Eight Pieces of Our Oil Price Predicament

A person might think that oil prices would be fairly stable. Prices would set themselves at a level that would be high enough for the majority of producers, so that in total producers would provide enough–but not too much–oil for the world economy. The prices would be fairly affordable for consumers. And economies around the world would grow robustly with these oil supplies, plus other energy supplies. Unfortunately, it doesn’t seem to work that way recently. Let me explain at least a few of the issues involved.

1. Oil prices are set by our networked economy.

As I have explained previously, we have a networked economy that is made up of businesses, governments, and consumers. It has grown up over time. It includes such things as laws and our international trade system. It continually re-optimizes itself, given the changing rules that we give it. In some ways, it is similar to the interconnected network that a person can build with a child’s toy.

Figure 1. Dome constructed using Leonardo Sticks

Figure 1. Dome constructed using Leonardo Sticks

Thus, these oil prices are not something that individuals consciously set. Instead, oil prices reflect a balance between available supply and the amount purchasers can afford to pay, assuming such a balance actually exists. If such a balance doesn’t exist, the lack of such a balance has the possibility of tearing apart the system.

If the compromise oil price is too high for consumers, it will cause the economy to contract, leading to economic recession, because consumers will be forced to cut back on discretionary expenditures in order to afford oil products. This will lead to layoffs in discretionary sectors. See my post Ten Reasons Why High Oil Prices are a Problem.

If the compromise price is too low for producers, a disproportionate share of oil producers will stop producing oil. This decline in production will not happen immediately; instead it will happen over a period of years. Without enough oil, many consumers will not be able to commute to work, businesses won’t be able to transport goods, farmers won’t be able to produce food, and governments won’t be able to repair roads. The danger is that some kind of discontinuity will occur–riots, overthrown governments, or even collapse.

2. We think of inadequate supply being the number one problem with oil, and at times it may be. But at other times inadequate demand (really “inadequate affordability”) may be the number one issue. 

Back in the 2005 to 2008 period, as oil prices were increasing rapidly, supply was the major issue. With higher prices came the possibility of higher supply.

As we are seeing now, low prices can be a problem too. Low prices come from lack of affordability. For example, if many young people are without jobs, we can expect that the number of cars bought by young people and the number of miles driven by young people will be down. If countries are entering into recession, the buying of oil is likely to be down, because fewer goods are being manufactured and fewer services are being rendered.

In many ways, low prices caused by un-affordability are more dangerous than high prices. Low prices can lead to collapses of oil exporters. The Soviet Union was an oil exporter that collapsed when oil prices were down. High prices for oil usually come with economic growth (at least initially). We associate many good things with economic growth–plentiful jobs, rising home prices, and solvent banks.

3. Too much oil in too short a time can be disruptive.

US oil supply (broadly defined, including ethanol, LNG, etc.) increased by 1.2 million barrels per day in 2013, and is forecast by the EIA to increase by close to 1.5 million barrels a day in 2014. If the issue at hand were short supply, this big increase would be welcomed. But worldwide, oil consumption is forecast to increase by only 700,000 barrels per day in 2014, according to the IEA.

Dumping more oil onto the world market than it needs is likely to contribute to falling prices. (It is the excess quantity that leads to lower world oil prices; the drop in price doesn’t say anything at all about the cost of production of the additional oil.) There is no sign of a recent US slowdown in production either.  Figure 2 shows a chart of crude oil production from the EIA website.

Figure 2. US weekly crude oil production through October 10, as graphed by the US Energy Information Administration.

Figure 2. US weekly crude oil production through October 10, as graphed by the US Energy Information Administration.

4. The balance between supply and demand is being affected by many issues, simultaneously. 

One big issue on the demand (or affordability) side of the balance is the question of whether the growth of the world economy is slowing. Long term, we would expect diminishing returns (and thus higher cost of oil extraction) to push the world economy toward slower economic growth, as it takes more resources to produce a barrel of oil, leaving fewer resources for other purposes. The effect is providing a long-term downward push on demand, and thus on price.

In the short term, though, governments can make oil products more affordable by ramping up debt availability. Conversely, the lack of debt availability can be expected to bring prices down. The big drop in oil prices in 2008 (Figure 3) seems to be at least partly debt-related. See my article, Oil Supply Limits and the Continuing Financial Crisis. Oil prices were brought back up to a more normal level by ramping up debt–increased governmental debt in the US, increased debt of many kinds in China, and Quantitative Easing, starting for the US in November 2008.

Figure 3. Oil price based on EIA data with oval pointing out the drop in oil prices, with a drop in credit outstanding.

Figure 3. Oil price based on EIA data with oval pointing out the drop in oil prices, with a drop in credit outstanding.

In recent months, oil prices have been falling. This drop in oil prices seems to coincide with a number of cutbacks in debt. The recent drop in oil prices took place after the United States began scaling back its monthly buying of securities under Quantitative Easing. Also, China’s debt level seems to be slowing. Furthermore, the growth in the US budget deficit has also slowed. See my recent post, WSJ Gets it Wrong on “Why Peak Oil Predictions Haven’t Come True”.

Another issue affecting the demand side is changes in taxes and in subsidies. A change toward more taxes such as carbon taxes, or even more taxes in general, such as the Japan’s recent increase in sales tax, tends to reduce demand, and thus give a push toward lower world oil prices. (Of course, in the area with the carbon tax, the oil price with the tax is likely to be higher, but the oil price elsewhere around the world will tend to decrease to compensate.)

Many governments of emerging market countries give subsidies to oil products. As these subsidies are lessened (for example in India and in Brazil) the effect is to raise local prices, thus reducing local oil demand. The effect on world oil prices is to lower them slightly, because of the lower demand from the countries with the reduced subsidies.

The items mentioned above all relate to demand. There are several items that affect the supply side of the balance between supply and demand.

With respect to supply, we think first of the “normal” decline in oil supply that takes place as oil fields become exhausted. New fields can be brought on line, but usually at higher cost (because of diminishing returns). The higher cost of extraction gives a long-term upward push on prices, whether or not customers can afford these prices. This conflict between higher extraction costs and affordability is the fundamental conflict we face. It is also the reason that a lot of folks are expecting (erroneously, in my view) a long-term rise in oil prices.

Businesses of course see the decline in oil from existing fields, and add new production where they can. Examples include United States shale operations, Canadian oil sands, and Iraq. This new production tends to be expensive production, when all costs are included. For example, Carbon Tracker estimates that most new oil sands projects require a price of $95 barrel to be sanctioned. Iraq needs to build out its infrastructure and secure peace in its country to greatly ramp up production. These indirect costs lead to a high per-barrel cost of oil for Iraq, even if direct costs are not high.

In the supply-demand balance, there is also the issue of oil supply that is temporarily off line, that operators would like to get back on line. Libya is one obvious example. Its production was as much as 1.8 million barrels a day in 2010. Libya is now producing 800,000 barrels a day, but was producing only 215,000 barrels a day in April. The rapid addition of Libya’s oil to the market adds to pricing disruption. Iran is another country with production it would like to get back on line.

5. Even what seems like low oil prices today (say, $85 for Brent, $80 for WTI) may not be enough to fix the world’s economic growth problems.

High oil prices are terrible for economies of oil importing countries. How much lower do they really need to be to fix the problem? Past history suggests that prices may need to be below the $40 to $50 barrel range for a reasonable level of job growth to again occur in countries that use a lot of oil in their energy mix, such as the United States, Europe, and Japan.

Figure 4. Average wages in 2012$ compared to Brent oil price, also in 2012$. Average wages are total wages based on BEA data adjusted by the CPI-Urban, divided total population. Thus, they reflect changes in the proportion of population employed as well as wage levels.

Figure 4. Average wages in 2012$ compared to Brent oil price, also in 2012$. Average wages are total wages based on BEA data adjusted by the CPI-Urban, divided total population. Thus, they reflect changes in the proportion of population employed as well as wage levels.

Thus, it appears that we can have oil prices that do a lot of damage to oil producers (say $80 to $85 per barrel), without really fixing the world’s low wage and low economic growth problem. This does not bode well for fixing our problem with prices that are too low for oil producers, but still too high for customers.

6. Saudi Arabia, and in fact nearly all oil exporters, need today’s level of exports plus high prices, to maintain their economies.

We tend to think of oil price problems from the point of view of importers of oil. In fact, oil exporters tend to be even more affected by changes in oil markets, because their economies are so oil-centered. Oil exporters need both an adequate quantity of oil exports and adequate prices for their exports. The reason adequate prices are needed is because most of the sales price of oil that is not required for investment in oil production is taken by the government as taxes. These taxes are used for a variety of purposes, including food subsidies and new desalination plants.

A couple of recent examples of countries with collapsing oil exports are Egypt and Syria. (In Figures 5 and 6, exports are the difference between production and consumption.)

Figure 5. Egypt's oil production and consumption, based on BP's 2013 Statistical Review of World Energy data.

Figure 5. Egypt’s oil production and consumption, based on BP’s 2013 Statistical Review of World Energy data.

Figure 6. Syria's oil production and consumption, based on data of the US Energy Information Administration.

Figure 6. Syria’s oil production and consumption, based on data of the US Energy Information Administration.

Saudi Arabia has had flat exports in recent years (green line in Figure 7). Saudi Arabia’s situation is better than, say, Egypt’s situation (Figure 5), but its consumption continues to rise. It needs to keep adding production of natural gas liquids, just to stay even.

Figure 7. Saudi oil production, consumption and exports based on EIA data.

Figure 7. Saudi oil production, consumption and exports based on EIA data.

As indicated previously, Saudi Arabia and other exporting countries depend on tax revenues to balance their budgets. Figure 8 shows one estimate of required oil prices for OPEC countries to balance their budgets in 2014, assuming that the quantity of exported oil is pretty much unchanged from 2013.

Figure 8. Estimate of OPEC break-even oil prices, including tax requirements by parent countries, from APICORP.

Figure 8. Estimate of OPEC break-even oil prices, including tax requirements by parent countries, from APICORP.

Based on Figure 8, Qatar and Kuwait are the only OPEC countries that would find $80 or $85 barrel oil acceptable, assuming the quantity of exports remains unchanged. If the quantity of exports drops, prices would need to be even higher.

Saudi Arabia has set aside funds that it can tap temporarily, so that it can withstand a lower oil price. Thus, it has the ability to withstand low prices for a year or two, if need be. Its recent price-cutting may be an attempt to “shake out” producers who have less-deep pockets when it comes to weathering low prices for a time. Almost any oil producer elsewhere in the world might be in that category.

7. The world really needs all existing oil production, plus more, if the world economy is to grow.

It takes oil to transport goods, and it takes oil to operate agricultural and construction equipment. Admittedly, we can cut back world oil production with lower price, but this gets us into “a heap of trouble”. We will suddenly find ourselves less able to do the things that make the economy function. Governments will stop fixing roads. Services we take for granted, like long distance flights, will disappear.

A lot of people have a fantasy view of a world economy operating on a much smaller quantity of fossil fuels. Unfortunately, there is no way we can get there by way of a rapid drop in oil prices. In order for such a change to take place, we would have to actually figure out some kind of transition by which we could operate the world economy on a lot less fossil fuel. Meeting this goal is still a very long ways away. Many people have convinced themselves that high oil prices will help make this transition possible, but I don’t see this as happening. High prices for any kind of fuel can be expected to lead to economic contraction. If transition costs are high as well, this will make the situation worse.

The easiest way to reduce consumption of oil is by laying off workers, because making and transporting goods requires oil, and because commuting usually requires oil. As a result, the biggest effect of a cutback on oil production is likely to be huge job layoffs, far worse than in the Great Recession.

8. The cutback in oil supply due to low prices is likely to occur in unexpected ways.

When oil prices drop, most production will continue as usual for a time because wells that have already been put in place tend to produce oil for a time, with little added investment.

When oil production does stop, it won’t necessarily be from high-cost production, because relative to current market prices, a very large share of production is high-cost. What will tend to happen is that production that has already been “started” will continue, but production that is still “in the pipeline” will wither away. This means that the drop in production may be delayed for as much as a year or even two. When it does happen, it may be severe.

It is not clear exactly how oil from shale formations will fare. Producers have leased quite a bit of land, and in some cases have done imaging studies on the land. Thus, these producers have quite a bit of land available on which a share of the costs has been prepaid. Because of this prepaid nature of costs, some shale production may be able to continue, even if prices are too low to justify new investments in shale development. The question then will be whether on a going-forward basis, the operations are profitable enough to continue.

Prices for new oil development have been too low for many oil producers for many months. The cutback in investment for new production has already started taking place, as described in my post, Beginning of the End? Oil Companies Cut Back on Spending. It is quite possible that we are now reaching “peak oil,” but from a different direction than most had expected–from a situation where oil prices are too low for producers, rather than being (vastly) too high for consumers.

The lack of investment that is already occurring is buried deeply within the financial statements of individual companies, so most people are not aware of it. Dividends remain high to confuse the situation. By the time oil supply starts dropping, the situation may be badly out of hand and largely unfixable because of damage to the economy.

One big problem is that our networked economy (Figure 1) is quite inflexible. It doesn’t shrink well. Even a small amount of shrinkage looks like a major recession. If there is significant shrinkage, there is danger of collapse. We haven’t set up a new type of economy that uses less oil. We also don’t have an easy way of going backward to a prior economy, such as one that uses horses for transport. It looks like we are headed for “interesting times”.

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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791 Responses to Eight Pieces of Our Oil Price Predicament

  1. VPK says:

    Why Does Saudi Arabia Seem So Comfortable With Falling Oil Prices?
    One popular conspiracy theory is that Saudi Arabia is trying to deprive valuable oil revenues to Russia because of its support of the regime of Bashar Assad in Syria. Saudi Arabia is opposed to Assad.

    Another target is its archrival in the region, Iran. Bronson says the low oil prices are hurting Russia and Iran, which both depend heavily on oil exports and need higher prices than Saudi Arabia does to meet all their domestic needs.

    “The Saudis are always mindful of oil prices. They always try to keep the oil prices high enough for them to cover budget, but low enough to hurt the Iranians,” says Bronson.

    Another theory is that Saudi Arabia is manipulating the markets to try and quash competition, especially from new oil producers, like those involved with the Canadian oil sands and the shale revolution in the U.S., says Krane.

    “They figure if prices go down and they help them go down a little bit, some of these people will be forced out of the business and the Saudis will be able to maybe scare some people away and retain their market share,” he says.

    Krane says demand for oil has fallen off in Europe and Asia, especially China, and there are more exporters vying for a smaller piece of the market.
    We read it FIRST HERE, thanks Gail and others!

  2. VPK says:

    Low oil prices threaten Norway’s Arctic, UK’s mature fields
    * Over 1 bln barrels could stay in the ground

    * Arctic Norway, mature British fields most vulnerable

    * British, Norwegian oil investments set for sharp falls

    * Ongoing UK projects, Sverdrup to go on
    OSLO, Oct 28 (Reuters) – Big oil and gas finds in waters along Europe’s northern edge may remain undeveloped now that oil prices have dropped, keeping potential supply of over a billion barrels of oil equivalent out of the market for the foreseeable future.

    Discoveries in Arctic Norway could stay dormant, while mature British fields could face early closure and frontier exploration in areas such as Greenland could be called off as oil companies cut capital spending by up to a fifth.

    Projects such as Statoil’s $15.5 billion Johan Castberg in the Barents Sea and smaller finds by Shell, OMV and others were once expected to open new oil provinces.

    They now face delays, cancellations or a radical redesign as oil prices at $85 per barrel make them unprofitable.

    • Thanks! Another good quote from the article:

      “Oil majors started to realise that their business model doesn’t work unless the oil price continues to rise,” Torbjoern Kjus, an oil analyst DNB bank, said.

  3. edpell says:

    Exciting news from the 15th Annual Japanese Cold Fusion Conference. Two independent groups Kitamura, Takahashi, et. al. and Mizuno and Yoshino both report generation of 1W/gram of Nickel in deuterium gas. Cold fusion is alive and well.

    It is still a finite world world but maybe energy will not be the first link in the chain to break.

      • Paul says:

        I was re-reading this excellent research yesterday (from p.59):


        And they mention fusion:

        Other energy sources look even worse
        in EROEI terms. Biofuel EROEIs seldom
        exceed 3:1, and some are negative. The
        much-vaunted “hydrogen economy”
        is a myth, because hydrogen acts as
        a store (not a source) of energy, and
        is very inefficient in the way in which
        it converts energy obtained from
        conventional sources. About 40% of
        the initial energy is lost in conversion,
        perhaps another 15% is lost in the
        collection process and, if the hydrogen
        energy is reconverted into electricity,
        the process losses mean that one
        finishes with barely 15% of the energy
        put into the process in the first place.

        Policymakers who pin their hopes on
        unconventional hydrocarbon sources
        are guilty of a quite extraordinary
        degree of self-delusion.

        This research is absolutely brilliant… well worth spending 30 minutes reading it….

    • ordinaryjoe says:

      Is this one for real in your opinion? Ive got some nickels. Can you get deuterium gas on e-bay?

  4. Pingback: Is er te weinig vraag naar moeilijk winbare, dure aardolie? | Cassandraclub

  5. Paul says:

    Global Debt Grows Exponentially While The Income To Support It Does Not
    Excellent visual below posted this past weekend at Mauldin Economics showing the growth in global debt to GDP over the last 12 years. While we often focus on the worst offenders here on this site (Japan, U.S., Europe, UK, China) which are the most likely to have a debt crisis/implosion first, it is important to remember that the debt binge that has taken place since the start of this century has been a truly global phenomenon.

    Global debt to GDP has grown from less than 165% to over 210% in just 12 years.:


    If you borrow money today you must sacrifice in the future when the debt must be repaid. Borrowing money turbocharges present growth at the expense of future growth. We are 75 years into the current debt super cycle so many believe it is impossible for a developed economy to face a real debt crisis (2008 was concentrated in just a small sector of the global debt market; U.S. subprime housing).

    My guess is there will be a severe crisis from one of these major economies in the next five years:

    1. Japan (government debt)
    2. China (corporate/real estate debt)
    3. Europe (government/financial debt)
    4. U.S. (government debt)
    5. U.K. (financial debt)

    I think the likelihood of them occurring are listed in the order above, but on paper every single one of those debt categories should implode tomorrow morning. The only thing that has stopped that from occurring has been the ability to continuously roll the debt into new loans at lower interest rates. This has been supported by the central banks around the world and investor willingness to continue to buy today and hope there will be a greater fool tomorrow waiting to offload the debt.


    • VPK says:

      Starting to look like the classic “J curve” we read about in biology….and we know what happens at the “peak”…..crash!

  6. justeunperdant says:

    So many of these stories with the same themes.
    BP profit falls; says not hit by Russia sanctions


    LONDON– BP PLC posted a big fall in third-quarter profit from a year earlier, giving the first indication of how big oil companies are weathering falling oil prices since June.

    The U.K. oil giant said net profit fell in the quarter ended Sept. 30 to $1.29 billion, compared with $3.5 billion a year earlier.

    BP said that to date, Russian sanctions have had no material adverse impact on the company.

    BP’s third-quarter replacement-cost profit–which is similar to net profit under U.S. generally accepted accounting principles–was $2.39 billion, down from $3.18 billion in the same period last year. Based on a poll of 10 analysts conducted by The Wall Street Journal, replacement cost profit was forecast at $2.81 billion.

    Reported production for the quarter was 2.15 million barrels of oil equivalent per day, 2.7% lower than the third quarter of 2013. It had warned last quarter that production would decline due in part to maintenance.

    BP added that depending on weather and the closing of the Alaska package sale to Hilcorp, fourth-quarter reported production is expected to be slightly lower.

    BG Group net profit down 29% as output declines


    LONDON–Oil and gas company BG Group said Tuesday its net profit dropped 29% in the third quarter and its output declined further amid higher costs and lower global hydrocarbon prices.

    BG said its earnings for the period were $759 million, down from $1.1 billion a year ago.

    Once known for its rapid production growth, BG’s production has slowed in recent years. Output slipped 2% to 569,000 barrels of oil equivalent as the company again experienced problems with its Egyptian operations.

    But BG said its major projects in Brazil and Australia were “progressing well” and that its is expecting to export its first liquefied natural gas cargo from Queensland, Australia, before the year end.

    BG recently said former Statoil ASA chief executive Helge Lund would take over as its new CEO next March.

  7. Paul says:

    Lloyds cuts 9,000 jobs and shuts 150 branches as profits leap

    Taxpayer-backed bank unveils details of £1bn cost-saving plan that will see staff replaced by digital technology


    The cannibal bites off his fingers and rejoices — ‘see — I am lighter — I can run faster!’

  8. Stilgar Wilcox says:


    Sears Layoffs Top 6,000, Closing Over 110 Outlets

    Closures include 55 Kmart, 30 Sears and 31 Sears Auto Center locations.
    6,067 workers will lose their jobs.
    Pennsylvania, Michigan and Indiana are hardest hit.

    Sears spokesman Howard Riefs declined to speak by phone. “We disclose our store counts at the end of each quarter,” he said via email. “We don’t have further comment.”

    Well, we all knew Sears was having their troubles. We bought a frig from Sears, the condenser went out 3 months later, it took 2 weeks to get someone to look at it, then another 5 weeks to get a new condenser and another 3 weeks to get it replaced. So it’s no wonder that old tired company is closing stores, the question is; does this lead to more layoffs by other companies? Are we into another recession or is this an isolated incident?

  9. Simple Simon says:

    New Zealand is seen as one of “those” destinations.
    Result: house prices are going through the roof (excuse the pun) from the impact of the highest immigration numbers in decades.
    Unfortunately, this country is heavily fossil fuel dependent for its primary sources of income: farmers of all types (dairy, sheep and beef) have all told me that without gas for their farm vehicles/machinery, they simply could not run their farms.
    Meantime, commodity prices are dropping (NZ Is very dependent on primary industry exports), which will flow through to the rest of the economy over the next couple of years.
    We will probably suffer the same economic fate as everybody else, but it looks as though we may turn up to the party a little later than most.

    • Paul says:

      Completely agree Simon — from my observations during my visit last month the only advantages NZ has would be related to population density….

      All those thousands of farms are massively reliant on oil and gas based fertilizers and pesticides… as well as irrigation pumps…

      Sustainable commercial level farmers are few and far between… although a lot of people do grow organically in their backyards…

      Can the South Island support 1M people post collapse? Of course many would die so that number drops rather quickly …

      Difficult to say — but without a doubt top of the list in terms of odds of survival I would have to think…

      • Simple Simon says:

        Hi Paul,
        appreciate the comments from an “external” perspective.
        Before the europeans started arriving around 1800 CE, the Maori had been in New Zealand for around 500 years. In that time they had gone through a minor boom and bust in that they over-exploited the food resources. However, no fossil fuels, no metals, no wheels – an advanced Stone Age culture meant that the extent of the boom was comparatively limited. Their population for the whole of NZ had apparently more or less equilibrated around 120,000 – minor fluctuations depending on weather, intertribal warfare etc.
        I don’t see how NZ could support more than 500,000 sustainably for the long term even with more sophisticated agriculture etc than the Maori had, although a mate of mine did a thesis on exactly this topic, and reckoned we could maintain 1 million. I don’t think he allowed enough for the impact of fossil fuel crash.
        Also, bust follows boom to well below sustainable numbers, so i think we will be well below those numbers for a while.
        However, because the fossil fuel etc etc crash has come “soon enough”, I don’t think NZ will have burnt too many post crash options compared to lots of other places.
        So, NZ probably one of the better places to be – and I’m expecting a population crash meaning a reduction of population to maybe 50,000 – 100,000 from its present 4,500,000 – call it a 98% drop.
        Not pretty – but it may be one of the few lifeboats left.

      • VPK says:

        Well, if you like sheep, aren’t there more of them than people there?
        At least you’ll be warm

        • VPK says:

          Some interesting facts about NZ:
          Currently New Zealand generates about 10% of its electricity geothermally from volcanic heat. Another 55% of the country’s electricity is generated by water flowing through hydroelectic dams. Wind-power accounts for less than 5% of electricity needs, although this is planned to increase significantly in the years ahead. By 2025, the plan is that 90% of New Zealand’s electricity will come from renewable sources

        • Simple Simon says:

          And that sums up the problems in a nutshell. There are 30 + million sheep in NZ – and they all get shorn using electricity. A good shearer can shear hundreds of sheep in a day. However, a blade shearer (non-electricity) would do well to manage 20 – 30. There are very few people skilled in blade shearing around, and very few sets of blade shears around because they haven’t been used for decades.
          Because most of our electricity is hydro, that is fine – until the generators start to wear out and the parts (almost always manufactured offshore) aren’t available. Also, there are already occasional thefts of the copper wire from the transmission lines.
          A sheep that hasn’t been shorn for a couple of seasons starts to really struggle with the extra weight of the fleece, too hot in summer etc.
          There will be a lot of sheep dying when SHTF.
          Further, NZ exports almost all of its wool to be spun, woven, made into clothing, carpets etc offshore. The capability to process wool industrially onshore now is very limited – and there are only a few hobbyists who know how to do the process manually.
          As Gail has so often pointed out, we are in an integrated global economy – which has meant reduced viability/capability of the societies formerly able to operate somewhat independently.

