The Problem of Debt as We Reach Oil Limits

(This is Part 3 of my series – A New Theory of Energy and the Economy. These are links to Part 1 and Part 2.)

Many readers have asked me to explain debt. They also wonder, “Why can’t we just cancel debt and start over?” if we are reaching oil limits, and these limits threaten to destabilize the system. To answer these questions, I need to talk about the subject of promises in general, not just what we would call debt.

In some sense, debt and other promises are what hold together our networked economy. Debt and other promises allow division of labor, because each person can “pay” the others in the group for their labor with a promise of some sort, rather than with an immediate payment in goods. The existence of debt allows us to have many convenient forms of payment, such as dollar bills, credit cards, and checks. Indirectly, the many convenient forms of payment allow trade and even international trade.

Figure 1. Dome constructed using Leonardo Sticks

Each debt, and in fact each promise of any sort, involves two parties. From the point of view of one party, the commitment is to pay a certain amount (or certain amount plus interest). From the point of view of the other party, it is a future benefit–an amount available in a bank account, or a paycheck, or a commitment from a government to pay unemployment benefits. The two parties are in a sense bound together by these commitments, in a way similar to the way atoms are bound together into molecules. We can’t get rid of debt without getting rid of the benefits that debt provides–something that is a huge problem.

There has been much written about past debt bubbles and collapses. The situation we are facing today is different. In the past, the world economy was growing, even if a particular area was reaching limits, such as too much population relative to agricultural land. Even if a local area collapsed, the rest of the world could go on without them. Now, the world economy is much more networked, so a collapse in one area affects other areas as well. There is much more danger of a widespread collapse.

Our economy is built on economic growth. If the amount of goods and services produced each year starts falling, then we have a huge problem. Repaying loans becomes much more difficult.

Figure 2. Repaying loans is easy in a growing economy, but much more difficult in a shrinking economy.

In fact, in an economic contraction, promises that aren’t debt, such as promises to pay pensions and medical costs of the elderly as part of our taxes, become harder to pay as well. The amount we have left over for discretionary expenditures becomes much less. These pressures tend to push an economy further toward contraction, and make new promises even harder to repay.

The Nature of Debt

In a broad sense, debt is a promise of something of value in the future. With this broad definition, it is clear that a $10 bill is a form of debt, because it is a promise that at some point in the future you, or the person you pass the $10 bill on to, will be able to exchange the $10 bill for something of value. In a sense, even gold coins are a promise of value in the future. This is not necessarily a promise we can count on though. At times in the past, gold coins have been confiscated. Derivatives and other financial products have characteristics of debt as well.

To understand how important debt is, we need to think about an economy without debt. Such an economy might have a central market where everyone brings goods to exchange. But even in such an economy, there will be a problem if there is not a precise matching of needs. If I bring apples and you bring potatoes, we could exchange with each other (“barter”). But what if I don’t have a need for potatoes? Then we might need to bring a third person into the ring, so each of us can receive what we want. Because barter is so cumbersome, barter was never widely used for everyday transactions within communities.

An approach that seemed to work better is one mentioned in David Graeber’s book, Debt: The First 5,000 Years. With this system, a temple would operate a market. The operator of the market would provide a “price” for each object, in terms of a common unit, such as “bushels of wheat.” Each person could bring goods to the market (and perhaps even services–I will work for a day in your vineyard), and have them exchanged with others based on value. No “money” was really needed because the operator would take a clay tablet and on it make a calculation of the value in “bushels of wheat” of what a person brought in goods, The operator would also calculate the value in “bushels of wheat” that the same person was receiving in return, and make certain that the two matched.

Of course, as soon as we start allowing “a day’s worth of labor ” to be exchanged in this way, we get back to the problem of future promises, and making certain that they really happen. Also, if we allow a person to carry over a balance from one day to another–for example, bringing in a large quantity of goods that cannot be sold in one day–then we get into the area of future promises. Or if we allow a farmer to buy seed on credit, with a promise to pay it back when harvest comes in a few months, we again get into the area of future promises. So even in this simple situation, we need to be able to handle the issue of future promises.

Future Promises Even Before Debt

Whenever there is division of labor, there needs to be some agreement as to how that division will take place–what are the responsibilities of each participant. In the simplest case, we have hunters and gatherers. If there is a decision that the men will do the hunting and the women will do the gathering and care for children, then there needs to be an agreement as to how the arrangement will work. The usual approach seems to have been some sort of “gift economy.” In such an economy, everyone would share whatever they were able to obtain with others, and would gain status by the amount they could offer to share.

Instead of a formal debt being involved, there was an understanding that if people were to participate in the group, they had to follow the rules that the particular culture dictated, including, very often, sharing everything. People who didn’t follow the rules would be thrown out. Because of the difficulty in living in such an environment alone, such people would likely die. Thus, participants were in some sense bound together by the customs that underlay gift economies.

