Eight Pitfalls in Evaluating Green Energy Solutions

Does the recent climate accord between US and China mean that many countries will now forge ahead with renewables and other green solutions? I think that there are more pitfalls than many realize.

Pitfall 1. Green solutions tend to push us from one set of resources that are a problem today (fossil fuels) to other resources that are likely to be problems in the longer term.  

The name of the game is “kicking the can down the road a little.” In a finite world, we are reaching many limits besides fossil fuels:

  1. Soil quality–erosion of topsoil, depleted minerals, added salt
  2. Fresh water–depletion of aquifers that only replenish over thousands of years
  3. Deforestation–cutting down trees faster than they regrow
  4. Ore quality–depletion of high quality ores, leaving us with low quality ores
  5. Extinction of other species–as we build more structures and disturb more land, we remove habitat that other species use, or pollute it
  6. Pollution–many types: CO2, heavy metals, noise, smog, fine particles, radiation, etc.
  7. Arable land per person, as population continues to rise

The danger in almost every “solution” is that we simply transfer our problems from one area to another. Growing corn for ethanol can be a problem for soil quality (erosion of topsoil), fresh water (using water from aquifers in Nebraska, Colorado). If farmers switch to no-till farming to prevent the erosion issue, then great amounts of Round Up are often used, leading to loss of lives of other species.

Encouraging use of forest products because they are renewable can lead to loss of forest cover, as more trees are made into wood chips. There can even be a roundabout reason for loss of forest cover: if high-cost renewables indirectly make citizens poorer, citizens may save money on fuel by illegally cutting down trees.

High tech goods tend to use considerable quantities of rare minerals, many of which are quite polluting if they are released into the environment where we work or live. This is a problem both for extraction and for long-term disposal.

Pitfall 2. Green solutions that use rare minerals are likely not very scalable because of quantity limits and low recycling rates.  

Computers, which are the heart of many high-tech goods, use almost the entire periodic table of elements.

Figure 1. Slide from presentation by Alicia Valero at UNED energy conference showing that almost the entire periodic table of elements is used for computers.

When minerals are used in small quantities, especially when they are used in conjunction with many other minerals, they become virtually impossible to recycle. Experience indicates that less than 1% of specialty metals are recycled.

Figure 2. Slide from presentation by Alicia Valero at UNED energy conference showing recycling rates of elements.

Green technologies, including solar panels, wind turbines, and batteries, have pushed resource use toward minerals that were little exploited in the past. If we try to ramp up usage, current mines are likely to deplete rapidly. We will eventually need to add new mines in areas where resource quality is lower and concern about pollution is higher. Costs will be much higher in such mines, making devices using such minerals less affordable, rather than more affordable, in the long run.

Of course, a second issue in the scalability of these resources has to do with limits on oil supply. As ores of scarce minerals deplete, more rather than less oil will be needed for extraction. If oil is in short supply, obtaining this oil is also likely to be a problem, also inhibiting scalability of the scarce mineral extraction. The issue with respect to oil supply may not be high price; it may be low price, for reasons I will explain later in this post.

Pitfall 3. High-cost energy sources are the opposite of the “gift that keeps on giving.” Instead, they often represent the “subsidy that keeps on taking.”

Oil that was cheap to extract (say $20 barrel) was the true “gift that keeps on giving.” It made workers more efficient in their jobs, thereby contributing to efficiency gains. It made countries using the oil more able to create goods and services cheaply, thus helping them compete better against other countries. Wages tended to rise, as long at the price of oil stayed below $40 or $50 per barrel (Figure 3).

Figure 3. 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.

More workers joined the work force, as well. This was possible in part because fossil fuels made contraceptives available, reducing family size. Fossil fuels also made tools such as dishwashers, clothes washers, and clothes dryers available, reducing the hours needed in housework. Once oil became high-priced (that is, over $40 or $50 per barrel), its favorable impact on wage growth disappeared.

When we attempt to add new higher-cost sources of energy, whether they are high-cost oil or high-cost renewables, they present a drag on the economy for three reasons:

  1. Consumers tend to cut back on discretionary expenditures, because energy products (including food, which is made using oil and other energy products) are a necessity. These cutbacks feed back through the economy and lead to layoffs in discretionary sectors. If they are severe enough, they can lead to debt defaults as well, because laid-off workers have difficulty paying their bills.
  2.  An economy with high-priced sources of energy becomes less competitive in the world economy, competing with countries using less expensive sources of fuel. This tends to lead to lower employment in countries whose mix of energy is weighted toward high-priced fuels.
  3. With (1) and (2) happening, economic growth slows. There are fewer jobs and debt becomes harder to repay.

In some sense, the cost producing of an energy product is a measure of diminishing returns–that is, cost is a measure of the amount of resources that directly and indirectly or indirectly go into making that device or energy product, with higher cost reflecting increasing effort required to make an energy product. If more resources are used in producing high-cost energy products, fewer resources are available for the rest of the economy. Even if a country tries to hide this situation behind a subsidy, the problem comes back to bite the country. This issue underlies the reason that subsidies tend to “keeping on taking.”

The dollar amount of subsidies is also concerning. Currently, subsidies for renewables (before the multiplier effect) average at least $48 per barrel equivalent of oil.1 With the multiplier effect, the dollar amount of subsidies is likely more than the current cost of oil (about $80), and possibly even more than the peak cost of oil in 2008 (about $147). The subsidy (before multiplier effect) per metric ton of oil equivalent amounts to $351. This is far more than the charge for any carbon tax.

Pitfall 4. Green technology (including renewables) can only be add-ons to the fossil fuel system.

A major reason why green technology can only be add-ons to the fossil fuel system relates to Pitfalls 1 through 3. New devices, such as wind turbines, solar PV, and electric cars aren’t very scalable because of high required subsidies, depletion issues, pollution issues, and other limits that we don’t often think about.

A related reason is the fact that even if an energy product is “renewable,” it needs long-term maintenance. For example, a wind turbine needs replacement parts from around the world. These are not available without fossil fuels. Any electrical transmission system transporting wind or solar energy will need frequent repairs, also requiring fossil fuels, usually oil (for building roads and for operating repair trucks and helicopters).

Given the problems with scalability, there is no way that all current uses of fossil fuels can all be converted to run on renewables. According to BP data, in 2013 renewable energy (including biofuels and hydroelectric) amounted to only 9.4% of total energy use. Wind amounted to 1.1% of world energy use; solar amounted to 0.2% of world energy use.

Pitfall 5. We can’t expect oil prices to keep rising because of affordability issues.  

Economists tell us that if there are inadequate oil supplies there should be few problems:  higher prices will reduce demand, encourage more oil production, and encourage production of alternatives. Unfortunately, there is also a roundabout way that demand is reduced: wages tend to be affected by high oil prices, because high-priced oil tends to lead to less employment (Figure 3). With wages not rising much, the rate of growth of debt also tends to slow. The result is that products that use oil (such as cars) are less affordable, leading to less demand for oil. This seems to be the issue we are now encountering, with many young people unable to find good-paying jobs.

If oil prices decline, rather than rise, this creates a problem for renewables and other green alternatives, because needed subsidies are likely to rise rather than disappear.

The other issue with falling oil prices is that oil prices quickly become too low for producers. Producers cut back on new development, leading to a decrease in oil supply in a year or two. Renewables and the electric grid need oil for maintenance, so are likely to be affected as well. Related posts include Low Oil Prices: Sign of a Debt Bubble Collapse, Leading to the End of Oil Supply? and Oil Price Slide – No Good Way Out.

Pitfall 6. It is often difficult to get the finances for an electrical system that uses intermittent renewables to work out well.  

Intermittent renewables, such as electricity from wind, solar PV, and wave energy, tend to work acceptably well, in certain specialized cases:

  • When there is a lot of hydroelectricity nearby to offset shifts in intermittent renewable supply;
  • When the amount added is sufficient small that it has only a small impact on the grid;
  • When the cost of electricity from otherwise available sources, such as burning oil, is very high. This often happens on tropical islands. In such cases, the economy has already adjusted to very high-priced electricity.

Intermittent renewables can also work well supporting tasks that can be intermittent. For example, solar panels can work well for pumping water and for desalination, especially if the alternative is using diesel for fuel.

Where intermittent renewables tend not to work well is when

  1. Consumers and businesses expect to get a big credit for using electricity from intermittent renewables, but
  2. Electricity added to the grid by intermittent renewables leads to little cost savings for electricity providers.

For example, people with solar panels often expect “net metering,” a credit equal to the retail price of electricity for electricity sold to the electric grid. The benefit to electric grid is generally a lot less than the credit for net metering, because the utility still needs to maintain the transmission lines and do many of the functions that it did in the past, such as send out bills. In theory, the utility still should get paid for all of these functions, but doesn’t. Net metering gives way too much credit to those with solar panels, relative to the savings to the electric companies. This approach runs the risk of starving fossil fuel, nuclear, and grid portion of the system of needed revenue.

A similar problem can occur if an electric grid buys wind or solar energy on a preferential basis from commercial providers at wholesale rates in effect for that time of day. This practice tends to lead to a loss of profitability for fossil fuel-based providers of electricity. This is especially the case for natural gas “peaking plants” that normally operate for only a few hours a year, when electricity rates are very high.

Germany has been adding wind and solar, in an attempt to offset reductions in nuclear power production. Germany is now running into difficulty with its pricing approach for renewables. Some of its natural gas providers of electricity have threatened to shut down because they are not making adequate profits with the current pricing plan. Germany also finds itself using more cheap (but polluting) lignite coal, in an attempt to keep total electrical costs within a range customers can afford.

Pitfall 7. Adding intermittent renewables to the electric grid makes the operation of the grid more complex and more difficult to manage. We run the risk of more blackouts and eventual failure of the grid. 

In theory, we can change the electric grid in many ways at once. We can add intermittent renewables, “smart grids,” and “smart appliances” that turn on and off, depending on the needs of the electric grid. We can add the charging of electric automobiles as well. All of these changes add to the complexity of the system. They also increase the vulnerability of the system to hackers.

The usual assumption is that we can step up to the challenge–we can handle this increased complexity. A recent report by The Institution of Engineering and Technology in the UK on the Resilience of the Electricity Infrastructure questions whether this is the case. It says such changes, ” .  .  . vastly increase complexity and require a level of engineering coordination and integration that the current industry structure and market regime does not provide.” Perhaps the system can be changed so that more attention is focused on resilience, but incentives need to be changed to make resilience (and not profit) a top priority. It is doubtful this will happen.

The electric grid has been called the worlds ‘s largest and most complex machine. We “mess with it” at our own risk. Nafeez Ahmed recently published an article called The Coming Blackout Epidemic, discussing challenges grids are now facing. I have written about electric grid problems in the past myself: The US Electric Grid: Will it be Our Undoing?

Pitfall 8. A person needs to be very careful in looking at studies that claim to show favorable performance for intermittent renewables.  

Analysts often overestimate the benefits of wind and solar. Just this week a new report was published saying that the largest solar plant in the world is so far producing only half of the electricity originally anticipated since it opened in February 2014.

In my view, “standard” Energy Returned on Energy Invested (EROEI) and Life Cycle Analysis (LCA) calculations tend to overstate the benefits of intermittent renewables, because they do not include a “time variable,” and because they do not consider the effect of intermittency. More specialized studies that do include these variables show very concerning results. For example, Graham Palmer looks at the dynamic EROEI of solar PV, using batteries (replaced at eight year intervals) to mitigate intermittency.2 He did not include inverters–something that would be needed and would reduce the return further.

Figure 4. Graham Palmer’s chart of Dynamic Energy Returned on Energy Invested from “Energy in Australia.” (Power point words are my explanation.)

Palmer’s work indicates that because of the big energy investment initially required, the system is left in a deficit energy position for a very long time. The energy that is put into the system is not paid back until 25 years after the system is set up. After the full 30-year lifetime of the solar panel, the system returns 1.3 times the initial direct energy investment.

One further catch is that the energy used in the EROEI calculations includes only a list of direct energy inputs. The total energy required is much higher; it includes indirect inputs that are not directly measured as well as energy needed to provide necessary infrastructure, such as roads and schools. When these are considered, the minimum EROEI needs to be something like 10. Thus, the solar panel plus battery system modeled is really a net energy sink, rather than a net energy producer.  

Another study by Weissbach et al. looks at the impact of adjusting for intermittency. (This study, unlike Palmer’s, doesn’t attempt to adjust for timing differences.) It concludes, “The results show that nuclear, hydro, coal, and natural gas power systems . . . are one order of magnitude more effective than photovoltaics and wind power.”

