do this http://www.forbes.com/sites/lauriewerner/2014/01/06/paradise-2-0/

      The only problem is that you will need security — if I was your chief of security — I might conclude that I have the might — and I might make you the pool boy… and take all your caviar and champagne for me and my guys with the guns….

      You would want to choose your security team carefully — very loyal, very stupid men… you might want to run psychological profiles on them to make sure none have streaks of independence….

      • wadosy says:

        paul, did you know that steve forbes is a PNAC signatory?

        …whaich probably is why forbes’ website denies peak oil…

        • Paul says:

          He can deny as he likes — he can rant and jump up and down and scream ‘I inherited daddy’s empire and I was born with a silver spoon in my mouth and I have never known what it is like to run out of money before the end of the month and there is no way that peak oil can exist because it means I eat dog food with the rabble under the bridge!!!’

          He can even dedicate half his magazine to peak oil denial stories….

          But he won’t be able to change the reality.

        • wadosy says:

          do you spose that’s a requirement to get in the club? …you got to deny peak oil and global warming to get included in whatever plan these people have to preserve their wealth and survive?

          • InAlaska says:

            I suggest that your mythical fellow stop trying to buy his way into everything. Instead of getting into the club, he ought to find a decent woman, have a big family, learn to do things for himself and teach his kids to do the same. If he and his family can handle firearms and grow there own food, then he can tell the club to go to hell.

    • wadosy says:

      air america pilots were notroriously bad with money… they made quite a bit… at least compared to the average wroking stiff

      but they’d invest in the godawfullest schemes, play the commodities markets where they routinely lost heir shirts because they werent in on the joke.. grand development schemes, mini-suburbs on unheard of islands… anything that was too good to be true

      the worst was those gold bracelets… heavy gold bracelets… supposedly, if you got shot down and survived the wreck, you could break off a link at a time and buy your way back to civilization…

      those bracelets impressed the stewardesses at least… which was probably what it was all about

      …tales of kinky threesomes in hong kong with northwest stews… i wonder if any of it was true

    • There is this misconception that everything is and will be lost in the great reset.
      Which is obviously not very history matching narrative, at least for shallow type of societal and governmental reshuffles. To your question, the strategy? Simply the smart or the generational wealth properly instructed, simply have it and prep for it all, and cover “all bases”. So, they own secluded properties and compounds in various climate zones from the high plateau jungle to tempered forrests, in various forms (like chateux and hunting lodge complexes or hidden private bunkers). They own some industries, some banks, some politicians and lobbyists, some media..

      In essence, they on purpose increase, but not guarantee chances of starting right away within the new cycle with noticable advantage. So far it worked like a charm during past centuries. However as we are most likely entering reset of longer cycle, say at least 250-500yrs wide, that might derail that trend and increase changes for completely new breed of elites taking over. Perhaps some weird combination of handson permaculturists with martial arts pedigree and or military experience.

      • edpell says:

        “permaculturists with martial arts pedigree” that just leads to such comic images LOL.

        Maybe more like specialization premaculturists and martial arts experts. Maybe throw in a good managers (yes there are a few good managers), a carpenter, a stonewright, a skilled cook, a weaver eventually, ….

        • Paul says:

          Rambo XX11…. a roided up Sly Stallone drags a plow around a field while firing an AK47 from the hip at marauding hordes ripping carrots out of the ground…


          • Jarle B says:

            Paul wrote:
            “Rambo XX11…. a roided up Sly Stallone drags a plow around a field while firing an AK47 from the hip at marauding hordes ripping carrots out of the ground… Exciting!”

            Rambo XX111: Norris and Schwarzenegger is hired as field workers/gunslingers, and the show goes on.

            • Paul says:

              Bringing us to the final installment of Rambo — Rambo The End — in which Sly is starving and eating hunks of grass — his body is riddled with tumors caused by radiation from exploding nuclear fuel ponds — he crawls to a cave entrance where he is found by the last remaining humans who live under ground — but he is too far gone and soon dies of total organ failure.

      • dolph09 says:

        Yeah this time we are clearly hitting various limits. There is no more “wealthy, unappreciated son from England moves to America and takes over steel industry” or “we’ll take your oil and give you weapons and bonds” anymore. All the countries of the world are full up, all of them have their elites. We are running out of resources and time, and therefore running out of games to play.

        If the elites don’t provide for their own population in some way or another (even with bread and circuses) it’s over for them as well. As can already be seen in parts of Europe and the Middle East.

        The American elites have lots of cards and tricks to play. They own North America and most of the world, so they’ll go on for a bit.

        • InAlaska says:

          Unfortunately, I think you might be right. One thing we know from history is that the elites seldom lose the game. They buy their way into the next set of good circumstances and keep transforming themselves into the future.

    • edpell says:

      Start with 60,000 acres in Paraguay and work from there….

  29. Adam says:

    Jokes that won’t work post-crash.


    You won’t be able to perform this one, and nobody would understand it anyway.

  30. John Drake says:

    When looking at the total US energy mix, it is very important to compare the EROEI of the various energy sources and to look at the evolving trends.

    It might also be interesting, from a geopolitical perspective, to compare the average US EROEI with that of its major competitors…

    • The networked system breaks when it breaks. I have difficulty connecting this with EROEI trends.

      Clearly the EROEI of coal is better than that of almost any other fuel, except perhaps previously installed hydroelectric, and perhaps previously installed nuclear. Thus countries using these fuels predominantly might have some advantage, unless the system falls apart completely. Renewables and oil are all on the relatively low end of the EROEI scale. Natural gas EROEI looks very good, unless one considers the energy of distribution all the way to final customers–something that brings it way down.

      EROEI of oil exporters will tend to look very good, regardless of what is ahead for them–depleting supply, inadequate price for oil, or revolting population.

      • John Drake says:

        You are correct in stating that a “networked system breaks when it breaks”.

        However the energy mix average EROEI may very well provide an important clue as to when the system is likely to break.

        For example, if the energy mix average EROEI of a country having a high tech complex society was to fall close to 10:1, you might expect “something” to trigger a “major break-up”. The laws of physics are in that regard simply unescapable.

        Hence, closely following the evolution of the energy mix average EROEI of the US and comparing it to that of its major competitors will provide interesting clues as to how close they are from “the precipice”… and how desperate they might become.

        Desperate tigers are most dangerous creatures…

  31. B9K9 says:

    Xabier, I apologize for not including you, End, Ed, et al, and of course our gracious host, in the group who actually “get it”. For convenience, Paul serves as a proxy for the regulars, and an effective foil to point out the futility in complaining about reality.

    His comment that humans are a “vile species” reveals some residual programming which many of us received. It taught him that we are somehow unique, with special burdens and obligations different from every other life form. These lies, of course, are what separate us from the PTB, which go about freely designing systems that favor them alone, with the full force of law, military and economics to support their control.