          • xabier says:

            So NZ sounds as though it is at the same stage of development as England in the early Middle Ages, when the wool processing was all done in Europe by the clever Continentals.

            Reading the memoirs of an English peasant recalling life before WW2, he said that sheep were regarded as a real pain -too prone to disease, etc -and cows were much preferable for the small-holder.

            • Simple Simon says:

              Agreed, sort of.
              There used to be lots of onshore processing, but the pressure of more “efficient” operators globally – like China – meant that the small onshore plants could not compete, simply because of economies of scale.

              There are lots of “lifestyle block” owners (roughly 2 to 30 acres, or 0.5 hectare to 12 hectares) who, as hobbyists are accumulating skills, experience and expertise with various livestock.
              For instance, I have a neighbour on 25 acres who is becoming quite expert with alpacas (related to llamas).
              Most DON”T go for sheep.

              IF we have a slowish descent, i.e. 10 – 20 years, there is a chance that these lifestylers and eco-communities, along with adaptable farmers and communities will make a reasonable base for something to be retained for the long haul.
              I’m crossing my fingers!

            • Paul says:

              I noticed a fair number of alpacas …. is that because they are cuter than sheep? — kinda like pets…. or is there some other reason to favour them over sheep?

              One thing I understand is that they are cleaner — unlike sheep that will drop poo where they eat — I believe alpacas drop in the same spot consistently…. making them less prone to worms and other diseases….

          • Paul says:

            Some very sobering points you make Simon.

            The closest I have ever been to one of the few places on the planet that are almost completely unplugged from BAU was Irian Jaya …. many days trek off the touristed paths outside Wamena where the locals will play ‘savage’ for a buck a photo… our instructions to the guide were to take us where nobody goes… (which meant humping up and down 3000m hills from freezing cold to steaming hot for 10 days…)

            At the furthest point — where at most a handful of people visit each year and often nobody — the people were subsisting … they did not even have a plastic water bottle — not even a jar — and they were miserable eating mostly yams and perhaps a pig from time to time… they were stunted with few over 5ft tall…

            This is what life unplugged from BAU looks like… it is primitive living at its finest.

            We take for granted many of the things that BAU brings us — never mind electricity and cars…. simple things like a tooth brush… nail clippers… a plastic cup…. toilet paper…. a woolen sweater… shoes… a pen… a piece of paper… a lighter…

            These things will not be produced post collapse — unless you have stockpiled such items then you will not have them — the shops will empty and they will remain empty.

            • Simple Simon says:

              It IS sobering – but pre-European Maori did reasonably well. Life expectancy around 30 – 32, and Captain Cook, one of the early European “discoverers” of NZ described them as superb physical specimens.
              Life was mostly settled hunter gatherers – partially enabled by NZ being such a long skinny country with a very extensive coastline – thus lots of seafood available.
              I do think that, given retention of some sustainable agriculture knowledge etc that this country can ultimately sustain 200,000 to 500,000 people (i.e 2 to 4 x the equilibrium number for the Maori) – but the path from here to there is going to be “interesting”.
              There are lots of attempts at sustainable living scattered around the place, but as you and I agree, an awful lot of these people don’t realise the extent to which they have assumed some aspects of BAU to maintain their “sustainable” existence.

            • Paul says:

              … but the path from here to there is going to be “interesting”…

              That pretty much sums it up.

            • I had to look up where Irian Jaya is – Western New Guinea. When hunter-gatherers became farmers, there is evidence that height decreased by 6 inches. It is very hard to do primitive farming well enough to get adequate nutrients. Perhaps with trading with many others, it is better.

          • Good points!

            There is also the issue of making blades for the blade shearers (non-electricity). The existing ones clearly last for a while, but once new ones are needed there is a problem of making the steel fro the blades. I don’t know the ins and outs. I suppose electricity could be used to melt the steel from worn blades to form them into new ones, for a while. But eventually, there is a limit with respect to making the blades even for hand operated shearers. Iron can be made using charcoal for heat, but I don’t believe steel can. Also, getting the right additives would likely be a problem.

  10. not fazed says:

    A Poison Tree
    By William Blake

    I was angry with my friend;
    I told my wrath, my wrath did end.
    I was angry with my foe:
    I told it not, my wrath did grow.

    And I waterd it in fears,
    Night & morning with my tears:
    And I sunned it with smiles,
    And with soft deceitful wiles.

    And it grew both day and night.
    Till it bore an apple bright.
    And my foe beheld it shine,
    And he knew that it was mine.

    And into my garden stole,
    When the night had veild the pole;
    In the morning glad I see;
    My foe outstretched beneath the tree.

  11. Issam says:

    Hi Gail,

    Thank you for your blog ! I learned so many things when I found it. I used to be a simple ”peak oiler” as you call them, but now I understand more about economical considerations, and not just about geological reserves.

    I am curious about what Steven Kopits calls the carrying capacity price, or what you call the maximum affordable price that an economy ( a country, or the world ) can afford for a barrel of oil.

    I do understand that one can deduce it empirically by observing the consumption and price curves superimposed, but I am curious if there is a way of calculating it and if yes, what is the method/assumption/datas needed for doing that ? For example how come China has a higher carrying capacity price than the USA for a barrel of oil although their total nominal GDP is smaller, so the share of their GDP used to import oil should be higher than the one for the USA ?

    Thank you very much,


    • apcissam says:

      I am sorry, I make a small correction here. After quickly looking at oil consumption and nominal GDP, it seems that the ration oil consumption to GDP may actually be similar for China and the USA, but still, I don’t understand how one could calculate the max affordability price and why China has a higher price than the US.

      Thank you,

    • From what I have observed, what is important is the average price of energy products to a nation. This partly depends on mix and partly depends on prices of individual products. The countries that have the lowest average price tend to do best. As the price of oil rises, it raises the average price of fuel, especially in countries that use a lot of it in their energy mix. The PIIGS stood out in Europe, because of their heavy reliance on oil in their energy mix. So did Cyprus. They were hurt especially badly, early on. China, with its heavy reliance on coal, has been more protected. Now, its cost of coal is increasing, and I believe its percentage of oil is up. Also, the government may not be subsidizing oil prices quite as much in the past–I am not sure. Its problems may also be debt related-not all problems are directly oil price related.

      Europe has economic growth problems at least partly because of the high cost of its fuel. Adding renewables seems to make the situation worse, not better, unless these are offset by use of a cheap fuel such as lignite coal. Thus, we end up with the situation we have in Germany.

      I am not sure about how one tells what the effect is at a given price, except by looking at trends in oil consumption and in economic growth. (These tend to go together.)

      • apcissam says:

        Thank you for your insight !

        Then what do you think of these two alternatives :

        1) cut oil ( and energy in general ) taxes so that the price ”felt” by the economy does not rise when the energy price rises ( like in the 2000’s oil shock for example ), but then we are back on the debt side of the problem ( right ? )

        2) increase in a predictable manner ( so that there is visibility for future investments ) oil ( and energy, in particular non-renewable ) taxes ( like the ”carbon tax” ) so that as the economy invest to reduce its energy use ( through energy conservation more that efficiency I guss…. ) it becomes less sensitive to energy prices rising ( that would mean increase the GDP/energy ratio )

        I tend to be ”a priori” ( as an ex ”peak oiler ” ) in favour of the number 2), but I cannot solve what seems to be a paradox, that because one need cheap energy to have GDP growth number 1) would be the solution instead of 2)

        Thank you to share your insight on that,

        • We live in a world oil market, so it is not so much the actions of any one country that affect outcomes, but the actions of all countries combined.

          With higher costs of oil extraction and growing economies, oil subsidies of many oil importers (China, India, Brazil, etc) become increasingly difficult to maintain. These countries cut back on their subsidies, thereby reducing world demand, and thus oil prices. This is part of what is happening now. To some extent this may also happen in oil exporters, with the same effect.

          I am not sure that either of the ideas you suggest work, with respect to a single country. Regarding (1) I have sometimes thought that governments need to artificially fix the price of oil, rather than let it float up and down with supply and demand. There are numerous problems with this, including picking a price that would be high enough for producers but would not completely kill most of the world’s economies.

          Regarding (2), we live in a networked economy that must grow, to repay debt with interest, to keep up with rising world population, and to overcome the effects of diminishing returns. Even conservation doesn’t really work because of the growth imperative. Also, with a world market, oil that one country doesn’t use is used by someone else, although perhaps at a slightly lower price.

  12. Adam says:

    Here in London it has been an unusually warm October, with the daily maximum temperatures usually significantly above the average. Here is an overview:


    And now this:

    Halloween heatwave as temperatures soar to 21C for half-term



    If it reaches 69F (21C) tomorrow it will be the hottest October 28 since records began, 160 years ago. Just eight weeks from Christmas, Britain is hotter than Valetta in Malta. Met Office forecaster Mark Wilson said: “What we are going to see today and tomorrow are much higher temperatures than usual in the south east, getting up to around 21C tomorrow. The temperatures are quite above average for this time of year, where you would expect highs of around 14C.”

    21°C is of course a very mild or even cold temperature for people in many parts of the world, but not here in poor old Britain!

  13. Don Stewart says:

    Dear Gail and All
    What do you think of David Hughes report on Shale Oil and Gas?

    Don Stewart

    • Paul says:

      Don – what I wonder… is how shale continues to offset the declines in conventional oil plays which peaked in 2005….

      What does shale produce – 3M barrels of oil per day or so? It is not as if this is a massive windfall of oil….

    • I think the report is a fine addition to the Peak Oil literature. I expect that the report’s basic findings are probably true:

      -Tight oil production from major plays will peak before 2020.
      -Shale gas production from the top seven plays will likely peak before 2020.
      -Over the short term, U.S. production of both shale gas and tight oil is projected to be robust—but a thorough review of the production data indicate that this will be unsustainable in the longer term.

      In a way, I might like to have seen more financial information about the cost of extraction and the current condition of oil and gas production companies. But this is not the way David Hughes is analyzing the data–he is only looking at the geology of the area. So what he really is saying is that even if the finances are favorable, (oil prices high enough, companies balance sheets in good enough shape, debt still available cheaply) production of both tight oil and shale gas are likely to peak before 2020. In fact, the decline could start quite a bit sooner, if things don’t work out well with respect to finances.

  14. edpell says:

    Here is an emerging piece of the new economy. My local electric company is urging the state of New York to create state owned renewable energy companies because only the state has access to capital at low rates require to make this economically viable.

    With zero cost capital and a revenue stream just about anything is at least break even. Unless of course it takes longer than the physical lifetime of the systen to repay the system. But even then that is a cost shoved into the future on to our children and grandchildren. Kicking the can one more year.

    • As far as I can see, if a utility adds intermittent electricity to the grid, it makes the grid more complex to manage and likely makes the date of grid failure sooner, not later. Because of this, the value of the intermittent renewables to the grid is in some sense negative. Or perhaps its contribution is slightly positive, when you consider that the fossil fuel that would have been burned is saved to be burned at a later time. But even this is not very positive, from a climate change point of view–a ton of CO2 now and a ton of CO2 a few years from now are not all that different.

      Politicians have to have something that seems to work, whether or not it really does.

  15. The above mentioned Art Robinson is running for Congress in Oregon. I doubt that he has much of a chance to win. http://www.artforcongress.com

  16. Pingback: Eight Pieces of Our Oil Price Predicament | Spa...

  17. Don Stewart says:

    Dear Gail
    This is in response to the Cuban Special Period. (I can’t get the response button to work correctly on that).

    Cuba is one of the best Caribbean islands in terms of producing food. They are all miserable in terms of calories. Which leads one to the conclusion that, in a collapse, the Carribean will lose an awful lot of people.

    Venezuela helped them out with oil. Which shows that a little oil is a very good thing if one is thinking about survival. But there are lessons to be learned. A society CAN move from a cog in a machine to a more self-reliant (albeit poorer) place. The transition is likely to involve some starvation…as people in Cuba lost considerable weight But a country can also figure out ways to do things without using lots of oil…as evidenced by the medical school constructed in a reclaimed building. Even a country as hostile and irrational as the US provides scholarships for people in poor countries to go to Havana to study medicine.

    Instead of doing a time series plot of Cuban oil consumption, do one relative to the US, per capita. And then see if you want to claim that there is nothing to be learned.

    Don Stewart

    • You are right. Cuba’s oil per capita oil consumption dropped by about 21% in the 1992-1995 period, relative to the 1980 to 1989 period. And it dropped by another 12% in the 2007-2013 period.

      Comparson of oil consumption for selected countries

      The USA dropped less. Only 3% in the 1992 to 1995 period, and another 7% in the 2007-2013 period.

      Oil consumption varies a lot from area to area. Even at the current low level, Cuba’s per capita oil consumption is a bit higher than the Dominican Republics, and a whole lot higher than North Korea’s.

  18. Paul says:

    Idiot Alert!

    BP plc And Royal Dutch Shell Plc: Just How Low Will The Oil Price Fall?
    By Prabhat Sakya – Monday, 27 October, 2014 |

    Is there anything as controversial as the oil price?

    I have recently been wary of investing in oil companies such as BP (LSE: BP) and, to a lesser extent, Royal Dutch Shell (LSE: RDSB). From my point of view, we live in a world where oil is increasingly difficult to find and to extract. And most of the remaining reserves in the world are owned by state oil companies, rather than the majors.
    The oil price is tumbling

    This means that the oil companies are having to spend much more money extracting oil, whether it be from the depths of the ocean, the Arctic or the Athabasca oil sands. However, one positive for these firms has been the oil price. The historically high price levels has meant that oil has, nonetheless, still been a highly profitable industry. Until now.

    Since June 2014 the oil price has fallen from $115 to $85 – that’s quite a fall. And it could still fall further. In recent months commodities across the board have been falling. The mining companies have been suffering as the iron ore price has tumbled. I think that this may be part of a broader cyclical downtrend in commodities as we move from commodities bull market to bear market. Now the oil companies are suffering, too.
    This may be uncomfortable reading

    I know that investors won’t like to hear this, but an oil price fall of this magnitude, if sustained, will have a massive impact on BP and Shell’s profits. It may mean that consensus has overestimated profitability, and that these businesses are not as cheap as they seem.

    What’s more, a lower oil price may have a longer-term effect on the oil industry. Suddenly, projects that the oil companies are investing in will no longer be viable. It may mean that these businesses will need to scale back their exploration and production spend. This will also have an impact on services companies such as Petrofac and Schlumberger. Is the oil industry beginning to embark on a smaller-scale future?

    There used to be a lot of discussion about peak oil. In terms of consumption, we may have already passed peak oil. We no longer use oil to heat our homes. Cars are becoming increasingly fuel efficient, and a growing proportion are hybrid or electric. Renewable energy is just on the cusp of taking off. The energy industry is in transition.

    The Stone Age didn’t end because we ran out of stones. The oil age could end long before we run out of oil.

    Whether or not you share my view on the shares in question, I’m confident that you can benefit from reading this new report from The Motley Fool that takes you through the seven key steps you need to take to become a stock market millionaire.

    “How You Could Retire Seriously Rich” explains how spending just 20 minutes a month could help you create a portfolio that could bring you closer to financial freedom for life. Click here to check out the report — it’s completely free and comes with no further obligation.


  19. theedrich says:

    From Tom Whipple, ASPO-USA, 2014 October 27 — “Oil majors’ decline:  Last year, Exxon, Chevron and Shell failed to increase oil and gas production despite having spent $500 billion over the previous five years, $120 billion in 2013 alone.  Under pressure from investors, the world’s largest oil companies are now forced to cut capital expenditure and sell assets to boost cash flows.  (10/24)

    Where is Madoff when you need him?

  20. CTG says:

    Guys, here is an interesting article. http://d21uq3hx4esec9.cloudfront.net/uploads/pdf/141025_TFTF2.pdf

    The key points is that capital flow can reverse instantaneously, like what happened in 1997 in Asia. I remembered very well in 1997 and I bought my first house during that severe downturn for a very low price. It was rather instantaneous, without any warning (just a simple devaluation in Thailand) and things went south and spread to all corners of Asia.

    In every financial metrics like debt/GDP/bad loans/leverage, what we have now in 2014 is even worse than 2007 or 1997. The credit card debts in South Korea was worse now than any other time in history; the real estate prices are totally disconnected in every country in Asia, etc.

    The article covers also the fact that Paul loves – central banks have no ammunition anymore. Many people will not believe it but this can be an event that will trigger the collapse of the supply chain which can cause widespread pain and even the event that we feared. Like population overshoot, we are way beyond the territory of “financial overshoot”. Any simple or small events may cause the entire “just-in-time” supply chain to freeze up.

    • Paul says:

      I was in Hong Kong at that time but unfortunately did not have the funds to jump into a housing market that crashed by 70% during the Asian financial crisis….

      The bubble is significantly more frothy now http://www.macrobusiness.com.au/wp-content/uploads/2013/04/ScreenHunter_09-Apr.-22-17.04.gif

      I won’t be participating in the collapse this time either — for entirely different reasons of course…

      I am still not quite certain how this unravels — the central banks continue to demonstrate that they will buy the markets if they fall — so the big money stays long knowing that to short is a fool’s game —- because the central banks have unlimited funds at their disposal….

      Can that go on for years still? Or does it somehow bust? Or does something present itself that the central banks cannot print away — and that tips the entire table over.

      One thing that I am very much certain of — once the table tips — they will be able to do nothing — 1997/8 was nothing compared to this…. The pent up negative energy involved in what the central banks are doing will unleash a hurricane force on the markets when let out of the jar…

    • Interesting quotes

      After years of enjoying relatively easy capital inflows and high levels of debt growth against a backdrop of deteriorating fundamentals, the “Fragile Eight” (Argentina, Brazil, Chile, India, Indonesia, Russia, South Africa, and Turkey) find themselves in the “addicted to capital” phase of the balance of payments cycle (outlined in the chart on the next page from Bridgewater Associates), with high vulnerability to a reversal in flows.

      . . .

      The question for 2014 is, what happens when the tide of easy dollars reverses and reveals a more challenging funding environment?

      . . .

      As the example of Russia shows – and the inverse relationship between the US dollar and oil prices highlights – this is not just a matter of capital inflows turning into outflows, but rather inflows giving way to outflows while the value of commodity exports falls simultaneously. So, this dynamic gets more and more dangerous for increasingly fragile economies as the dollar reaches new heights and commodity markets are stressed.

    • Interesting quotes

      After years of enjoying relatively easy capital inflows and high levels of debt growth against a backdrop of deteriorating fundamentals, the “Fragile Eight” (Argentina, Brazil, Chile, India, Indonesia, Russia, South Africa, and Turkey) find themselves in the “addicted to capital” phase of the balance of payments cycle (outlined in the chart on the next page from Bridgewater Associates), with high vulnerability to a reversal in flows.

      . . .

      The question for 2014 is, what happens when the tide of easy dollars reverses and reveals a more challenging funding environment?

      . . .

      As the example of Russia shows – and the inverse relationship between the US dollar and oil prices highlights – this is not just a matter of capital inflows turning into outflows, but rather inflows giving way to outflows while the value of commodity exports falls simultaneously. So, this dynamic gets more and more dangerous for increasingly fragile economies as the dollar reaches new heights and commodity markets are stressed.

  21. Christian says:

    It would be interesting to drive a sociological enquiry about “us” here

  22. Paul says:


    The Toba supereruption was a supervolcanic eruption that occurred some time between 69,000 and 77,000 years ago at the site of present-day Lake Toba (Sumatra, Indonesia). It is one of the Earth’s largest known eruptions. The Toba catastrophe hypothesis holds that this event caused a global volcanic winter of 6–10 years and possibly a 1,000-year-long cooling episode.

    According to the Toba catastrophe theory,[97] the event may have reduced human populations to only a few tens of thousands of individuals.


    I think a better benchmark….

  23. Paul says:

    A Window Opens (with credit to B9K9)

    – The luckiest, fittest, smartest, with the capability for ruthlessness survive – always have – always will

    – Resources are finite and therefore ownership is a zero sum game

    – The strong always take from the weak – if they do not then that is a sign of weakness and a competitor will take from the weak and will usurp the formerly strong dropping them into weakling status

    – Humans tend to group by clan or on a broader basis by nationality (strength in numbers bonded by culture) and they compete with others for resources

    – Competition always exist (I want it all!) but it becomes fiercer when resources are not sufficient to support competing clans or nations

    – Tribal societies understand these dynamics because they cannot go to the grocery store for their food – so they are intimately aware of the daily battle to feed themselves and the competition for scare land and resources

    – Modern affluent societies do not recognize this dynamic because for them resources are not scarce – they have more than enough.

    – One of the main reasons that resources are not scarce in affluent societies is because they won the battle of the fittest (I would argue that luck is the precursor to all other advantages – affluent societies did not get that way because they started out smarter — rather they were lucky – and they parlayed that luck into advances in technology… including better war machines)

    – As we have observed throughout history the strong always trample the weak. Always. History has always been a battle to take more in the zero sum game. The goal is to take all if possible (if you end up in the gutter eating grass the response has been – better you than me – because I know you’d do the same to me)

    – And history demonstrates that the weak – given the opportunity – would turn the tables on the strong in a heartbeat. If they could they would beat the strong into submission and leave them bleeding in the streets and starving. As we see empire after empire after empire gets overthrown and a new power takes over. Was the US happy to share with Russia and vice versa? What about France and England? Nope. They wanted it all.

    – Many of us (including me) in the cushy western world appear not to understand what a villager in Somalia does – that our cushy lives are only possible because our leaders have recognized that the world is not a fair place — Koobaya Syndrome has no place in this world — Koombaya will get you a bullet in the back — or a one way trip to the slum.

    – Religious movements have attempted to change the course of human nature — telling us to share and get along — they have failed 100% – as expected. By rights we should be living in communes — Jesus was a communist was he not? We all know that this would never work. Because we want more. We want it all.

    – But in spite of our hypocrisy, we still have this mythical belief that mankind is capable of good – that we make mistakes along the way (a few genocides here, a few there… in order to steal the resources of an entire content so we can live the lives we live) — ultimately we believe we are flawed but decent. We are not. Absolutely not.

    – But our leaders — who see through this matrix of bullshit — realize that our cushy lives are based on us getting as much of the zero sum game as possible. That if they gave in to this wishy washy Koombaya BS we would all be living like Somalians.

    – Of course they cannot tell us what I am explaining here — that we must act ruthlessly because if we don’t someone else will — and that will be the end of our cushy lives. Because we are ‘moral’ — we believe we are decent – that if we could all get along and share and sing Koombaya the world would be wonderful. We do not accept their evil premises.

    – So they must lie to us. They must use propaganda to get us onside when they commit their acts of ruthlessness.

    – They cannot say: we are going to invade Iraq to ensure their oil is available so as to keep BAU operating (BAU which is our platform for global domination). The masses would rise against that making things difficult for the PTB who are only trying their best to ensure the hypocrites have their cushy lives and 3 buck gas (and of course so that the PTB continue to be able to afford their caviar and champagne) …. Because they know if the hypocrites had to pay more or took at lifestyle hit – they’d be seriously pissed off (and nobody wants to be a Somalian)

    – Which raises the question — are we fools for attacking the PTB when they attempt to throw out Putin and put in a stooge who will be willing to screw the Russian people so that we can continue to live large? When we know full well that Putin would do the same to us — and if not him someone more ruthless would come along and we’d be Somalians.

    – Should we be protesting and making it more difficult for our leaders to make sure we get to continue to lead our cushy lives? Or should we be following the example of the Spartans https://www.youtube.com/watch?v=eZeYVIWz99I

    – In a nutshell are our interests as part of the western culture not completely in line with those of our leaders – i.e. if they fail we fail – if they succeed we succeed.

    – Lee Kuan Yew is famous for saying ‘yes I will eat very well but if I do so will you’ Why bite the hand that whips the weak to make sure you eat well…. If you bite it too hard it cannot whip the weak — making you the weak — meaning you get to feel the whip….

    – Nation… clan … individual…. The zero sum game plays out amongst nations first … but as resources become more scarce the battle comes closer to home with clans battling for what remains…. Eventually it is brother against brother ….

    – As the PTB run out of outsiders to whip and rob…. They turn on their own…. As we are seeing they have no problem with destroying the middle class because it means more for them… and when the weak rise against them they have no problem at all deploying the violent tactics that they have used against the weak across the world who have attempted to resist them

    – Eventually of course they will turn against each other…. Henry Kissinger and Maddy Albright bashing each other over the head with hammers fighting over a can of spam – how precious!

    I continue to learn from the wise people on this forum.

    • not fazed says:

      How do you manage to come out with quite so much imitational second hand crap?

    • B9K9 says:

      As we all know, Diamond argues that geography was a primary determinant of mankind. However, he posits that that where one found himself geographically was mostly a product of luck.

      There are two issues with this thesis: (1) There are numerous case examples where people populating the same general regions had different cultural behaviors; and (2) He tends to downplay that whether one found himself in a desirable location, the ensuing competition for that resource was itself a key driver in evolutionary development.

      What this means, is that just like with beautiful women, men will fight over desirable locations.