Conclusion

It would be nice to have a way around limits in a finite world. Unfortunately, this is not possible in the long run. At best, green solutions can help us avoid limits for a little while longer.

The problem we have is that statements about green energy are often overly optimistic. Cost comparisons are often just plain wrong–for example, the supposed near grid parity of solar panels is an “apples to oranges” comparison. An electric utility cannot possibility credit a user with the full retail cost of electricity for the intermittent period it is available, without going broke. Similarly, it is easy to overpay for wind energy, if payments are made based on time-of-day wholesale electricity costs. We will continue to need our fossil-fueled balancing system for the electric grid indefinitely, so we need to continue to financially support this system.

There clearly are some green solutions that will work, at least until the resources needed to produce these solutions are exhausted or other limits are reached. For example, geothermal may be solutions in some locations. Hydroelectric, including “run of the stream” hydro, may be a solution in some locations. In all cases, a clear look at trade-offs needs to be done in advance. New devices, such as gravity powered lamps and solar thermal water heaters, may be helpful especially if they do not use resources in short supply and are not likely to cause pollution problems in the long run.

Expectations for wind and solar PV need to be reduced. Solar PV and offshore wind are both likely net energy sinks because of storage and balancing needs, if they are added to the electric grid in more than very small amounts. Onshore wind is less bad, but it needs to be evaluated closely in each particular location. The need for large subsidies should be a red flag that costs are likely to be high, both short and long term. Another consideration is that wind is likely to have a short lifespan if oil supplies are interrupted, because of its frequent need for replacement parts from around the world.

Some citizens who are concerned about the long-term viability of the electric grid will no doubt want to purchase their own solar systems with inverters and back-up batteries. I see no reason to discourage people who want to do this–the systems may prove to be of assistance to these citizens. But I see no reason to subsidize these purchases, except perhaps in areas (such as tropical islands) where this is the most cost-effective way of producing electric power.

Notes:

[1] In 2013, the total amount of subsidies for renewables was $121 billion according to the IEA. If we compare this to the amount of renewables (biofuels + other renewables) reported by BP, we find that the subsidy per barrel of oil equivalent in was $48 per barrel of oil equivalent. These amounts are likely understated, because BP biofuels include fuel that doesn’t require subsidies, such as waste sawdust burned for electricity.

[2] Palmer’s work is published in Energy in Australia: Peak Oil, Solar Power, and Asia’s Economic Growth, published by Springer in 2014. This book is part of Prof. Charles Hall’s “Briefs in Energy” series.

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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1,278 Responses to Eight Pitfalls in Evaluating Green Energy Solutions

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  3. interguru
    interguru says:

    Google has spent much time and effort to make renewables cost competitive with fossil fuels. They recently stated that it was an impossible goal, and cancelled their project. Here is a detailed explanation by tow of the engineers

    What It Would Really Take to Reverse Climate Change

    Today’s renewable energy technologies won’t save us. So what will?

    http://spectrum.ieee.org/energy/renewables/what-it-would-really-take-to-reverse-climate-change

    • Don Stewart says:

      Dear inter guru
      Thanks for the link. I read this near the end of their article:
      ‘In carbon storage, bioengineers might create special-purpose crops to pull CO2 out of the air and stash the carbon in the soil.’

      It would doubtless comer as a shock to the two authors, but such ‘special-purpose crops’ were invented long ago by Mother Nature. Perennial grasses fit the bill nicely. They sequestered enormous amounts of carbon as they built the topsoil that we call the Midwest. Human have used various methods to release the carbon from the soil and put it into the air. We know how to put it back in the soil.

      The problem is, the method isn’t patentable. So Google couldn’t make a lot of money doing it.

      Don Stewart

      • Quitollis says:

        Don, do you think that there would need to be some compromise between the need to restore the Mid West to perennial grassland and the farming needs of the masses or would the two be mathematically compatible? In other words, can planet earth feed 7B and still soak up the carbon in your estimate? QT

        • Don Stewart says:

          Dear Quitollis

          There are a very great number of moving parts involved in any answser to your question. For a teaser, see Albert Bates current article on the Lima conference:

          http://peaksurfer.blogspot.com/2014/12/sausage-making-in-lima.html

          He just hits the subject a glancing blow, and indicates that ‘serious people’ are not interested in some solution which involves a bunch of farmers doing the right thing. Serious People are interested in proprietary solutions surrounded by patents which can be turned into money by giant corporations.

          First, a thought experiment. The Ogallala irrigated lands should not be producing corn ethanol, for all the reasons that have been discussed here. They should be returned to grasslands, and would be ideal for growing the perennial grasses which sequester the carbon. They need to be grazed by cattle, because grass and herbivores have co-evolved. The areas of the Midwest which get adequate rainfall need to be producing human food rather than the corn and beans which are used by confined animal feeding operations. That doesn’t mean that there will be zero animals on that land. More likely, it will be an integrated crop and animal rotation. These integrated rotations are the kinds of farming which were studied by the decade long Iowa State trials.

          The kinds of farming which produced the Dust Bowl should be way back in the rear view mirror. We now know how to farm flat land to produce crops sustainably. Hilly land in the well-watered parts of the country should be either grassland with grazing animals or forests.

          I recently quoted the statistic that the green leaves of cowpeas produce 9 times the calories (and many times the protein and micronutrients) as the seed: black eyed peas. The grains or beans that we prefer to harvest are an order of magnitude less efficient in their use of sunlight. David Kennedy’s books reflect the lessons he has learned over many years of his own land in Kentucky and his 40 years of experience working with very poor people in the South.

          Bill Clinton, reflecting on the work of his foundation in Africa, ruefully commented that it isn’t so much the ability to grow food as it is the ability of the richest billion to hijack all the land to grow biofuels and, thus, starve the poorest billion.

          Don Stewart

          • Stefeun says:

            Excellent comment, Don.
            Love your sentence about the “serious people”, spot on.
            Re your conclusion (Clinton’s (??) comment about BigAg hijacking land for biofuels) I’m preparing a short summary with a few figures about landgrabbing, that I’ll post here soon.

          • 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.
            Gail Tverberg says:

            I hadn’t heard this:

            Bill Clinton, reflecting on the work of his foundation in Africa, ruefully commented that it isn’t so much the ability to grow food as it is the ability of the richest billion to hijack all the land to grow biofuels and, thus, starve the poorest billion.

            Somehow, the whole idea of “renewables” and how we can save ourselves with them, has been highjacked into a way corporations can get rich, and the rich world can have more.

        • InAlaska says:

          The great plains and perennial grasslands were only a healthy ecosystem with the interaction of millions of herbivores (bison) that churned up the soil and recycled nutrients via their manure.

    • “Google has spent much time and effort to make renewables cost competitive with fossil fuels. They recently stated that it was an impossible goal, and cancelled their project.”

      No, that is not what they said at all. They concluded that, even if renewables could be brought down to the price of coal, it would not solve carbon emissions. The reason is that the existing coal plants would keep running; the only way it could work is if renewables were so cheap, they drove coal plants out of business.

      They then go on to state the current technology cannot achieve that goal, and they recommend power companies investing along the Google model, to accelerate innovation. Basically, they are technotopian and believe the technological singularity will save us.

      Of course, most of the “green activists” or whatever they call themselves, instead of trying to make more affordable renewables, want to simply tax coal up to the price of renewables.

      • Don Stewart says:

        Dear Matthew Krajcik

        Joe Romm recently wrote an article saying that no serious people think that solar or wind electricity can be produced at a low enough price to drive a coal fired power plant out of business. He refers back to his work in government.

        Silicon Valley, and Google in particular, like to use the word ‘disruptive’…completely change the landscape. The two Google engineers end with a call for the energy industry to invest in Disruptive Research. Yet Robert Rapier wrote an article prompted by the bankruptcy of a Silicon Valley backed biofuels company, pointing out that the energy industry is a very well expolored territory. Exxon and Shell are not stupid. They have invested money and, mostly, pulled out. Rapier argues that Silicon Valley is a victim of its own hubris, and overreliance on slogans such as ‘disruptive change’.

        Don Stewart

  4. MG says:

    When I read websites concerning the collapse after peak oil, peak resources etc., the people usually write about the food production as the main problem. But there is one even bigger problem: clothes and shoes.

    Today, many of the former industrial countries are totally dependent on the clothes and shoes from countries like China, Bangladesh, Vietnam etc. Many former industrial nations do not experience any problems regarding the self-sufficiency in food. But almost all of them are not self-sufficient regarding the clothes and shoes.

    How much agricultural land would be needed to provide clothes for todays population? Our todays high-tech clothes have features that the clothes of the previous non-industrial centuries did not have. The lower quality clothes would completely change are attitudes, habits, lifestyles, work, roles etc.

    Has anybody tried to analyze this special particular post-collapse problem?

    • Don Stewart says:

      Dear MG
      As someone who used to live in St. Louis (First in Shoes; First in Beer; Last in the American League (baseball)), I think about shoes. The US is doing fine with beer and can do without baseball. One of James Howard Kunstler’s novels deals with the shoe issue. People make sandals out of old tires.

      If you look at accurate historical pictures of Native Americans, you see that their foot ware was pretty primitive. Europeans seemed to wrap their feet up with rags.

      I can see many years of scavenging clothing, but shoes need to fit. So I think foot ware is an issue.

      Don Stewart

      • Unless you live in an area with frequent sub-zero weather, you do not need shoes to survive. I’m in the Pacific Northwest, and there’s a guy here who never wears shoes. Walks around barefoot everywhere. Rides a kayak into town to minimize time walking on asphalt. It is not ideal, but it is possible.

        In colder climates, boots are obviously necessary. Once people move out of cities into the country side, boots and shoes wear out much slower on grass and dirt than on cement and asphalt.

        The rest of clothes mostly wear out due to using mechanical washer and dryer combos. Hang drying clothes, which will be a necessity anyways, will greatly extend clothing life. Washing clothes less frequently also helps; there are many people who believe blue jeans should never be washed, for example.

      • MG says:

        Dear Don Stewar,

        I live in the area close to the Czech town Zlin, where the Bata shoes empire originated (http://en.wikipedia.org/wiki/Bata_Shoes) and at the same time in the area of the former heart of the Slovak textile industry.

        I see the trend of lower and lower quality as regards especially the clothes: not so long ago the most renown world brands relocated their production to cheaper countries in order to keep the costs down. And preserve the quality. Now, even those most famous world brands are not able to produce the same good quality as before. Probably, the rising wages in the new, now already formerly cheaper countries (and other costs, too) force them to economize. When you want some sturdy clothes, you have to pay more and more. What you get in the shopping centers are clothes which are mostly for “puppets”, not for real people, as these clothes are less and less durable, made from ever thinner materials. These clothes are more and more for image, but not for real life.

        As regards the shoes, finding a good pair of sturdy shoes with modest look in those shopping centers is not always possible. E.g. ten or fifteen years ago you had no problem buying sturdy leasure shoes sold by some of the world sportwear brands that were made from artificial leather of good thicknes. Now you get leasure shoes that are mostly made from thinner and thinner materials or the artificial leather is replaced by plastics. This move from leather, through artificial leather to plastics is the move to lower and lower quality.

      • Creedon says:

        After food, clothing needs to be the #2 concern as we enter a post collapse world. So we are going to live in a world where we wear tire tread strapped to our feet and farm with wooden sticks. Not many of us would survive such a world. John L Casey says that we are entering a new solar minimum, to reach it’s coldest about 2030 at the same time that oil runs out. In 2030 we will be wearing tire treads on our feet, farming with sticks, have no oil and living in the coldest climate of the last 200 years in isolated small economic communities. Many will die.

      • 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.
        Gail Tverberg says:

        I understand that in Norway, getting good enough foot ware to withstand the cold was a problem. Just a layer of animal skins was not enough to keep out the cold.

    • Quitollis says:

      better stock up on Gucci now

      • Creedon says:

        According to the IMF, China is now officially the world’s largest economy, when measured by Purchasing Power Parity, which is apparently the state of the art in measuring economies. http://peakoil.com/consumption/its-official-america-is-now-no-2 We have just driven Russia and it’s large oil and natural gas supply into the China, Asia camp. JMG calls the rulers of declining empires ‘The Senility of the Elites.’ The rulers in the state department and pentagon are operating by questionable motives.

  5. Stefeun says:

    President Vladimir V. Putin of Russia announced today that Russia is dropping plans for the South Stream pipeline and instead will expand a pipeline through Turkey.