At some point, as more of an economy was built up, there would be a need for one or more leaders, as well as some way of financially supporting those leaders. Thus, there would need to be some sort of taxation. While taxation to support the leader would not be considered debt, it has many of the same characteristics as debt. It is an ongoing payment obligation. The leader and the other members of the group plan their lives as if this situation is going to continue. In a way, the governmental services and the resulting taxation help bind the economy together.

Benefits of Debt

The benefits of debt are truly great, including the following:

  1. Debt allows transactions to take place that are not precisely at the same time and place. I can order goods and have them delivered to my home. An employer can pay me for a month’s work with a check, rather than needing to give me food or some other barter item corresponding to each hour I work. There is no need to have billions of gold coins (or other agreed up metal currency) to facilitate each and every transaction, and to transport around. We can each have bank accounts. From the bank’s perspective, the amount in a bank account is a liability (debt) owed to the depositor.
  2. Additional debt gives additional purchasing power to individuals, governments or businesses. The additional funds available can be spent immediately. Very often, repayment (with interest) is spread over several years, making goods that would not be affordable, affordable. Thus debt raises “demand” for goods and also for the commodities used to create these goods.
  3. Because debt makes goods more affordable, additional debt tends to “pump up” the price of commodities. These higher prices make it worthwhile for businesses to extract more minerals (including fossil fuels) from the earth, and make it worthwhile to plant more acres of food. Debt, particularly cheap debt, makes building new factories and opening new mines more affordable for businesses.
  4. Debt allows a steep step-up in standard of living, such as that obtained by adding coal or oil to an economy. Debt allows goods to be purchased that will substantially change a person’s future, such as transit to a new country, or purchase of a college education, or purchase of a delivery vehicle that can be used to start a business. Without debt, it is unlikely that fossil fuels could ever have been extracted; consumers would never have been able to afford the goods provided by fossil fuels, and businesses would have had difficulty financing the many new factories required to make goods using these fuels. See my post, Why Malthus Got His Forecast Wrong.
  5. Adding debt is self-reinforcing. Suppose a considerable amount of debt is added for what is deemed a good purpose, such as extracting oil in North Dakota. Oil companies will use the debt they receive for many different purposes–including paying employees, paying royalties to land owners, and paying taxes to the state. Employees will buy new houses and cars, taking out loans in the process. North Dakota residents who receive royalty payments may decide to take out home improvement loans to fix up their homes, expecting that the royalties will continue. The state may fix its roads with its revenue, giving additional income (which may lead to more debt) to road workers. A grocery chain may decide to build a new store (borrowing money to do so), further pushing the chain along. What happens is that indirectly, the new oil company debt makes a lot of people at least temporarily wealthier. These temporarily wealthier individuals can then “qualify” for more in loans than would otherwise be the case, giving them more to spend, and allowing yet others to qualify for loans.
  6. Arrangements that are not debt, but more of the nature of contingent debt, make people feel more confident of the current system. There are insurance programs for pension programs and for bank accounts, up to a selected balance per account. These insurance programs generally don’t have very much money in them, relative to what they are insuring. But they make people feel good, especially if there is a government that might come in and take over, beyond the actual funding of the insurance program.

What Goes Wrong with Debt and Other Financial Promises

1. As mentioned at the beginning of the post, debt works very badly if the economy is contracting.

It becomes impossible to repay debt with interest, without reducing discretionary income. Government programs, such as health care for the elderly, become more expensive relative to current incomes as well.

2. Interest payments on debt tend to transfer wealth from the poorer members of society to the richer members of society.

Economists have tended to ignore debt, because it represents a more or less balanced transaction between two individuals. The fact remains, though, that the poorer members of society find themselves especially in need of debt, and many pay very high interest rates. The ones lending money tend to be richer. Because of this arrangement, over time, interest payments tend to increase wealth disparities.

3. All too often, the payment stream upon which debt depends proves unsustainable.

In the example given above, everyone thinks the North Dakota oil will continue for a while, so takes out loans as if this is the case. If it doesn’t, then this is an “Oops” situation.

In the case of US student loans, many students are never able to get jobs with high enough wages to pay back the loans they were given.

4. Governments tend to put programs into place that are more expensive than they really can afford, for the long term.

As an economy gets wealthier (because of more fossil fuel use), there is a tendency to add more programs. Representative government is used instead of a monarch. Medical care and pensions for the elderly are added, as are unemployment benefits, and more advanced levels of schools.

Unfortunately, it is hard to properly estimate what long-run cost of these programs will be. Also, even if the programs were affordable with a high level of fossil fuels, they almost certainly will not be affordable if energy availability declines. It is virtually impossible to roll programs back, even if they are not guaranteed, once people plan their lives on the new programs.