      With regard to point #1, pre-Spanish California had a large native American population comprised of many different tribes. DDue to competition over prime locations, archeologists have found evidence of habitation in remote sections of the Inyo mountains, the dry range to the east of the Sierra. So, guess who the losers where that claimed that piece of leftover land? Yep, the so-called “peaceful” ones that developed different cultural practices vs those fighting for the most desirable locations.

      With regard to point #2, you can be assured that a California native living by the coast in SoCal is, by any measure, an expert in perfect weather. Yet, I will tell you that on my various trips to W Europe, SE England, France & Germany, for 6-8 months out of the year this area can epitomize perfect weather. Perhaps rainier, but still a very pleasant ambient environment. So, what does this mean? Well, it doesn’t take a great student of history to anecdotally note that throughout recorded history (and before), this entire region has experienced one basic constant: warfare.

      Now consider Diamond’s claim that geography was a matter of luck. Sure, for the very first tribe stumbling into the area. But afterward? Is he suggesting that a life forced to be dedicated to warfare is one that should be considered lucky? LOL. Anyway, there’s a reason why W Europe colonized the globe, but it rooted in luck. Rather, its basis is live or die by the sword.

      Now, to get back to Paul’s summation, the soliloquy made by J Nicholson’s character in a “Few Good Men” begins to make more sense:
      You can’t handle the truth! Son, we live in a world that has walls, and those walls have to be guarded by men with guns. Who’s gonna do it? You? You, Lieutenant Weinberg? I have a greater responsibility than you can possibly fathom. You weep for Santiago, and you curse the Marines. You have that luxury. You have the luxury of not knowing what I know — that Santiago’s death, while tragic, probably saved lives; and my existence, while grotesque and incomprehensible to you, saves lives.

      You don’t want the truth because deep down in places you don’t talk about at parties, you want me on that wall — you need me on that wall. We use words like “honor,” “code,” “loyalty.” We use these words as the backbone of a life spent defending something. You use them as a punch line.

      I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the blanket of the very freedom that I provide and then questions the manner in which I provide it.

      I would rather that you just said “thank you” and went on your way. Otherwise, I suggest you pick up a weapon and stand the post. Either way, I don’t give a DAMN what you think you’re entitled to!

      The great mass of people don’t want to know what the PTB are actually doing – in their names – to maintain their lifestyles. They may suspect, but there is a never ending stream of propaganda extolling the virtues of the “American way of life” ™ to keep them doubting.

      To fight this mass hypnosis is not only futile, but stupid. C Hedges can go on moralizing about the “right thing to do”, but the truth is, the ones who are really on top of what’s coming down the pike are those conning the suckers today. We can see this plainly, day in & day out. So, why be a loser when you can just as easily be a winner?

      • Paul says:

        However — as the pool of resources dwindle we end up with ‘brother against brother’ — so ultimately there are no winners…

        Another book worth reading which I feel is much better than Diamond’s Guns Germs Steel (Diamond I believe has indicated this book exposes some weaknesses in his theories) is

        Why Nations Fail: The Origins of Power, Prosperity, and Poverty

        Brilliant and engagingly written, Why Nations Fail answers the question that has stumped the experts for centuries: Why are some nations rich and others poor, divided by wealth and poverty, health and sickness, food and famine?

        Is it culture, the weather, geography? Perhaps ignorance of what the right policies are?

        Simply, no. None of these factors is either definitive or destiny. Otherwise, how to explain why Botswana has become one of the fastest growing countries in the world, while other African nations, such as Zimbabwe, the Congo, and Sierra Leone, are mired in poverty and violence?

        Daron Acemoglu and James Robinson conclusively show that it is man-made political and economic institutions that underlie economic success (or lack of it). Korea, to take just one of their fascinating examples, is a remarkably homogeneous nation, yet the people of North Korea are among the poorest on earth while their brothers and sisters in South Korea are among the richest.

        The south forged a society that created incentives, rewarded innovation, and allowed everyone to participate in economic opportunities. The economic success thus spurred was sustained because the government became accountable and responsive to citizens and the great mass of people.

        Sadly, the people of the north have endured decades of famine, political repression, and very different economic institutions—with no end in sight. The differences between the Koreas is due to the politics that created these completely different institutional trajectories.

        Based on fifteen years of original research Acemoglu and Robinson marshall extraordinary historical evidence from the Roman Empire, the Mayan city-states, medieval Venice, the Soviet Union, Latin America, England, Europe, the United States, and Africa to build a new theory of political economy with great relevance for the big questions of today, including:

        – China has built an authoritarian growth machine. Will it continue to grow at such high speed and overwhelm the West?

        – Are America’s best days behind it? Are we moving from a virtuous circle in which efforts by elites to aggrandize power are resisted to a vicious one that enriches and empowers a small minority?

        – What is the most effective way to help move billions of people from the rut of poverty to prosperity? More philanthropy from the wealthy nations of the West? Or learning the hard-won lessons of Acemoglu and Robinson’s breakthrough ideas on the interplay between inclusive political and economic institutions?


        • Stefeun says:

          He who burns most energy wins…
          ..in the short term, but also depletes resources in the long term and therefore compromises chances of survival/success of his offspring/lineage, who in turn must get energy & resource from elsewhere (eg colonisation) or/and emigrate elsewhere themselves.
          We are the grandchildren, with -almost- no more country to pillage and nowhere else to go.
          (and many more mouths to feed, with a “shrinking spoon”).

          So in our finite world, what we call prosperity is a brief increase in comfort/wellbeing of a few people, at the expense of most of their likes (and of the environment), as well as at the expense of next generations. I don’t know if we could have been something else than waste-makers.

          • Paul says:

            At the end of the day we are animals — and we can be expected to behave like animals.

            If you captured 10 rats from the sewer and locked them in a barn full of grain that was situated on a small rocky island in the middle of the ocean… the would breed voraciously quickly numbering in the thousans … consume ever last bit of grain leaving nothing for future generations…. and then starve to death or drown trying to get off the island…. perhaps they might even eat each other….

            The only difference between us and the rats is that when we ran out of food we were able to convert oil and gas into food and now we number in the billions….

            The end result will be the same — only the scale will be different.

            • ordinaryjoe says:

              Yes yes its like the all you can hear is raven wings and that beating heart.
              That damn beating heart!

      • Paul says:

      • Paul says:

        Thanks for that incredible insight!

      • I am less convinced than you that that the powers that be know what is coming down the pike. I expect that they tend to be fairly confused. They are mostly trying to hold things together for the next weeks or months, without a true understanding of what the problems are. Perhaps growth really will return.

        Regarding geography, I think that there is some truth to “geography is destiny,” but in a way, it determines how much fighting will be needed to keep the land that is available. When we visited Norway, it was clear that the land was no great prize. In fact, the die off from plague seemed to be worse than farther south, likely because the inhabitants had been in poorer health all when it hit. There had been a need for immigrants from Germany, just to keep some businesses operating.

        But the outcome of not being desirable land was that the people could be more peaceful than elsewhere. Women could be given a greater role.

        When it came to religion, the area was a long ways from Rome. The version of Christianity ended up being quite watered down relative to what was practiced closer to Rome. But being so far away, no one came out and checked. This seems to be why the Lutheran denomination can ignore quite a few teachings that others considered important.

        • not fazed says:

          Yes that is one of the best things about Protestantism, people get to believe or deny pretty much anything that they like without the Church-State jumping down their throats and burning them as heretics/ witches/ pagans/ deniers etc. They tried to force everyone to go to Anglican services here at first but centuries later no one ever even talks about religion on the streets, it is a private matter which is how it should be. I am not a Christian but I am a Protestant. That said, I admire Catholic architecture and ritual and especially the music.

          • MG says:

            The Christianity as a whole is in deep crisis: the era of expansion is over. Perhaps the version of Christianity at the end of the Roman Empire would be more appropriate. Anyway, awaiting the early end of the world was at the roots of the Christianity.

            Resource depletion, diminishing returns, energy decline etc. are serious phenomena that undermine the very material substance (i.e. maintenance of the churches, finincing the activites etc.) of the churches as we know them.

            There is quite a long debate about the separation of the churches from the state (i.e. they would not receive money support from the state) in Slovakia. Everyone who knows the deeper implications regarding the historical monuments and their financing or the demographic changes will not support the separation of the churches from the state.

            The fact that the religion is subsidised is more and more in the contrast with its anti-sin (i.e. anti-debt) roots. That is why the Christianity becomes compromised: the very fact that it receives subsidies, makes use of loans etc. This way there is no difference between the religion and the world that supports fast resource depletion via various financial instruments, the stimuluses etc.

            The crisis of the Christianity can be seen in the fact that when you go to church and search the answers regarding your life you receive this expansionist intepretations of the world. And you, somewhere deep inside, feel that you are being lied.

            Some people think that the increased activity will save us: but the truth is the opposite. The protestantism discovered this truth in the doctrine of “Sola fide” (http://en.wikipedia.org/wiki/Sola_fide). I think that is why the protestantism is closer to the truth of the human existence that faces the resource limits.

            • We know “sola fide” as “justification by faith” in the United States. It is a cornerstone of Lutheran theology. According to justification by faith, there is nothing that we “do” that saves us, or conversely, anything that we don’t do that condemns us. Thus, Lutherans are generally not concerned about opposing homosexuality or following Biblical injunctions that seem to forbid contraceptive use. They are more concerned about “Love thy neighbor as thyself,” “Do unto others as you would have them do unto you,” and “Even as you have done it to the least of them my brethren, you have done it to me.” (In other words, looking out for the poor and oppressed.) Lutheran World Relief is a very big organization sponsored by Lutherans that “works with local partners to provide lasting solutions to poverty, injustice, and human suffering.”

              In the United States, pretty much all religions are doing poorly. Part of this seems to relate to young people (and others) being worse off financially. If a person needs to cut back, religion is an easy place to do so. No need to buy fancy clothes, or give to the church, or spend money on driving to services. The other part seems to me to be faith in capitalism, in governments, and in the Federal Reserve. “Everything is getting better. The government can fix all problems. We have no need for salvation other than that provided by Ben Bernanke and Janet Yellen.” Or perhaps one of the new versions, “We can save ourselves by permaculture and recycling,” or “All we need to do is take care of the environment, and everything will be fine.”

            • ordinaryjoe says:

              “The government can fix all problems. We have no need for salvation other than that provided by Ben Bernanke and Janet Yellen.” Or perhaps one of the new versions, “We can save ourselves by permaculture and recycling,” or “All we need to do is take care of the environment, and everything will be fine.” ”

              I take issue with your metaphor. A cornerstone of spirituality is respecting and taking care of your body, and your community. A extension of this is to take active ownership of caretaking for the environment. While there are certainly delusions regarding future levels of consumption caretaking of the environment in itself is a very sound practice that must be cultivated if we are to have a future.

            • MG says:

              I would say that the rise of atheism is deeply connected with the postindustrial decline. When I look at the neighbouring Czech Republic, once one of the leading industrial states of the world as the heart of the former Czechoslovakia, is now the country with the highest percentage of atheists.

              The false, rosy folclore picture of the past is in the deep contrast with the reality of the postindustrial decline. But the truth is that the population before the industrial age lived in serfdom and poverty. There was widespread alcoholism in Slovakia in the 19th century (and probably also before the 19th century, as we do not have much information).

              The fact is that with the energy decline, the population returns to “normal state” of the depleted local resources before the industrial boom. This “normal state” was characterized by poverty, poor health, contagious diseases, alcoholism etc.

              Based on this, we should not be surprised or disappointed. Because the rise of the atheism is just the lack of faith in a better future here, on this Earth. Which is completely in line with what is happenning in the reality.

              The man with the help of the external energy became strong as God. At least he believed it. Accepting the worse reality means understanding the limits of resources we all face. And we have been facing from the start of the humankind. This is nothing new.

              Some people may consider us as retrogressive. But this scepticism about this world in fact relieves us from its limits. That is the result of the faith in the finite world: accepting the limits gives us real and realistic freedom…

            • Paul says:

              As an atheist wouldn’t one be more concerned with taking care of the planet than a theist?

              Because for atheists there is no after life… there is only one planet …. whereas if you believe the real deal is heaven then why care about burning out the earth?

  24. Paul says:

    Haven’t watched this yet but looks interesting:

    Oil wars: Saudi vs the world?

    As global oil prices tumble, we ask why the country that is OPEC’s kingpin is doing nothing to stop it.


  25. Paul says:

    Oil wars: Saudi vs the world?

    As global oil prices tumble, we ask why the country that is OPEC’s kingpin is doing nothing to stop it.

    There are winners and losers in every economic situation, but few have the impact of one involving oil. The price of Brent crude, which at one time priced 90 percent of the world’s oil, has tumbled by one-fifth. And analysts believe the price could fall to as low as $60 a barrel.

    Already at $80, it is a major adjustment for countries trying balance their budgets. And the question is not what, but who is driving oil prices, and what the fallout means for ordinary people and the global economy.

    Many would expect Saudi Arabia to be defending higher prices, but that is not exactly the case. So why is Saudi doing this? And what will be the outcome for everyone else? The answer depends on where you are standing.

    In Russia, the belief is that this is punishment for what has happened in Ukraine and for Russia’s ongoing support of Syria’s Bashar al-Assad. While in the shale fields of the United States, it is thought the Saudis are trying to maintain lucrative oil contracts with Asia, which would set back those US company attempts to get their export ban lifted by Washington. At $80 a barrel, US oil companies would need to shut down or cancel new shale projects.

    For some perspective on the current situation, Hilda Mulock-Houwer, the global head of energy at KPMG, speaks to Counting the Cost about the different theories behind Saudi Arabia not defending higher oil prices and the impact on the global economy:


  26. Paul says:

    Jared Diamond: ‘150,000 years ago, humans wouldn’t figure on a list of the five most interesting species on Earth’


  27. not fazed says:

    I am not a climate scientist and I don’t really know much about this.

    Climate change PROVED to be ‘nothing but a lie’, claims top meteorologist

    THE debate about climate change is finished – because it has been categorically proved NOT to exist, one of the world’s leading meteorologists has claimed.

    John Coleman, who co-founded the Weather Channel, shocked academics by insisting the theory of man-made climate change was no longer scientifically credible.

    Instead, what ‘little evidence’ there is for rising global temperatures points to a ‘natural phenomenon’ within a developing eco-system.

    In an open letter attacking the Intergovernmental Panel on Climate Change, he wrote: “The ocean is not rising significantly.

    “The polar ice is increasing, not melting away. Polar Bears are increasing in number.

    “Heat waves have actually diminished, not increased. There is not an uptick in the number or strength of storms (in fact storms are diminishing).

    “I have studied this topic seriously for years. It has become a political and environment agenda item, but the science is not valid.”

    Mr Coleman said he based many of his views on the findings of the NIPCC, a non-governmental international body of scientists aimed at offering an ‘independent second opinion of the evidence reviewed by the IPCC.’

    He added: “There is no significant man-made global warming at this time, there has been none in the past and there is no reason to fear any in the future.



    • Paul says:

      Who is John Coleman? What are his qualifications?

      Professional career

      Coleman started his career in 1953 at WCIA in Champaign, Illinois, doing the early evening weather forecast and a local bandstand show called At The Hop while he was a student at University of Illinois.

      After receiving his journalism degree in 1957, he became the weather anchor for WCIA’s sister station WMBD-TV in Peoria, Illinois. Coleman was also a weather anchor for KETV in Omaha, WISN-TV in Milwaukee and then WBBM-TV and WLS-TV in Chicago.[1][4]
      Eyewitness News team, 1972. Back, from left: anchor John Drury, anchor Joel Daly. Front, from left: weatherman John Coleman, anchor Fahey Flynn, sportscaster Bill Frink.

      At WLS, Coleman was teamed with Fahey Flynn, Joel Daly and Bill Frink to form the Eyewitness News team, creating a news brand name and establishing a highly successful new local news format derisively dubbed “happy talk” by a local television columnist.

      This style of local news has been widely copied. The team dominated Chicago television news ratings for more than a decade. During his time at Chicago’s WLS-TV, Coleman was one of Chicago’s most popular weathercasters, famous for his amusing and irreverent style.

      It was then that Coleman became the original weathercaster on what was then the brand-new ABC network morning program, Good Morning America. He stayed seven years with this top-rated program anchored by David Hartman and Joan Lunden.[1]

      In 1981, he persuaded communications entrepreneur Frank Batten to help establish The Weather Channel, serving as TWC’s CEO and President during the start-up and its first year of operation. After leaving TWC, Coleman became weather anchor at WCBS-TV in New York and then at WMAQ-TV in Chicago, before moving to Southern California to join the independent television station, KUSI-TV in San Diego, in what Coleman fondly calls, “his retirement job.”[1] Coleman abruptly left KUSI while on vacation in April 2014, with no on-air farewell.[3]

      Coleman was a member of the American Meteorological Society.[1] He left this organization after he disagreed with the stance on Global Warming/Climate Change.[5]


      • not fazed says:

        Paul, you make a valid point but it would seem to apply to all of us as well. What qualifications do any of us have to evaluate the conflicting claims of the IPCC and the NIPCC? Their work is either accessible to the common man or is it not. If it accessible then I do not see why Coleman is particularly unqualified. If it is not accessible then again Coleman does not seem to be particularly unqualified, no more than us anyway, but that would leave the subject esoteric. We would have to suspend judgement on the subject, unable to discern the truth of contrary claims which equally have the authority of scientists and scholars. I suppose I could have a read of their work.

        Loads of people in the UK doubt AGW btw…

        Climate scepticism ‘on the rise’, BBC poll shows

        … And only 26% of those asked believed climate change was happening and “now established as largely man-made”.


        • Paul says:

          Oh I don’t know — perhaps because the organization he is quoting is funded by the fossil fuel industry?

          What would you think if the scientists who claim climate change is real were exposed as being funded by the solar and windmill industries?

        • VPK says:

          Thank you, Paul, for exposing this denial rant for what it really is, just smear and baseless opinion from a layman that reports the weather.
          Just like the other fellow, Anthony Watts, and his blog.
          Not fazed, sorry, but I have engaged your kind too many times and at this point it really does not matter. As Gail likes to state, “Time will Tell”.
          I believe Paul points out that China will play lip service to Global Warming, as the United States. What Obama proposes assures almost nothing will be done.
          So, “Not fazed”, go ahead and continue with your “informational lies”.
          We already have past 400 ppm and headed for 450 ppm. There the majority of the scientific community has stated automatic feedbacks will kick in and “natural systems” will take care of the rest. We need not “burn” all “reserves” for this to happen.
          Too bad the likes of your kind most likely will not be around to see your folly.

          • Paul says:

            Fazed — i will rescue you from drowning in a sea of ignorance …. feel free to grasp these lifelines….

            More logical positions might be:

            We cannot stop burning fossil fuels — even though continuing to do so will eventually result in some very bad consequences — because economic growth requires fossil fuels — and stopping or even slowing means immediate collapse of the global economy resulting in the deaths of billions….

            It might also result in an extinction event for all life because we need fossil fuels and BAU to keep the thousands of spent nuclear fuel rods from exploding.

            And…. there are those that say (including Gail) that global warming is the least of our problems — we will collapse well before the worst of global warming strikes… that the end of cheap energy will get us well before global warming….

            And hereto and therefore and hereyunder and thereunder there are those who say we have already crossed the magic line of burning enough fossil fuels to destroy the world already and that it is just a matter of time before the trigger event occurs (possibly the release of methane from the frozen lands of the Arctic and sub-Arctic regions — otherwise previous known a permafrost…. but soon to be just post-frost — or swamps). And therefore and hereto and thereto and yadda yadda yadda — don’t feel guilty about driving a Hummer — in fact feel free to roll over the next parked Tesla with your hummer because we are just so bloody far past the point of no return that it does not matter.

            You might also argue that we are running out of pretty much every resource from fresh water to copper because we have 7.2B people on the planet and that number MUST keep growing or we collapse into anarchy and chaos (see nuclear ponds)

            As you can see there are ways to support the position that poisoning mother earth is a necessary evil — without coming across as rather gullible and foolish.

            Feel free to post the above on the climate septic boards … no royalties required.

            • Paul says:

              I thought is was a very appropriate turn of phrase…. alas a wasted effort … my life line floats limply across the sea of ignorance … and I watch you sink slowly below the surface…

              You know what is awesome about this site?

              Unlike the sites that are trolled by paid minions of the the fossil fuel industry who shout down logic with their endless idiocy driving off anyone with the slightest bit of common sense….

              When the misinformed show up here tossing their rubbish around — the tables are turned — and as you have seen — when you post nonsense and attempt to pass it off as legitimate research — the sharp lash of logic beats you into the ground…

              You can of course continue to post this bullshit — and continue to remain in ignorance… and continue to be mocked … or you can think about what others are posting and hopefully come to your senses….

              This tough love is not coming from someone who with green fever — global warming is way down my list of concerns…

              But even a 5 year could be made to understand that spewing obscene amounts of carbon and toxins into the air year after year is surely not a good thing for the climate – or the environment.

            • edpell says:

              Paul, we can agree on “spewing obscene amounts of carbon and toxins into the air year after year is surely not a good thing for the climate – or the environment”.

              Since I believe both the ultra rich and everyone who does not want cold feet in the winter will burn all the FFs that are affordable I see no need to debate the quality of current global climate models.

            • B9K9 says:

              I live by the beach. There is a never ending debate about banning/limiting fire rings. I can assure you, even one campfire puts out a lot of smoke. If you walk by even 50-100 yards downstream, you will pick up some residue and your clothes will smell like smoke.

              A modest fire of just two bundles of firewood might amount to a single branch on a 10 year old fast growth tree. Now, let us consider that over the last 200 years, mankind has managed to blow through 25-50% of around 200 **million** years worth of sequestered solar energy. This is what scientists are measuring in carbon PPM calculations.

              This is all very straightforward. The only real question then is how well can the biosphere handle these massive inputs. Initiate a series on non-linear feedback loops a la’ Guy McPherson on the way to perdition, or are there some other types of balancing mechanisms that mitigate the worst effects? That’s the only variable I see.

            • VPK says:

              One thing that is lacking in many corners of human endeavor is “common sense” and to ignore the obvious.

            • jal says:

              Where would the world economy be if China had not built ghost cities?
              Who/what will keep the system functioning for a few more years?

            • Artleads says:

              “Where would the world economy be if China had not built ghost cities?
              Who/what will keep the system functioning for a few more years?”

              This is making the system function through financial sleight of hand–shifting money around but not addressing a sustainable need. This is growth on empty calories. What I wonder is whether nutritious growth can be obtained–planting trees, building gardens, retrofitting infrastructure, etc. And I don’t see why it is genetically ordained for humans to use fossil fuels in as destructive a way as possible. (That’s just me; such an POV would meet strong opposition in some places.) Why is growth not possible without that–by, say, spreading the benefits and economic charge of FF to a larger population? And if that were done, why is it mandated that this must destroy the respective environments? Is this like saying no one can walk and chew gum at the same time?

            • Paul says:

              Imagine what would happen if the world’s resources/wealth were to be more equally spread amongst the population — say we give everyone at least a minimum wage that allows for a decent standard of living — say they all get at least a motorbike, a washer and dryer, a small house, enough food and some spending money so they could go to Walmart and pick up a few things each month.

              Imagine what 7.2B people living at this level would do to the world’s resources….

              Re China Ghost Towns: very obviously it is pointless to build stuff that is not needed … that sits empty and unused… but other than return on investment … I am wondering what is the difference between this and building something that is actually needed and that will generate a return?

              (and is this not a symptom of the end of growth — the point where you reach a point of saturation and there are no longer any opportunities for productive growth?)

              At the end of the day both would keep people working — and the economy growing….

              Of course there is the fact that the financial system rewards productive investment…. but the financial system no longer operates on any sort of rules — central banks buy the markets to stop them from crashing using printed money…

              Rewards are now tied to predicting what the central banks next moves will be….

              At this point up is down and down is up…. 1+1 is whatever the Fed says it is…. and if they say it is 7 — and you say no it is 2 — you lose.

            • Rodster says:

              “This is growth on empty calories.”

              Of course it is and that’s EXACTLY the economic system that has been created. Just build to keep people working and the economy constantly growing. That’s why the problem will not be addressed regarding the economies or CC until there is a total collapse, everywhere and oil stays in the ground because the economies around the world have gone …Poof!

          • Paul says:

            Let’s just say that you are misinformed…. but if you continue down the current path of ignoring the facts … then I reserve the right to revise my judgment…

            Let me connect a some dots for you…

            The Denial Industry

            For years, a network of fake citizens’ groups and bogus scientific bodies has been claiming that science of global warming is inconclusive. They set back action on climate change by a decade. But who funded them? Exxon’s involvement is well known, but not the strange role of Big Tobacco. In the first of three extracts from his new book, George Monbiot tells a bizarre and shocking new story

            ExxonMobil is the world’s most profitable corporation. Its sales now amount to more than $1bn a day. It makes most of this money from oil, and has more to lose than any other company from efforts to tackle climate change. To safeguard its profits, ExxonMobil needs to sow doubt about whether serious action needs to be taken on climate change. But there are difficulties: it must confront a scientific consensus as strong as that which maintains that smoking causes lung cancer or that HIV causes Aids. So what’s its strategy?