    NY Times presents it as:
    “It was a rare diplomatic defeat for Mr. Putin, who said Russia would redirect the pipeline to Turkey. He painted the failure to build the pipeline as a loss for Europe and blamed Brussels for its intransigence.
    The decision also seemed to be a rare victory for the European Union and the Obama administration, which have appeared largely impotent this year as Mr. Putin annexed Crimea and stirred rebellion in eastern Ukraine.
    (…)
    If there was one winner it was Turkey, which, along with China and other energy-hungry developing nations, has been exploiting the East-West rift to gain long-term energy supplies at bargain prices.”
    http://www.nytimes.com/2014/12/02/world/europe/russian-gas-pipeline-turkey-south-stream.html?_r=0

    Globalresearch have slightly different opinion:
    “From South Stream to “Turk Stream” Pipeline: Huge Win for Turkey, Big Win For Russia, Historic Loss for EU.
    (…)
    Turkey also made a killing. It’s not only the deal with Gazprom; Moscow will build no less than Turkey’s entire nuclear industry, apart from increased soft power interaction (more trade and tourism).
    Most of all, Turkey is now increasingly on the verge of becoming a full member of the Shanghai Cooperation Organization (SCO); Moscow is actively lobbying for it.
    This means Turkey acceding to a privileged position as a major hub simultaneously in the Eurasian Economic Belt and of course the Chinese New Silk Road(s).
    (…)
    So here’s the bottom line; Russia sells even more gas – to Turkey; and the EU, pressured by the US, is reduced to dancing like a bunch of headless chickens in dark Brussels corridors wondering what hit them. The Atlanticists are back to default mode – cooking up yet more sanctions while Russia is set to keep buying more and more gold.”
    http://www.globalresearch.ca/from-south-stream-to-the-turk-stream-pipeline-huge-win-for-turkey-big-win-for-russia-historic-loss-for-eu/5418312

    I didn’t notice any reference to currencies in above articles; I guess it won’t be in USD.
    So things are moving, and -to really understand what it means- I think we should keep an eye on Turkey’s relationship with NATO, and see if further agreements are taken by Turkey with China or Saudi Arabia, or..? Being such a huge crossroads is a dangerous place to be, but can also be very powerful. Wait and see…

    • InAlaska says:

      That’s one way to look at it. Another is that Turkey then becomes the major hub supplier of natural gas to Europe via pipelines and tankers. The premium its customers will pay will enrichen Turkey and keep Europe from catastrophe. Russia, Turkey, Europe everybody still wins.

      • Don Stewart says:

        Dear InAlaska and Stefeun
        The behavior of Europe relative to North Stream and South Stream has never made any sense to me. Perhaps one of you can explain.

        Russia obviously wanted to get their distribution pipes to western Europe without subjecting them to the treatment that might very well be inflicted by Poland and Ukraine. So North Stream was built through the Baltic and South Stream was to have been built through the Black Sea. If I lived in western Europe, I would be quite alarmed if my gas was coming through Ukraine…a very unstable country with a history of larceny. Why anyone in Europe would think that preventing Russia from building a more secure distribution network is somehow a ‘victory’ for Europe is a mystery to me. It seems that Russia is simply taking the gas that used to go to Europe and rerouting it to China and Turkey. It costs them some money, but it is better than dealing with the irrational leaders in Brussels.

        Am I missing something? Don Stewart

      • Quitollis says:

        Bulgaria loses half a billion dollars per year in transit fees because of the new deal. Their euro sceptics are very unhappy about this, they say that the EU and the US has used them as geopolitical pawns. Perhaps Bulgarians will begin to rethink the benefits of EU membership. East-West tensions tend to put strains on the border countries.

        http://sputniknews.com/business/20141204/1015487606.html

        quote:

        The chairman of Bulgaria’s Attack party blames the United States and the European Union for using Bulgaria as a pawn in geopolitical games against Russia. He states that Sofia had to terminate the construction of the South Stream pipeline under Washington’s pressure.

        MOSCOW, December 4 (Sputnik) — Bulgaria could lose 400 million euro ($492 million) per year from closure of the South Stream gas pipeline as Washington and Brussels use the country as a “pawn,” the chairman of Bulgaria’s Attack party Volen Siderov told Sputnik on Thursday.

        “Supine submission to Brussels and Washington leads to no good. As a result of this policy Bulgaria could lose 400 million euro per year,” Siderov told Sputnik in an interview.

        The party chairman also added that “Brussels and Washington have started a rough geopolitical game against Russia, using Bulgaria as a pawn, as a tool in this game.”

        Siderov told the agency that several months ago, Bulgaria received “a warning” from the US ambassador to the country and a delegation of senators led by John McCain. The country’s then Prime Minister Plamen Oresharski was “literally forced to terminate the construction of the South Stream. Bulgaria obeyed,” the politician said.

    • 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.
      Gail Tverberg says:

      You are right–this can be interpreted many different ways. I am not sure anyone is will come out well in the years ahead, but dropping plans for the South Stream pipeline makes it less likely that Europe will come out well. We will have to wait and see.

      • InAlaska says:

        Turkey is a member of NATO and so sending oil to Turkey is a way for all sides to save face. The Ukraine Problem is bypassed, Russia gets access to the stable markets of Europe via the pipeline network Turkey-Bulgaria-Eastern Europe, Europe gets the gas it needs, Turkey gets all sorts of benefit. This is a rational decision and underscores the FACT that these are rational actors acting in self interest NOT some apocalyptic End Game.

        • Quitollis says:

          Another perspective, the EU and Russia are increasingly hostile and Putin is weakening EU unity by diverting the gas to Turkey.

          http://chersonandmolschky.com/2014/12/06/south-stream-sow-mow/

          quote:

          Finally, the third group of countries are those who will suffer most and directly, Bulgaria and Serbia above all. Bulgaria will lose the $750 mln a year it could gain from gas transit. For Bulgaria, who entered the EC trap a moderately developed country- exporter of fruits, vegetables, wine and certain types of machinery to Russia and neighboring countries and just a decade after breathing “the air of liberty” has become a net importer of fruits and vegetables, a poverty-stricken third world country with the unemployment over 20% (in the previously industrial North, unemployment reaches 60%), and with the population that dwindled from 9 million to 7 million in just seven years, $750 mln a year is an astronomic sum.

          Serbia wanted Russian gas so badly that it even revolted against the EC sanctions on Russia and now accuses Putin of almost a treachery. Serbian losses from the South Stream stoppage look really serious, even more serious than Bulgarian ones: $500 mln for transit, thousands of lost working places, about $5 bln of direct and indirect investment losses… But let’s not forget that this same Serbia refused to sign a final agreement on South Stream during Putin’s visit to Beograd in October 2014. Yes, Serbia resisted EC sanctions on Russia- but let’s be honest, Brussels did not press it too hard knowing very well that the “key country” is Bulgaria and knowing also that the political elite of this country will do anything Washington and Brussels order. There was simply no need to pressure Serbia too hard.

          So now there are no triumphing cries in the Bulgarian and Serbian media; Russia will not be in Bulgaria and Serbia- but instead, it will be Turkey, who happily agreed to host the alternative route of the South Stream, with a gas hub on its borders with the EC.

          And Russia explained its position very clear: if you guys want to see the South Stream passing through your countries – YOU go to Brussels and put your cards on the table.

          With this move Russia has driven a very big nail into the “European unity”, and I shall not be surprised if Bulgaria, Hungary and Serbia join Britain in leaving the EC. Russia does in Europe what Europe and the US did in Ukraine and planned to do in Russia: splitting and weakening. And if it happens, Europe will not have the right to cry and complain: what you sow, you shall mow.

          • Adam says:

            > I shall not be surprised if Bulgaria, Hungary and Serbia join Britain in leaving the EC.

            EC or EU? Britain has not left the EU. Serbia was never a member – it is however a candidate country to join the EU. Candidate countries have applied to the EU and been accepted in principle. When they will actually join the EU (if at all) is not yet known. However, any that do join will be required to introduce the euro, if they meet the convergence criteria.

  6. Don Stewart says:

    Dear Gail
    Here is a scenario which could result in a massive reduction in population very quickly.

    According to George Mobus, perhaps one third of the world’s people have dormant TB bacteria. About 10 percent of the infected people will develop TB. But among those who have HIV compromised immune systems, 30 percent will develop TB. We also know that TB is increasingly drug resistant, and that treating TB requires the functioning of a modern health care system.

    Now assume that the events you prophesy happen, and the modern health care system collapses and the global food system collapses. The collapse of the global food system will compromise immune systems just as surely as HIV will do so.

    So we have 3 billion people with dormant TB. They are overwhelmingly in poor parts of the world. Many are crowded into third world supercities. TB is highly infectious. So perhaps we have about a billion people who are currently infected but not active, who become active as they develop compromised immune systems. These billion infect other people, who also have compromised immune systems. Before you know it, you are talking about serious numbers of deaths.

    Are there any alternatives? Well…the governments could take the land held by the multinationals to grow crops to ship to the rich countries and distribute it to poor people. The poor people could implement the gardening strategies outlined by David Kennedy for growing greens in both the tropics and the temperate zone. Leafy greens are the immune boosters par excellance.

    The new farmers would face many challenges, not the least of which is adjusted expectations. Many of them would probably go right back into the cities, just as people left rural England for the pestilences of London.

    Another alternative is that governments react calmly as the inevitability of decline becomes apparent. The governments engage in triage, and manage to save public health services and also to increase the amount of leafy greens people eat in order to boost immunity. (I have heard that if everyone in the US tried to eat the My Plate recommendation for fresh fruit and vegetables, only 3 percent of the population could be accommodated.) The only realistic way to boost greens consumption is to multiply home gardens by a large factor. Mathematics says it can be done, but, just as with the poverty stricken people in Asian and African cities, the psychological adjustment would be severe.

    Don Stewart
    PS There are, of course, other reasons why people might die besides TB.

    • jarvis9077
      Jarvis says:

      Good advice Don Just wondering – am I the only one collecting a supply of heritage seeds?

      • Jan Steinman – http://www.EcoReality.org/wiki/User:Jan_Steinman
        Jan Steinman says:

        “am I the only one collecting a supply of heritage seeds?”

        “Collecting” isn’t good enough.

        Are you planting them out and keeping the resulting seed?

        Some seeds (notably, beans and pulses) don’t last more than a year or two, while others can go many times as long.

      • InAlaska says:

        No. There are others.

    • 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.
      Gail Tverberg says:

      We don’t know how things will end, but we do know that epidemics have been involved in a lot of population reductions in the past. We in the West seem to think that doctors can cure almost every disease, but that really isn’t the case, especially if immunity is compromised for some reason. If population declines, it would not be surprising if diseases play a major role.

  7. Don Stewart says:

    Dear Quitollis
    I’ll try to explain my ideas about health issues using this article as a springboard:
    http://drhyman.com/blog/2014/11/25/chronic-stress-creates-hormonal-havoc/

    I’ll also refer back to Kelly McGonigal’s TED talk where she apologized for demonizing stress. It turns out that some people thrive under stress.

    I was watching an Ingmar Bergman movie about the frustrations of the human condition, thinking that he was under the stress of both making movies and his complicated personal life, and how he lived to be 87 (I think).

    My homemade conclusion is that the stress of creating something, overcoming obstacles, is not at all like a helpless rat in a cage getting random shocks. That’s one of the reasons I promote the idea that a family should produce some of the essentials that it needs…as opposed to being utterly reliant on something called ‘the market’. Better to wrestle with the cabbage loopers than the Federal Reserve or the idiots in the House of Representatives passing war resolutions about Russia.

    Let’s suppose that I am correct in dividing stress into two different categories: one destroys health while the other is a creative response to the challenges of life. Then what does a statistical study of ‘stress’ actually tell you?

    As for the gut bacteria. (Full disclosure. An in-law of mine is a gut bacteria researcher.) It seems to me that the crucial issue may be ‘leaky gut’. That is, chemicals in the food we eat is getting into the body proper through the gut lining when it should not be. The great increase in the production of Frankenfoods might lead us to think along those lines. Whether the movement of Frankenfoods across the gut lining is a function of bad bacteria or some more mechanical malfunction, I simply don’t know.

    Don Stewart

  8. Don Stewart says:

    Dear Gail and All
    Here is a ‘green solution’ which may illustrate some of the opportunities and issues in the field of food.

    ‘According to James Duke in his Handbook of Legumes of World Economic Importance, growing cowpeas for leaves can produce 9 times more calories, 15 times more protein, 90 times more calcium, and thousands of times more vitamin C and beta-carotene, than growing the same crop for seed.’ (A typical seed might be called a black-eyed pea.)

    This is from the excellent book Eat Your Greens by David Kennedy. Kennedy has many very practical ways to increase the harvested human nutrition from green leaves, which are the magical vehicles which create food out of air and water and sunshine.