    Once you fully see the beautiful evil embodied in the truth, then it can become a subject of appreciation. The winners have so worked over the pathetic losers for so many millennia, that it becomes laughable when the propaganda is fully exposed for the charade it truly is. That’s the humor, and intrigue, in seeing this sucker play out.

    • Paul says:

      We most definitely are unique

      I am not aware of any other species on the planet that enslaves, murders for joy, rapes, pillages, steals, covets, genocides, destroys the planet, etc etc etc

      We are most definitely vile… a disgusting aberration on the planet… a mistake of nature perhaps?

      • MJx says:

        Thank God Ben Bernanke SAVED the human race to continue the above, right Paul?

        • Paul says:

          I doubt Ben shares my sentiments on the human species…. very few people do.

          • MJx says:

            Regardless Paul, you are grateful that he acted as he had. The only benefit was a DROP in Carbon emissions, something the denier gallery pointed to as proof a treaty was not necessary in Copenhagen. God Bless America!

          • Jarle B says:

            Paul said:
            “I doubt Ben shares my sentiments on the human species…. very few people do.”

            I do, Paul, I do.

          • Harry says:

            Paul, we also have Buddha, Beethoven, Da Vinci et al. It is unfortunate that we are not wise enough as a collective to overcome the biological imperative to maximize access to resources and reproduce like crazy – but this sort of polarized view of humanity is not a recipe for contentment. There are plenty of examples within the natural world (to which we belong, of course) of gratuitious cruelty, and almost every death is a violent one. Ever watched a cat toy with a mouse? Can you imagine if it had been the felines rather than the primates who had evolved opposable digits and higher cognitive function? Well, regardless, for the misanthropes amongst us justice is about to be served, and then some.

            • InAlaska says:

              And let’s not forget that no one promised us that life was supposed to fair or pleasant. Who said that we had certain inalienable rights to life, liberty and the pursuit of happiness? Just a bunch of guys in wigs. Disappointment in humanity may be a misunderstanding of the natural world of which we are, indeed, a part of. Ever see a bear tear a salmon apart while it is still alive? Ever watch a pack of wolves wound and cripple a caribou and then harass it to death for days? Ever watch a marten go after a nest of baby squirrels? Ever watch hordes of deer starve because they overran their range? Why should we expect humans or nation states made up of humans to be any less cruel? Life is fundamentally cruel. It just so happens that the alternative is oblivion.

            • Paul says:

              When a salmon kills a fish it does it to eat – not to torture it.

              Animals do not do this http://www.theguardian.com/gall/0,8542,1211872,00.html

              Of this http://www.digitaljournal.com/img/4/9/8/8/0/7/i/8/5/8/o/congo-hands.jpg

              Or this http://www.youtube.com/watch?v=ShCgGGqlrEU

              Or particularly this http://www.shrineofsaintjude.net/Hiroshima%20atomic%20bomb%20damage.jpg

              So we write poetry — and play the piano… other animals sing songs and dance too…

              What differentiates us from them is primarily our capacity for evil.

              ALL of us have this capacity — the Jewish community is a perfect example — abused horribly — and the minute they get the upper hand they abuse others.

              What’s the first thing usually out of the mouths of people who knew a mass murderer? — He seemed like such a nice quiet man — we are shocked.

              I stand by my comments – the sooner we are wiped off this planet the better. We are monsters.

            • Harry says:

              That doesn’t sound very “anti-doom” to me!

      • edpell says:

        Paul, you have not been reading your Jane Goodall. Chimps murder the group next door even when (especially when?) that group broke off from the first group. Infanticide of follow group members young is observed, rape just does not apply in their case, covet oh yes, genocide yes the group next door is systematically hunt to extinction.

        • edpell says:

          Through a Window: My Thirty Years with the Chimpanzees of Gombe by Goodall. In my opinion one of the most important scientific result in human history.

          • Paul says:

            Chimps are a derivative of the human species…

            That said they do not tick all the boxes that I have laid out — genocide of other species… enslavement of their own and other species…. etc etc etc…

            • InAlaska says:

              Perhaps we are acting just as nature “intended” for us to act. If you follow the school of philosophy that says that anything we do as a species is ok because that is how we were evolved on this planet. Everything has purpose and a design to it. None of us know what evolutionary directions the planet will go as a result of our genocidal, raping, pillaging, climate changing ways. It is possible that this course will lead to the next phase of life (and mind) on the planet.

            • Lizzy says:

              I agree with you, InAlaska. We’re not the masters of our fate completely. Though I wish, I wish…

            • Paul says:

              I agree with that statement. We were born this way… and because no other species acts as we do — I suggest we were are some freak of nature — some sort of mistake… an aberration from hell…

              Maybe we are actually what is referred to as ‘the devil’?

              That would explain a lot.

    • xabier says:

      No offence was taken B9K9.

  32. Don Stewart says:

    Dear Gail and All

    May I suggest the use of this video tour of Helen Atthow’s Montana home as a tool for thinking about life off the grid.


    We can see that Helen has solved certain problems pretty satisfactorily, but she is not independent of the larger society:
    *She grows a lot of her own food
    *The external inputs required for her food are small, but significant. In other videos, you will learn that she uses a small tractor with a mower attachment. She may buy seeds..I don’t know. She does not till extensively or apply industrial soil amendments and fertilizers and pesticides and herbicides.
    *In order to earn money, she grows crops which she sells in town, and doubtless transports those crops in a fossil fuel powered vehicle.
    *She heats with wood from her own property
    *She cooks with propane
    *She uses some electricity…but much less than most Americans…generated by solar panels. She also uses two batteries, two inverters, and a charge controller
    *She uses some electrical appliances: a computer, a refrigerator, electric lights, and a cell phone. Some of the appliances are DC and some are AC.
    *She uses some ‘appliances’ which do not use external energy, such as the cold box protruding through the wall and the root cellar
    *Her house is constructed to take advantage of the cycle of the seasons…collect warmth in the winter and remain cool in the summer. She actively manages the energy in the house, as opposed to setting a thermostat. The house is divided into smaller compartments to aid in managing the energy.

    We can think of alternatives to Helen’s set-up. For example, Ben Falk in the cold climate of the Green Mountains of Vermont, recommends a large wood cook stove as the central appliance. Such a stove combines the functions of heating and cooking and conviviality which Helen solves separately. She might also use a DC rice cooker instead of the propane stove…not as versatile, but pretty handy.

    We can also think of choosing to live as an isolated homestead rather than as an integrated part of a local economy in Missoula, MT. So that, for example, she would no longer be dependent on selling her products in Missoula to earn money. But such a choice probably requires the disappearance of taxes imposed by governments.

    If taxes disappear along with governments, then the purchased appliances probably also disappear, at least over a span of decades. The computer would no longer function as a communications tool, the cell phone would stop working. The electric lights will only last as long as the bulbs. She could not expect reliable deliveries of propane, but if she adopted Ben Falk’s big wood stove idea, she would still be able to cook and heat. DC appliances, such as the DC refrigerator and a DC rice cooker, might last for several years to a couple of decades. Appliances which continue to function in a collapse are very important because they reduce the inevitable stress of inventing new ways to live when things change. Putting the refrigeration issue off for a decade or two is a big plus.