            The website Exxonsecrets.org, using data found in the company’s official documents, lists 124 organisations that have taken money from the company or work closely with those that have. These organisations take a consistent line on climate change: that the science is contradictory, the scientists are split, environmentalists are charlatans, liars or lunatics, and if governments took action to prevent global warming, they would be endangering the global economy for no good reason. The findings these organisations dislike are labelled “junk science”. The findings they welcome are labelled “sound science”.

            Among the organisations that have been funded by Exxon are such well-known websites and lobby groups as TechCentralStation, the Cato Institute and the Heritage Foundation. Some of those on the list have names that make them look like grassroots citizens’ organisations or academic bodies: the Centre for the Study of Carbon Dioxide and Global Change, for example. One or two of them, such as the Congress of Racial Equality, are citizens’ organisations or academic bodies, but the line they take on climate change is very much like that of the other sponsored groups. While all these groups are based in America, their publications are read and cited, and their staff are interviewed and quoted, all over the world.

            By funding a large number of organisations, Exxon helps to create the impression that doubt about climate change is widespread. For those who do not understand that scientific findings cannot be trusted if they have not appeared in peer-reviewed journals, the names of these institutes help to suggest that serious researchers are challenging the consensus.

            This is not to claim that all the science these groups champion is bogus. On the whole, they use selection, not invention. They will find one contradictory study – such as the discovery of tropospheric cooling, which, in a garbled form, has been used by Peter Hitchens in the Mail on Sunday – and promote it relentlessly. They will continue to do so long after it has been disproved by further work. So, for example, John Christy, the author of the troposphere paper, admitted in August 2005 that his figures were incorrect, yet his initial findings are still being circulated and championed by many of these groups, as a quick internet search will show you.

            But they do not stop there. The chairman of a group called the Science and Environmental Policy Project is Frederick Seitz. Seitz is a physicist who in the 1960s was president of the US National Academy of Sciences. In 1998, he wrote a document, known as the Oregon Petition, which has been cited by almost every journalist who claims that climate change is a myth.

            The document reads as follows: “We urge the United States government to reject the global warming agreement that was written in Kyoto, Japan, in December 1997, and any other similar proposals. The proposed limits on greenhouse gases would harm the environment, hinder the advance of science and technology, and damage the health and welfare of mankind. There is no convincing scientific evidence that human release of carbon dioxide, methane, or other greenhouse gases is causing or will, in the foreseeable future, cause catastrophic heating of the Earth’s atmosphere and disruption of the Earth’s climate. Moreover, there is substantial scientific evidence that increases in atmospheric carbon dioxide produce many beneficial effects upon the natural plant and animal environments of the Earth.”

            Anyone with a degree was entitled to sign it. It was attached to a letter written by Seitz, entitled Research Review of Global Warming Evidence. The lead author of the “review” that followed Seitz’s letter is a Christian fundamentalist called Arthur B Robinson. He is not a professional climate scientist. It was co-published by Robinson’s organisation – the Oregon Institute of Science and Medicine – and an outfit called the George C Marshall Institute, which has received $630,000 from ExxonMobil since 1998. The other authors were Robinson’s 22-year-old son and two employees of the George C Marshall Institute. The chairman of the George C Marshall Institute was Frederick Seitz.

            The paper maintained that: “We are living in an increasingly lush environment of plants and animals as a result of the carbon dioxide increase. Our children will enjoy an Earth with far more plant and animal life than that with which we now are blessed. This is a wonderful and unexpected gift from the Industrial Revolution.”

            It was printed in the font and format of the Proceedings of the National Academy of Sciences: the journal of the organisation of which Seitz – as he had just reminded his correspondents – was once president.

            Soon after the petition was published, the National Academy of Sciences released this statement: “The NAS Council would like to make it clear that this petition has nothing to do with the National Academy of Sciences and that the manuscript was not published in the Proceedings of the National Academy of Sciences or in any other peer-reviewed journal. The petition does not reflect the conclusions of expert reports of the Academy.”

            But it was too late. Seitz, the Oregon Institute and the George C Marshall Institute had already circulated tens of thousands of copies, and the petition had established a major presence on the internet. Some 17,000 graduates signed it, the majority of whom had no background in climate science. It has been repeatedly cited – by global-warming sceptics such as David Bellamy, Melanie Phillips and others – as a petition by climate scientists. It is promoted by the Exxon-sponsored sites as evidence that there is no scientific consensus on climate change.

            All this is now well known to climate scientists and environmentalists. But what I have discovered while researching this issue is that the corporate funding of lobby groups denying that manmade climate change is taking place was initiated not by Exxon, or by any other firm directly involved in the fossil fuel industry. It was started by the tobacco company Philip Morris.

            In December 1992, the US Environmental Protection Agency published a 500-page report called Respiratory Health Effects of Passive Smoking. It found that “the widespread exposure to environmental tobacco smoke (ETS) in the United States presents a serious and substantial public health impact. In adults: ETS is a human lung carcinogen, responsible for approximately 3,000 lung cancer deaths annually in US non-smokers. In children: ETS exposure is causally associated with an increased risk of lower respiratory tract infections such as bronchitis and pneumonia. This report estimates that 150,000 to 300,000 cases annually in infants and young children up to 18 months of age are attributable to ETS.”

            Had it not been for the settlement of a major class action against the tobacco companies in the US, we would never have been able to see what happened next. But in 1998 they were forced to publish their internal documents and post them on the internet.

            Within two months of its publication, Philip Morris, the world’s biggest tobacco firm, had devised a strategy for dealing with the passive-smoking report. In February 1993 Ellen Merlo, its senior vice-president of corporate affairs, sent a letter to William I Campbell, Philip Morris’s chief executive officer and president, explaining her intentions: “Our overriding objective is to discredit the EPA report … Concurrently, it is our objective to prevent states and cities, as well as businesses, from passive-smoking bans.”

            To this end, she had hired a public relations company called APCO. She had attached the advice it had given her. APCO warned that: “No matter how strong the arguments, industry spokespeople are, in and of themselves, not always credible or appropriate messengers.”

            So the fight against a ban on passive smoking had to be associated with other people and other issues. Philip Morris, APCO said, needed to create the impression of a “grassroots” movement – one that had been formed spontaneously by concerned citizens to fight “overregulation”. It should portray the danger of tobacco smoke as just one “unfounded fear” among others, such as concerns about pesticides and cellphones. APCO proposed to set up “a national coalition intended to educate the media, public officials and the public about the dangers of ‘junk science’. Coalition will address credibility of government’s scientific studies, risk-assessment techniques and misuse of tax dollars … Upon formation of Coalition, key leaders will begin media outreach, eg editorial board tours, opinion articles, and brief elected officials in selected states.”

            APCO would found the coalition, write its mission statements, and “prepare and place opinion articles in key markets”. For this it required $150,000 for its own fees and $75,000 for the coalition’s costs.

            By May 1993, as another memo from APCO to Philip Morris shows, the fake citizens’ group had a name: the Advancement of Sound Science Coalition. It was important, further letters stated, “to ensure that TASSC has a diverse group of contributors”; to “link the tobacco issue with other more ‘politically correct’ products”; and to associate scientific studies that cast smoking in a bad light with “broader questions about government research and regulations” – such as “global warming”, “nuclear waste disposal” and “biotechnology”. APCO would engage in the “intensive recruitment of high-profile representatives from business and industry, scientists, public officials, and other individuals interested in promoting the use of sound science”.

            By September 1993, APCO had produced a “Plan for the Public Launching of TASSC”. The media launch would not take place in “Washington, DC or the top media markets of the country. Rather, we suggest creating a series of aggressive, decentralised launches in several targeted local and regional markets across the country. This approach … avoids cynical reporters from major media: less reviewing/challenging of TASSC messages.”

            The media coverage, the public relations company hoped, would enable TASSC to “establish an image of a national grassroots coalition”. In case the media asked hostile questions, APCO circulated a sheet of answers, drafted by Philip Morris. The first question was:

            “Isn’t it true that Philip Morris created TASSC to act as a front group for it?

            “A: No, not at all. As a large corporation, PM belongs to many national, regional, and state business, public policy, and legislative organisations. PM has contributed to TASSC, as we have with various groups and corporations across the country.”

            There are clear similarities between the language used and the approaches adopted by Philip Morris and by the organisations funded by Exxon. The two lobbies use the same terms, which appear to have been invented by Philip Morris’s consultants. “Junk science” meant peer-reviewed studies showing that smoking was linked to cancer and other diseases. “Sound science” meant studies sponsored by the tobacco industry suggesting that the link was inconclusive. Both lobbies recognised that their best chance of avoiding regulation was to challenge the scientific consensus. As a memo from the tobacco company Brown and Williamson noted, “Doubt is our product since it is the best means of competing with the ‘body of fact’ that exists in the mind of the general public. It is also the means of establishing a controversy.” Both industries also sought to distance themselves from their own campaigns, creating the impression that they were spontaneous movements of professionals or ordinary citizens: the “grassroots”.

            But the connection goes further than that. TASSC, the “coalition” created by Philip Morris, was the first and most important of the corporate-funded organisations denying that climate change is taking place. It has done more damage to the campaign to halt it than any other body.

            TASSC did as its founders at APCO suggested, and sought funding from other sources. Between 2000 and 2002 it received $30,000 from Exxon. The website it has financed – JunkScience.com – has been the main entrepot for almost every kind of climate-change denial that has found its way into the mainstream press. It equates environmentalists with Nazis, communists and terrorists. It flings at us the accusations that could justifably be levelled against itself: the website claims, for example, that it is campaigning against “faulty scientific data and analysis used to advance special and, often, hidden agendas”. I have lost count of the number of correspondents who, while questioning manmade global warming, have pointed me there.

            The man who runs it is called Steve Milloy. In 1992, he started working for APCO – Philip Morris’s consultants. While there, he set up the JunkScience site. In March 1997, the documents show, he was appointed TASSC’s executive director. By 1998, as he explained in a memo to TASSC board members, his JunkScience website was was being funded by TASSC. Both he and the “coalition” continued to receive money from Philip Morris. An internal document dated February 1998 reveals that TASSC took $200,000 from the tobacco company in 1997. Philip Morris’s 2001 budget document records a payment to Steven Milloy of $90,000. Altria, Philip Morris’s parent company, admits that Milloy was under contract to the tobacco firm until at least the end of 2005.

            He has done well. You can find his name attached to letters and articles seeking to discredit passive-smoking studies all over the internet and in the academic databases. He has even managed to reach the British Medical Journal: I found a letter from him there which claimed that the studies it had reported “do not bear out the hypothesis that maternal smoking/ passive smoking increases cancer risk among infants”. TASSC paid him $126,000 in 2004 for 15 hours’ work a week. Two other organisations are registered at his address: the Free Enterprise Education Institute and the Free Enterprise Action Institute. They have received $10,000 and $50,000 respectively from Exxon. The secretary of the Free Enterprise Action Institute is Thomas Borelli. Borelli was the Philip Morris executive who oversaw the payments to TASSC.

            Milloy also writes a weekly Junk Science column for the Fox News website. Without declaring his interests, he has used this column to pour scorn on studies documenting the medical effects of second-hand tobacco smoke and showing that climate change is taking place. Even after Fox News was told about the money he had been receiving from Philip Morris and Exxon, it continued to employ him, without informing its readers about his interests.

            TASSC’s headed notepaper names an advisory board of eight people. Three of them are listed by Exxonsecrets.org as working for organisations taking money from Exxon. One of them is Frederick Seitz, the man who wrote the Oregon Petition, and who chairs the Science and Environmental Policy Project. In 1979, Seitz became a permanent consultant to the tobacco company RJ Reynolds. He worked for the firm until at least 1987, for an annual fee of $65,000. He was in charge of deciding which medical research projects the company should fund, and handed out millions of dollars a year to American universities. The purpose of this funding, a memo from the chairman of RJ Reynolds shows, was to “refute the criticisms against cigarettes”. An undated note in the Philip Morris archive shows that it was planning a “Seitz symposium” with the help of TASSC, in which Frederick Seitz would speak to “40-60 regulators”.

            The president of Seitz’s Science and Environmental Policy Project is a maverick environmental scientist called S Fred Singer. He has spent the past few years refuting evidence for manmade climate change. It was he, for example, who published the misleading claim that most of the world’s glaciers are advancing, which landed David Bellamy in so much trouble when he repeated it last year. He also had connections with the tobacco industry. In March 1993, APCO sent a memo to Ellen Merlo, the vice-president of Philip Morris, who had just commissioned it to fight the Environmental Protection Agency: “As you know, we have been working with Dr Fred Singer and Dr Dwight Lee, who have authored articles on junk science and indoor air quality (IAQ) respectively …”

            Singer’s article, entitled Junk Science at the EPA, claimed that “the latest ‘crisis’ – environmental tobacco smoke – has been widely criticised as the most shocking distortion of scientific evidence yet”. He alleged that the Environmental Protection Agency had had to “rig the numbers” in its report on passive smoking. This was the report that Philip Morris and APCO had set out to discredit a month before Singer wrote his article.

            I have no evidence that Fred Singer or his organisation have taken money from Philip Morris. But many of the other bodies that have been sponsored by Exxon and have sought to repudiate climate change were also funded by the tobacco company. Among them are some of the world’s best-known “thinktanks”: the Competitive Enterprise Institute, the Cato Institute, the Heritage Foundation, the Hudson Institute, the Frontiers of Freedom Institute, the Reason Foundation and the Independent Institute, as well as George Mason University’s Law and Economics Centre. I can’t help wondering whether there is any aspect of conservative thought in the United States that has not been formed and funded by the corporations.

            Until I came across this material, I believed that the accusations, the insults and the taunts such people had slung at us environmentalists were personal: that they really did hate us, and had found someone who would pay to help them express those feelings. Now I realise that they have simply transferred their skills.

            While they have been most effective in the United States, the impacts of the climate-change deniers sponsored by Exxon and Philip Morris have been felt all over the world. I have seen their arguments endlessly repeated in Australia, Canada, India, Russia and the UK. By dominating the media debate on climate change during seven or eight critical years in which urgent international talks should have been taking place, by constantly seeding doubt about the science just as it should have been most persuasive, they have justified the money their sponsors have spent on them many times over. It is fair to say that the professional denial industry has delayed effective global action on climate change by years, just as it helped to delay action against the tobacco companies.


            • I am getting tired of the climate change topic. Let’s find other things to talk about.

            • jal says:

              Have the building of ghost cities of China delayed the crash?

            • The building of ghost cities has kept a lot of people employed, so I would say, “Temporarily yes.” At some point, it would seem like the “Piper has to be paid.” Or at a minimum, the model can’t be carried foreword.

            • when you dig materials out of the earth, put them in a mould of some kind, and apply heat. you finish up with a brick. the brick remains a brick forever. You can’t smash it up and recycle its component parts.
              city construction is just an extension of that, another way of extracting energy from source, then locking it up so that it becomes permanently beyond the reach of mankind.
              Once energy is locked into the city, its gone for good.
              Calling it ‘wealth’ and ’employment’ is a temporary delusion.

            • I am afraid you are right. Recycling does not work very well. We are taking natural resources and using them in ways that often make them harder to recover than extracting the resources originally. Ugo Bardi talks about the concentrated ores of the planet earth being a gift, from the way it was originally formed. As we use these ores, it becomes very difficult to get them back again. When we combine them into specific compounds we need, it becomes hard to reuse them. The energy requirements for re-separation become very high.

            • It is true that the epithermal deposition of concentrated minerals was essentially a one time gift. There has been controversy in the past as to whether most of the original heat energy came from radioactivity or gravitational collapse. Recycling is extremely variable. It is easy to recycle silver from large stores of discarded x-ray film though there is an energy cost. It is impossible to recycle silver used for used for cloud seeding or burn therapy

            • Our modern renewables as well as electric vehicles, computers, and cell phones seem to be exercises in using rare and polluting elements more quickly. Our ability to recycle is only so-so. It seems like when we do, we end up sending the item in question to India or some other poor country, and exposing workers to polluting effects again in the recycling. We could in theory bring the “work opportunity” home, but this is not really a solution either.

            • I am able to download Energy and Economic Myths, a 1975 article from the Southern Economic Journal by Nicholas Georgescu-Roegen. Among other things NGR stated that recycling can never be complete. He particularly noted difficulties recycling phosphorus and helium. He compared the dissipation of material to an entropic process and indeed attempted to formulate a Fourth Law Of Thermodynamics to apply to material. thttp://www.dipecodir.it/upload/file/Cecchi/EcoTurCa/1975_georgescu-roegen_energy_and_economic_myths.pdf

            • ordinaryjoe says:

              Fascinating Robert!

            • Alecia Valero Delgado gave a presentation at the Barbastro Conference. If I understood her correctly, if we were to actually take and put back all materials where they began, the amount of energy required would be of the same order of magnitude as extracting the materials and making things from them in the first place.

            • Alecia may be of interest to me. But this paragraph seems to refer to industrial energy applied after the epithermal precipitation of concentrated minerals and not to the original energy sources that boiled the earth prior to cooling process.

            • Ann says:

              I’m having difficulty putting my replies where I want them to appear, so I just randomly picked your’s, Robert.

              Here is an excellent analysis of the Bank of Japan’s monetization of the entire government debt and the global consequences:


              A must-read for clear-headed thinking about debt.

            • Creedon says:

              The conclusion as I understand it is that interest rates will begin to rise, creating a depression. I really don’t see interest rates rising. I did not know that Japan was monetizing 100 percent of it’s debt. Whose to say that this isn’t leading to a very slow over time destruction of the middle class that could take a decade or more to play out. We will all in essence over time become the impoverished majority. An entire world of the impoverished.

            • i seem to recall, a few years ago, some kind of gizmo that collected polluted air and extracted gasoline out of it—whatever happened to that?

            • SlowRider says:

              What kind of wealth does a society want? It can be many things – health, education, mobility… Watched from outside, China may be taking many wrong choices. But for them, it is different. They think they can build all these things with huge effort, and they have a tremendous belief in a better future. You can admire their spirit or be sad about what they do to the planet, but they will do it anyway, no one is to change that.

            • xabier says:


              No, quite wrong. Happiness and Utopia = Construction.

              Well, nice little commissions for the politicians at least……

            • Adam says:

              OK, let’s get serious.

              1] NSA claims photo is proof that Gail Tverberg is just peak Photoshop. Gail to sue.


              2] Catalonia dropped its plan for an independence vote recently. Gail dashed over to Spain to make speech. “Are you Catalonia or Catatonia?!” she asked (witheringly). Catalonia reinstated independence vote plan.

              3] Emperor of Atlantis makes Gail “Ambassador for Doom”.

              4] Leonardo sticks to change name to “Liebig’s law of the minimum sticks” in honor of Gail.

              But now for something completely different:

              “Sweden’s Riksbank cuts rates to zero and mulls currency war to fight deflation”


            • Paul says:

              Great article – thanks for the link.

              “The Riksbank faces an acute dilemma, forced to pick between the competing poisons of deflation or an asset boom. It is a variant of the Morton’s Fork faced by a growing number of central banks around the world.”

              This truly is desperation — you already have a massive bubble because of cheap money… and what do you do? Throw gasoline onto the inferno with even CHEAPER money!

            • VPK says:

              As Paul Hawken pointed out in his book the Ecology of Commerce….the easy way is to throw money at a problem….but rarely does it actually solve it and usually makes it worse…
              Oh, my gosh….Paul those are your words too.
              Thanks for the post….

            • edpell says:

              Bonfire of the vanities?

            • VPK says:

              I agree! Had enough of it engaged at RS “Terrifying New Math” by Bill McKibben and close to 14,000 comments! Wish Paul was there to silence Watts Up With That blogger, Evan Jones of NYC. He was troll that could not stop with the denial rant.
              I do not wish to go through that again, especially now that it is a mute point to “debate”.
              Thanks Gail

              “We have five times as much oil and coal and gas on the books as climate scientists think is safe to burn. We’d have to keep 80 percent of those reserves locked away underground to avoid that fate.”

              Thanks to your work, Gail, that may just happen!

            • kesar says:

              “Thanks to your work, Gail, that may just happen!”

              Wow, to be honest, I would like to know how Gail contributed to WWC (world wide collapse) and fossil fuels consumption crash. Apart from enlightening a small group of people spread all over the globe, of course.

            • VPK says:

              Tongue in cheek comment, we are all not blame, and yet it may not be directly our fault.

            • Agreed. Unless I start a run on the bank, for example. Not likely, though. The collapse is baked into the cake. It is just that the climate change folks forgot to put it in their models.

            • J says:

              There is at least a possibility that the RRR (Ridiculously Resilient Ridge) outside California is a new stable pattern and may prevent CA from getting normal rainfall again for a long time. That could put a sizable number of people on the move in the near term. And that would be something. Even 1M people moving out in a year would be massive.

              But I hear you that there are all these people talking about 1000ppm CO2 and that will never happen. I think it’s worth noting though that the true effect of global warming has been masked by aerosols, so that when coal burning stops it ironically gets even warmer! And when you add CH4 and other trace gasses we get to CO2e of about 480ppm today.

              But who cares if we’re collapsing in the next 20 years? I guess the survivours should.

            • Somehow, humans have lived through a variety of weather conditions. The growth of farming didn’t occur until the end of the last ice age. In the absence of global warming, we would be about due for another ice age about now. All of our long-term investment is built on the assumption that climate will stay the same. But with or without man-made interference with the climate, that is a poor assumption.

            • not fazed says:

              Yes very true G, we are due another ice age just about now. The irony is that we may be glad of a touch of AGW one day. Climate has driven, crashed, created and changed human cultures ever since we evolved from our common ancestors with the apes – and from before that too. Anthropologists talk about this a lot. It is probably the greatest fact of our existence viewed in the long term. The climate changes, so do our cultures and so do we genetically. Populations crash, populations move, populations flourish. That is how it has always been and it is how it will always be, sooner or later. It would be naïve to think that we can assess different epochs with our values. Our values follow epochs and times not vice versa (which is not deny that we have an impact on the environment or that we _may_ be able control that more or less.) Hunter-gathering sounds pretty cool, we sometimes do a bit of that in the woods around here and it is really peaceful though I am sure that the life-style has its drawbacks. Regards.

            • you seem to have ignored the speed factor.
              Yes, there has always been change, but at an infinitely slower pace than now. Ice age cycles span maybe 100000 years, with virtually no people to worry about.
              Now we are melting icecaps in decades with 3bn people living on the coast. They cannot move—nowhere to go.
              As to genetics, a species needs 000s of years for any noticeable change to take place.
              And let us know how hunter gathering suits you when your life depends on it.

            • Stilgar Wilcox says:

              “let us know how hunter gathering suits you when your life depends on it.”

              I think this happened before in human history; the dark ages. We went from a gradual ascent, to a period lacking of ascent. Now we will plunge back into another dark ages of sorts as the requisites for survival will revert to primordial exploits. The toughest, hardest, most violent, least feeling will rise the to top of local militia taking what they need as it once occurred with pillaging. To some degree we are already seeing this with Boko Haram and ISIS. Intellectuals will be replaced by psychopaths. But hopefully by way of that funnel world population will be forced through to filter out the over emotional, the physically weak and obese, some remaining wildlife will abide and there will be game to butcher and roast over an open fire. And in some distant future most likely another ascent will ensue but hopefully with a much greater appreciation for the value of natural habitats.

            • ordinaryjoe says:

              Nope, The singularity will occur. Evolution.

            • edpell says:

              The psychopaths are usually the thieves at the top of the criminal organization called government. Past, present, and future.

            • xabier says:


              Very true. The Modernist architecture of the 20th century, -one-size-fits-all from the Gulf States to Scandinavia, – is based on the assumption not only of a stable climate, but of continuing access to high levels of cheap energy for heating, cooling and maintenance, and has to be the worst ever devised in terms of durability and adaptability.

              Without fossil fuels, you either freeze or fry. But in the old stone houses of Europe, thick walls kept you very cool in summer, and much warmer in winter, and could be maintained with human and animal muscle-power and skill, from local resources.

              The 20th century can be defined as the Age of Denial of Physical Reality -culminating in the obscene American-Chinese industrial culture. Paradoxically, at the same time the physical sciences have revealed more than ever known about the living structures of this planet, which we persist in ignoring.

            • Good points!

            • Steven Rodriguez says:

              2014 Ice minimum back above 5 million sq km for first time since 2006. Acrctic Ice formation on fastest pace this fall since 2002. Maybe that ice age is finally returning…?

            • VPK says:

              Sorry, the trend is downward, one year does not make a trend Steven.
              Also, the ice coming back to the area covered is new ice formation, not the old thicker foundation. There are “statistics” and than we make up numbers to fit what we wish for.

            • edpell says:

              What are the odds of the rich leaving 20 trillion dollars of wealth in the ground? Zero, I think.

            • We humans are not the deciders of how much “wealth” is removed from the ground. It depends on how much of a system we can create to extract this wealth. The evidence is that the system we have created for extraction is failing. So even if the wealth seems to be there, it very likely will stay in the ground. This may be one of the Earth’s built in feed back loops, but not one that was built into climate models.