    The issues which must be dealt with are also covered in the book. While the straightforward way to maximize nutrition is to simply eat the leaves, and while most of our primate cousins would do just that, the human gut is not designed to subsist on a diet of green leaves. If we don’t eat ANY green leaves, which most Americans don’t, we will have all sorts of chronic diseases. But we can’t very well eat 20 pounds per day of green leaves, as a gorilla might do.

    The issue, then, for humans is how to get some concentrated calories. At the present time, we get them overwhelmingly from seeds (e.g., corn, wheat, soybeans, rice, etc.) and roots and tubers (potatoes, sweet potatoes, yams, etc.). David Kennedy covers two methods for turning green leaves directly into more calorie dense food. The first is drying and grinding, which can be accomplished by a solar dryer and hand grinding, in the simplest case, and industrial drying and industrial grinding and incorporation into industrial, packaged food in the most complex case. The second method is the production of a leaf concentrate by a process of juicing and making curd and then using or preserving the curd. Kennedy thinks that making concentrate is good therapy, but believes it is best done at the industrial scale.

    The first thing to notice is those things which are probably NOT limiting factors. Cowpeas host the bacteria which fix nitrogen, so a lack of industrial nitrogen is NOT an issue. If green leaves are our source of calories as opposed to the seeds, we can grow 9 times more calories on the same land used to produce the black-eyed peas. So calories and protein and micro-nutrients are NOT the critical issue. The refusal of most people to eat what they need to eat MIGHT be the most pressing problem.

    So, let’s suppose that we want to make a solar dryer and grind some leaves. My daughter made a solar dryer out of a salvaged paper towel dispenser and disposal receptacle. Broadly, we need some industrial detritus to make most solar dryers. Direct exposure to the sun is NOT a good idea. So we need some rather simple infrastructure in a shaded spot.

    Grinding used to be accomplished by women using two rocks and lots of repetitive motion. The result was women with back problems and teeth which were ground down by small particles of rock.

    I have, in previous comments, tried to make the point that the survival of modest sections of the industrial world will be a very big help…referring to the Pareto Principle that 20 percent of anything generates 80 percent of the value, and sometimes its more like 10 and 90.

    At any rate, I hope this helps to clarify some of the issues which will become apparent as we descend the energy curve.

    Don Stewart

    • 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.
      Gail Tverberg says:

      Thanks!

      I have a new post ready, but I am going to wait until Sunday evening to put it up. With everyone very busy over the weekends leading up to Christmas, not many will have time to read a post during the weekend, and I won’t have much time to respond.

    • Don Stewart says:

      Dear Stilgar
      The article is a cut and paste from Chris Martenson’s article that I referred to. I would again like to point out that the second part of the article by Chris pointed out that other essential commodities such as coal and iron ore have fallen in price comparably, or even more, than oil. Therefore, the explanation required is probably much broader than oil alone…or else a fundamentalist explanation that with conventional oil on a plateau, and net oil decreasing, the entire global economy must necessarily enter recession and deflation.

      Don Stewart

      • Jan Steinman – http://www.EcoReality.org/wiki/User:Jan_Steinman
        Jan Steinman says:

        “or else a fundamentalist explanation that with conventional oil on a plateau, and net oil decreasing, the entire global economy must necessarily enter recession and deflation.”

        What’s wrong with that explanation? Makes perfect sense to me!

    • 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.
      Gail Tverberg says:

      It is not just the banks that need growth, however. The system we live in with species competing against each other requires that humans compete with other species, including germs. This arrangement doesn’t allow much room for steady state or small shrinkage.

      • Don Stewart says:

        Gail
        Just a quibble on your germ theory.

        The ‘hottest topic in current research’ (according to some doctors), is the role of gut health in chronic disease. Some speculate that bad gut health is a factor in all chronic disease. And how do we get bad gut health? Largely by taking advantage of fossil fuels to create a lifestyle that we did not evolve to live in.

        If humans were gifted with wisdom, we could figure out how to live with far less fossil fuels and chemicals and all that sort of stuff and be healthier than we are now. We would be living much more on a sunlight budget, with fossil sunlight used to extend and manage a system basically driven by sunshine.

        Don’t hold your breath…Don Stewart

        • Quitollis says:

          Don, on the food and evolution thing, scientists recently discovered that Central Europeans (Hungary) remained lactose intolerant for 5000 years after animals were farmed in Europe.

          I don’t know what the answer is but I guess that it may be that Neolithic technology like cheese making stopped them from adapting to raw milk. Also the Neolithic was a time of huge population expansion; farming could support a much higher population density than hunter-gathering and farmers could gradually move further north to use more land. Thus milk never became vital for survival, they never bottlenecked, and lactose tolerance was not selected for.

          On the other hand, lactose tolerance peaks in Britain and Scandinavia, the last regions to receive farming and it is lowest in SE Europe and the Near East, the urheimat of farming. It may be that farming was harder in the climate of the far north, there were times that we depended on milk and so we adapted to it.

          I am not sure what any of it means but it may be that technology can hinder adaptation and a harsh climate can facilitate it. Also it cannot be assumed that we would be adapted if the technology is lost. It may even be that we have grown genetically “flabby” over thousands of years of agriculture, and now industrialism, and that we would be (I would imagine) less adapted to hunter-gathering than we were at the end of the Mesolithic and before the spread of farming.

          I can only assume that our adaptation will accelerate by bottleneck after the collapse.

          As an aside, the genetic study of ancient skeletons has also reaffirmed the old anthropological narrative of Mesolithic northern-like hunter-gathers, Meds gradually flooding across Europe from the south east during the Neolithic and then the expansion of the northern-like Indo-Europeans, probably from the eastern steppes, during the Bronze Age. This is a great time for genetic anthropology.

          http://www.sciencedaily.com/releases/2014/10/141021125935.htm

          quote:

          By analyzing DNA from petrous bones of ancient Europeans, scientists have identified these peoples remained intolerant to lactose (natural sugar in the milk of mammals) for 5,000 years after they adopted agricultural practices. The scientific team examined nuclear ancient DNA extracted from thirteen individuals from burials from archaeological sites in the Great Hungarian Plain. The skeletons sampled date from 5,700 BC (Early Neolithic) to 800 BC (Iron Age).

          […]

          “Our findings show progression towards lighter skin pigmentation as hunter and gatherers and non-local farmers intermarried, but surprisingly no presence of increased lactose persistence or tolerance to lactose” adds Professor Pinhasi.

          “This means that these ancient Europeans would have had domesticated animals like cows, goats and sheep, but they would not yet have genetically developed a tolerance for drinking large quantities of milk from mammals,” he says.

          According to Professor Dan Bradley from the Smurfit Institute of Genetics, Trinity College Dublin, co-senior author on the paper, “our results also imply that the great changes in prehistoric technology including the adoption of farming, followed by the first use of the hard metals, bronze and then iron, were each associated with the substantial influx of new people. We can no longer believe these fundamental innovations were simply absorbed by existing populations in a sort of cultural osmosis.”

          http://www.frontlinedesk.com/201410498-europeans-start-drinking-milk-ancient-human-skulls-revealed/

          http://cdn.foodbeast.com.s3.amazonaws.com/content/wp-content/uploads/2012/11/Global-Lactose-Intolerance.png

          • Don Stewart says:

            Dear Quitollis

            I’ll try not to say something stupid.

            I find a striking parallel between what we have recently learned in soil science and what we are currently learning about human health. For example, we now know that one of the most important things in farming is feeding the soil, rather than ‘feeding the plant’. And so we do things such as promote the ‘liquid carbon pathway’ as espoused by Christine Jones in order to have healthy soil microbes and the larger predators which live on the microbes. Similarly with humans, we now know that most of the human immune system is in the gut…which makes sense because it is in the gut that we have to sort out what it is we want to let into the body and what it is we want to excrete directly. So keeping the gut happy, which means keeping the microbes in the gut happy, is just as critical as keeping the microbes in the soil happy. A decade ago I read a supposedly funny story about a Harvard commencement speech by some eminent person who said that regular bowel movements and comfortable shoes were the secrets to a happy and productive life. That doesn’t sound funny or ridiculous anymore.

            There was a TED talk this week by an MD at the UCLA Medical Center who talked about her experiences working at the Los Angeles zoo. She says that it was a wakeup call for her to actually physically work on animals which were identical in terms of the structure of their bodies to the humans she worked on. Sometimes, she did the same procedure in the morning at UCLA that she did in the afternoon at the zoo. She says that taking a class on evolution is not the same as doing the same surgery on a zoo animal and a human patient.

            She was pleading for more MD learning FROM vets. For example, she says that the vets learned back in the 1990s how to treat mothers who are ignoring their children. The answer is to give them oxytocin….which usually elicits good motherly behavior. Not only MDs, but things like courts and public opinion will condemn a human mother who is neglectful, when the answer is probably not Original Sin (Eve eating an apple), but an imbalance of hormones.

            If we reflect a little on the difference between vets and MDs (being neither, I can speak with great authority on the subject), it seems to me that vets are more free to experiment. A zoo animal is something valuable, but it isn’t a human. We don’t believe that God breathed life into a zoo animals exactly the same way He breathed life into a human. If you are Barack Obama, you believe that God saved his best breath for Americans. The upshot is that vets probably make more fatal mistakes than MDs, but also that they learn faster than MDs because their rate of experimentation is greater.

            All of this is actually an argument for thinking in Systems. Scarcity is both a curse and a blessing. Those living in the tropics or even in sub-tropical regions tended to have more choices in terms of food. But those in the harsh environments adapted to animal milk, because it proved to be a good source of calories when calories were scarce. I speculate that the Hungarians were relatively well fed and the population was not too dense for their technology and resources…so why go through the pain of changing? Most change happens not because we intellectually realize that something might make sense, but because we are feeling some pain and want to relieve it.

            In this space, I have tried to point out some of the downsides to fossil fuel abundance. For example, we are healthiest when we live by the rhythms which are built deep into our physiology. We respond to things such as sunrise and sunset at the physiological level. Yet it is very common here to claim that there is simply no alternative to energy sources which work when it is dark. My argument is that, first, we probably can’t have energy sources which work in the dark very much longer, and, second, going back to a system where we sleep when it is dark is likely to have very positive effects on health. For one thing, going to bed early encourages sex, which releases oxytocin, which we know is the cure for motherly neglect, as well as a host of other things.

            I don’t think I have ever held out the notion of returning to hunting and gathering as a realistic alternative for very many people InAlaska might be able to execute that plan. Well over 99 percent of us can’t. The easily killed big animals are all gone and won’t come back. The exquisite knowledge that the hunters and gatherers had and transmitted to their children is mostly vanished. It would be very difficult for gardeners to return to a stone age technology, which is why I have emphasized the value of keeping SOME technology alive. I usually take Pareto’s name in vain.

            Thanks for you comments and the information….Don Stewart

            • Quitollis says:

              Interesting stuff Don. Intestinal bacterial sounds like a complicated subject. This stuff is new to me. I cant say that I know much about the different bacteria and how to promote them. I just read this. It says that eating is a factor but it doesn’t say how great a factor or what sorts of things one should/ not eat. (I am not sure that I am up for a fecal implant lol)

              http://genetics.thetech.org/gut-bacteria-another-risk-factor-heart-attack

              quote:

              Just like which genes people inherit from their parents, a person doesn’t get to decide which bacteria end up in their guts. The bacteria in their gut start to appear during birth, and right after, from their mother, their environment, and what they eat.

              Since most family members tend to live together, in the same environment, they usually have similar bacteria inside of them. But a person’s environment isn’t the only thing that determines which bacteria they get, their genes play a part too.

              Identical twins, who have the same DNA, share more of the same kinds of bacteria than fraternal twins, who have different DNA. This means that a person’s genes have some influence on which bacteria end up living in their gut. / unquote

              It references this following study, which argues that our gut bacteria mainly depends on our own genome. Those, related, with a similar genome have similar gut bacteria while spouses with similar environments and eating habits have dissimilar bacteria. I will have to research the matter further to get a better idea.

              http://informahealthcare.com/doi/abs/10.1080/089106001750462669

              The Host Genotype Affects the Bacterial Community in the Human Gastronintestinal Tract

              Quote:

              The gastrointestinal (GI) tract is one of the most complex ecosystems consisting of microbial and host cells. It is suggested that the host genotype, the physiology of the host and environmental factors affect the composition and function of the bacterial community in the intestine. However, the relative impact of these factors is unknown. In this study, we used a culture-independent approach to analyze the bacterial composition in the GI tract. Denaturing gradient gel electrophoresis (DGGE) profiles of fecal bacterial 16S rDNA amplicons from adult humans with varying degrees of genetic relatedness were compared by determining the similarity indices of the profiles compared. The similarity between fecal DGGE profiles of monozygotic twins were significantly higher than those for unrelated individuals (ts = 2.73, p1-tail = 0.0063, df=21). In addition, a positive relationship (F1, 30 = 8.63, p = 0.0063) between the similarity indices and the genetic relatedness of the hosts was observed. In contrast, fecal DGGE profiles of marital partners, which are living in the same environment and which have comparable feeding habits, showed low similarity which was not significantly different from that of unrelated individuals (ts = 1.03, p1-tail = 0.1561, df=27). Our data indicate that factors related to the host genotype have an important effect on determining the bacterial composition in the GI tract.