    In a homestead scenario, one has to plan on reduced reliance on refrigeration. One never knows when the refrigerator might cease to function and there would be no replacement. This scenario implies that Helen would have to either plan her garden to be continuously productive of what she wants to eat each day, or else that she preserve the garden’s produce and live off her pantry. The pantry is more work, but is the way most women in horticultural societies spent much of their time in ages past. She may also build a spring house to provide cooling in the hot summer. And collecting ice during the winter and storing it for summer might be an attractive option to provide a little luxury.

    In a homestead scenario, Helen would probably add another level of subdivision of her space. She would add draperies around her bed to provide more insulation so that body heat would increase the temperature, making sleeping more comfortable. She would also probably wear warmer clothing indoors as she goes about her chores. She may also plan on sleeping outdoors in summer so that she radiates heat to the coldness of outer space…depending on the insect pressure. A mosquito net might be an excellent investment.

    Here are some of my conclusions:
    One, thinking about solar or wind or water power should be done with some ideas about the extent of collapse and be exquisitely sensitive to one’s local situation.
    Two, setting up a straw man scenario that involves the continuation of BAU, just with wind and solar instead of fossil fuels and nuclear, is a useless exercise.
    Three, actions taken now have consequences in a collapse.
    Four, since we cannot accurately predict the exact nature of the collapse, it makes sense to try for the preservation of degrees of freedom (e.g., Ben Falk’s big cook stove as opposed to a propane cook stove; or a DC rice cooker.)
    Five, since collapse has been (wrongly) predicted many times, those of us who have done less than Helen should refrain from criticizing her for what she has done. She is choosing to live well now, with an eye on the future. Can any of us do better than that?
    Sixth, Helen is not trying to ‘feed 9 billion’. Most of us have enough trouble trying to visualize rational behavior for a homestead or a small community. Trying to save the whole world is likely to lead to paralysis.

    Don Stewart

    • Good points. This subject is quite climate dependent.

      Lets recall the lesson of northern/alpine countries where the livestock had to be part of the house, either as added section sideways to the main house. Or these animals placed at ground level, while people living above it. Obviously, the latter case is more energy efficient as the lifestock heats the house better, however it’s more laborious/expensive since you have to build there proper stone/bricks vaulted celings against the sounds, smells and moisture evaporation. Well you can do it in the wood ceiling version too, but that would be perhaps too 3rd worldish/bronzeagish. This arrangement also ads lot of manual labour, you have to clean it for the animals regularly and then manage the compost externally and obviously feed the lifestock. Very good system overall historically speaking, even lower echelons of european country nobility lived like that till early 20th century, but you need either forced labor (peasants, or lots of own kids) or excess of money/resources to pay labor for such upkeep. Today, few decades later almost nobody does this straight animal cohabitation anymore.

    • Thanks for your comments. I especially like, “setting up a straw man scenario that involves the continuation of BAU, just with wind and solar instead of fossil fuels and nuclear, is a useless exercise.” We have a few readers who don’t understand this. Also, that it is very hard to feed 9 billion.

    • J says:

      Fantastic! But just like Orlov’s boat idea doesn’t scale, this doesn’t scale either. Just think of getting one tower of people converted to this living. How much would that cost? And more importantly there isn’t enough land. That doesn’t mean you and I couldn’t do it. Just that everyone couldn’t do it.

      • Don Stewart says:

        Dear J
        Who is supposed to bear the cost of converting a tower of people to Helen’s solution? I’m not going to pay for it. You’re not going to pay for it. The government surely will not pay for it.

        Some people will prepare…most won’t.

        Don Stewart

    • xabier says:

      I recommend the comments, and also blog, of ‘Cherokee’ on the Archdruid site, lots of practical stuff on off-grid solar – strengths and weaknesses – and permaculture: straightforward to take his principles and think about one’s own situation and locality.

      One thing he does point out is that the authorities where he has his farm are quite a pain, and generally behind the curve and obstructive.

    • edpell says:

      To the list connection to the larger community I would add clothes made globally using giant industrial looms, wood in the building made using full industrial system.

      When the electric goes out we have no heat from the oil furnace due to its electric pumps. We all sleep in the same room. It works quite well.

    • antares71 says:

      Hej Don,

      interesting material for a brainstorming.
      Regarding the stove I have plan to buy a Rayburn to redundant my future solar heat system. This one:
      I will use it for cooking primarily but if/when the solar heat in winter won’t be able to put up with my demand of heat I just put more log in the stove and deliver hot water to the radiator. What do you think?
      Regarding the refrigerator, I saw a video where a woman said that when her freezer will not function anymore she will “bury” it, that is the heat insulation capability of the freezer will still be there and putting it underground will guarantee constant temperature throught the year. I think I would give it a try.
      Regarding isolating oneself, I personally think it is a very bad idea, I would not do that. I reckon the best would be to stay in a small community, around 20-100 individuals and try somehow to complement each other provisions, that is a family breeds sheeps and exchange milk, meat and wool, another cows, another specialises in fishing etc…
      I agree with you that she at least is doing something, which is on itself deserving of respect.

      • Don Stewart says:

        Dear antares71

        Check out:

        I live in a place where a big wood stove would just get in the way. The inside temperature in my house would seldom drop below 50 degrees, with no external heat at all. Ben Falk lives in the very cold Green Mountains of Vermont. He makes interesting points about the difference that being in a cold, damp place makes versus being in a warm, dry place. What works in one may not work in the other. I am in warm and damp.

        I have friends who live in the mountains, and have big wood burning cookstoves. But Ben manages to get a lot more out of his stove than my friends do. Ben really applies the Permaculture principle of looking for multiple functions. I have spent some time in Vermont, and what he says sounds about right to me, although I never lived there.

        Agree with you on the ‘lone survivor’ not being a good strategy. You can look at log cabins of very isolated people on the Blue Ridge Parkway. Most of the cabins had a big loom so the lady of the house could weave cloth to make clothing. The light was atrocious, coming through very small windows. You wonder how any of them failed to go blind. Some people have characterized this type of backwoods living as one where a husband ‘wore out’ three wives. Alternatively, go visit a Shaker community, where there was specialization and a proper wood shop and a proper weaving studio and a proper dairy. It’s like Night and Day. Best choice by far is a community.

        Don Stewart

  33. Harry says:

    It seems to me that two things need to happen promptly if we (meaning pretty much all of us) are to have any chance of surviving our little plunge off the net energy cliff.

    1.) Food production needs to be relocalized. Or at least vegetable patches need to spring up in every garden and chicken farming needs to become the global hobby of choice.

    2.) Every nuclear power station must be decommissioned.

    Any ideas as to how we make this happen without prematurely instigating collapse?

    • Lizzy says:

      I agree with point no. 1, Harry, but can you please explain why the second one is necessary? Wouldn’t that be hastening electricity demise?