            • jeremy890 says:

              I felt like here was this huge signal I was finding and no one was paying attention to it,” Parmesan says. “I was really thinking, ‘Why am I doing this?’” She ultimately packed up her life here in the States and moved to her husband’s native United Kingdom.

              “In the U.S., [climate change] isn’t well-supported by the funding system, and when I give public talks in the U.S., I have to devote the first half of the talk to [the topic] that climate change is really happening,” says Parmesan, now a professor at Plymouth University in England.
              For scientists like Parmesan on the front lines of trying to save the planet, the stakes can be that much higher. The ability to process and understand dense climatic data doesn’t necessarily translate to coping with that data’s emotional ramifications. Turns out scientists are people, too.

              Climate scientists not only wade knee-deep through doomsday research day in and day out, but given the importance of their work, many also find themselves thrust into a maelstrom of political, ideological, and social debate with increasing frequency.

              As Naomi Klein writes in her most recent book, This Changes Everything: Capitalism vs. The Climate, “We probably shouldn’t be surprised that some climate scientists are a little spooked by the radical implications of their own research. Most of them were quietly measuring ice cores, running global climate models, and studying ocean acidification, only to discover, as Australian climate expert and author Clive Hamilton puts it, that in breaking the news of the depth of our collective climate failure, they were ‘unwittingly destabilizing the political and social order.’” Talk about a lot of pressure.

              “I don’t know of a single scientist that’s not having an emotional reaction to what is being lost,” Parmesan is quoted saying in the National Wildlife Federation’s 2012 report, “The Psychological Effects of Global Warming on the United States: And Why the U.S. Mental Health Care System is Not Adequately Prepared.” “It’s gotten to be so depressing that I’m not sure I’m going to go back to this particular site again,” she says, referring to an ocean reef she has studied since 2002, “because I just know I’m going to see more and more of it dead, and bleached, and covered with brown algae.”

              Seems you are not the only one Gail

        • not fazed says:

          Yes Paul I am just a “sea of ignorance” because I do not “believe” in AGW even though you tell me that I am not “qualified” to judge the matter and there is no _evidence_. Thanks for clearing that one up. We are just not good enough for you are we? It is always up in the clouds isn’t it? the Credo, the I Believe in this and that, God, the Holy Spirit, AGW, and we are _never_ qualified to judge are we? Or we are “a sea of ignorance”, “idiot” and we deserve to “see” GW. Yeah hell fire man! Are you for real or what?

          • VPK says:

            Just confirmed my judgement on those in denial, Paul.
            This fellow is just a waste of comment space.
            Just ignore.

            • not fazed says:

              LOL VPK Feel free to “ignore” anyone you like over AGW “denial”. That includes 70% of the British public. Hey add in a couple more disputed issues and you can ignore 99.9% of people and they of course can ignore you. Then you will be very popular. No one is asking your permission to think, “deny” or say anything. We have seen this for thousands of years, “believe everything that I tell you or you are exterminated as a heretic” and we have overcome your mentality again and again. You and your “kind” will prove no different.

            • Paul says:

              “That includes 70% of the British public”

              The majority of people are stupid and/or ignorant…

              See: http://en.wikipedia.org/wiki/Sheeple is a derogatory term that highlights the herd behavior of people by likening them to sheep, a herd animal. The term is used to describe those who voluntarily acquiesce to a suggestion without critical analysis or research.

          • VPK says:

            I’ll ignore public Polls that you cite as evidence of the truth.
            Just like there has been no warming for the last 18 years!
            That it why this year we are in will most likely be the WARMEST on record!
            If 2014 breaks the record for hottest year, that also should sound familiar: 1995, 1997, 1998, 2005 and 2010 all broke NOAA records for the hottest years since records started being kept in 1880.

            “This is one of many indicators that climate change has not stopped and that it continues to be one of the most important issues facing humanity,” said University of Illinois climate scientist Donald Wuebbles.

            Some people, mostly non-scientists, have been claiming that the world has not warmed in 18 years, but “no one’s told the globe that,” [NOAA climate scientist Jessica] Blunden said. She said NOAA records show no pause in warming.

          • not fazed says:

            Yes Paul but lets take it easy on this forum. We probably agree 99% and it is not worth a row. So chill.

    • not fazed says:

      Coleman based his comments on the work of the NIPCC.

      Who and what is the NIPCC?

      The Nongovernmental International Panel on Climate Change, or NIPCC, as its name suggests, is an international panel of scientists and scholars who came together to understand the causes and consequences of climate change. NIPCC has no formal attachment to or sponsorship from any government or governmental agency. It is wholly independent of political pressures and influences and therefore is not predisposed to produce politically motivated conclusions or policy recommendations.

      NIPCC seeks to objectively analyze and interpret data and facts without conforming to any specific agenda. This organizational structure and purpose stand in contrast to those of the United Nations’ Intergovernmental Panel on Climate Change (IPCC), which is government-sponsored, politically motivated, and predisposed to believing that climate change is a problem in need of a U.N. solution.

      NIPCC traces its beginnings to an informal meeting held in Milan, Italy in 2003 organized by Dr. S. Fred Singer and the Science & Environmental Policy Project (SEPP). The purpose was to produce an independent evaluation of the available scientific evidence on the subject of carbon dioxide-induced global warming in anticipation of the release of the IPCC’sFourth Assessment Report (AR4). NIPCC scientists concluded the IPCC was biased with respect to making future projections of climate change, discerning a significant human-induced influence on current and past climatic trends, and evaluating the impacts of potential carbon dioxide-induced environmental changes on Earth’s biosphere.

      To highlight such deficiencies in the IPCC’s AR4, in 2008 SEPP partnered with The Heartland Institute to produce Nature, Not Human Activity, Rules the Climate, a summary of research for policymakers that has been widely distributed and translated into six languages. In 2009, the Center for the Study of Carbon Dioxide and Global Change joined the original two sponsors to help produce Climate Change Reconsidered: The 2009 Report of the Nongovernmental International Panel on Climate Change (NIPCC), the first comprehensive alternative to the alarmist reports of the IPCC.

      In 2010, a Web site (www.nipccreport.org) was created to highlight scientific studies NIPCC scientists believed would likely be downplayed or ignored by the IPCC during preparation of its next assessment report. In 2011, the three sponsoring organizations produced Climate Change Reconsidered: The 2011 Interim Report of the Nongovernmental International Panel on Climate Change (NIPCC), a review and analysis of new research released since the 2009 report or overlooked by the authors of that report.

      In 2013, the Information Center for Global Change Studies, a division of the Chinese Academy of Sciences, translated and published an abridged edition of the 2009 and 2011 NIPCC reports in a single volume. On June 15, the Chinese Academy of Sciences organized a NIPCC Workshop in Beijing to allow the NIPCC principal authors to present summaries of their conclusions.

      In September 2013, NIPCC released Climate Change Reconsidered II: Physical Science, the first of two volumes bringing the original 2009 report up-to-date with research from the 2011 Interim Report plus research as current as the third quarter of 2013. A new Web site was created (www.ClimateChangeReconsidered.org) to feature the new report and news about its release. A second volume, Climate Change Reconsidered II : Impacts, Adaptation, and Vulnerability, is planned for release in 2014.


      • not fazed says:

        The EU last week agreed to cut our emissions by 40% on the basis of AGW even though China burns 90X as much coal as the UK per year, which seems pretty naïve and pointless.


        That is clearly a huge deal and I would think that it would significantly impact our economies, which are already flat lining.

        Could an increased reliance on more expensive renewables (27%) eventually crash the economic and financial systems? If Gail is correct in her timescale then there probably won’t be enough time left for it to make a difference.

        • Paul says:

          I’ll do them one better — the EU will cut green house gases by nearly 100% by 2030.

          The only green house gases they will be emitting in the coming years will be from burning the few remaining forests to keep warm and cook food.

          In the meantime, the band plays on:

          Coal Returns to German Utilities Replacing Lost Nuclear

          What’s a beleaguered utility to do when forced by the government to close its profitable nuclear power plants?

          It turns to lignite, a cheap, soft, muddy-brown colored form of sedimentary rock that spews more greenhouse gases than any other fossil fuel.

          The story of German power giant RWE AG (RWE) exemplifies the crisis facing the nation’s utility industry — and those of many countries across Europe — as nuclear power plants get shuttered in the wake of the Fukushima disaster, renewables steal away revenue, and consumers and companies complain about rising power costs that are three times higher than in the U.S.

          Chancellor Angela Merkel’s decision in 2011 to shutter all 17 of Germany’s nuclear power stations by 2022 struck a blow to RWE’s profit stream, particularly for a company that has almost no presence in renewables. RWE posted its first loss last year since World War II and may face worse losses going forward.

          The Essen-based company, founded in 1898 to produce power for Germany’s industrial heartland, has had no choice except to ramp up production from its profitable coal-fired plants, most of which burn lignite.

          The result: RWE now generates 52 percent of its power in Germany from lignite, up from 45 percent in 2011. And RWE isn’t alone. Utilities all over Germany have ramped up coal use as the nation has watched the mix of coal-generated electricity rise to 45 percent last year, the highest level since 2007.

          More http://www.bloomberg.com/news/2014-04-14/coal-rises-vampire-like-as-german-utilities-seek-survival.html

          Despite Climate Campaigners Efforts, Germany’s New Coal Boom Reaches Record Level


          And let’s not forget this:

          The German Solar Disaster: 21 Billion Euros Burned

          Reality is a bitch.

        • As long as Europe imports goods made in coal-consuming areas to replace goods no longer made in Europe because of carbon rules, I think the world could be worse off with the new European carbon rules. The devil is in the details. Just shifting production to coal consuming regions (that, in addition, don’t monitor other more general pollution problems) will tend to make the world as a whole worse off. If there were a high tax on imported goods, this might not be such a big issue. But with free trade agreements, it is hard to make carbon roles that really work as intended.

      • Paul says:

        But the initial comment said he was a scientist when he is nothing more than a celebrity weather presenter… So off to a very bad start….

        Global Warming: Scholarship vs. Pseudoscholarship

        Note the following comment as you read this: “a document published by the Heartland Institute (a fossil-fuel-funded political pressure group) for an organization called “Nongovernmental International Panel on Climate Change”

        Mark Boslough
        Physicist; Fellow of the Committee for Skeptical Inquiry

        How many times have we heard the apocryphal statement about global warming that “the science is settled”? Is the debate really over? It depends on who is doing the debating, and what is supposed to have been settled. There have been many climate-change debates among scientists as well as non-scientists. We need to recognize the difference between a scientific debate and other forms of disagreement. Science has ground rules. Those who don’t follow the rules are entitled to their opinions, but cannot legitimately claim to be participating in a scientific debate.

        Before scientific results can be fully accepted, they must be subjected to peer review and published in a scholarly scientific journal. This is a necessary, but insufficient, condition (nobody is compelled to embrace the conclusions of a paper just because it has been refereed). This rule is not intended to create a “high priesthood” of scientists or keep others from participating. On the contrary, scientists welcome dissent and encourage contrarians to publish their ideas so they can be subjected to the same harsh scrutiny that is applied to conventional thought.

        Peer review is designed to screen out material that is demonstrably wrong, flawed, or illogical. Non-specialists are not always able to spot errors quickly in a highly technical piece of work, so experts are recruited to make sure any mistakes are corrected and necessary documentation is provided before peer-reviewed science can be published. Think of this as a kind of standard for all scholarly papers.

        In my line of work, I’m often asked to comment on various claims about climate change. The first thing I do when I read an editorial or blog entry is to check to see if the claims have been published in the scientific literature. If not, my response is usually this: “I don’t see why I should bother to read it if the authors couldn’t be bothered to put it through scientific peer review.” My reasoning is not that such material is necessarily wrong. But without any scientific review I have no assurance that anyone has checked to see if the equations are right, data sources correctly cited, figures properly attributed, or other workers’ conclusions fairly represented.

        Nobody claims that the global warming debate has ended among editorial writers, media pundits, bloggers, and politicians. The calculation of the mass of CO2 produced from burning a gallon of gasoline was the subject of a vigorous debate on the Albuquerque Journal letters page a couple years ago. This is a question that a decent high school chemistry student should be able to answer, but the highly-opinionated letter writers were not able to resolve their differences–despite the fact that reaction stoichiometry is indeed settled science.

        Likewise, a competent high school physics student understands how the greenhouse effect works, which is based on the first law of thermodynamics (conservation of energy). This is also settled science. It has been known for over a hundred years that adding CO2 to the atmosphere increases its infrared opacity, and when this happens, more energy from sunlight enters the Earth’s atmosphere than escapes. The atmosphere must heat up, on average. There is no scientific debate about this fact, and nobody has ever published a “zero-warming” theory to explain how it could be otherwise.

        What is not settled is the degree of climate change. In the peer-reviewed scientific literature there is a healthy, open, honest, and vigorous scientific debate. The best scientific estimate of the amount of warming (when CO2 levels double, which is likely to happen this century) is about 6 ºF. There are those who disagree, and have published the basis for their disagreement. The most useful assessments are not limited to the best estimate, but include quantification of the uncertainty, which is one of the hallmarks of honesty in science. There is a broad range of possibility, from below 4 ºF to greater than 11 ºF.

        One recent paper estimates a likelihood of about 2.5% that average temperature increases could exceed 14 ºF; a change that would probably lead to the collapse of global ecosystems, loss of civilization, and possible human extinction. There is no way to prove or disprove these quantitative estimates, other than to wait and see what happens. That said, it is hard to ignore a scholarly paper (emphasis on the word “scholarly”) that gives longer odds for civilization than for a shuttle launch.

        Recently, opinion pieces have been published that masquerade as scientific literature. Most notably is a document published by the Heartland Institute (a fossil-fuel-funded political pressure group) for an organization called “Nongovernmental International Panel on Climate Change” (NIPCC), a play on the name of the IPCC, which publishes summaries of mainstream peer-reviewed science. After reading a few sections of the document, I remembered a comment from a fellow scientist and friend of mine: “Pseudoscience is like spoiled food; you don’t have to eat it all to know something is badly wrong. Just a few bites will do.”

        The authors’ use of loaded words like “fearmonger” and “hype” were the first whiff of spoilage. Rhetorical devices are rarely if ever seen in a scholarly paper. This suspicion was borne out by close examination of figures re-plotted by NIPCC from peer-reviewed sources. The original data were mis-plotted, modified, and misrepresented. Important information was removed, and in at least one case, a data point was fabricated. The NIPCC report is an example of pseudoscholarship at its worst.

        Just as serious a blunder was the unwillingness of the authors to concede any uncertainty in their beliefs. As scientists, we all have a professional obligation to be honest about what we know and what we do not know. As professionals whose work informs policy, we must always err on the side of caution. Climate change must be treated like all real but uncertain threats. To ignore that possibility is reckless.

        For any debate to be called scientific, the entire spectrum of expert opinion must be taken into account. Two questions must always be asked of experts by policymakers and by the public: 1) How certain are you that you are correct? 2) What is the worst thing that can happen if you are wrong?

        And then we have this:

        The Heartland Institute’s Credibility

        The Heartland Institute has a long history of valuing the interests of its financial backers over the conclusions of experts. It has campaigned against the threats posed by second-hand smoke, acid rain, and ozone depletion, as well as the Endangered Species Act. With its aggressive campaigning using tools such as billboards comparing climate change “believers” to the Unabomber, Heartland makes no pretense at being a scientific organization.

        Heartland’s funding over the past decade has included thousands of dollars directly from ExxonMobil and the American Petroleum Institute, but a large portion of their funding ($25.6 million) comes from the shadowy Donor’s Capital Fund, created expressly to conceal the identity of large donors to free-market causes. The Koch brothers appear to be funneling money into Donor’s Capital via their Knowledge and Progress Fund.

        Heartland’s credibility has been so damaged that mainstream funders have been abandoning the organization, and it has been forced to discontinue its annual climate conference.


        When it sounds too good to be true — go to google….

        Next topic please….

        • Paul says:

          The problem is that what they report is not true — as has been demonstrated over and over and over…

          I am not about to spend my day digging out the evidence of this just as I am not going to dig out evidence that 1+1=2…. you have come to the wrong place to spout this utter nonsense.

          “Look Zeke — it’s 20 below and there’s 4 feet of snow on the ground — so much for global warming hahahaha’

          • VPK says:

            These deniers will never let up. Their goal is engage in “debate” and for them it really does not matter the discourse. Take from me, we can easily run thousands of comments with these fools.
            You summed it up nicely by writing:
            “Next topic please”

        • ordinaryjoe says:

          Thank you for this Paul!

      • john c green jr says:

        Not Fazed,
        You might read: Merchants Of Doubt: How A Handful Of Scientists Obscured The Truth On Issues From Tobacco Smoke To Global Warming by Naomi Oreskes, a book I learned of in SEP from a comment to an article in this blog. It was quite interesting. The handful including Fred Singer have pushed a wide variety of points of view: the missile gap, tobacco doesn’t cause cancer, Rachel Carson was one of the greatest mass murderers of all times, second hand smoke dangers are a hoax, the ozone hole is a hoax, anthropomorphic climate change is a hoax, etc.

      • The whole topic seems to have become highly politicized.

        An article someone passed on to me today: Climate change caused by ocean, not just atmosphere

        According to the Science Daily article,

        The study shows that changes in heat distribution between the ocean basins is important for understanding future climate change. However, scientists can’t predict precisely what effect the carbon dioxide currently being pulled into the ocean from the atmosphere will have on climate. Still, they argue that since more carbon dioxide has been released in the past 200 years than any recent period in geological history, interactions between carbon dioxide, temperature changes and precipitation, and ocean circulation will result in profound changes.

        Exactly what, we don’t know.

    • misha says:

      coleman doesn’t sound trustworthy

      while that page hasnt been updated since june it has links to detailed rebuttals

  28. VPK says:

    Another tale that BAU is not all that bad!
    #1. Christopher McCandless

    What He Tried to Prove: That he didn’t need the shallow comforts of modern life, damnit.
    The Method:
    Everyone, at some point in their life, has had the desire to just leave it all behind. For some people, this involves starting over in another country, for others, it involves cancelling their World of Warcraft subscription. Christopher McCandless decided, fuck it, he’d just leave his family, and all of civilization, behind.
    McCandless had a strong contempt for the “empty materialism of American society,” and just took off to live in the wild of Alaska, with little to no food or equipment. Just the way nature intended!

    What He Actually Proved: That the corrupt, capitalist society he so loathed was pretty much the only thing keeping him alive. Though the book on McCandless’s life and the movie it spawned were sympathetic to the whole situation, many Alaskans believe that he was foolish to embark on such a lifestyle without the appropriate skills or equipment, such as a map or compass. Or common sense

    Read more: http://www.cracked.com/article_16760_6-people-who-died-in-order-to-prove-retarded-point.html#ixzz3HGost1TU

    • Paul says:

      This is one of the few instances that the movie was better than the book.

      A very good friend handed me this book at a point when I was becoming disenchanted with many of the same things that McCandless eschewed – it resonated.

      For someone so young — and raised in the belly of the beast in the ‘me’ generation — to come up with such brilliant insights at his age was incredible.

      That said — as was implied by his diary and I think by his sister — the call of BAU remained strong … that his dalliance with ‘Walden’ and the wild would have been over had he survived … that he would have been set to embrace the Borg…

      Perhaps while in his bus in the forest he realized that a) a subsistence lifestyle was utterly brutal and that a hot bath, a tasty meal, a washing machine and comfortable bed had their merits b) and being a very wise man maybe he understood that resistance was futile — that we had passed the Rubicon long ago…

      If this is correct this of course does not diminish him in the slightest – most never come to these conclusions or if they do, generally not until much later in life.

      • VPK says:

        Paul, I too have read the book and saw the movie and investigated his life and death.
        I believe folks have been too harsh on his motives myself, as explained here:
        As with Aron Ralston, the story of Chris McCandless has sharply divided observers, between those who see him as a hero for eschewing a materialistic, traditional western life and those who think he was an idiot who got in over his head and then paid the ultimate price in the Alaskan bush. There’s also been disagreement over precisely what caused McCandless’s death, but new evidence assembled by curious writer and then chronicled by Into the Wild author Jon Krakauer points a likely final verdict: poisoning from a toxin unknown to be in the wild potato seeds he consumed, which led to McCandless’s weakening, paralysis, and starvation
        In a piece in the New Yorker, Krakauer spins a detective tale of chemistry and curiosity. McCandless foraged and ate wild potato seeds in his last months spent just north of Denali National Park, which contained no known toxins or harmful substances but that he suspected were killing him. “EXTREMELY WEAK. FAULT OF POT[ATO] SEED. MUCH TROUBLE JUST TO STAND UP. STARVING. GREAT JEOPARDY,” he wrote on July 30, a few weeks before he died.
        Just bad luck and I understand why he did not have a map or compass, it would have tarnished his journey.

        • Paul says:

          His intentions were certainly well-placed…. but of course ultimately futile…

          It may seem romantic to do a Thoreau and go ‘Walden’… but the reality is that nobody really wants to go there because we like what BAU has to offer….

          We don’t like plowing fields or washing clothes by hand…. we like lights… and instance cook stoves…. and water pumps and taps…. we like driving to town on non-rutted roads and buying stuff (instead of making it ourselves)…

          We may fool ourselves into thinking Walden would be wonderful…. but as I am fond of saying … try turning off the power for a week and using no petrol …. and see how romantic that is….

          As one of the wisest, practical men I know recently said — when BAU shuts down screw the organic farming…. get a really nice hotel room and a bottle of pills… and when room service stops… end it.

          Easier said than done of course…. we are like rats on a sinking ship … we will try to survive because it is in our DNA… many of us will do anything to survive… kill, cannibalize, steal, enslave others… anything….

          • ordinaryjoe says:

            Oh the horror! why even try! I might soil my underwear. I might be rejected. they might not laugh at my joke.

    • Some people have to prove for themselves something that should be pretty obvious.

  29. VPK says:

    Surprise, Surprise (not):
    ECB Fails 25 Banks as Italy Fares Worst in Stress Test
    By Jeff Black Oct 26, 2014 10:37 AM ET

    Twenty-five lenders including Banca Monte dei Paschi di Siena SpA failed a stress test led by the European Central Bank, which found the biggest capital hole in the region’s banking system lurking in Italy.
    …The ECB said lenders will need to adjust their asset valuations by 48 billion euros, taking into account the reclassification of an extra 136 billion euros of loans as non-performing. The stock of bad loans in the euro-area banking system now stands at 879 billion euros, the report said.

    Italian banks will have to implement the largest asset-value adjustments according to the findings of the review, equivalent to 12 billion euros. Greek banks will have to revalue by 7.6 billion euros, and German banks by 6.7 billion euros, the report showed.
    Better to perform the “stress test” now, before things get even worse!

    • alturium says:

      I have this image of red lights going off, people running around, file cabinets closing, paper flying thru the air, hysterical intercom voices… When they have a stress test.

    • If Greece is smallest, the effect there would seem to be greatest. Needing more equity usually means that less lending can be done with existing equity.

  30. Don Stewart says:

    Dear Gail and All
    Some thoughtful and fact filled observations about human behavior during hard times and collapse, courtesy of Dave Pollard:


    Note the introductory analysis of the different camps and their responses to the impending disasters. Note Dave’s appreciation for John Michael Greer’s assessment of the drivers of collapse, but his disappointment about fuzzy prescriptions for the appropriate behavioral response.

    Note Dave’s observations about the Irish quietly starving, and the pretty good response of Americans during the Depression. But also see the link, very close to the bottom, of the description of the collapse of Honduras. Then read John Gray’s treatise on humanity and evil.

    Just one thought from me. In response to a question, Toby Hemenway commented on changes in Belize in response to the arrival of the drug business and lots of cash floating around. I wonder if the US drug policies are what keep the money flowing to the violent gangs in Latin America. If drugs were legal and cheap, would the disappearance of the drug money in Latin America make the region more peaceful?

    Don Stewart

    • Paul says:

      Don – a slight problem with the Irish example …. when this hits the entire world becomes Ireland — the famine will encompass the planet… there will be no America to move to …

      I understand that when super volcanoes of the past erupted that caused wide spread crop failures across much of the world …. perhaps you could dig out some research on the impact of such an event as it would be far more relevant….

      But keep in mind when those volcanoes hit we had not ruined our farmland with chemicals and there were not 7.2B people on the planet…

      Nevertheless I think this might be useful in giving us a taste of the bitter harvest that is imminent….

      • Adam says:

        Peak ellipses, Paul! And I bet you’ve never bothered to taste a single harvest in your life, never mind a bitter one. Anyway, there’s nothing to worry about:


        During his MIT appearance Elon Musk also discussed his company SpaceX’s plans to help populate Mars. “It’s cool to send one mission to Mars, but that’s not what will change the future for humanity,” he said.

        “What matters is being able to establish a self-sustaining civilisation on Mars, and I don’t see anything being done but SpaceX. I don’t see anyone else even trying.”

        I think his mother meant to name him “Noel”, but being dyslexic, she unwittingly turned it into an anagram.