            • Don Stewart says:

              Dear Quitollis
              I will respond with mostly ignorance, but perhaps something useful. In general, I think that the drift of science and medicine is to recognize that gene expression is considerably more important than raw genes. If we consider that a gene is a formula for making a protein, then it should not surprise us that we share genes (formulas) with other living things…as in the story about the UCLA doctor who doubles as a vet. So the real action would tend to be in the regulatory genes and things such as epigenetics which turn genes on and off and events such as trauma which change gene expression and even mental stress which can turn genes on and off.

              The statement that something is ‘ statistically significant’ doesn’t equate with the statement that some relationship is ‘important’.

              I am not a student of the ‘fecal implant’ literature. If such interventions are effective, then it means that microbes from another person’s gut can be fruitfully transplanted into the patient’s gut. Which implies that there is a lot more to the story than that one’s genes determine microbes in the gut.

              Half one’s genes come from the father, half from the mother. Yet the microbes one picks up during passage through the birth canal all come from the mother (I think). So a person has half the genes from the mother, but all of the microbes picked up in the birth canal are from the mother. Which would make a mechanical relationship dubious, I think.

              I suspect that a lot of the current marketing of substances such as pro-biotics is not very well based in science. I would refer people to the soil science talk that I mentioned earlier in this article. The scientist said that when she started graduate school, the assumption was that we knew about 20 percent of what there was to know about soil microbes. Now, she puts the fraction at half of one percent. As we have learned a little, we have begun to realize how little we actually know.

              It reminds me of nutritional research from a couple of decades ago. Antioxidant efficacy was measured in units of Vitamin C equivalent. But the Vitamin C might only account for a percent or two of the antioxidant effect of a particular food. The rest of the effect was ‘unexplained’ or ‘synergistic’ or some other weasel-word.

              Our genes have not changed in the last one hundred years. Yet we are currently witnessing an explosion in auto-immune diseases. Since the heart of our immune system is in our gut, we might reasonably expect that something has gone very wrong. The food we eat would probably make most people’s Suspect List. See InAlaska’s comment to me about the change in his diet. Or all the variations of the Paleo diet.

              Did we cross a ‘tipping point’ around 1980? Have we overloaded the immune system in the gut with toxins in the food we eat?

              Don Stewart

            • Jan Steinman – http://www.EcoReality.org/wiki/User:Jan_Steinman
              Jan Steinman says:

              ” the microbes one picks up during passage through the birth canal all come from the mother”

              I think the greater environment contributes significantly.

              Witness the raw milk studies that show children who drink raw milk have fewer allergies, asthma, and other auto-immune problems. Think I’ll go have some now.

              And keep in mind that whenever you have a course of oral antibiotics, you wipe the slate clean and start over.

            • “Our genes have not changed in the last one hundred years. Yet we are currently witnessing an explosion in auto-immune diseases. Since the heart of our immune system is in our gut, we might reasonably expect that something has gone very wrong. The food we eat would probably make most people’s Suspect List.”

              I suspect prevalent, excessive and unnecessary use of antibiotics may be more of a problem than just diet. I mean, they’re everywhere now. hand sanitizers everywhere you look. In the food supply (so, I guess the food we eat still applies, just more specifically the drugs injected into the animals). Handed out like candy from doctors.

            • 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.
              Gail Tverberg says:

              Agreed! I carefully look for detergents that don’t claim, “Kills 99% of Germs,” and don’t use hand sanitizers when offered.

            • InAlaska says:

              Diet is by far the most important factor in our health. It is not only a main determinant in our immune system, it is the base of our whole being. “You are what you eat.” Obesity, chronic diseases of the liver, diabetes, heart disease, auto-immune diseases such as arthritis, these can all be avoided, lessened or cured by how a person chooses to eat. Refined sugar feeds cancer. True, the food system in the US is corrupt, but it is still up to the individual person to make good choices. You can still buy fruit, vegetables, nuts and other other whole foods reasonably cheaply. You don’t have to go to McDonald’s.

            • Quitollis says:

              Another study, of a large sample of UK twins, finds that our genomes influence the abundances of gut bacteria associated with health and that much of it is heritable.

              http://www.cell.com/abstract/S0092-8674(14)01241-0

              quote:

              Highlights

              •Host genetics influence abundances of health-associated gut bacteria
              •Many heritable taxa co-occur
              •The most heritable, Christensenellaceae, associates with a lean BMI
              •Heritable taxa reduce weight gains in germ-free transplant experiments

              Summary

              Host genetics and the gut microbiome can both influence metabolic phenotypes. However, whether host genetic variation shapes the gut microbiome and interacts with it to affect host phenotype is unclear. Here, we compared microbiotas across >1,000 fecal samples obtained from the TwinsUK population, including 416 twin pairs. We identified many microbial taxa whose abundances were influenced by host genetics. The most heritable taxon, the family Christensenellaceae, formed a co-occurrence network with other heritable Bacteria and with methanogenic Archaea. Furthermore, Christensenellaceae and its partners were enriched in individuals with low body mass index (BMI). An obese-associated microbiome was amended with Christensenella minuta, a cultured member of the Christensenellaceae, and transplanted to germ-free mice. C. minuta amendment reduced weight gain and altered the microbiome of recipient mice. Our findings indicate that host genetics influence the composition of the human gut microbiome and can do so in ways that impact host metabolism.

              / unquote

              Another study finds that gut bateria colonies are generally stable over the long term and they found no correlation between colony stability and the sleep, exercise or mood of the participants or a wide range of other behavioural attributes. However the stability can be disrupted by certain events, most importantly travel to another part of the world, and eating a lot of fiber affects some colonies – whether that disruption is generally good or bad is another matter. Infections like Salmonella can have a lasting impact on some colonies.

              http://genomebiology.com/2014/15/7/r89

              quote:

              Conclusions

              Despite the relationships inferred above, it is perhaps surprising that given the multiple of tracked host variables, we did not observe more correlations between host behavior and the microbiota. For example, we did not observe extensive links between gut microbiota and variables like sleep, exercise, or mood. These findings suggest that future longitudinal studies of human microbiota will not have to exhaustively control for host behavior, as a wide range of lifestyle attributes are unlikely to broadly disrupt individuals’ microbiota. We note, however, that false negative interactions in this study may have been due to our conservative analysis pipeline, which we biased against inferring false positive correlations. It is also possible that subjects’ self-awareness due to daily tracking skewed our results. To guard against this outcome, we instructed subjects not to deviate from their normal behavior during the study. Moreover, subjects were not aware of their microbial data as the study progressed. Lastly, even though we tracked subjects closely, the range of health and behavioral choices we measured was limited to the individual choices of only two people over 1 year; larger and longer observational studies may cover a broader range of human behaviors and account for temporal effects, like seasonality.

              / unquote

            • Quitollis says:

              Don, I think that there is some truth in what you say, certainly it is not ALL a matter of genetics. It would take a very convincing scientist to get me to consent to a fecal implant though. I have learnt that one should be very careful about travelling around the world – and take Salmonella seriously. Mainly it has opened my eyes to how little I understand about my “secondary genome”, the tens of trillions of gut bacteria that outnumber my primary genome and which are a vital part of myself. In a sense I am manifold colonies, my own “little” ecosystem. Thanks for raising an interesting subject!

              Btw. I will probably try to approximate to your daylight/ night rhythms, as it seems a generally good idea. (So I had better go to bed and stop googling.) Cheers! QT

          • That’s pretty interesting how Niger has only 12% lactose intolerance, compared to 70%+ in surrounding countries.

            Are they certain there isn’t an epigenetic or gut flora based factor behind it?

        • InAlaska says:

          Don,
          I completely agree. Have recently been changing my own gut health, by eating only whole foods and food that my great grandparents might have recognized as food. Otherwise, I have long felt that we should go to a sunlight budget and use fossil fuels to extend the range of that budget but not its size. Best regards,

        • 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.
          Gail Tverberg says:

          I probably should have phrased what I said differently. Living in terribly close proximity, with little fossil fuels, would likely be a problem with respect to disease transmission. Trying to transport food and human waste long distances doesn’t work without significant use of fossil fuels. We have a very large share of the world’s populations in cities now.

          • Don Stewart says:

            Gail
            I agree with the problematic role of cities. As population declines, we get back to cities the size of Edo, Japan or London, England of a couple of hundred years ago. Then we face the choice between healthy Edo or disease ridden London. Disease or health depends on how we configure the cities of that size.

            I don’t see how a city of 20 million can be ‘healthy’ without fossil fuels.

            Don Stewart

    • Jan Steinman – http://www.EcoReality.org/wiki/User:Jan_Steinman
      Jan Steinman says:

      Humanure is the answer!

      What Wendell Berry said about animals:

      Once plants and animals were raised together on the same farms — which therefore neither produced unmanageable surpluses of manure, to be wasted and to pollute the water supply, nor depended on such quantities of commercial fertilizer. The genious of American farm experts is very well demonstrated here: they can take a solution and divide it neatly into two problems.

      … applies equally well to humans.

  9. Don Stewart says:

    Dear Gail and All
    Chris Martenson has a nice article on deflation. I note that the decline in oil prices is not as great as the decline in coal and iron ore. So it may make sense to look for broad explanations of the decline in the price of oil, rather than focus entirely on the peculiarities of the oil market.

    It is also interesting that both Harold Hamm and Boone Pickens are predicting that oil will soon be back up to 100 dollars. I wonder if they expect the same for coal and iron ore.

    Don Stewart

    • Creedon says:

      The rise in the value of the dollar. Their are currently too many variables for me to get my head around them. Time will have to be the judge.

    • 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.
      Gail Tverberg says:

      The issue I see is that the current debt bubble that is keeping all commodity prices up–oil, coal, natural gas, iron ore, etc. We are reaching the limits of debt, even with QE. This is why prices are dropping. My next post talks about this issue (among others).

      I expect that all fuels supplies (fossil fuels and renewables that depend on fossil fuels for maintenance) collapse pretty much at the same time. This is what I have been saying for quite a while.

      • Creedon says:

        Gail, draw us a picture of the world economy in 2025.

        • 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.
          Gail Tverberg says:

          I don’t think we exactly know. One guess is that economies will be pretty small and scattered around the world, with much less interconnection than today. People will mostly have abandoned big cities, because it will be too hard to maintain services there. Or maybe the decline will be slower than I imagine.

      • Creedon says:

        The current extraction of tight oil only adds to the debt bubble, thus the limiting factor.

        • 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.
          Gail Tverberg says:

          If prices are high, tight oil adds to the debt bubble. If prices drop, tight oil’s likely default on debt is part of what will continue to pull prices down, and lead to problems for banks.

  10. VPK says:

    Falling Oil Prices…ouch DEFLATION?
    http://www.nytimes.com/2014/12/05/upshot/falling-oil-prices-create-a-central-banking-conundrum.html?_r=0&abt=0002&abg=0
    When is good economic news a reason to worry?

    When you’re a central banker fighting a slump toward deflation, or broadly falling prices, in a time that oil prices are plummeting. And that is the situation that Mario Draghi, the president of the European Central Bank, faced as he announced the results of the bank’s latest policy meeting on Thursday. How he wrestles with that problem will determine the outlook for Europe’s flailing economy.

  11. Quitollis says:

    Interesting article on the French ping back site, commenting on the Idiocracy film that Paul alluded to. I used google translate.

    http://yoananda.wordpress.com/2014/12/03/sommes-nous-en-train-de-degenerer/

    LOL I suspect that global collapse will fortunately (?) go some way to solve this problem.

    https://alfinnextlevel.files.wordpress.com/2014/11/e0337-fourmilab_iq_projection.gif

    quote:

    Adverse genetic variants accumulate in the human genome. This latest build is already noticeable: a study published in the journal Nature late November 2012 reveals that 80% of deleterious genetic variants in the human species appeared for 5 000 to 10 000 years only.