      • Harry says:

        Lizzy, it might well do. But of course the alternative is to let the nuclear power stations go ‘Fukushima’ or worse when the grid eventually goes down, because of course their cooling pools and safety systems are dependent on external, non-nuclear power sources. We have circa 435 nuclear power stations dotted around the globe, mostly in the northern hemisphere. It keeps me awake some nights.

    • Good luck!. As you just said, “The networked, hypercomplex system we have built functions as a totality or it does not function at all.”

      • Harry says:

        I know. I’m clutching at straws a little. We’re not only looking at the nuclear power issue but also the approx 1°C of additional global warming as we lose the cooling effects of industrial aerosols. I’m more than a little horrified that there seems to be nothing to be done by way of mitigation.

        I would suggest that those of you who are ‘prepping’ are either wasting your time or potentially keeping yourselves alive for experiences you’d have preferred not to have. Most will die as the system fails and they will be the lucky ones. It would seem sensible, and I use the word in its broadest possible sense, to live out your dreams on cheap credit now and then throw yourself a party with no hangover when collapse occurs.

        • xabier says:


          We have been having that End of the World party on cheap credit……

        • Jim King says:

          Harry, clutching at straws is realistic at this point, don’t you think?

          There can’t be very much time left, it seems. Go where you want to go, do what you want to do, while you still can, and hope you are not far away from home when confidence in the global Ponzi debt scheme wavers. Once things begin to unravel, the short AND long term futures will get bleak pretty fast.

          If it gets really bad, with most people succumbing soon, there might be hope for the survivors. Except for the nuclear power plants spewing radiation and the climate getting hotter and a lot more hostile in its extremes. Agriculture seems increasingly impractical.

          The financial prelude will be a walk in the park. We have already crapped in our nest enough to kill us. Mother Nature will figure out the rest.

        • Paul says:

          Harry – I am increasingly leaning in that direction — even if radiation does not get the survivors — life is without a doubt going to be so difficult that most people would wish it were just over with…

        • Pedro says:

          Prepping can be the best use of your time ever. It certainly has been for me. Now three years into living in the bush surrounded by rain forest with clean rainwater from the roof, a hillside spring and the river. Wildlife abounding (rabbits, wallabies, possums etc).
          Learning what veggies I can grow, wild plants I can eat, tending hens, and just enjoying life. Certainly beats the nine to five rat race in the city when I really did ‘waste’ most of my life.
          When the collapse occurs I have some idea what to expect thanks to Gail and others and have multiple plans figured out for most scenarios, equipment failures etc.
          Of course plans fail and I could easily be a victim on the first day but at least I will give it a try. Can only die once and probably won’t be pleasant but this will apply to everyone whether they ‘prep’ or not.
          Sorry for the other 7 billion but I can’t save the world. I will try to work with all my neighbours in the valley (all ten of them) and family members and try to enjoy each day as it comes or at least accept it with stoicism.

          • Paul says:

            It is definitely a bonus if one enjoys working on the land…. regardless of if my shift to the land will make a difference — I am glad I have done it.

          • InAlaska says:

            Yes, this seems to me to be the only rational response for people living within a system they can’t control. Just live your life the way you want to live it and where. Prepare as best you can to live as independently from the machine as is possible nowadays and enjoy life! Just don’t cut your finger on your garden hoe and die of infection while doing it!

  34. I read the article as short-term or even mid-term confirmation of plateau bouncing scenario. The western public could be still shaved off much more in terms of their energy consumption and creature comforts in order to allow some sluggish growth in the East/South. So, globally speaking the plateau would be more or less maintained. There is no reason, why this couldn’t be duct taped for few more decades mostly on coal and nat gas.

    I think as I mentioned previously, people here discount the viability of some semi autarchic global order (inclusive blocks of countries/regions) lasting say upto two or three decades from now, where much reduced in throughput global exchange of goods and capital still somewhat functions mainly in energy and food (currency swaps, barter), but most of the consumer fluff is eliminated for ever. The luxury stuff continues to flow. Precursors of this is what we see now anyways.

    And only after this “emergency” arrangement hits final limit, the true Seneca Cliff could occure, which would probably cement some elites into neofeudal position for centuries, while other big honchos will be parted with their real or virtual “wealth” in swift fashion. What is it going to do with most of the 8bln. soals and their living arrangements, especially those i nurban setting, on the planet by that point it’s up to imagination.

    • Harry says:

      I think your reduced consumption scenario overlooks both the calamitous effects of deflation/de-growth on financial systems and the vulnerability of supply-chains to cascading failures. The networked, hypercomplex system we have built functions as a totality or it does not function at all.

      • Again, the global financial system is changing rather quickly as we speak. Non USD/EUR swap payments are growing, including deals in energy and commodities. The manufacturing and large part of the science base had relocated already. Moreover even the US-EU alliance is melting away as evidenced by hints from German elites, e.g. just in during past month: top business journal favoring getting off the US overloards, former rightwing defence minister and 30yrs MP saying Germans are sick and tired of NATO etc.. And now even the old Gulf proxies are showing signs of going alone, ehm with another alliance.

        Do you really think the world ends in a heartbeat when US/London/EU gets a comma, do you really think it matters when derivative, bond and real estate bubbles evaporate? Perhaps for a US suburbanite dweller this will be like the end of his little world. But elsewhere.. ? Not so much.

        The general trend discussed here towards dislocation of this industrial civilization is right, however the idea of sudden universal collapse is not. This will be a straicase fall affair in several different houses (regions).

        • Harry says:

          “Do you really think the world ends in a heartbeat when US/London/EU gets a comma, do you really think it matters when derivative, bond and real estate bubbles evaporate?”

          Yes, in a word. Our interdependence and complexity means that collapse will be swift. The scenario outlined by David Korowicz in his ‘Trade Off’ paper and oft-referenced here seems likely to me: http://www.feasta.org/wp-content/uploads/2012/10/Trade_Off_Korowicz.pdf

          • Paul says:

            Most want to read that entire paper — I’d suggest skipping to p. 56 where the punch line starts…

            What research was a real eye-opener for me when I first read it … one of the bigger pieces of the puzzle…

        • dolph09 says:

          Although we can argue about the specifics and timing, I agree broadly with the idea that the world moves on even if one or more foci fail.

          Past examples in recent memory are the British Empire and the Soviet Union. Remember, the managers of big systems always say the same thing: those degenerate savages can’t manage their affairs on their own! What will they do without our control and debt!

          And it turns out that humans on the ground find ways to survive.

          Now it’s America’s turn and many, many people have a problem with that. So they say the same thing: those Chinese are going to starve without us! those old and bureaucratic Europeans can’t manage anything!

          Well, we’ll see.