        • Paul says:

          On the contrary — while in Bali we have not purchased any vegetables and very little fruit for close to a year now — we support our family and 7 others from our gardens…

    • Christian says:

      Dear Don

      Regarding drugs, remember alcohol prohibition in the US? Did alcohol gangs were peaceful people? Did wealthy people taking Mariani (coked) wine in the early XX century were violent? In case cocaine was made legal again, it would cost some fraction of a dollar each gram, which now goes up to 70 in the US, as I’am told. In that case Mexico and Colombia would be more peaceful places, and it’s not by chance that former presidents of both countries are (unsuccesfully) advocating legalization. But actual presidents don’t legalize, why is it, just because of DC orders? Nope, it’s them, actual presidents, who would “pay the price”: GDP and USD inflow would fall down. Prohibition = business + control + collateral damages. In the other side, the US don’t bother about a couple of millions flying to South America or Asia, because they print it and because it’s nice to have another moral point upon which to teach and control the rest (that’s an important part of hegemony).

      I’ve heard many times “the PTB don’t legalize because they don’t want to take all that money out of the market”. But now, according to Gail’s explanations, I’m affraid widespread legalization would even collapse the financial system, just as if BoA got broken. I’m for legalization, anyway, very specially for use legalization, as it goes in Uruguay, Spain, Holland, Russia I think and some other countries. No need to protect people from themselves, surely no need to make money jailing them as it is so often the case in the US. Here the gov say since many years they are for not criminalizing use, while they don’t take the time to approve one of the 14 existing projects in the congress to decriminalize it. As slow as they go, the world will collapse before.

    • I notice Dave Pollard links to this image of his complete list of responses:

      Dave Pollard New Political Map

      • alturium says:

        Oh wow that is great! I really like those categories!

        • Lizzy says:

          Everybody, farewell. I used to like this blog when it was Gail’s, but now it’s changed to “Gail’s and Paul’s”, and I’ve stopped liking it.
          Paul, ever thought of starting your own gig? I presume you’re not working because how on earth would you find the time. Be a little nicer to people who don’t share your point of view.
          Adios, Xabier — it’s been fun. Gail, I really like reading your articles, though I don’t think civilisation will end. Economies will localise.
          Keep the faith, InAlaska! Don Stewart, you’re brilliant.

          Bye-bye, and good luck,

          • VPK says:

            Bye, Lizzy…..do not blame you for saying bye bye and after all we can digest so much of this explanation on why and how our modern industrial society will end.
            Can’t speak for Gail or Paul, but maybe you may want to read her articles and skip the comment section

          • xabier says:

            Adios, Lizzy! I rather agree the balance in comments has been lost somewhat recently…

  31. B9K9 says:

    Went to a corporate affair last night. Major movers in a major industry with good looking wives in the heart of the plastic surgery universe.

    Ants, every one of them; ants. Set to work within the confines and strictures of an economic model originally developed 200+ year ago – long before population demand crossed over energy/resource supply. And all leveraged by smart operators playing/manipulating primary & marginal claims collateralized against future (non)production.

    What a world. LOL. What is one to make of this when thrown into the mix? Well, I’ll tell you: talk/joke about the kids, trips, sports, weather, (office) politics, etc. Never, ever broach the subject that just like the party itself, our collective human experience called ‘civilization’ is nothing than an ephemeral chimera. No, sorry to say, it’s not merely a waypoint along the path of ever expanding consciousness, but in reality, simply our peak separation from nature made possible by an unbelievable stroke of good luck.

    There’s not a day that goes by that I don’t savor my excellent good fortune. To have been born into this world of hot running water, sewage flushed away somewhere else, healthy food available in refrigerated bins, hundreds/thousands of cheap & plentiful energy slaves available at my beck & call to propel my chariot down smooth highways … no wonder no one want to consider, much less contemplate this fantasy coming to an end.

    I’m with Paul – we should start a movement to deny the facts. Since we are the vanguard, we should be limiting awareness lest it impacts our comfortable lives. As more people become exposed to the truth, it will the few of us who will be able to mock, belittle and reduce the few stragglers from the flock who might return & alarm the great mass of sheep.

    Now do you see how the PTB operate? Doesn’t it make perfect sense to act just like them? Why should a sucker ever get an even break?

    • B9K9 says:

      Which brings up an interesting point: what if Kunstler and others who take the claims of technologists seriously (eg too much magic) are in actuality being royally punked?

      What if Elon and all the other clever players, including Kurzweil himself, are merely carving out their share of the booty **today** with pseudo-sincere claims of future, ever expanding prosperity? How would this secular approach be any different than various religious techniques geared towards getting believers to pay today’s ‘leaders’ with the promise of future benefits?

      How could one possibly detect that purveyors of green promises were operating a business model much more sophisticated, and more successful, than guys like Martenson who plods along selling both alarm and (low tech) [non]solutions? What’s that old saying? Anything worth doing is worth doing to excess?

      I posit that those who fully understand the situation should: (a) applaud, not criticize the Fed and other CBs in their efforts to maintain BAU; and (b) consider that those selling promises of a bright future are not doing so because they **themselves** believe such nonsense, but rather, they are straight up calculating mercenaries.

      As such, I respect their approach and think it’s a valid way to maximize current comfort & enjoyment.

      • Paul says:

        1000% correct.

        I have stopped reading the drivel from the greatest financial minds who continue to suggest the central bankers are corrupt and/or stupid — that they are going to collapse the world.

        These critics are idiots.

        How can they not see that the central bankers are involved in a desperate fight to keep billions alive a few months or years longer? That they are almost certainly fighting to for their own lives – to fend off the extinction of the species and possibly every species (remember the thousands of nuclear fuel ponds…).

        Of course they cannot admit what we know — because if they did then they could no longer do their jobs. All their high powered degrees and years of experience would be worth jack shit…

        So rather than accept the obvious they jam their heads deeper and deeper into the sand and ever more vehemently defend their positions. They continue to dance while the music plays — they even offer strategies for how to play the aftermath.

        Then of course we have the new Jesuses — offering salvation — at a price — isn’t that always the case with salvation….. perhaps they have convinced themselves that there is a way out — or perhaps they have figured that they too might as well dance while the music plays… and are just trying to make a living in the run up to the main event.

        It is all rather amusing to observe the rats scurrying around the Titanic as it lists…

      • alturium says:

        “And all leveraged by smart operators playing/manipulating primary & marginal claims collateralized against future (non)production.”

        Wow. Great post. Sublime. +1 bump. That sentence is priceless for it’s insights.

      • We are dealing with a situation where nothing is known with certainty. Instead, each person has his own “probability distribution” inside his head, regarding what is likely to happen in the future. Many people also have a compulsive need to “do something” to fix bad situations.

        The purveyors of promises themselves are not 100% sure of what is ahead. In many cases, the purveyors of green promises have heard third-hand stories that lead themselves to believe that the device in question might be helpful. Furthermore, with respect to Martenson, in the range of the way collapse may occur, it certainly can be argued that something or other may be helpful for a while.

        So I am not convinced that any of these folks are consciously out to maximize current comfort and enjoyment. It is just that with the public in a mood to “buy something” that might help, they are very willing to find something that might possibly help. If Martenson wanted to get rich quick, I am sure that there would be more effective ways for him to do that.

        • alturium says:

          “each person has his own ‘probability distribution’ inside his head”

          In computer science, the introduction of random numbers is extremely important. One of
          its uses is for a probability distribution. I don’t believe in a Christian God anymore, but I do believe that we have been programmed by a higher entity. Our minds reflect this programming.

          Perhaps God uses this “probability distribution” to introduce randomization for branching different path decisions. A random number generator for probability distribution would an important mechanism for creating beings that make “free will” decisions. Part of this idea occurred when I was listening to Don Knuth’s lectures “God And Computers” (He is a famous computer scientist) . If I remember correctly, he suggested that God may be finite and that God may be bound by computational complexity. As such, it would be impossible to build a computer to simulate the universe or to predict its outcome.

          Hmm…maybe I still struggle with the existential question of why God would allow such a massive collapse of society. Sorry Gail, I realize you have a spiritual and religious foundation but that topic may be off-topic due to its controversial nature. 🙂

    • Paul says:

      If I had one wish — I would wish there were an ‘island’ — where only those of us who see through the matrix would be allowed to enter — an island that was stocked with everything we would need to live out our lives in comfort — with front row seats to watch the Big Show …

      And those in Mother of All Reality Shows could see us up there in our land of plenty — and we’d be able to say — ‘we told you so…. and now look at you’

  32. Rodster says:

    Chris Martenson just posted Chapter 19 of his crash course and it fits right in with Gail’s recent articles. 🙂


    “THE reason why growth will be more scarce in the future ”

    Chapter 19 of the Crash Course is now publicly available and ready for watching below.

    The central point to this latest video is this: as we’ve shown in previous chapters of the Crash Course, our global economy depends on continual growth to function. And not just any kind of growth; but exponential growth.

    But in order to grow, it must receive an ever-increasing input supply of affordable energy and resources from the natural world. What I’m about to show you is a preponderance of data that indicates those inputs will just not be there in the volumes needed to supply the growth that the world economy is counting on.

    In short, on top of all the debt and other economic messes we’ve made for ourselves, constraints from the natural world will increasingly place limits on economic growth in a way we haven’t had to deal with over the past century.

  33. CTG says:

    Hi guys,

    A little off topic. I have read so many people discussing on how solar and wind will save the BAU and I think I am in the state of “being severely sickened” by it. I am written below a basic calculation. I need favours from you all, please

    1. Feel free to check and counter check and tell me if it is wrong.
    2. Copy and paste in any future posting when someone talked about solar and wind and how it will maintain our BAU. I am more than happy if this can make them counter on how solar/wind will continue BAU.

    Typical solar panel size is 5’x3′. Let us make it 5’x5′. We can line up end to end and side-by-side. The 5′ length will stretch for hundreds of panel. The 3′ will be placed side by side (total 6′) and another 4′ as walkway for maintenance. The typical output is 200W.

    So, I assume that that we will have sufficiently strong sunlight for 10 hours a day (very optimistic assumption). That will make 1 solar panel producing 2kWh.

    See the links below. The bigger the rotor, the bigger the power, the higher the complexity and there a greater chances of failure. Let us stick to the smallest. 10m rotor diameter generating 25kW. Let us give extremely generous 20hour wind availability. So, each turbine will be 500kWh.

    1. Intermittency is a big problem. The link http://www.wind-power-program.com/powerprofile.htm shows you how intermittent the winds are at “good locations”. Let us not dwell in locations that are not good.
    2. At night, solar panel is useless and you need someone to clean the panels as dusts can lower efficiency. Forget about automated systems. It is too complex to maintain and prone to failure. The best is to get a guy to sweep the panels everyday.

    It takes about 6000kWh (See link below. I take the average number) to melt and make (produce) one(1) metric ton of iron from iron ore. This is not even steel but iron only.

    You need 6000/2=3000 solar panels or 6000/500=12 small wind turbines and run for one full day (daylight hours for solar and 20 hours for wind). Spread out for 3000 solar panels (5’x5′), you need 275′ x 275′ land area. For commercially viable mini steel mills. It can produce produce 200,000 tons per year. Due to cost consideration and economies of scale, that is the smallest amount. 200,000/365=55 tons per day. Therefore, we need 55×6000=330,000kWh/day of electricity. Thatwill be 330,000/2=166,500 solar panels. Spread out, you need a square of 600m x 600m

    I am assuming the size of iron mills are the same as steel mills. This is not steel but iron. Referring to the link below, you need additional processing and energy to get from iron to steel. Some points to note:

    1. The land used for solar cannot be used for agriculture.
    2. Assume that the land is flat. Levelling the land uses a lot of energy as well
    3. How about the inverters, distribution centers?
    4. High current (amperage) is required for steel manufacturing. How are you going to “gather” all the current electricity, stored it and put it quickly to the steel mill when they require that blast of current to melt the iron? Capacitors? batteries?
    5. Sure, we can put solar panels in the desert, how about transmission lines (especially maintaining them)?
    6. This energy usage does NOT include preparing the furnace (it must not be cooled down, must be continuously processed 24 hours a day), the pre and post processing of iron (sperating iron ore, hammering, shaping). It does not include transportation, the power used for conveyor belts, the computer systems, the lighting, the cafeteria food preparation, etc.
    7. How many of the 166,500 panels needs to be replaced daily. Cracked, hit by hail, birds, stones, damaged, shortcircuit
    8. We can only run the mills during daylight. We cannot use it at night or when it rains or overcast.
    9. Getting someone to clean 166,500 panels is a great challenge.
    10. I am assuming 200W and there is no degradation of panels over a period of time.
    11. Let us not talk about spare parts for the solar panel, wires/cables, controllers, converters, transformers (to make it high current), etc.
    12. Yes, government can force lower-sized mills and other forced nationalized projects but just refer to USSR’s collective farm and factories for the consequences of government control.

    ** That is just for one small iron mill. There are hundreds of mills worldwide.

    The same goes for windfarm. We need 330,000/550=600 small wind turbines just to support one small iron mill.

    From http://www.lowtechmagazine.com/what-is-the-embodied-energy-of-materials.html , you can see that to make 1kg of electronic grade Si, it takes about 2 MWh. This figure is not verified but I am not surprised as semiconductor is a very power intensive industry. I am also not sure how many solar panels can be made from 1kg of silicon but I guess not many. 2MWh is about 2000/2=1000 panels. You need 1000 panels, working 10 hours a day to provide energy to make 1kg of electronic-grade silicon. That is an irony.

    **Will someone say iron mills are not required for modern civilization ….. ??? **

    Well, I can work from home using internet…..

    Datacenter electricity usage in US only (not worldwide) as per http://www.computerworld.com/article/2598562/data-center/data-centers-are-the-new-polluters.html – 91 billion kWh per year in 2013 or 249,315,068 kWh per day. That translate to 124,657,534 solar panels needed (working 10 hours a day) or close to 500,000 small wind turbines (10m rotor) working 20 hours a day. If you put 124,657,534 in a square grid, that will be 16.7km (10miles) each side. Just think of how many replacement parts you need for 124,657,534 5’x3′ panels. You need to think of how you can transmit the power to all the datacenters in USA when the power transmission system in any country is crumbling. How many people you are going to employ to maintain, change the panels, inverters, cables, clean the panels?

    Now, how about residential, mega factories and other “modern civilization” critical facilities that requires tons of electricity?

    Are we going towards “using solar-powered” machines to combined CO2, water and air to form hydrocarbons that will be used as fuel for planes? We cannot have battery-powered airplanes…..

    Solar panel sizes and output : http://brightstarsolar.net/2014/02/common-sizes-of-solar-panels/
    Wind turbine : http://www.wind-power-program.com/powerprofile.htm
    Wind turbine : http://science.howstuffworks.com/environmental/green-science/wind-power4.htm

    Energy to make 1kg of material : http://www.lowtechmagazine.com/what-is-the-embodied-energy-of-materials.html
    Steel mills : http://en.wikipedia.org/wiki/Steel_mill

    • Paul says:

      I am in the state of “being severely sickened” 🙂

      Brilliant work CTG.

      I wonder how many tonnes of coal would be required to make this renewable energy dream come true (I think that would be call irony … and since a lot of iron is involved this could also be consider a pun I believe…)

      I posted an article earlier that indicated that Germany has turned off its nukes and it’s flirtation with solar had failed — and they have gone to burning lignite — a very dirty version of coal… because the cleaner grades of coal are already gone…

      So we shall assume the lignite is what we will use to fashion this dream world of solar panels and windmills….

      Oh wow – I found the answer to my question:

      “Approximately 1.5 tonnes of metallurgical coal are needed to produce one tonne of steel” (not sure if that refers to lignite coal or not — of course lignite would have less energy so you’d need to burn more to get the same bang)

      So we multiple 1.5 by the total amount of steel needed — then add in the coal needed to refine all the other inputs…. then we need to add in the oil that is used to transport the panels from China to their final destination…. etchetera — etchetera

      I don’t think we need to continue…. clearly this is not feasible.

      Hang on… something is coming in over the interweb… what’s this…. is this the breakthrough we have all been waiting for????? We turn you over to CNBs for ……

      Breaking News: An eco-farmer in Bali who goes by the name of Paul (apparently he fancies himself the Ronaldo of eco-farming so uses only one name) has just announced that his intensive efforts to solar panel trees has failed.

      In a terse press release ‘Paul’ said, “we have tried everything — we even gathered the villagers around theorchard and sang Koombaya — we had Chris Martenson fly in (paid his first class tickets and the Four Seasons pressy suite + a hefty appearance fee) and in exchange for doing some back up dancing during the rendition of the anthem — and sweet *&^% all – we have failed. Needless to say we are profoundly disappointed as is the Green Brigade”

      And the Green Brigaders sink into a black sea of anger and depression… as they realize that their dream of infinite growth on a finite planet is not possible….

      • CTG says:

        Ronaldo, do me a favour, copy and paste this section to counter anyone who still says that solar and wind will help us resolve our current FF predicament… You come here much more often than I do…. thanks….. 😉

      • Christian says:

        Paul, you will not make me believe you kick the ball as Ronaldo…

      • ordinaryjoe says:

        Steel has a VERY high embodied energy indeed. As we evaluate our energy footprint the knowledge of which materials embody high amounts of energy should be evaluated in our choice to consume them or not. The calories that we consume daily, weekly, yearly can be easily determined. The conversions from calories to watts to joules to BTUs are easily done. 114000 BTU per gallon of gasoline. As Ludlow says a automobile in its essence destroys capital both in its steel and its use of petrol. If one does the math to evaluate personal consumption stepping away from $ value it becomes clear that the two greatest consumptions in energy are combustion engines and home heating. Reducing consumption in these two areas while inconvenient is certainly not unachievable,

    • There are many other issues with intermittent electricity, over and above the ones you listed. The Institution of Engineering and Technology recently presented Evidence to the House of Lords Technology and Infrastructure Committee on the Resilience of Electricity Infrastructure. It pointed out

      More significant for the medium term (and to a degree the short term) are the transformational changes to the electricity system as a consequence of decarbonisation. These include the introduction of large amounts of self-dispatching renewable generation, the potential electrification of much of transport and space heating, and the rise of the smart consumer and smart home. These, combined with the need to make power networks fit for this new world, vastly increase complexity and require a level of engineering coordination and integration that the current industry structure and market regime does not provide. In turn this increased complexity presents potentially substantially increased vulnerability to cyber threats.

      In my view, the increased complexity noted above is a huge problem–something that has a tendency to cause systems to collapse. The same report says:

      The electricity system is dependent on the successful operation of other infrastructures including gas transmission, telecommunications, highways (so staff can reach sites to repair faults), railways (for coal transport). Major outages of these systems could impact electricity system resilience.

      The use of cell phones to co-ordinate maintenance by some electricity companies creates a critical inter-dependency as service would be lost from the current cellphone networks in a widespread power outage.

      It also says:

      In conclusion, it is possible today to say that the current UK electricity infrastructure is highly resilient. However this picture is changing quite rapidly – in the short term as plant closes and demand begins to recover following the recession, and long term as the UK moves further into its energy transformation. This will create new resilience challenges which are discussed further in our response to subsequent questions.

    • xabier says:


      Saw an article today which cited research showing that, in Britain, wind turbines can produce only 10 to 20% or so of their maximum production potential for no less than 30 months of the year. This rather surprised people who though Britain to be rather a windy place….which it is!

      So, the sun doesn’t shine, and the wind doesn’t blow, enough here for Utopia.

      • CTG says:

        30 months out of a year??

      • This may be referring a report I saw today. http://www.adamsmith.org/wp-content/uploads/2014/10/Assessment7.pdf

        Wind is a fossil fuel extender. With the help of expensive wind turbines, we can burn fossil fuels a little more slowly. Because of the variability in quantity of wind and solar PV, as much fossil fuel-electric or nuclear-electric capacity is needed as in the past. These fossil fuel and nuclear facilities continue to have pretty much the expenses they had in the past, except for savings of fuel. The cost of building and maintaining the grid is at least as high, and probably higher. The net benefit to the system is very small, or perhaps negative, because of the additional grid complexity added, leading to more likely near-term failure.

        • Paul says:

          If you think about it, are solar panels (and windmills) not worse than a complete disaster?

          As we know we barely get any nett energy out of a solar panel over it’s life span – let’s say 20 years.

          But we have pre-burned almost the entire 20 years of the energy that the panel will produce during the manufacturing process.

          And, because BAU will collapse long before those 20 years are up — could we not have kept BAU going a little longer if we had not wasted that energy?

          Of course we also release 20 years worth of carbon into the atmosphere burning many millions of tonnes of lignite coal when producing these pointless contraptions…

  34. edpell says:

    Who are the next three countries to have their production and consumption crossover?

  35. not fazed says:

  36. MG says:

    The diminishing returns regarding the nucelar energy are already hitting in Slovakia. There is a big problem with finishing the third block of the already existing nuclear power plant Mochovce: the costs are running over:


    On the other side, the companies present in Slovakia complain about the already high electricity prices:


    Further signs of the diminishing returns can be seen in the construction sector. Due to the lack of contracts, two major construction companies in Slovakia went too low with their prices for highway construction and now they face restructuring:


    The debt is simply passed down to subcontractors, who will get almost nothing.

    This is also present in the agricultural sector in Slovakia: it exists mainly thanks to the EU subsidies. When the agricultural company goes bankrupt, a new one is created. Again, the subcontractors get little or nothing.

    • edpell says:

      Time to go for cheaper nuclear designs. No containment structure just operate it safely. No backup plumbing, no backup pumps. You get the safety you can afford.

    • One important aspect you did not mention and that’s price fixing on the wholesale electricity paneuropean market (or even globally). The real price from domestic nuclear electricity is obviously very different among producers/exporters say in France, Finland, Slovakia and Czech rep. So for instance in your example without the current EU structure (incl. pseudo continent wide mandated energy markets) the prices would certainly differentiate widely per given local. I’m big believer in some form of attempts of increasing national/regional autarky in the times of PO/debt crash. So, likely not very far from now you will enjoy quite differerent situation..

    • Ultimately, problems in the “real” economy show up in the financial economy. A lot of people assume that they are separate, but they are not.

      • MG says:

        Also The Economist noticed this insolvency problem in Slovakia:


        Despite the fact that Slovakia is producing record numbers of cars per number of inhabitants in the world, its position regarding resolving insolvency is worse than Greece, putting it on the last place in Europe.

        • This article relates to how long it takes the courts to resolve insolvencies.

          • MG says:

            Prolonging the time for resolving insolvencies can be one of the ways how to keep some trust in the system, that is crumbling down due to deflation. The naked truth about some sectors of the economy of the given state could show that the economy is almost completely dependent e.g. on cars production and some electronics production for exports and EU subsidies in case of Slovakia.

            Such flawed judicial system is good for those who can steal from subcontractors, giving them false hope in the way: Look, the courts do not function, just wait and you get your money one day. This way the dead parts of the system can continue living for a while, parasitising on the live parts.

  37. Don Stewart says:

    Dear Gail and All

    This note will try to address some possibilities in terms of the price of oil. I think it will come out of Left Field, so bear with me for a few paragraphs.

    Dennis Bray is the author of Wetware: A Computer in Every Living Cell. Jeremy Gunawandena, the Director of the Virtual Cell Program at Harvard Medical School describes the book as follows:

    ‘Dennis Bray engages in a provocative debate about the computational capabilities of protein networks, while taking the reader on a delightful ramble across biology, from the antics of Stentor (a single celled critter) to the plasticity of synapses, with PacMan and robot salamanders along the way.’

    I want to specifically call your attention to his chapter on PacMan and other virtual experiences. Let’s assume for the sake of discussion that the human enterprise consists of two broad endeavors. The first is to find the food and water that fuel our bodies, and a few elementary needs such as shelter. The second broad endeavor is to find ways to stimulate ‘feel good’ experiences…for example, oxytocin in the brain.

    Bray shows how a few hundred lines of computer code which make PacMan move can easily fool our brain and cause us to become totally engaged in playing a game with virtual actors. From PacMan, of course, we have progressed to Massively Multiplayer Online Role-Playing Games, which currently occupy 100 million people everyday. Bray notes that ‘crude and clunky interfaces’ are ‘sufficient to engross players’, and that this ‘testifies to the power of role playing’. In short, the Feel Good Experience is generated by not much of anything physical. The game players are not moving heaven and earth in order to move some dopamine.

    Bray also talks about ‘the energetic, voluptuous Lara Croft’ as the ‘sex symbol for a generation of adolescent boys’. I don’t know if anyone has studied the brain chemicals of adolescent boys playing games with Lara Croft, but the continual barrage of young, scantily clad women that Google advertisements throw my way leads me to believe that something must be happening somewhere. Lara Croft and her compatriots stand in stark contrast to a peacock, who has to invest a lot of energy and expose himself to danger in order to make that spectacular tail and attract a peahen.