    By emerge our brain, Darwinian evolution, however, created the conditions for its own eradication: we have significantly softened the rigors of the selection by holding us united human society. The collapse of infant mortality is the translation of this less selective pressure. It affected about 20% of children in the XVII th century, now around 0.3% … Many children who survive these days would not have reached the age of reproduction tougher time. The selection eventually leads to delete itself.

    • “Adverse genetic variants accumulate in the human genome.”

      If we don’t have collapse soon, maybe we’ll be able to clean out our genomes and remove all the defects, viruses and other junk built up there in the near future.

      Also, a great deal of cognitive impairments are not from genetic defects, but from mercury, lead, viruses and bacteria living inside us. Just by treating a couple diseases in the general population, we could conceivably raise average intelligence 10 or 20 points. Cleaner coal, or no coal in case of total collapse, will also help.

      • Creedon says:

        I am currently reading a book by John L Casey who is predicting a much colder period over the next few decades based on a study of solar cycles. He is definitely not in the global warming camp. If he is correct and we have a much colder period coming at us along with the end of the oil age, we will definitely see a reduction in the human population.

        • Martin Kral – United States – Retired, just having fun writing about energy.
          kralspaces says:

          That is why the fossil fuel industry needs to invest in nuclear technology. They can start with the fourth generation and bypass all the problems with earlier versions.

  12. Pingback: Archive Edito Novembre 2014 | Blog de Yoananda

  13. Quitollis says:

    Putin is cementing ties with the far right in Europe. He had an enthusiastic representative at the FN conference at the weekend. I can see the geopolitical and cultural logic but I admit that I did not see this coming.

    http://www.france24.com/en/20141130-france-national-front-europe-far-right-leaders-marine-le-pen-wilders-russia/

    quote:

    There was praise from all sides for Putin’s Russia, and fierce condemnation of Western sanctions against Moscow.

    “Why wage a commercial war on the main bulwark against the spread of barbaric, Islamic extremism?” asked Matteo Salvini, the new leader of Italy’s Northern League, sporting a T-shirt that read “Basta Euro” (Enough of the euro).

    All cast themselves as the “last true defenders of Europe”, a role they are happy to share with Moscow, “our natural ally”.

    Russian influence

    The Russian saviour was represented by Andrey Isaev, a vice-president of the Russian Duma (the lower house of parliament) and the star guest in Lyon.

    A member of Putin’s United Russia, Isaev said Europe had fallen prey to “bureaucrats in Brussels, who are little more than American dummies”.

    His appearance underscored the growing ties between Moscow and the French far right.

    Last week, the National Front was forced to confirm media reports it had secured a 9-million-euro loan from a Russian lender, claiming “no European bank will give us as much as a cent”.

    Le Pen has made no secret of her respect for Putin, repeatedly slamming EU leaders for stoking a “new Cold War” with Russia.

    She has been particularly critical of French President François Hollande’s decision to suspend delivery of two Mistral-class warships to Moscow, accusing the government of bowing to pressure from the US.

    In an interview with FRANCE 24, Isaev denied the Russian authorities had played a part in the FN’s deal with Moscow-based bank First Czech Russian Bank (FRCB).

    But he confirmed that Putin and Le Pen agreed on a number of issues, including their analysis of the crisis in Ukraine.

    “Moreover, FN values are close to Russian values,” he said. “We agree on the need to protect European traditions, including our Christian roots, family values, and national sovereignty.”

    ‘Proud Lepeniste’

    Like the other foreign guests in Lyon, Isaev urged the National Front to “show the way” and lead Europe’s nationalists and Eurosceptics to power.

    Earlier this week, Le Pen appeared as one of five French nationals – and the only French politician – in Foreign Policy’s list of the 100 most influential figures of 2014.

    The respected magazine said she had become “something of a standard-bearer for Europe’s far-right, Eurosceptical forces – a model for how they, too, can become serious political contenders.”

    • Don Stewart says:

      Dear Quitollis
      Please treat the following as arising out of deep ignorance.

      I was in France about 15 years ago. I saw spray-painted signs for the elder Le Pen’s party. I asked people about them, but nobody wanted to talk. At that time, I think Le Pen was getting about 5 or 10 percent of the vote, but nobody would admit to voting for him.

      I seem to remember a recent talk by Putin where he was advocating free trade but no political integration. Are the current ‘far right’ people advocating free trade but no political integration?

      It seems to me that it is the political integration that is generating the large bureaucracy in Brussels. Which seems to be a sore point with a lot of people. The political integration also seems to be propelling the seemingly suicidal attacks on Russia.

      I see that the ‘united Europe’ can fund things like fusion research and Ariane rockets and airliners and an expensive agricultural policy. My own prediction would be that Europe just can’t afford those kind of expensive programs anymore.

      In terms of immigration. I saw a prediction that Nigeria would have a billion people in the not too distant future. I can’t imagine that a billion people in Nigeria and unlimited entry into Europe are remotely sustainable.

      What am I misusing? Are the ‘far right’ people advocating concentration camps and ethnic cleansing? Is ‘far right’ equivalent to corporate fascism?

      Thanks….Don Stewart

      • Quitollis says:

        Dear Don, I am about to crash for the night, so I will be brief. Yes I think that you have hit most of the nails on the head.

        I probably should not have used the MSM term “far right”. More objective terms like euro sceptic or populists would have been better. Mainly it seems to be about the return of national sovereignty, the protection of the more traditional European cultures and identities, concern about radical Islamism, and as you suggest the need for a sensible and sustainable migration policy. None of them propose repatriation let alone anything more extreme. Yes they want to break up the EU and regain democratic and popular control over the countries. Economically Le Pen is more leftist, UKIP more rightist, none of them are ‘fascist’ or corporate state in any historical sense. There seems to be a sense among them of the problems of overpopulation, resource depletion and environmental degradation, finite world and sustainability issues but I would not think that those issues will emerge on a policy level for some time to come. It is all about the EU at this stage. I agree with you and the folks on here that it seems likely that the world is about to change drastically. I would guess that euro scepticism will be part of a much broader move away from globalism and toward localism and sustainability. I suspect that they have grown because of the Euro crisis post-2008 but they were always waiting in the wings and I suspect that they will grow further as the crisis deepens. Interesting times ahead?

        Incidentally the euro sceptics may bring down the government in Sweden later today. The Sweden Democrats got about 14% in the parliament earlier this year which gives them the balance of power in the parliament. As I mentioned earlier, electoral systems are ceasing to function in Europe, to provide strong “centrist” governments or to exclude the “extremes”.

        Regards, QT

        Sweden faces government crisis as far-right party vows to block budget

        http://www.todayonline.com/world/sweden-democrats-back-opposition-budget-government-teeters

        quote:

        STOCKHOLM – Sweden’s minority, center-left government teetered on the brink of collapse on Tuesday after just two months in office when a far-right party announced it would vote against the 2015 budget, effectively dooming it to defeat.

        The anti-immigration Sweden Democrat party, which holds the balance of power in parliament, said it would support an alternative budget proposed by the center-right Alliance opposition bloc, leaving the government isolated.

        Prime Minister Stefan Lofven said last-ditch talks with Alliance leaders to resolve the crisis sparked by the unaligned Sweden Democrats, who want to cut the number of asylum seekers by 90 percent, had proved fruitless.

        “There is no one on the other side of the table, it is meaningless to hold talks,” Lofven told reporters after the meeting at the government headquarters, saying he would decide how to proceed after Wednesday’s debate in parliament.

        “We may call snap elections later, when the constitution allows. We could also resign and there are other alternatives.”

  14. mikestasse
    mikestasse says:

    Reblogged this on Damn the Matrix and commented:
    The word is slowly getting out…… I’ll write up something else on this soon, too much to do around here to sell sell sell…!!

  15. VPK says:

    http://seekingalpha.com/article/2723695-the-oil-drenched-black-swan-part-2-the-financialization-of-oil

    The Oil-Drenched Black Swan, Part 2: The Financialization Of Oil
    Dec. 2, 2014 6:11 AM ET | Includes: BNO, CRUD, DBO, DNO, DTO, DWTI, OIL, OLEM, OLO, SCO, SZO, UCO, USL, USO, UWTI

    All the analysts chortling over the “equivalent of a tax break” for consumers are about to be buried by an avalanche of defaults and crushing losses as the chickens of financializing oil come home to roost.

    The pundits crowing about the stimulus effect of lower oil prices on consumers are missing the real story, which is the financialization of oil. Financialization is another word that is often bandied about without the benefit of a definition.
    Here is my definition:

    Financialization is the mass commodification of debt and debt-based financial instruments collateralized by previously low-risk assets, a pyramiding of risk and speculative gains that is only possible in a massive expansion of low-cost credit and leverage.

  16. Don Stewart says:

    Dear Gail and All
    Second part of Charles Hugh Smith’s article on the perils arising from the financialization of oil:

    http://www.oftwominds.com/blogdec14/financialized-oil12-14.html

    In a nutshell, Charles exoects a replay of the subprime mortgage debacle, but with oil backed securities as the trigger this time around.

    Don Stewart

    • Don Stewart says:

      Dear All
      I should have added that the G20 just ratified the plan to put derivatives ahead of your deposits in the bank and the bonds which back your pension plan.

      I know that using the C word will get me in trouble….but do you suppose that the heads of government concocted the newsworthy attacks on Putin as a diversion from the real story?

      Welcome to Cyprus….Don Stewart

    • 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.
      Gail Tverberg says:

      Thanks! This is Part 2 of a series. Part 1 of this series (The Oil-Drenched Black Swan) uses one of my charts.

  17. Christian Gebauer
    Christian says:

    Well, in case some conditions would be satisfied nukes could even happen to be good places to go through the bottleneck wich is supposed to happen. Being there and having some solar to keep pumping (US Mil was getting so many solar PV, what for?), just add some food and when things seems to get really ugly you just set fire to some old tires or such to make a heavy smoke: in such a cahotic context not much people would be willing to enter a smoking nuke… Better if the smoke is say redish and has some strange odor (tire’s smoke is very well known).

    I’d do it if I knew the plant could be keep cooled. And if it goes to six years there and definite storage for the rods could be carried on, I’d take the job. Will tell to my gov he brings me some 1500 families as those he got for himself, so I can do it. And the extra stuff. And after the job I’d take “my people” and head south until the next river, some 100 km, to establish definitely.

    Provincial gov found a way to erase from the online version of the journal the news about this 1500 families gardening traning (and a couple of extra, as giving them some hens). This action had surprised many people because these guys are not kumbaya, so it seems they though it better and got it erased to minimize the chances of somebody going to pay a visit when TSHF: I am myself looking for some details as the exact place where it is being carried on (the whole project is concentrated in one isolated place I’ve never been) but it seems I am now in need to go to a paper archive!

    The point is that given some materials an creativity many things could be done for the nukes.

    Another point is that as nobody do anything (or doesn’t make a public statement upon it) the rest seems to be thinking “I (us, if it is thought as a country) will not be the only fool trying to preserve some fuel pond”

  18. Don Stewart says:

    Dear Gail and All
    Discussion of ‘Green Solutions’ almost always leave out the greenest solution of all: photosynthesis.

    Here is a link to a 30 minute talk by Kristine Nichols, a PhD soil scientist who was with the USDA in North Dakota. She is now at Rodale in Pennsylvania.

    https://www.youtube.com/watch?v=C6xDfl_G8js

    Kristine has some nice graphics which clarify many points which confuse many people. For example, she talks about how people want to focus on what is above ground, while the real action is below ground. She echoes Christine Jones from Australia’s message on the importance of ‘year round green farming’ and on the notion that productivity is carbon limited… and so Christine Jones’ emphasis on the ‘liquid carbon pathway’ is right on the money. At about the 20 minute point she shows graphics which explain why minerals in the soil are actually much greater than indicated by a soil test, and how the soil food web liberates those nutrients in plant available form. (Both Christine Jones and Elaine Ingham have drawn some flack on this site for saying the same thing.)

    Gabe Brown, a North Dakota farmer, had made a presentation before Kristine and had told the group that he was not using fertilizers…simply relying on the liquid carbon pathway feeding the soil food web. In response to a question from the audience at the end of her talk, Kristine suggests cutting fertilizer applications slowly. She is not as aggressive as Christine Jones in terms of reducing the fertilizer…Christine is 30 percent, 30 percent, 30 percent and then retaining 10 percent of your base application. Kristine’s conservatism may be a healthy fear of being blamed for farm failures (the same reason physicians overprescribe antibiotics), or it may be that the USDA sees themselves as representing the Big Ag interests.

    Don Stewart

    • Don Stewart says:

      Dear All
      I should have added, of course, that putting more carbon into the soil through the liquid carbon pathway not only solves the food problem and the fertilizer problem, it also solves the climate change problem.