          • Harry says:

            The Chinese economy is primarily mercantile. They need a functioning world economy within which to sell their products. They are themselves teetering atop a $25+ trillion credit bubble. Understanding the extent of our global interdependence and the frankly terrifying vulnerabilities that stem from that has nothing to do with old-fashioned jingoism. For geopolitical reasons the Soviet Union developed into a uniquely self-reliant empire. Our current, globalized situation is very different:


    • The issue is governments and the financial systems holding together, as one attempts to shave off energy consumption. In past collapses, we know that governments were part of what were vulnerable. We have so much debt now, this is likely to play a role as well.

      • xabier says:

        Historically, for as long as they function and have coercive force, governments will turn the screws on the populace.

        When the Byzantine Empire was hit by plague (25% killed? 50%? who knows really), in the 6th century, farmers who survived found themselves liable for taxes even if they hadn’t been able to harvest and sell, and also liable for the taxes owed by their dead neighbours.

        It is to be noted that the IMF consistently advocates heavy sales tax increases to governments in trouble, regardless of the impact on those who are struggling .

    • Thanks! The Chinese system seems to be quite different from ours. As I understand the situation, political leaders are given goals they are expected to meet, and considerable flexibility in meeting those goals. I don’t know if this situation is part of what is behind the “ghost cities” or not. Clearly a lot of debt is generated from somewhere to finance all of this. How the lack of payback is hidden is not at all clear. It certainly does look like a bubble ready to burst.

  35. Stilgar Wilcox says:

    Your article Gail explains well the difficulties of the idea of switching from FF usage to non-FF.

    What we often neglect to acknowledge is we stumbled upon an energy legacy from previous eons of time, built an entire global civilization around it’s entropy without concern for limits, then at some point had an ah-ha moment of realization regarding it’s finite nature, saw the peak coming and pondered how we could substitute for that energy source, but with limited success.

    • Paul says:

      That’s a very concise summary

    • Jarle B says:

      Stilgar Wilcox,

      dead on!

    • One big Oops!

    • dave says:

      Or said more simply: The Wile E. Coyote moment.

    • Mr Bill says:

      That ah ha moment occurred in 1972 with publication of “The Limits to Growth”.
      That year, the awareness of global limits was dramatically raised. I clearly recall that the week the book the book was published Wall Street took a brief nosedive. It took about two weeks for the kickback about all that computer simulation by some unknown academics being fantasy. It seems that ah ha moment died and mostly faded away close to 40 years ago. What sane direction is mankind headed currently?.

  36. T. G. Neason says:

    Gail, thank you once again for the effort that you put into these posts. You have a unique ability to connect the dots in an understandable presentation.

    You mentioned that house hold formation is lagging due to a lack of well paying jobs. That is true but the high level of student debt is another restraint on household formation. This debt has now exceeded a trillion dollars (more than outstanding credit card debt) and can rarely be discharged through bankruptcy.

    Any time there is a surplus of capital, there will be capital misallocation. The government has made student loans available to all applicants whether they are suited for higher education (unlimited capital). The education establishment has taken advantage of this free money and increased education cost to obscene levels.

    Finally, this high level of debt leaves these poor people with out the ability to cope with higher energy costs.

    • The issue of student debt is an important one as well. I know I have seen stories about people who cannot “make it” financially, taking out student loans with the idea of living on the proceeds and perhaps taking a course or two as well. Whether or not they are really planning to study and get a degree is less than clear.

      Of course, if students manage to graduate, the jobs many of the graduates are getting don’t pay all that well, either. And the new college graduates are taking the jobs high school graduates previously had, leaving more of them unemployed.

      The poor (in more than one way) students with the loans can’t get married, buy and home, and start a family, because they are so burdened with debt.

      • J says:

        This is apparently how the world population will shrink. People will be so poor that starting a family is not an option, and hence the decline sets in. Textbook Malthus.

        • edpell says:

          Snap and section 8. The too proud will not reproduce but everyone else is doing fine.

        • sheilach2 says:

          If you look at the situation in the Philippians, you will see that even abject poverty doesn’t prevent them from having many children. I’ve seen images of households living in shacks on stilts existing literally in sewage & poop filled water & getting their “living” from picking trash to sell & eating rotten fruit.
          Here in the US, poor people can have many children while living on food stamps & welfare, the more kids, the greater the food stamps & welfare but they are not living in luxury but in slums. They just don’t seem to care & have no sense of responsibility.

          Proud, independent people try not to have children they cannot afford but some people don’t care as long as someone supports them & their children they will keep on having them with different fathers who only stick around long enough to get them pregnant.

          The book “Limits to growth” showed that as death rates rose, so did the reproduction rate as parents struggled to replace the babies they lost to disease & starvation.
          Only extreme emaciation of the mother prevents her from having more children.

          • Paul says:

            If you get a chance to travel to Manila take a walk through Smokey Mountain — quite an amazing place — people waiting anxiously for each dumpster to arrive…

            The biggest problem in 3rd world countries re: population is not so much irresponsibility — I have seen surveys that indicate women despair at adding new mouths to feed beyond a certain level — BUT — they are poor so they have no money for birth control.

            In the philippines the wonderful catholic church exacerbates the problem by insisting followers NOT use birth control.

  37. John Doyle says:

    Does anyone know what is the oil input energy cost regarding the production of crop biofuels?
    I.e., how energy efficient are these crop biofuels? Do they contribute any value in the final analysis considering the loss of agricultural land, both in area and soil degradation, away from food production etc?

    • I know that there are quite a few different articles pointing to different deficiencies of crop biofuels. The USDA article I linked to pointed out that to get today’s high proportion of corn in the mix, crop rotations needed to change, to include more corn in the mix. Thus we are becoming more and more dependent on fertilizers to replace nutrients, rather than allowing crop rotation to provide part of the nutrient mix. We are using more marginal land as well.

      There is a fair amount of argument about the EROI of corn, but I don’t see that as being as important as the many direct and indirect issues with using so much land for corn. The EROI argument has to do with how much natural gas and coal are used (plus oil) to make liquid fuel. In a way, what we are doing is simply putting energy in a more convenient form, just as coal-to-liquid and gas or coal to electricity plants do.

      I think it is more important that we are depleting aquifers, using irrigation to grow corn in places where it is not meant to grow. (Energy required for irrigation is not included in EROI calculations, either, by the way.) And of course degrading the soil.

      Of course, biofuels are not at all sustainable without fossil fuels. Most folks don’t think about this. They see biofuels as a way of extending oil (or rather gasoline–something that voters use) supply, using a home-grown product that previously was subject to price supports. Politicians could therefore make farmers happy, cut price support costs, and hold down gasoline prices at the same time.

      • Mr Bill says:

        My complements on a thought provoking report. I found your site only recently, and I thank you for being here.

        As I followed the US government plan to encourage and subsidize “harvested” biomass, codeword mostly for corn, for ethanol production, in the early stage, it seemed to make sense, good for the gasoline consumer and good for the farmer. This is government planning without analysis. The law was passed to move forward.

        As I recall, the EROI calculations, after accounting for production, processing and hauling enery, etc, was unfavorable. The ethanol reinforced gasoline cost more than
        the non ethanol gasoline. A false premise in the law! And it is costing the public.