    Bray describes the European development of Swarm-bots: ‘Each robot also carries its own small computer to analyze the movements of its neighbors. It decides on its own actions. Swarm-bots know how to join forces to cross a chasm (using their grippers to self-assemble into a bridge); they know how to pull a large body over a surface (working together like Lilliputians).’ Bray notes that the Swarm-bots were designed on computers: ‘Virtual robots took the place of real, engineered robots in their early stages. Lines of computer code represented both the electrical circuit of the robot and its movements within a defined arena. THIS MADE IT FAR EASIER AND CHEAPER TO TRY OUT DIFFERENT DESIGNS, MAKE CHANGES TO THE SIMULATED WIRING, AND SEE WHAT EFFECT THE CHANGES HAD ON THE ROBOT’S PERFORMANCE. ONLY WHEN THE DESIGN WAS PERFECTED ON THE COMPUTER DID THE DESIGNERS MOVE TO THE FAR MORE LENGTHY AND EXPENSIVE PROCESS OF ACTUALLY MAKING THE ROBOT.’ (Capitalization is mine.)

    Bray observes that the processes which produce Swarm-bots represent the deployment of innumerable sub-processes developed by human societies over thousands of years. In the succeeding chapter, he shows how the biological systems that we take for granted similarly represent the deployment of innumerable sub-processes developed by natural selection over billions of years.

    We might say that both biology and software have been developing capital. An example of biological capital is hemoglobin: ‘Human hemoglobin is built from 574 amino acids arranged in four chains that loop and fold back on themselves like spaghetti on a plate. But although they appear unruly and disordered the chains are in fact arranged with amazing precision.’ As someone who once programmed a computer in machine language, I can attest that high level programming tools are also a form of capital…they make it vastly easier to get a computer to do what you want it to do.

    At the present time, the vast majority of the fossil fuel energy expended is devoted to manipulating the Feel Good chemicals. Only the very poor spend most of their time and energy trying to survive, and they use very small amounts of fossil fuels.

    Therefore, a relevant question becomes: Are developments in virtual reality affecting the price of fossil fuels? Can we feel good without spending so much fossil fuels? The immersion of people in their cell phones and computer games and the ease with which corporations can substitute faux products for the real thing should prompt us to reconsider much of the dogma which has come to surround the Peak Oil and Limits to Growth constructs. The dispute between Paul Krugman and Richard Heinberg, as examined by Erik Lindberg, may not be so simple as some of us think. For example, I have recently commented on the fact that the US spends vastly more on oil than Cuba or Costa Rica, but does not produce better health outcomes as measured by life expectancy. Similarly, the decade long trial of traditional versus ‘modern’ farming at Iowa State DID NOT show that the modern methods are superior…but they surely do use a lot more fossil fuels. I think it is safe to say that both the US medical methods and the industrial agriculture methods DO generate more Feel Good. For example, someone goes to a high tech hospital and comes away assured that ‘I received the best, cutting edge treatment there is’, and the farmer driving an enormous vehicle in air-conditioned comfort and a sound system probably feels pretty good.

    Does social networking software substitute for physically getting together with other people? For people of my generation, I think the answer is No. I am not so sure about younger people. The coffee shop where I go features extensive talking between the (mostly) old people. But if I go to a coffee shop which caters to the young, I see mostly consumption of caffeine and sugar and staring at screens and very little face to face contact.

    These matters deserve more consideration than they usually get.

    I will hazard a couple of guesses. As fossil fuels become more expensive in real terms (not necessarily in monetary terms), I would expect more substitution of virtual for real experiences. Just as it is cheaper to develop a car or an airplane or a Swarm-bot on a computer rather than with mechanical models, I expect we will turn more toward the virtual in order to get the Feel Good chemicals we are programmed to want. It is not clear to me whether virtual experiences can be monetized to the same extent as the more fossil fuel intensive experiences. For example, how much are people willing to pay for a virtual trip to Tahiti as opposed to a real trip to Tahiti? Will teenagers turn away from real meetings and toward virtual encounters? It seems that this is happening as we speak. Will the stocks of companies producing virtual experiences rise in value as those who specialize in physical transformations decline? Will GDP go up or down…and what is the connection between fiat money and virtual experiences and well-being and GDP?

    My guess is that the inherently inefficient processes (for example, US vs. Cuban health care, and industrial vs. traditional agriculture) will come under increasing pressure as fossil fuel’s real prices increase. As these inherently inefficient processes are driven out of the market, will a financial crash be triggered? My guess is that it will be. Will governments be sapient enough to disconnect the financial system from the real system so that real production can continue? My guess is that the diligent search for government sapience will continue to be fruitless.

    Don Stewart

    • alturium says:

      Hi Don,
      Lots of neurons were firing in my head from that last post…

      Virtual reality with less fossil fuels? More feel good with less fossil fuels?
      I believe our economic growth is correlated to the use of fossil fuels. Economic growth is created from using cheap fossil fuels and it’s probably 1:1. What the growth represents –better medical care, better agriculture techniques – does not matter. It is the growth of money exchange, profit margins being met, products being created, etc. that create the ever-rising complex society. The value of that complex society – the value of what those consumers bought – may not matter in the final analysis. But that is just my opinion.

      Virtual reality can be expensive. It requires servers that use a lot electricity (and generate heat) and cable lines to network our computers. I can see it serving (at least) two purposes in our economy – allowing virtual meetings and the exchange of information that leads to efficient technological innovation (in your example, the swarm robot was design and tested in a simulated environment vice a physical one). But, I still see that as technological innovation. The second purpose can be the manipulation of the Feel Good chemicals. I see that as the extension of TV. More involved, more interesting , and probably more hours spent in front of a screen. I would ask the question, how does watching TV affect the growth of an economy?

      The social virtual reality thing – we are engaged here in a way, in Gail’s virtual living room. The conversation is usually polite and opinions lively, at times. Gail has set the tone of the conversation and she has a lot of tolerance for different viewpoints. If we were all transported to Gail’s physical living room, I would expect that the conversation to be carried out just as it is here. I would expect the people that post a lot to be the most vocal participants. So social networking is great way to connect people over great physical distances.

      At the other extreme…if you have ever seen the trade chat channel in World of Warcraft – well, you would be totally shocked. In the game, any person can post to the trade channel and everybody can see it. The trade channel is the cesspool of conversations. Each insult is exchanged for another one between anonymous players. The virtual bullying and racist remarks go on and on. It may just represent the lowest point of our civilization. I believe that only a small percentage of players are the bad apples – but it is a bad influence. How much of an influence on young kids, I don’t know.

      • Don Stewart says:

        Dear alturium
        I think that the 80/20 rule almost always applies: we get 80 percent of the benefit from 20 percent of the effort or money or resource. PakMan operated on what we would now consider to be very primitive devices. The innovation, which occurred to a Japanese designer when he was eating pizza for lunch, was the role playing. The processors which powered the original PakMan can probably be bought now for a buck or two.

        Role playing goes back at least to Greek theater. Maybe back to Homer. Movies and TV offered a sort of theatrical experience. PakMan offered first person role playing with a few hundred lines of computer code plus some now primitive hardware. PakMan was considered addictive at the time.

        The electronic technology may be a 90/10 situation (I think so). We get 90 percent of the value with 10 percent of the resource. That means that the vast majority of our use of the resource is essentially wasted. A lot of the value of the internet was realized before it was commercialized by the World Wide Web. But the Google search engine is definitely worth something. However, the incessant commercials, which is where most of the resource is spent, are probably counterproductive.

        I believe that oil is more in the ratio of 80/20. We get most of the benefit from oil with the first 20 percent we burn. I have cited evidence from public health and agriculture to that effect.

        If people were to suddenly develop sapience, and stop using the 80 percent or 90 percent of the resource which is essentially wasted (and may be actually counterproductive), would companies collapse? I think so. We would have to have ‘reorganizations’. If Gail is correct about Limits to Growth, the reorganizations are going to happen anyway. If we are wise, we will select the 10 percent or 20 percent which gives us the most value and try to preserve it.

        Don Stewart

        • VPK says:

          Jeff Dailey and Peter Burkowski were teenagers and avid video gamers, aged 19 and 18 respectively, both had a passion for the game, popular arcade hit “Berzerk,” in which players control a stick-figure character who is trapped in a perilous maze populated by ambiguously-shaped robot enemies that bordered on dangerous obsession. Fatal obsession, you might say. Fatal Attraction you would not say, because it wouldn’t make any sense in this context.
          Anyway, they pushed their limits day after day, determined to prove once and for all that they were the undisputed masters of the universe and all of that which is contained within it. And that they were good at video games
          What They Actually Proved:
          If you’re in poor enough physical condition, even video gaming can be an extreme sport.
          In 1981, Jeff Dailey died of a heart attack after posting a dazzling high score of 16,660. A year later, Peter Burkowski achieved two similar high scores, and also died of a heart attack shortly after.

          Don, so much virtual reality

          Read more: http://www.cracked.com/article_16760_6-people-who-died-in-order-to-prove-retarded-point.html#ixzz3HGn5JaA3

          • Don Stewart says:

            Dear VPK
            I haven’t played a video game in decades. I don’t have time…I garden.

            What I was mostly addressing are the linked questions about oil price, GDP, employment, debt repayment, cost of achieving ones goals in terms of Feel Good chemicals, etc. Not defending video games at all.

            For example, I saw a recent story about a Manhattan restaurant which was getting increasing complaints about poor service. The restaurant videotapes the dining room. They dug up some ten year old tapes and studied them. Compared to current tapes. It turns out that 10 years ago people came into the restaurant, were seated, promptly handed a menu, looked at it, waiter came and had a little chit-chat and took their order. Diners talked with each other. Order arrived, and they promptly began to eat. Waiter brings check and they were out the door in about an hour.

            Now: diners arrive and are seated and promptly begin to mess around with their phones. Waiter arrives with menus. Diners continue to mess around with phones and do not look at menus. After 15 minutes, waiter shows up and asks if they are ready to order. They pick up menus and tell him to come back. He comes back, takes order, they pick up phones again. Food arrives. They continue to talk on phone as food gets cold. Many of them send ‘cold food’ back to kitchen. Finally eat, and complain about the service. Two hours before they leave.

            If you parse all this into the cost of running a restaurant, the tip take of the waiter, the price the restaurant has to charge, the GDP due to the increased charges plus the phone fees, and the complicated hormonal effects on everyones’ brains, you begin to get a picture of how GDP and various other indicators are affected.

            My view is that we are worse off, but GDP goes up.

            Other things are quite different. I seldom attend conferences I can see on video, which is now quite common. I am pretty sure the GDP associated with conferences has declined (at least coming out of my pocket). No travel, no hotel, no restaurants. Video bandwidth is cheap. Video displays are cheap. Quality video isn’t cheap if you do good editing, etc., but a lot of these conferences just point a camera at the podium and let it roll.

            How does the government impute ‘hedonic effects’ for all this? They can make GDP anything they want to make it.

            Don Stewart

            • jeremy890 says:

              Jennifer Strange was a 28-year-old woman and a mother of three from California. As far as we know, she lived a perfectly normal life, until she saw a chance to get the hot toy of the year: a Nintendo Wii. Parents were lining up in the middle of the night to get the things.
              In 2007, the radio station KDND 107.9 “The End” held a competition cleverly titled “Hold Your Wee for a Wii,” in which participants had to consume copious quantities of water without using the bathroom. The prize, as you may have guessed, was a Nintendo Wii, and Jennifer Strange felt she needed one of these so badly that she would go against thousands of years of biological imperative and prove that she didn’t need to urinate.
              Jennifer died of a condition known as “water intoxication”, which is caused when vast amounts of liquids are taken into the body and results in a fatal electrolyte imbalance in the brain.
              Everybody involved at the radio station was fired. And, adding insult to death, Jennifer didn’t even win the competition. We hope the winner enjoys their game console.

              Read more: http://www.cracked.com/article_16760_6-people-who-died-in-order-to-prove-retarded-point.html#ixzz3HHiKpOst

            • ordinaryjoe says:

              “Jennifer died of a condition known as “water intoxication”, which is caused when vast amounts of liquids are taken into the body and results in a fatal electrolyte imbalance in the brain.”

              RIP. Strip away the consumption model and what is left of a human. No one knows

        • I see virtually no possibility of a reorganized economy running on 10% or 20% of the world’s electricity and oil. The scale needs to be there, to make the pipelines flow above “minimum operating level.” You end up with the situation we are reaching in Alaska, where the pipeline is so empty that there is a problem with keeping it warm enough to flow. The issue of needing to heat it to keep it operating has been raised.

          Businesses cannot maintain huge amounts of infrastructure for 20% of the customers, without charging close to five times the rates. In some sense, video game players and music downloaders are what are supporting Internet use for research purposes and for business use.

          Using less electricity means that the same amount of transmission must be maintained to transport this electricity. Thus rates must rise by 5 or 10 times, to support the new high-cost electricity. Windstorms continue to blow. Adding more intermittent transmission will tend to raise maintenance costs as well.

          Roads will still need to be maintained.

          Jobs will be lost, because the 80% of 90% you consider waste, is what other folks consider their jobs. In fact, these may be disproportionately US jobs, because we have added more “fluff” in recent years, to disguise the fact that we no longer can competitively manufacture goods for the world marketplace.

          • Don Stewart says:

            Dear Gail
            ‘I see virtually no possibility of a reorganized economy running on 10% or 20% of the world’s electricity and oil. ‘

            If we start with ‘what we need’, and look at a Stone Age method for achieving it, and then look at how much more we could do with 10 or 20 percent of the oil we use today…we would discover the Pareto Principle. 10 or 20 percent provides 80 or 90 percent of the benefit. The rest is essentially wasted in low benefit, or negative benefit, activities.

            It is essential, I think, to begin conceptually with Needs, as opposed to BAU. I don’t deny that Alaska may not be able to keep the pipeline running. But then…we don’t need to keep the pipeline running to get the benefits from the Pareto Principle. Similarly, with electricity, we don’t need to have unlimited electricity running to every house in the US to gain enormous benefits from electrical consumption at 10 or 20 percent of the current level. For example, some off-grid solar instead of cooking fuel can be enormously beneficial. Or, some bottled fuel (as backpackers carry) instead of the unlimited supplies we commonly have today.

            If you begin with the assumption that we have to continue what we are doing, you only hit absurdities. If you assume that all efforts to make do with less are counterproductive because they don’t provide the cash for repayment of debts…you remain a slave to BAU. If you assume that we must continue to airfreight Chilean grapes to the US, you just cement our global warming fate. If you assume that the US must spend more and more on ‘sick care’, then you are dooming the country to bankruptcy. To repeat myself: At this point in time, there is no alternative but to rethink our world in terms of Needs, not Wants, and certainly not BAU.

            Don Stewart

            • Paul says:

              Don – as Gail has explained a number of times — it is either all or none…. as in without BAU there will be no energy available at all — except trees…

              Energy is a high tech business – high tech cannot happen without the full force of BAU behind it.

              How do you operate drilling rigs, hydro plants, refineries and the grid without the full force of BAU?

            • Don Stewart says:

              For one thing, you don’t have to add new production. You just have to operate what you have.

              Second, humans have a LOT of ingenuity. If there is money to be made by producing 20 percent of the oil we have today, it would be foolhardy to bet that oil companies won’t be able to do it.

              Don Stewart

            • Paul says:

              Don – you cannot produce 20% of the oil that we are producing today.

              As Gail has explained that is not possible.

              Simply saying ‘man is ingenious’ is not an explanation of how we can continue to produce oil when BAU is collapsed.

              Details please…

              For instance – how to you maintain something like this (repair it, obtain spare parts for it, operate the computer systems etc…)


            • Don Stewart says:

              I don’t expect that the facility you show would be operated at 10 percent of its capacity. What has happened in the US and Europe is that whole refineries are closed. Ugo Bardi commented recently on the closing of refineries in Italy. Refining capacity is reduced by closing whole refineries.

              In general, my skepticism about the Black Friday Collapse scenario for oil production hinges on two considerations. The first is that Gail links physical production by rigid links to finance. If finance fails, then all production must also fail. Yet the US government has made legal provisions for the government to take direct control of industries in the event of ‘national emergency’. Therefore, I don’t take it as a given that a financial crash would necessarily bring down oil production. Governments have done extraordinary things to keep the banks alive. I think it would be simpler to keep the oil companies alive, if need be.

              The second source of skepticism is Gail’s resistance to the notion of tranches. If you look at David Hughes analysis of shale oil and gas, you see him going to considerable pains to dissect the various tranches. For example, the Bakken and Eagle Ford are clearly the most productive oil formations and the Marcellus is clearly the most productive gas formation. Within those geographic areas, there are hot spots and secondary spots and spots which are not likely to ever produce anything. The Marcellus has outcompeted some of the initial shale gas formations such as the Barnet and the Haynesville…but Hughes says that production might increase again in those formations if the price goes back up to where it used to be.

              I also apply the notion of tranches to consumption. For example, people may substitute less energy expensive items for more energy expensive items. Small cars instead of SUVs, for example. They may tolerate higher temperatures in the summer and lower temperatures in the winter. Virtual experiences for experiences which require physical rearrangement of the pieces. Given a little time, people figure out the Pareto Principle and excise the least productive expenditures.

              I think the black and white scenario is overrated. Furthermore, it is dangerous because it tends to freeze the deer in the headlights, so they do nothing at all.

              Don Stewart

            • The economy is not very adaptable downward. When I give up driving my car for walking or bicycling, I cut back greatly in what I can do. The businesses I would visit tend to cut back as well–lay off workers or close. I can’t get to my job, in most cases.

              Moving to higher mileage cars or buses is not really an option that makes much difference in any reasonable time frame–it simply is too slow an operation, and requires too much energy-intensive “hardware” changes–using scarce resources to build more cars and buses. These cannot actually be purchased until someone has the funds to do so–either through tax revenue for the bus, or from wages for the car, or more debt for either. If people are being laid off, government revenue will be down, so more buses seem less likely than other options. Unless the old cars that are being traded in remain valuable, the cost of replacing the old car with the new one becomes unreasonably high. Thus, the changeover takes pretty much twenty years, and even at that, gets you no where near the 80% or 90% reduction needed.

              When refineries are closed, it adds a whole new set of problems. One is the laid off workers, who need more government services. At the same time, government revenue is down, because refinery workers and the refinery itself aren’t paying taxes. The amount of needed imports rises, because there is now a need for refined oil products, instead of crude oil to operate the refinery–the value added by the refinery has been lost in the process.

              Every cutback in what I use, leads to the loss of some jobs somewhere, and because of this, a loss of tax revenue. This is the fundamental reason why shrinkage works so badly.

            • The problem is that you cannot operate an economy on 20% of the oil. Roads would not be repaired. Schools would close. Most vehicles of all kinds would stop running–ambulances, police cars, agricultural machines, cars to take workers to work. Replacement parts would become unavailable. It would not be possible to keep electricity transmission lines repaired. Governments would collapse. Banks would cease to operate, in part because they need electricity to operate their systems. An oil company could not operate in such an environment, even if it wanted to–certainly not for very long.

            • As long as you understand that the 10% or 20% is temporary–once it goes away, it is gone forever, it is OK to use it. But if you are depending on it, and it fails you, you will likely face the problem of not being able to feed as many people, or not being able to pump as much water. You may need to make a decision as to which member of your group will not survive, with lesser inputs. I don’t think I would like to be the one conducting the, “Who will we vote off the island?” vote when that times comes.

            • Don Stewart says:

              Today I was in a big box hardware store and saw a sign for ‘total integrated heating and air conditioning system.’ What is wrong with that? Simply that the human physiology works best when we have an oscillation in temperature between day and night, between summer and winter. Setting a thermostat and letting the machinery keep you at 70 degrees year round is not healthy. Neither is flouting the light/ dark cycle of every day. A great deal of the energy we use today is actually destructive in this way.

              Similarly, an article appeared in the medical journals showing that an allele in a certain gene, when combined with a traumatic experience as a child, considerably increases the risk of PTSD as an adult. Apparently the gene is marked, as in epigenetic effects. One of the ‘traumatic experiences as a child’ was witnessing a fight between mother and father. What is a chief cause of conflict between married people? The number one reason is money. And why does the couple have money problems? Because they are in debt…which leads to all sorts of problems. So while you may defend debt as ‘essential’ to selling houses and cars and refrigerators, we should remember that it has huge negative impacts.

              In short, many of the things we use debt and energy for are really not good for us.

              On the other hand, a recent study found that cranberries grown in a bog have higher anthocyanin levels because the water reflects more sunlight onto the berries. This has only good effects on human health, from anti-inflammatory to anti-cancer effects. So using some fossil fuels to make a cranberry bog is an excellent investment of fossil fuels. With some care, the bog should last a very long time Bogs CAN be made by hand, but it is a lot more convenient to make them with machinery.

              Brassica are subject to attack by cabbage worms. The best solution I know (at least around here) is to use row cover over the young brassica until they are growing rapidly. Row covers are relatively inexpensive spun cloths made by machinery powered by mostly fossil fuels. I think that the use of fossil fuels to make row covers is an excellent idea.

              In summary, the ability to use a small amount of fossil fuels can greatly facilitate the human project. To eliminate fossil fuels altogether, we need to transition to the place where Edo Japan was prior to Admiral Perry. Japan had a population at the time of about 40 million, and the population was stable. It would be very difficult to get to the sophistication of Edo in a single movement from an industrial economy. Given a decades long transition period, where fossil fuels gradually disappeared, and population fell, then I think it is possible. Our ways of making a living and living socially would change beyond recognition

              In fact, the population of Japan in the Edo period roughly doubled from the disastrous Middle Ages, as the people gradually built a civilization without fossil fuels and few metals. When they hit 40 million, that was all the islands would support, and there the population stayed.

              Success requires, I think, a constant remembrance of the Pareto Principle, steady reduction in fossil fuel use, strict Edo-like limits on forest cutting, recycling everything, and horticultural science. There also needs to be social organization in terms of road maintenance, clean water, agreement on population limits, little to no debt, elimination of weapons, etc.

              I think that those who get started now have a better chance than those who do nothing except cry in their beer.

              Don Stewart

            • For those who are not familiar with the Pareto Principle, it states that for many events, roughly 80% of the effects come from 20% of the causes. The catch, of course, is that we can’t figure out the right ones ahead of time. And we can’t operate a networked system, with just 20% of the inputs.

              If we think that we can make use of the 80%-20% rule, We can decide that, for the most part, it doesn’t make sense to allow workers other than farm workers and those processing and transporting food to have access to oil based fuels for operating vehicles. But then an ebola epidemic comes along, and we have no health care system. Furthermore, the would-be buyers of food have no way to pay for the food, because they have no jobs. The government has vastly inadequate tax revenue, so it collapses. No matter how we pick out the 80% -20%, the system doesn’t work. Even doing it randomly doesn’t work, because then the fixed expenses overwhelm the profitability of companies.

              In many ways, the economy is like a human body, in that it is a networked system. We can decide that the digestive system is all important, but that doesn’t mean that we can live without the other systems. We can perhaps cut off an arm or a leg, but it handicaps us. Someone, looking at the situation from afar will say, that individual is right-handed. She does 80% of her work with her right hand. She doesn’t need her left hand. But it really doesn’t work that way. Left hands are very important for many two handed uses.

            • ordinaryjoe says:

              “we need to transition to the place where Edo Japan was”
              In many ways i feel this was the highpoint in human civilization.

            • Steven Rodriguez says:

              Don – Wise analysis. You have distilled the concept of BAU from 80% filler to it’s essence. Parretto effects are scale independent. I don’t think that Gail or other posters will concede that this is a reason to hope against morbidity. Their point is that the adjustment in economic scaling is too great and thus will result in a cascade failure of the entire system. While I must admit the possibility of sudden collapse, I am reminded from my own experiences with (non-clinical) hypochondria. It is easy to assume you have cancer when you have a handful of the symptoms, but diagnosis requires not just the symptoms but the presence of cancer. Life’s traumas and disappointments may lead us to abandon all hope, but that does not mean that all hope is lost. I CHOOSE to believe that we may be capable of greater cooperation and ingenuity than BAU would indicate. If I am wrong, I may never find out. Or I may find out all too soon. Or, I may be right. The only important thing is that I chose the only way that allows me to act with dignity and a pure heart.

            • Don Stewart says:

              Dear Steven
              Thank you.
              And Hear! Hear!

              Don Stewart

        • I see virtually no possibility of a reorganized economy running on 10% or 20% of the world’s electricity and oil. The scale needs to be there, to make the pipelines flow above “minimum operating level.” You end up with the situation we are reaching in Alaska, where the pipeline is so empty that there is a problem with keeping it warm enough to flow. The issue of needing to heat it to keep it operating has been raised.

          Businesses cannot maintain huge amounts of infrastructure for 20% of the customers, without charging close to five times the rates. In some sense, video game players and music downloaders are what are supporting Internet use for research purposes and for business use.

          Using less electricity means that the same amount of transmission must be maintained to transport this electricity. Thus rates must rise by 5 or 10 times, to support the new high-cost electricity. Windstorms continue to blow. Adding more intermittent transmission will tend to raise maintenance costs as well.

          Roads will still need to be maintained. Freezing and thawing occurs, regardless of how few drivers occupy roads.

          Jobs will be lost, because the 80% of 90% you consider waste, is what other folks consider their jobs. In fact, these may be disproportionately US jobs, because we have added more “fluff” in recent years, to disguise the fact that we no longer can competitively manufacture goods for the world marketplace. The lack of workers with jobs will flow back into the economy, cutting off government revenue, pushing the economy toward collapse.

    • I don’t think that “disconnecting the financial system from the real system” is in any way a possibility. It is simply asking for the supply chain to freeze up. The two are one and the same, whether we like it or not.