      Notice that she promises little in terms of long term carbon from litter or turning in above ground crops. So she is echoing Christine Jones on the liquid carbon pathway.

      Don Stewart

  19. Quitollis says:

    These anxiety/ mood herbs may be of some interest to FW folk.

    I have ordered valerian root, passion flower, chamomile, damiana and lavender capsules. I use a hops and lavender pillow and I going to start on chamomile and peppermint teas. I use milk thistle to moderate alcohol intake and to protect the liver. I may be due another course of ginseng and gingko. I may look into bath herbs and aromatics.

    Do any of you use/ recommend any herbs or teas?

    • Jan Steinman – http://www.EcoReality.org/wiki/User:Jan_Steinman
      Jan Steinman says:

      “anxiety/ mood herbs”

      Most of those you mention (except ginseng) are sedative/soporific.

      Have you looked into adaptogens? I like them a lot! They can provide calming without deadening, as many you cite (particularly valerian, chamomile, and lavender) are. (Don’t take valerian and operate machinery!)

      Top of my list is ocimum sanctum, or Holy Basil, also called tulsi. It has a simultaneous energizing and calming effect. It’s also an immunomoderator and cancer-fighting andi-oxidant. I grow four varieties, harvest the buds and flowers, grind them in VSOP brandy, then press out the tincture to use year-round. (I also sell it for $14/50ml.) It’s frost-tender, but you can grow it in pots and bring it inside for the winter.

      Other notable adaptogens include ashwahandha, astragalus, codonopsis spp, echinacea spp, maca, and rhodiola.

      • Quitollis says:

        Nice one Jan, I will check them out at my next order. I nearly ordered holy basil and rhodiola tonight in a complex with valerian, those two were new to me.

        I recently got a bag of Chinese five spice mix (Natco brand) for cookery and there seems to be something “odd” and instant about the effect. It seems to somehow “animate”, calm and aestheticize the world. I don’t know if it is the fennel, the cassia or the addition of the ginger, black pepper and cloves. I would guess that it is the fennel because some used to grow in the garden where I grew up and the mental feel seems unexpectedly familiar. Wow I just googled (fennel psychoactive) and it turns out that ALL of those spices are psychoactive. I use tons of Indian spices in my cookery. My father used to joke that he always got “high” off my cooking.

        http://www.currentpsychiatry.com/home/article/taking-the-spice-route-psychoactive-properties-of-culinary-spices/6b1192544e03a8659d455a11fdeb6658.html

        I have been making a quick “hot” soup with five spice, dry couscous, frozen crushed garlic, chili powder, soy sauce and olive oil, just cover in a thick small bowl with twice the volume of boiled mineral water and cover with a small plate for ten minutes. An incredible quick omelette, mixed with a drop of milk and with five spice sprinkled all over during the cooking – wow that is good.

        • Jan Steinman – http://www.EcoReality.org/wiki/User:Jan_Steinman
          Jan Steinman says:

          A great resource for information about medicinal plants is Plants For A Future.

          You can click on the “Database” tab, and then there are lots of choices for selecting for particular uses.

          I’ve downloaded this database, ported it to MySQL, and maintain a copy on my server, albeit with a vastly less fancy interface. 🙂

    • pintada says:

      I highly recommend cannabis.

      “highly” recommend … LOL

    • Good old epsom salts footbath is as good as any

  20. Stefeun says:

    This one is for Paul:
    “Last week, CNN’s Christiane Amanpour invited RT’s Anissa Naouai to discuss what the US channel called ‘a heated propaganda war’ by the Russian government. But it never showed viewers Naouai’s criticism of Amanpour’s own propaganda exercises.”
    Both videos and the transcription here:
    http://rt.com/news/208302-cnn-propaganda-interview-edited/

  21. Ed – I am interested in energy issues.
    edpell says:

    BP, excellent post.

    I enjoy studying cold fusion. “So f^$% it. I’m going to go on living my life.”

  22. Don Stewart says:

    Dear Gail and All

    Just a few thoughts on the issue of humans and cooperation and competition and violence and how the environmental realities of Limits to Growth may interact with our choices.

    First, there is no such thing as a purely cooperative or a purely competitive human society. It’s a question similar to yin and yang…how to achieve a balance. Humans can look at chimp societies and bonobo societies and compare them and, to some extent, decide which way we would prefer to go. It’s much harder to imagine ourselves as a single celled critter, although close study reveals that they face choices similar to the ones we face. If we want to get philosophical, we can even begin to speculate about the forces of attraction and the forces of repulsion which mold physical reality from the atom to the universe.

    Second, E.O. Wilson’s book The Social Conquest of Earth points out that the social critters are the ones which have fared the best in the last few hundred million years. Humans are social animals. It seems to me to make no sense at all to think in terms of atomized humans as some solution to Limits to Growth.

    Third, so our challenge is to use the imagination that Peter Mendelsund explores in terms of reading, in the context of what we can reasonably expect in terms of the environment in a Limits to Growth world. The imagination is needed to devise the proper balance and relationships between the levels of organization: the individual, the family, the clan, trade guilds, tribes, and strangers. Global Capitalism has moved the needle very far toward the ‘strangers’ side…I think Limits to Growth will force us back closer to the way things used to be. The penalty for rigidity may well be death.

    I obviously don’t know exactly how things will turn out. But my preferences for right now tend more toward the Jeffersonian ideal than the financialization of Hamilton. I think every family is well advised to craft a vibrant home economy for the production of the necessities of life, and to get out of debt. I am not fanatical that the home economy must operate with Stone Age technology. I think that the simpler the better, as a rule…but use things like row covers and rice cookers when they give a big boost to productivity.

    In terms of relationships with those beyond the family, I think that what Albert Bates describes is generally a good direction (but not defending or criticizing any specific practices at The Farm.)
    http://peaksurfer.blogspot.com/2014/11/the-hippies-were-right.html

    I don’t think that the adjective ‘docile’ is applicable to what I have just described.

    Don Stewart

  23. Stefeun says:

    E.ON creates spin-off in green energy revamp
    E.ON, Germany’s largest power supplier, on Sunday announced the creation of a spin-off company as part of a major restructure that will allow it to focus more on renewable energy.
    http://www.thelocal.de/20141201/eon

    • 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.
      Gail Tverberg says:

      Conveniently, this puts the renewable energy and related issues (including distribution networks) into a separate company. Insurers did this with Long Term Care insurance a while back. When the costs don’t work, then it is someone else’s problem.

    • 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.
      Gail Tverberg says:

      I am not familiar with this. I wonder about the accuracy of their “burn off times.” Also, if oil depletes our ability to get the other minerals drops dramatically.

  24. “Anyway I love you all and I respect you all but if you start to execute the ‘alphas’ of other primate species because of your moral judgements then there is a real possibility that I will stand in the way with my prehistoric club.”

    I don’t think anyone was talking about eliminating alphas from OTHER species …

    Also, eliminating is not the same as exterminating. If type is caused by epigenetics or other “nurture” factors, then it seems what is being proposed is to create gentler, less stressful environments for children so they grow up to be betas and deltas instead.

    If it is genetic, artificial selection could be used to create a society of docile, co-operative followers devoid of competitive, aggressive, individualist people.

  25. Quitollis says:

    “The man who planted trees.”

    Lol comrade BP, the trees in NW Europe grew not because of the man who planted the trees so much as the “accidental” climate change. pfft. Keep planting comrade, chance will do the rest. We defend the westernwalds as our final retreat.

    http://sciencenordic.com/norwegian-woods-triple-ww2

    http://sciencenordic.com/sites/default/files/imagecache/620x/sn2_23.jpg

    Norway now has three times as much forest as it did before World War Two. The volume of growth this year will be the equivalent of nearly 100 sacks of firewood per Norwegian.

    …. What’s the cause?

    Like detectives, the researchers have their list of usual suspects: Higher average temperatures, longer growth seasons, more carbon dioxide in the atmosphere and more nitrogen deposition from the air. Some also point to a decrease of grazing by domesticated and wild animals in the forest.

    “The answer is probably a combination of these factors. What we can’t answer is the relative contribution of these individual factors and the interplay among them,” says Rasmus Astrup at the institute in Ås.

    “We are now conducting a lot of research on this. But providing a good answer is far from easy.”

    Not surprisingly, Astrup and his colleagues think our warming climate has a major role. In a cold country like Norway, temperature is a strong factor with regard to growth…

  26. Christian Gebauer
    Christian says:

    Good summary BP. Keep these trees coming

  27. Don Stewart says:

    Dear Gail and All
    From BC commenting on Ron Patterson’s site…Don Stewart

    Put another way, we can’t afford to profitably extract oil above $40-$50 AND grow real GDP/final sales per capita so that demand is sufficient to continue extracting the costlier, lower-quality oil. This implies that neither can we afford to build out renewables at necessary scale AND grow real GDP/final sales per capita AND simultaneously maintain the fossil fuel infrastructure indefinitely.

    We are likely to see global demand for energy and goods and services constrained sufficiently hereafter, even at the oil price in the $40s-$50s, while production declines with the lower price of oil and decelerating or contracting real GDP/final sales per capita as the long-term secular trend hereafter.

    This is the definition of Peak Oil and “Limits to Growth” (LTG), and we’ve been at or near the log-linear limit bound of LTG since 2005-08.

    • 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.
      Gail Tverberg says:

      Thanks for pointing this out.

  28. Pingback: Piekolie nieuwsupdate: week 47 | Stichting Peakoil Nederland

  29. Stefeun says:

    Oil Price Crash

    Interesting trend lines on oil price Vs volumes chart, added by first commenter after this article on Euarn Mearn’s blog:
    http://euanmearns.com/the-2014-oil-price-crash-explained/

    http://fr.tinypic.com/view.php?pic=sq1194&s=8

    • Stefeun says:

      let’s see if this link works better:
      [IMG]http://i57.tinypic.com/sq1194.jpg[/IMG]

      • 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.
        Gail Tverberg says:

        That is a great image. I am getting warnings however of “malware” (Virus) related to the site, however.

        • Stefeun says:

          Yes, sorry for that. I got the link when trying to open the image alone (for pasting it here…).
          Better directly read Euarn Mearns’ article for better understanding of the chart (as well as the point, which is that oil price now has extreme sensitivity to the demand, +/- 1 Mbd makes huge difference in price), then you see the chart in the 1st comment, and also have some more precisions in the following comments.

  30. Don Stewart says:

    Dear All
    Adding a footnote to my previous note on Dave Pollard and the various tribes who are dealing with collapse.

    Peter Mendelsund has written a good book about reading, What We See When We Read. (We clearly do not see ink spots on paper).

    ‘Children read picture books; preteens read chapter books with pictures; young adults graduate to books made up entirely of words. This process exists because we learn to read a language slowly, in stages, though I wonder if we also need, over time, to learn how to picture narratives unassisted. (The implication being that our imaginations can, and do, improve over time.)

    So can we practice imagining–as we practice drawing–in order to imagine better?….

    Books allow us certain freedoms–we are free to be mentally active when we read; we are full participants in the making (the imagining) of a narrative.’

    Each of the collapsenik tribes that Pollard describes are constructing narratives of how life might be in a very different physical environment. We can see that the primates that Robert Sapolsky studies have the ability to construct very different narratives about life…once the ruling hierarchy is destroyed. We can speculate that humans might similarly construct a very different narrative if relatively few survive through the bottleneck, and if the physical environment encourages co-operation rather than competition and thus an absence of stress.

    Or we can construct narratives in which the current level of competition is intensified in a struggle for resources.

    I think it is difficult for each of the tribes to admit that some other tribe might have valuable insights which contradict the accepted truths of their own tribe. We see a lot of that kind of thing on this site.

    We can also see evidence that constructing narratives which fit a different future is inherently risky. Few of the Dow Jones companies which were around 50 years ago are still dominant, or even exist. Who would have believed that Microsoft would be worth more than Exxon-Mobil?

    My conclusion is to stay alert and stay flexible. It seems that Dave is doing that, as he floats between the various groups.

    Don Stewart

  31. Don Stewart says:

    Dear Gail and All

    Dave Pollard has posted a new article in his examination of collapsenik groups, and the difficulties such groups have in working together:

    http://shift-magazine.org/magazine/see-no-evil-the-morality-of-collapse/

    A quote: ‘Robert Sapolsky has studied baboons in the wild for twenty years and admits he doesn’t like them much – they’re violent, arbitrarily cruel and self-traumatizing creatures. But he tells the story about one baboon troop whose alpha males all died from eating tuberculosis-tainted meat from a garbage dump. The survivors quickly evolved into a peaceful, gentle, egalitarian matriarchy, and remained so for generations later.
    Gabor Mate has similarly argued that almost all human violent behaviour and stress is rooted in childhood trauma, suggesting that a human ‘reboot’ (perhaps after a collapse), allowing children to grow up trauma-free, might produce a human society so gentle, healthy and egalitarian we might hardly recognize it.’