        But the law prevails, in spite of a false premise in the law. Now we have consumers, corporations, farmers, politicians, etc all muddled up in this ETHANOL FOR GASOLINE
        quagmire. (Even if the solution should take short order to overturn based on a false premise).

        I just cannot help but visualize all of these high caliber group members, collectively gather in a large octagon fighting ring. And the objective of each is to win at all cost. The winner will be declared CHAMPION. And they are oblivious to the needs and expectations of the audience, the public.

        Is that vission absurd?

        • The object of the game is to provide income for farmers and for various middle men who produce biofuels, and to reduce government spending. It is also to get government officials re-elected. There has been some benefit in “extending” the amount of gasoline–its price tends to stay lower, relative to diesel, than in the past. This also makes elected officials happy. The overall real benefit of the program is doubtful–soils are depleted faster, aquifers are depleted faster, marginal lands are put into production increasing erosion. With the heavy fossil fuel use and adverse effect on land use, CO2 benefits are doubtful.

      • sheilach2 says:

        I think too many here are overly concerned with the loss of electricity. But before all the lights go out, what you will be missing most in your life is FOOD & clean water! For every calorie you consume, it took about 10 calories of OIL to produce it.
        You can’t grow food with electricity & we won’t be able to produce enough electricity with renewables to power the farm machinery or transportation, neither will we have the energy left to produce electric farm equipment.
        This means we will have to return to a system of farming with a large human labor input.
        Working animals would need farmland to feed themselves leaving less land to feed humans.
        No matter what we could do now, there are simply too many of us, we are committed now to a mass die off. We will be contending with mass immigration of billions of people fighting to escape starvation/dehydration. This has already been happening in southern Europe with thousands of Africans trying to escape wars & abject poverty. The US has be inundated with tens of thousands of immigrants from central america escaping drug lords & poverty.
        May as well party on while you still can.

        • I agree. Also, I wonder how many of us will end up living in our existing locations. If we need to move in order to have food, will we really be able to dismantle solar panels and take them with us? (I expect their best use in the new location would be for water pumping, not running iPhones.)

          • InAlaska says:

            This is true. Electricity is a luxury not a necessity. We’ve only had it for about 150 years out of 10,000. Life is possible, even nice with out it. Of course, we need it for the modernity part and to keep nuclear reactors from melting down, but hey, lets not let perfect get in the way of good.

        • Coilin MacLochlainn says:

          Sheila, – I agree with you. We must soon return to labour-intensive farming of a permacultural kind. But how many industrialised nations are preparing for this? Where I come from, Ireland, the powers that be are investing everything they’ve got in bigger, more heavily industrialised farms, in beef and dairy predominantly, and totally dependent on oil; this is a policy with no future whatsoever. And all this at the expense of soil health, environmental quality and communities of traditional small farmers that in the past supported and fed all of the people in their area. The current corporation-led approach is the worst possible agricultural policy at this time, built on short-termism and pandering to wealthy farmers and huge multinational corporations. Everyone else suffers, and the viability of the farming tradition as we know it moves closer and closer to wipeout.

          • xabier says:


            Same pattern in England as in Ireland – not just a lack of understanding but a clear irritation with small farmers, and a government and bureaucracy entirely in the pockets of the huge industrial farming concerns.

            Electorally it is insignificant, as farming hardly employs anyone at all. Economically, it is seen as a minor industry, and potentially a source of great costs to government if livestock disease strikes, or flooding.

            Essentially, they want agriculture to go away. Insane.

  38. Fred132 says:

    “Nuclear power plant electricity production has grown even since the 1986 Chernobyl accident because the United States has continued to expand the capacity of existing nuclear facilities. I do not expect this trend to continue, for a variety of reasons.”

    Neither do I. I’m not even convinced it makes economic sense to build nuclear power plants in the first place:


    • A person could write multiple articles on nuclear, and the issues associated. As the article linked points out, the front end costs are very high now. This is especially the case in countries that are trying to increase safety requirements. I expect that costs are considerably lower in countries that are willing to cut costs, such as India and perhaps China. There are a lot of other issues, including:
      (1) What happens, if we have a loss of fossil fuel capability to keep up the power plants and decommission them? How about simply a loss of grid electrical power?
      (2) Can we really keep up uranium supply for the lives of the plants? I know that there is theoretically reprocessing, but these plants are expensive and haven’t been built yet. IIRC, there are also US laws against them.
      (3) Excessive dependence on natural gas isn’t good either. Do we really have alternatives other than nuclear that “work” and have low CO2 emissions? Aren’t we kidding ourselves with offshore wind and solar PV? Even onshore wind does not scale up well, unless there is a lot of hydro backing it up, and nearby use for the electricity.

      • J says:

        As long as emitting carbon has no cost, the winner is clear. I suspect that we can’t add a price to carbon emissions since that will bring about the end of the world that much faster. That said, if California doesn’t get substantial rainfall in the next 5 years we will face a migration from CA to other states. Seattle/Bellevue is already the fastest growing city in the US. At least it rains here although less than it used to and the city is scrambling to keep up with the amount of new cars added to the system.

        • If only some countries have taxes on carbon, and there is no tax on imported goods made with coal, carbon taxes tend to shift production to the countries that don’t have carbon taxes, particularly those using low cost fuels, like coal. In general, carbon taxes tend to be counter-productive, as far as I can see.

      • edpell says:

        Once through nuclear reactor use less than 1% of the energy. They will be gone when cheap uranium is gone. Fast reactors can happily burn all that 99% good spent fuel. The big concern is that slow reactors can never blow up like a nuclear bomb but fast reactors can blow up like a nuclear bomb. If you though a simple accumulated hydrogen explosion was bad (Fukushima) just wait. Of course blowing the plant to little pieces spread across the one mile neighborhood (mostly) will mean simple clean up just scrap off the top foot with a bulldozer.

  39. timl2k11 says:

    Thanks for the link to the article “Germany’s Electricity Market Out of Balance”. I had heard that wholesale electricity prices in Germany were very cheap, which some people seem to be pointing to as a plus, while retail customers are paying a rather (relatively speaking) expensive price for electricity. Perhaps electricity should be more expensive though. How to guage if wind and solar are providing any net benefit to Germans? The intermittency issue seems to be a major problem that very few people truly understand. If you have a sunny and windy day great, but what do you do when it is calm and cloudy? Does the intermittent energy ever offset the extra energy and carbon costs required to stabalize the system? Without some very cheap and efficient way to store wind and solar, they both seem like ill-advised solutions to our energy problem. In fact, for now they seem to be making things worse, not better. Same with electric cars. The batteries are waaay too expensive, not even close to being economical! It’s insanity some of the things people think are solutions to our oil problem. For better or worse, as your article shows, coal remains cheap and will probably be leaned on increasingly as crude oil becomes less economical.