      I will agree that as oil is in shorter supply, virtual experiences have been substituted for real experiences. Stay at home and play video games, if a person doesn’t have a job he can drive to. We have been able to ramp up a health care system that generates huge revenue for a lot of folks as a way of providing jobs to people when jobs making real goods and services have disappeared. These healthcare jobs provide less and less value. In fact, the food system has been making us sicker as well, adding to the problem.

      • Don Stewart says:

        In the previous thread, you replied to me about the great expense involved in making a changeover from BAU to some more resilient form of production. I can’t reply to that…for software reasons, I suppose. Let me reply to the impossibility of separating the financial system and the real system, and your previous response, together.

        I think that it is a mistake to assume that we have to continue doing what we are doing…and then figure out how to keep doing what we are doing without metals and oil and good soil and the other resources which are hitting limits. It leads to absurdities. For example, someone has calculated that if we aim to produce some projected amount of food in 2035 or 2050, using the same BAU methods, then in 2035 or 2050 we will be PLANNING to throw away more food than we produce today. That is as absurd a plan as the accusations you make against the climate change models and projected greenhouse gas emissions. (If you trace the source of the absurdities, you drill down to the economists’ assumption that the system is always near equilibrium, and everything is working pretty efficiently.)

        The only reasonable way to look at things is to think about how we might go about producing in 2035 or 2050 what we NEED. Then things get more tolerant of hope. For example, we stop wasting so much food, we stop using farming methods which deplete the soil, we stop using some of the more idiotic aspects of our health care system, etc., etc. For example, take a look at Albert Bates current blog post and see his idiotic encounter with the health care mafia. David Kennedy’s book Eat Your Greens is optimistic because he discards BAU and looks at Needs…and he has had a ton of experience working with hungry people, so he knows what Need is all about.

        You typically respond that ‘Yes, but the System will crash’ ….if we start living frugally and behaving rationally. But it is going to crash anyway. My simple way of looking at our situation is that those who have simplified (using bamboo for building, digging earthworks to conserve soil and water, etc.) have a chance at survival. Whether it is a good chance probably depends primarily on social order or social chaos. I recently referred people to Dave Pollard’s article on the likelihood of ‘quiet starvation’ vs. ‘John Gray’. I don’t know how that will go.

        In the meantime, I vote for bamboo and earthworks.

        Don Stewart

        • It is possible that some who are using bamboo and earthworks will survive. I don’t know how things will work out. I agree that BAU can’t continue.

          • Paul says:

            We have a bamboo guest house.

            Bamboo does not last very long unless it is treated by bathing it in a solution (I believe they use borax) for some weeks …. if it is not treated a structure might last a year maybe two…

            Also even treated bamboo does not last long if it is exposed to rain…. if you can keep the rain off of treated bamboo you might get 10 years out of a structure.

            Bamboo would not work very well in a cold climate… for obvious reasons.

            Stone is a better option….

            • VPK says:

              The Nearing made many buildings and garden walls using field stone both in Vermont and Maine using the slip form method. This required concert and some rebar. I noticed from some recent photos of their first place in Maine, the garden walls were failing over due to the heaving dynamics of the freezing and thawing.
              Of course, one must “repoint” the surface. After the contraction, I would expect concert will be in sort supply.

            • Paul says:

              Good points.

              Get ready for nasty, brutish and short…. because that is what life for those who survive — is going to be….

            • VPK says:

              Paul, I had some leaky plumbing fixtures that needing replacement. It really does not take much to create a situation that is a difficult problem without the proper parts. Without these in the store without 5-10 years many modern conveniences will no longer function.

        • Artleads says:

          “My simple way of looking at our situation is that those who have simplified (using bamboo for building, digging earthworks to conserve soil and water, etc.) have a chance at survival.”

          I believe that a “we’re all in it together” principle largely takes care of social order. Doing it only for one’s personal survival won’t work as well.

          In the near future, a more realistic building material might be paper-crete. I’ve been working on large paper-crete boulders for over 10 years, and some have held up in very extreme and varied weather almost that long. Since I do it only as art, and for no commercial purpose, my technique has been hit or miss, and some results are better than some. Roughly, a combination of 1/3 paper pulp (using waste paper), 1/3 aggregate (gypsum, etc.) and 1/3 cement, would be a good place to start from and refine. For instance, the addition of white glue or wood glue (which is too expensive for me) works wonderfully to waterproof and stabilize the product.

          I live in adobe country, in a state that has the oldest continually inhabited dwelling in America–a two or more story adobe structure that is a thousand years old. It is maintained through ritualistic annual maintenance by the Pueblo community which lives there. So there are different ways to build that last, but they depend on different social organization from the typical one under industrial civilization.

          But back to paper-crete. The advantage is that it can serve where good adobe soil is unavailable, and it keeps waste paper out of landfills. It provides an affordable alternative that takes some pressure off overwhelming need for forest lumber while potentially compensating for jobs lost to that industry. Acrylic base paint is touted as a substitute for wood glue, but it has to be bought in larger quantities and is less easy to find. If fossil fuels could be used to bring down the cost (and destructiveness) of producing large quantities of binding liquid, that would be a fine thing.

          Elsewhere, you talk about good paying jobs. But if there is adequate health care, education and other social supports, why couldn’t folks work for stipends? If all my basic needs were provided, I’d work for $10/hr in today’s world. That’s if I also have no mortgage to pay and I like the work. So why wouldn’t there be people like me who are not too decrepit to run abandoned factories and do work that is necessary to keep society functioning? I bet many retired teachers (under respectful and enlightened circumstances) would go back in the schools for free.

          So I see social order as everything. People can do anything in the world providing the social order is conducive to what needs to be done.

          • Paul says:

            I suspect cement will not be an option in a world without energy other than trees….

            Where does the heat come from? How would one mine the other materials that are required?

            The raw materials are delivered in bulk, crushed and homogenised into a mixture which is fed into a rotary kiln. This is an enormous rotating pipe of 60 to 90 m long and up to 6 m in diameter. This huge kiln is heated by a 2000°C flame inside of it. The kiln is slightly inclined to allow for the materials to slowly reach the other end, where it is quickly cooled to 100-200°C.

            Four basic oxides in the correct proportions make cement clinker: calcium oxide (65%), silicon oxide (20%), alumina oxide (10%) and iron oxide (5%). These elements mixed homogeneously (called “raw meal” or slurry) will combine when heated by the flame at a temperature of approximately 1450°C. New compounds are formed: silicates, aluminates and ferrites of calcium. Hydraulic hardening of cement is due to the hydration of these compounds.

            The final product of this phase is called “clinker”. These solid grains are then stored in huge silos. End of phase one.


          • Don Stewart says:

            Dear Artleads
            I agree with you that having a social structure is key to survival. A couple of years ago Albert Bates gave the advice to ‘find the others’, a phrase from a Steven Spielberg movie. The context of the statement in the movie was that most people could not recognize the truth of the situation and would do nothing. The hero had to ‘find the others’ who could recognize the truth and do something relevant.

            I think that is likely to be the way things go. Most people will ignore the truth of the situation and do nothing. Many people are and will try to work with a group, but fail for various reasons (Diana Leafe Christian quotes very high percentages for failure of intentional communities). But then I see something which works…currently the construction of a community for mentally challenged people in my county. The farmer I used to work for is setting up the garden, Habitat is building some tiny houses, they raise cash at farmer’s markets, etc.

            I quoted Bessel van der Kolk here yesterday on the importance of community for all primates, including humans. I do not think, however, that one or two percent who have ‘found the others’ can save the 95 plus percent who are determined to do nothing.

            Regarding adobe. I am not an expert on adobe. What I saw in the Chihuahua desert was that villages from a distance appeared to have 3 times as many buildings as were still habitable. When a building collapses, they don’t try to repair it, they just build another one. The same would be true of a bamboo structure….when it rots, just build another one…bamboo grows like a weed. The mental hurdle for a ‘civilized’ person is getting over the idea that a building is something which continues to increase in value, such that 40 year mortages to be followed by a 30 year reverse mortgage are sensible ideas. A second mental hurdle is the notion that property is private, which means the tiny plot on which I have built my tiny house is all I am allowed to utilize. Much better is the tribal notion of land ownership, so when my house begins to deteriorate I can just build another one somewhere else…nearby or not so near, as the occasion demands.

            Thanks for your thoughts….Don Stewart

            • Artleads says:

              “Much better is the tribal notion of land ownership, so when my house begins to deteriorate I can just build another one somewhere else…nearby or not so near, as the occasion demands.”

              I suppose that a house left to decay is not so bad. But ritual repair precludes abandonment and saves energy and space for plants and critters. I’m sure bamboo is more sustainable; it’s just that *I* can’t imagine myself learning how to construct properly with it. What I’m realizing is that my experiments are meant to apply to the least motivated and skilled people in society–the 80%?

              Cement: Yes. Making it is a nasty process. Mountains vanish. The air is hazy. Everything is covered with cement dust, very much including plants. Because I don’t keep notes or have a consistent technique, I won’t swear to this, but I’m almost certain that a mixture of paper pulp, earth and wood glue will make an impermeable product. The main problem for me with wood glue (why I even tried cement) is the cost. I would welcome a cheaper and less industrial alternative. I read that sap from the pinon tree makes a waterproof glue to apply over traditional Native basketry. But if you’re living in mainstream society, such techniques are out of reach.

              The 80%: The best I can see to do is make things as easy as possible for them, without any but the simplest “tools”–snips, utility knife, duct tape, staple gun, stapler, wire, hole punch, hand saws, glues. PVC tubes. $300 might cover the hard tools. $1000 might supply spares enough to last a lifetime. (But I suspect that with ingenuity, operating a few select factories run by human power or waterwheel, etc., such simple devices or stand-ins for them could be manufactured indefinitely). I don’t use power tools, and ordinary tools like hammers only rarely. In place of wood, I use found cardboard. Mostly, it looks like crap and leaks, but I figure it’s mostly due to poor workmanship and not thinking through the issues sufficiently. No fool like an old fool, so I persist. If I can make something work fairly well (the rain stays out, the structure endures for 5 years, and longer with constant repair), then anyone can do it. If they choose not to, that’s their problem.

              Paper Availability: I understand that there’s more paper by volume in landfills than plastic. It is the largest input in landfills. Would we run out of junk paper in the foreseeable future? I doubt it. But paper is not that hard to make by hand.

            • Paul says:

              Why try to re-invent the wheel…. is it not better to look at primitive societies (that also did not have access to energy sources) did for housing… what materials and methods they used … they would have refined things over the millennia…

          • I am afraid I am not an expert on the ingredients for paper-crete, except that most of the ingredients won’t exist outside of today’s fossil fuel system.

            With respect to jobs vs adequate health care, education and social supports, both of these go together. The fact that jobs disappear means that the services that today’s governments provide disappear as well. These include roads, besides education and social supports. People without jobs can’t afford health care either–whether financed by their own earnings, or whether financed by the tax system. So all of these things disappear together. They are part of a networked system.

            • ordinaryjoe says:

              Papercrete is a wonderful material.. It works best in polaces with low rainfall. It is not waterproof. It uses a small amount of cement. Shelter is relative. In the summer a little moisture entering your house is a pain but not life threatening. In the winter snow is less of a problem. Comparing papercrete houses and a sod home i would probably choose a sod home. In normal rains the sod and grass soaks up most of the moisture. Dirt has wonderful properties in terms of livabilty and heat. Dirt is labor intensive in terms of moving it. It requires steel shovels.

              Manure can make a good binder for paper.

              Once again there are no perfect or easy answers. earthbag building seems to have great promise for sustainability. The aggregate or the aggegate and the bags can be reused.

              Poly bags. UV deteriorates them.

              What has more value debating whether a building technique is completly fossil fuel free or rreducing fossil fuel use dramatically and starting living a life tht involves much less?


            • Steven Rodriguez says:

              Road = gravel + oil. Gravel abounds. Concrete eventually spalls to gravel (or you can help the process along). Oil grows on trees such as olives or annual plants such as safflower. Cast on the gravel, feed the birds, eat the birds, roll your bicycle velomobile tires over the seeds to mash them into the gravel. Grow giant basket gourds by placing developing fruits into molds that use gravity to form the light but strong dried gourd walls into panels that can be assembled into velomobile bodies. Use the bamboo to join small metal lugs that are the monocoque framing of the gourd paneled velomobile. Velomobiles can easily maintain speeds of 25 mph plus on straight level roads…BAU? that is for dummies. We are still inventing the future. It looks nothing like you imagine.

            • I am afraid we need edible oils to eat.

            • Paul says:

              Koombaya Syndrome…

            • Steven Rodriguez says:

              Even the spent pomace of oil crops contains significant amount of oil for roads. But some, especially safflower is still good for feeding poultry, either penned or baited…

        • Steven Rodriguez says:

          Any one here ever read Frank Rotering’s work on building the theoretical foundations for a new economic model based on limits. It used to be available on-line for free but now is being sold online. Read about it here http://www.countercurrents.org/rotering131010.htm and see an interview

          The book is well reasoned and, I thought, logical in its analysis and proposals. Not sure what the public opinion was. Feasta carrying water for it.
          My point being that, the choice is not between BAU and collapse. However much does depend on where we go for answers to questions that would seem to have only binary solutions.

          • Steven Rodriguez says:

            The online book(s) can be found here http://contractionism.org/books-2/ . I recommend a read. His overhaul of “opportunity cost” I thought was particularly insightful. A very smart and compassionate thinker.

          • kesar says:

            Interesting approach. Nice idea with health as a economical denominator, although quite naive and utopian. To make it happen the humanity en-masse would have to consist in 70% from wise, peaceful, enlightened, cooperative, altruistic and rational people. We all know it won’t happen, but nevertheless it’s a nice hypothesis.

            I would even vote for the idea if we had 40 years of energy consumption stored somewhere to burn in this transition period. Unfortunately, last time we had it was in 70’s, when the LTG was published. Then was the time for such ideas.

            Social paradigms always change after the big social events (like wars, revolutions, financial crises, environmental accidents, etc.), NOT BEFORE.

      • edpell says:

        Gail, I do think the government is using the health care system as a WPA program. But they have forgotten about the Laffer curve.

        • Agreed that the health care system is being used for the jobs it adds. (There is also the aspect that Americans are in poorer health, thanks to all of the corn fed animals and oversize food servings, giving rise to the need for he alt care.)

          Laffer Curve has to do with tax rates. It isn’t directly connected to this, that I can see.

  38. theedrich says:

    What great irony and great truth in Gail’s husband’s cartoon!  The need to keep the populace as mushrooms is becoming more desperate by the day.  Any fantasy, any diversion, any concocted “crisis” to maintain BAU will do.  But especially valuable are the academics and “experts” (e.g., Krugman, Yergin) who know quite well what the situation is but pretend all is well and all we need is some new painless preternatural fix by Big Brother.  Forget Tainter, diminishing returns and diabolical financial complexities.  Optimism is the new fuel for the growth system, able to levitate the global economy forever.  It goes without saying that Finite-World-ists like Gail must be consigned to the outer darkness of media obscurity and non-awareness.  After all, what you don’t know about cancer can’t hurt you.

    • Paul says:

      I think it is better that way — there is nothing we can do to fix the situation — and if the MSM were to make the masses aware of the situation — there would be panic and BAU would unravel more quickly.

      People may not believe (or want to believe) that the end game is close — however if you ask someone what they think would happen if oil stopped flowing and we were unable to find a replacement — they most definitely are aware of what that means… I know because I have asked that question…

      That is why they prefer to keep that beast behind the curtain of cognitive dissonance — they will accept any story that helps them to keep that door closed….

      • Paul says:

        I would also argue that even amongst the small community who are aware that something ominous is imminent there are many who have the door only half open — they continue to believe that we can have some sort of watered down version of BAU post collapse…. that some how we will magically hang on to a few key fragments of civilization …

        I would suggest this is partly a result of normalcy bias – it is difficult to imagine what a worst case scenario could look like…

        But also a product of an industry that has sprung up selling hope to desperate people … offering a way out — for a price…

        Most books on this subject have a happy ending that usually involves farmer Bob out there in his verdant fields of organic abundance… sitting by the fire after a good days work — enjoying excellent health…

        If only.

      • In fact, one of the issues raised at “The Oil Drum” was concern that if we laid out the situation too explicitly, it would cause a run on the banks, or would cause people to get rid of paper securities en masse. This could make the situation worse, not better. It almost has to be a situation where only an educated minority understands the true situation, and doesn’t go out of its way to tell the world as a whole.

        • Christian says:

          Gail, I must say I see no sociological contradiction in actual behavior. As odds for survival go by, and even extinctions of species and life itself are evocated, it is absolutely understandable most people just don’t try to survive. We don’t know how. We don’t know who. As Korowicz highlited, system is life, predictability, continuity, it’s almost everything. That’s why you created this place, and why we are here.

          Everybody gets instantaneously almost all the consequences of the end of the existing financial system and of oil, even if an emeritus may be so exquisite as to demand millions of words upon the matter. Knowledge is there, growing. As my friends say, the real ball will start day D, or Omega, or Alpha, or wathever. Meanwhile, we take things as they come. Some people loose their jobs, some others get a kick in the leg…

          Santa Fed will be the last bullet? What next? I’m guessing… Found a plot: first they send checks to US citizens only, paying attention to Obama’s budget, and in the big finale I receive myself my first thousand bucks, as the somalians and every person in the plantet being able to sign a contract with a bank and create a bank account.

          So, we definitely get our Jubilee or start lending to the monkeys

          Then, one of two: we just get our Jubilee and collapse instantaneously, or say start bartering. Or KSA runs a kind of degrowth world tab, you know… Gail, if you are ever invited there you can add you have some disciples who can do the job for them

    • Good quote:

      Optimism is the new fuel for the growth system, able to levitate the global economy forever.

      I don’t think people realize that it is possible to get wrong information from so many sources, simultaneously.

  39. Daniel Hood says:

    Hi all, check out this ingenius little Solar energy solution with love and a little basic engineering from a Dad somewhere in the US for his sons.

    These little things in life should give you hope during times of great transition. Sometimes it’s the little things and lessons kids are taught along the way that can still impact.

    • alturium says:

      Thanks for posting! 2 hours power for 4 hours of charging is awesome. Also, 60 Watts from solar cells so light and flexible also incredible.

    • Stilgar Wilcox says:

      So the kids sit around the house playing video games, then go outside and sit in an electric driving toy? Maybe someone should instead give them a soccer ball or a whiffle bat & ball. Get them using their legs, because exercise in childhood carries over into adulthood in body shape and metabolism.

  40. SlowRider says:

    During past supply crisis of fossil fuels, we always found a way out. We discovered substitutes, governements and banks helped, and/or the price went back up in the market. You demonstrate that these things won’t work, this time.
    An oil price between 70-100$ could shatter the system silently, like a ghost people don’t see. Too high for the way of life the economic system is designed for, too low for many producers, so something must give and it won’t be the laws of nature. But we will blame everything else for our problems.
    The “distribution mechanism” of the crisis has been clearly defined: lack of economic activity, growth and jobs. One of the new global paradigms is trying to protect yourself from this. People look for it, politicians promise it, governments try to provide it. We begin to see migration away from bad places into other countries that haven’t much to give them, either. Everyone, from China to Mexico, from doctor to worker, is trying to get into a place where things still hold together well. This will increase.

  41. Stefeun says:

    Falling Coal Prices Wreaking Havoc With Corporate Balance Sheets
    By Nick Cunningham | Thu, 23 October 2014 23:23 | 0

    “Coal markets are currently experiencing a supply glut that is showing no signs of recovery. Mining companies drew up plans for billion-dollar projects in the mid-2000s, when commodity prices were on the upswing. With many of those projects now coming online, coal production is rising.”

    … and demand (mainly Chinese) is weakening, which impacts mostly Australia, but not only:
    “And that is reverberating back to the United States. Coal companies are being ravaged by low prices. Coal exports from the United States dropped by 16 percent in the first half of 2014, compared to a year earlier. Peabody Energy (NYSE: BTU), the largest coal producer in the United States, reported another quarterly loss on Oct. 20, and its share price has been slashed in half since the beginning of the year.
    Until high-cost mines are shuttered, which would reduce the market glut, coal companies are going to have a tough time.”
    This seems to go in the direction of a weakening “real” economy, and we know it cannot shrink forever.

    • Our problem is not that oil prices are falling; it is that the prices of a wide range of commodities are falling. A big piece of this seems to relate to debt not rising as fast, partly relating to QE (or lack thereof) and partly relating to slow Chinese growth and debt problems. With the Chinese a big user of coal, it should not be surprising that coal price are down.

      • Stefeun says:

        Coal prices going down is not surprising, but is IMHO one more evidence that global consumption/demand is going down, pulling everything down with it. This is due to rising energy costs and all other depleting resources, that make everything more expensive, whilst wages are decreasing in real terms. I think this slowdown can lead to disruptions, as financial tricks don’t seem to be able to hide the reality any longer.
        Economy is not about money, but about real stuff, and central banks cannot print physical resources (raw materials and energy), which is what we’re lacking a bit more every day.

  42. VPK says:

    Yep, hope we don’t have some technician at Fukushima with the same I.Q. as this guy:

    Employees in a medium-sized warehouse in west Texas noticed the smell of a gas leak. Sensibly, management evacuated the building, extinguishing all potential sources of ignition; lights, power,etc. After the building had been evacuated, two technicians from the gas company were dispatched. Upon entering the building, they found they had difficulty navigating in the dark. To their frustration, none of the lights worked. Witnesses later described the sight of one of the technicians reaching into his pocket and retrieving an object that resembled a cigarette lighter. Upon operation of the lighter-like object, the gas in the warehouse exploded, sending pieces of it up to three miles away. Nothing was found of the technicians, but the lighter was virtually untouched by the explosion. The technician suspected of causing the blast had never been thought of as ‘bright’ by his peers.
    (never work with people who smoke !!)
    Robert, you smoke I bet

  43. Jason says:

    Have you explored why our economy is dependent on growth? I have had economic professors that have said this but they never said as to why.

    • A big part of the problem is that all species, including humans, reproduce in greater number than needed to replace its parents. Each species is in a contest with other species, including humans. Humans have been winning in this contest with other species, because of our control of external energy. We started by burning biomass, over 1 million years ago. This allowed us an advantage, by being able to keep warm and cook our food, getting better nourishment from it. More energy could go into a growing brain, and less into chewing and digesting.

      To make a long story short, we have a continually growing population. We have to keep increasing our use of energy to keep diminishing returns at bay, in order to maintain our winning streak against other species. There is no steady state–we need to grow as we win the battle, or collapse as we lose the battle. Our economy is dependent on growth, because it represents this physical reality.

  44. Stilgar Wilcox says:

    This is reflective of today’s diminishing returns as Cameron on behalf of the Brits tells the EU where they can stick their surprise bill for 2.1 billion euro. I guess there’s only so much fiscal follies that can take place before resistance is met.


    ‘We won’t pay,’ furious Cameron tells EU over surprise bill

    In a vivid display of fury at European Union technocrats, British Prime Minister David Cameron refused to pay a surprise 2.1-billion-euro bill on Friday as EU leaders ordered an urgent review of the calculations used.

    Cameron demanded action from fellow leaders at a summit, calling the sudden bill “completely unacceptable”.

  45. VPK says:

    Wondering when the XL pipeline will be approved? Was listening to NPR radio program open discussion on the topic of Alberta Tar Sands. If approved the cost of approval will decrease $25 a barrel incl transport cost. Also, if approved a million more barrel a day could be placed online.

    • I find those “facts” hard to believe. The oil sands development depends on the price in general of oil. There are other transport methods. Part of any “savings” goes to the government in taxes. There are other options, including shipping the oil to the coast by train, and shipping it to the Far East. Adding more pipelines doesn’t add more refinery capacity on the Gulf–that is already full. So if one bottleneck is removed, others remain.

  46. Pingback: Eight Pieces of Our Oil Price Predicament | Basic Rules of Life

  47. My husband found this cartoon in Funny Times. The only thing it got wrong was the name–Jane instead of Gail.

    Cartoon from Funny Times

  48. cal48koho says:

    I have been waiting for Gail to comment on the implications of a big drop in oil prices and some time back she offered it as a dangerous possibility. I suspect the shale game is now on shaky grounds not to mention the other unconventional plays like oil sands. Gail cites one source as saying oil sands need $85 to break even. We hear these break even comments from everyone but I think their validity has to be taken with many grains of salt. I don’t think the oil sanders have ever gotten $85 for their oil. They get $15-30 less than world market. None of these producers wants to tell the truth about break even because of how the market would react if they knew the real cost. Right now you see refi cost of their bonds,mostly junk bonds of course going up rapidly and this bodes poorly for some companies with high debt financing. The ones with more cash and the ones who put in place hedges will survive for a while but once cash flow starts to drop, the bust will begin, first slowly and then with a rush if oil prices don’t recover soon.

    • My understanding is that when the Canadian oil industry talks about break even, they are converting it back to WTI or Brent basis, figuring that they will get a fairly big haircut. The haircut keeps changing to confuse things further. The government gets more tax, as the price goes up, so that affects the break-even as well.

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