    Don Stewart

    • “The survivors quickly evolved into a peaceful, gentle, egalitarian matriarchy, and remained so for generations later.
      Gabor Mate has similarly argued that almost all human violent behavior and stress is rooted in childhood trauma, suggesting that a human ‘reboot’ (perhaps after a collapse), allowing children to grow up trauma-free, might produce a human society so gentle, healthy and egalitarian we might hardly recognize it.’”

      Maybe childhood trauma is the cause. Or perhaps it is simply high levels of testosterone that cause competitiveness and aggression. The vast majority of violent crimes are committed by young men. As men age, their testosterone drops, and a lot fewer violent crimes are committed by men in their 50s and 60s.

      Being an Alpha Male may be more of a genetic thing, then a reaction to childhood trauma.

      • Don Stewart says:

        Dear Matthew
        Gene expression is a still poorly understood phenomena. For example, if the environment is very stressful, as the modern world is stressful, then aggression genes may be expressed. But those genes may not be expressed in a low stress environment.

        Sapolsky’s studies show that species we regard as very nasty can live together peaceably if the environment changes radically.

        In the 1920s in Belgium, the government considered disbanding the police force because crime was practically non-existent. So far as I know, nobody knows why crime was so rare, but a reasonable assumption is that stress levels were very low.

        The genes don’t change, but the expression changes. The doctor that I linked to a few pages ago talks about how a given experience can be either benign or inflammatory depending on the state of the brain. A stressful brain state will generate cytokines, which are stress hormones.

        Don Stewart

    • Quitollis says:

      Likely aggressive alphas are the default setting for their species because it generally facilitates their survival. Wipe out the alpha stock and the betas will make do as best as they can. That does not mean that beta ways are “better” just because we may (or may not) find them less disturbing. Nor does it mean that the group will be better fitted for survival.

      Also it may be that we have already wiped out most of their natural competitors. It is a pretty disturbing idea that we would value domesticated groups and somehow alter their environment and execute their alphas because we think that it would be “better”. Where would it end? Would we kill all the carnivores because Nature would be “nicer” without them? Kill all the lions, breed all the lambs?

      If we have learnt anything, it is that Nature really doesn’t need our judgments, it has been doing well enough without us for billions of years and it probably knows what it is doing better than we do.

      Anyway. betas are just as much a problem for human survival as alphas, because of the sheer numbers. There is no easy, PC solution to any of this. It is natural that people find someone to blame, someone else, the leaders, the rich, the poor, the sheeple.

      There is a certain wisdom to just accept things as they are. Neither do I resent people who hates alpha or beta apes or humans, Nature made them that way too. (OK lets admit it, we all have a healthy hate as well as love, its only natural.) But I don’t think that I would welcome their interference in other species.

      A funny aside, I saw this on Red Dwarf last night. Kryten the android:

      “Of course there is a heaven, otherwise where would all the calculators go? Is it not written in the electronic bible that the iron shall lie down with the lamp? Humans don’t go to heaven, someone made that up to stop you all going nuts.”

    • Quitollis says:

      (sorry if this is a duplicate)

      Likely aggressive alphas are the default setting for their species because it generally facilitates their survival. Wipe out the alpha stock and the betas will make do as best as they can. That does not mean that beta ways are “better” just because we may (or may not) find them less disturbing. Nor does it mean that the group will be better fitted for survival.

      Also it may be that we have already wiped out most of their natural competitors. It is a pretty disturbing idea that we would value domesticated groups and somehow alter their environment and execute their alphas because we think that it would be “better”. Where would it end? Would we kill all the carnivores because Nature would be “nicer” without them? Kill all the lions, breed all the lambs?

      If we have learnt anything, it is that Nature really doesn’t need our judgments, it has been doing well enough without us for billions of years and it probably knows what it is doing better than we do.

      Anyway. betas are just as much a problem for human survival as alphas, because of the sheer numbers. There is no easy, PC solution to any of this. It is natural that people find someone to blame, someone else, the leaders, the rich, the poor, the sheeple.

      There is a certain wisdom to just accept things as they are. Neither do I resent people who hates alpha or beta apes or humans, Nature made them that way too. (OK lets admit it, we all have a healthy hate as well as love, its only natural.) But I don’t think that I would welcome their interference in other species.

      A funny aside, I saw this on Red Dwarf last night. Kryten the android:

      “Of course there is a heaven, otherwise where would all the calculators go? Is it not written in the electronic bible that the iron shall lie down with the lamp? Humans don’t go to heaven, someone made that up to stop you all going nuts.”

      • Paul says:

        i suspect there is an alpha inside every one of us… given the right circumstances it will emerge.

        See the series Breaking Bad for an example of how within every human heart lurks a predatory megalomaniac… Walter goes from docile high school teacher to power hungry drug lord…

        It’s a teevee show of course… but I think there is some truth to the message

        • Jan Steinman – http://www.EcoReality.org/wiki/User:Jan_Steinman
          Jan Steinman says:

          “i suspect there is an alpha inside every one of us”

          I don’t.

          I more resonate with Daniel Quinn’s (Ishmael) view that there are “takers” and “leavers,” and I think that, despite their individual tendencies, people can choose to be one or the other.

      • Don Stewart says:

        Dear Quitollis
        There are examples of betas turning into alphas overnight when the old king dies or is driven off. My only point is that it is probably a mistake to think that humans are ‘naturally and always’ aggressive. Our near cousin the bonobo generally acts peacefully…but the peace may be enforced when a gang of females beats up an aggressive young male.

        E.O. Wilson puts us into the ‘social’ class. Which I would take to imply that we will generally do better by cooperating with each other. The anonymity of the market economy has been a great facilitator of cooperation…without requiring us to like each other. Very localized economies do not function well with anonymity.

        There was a famous debate between Christopher Alexander and a modernist architect about 30 years ago. Alexander wanted to design built environments to foster human interaction, on the assumption that modern life generated too much isolation. The modernist argued that modernism generates way too much social interaction and thus becomes stressful…so what is needed in the built environment is a way for people to be anonymous.

        One could argue that trading emails in response to blog posts is a way of reducing the human interaction…if we met in a pub after a hard day working in the fields, we might come to blows.

        In a hard world, what lasts will be what works. My suspicion, based on my observation of humans and how hard it would be to live without fossil fuels, is that we will be best served by cooperation as befits a social species. Whether it is advantageous for Earth to have humans around, or alternatively, better off if humans disappear…I have no opinion.

        Don Stewart

        • Jan Steinman – http://www.EcoReality.org/wiki/User:Jan_Steinman
          Jan Steinman says:

          “My suspicion, based on my observation of humans and how hard it would be to live without fossil fuels, is that we will be best served by cooperation”

          When in doubt about sociology, look to natural science.

          Ecologists have surmised for decades that competition dominates in an energy-rich environment, such as the tropics, whereas cooperation dominates in energy-poor environments, such as alpine or arctic biomes.

          Does that mean all humans will put down their swords and get in a circle and sing Kum By Yah? Of course not, but I think cooperation will become a larger and growing force in human interaction in an energy-poor world.

        • Paul says:

          As we have seen throughout history … all it takes is a single alpha type…

    • That chart is an interesting break-down of different sub-factions within “collapsenik” thinking. I suppose I am currently straddling between L and M, and see H through K as being views that are useless due to the threat posed by nuclear waste.

  32. Creedon says:

    Over at peak oil news, Shortonoil is sticking with his argument that we are seeing a downward spiral in the collapse of the oil price that is bringing about the end of the oil age. If I’m reading him right he is saying that the Saudis know this and would have no reason to hold oil off the market when they know that in the coming years the price of oil will decline even more.
    If all of this is true, than we are waiting for the time when investment in shale oil, oil sands, and deep water drilling come to an end. JMG’s next stage of collapse.

    • Rodster says:

      “Shortonoil is sticking with his argument that we are seeing a downward spiral in the collapse of the oil price that is bringing about the end of the oil age.”

      Can you explain to me the concept because I can’t seem to understand it unless it means prices are so low no one will pull the oil out of the ground?

      • Don Stewart says:

        Rodster
        Butting in. Shortonoil answered a question with a statement like ‘oil just isn’t worth it anymore’.

        I find that very peculiar. Oil is still the same number of gross energy slaves it always was. Granted that the net energy slaves has declined.

        It seems to me that the correct statement would be something like this:

        The financial viability of the oil-saturated economy has been undermined by the rising cost of producing oil. As the oil-saturated economy declines, so does employment and wages and GDP and personal income. As those fall, the price of oil tends to fall as demand evaporates.

        I’m not trying to pre- judge the facts. In 2008 the oil price peaked some time before the financial crisis in the fall of 2008. But the big drops in personal income, employment, GDP, etc. only came in 2009. If the same pattern were to hold true now, we would expect a deep recession about the middle of 2015.

        In classical economics, the world would adjust to lower availability of oil with structural changes in the economy. However, the whole project of the Central Banks has been to prevent structural changes, and just try to resurrect the dead body of ‘the way it used to be’.

        I think the Hills Group model has illuminated something useful, but I think it is an oversimplification. For example, I posted Charles Hugh Smith’s observations about oil being used as collateral. As the oil loses value, then margin calls go out. Margin calls are a classic way that collapses accelerate.

        Don Stewart

        • “In classical economics, the world would adjust to lower availability of oil with structural changes in the economy. However, the whole project of the Central Banks has been to prevent structural changes, and just try to resurrect the dead body of ‘the way it used to be’.”

          It is not even the lower availability, but demand outstripping supply. I think society failed to adapt when oil climbed from ~$20 to ~$80 per barrel, which is when the collapse actually began, around 2005. Rather than adjusting, Western society simply began borrowing huge amounts of money to continue living as if oil was still $20/barrel.

          The spike up from ~$80 to $147 was part of the big move into financialization of commodities. Once you end up with 90 to 98% of all contracts being purely speculative with no intention of taking delivery, odd things happen. This was, I believe, not an intentional plan, but rather a reaction by the big banks to the slowing growth caused by the original climb in oil prices. They had to innovate new ways to make profits, because that is their primary function.

          Perhaps now, markets will clear and society will finally adapt to higher oil prices, but in-between now and the other side, there will likely be a whipsaw in oil prices, down to who knows how low, I’ve seen calls for $35 / barrel, and then mass defaults, and then once there is a real recovery, maybe something like $250 / barrel will become the new equilibrium. Priced in today’s dollars, of course; I have no predictions on the future purchasing power of the US Dollar.

          This is my short term view, say three to five years. In the long run, the oil will inevitably decline.

          • I’d love to believe a gradual readjustment to a lower energy state or alternate energy source was possible but I just can’t find a way that makes sense to me how it could actually happen.

            >

      • Creedon says:

        I think it means exactly that. We also underestimate the effect of debt on our economy. There is every reason to believe that the world economy is imploding.

      • Creedon says:

        One unit of energy equals on unit of economic activity. He says the net energy is declining, so, world economic activity has to decline. This is based on his math which is available.

        • 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.
          Gail Tverberg says:

          Net energy may very well be declining, especially if a person draws boundaries wide enough. Most EROEI calculations use far too narrow boundaries, in my view, neglecting things like governmental support required for energy extraction, and energy required to make the whole chain of machines required in the process.

    • 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.
      Gail Tverberg says:

      I agree with Shortonoil.

  33. VPK says:

    From the comments, I take it that everyone had a nice Thanksgiving and started their “Black Friday” early after their feast. Please post your “best deal” you got at Walmart, Target or Best Buy. Do not forget HSN on the internet!
    The Hamster thanks you!

    • Jan Steinman – http://www.EcoReality.org/wiki/User:Jan_Steinman
      Jan Steinman says:

      “Please post your “best deal” you got at Walmart, Target or Best Buy.”

      What are these things you write about? I haven’t seen such things where I live.

      My “best deal” was half-off at the local thrift store — three pair of like-new pants for $6!

  34. VPK says:

    Just came across this thoughtful article:
    Peak Oil in Retrospect
    Worth the read in full, the link
    http://www.edn.com/electronics-blogs/outside-the-box-/4437749/Peak-oil-in-retrospect

  35. Christian Gebauer
    Christian says:

    If money is a promess, interests are an exponential promess. And all these promesses are related to plundering the Earth. It looks fine as to the kind of things we expect from each other

    • 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.
      Gail Tverberg says:

      Good point!

Comments are closed.