    • I expect that the electricity problem is a major contributor to Germany entering into recession as well. We will see what the next few quarters bring.

      • J says:

        Do you know if they could start up 1-2 or their nuclear plants if they wanted to? Or have the started dismantling them?

  40. Ikonoclast says:

    Interesting analysis as usual. Gail’s is the only site on the Internet that I can find which regularly questions our global energy future and links it to limits to growth. The great majority of the public seem to be living in a fool’s paradise and have no idea what is coming. Whilst I am not quite as gloomy as Gail, I still don’t see much reason for hope. Let me explain.

    Fossil fuels (oil, coal, natural gas, methane clathrates) – Oil is the most useful, transportable and “flexible” fuel. It is ideal for transport needs apart from the pollution/CO2/climate change issue. It has many other industrial uses too. Oil is going to be impossible to replace. Natural gas ticks most of the boxes that oil ticks. Coal is very dirty pollution-wise. In terms of delivering energy, Gail’s graphs show that fossil fuels have peaked. The one possible exception is tundra and sea-bead methane clathrates but if we use or destabilise these deposits (mass clathrate release) we will totally cook our planet. It will be very hard to impossible to replace all that fossil fuels do and the amount they do.

    Nuclear – Gail is right. Production of nuclear energy will stay flat at best until 2050 from when it will decline due to peak uranium being past.

    Hydro – Gail is right again. Hydro is on a slow decline for the reasons Gail outlined.

    Wind/Solar – Wind and solar are likely to be considerably better than Gail predicts. It could save some regional patches but not the world. A Wind/Solar and almost totally electrical economy could work if we accepted much simpler lives. It would need about 1/3 the energy of a fossil fuel economy as it is much more efficient. Heavy machinery and farm machinery would have to be electrical too as well as mass transit. The feasibility of all this might be doubtful though. Only time will tell.

    Prediction – Collapse will occur. Indeed it has started in MENA, the Eurozone and other areas. Some regions might be able to transition to simpler living standards and a very modest wind-solar economy with some electrical grids still operating. Possibly 500 million to 1 billion people might be on the planet in 2100.

    • How do you support today’s governments on Wind/Solar? Doesn’t work, that I can see. Living simpler lives won’t be enough.

      • dolph09 says:

        I can see some enlightened smaller countries going for a bit longer on solar, if they are able to also muster enough force for defense, and reduce the welfare state.

        As for the modern warfare/welfare government of America, nothing can save it at this point.

        • xabier says:

          Defence is an important consideration: in discussing technologies we overlook the fact that they depend on stable social structures, and these are more than likely to be overwhelmed by violence, either directly or by indirect effects of wars (ie supply chain destruction).

          A European friend commented the other day that this is ‘like living in the late 3rd century Roman Empire, with the equivalent of the Thirty Years War ‘(in which everyone attacked everyone else and ruined Germany for a century at least) going on in the Mid -East. he has a point…

    • Question one should ask oneself is if its possible to build windmills from windmill power faster than they are worn down – if so you have a sustainable system of renewable energy. I believe its possible, especially with some help from hydro electric and biofuel.

      I worry more about us not getting off the fossil fuel train before it wrecks havoc with the climate of this planet.

      • edpell says:

        I think we can safely assume that all the FF that can be extracted for an equivalent cost of $100/barrel oil will be extracted and burned. The question is how much of that existing.

        • Suppose the $100 barrel oil is located in the Middle East, and the Middle East gets involved in a broad war. Are you assuming this oil will still be extracted? Quite a bit of the oil might be in Iraq. Who will build the necessary infrastructure amid war? Isn’t your assumption that $100 barrel oil will be extracted a fairly optimistic one, basically assuming that BAU can continue for quite a while, in a lot of oil exporters?

          • InAlaska says:

            Gail, you are right. Libya has still not reached the production levels it had prior to ousting Ghadafi. Neither has Iraq. War disrupts BAU including production of oil. War is basically a big entropy machine. It destroys things that take energy to restore.

            • xabier says:


              War is so often sawing off the branch on which you sit: you get the wood, and a broken neck too….

              The Ukraine is a perfect illustration of this futile war process. In order to reassert control over the Russian areas the central government is currently bombing its own infrastructure to pieces in the east, and it seems incurring debt to its allies for the funding of the army. If it wins, it will, as an already bankrupt state, be faced with huge expense to reconstruct the infrastructure. But ‘patriotism’ demands war and sacrifices……

              There is a parallel here with the way in which the Roman Empire devastated rebellious provinces -above all in what are now France and Spain -in its last years, in order to assert a status quo which was effectively finished.

        • Jim Lovejoy says:

          Even leaving aside Gail’s very pertinent caveat, coal use in developed countries would seem to be going out. I believe that over 50% of current US coal plants are within 10 to 20 years of the end of their design life. Very few new coal plants are being built in the US now, I don’t see that reversing to any great extent. If the economics aren’t here today with today’s interest rate, I don’t see the economics getting favorable in the future.

          India is going against new coal plants, mostly from an economics, and coal supply security standpoint, which leaves China. But we’d need enough organization that shipping coal from the US to China would be viable.

          • I think that there is a good chance all fuels decrease together. Coal is shipped by oil, for one thing. Any kind of electricity generating unit needs replacement parts. These often require supply chains from around the world. Electricity transmission requires a lot of maintenance and repairs, especially after major storms.

            • Don Stewart says:

              Dear Gail
              Have you noticed the orchestrated PR campaign to make the secret 9/11 commission report public? There was a clip of a Republican congressman yesterday where he said that on every page he found that his beliefs about 9/11 were wrong. He strongly encouraged every congressman to go to the room where the report is kept and read it. ‘We owe it to the families of the dead’.

              Now…a lot of people think the secret report implicates the Saudis.

              The two largest oil exporters are the Saudis and the Russians. I stated months ago that NATO was setting up the Russians by fomenting a situation where the ethnic Russians would be used for target practice by the Ukrainians, which Russia will find intolerable, which will lead to a war that NATO thinks it can win, which will lead to NATO control over Russian oil and gas.

              Now, Saudi behavior will be found to have been ‘intolerable’ and a war against them, and possibly other Persian Gulf states, will likewise result in NATO control over Persian Gulf oil.

              So NATO ends up controlling a very high percentage of the oil and gas in the world, including domestic supplies in the US. This gives a military organization the power to dispense oil and gas as it sees fit.

              Don Stewart

            • What I see is that it is the 10th anniversary of the 9/11 report, and various folks are using the occasion to raise questions.

              Mike Lofgren at Truth-Out.com raised the issue of Saudi Arabia fomenting and subsidizing Jihadist movements. http://www.truth-out.org/opinion/item/25190-how-to-read-a-government-commission-report-an-inquiry-into-the-9-11-commissions-10th-anniversary-report
              Ron Paul claims that there is a redacted 9/11 report that hasn’t been made possible.

              I suppose your theory is possible. When resource shortages are the problem, I suppose there are multiple ways to “skin a cat.” But I don’t think it is necessarily very likely. Too many things could go wrong.

            • Don Stewart says:

              Dear Gail
              Here is the brief video with Representative Massie:

              Ron Paul is in the news lately saying that the US government ‘knew about’ 9/11 before it happened…but I see his statements are far more speculative. So far as I know, he never read the classified 28 pages when he was in the House.

              What struck me about Massie’s statements is his referral to having to revise what he thought he knew about the events.

              Paul has been quoted in the last few days as saying that we will never get the truth from a government commission. Massie is not making such a claim…just that the truth is being hidden from the American people by the ill-founded claim of national security issues.

              Don Stewart

            • Paul says:

              I was driving recently in Canada and listening to a talk show that had one of the widows of a Cantor Fitzgerald employee killed in 911 on — she and 3 others were not happy with the investigation and took action themselves pounding on their reps’ doors and going public…

              As she said they ran into brick walls everywhere — nobody would do anything — nobody would answer questions — and very little money was ever allocated to this investigation…

              Something is not right with this picture…


            • Thanks for the link to the video. What Massie says is concerning, I agree.

            • Paul says:

              What I wonder is …

              Snowden has said he could access communications of anyone — right up to the President….

              So why is he not releasing more damaging information?

              Let’s say he had proof that the Deep State was complicit in 911 or some other false flag ops — could he not either use that to enforce his demands regarding the NSA’s violation of the Constitution?

              Of if he believed the US was truly on the verge of a totalitarian nightmare (which it is) and that threats would not have any effect …. why not just try to tear the whole thing down by releasing massively damaging pieces of information one after the other….

              Wouldn’t that be a spectacle…

              Rather than crap about the NSA spying on the Merkel or Petrobas (as if that’s a surprise…) — dump an endless stream of proof of US false flag atrocities onto the world….

              And just watch the country tear itself apart.

              All the effort to convince Americans that the US is the good guy —- would go right out the window as they were faced with the fact that their Dear Leaders were monsters…

              If I were Snowden — that’s what I would do — but FIRST…. I would find out who makes Xanax… and I would go long with every penny I could get my hands on…

              Perhaps Snowden does not have the info — or he is holding onto it as his trump card in case anyone messes with him — he has said he has passed around encrypted info as a fail safe…

            • Don Stewart says:

              One more thought on 9/11, the Persian Gulf, and Ukraine. If my scenario of military domination over world oil production comes true, then it upsets lots of assumptions. Militaries are notoriously uninterested in marginal costs and marginal revenues as drivers of decisions. If the militaries are driving the enterprise, they will simply tax the populace to get the money they need. If they perceive that they need fracked oil and gas, then they will simply give the fracking companies enough money to motivate them. Whether that makes the whole fracking enterprise cash flow negative would not be a major concern.

              The parallels with the late Soviet empire are striking. The system would become more and more dysfunctional, but there would not likely be a collapse in the next decade or two because ‘finance’ would not be a driver.

              For the ordinary citizen, it turns out that gardening is, ahem, still the right answser. The dachas
              gardens saved the Russians during the Soviet collapse, and might save me and you as the militaries grind things into dust.

              Don Stewart

            • It seems like there are more moving parts than what you are accounting for. Even if NATO takes over the Persian Gulf, there is a need for ethnic groups not to be fighting each other, and a high enough price to make oil production profitable for oil companies. There is also a need for people to be physically working in the oil fields. We have done a singularly terrible job of keeping things operating so far–look at Libya.

            • It is hard to depend on a country with that kind of record for production.

            • Paul says:

              Not sure if the parallels are that striking Don… the USSR’s economic system was very primitive — it had nowhere near the complexities of our current globalized system… it also did not have a complex financial interdependent financial system as we do now…

              The USSR may have been inefficient but it was a more simple system— and as we know from Korowitz and Tainter… complex systems are far more fragile than simple ones.

  41. Robert Firth says:

    Our current “renewables” are totally dependent on a fossil-fuel base. Solar PV requires rare elements whose mining and refining consume huge amounts of energy, as well as creating huge amounts of pollution. But wind is even worse, If you add up the energy investment required for obtaining the raw materials, refining them, and forging them into very precise shapes, you get a big number. Now add the cost of the infrastructure to get the turbines in place – the roads, trucks, workers’ hhuts, excavators, cranes, foundations, tall poles, electricity cables, transformers &c. Now add the cost of maintenance, stupidly high because our current designs can’t feather in high winds, but tend to burn out. Add the decommissioning costs. And amortise that over a lifetime that is barely 25% to 30% of what the enthusiasts claimed. Wind power is not an energy source; it is an energy sink. If you want to harness the wind, build a mediaeval windmill.

    • Paul says:

      Robert – you are so right…. and most people are so underestimating what is coming our way… the comments I am seeing border on delusional… 2100 till we get the die off – does anyone seriously think this can continue for 96 more years?

      When shale peaks if not sooner — we are done. Keep in mind conventional oil is dropping eveyr second — every minute — every hour – every day — after peaking in 2005…

      Mark my words. Tick tock

      • atmugh says:

        >most people are so underestimating what is coming our way
        You might read the article (sorry it’s in French) about this black-out in Belgium:


        but what mostly stroke me is the “comment of a client”, used a a paragraph’s title:
        “it is rather impressive that we can get this situation in the 21st century”.
        … which I could well hear around me if I were talking to a bunch of people about this. It shows that people are still completely “locked” in the eternal-progress-paradigm and they do not realize that not only growth as we knew it is over, but that probably the prow of the Titanic will hit the iceberg very soon, if not done already.

        • It is in the cold weather months that we hit peak usage of electricity, because electricity is used for heating in quite a few places. I know my highest electric bill is in winter, even though I have air conditioning in summer, and only a heat pump in the basement in the winter (natural gas heating elsewhere). I live in Atlanta, a city in the United States that is relatively warm.

      • InAlaska says:

        I think you meant 86 more years, Paul. Math will still be useful in 2100(;^D

    • Windmills were around before we discovered fossil fuels, and will be around when there is no fossil fuels left. It only takes more manpower to form the materials into them. Solar power is a different thing though as that needs a lot of energy for mineral extraction and processing into panels.

      If fossil fuels are dwindling, will we use them for flying and recreational use, or to make windmills and solar panels? All it takes is a shift in the mindset of what we choose to use our energy for – at the moment its an exceptionally wasteful relation. You first need to build the energy source for it to power the builiding of itself. Truly we are nowhere near that point now, but we could be.

      • There are two different types of wind mills:
        (1) Today’s fancy ones
        (2) Much less fancy ones, including ones used hundreds of years ago

        The second type has some chance of being somewhat sustainable. The current type runs on high-tech replacement parts. They can be expected to be very short-lived.

        • Paul says:

          A log cabin builder was telling me he was at a conference recently in the NE US…. he had a chance to visit a water wheel powered saw mill that has been in operation for nearly 200 years…. all original gear.

          Pretty cool — but very limited of course…