Figure 3 shows a graph of US government spending (all levels) compared to wages (including amounts paid to proprietors, including farmers). I use this base, rather than GDP, because wages have not been keeping up with GDP in recent years. The amounts shown include programs such as Social Security and Medicare for the elderly, in addition to spending on things such as schools, roads, and unemployment insurance.

Figure 3. Comparison of US Government spending and receipts (all levels combined) based on US Bureau of Economic Research Data.

Clearly, government spending has been rising much faster than wages. I would expect this to be true in many countries.

5. There is no real tie between amounts of debt issued and what will actually be produced in the future. 

We are told that money is a store of value, and that it transfers purchasing power from the present to the future. In other words, we can count on balances in our bank accounts, and in fact, in all of the paper securities that are outstanding.

This story is only true if the economy can continue to create an increasing amount of goods and services forever. If, in fact, the production of goods and services drops off dramatically (most likely because prices cannot rise high enough to encourage enough extraction of commodities), then we have a major problem.

In any year, all we have available is the actual amount of resources that can be pulled out of the ground, plus the actual amount of food that can be grown. Together, these amounts determine how many goods and services are available. Money acts to distribute the goods that are available. Presumably, the people who work at extraction and production of these goods and services need to be paid first, or the whole process will stop. This basically leaves the “leftovers” to be shared among those who are now being supported by tax revenue and by those who hold paper securities of some sort or other. It is hard to see that anyone other than the workers producing the goods and services will get very much, if we lose the use of fossil fuels. Workers will become less efficient, and production will drop by too much.

6. Derivatives and other financial products expose the financial system to significant risks.

Certain large banks have found that they can earn considerable revenue by selling derivatives and other financial products, allowing people or businesses to essentially gamble on certain outcomes–such as the price of oil falling below a certain price, or interest rates rising very rapidly, or a certain company failing. As long as everything goes well, there is not a huge problem. The concern now is that with rapidly changing commodity prices, and rapidly changing levels of currencies, companies may fail and there may be major payouts triggered.

In theory, some of these payments may be offsetting–money owed by one client may offset money owed to another client. But even if this is the case, these defaults can sometimes take years to settle. There may also be issues with one of the parties’ ability to pay.

One particular problem with many of the products is the use of the Black-Scholes Pricing Model. This model is applicable when events are independent and normally distributed. This is not the case, when we are approaching oil limits and other limits of a finite world.

 7. Governments tend to be badly affected by a shrinking economy, so may be of little assistance when we need them most.

As noted previously, payments to governments act very much like debt. As an economy shrinks, programs that seemed affordable in the past become less affordable and badly need to be cut. Thus, governments tend to have problems at the exactly same time that banks and other lenders do.

Governments of “advanced” countries now have debt levels that are high by historical standards. If there is another major financial crisis, the plan seems to be to use Cyprus-like bail-ins of banks, instead of bailing out banks using government debt. In a bail-in, bank deposits are exchanged for equity in the failing bank. For example, in Cyprus, 37.5% of deposits in excess of 100,000 euros were converted to Class A shares in the bank.

This approach has a lot of difficulties. Businesses have a need for their funds, for purposes such as paying employees and building new factories. If their funds are taken in a bail-in, the ability of the business to continue may be damaged. Individual consumers depend on their bank balances as well. As noted above, deposit insurance is theoretically available, but the actual amount of funds for this purpose is very low relative to the amount potentially at risk. So we get back to the issue of whether governments can and will be able to bail out banks and other failing financial institutions.

8. More debt is needed to hide the lack of economic growth in an ailing world economy. This debt becomes increasingly difficult to obtain, as wages stagnate because of diminishing returns. 

If wages are rising fast enough, wages by themselves might be used to pump demand for commodities, and thus raise their prices. Our wages are close to flatmedian wages have been falling in the US. If wages aren’t rising sufficiently, increasing debt must be used to raise demand. Debt is growing slowly in the household sector, according to figures compiled by McKinsey Global Institute. Household debt has grown by only 2.8% per year between Q4 2007 and Q4 2014, compared to 8.5% per year in the period between Q4 2000 and Q4 2007.

Even with business demand included, debt isn’t rising rapidly enough to keep commodity prices up. This lack of sufficient growth in debt (and lack of growth in demand apart from growing debt) seems to be a major reason for the drop in prices since 2011 in many commodity prices.

9. Differing policies with respect to interest rates and quantitative easing seem to have the possibility of tearing the world financial system apart.

In a networked economy, not moving too far from the status quo is a definite advantage. If the US’s policies have the effect of raising the value of the dollar, and the policies of other countries have the tendency to lower their currencies, the net effect is to make debt held in other countries but denominated in US dollars unpayable. It also makes goods sold by American companies unaffordable.

The economy, as it exists today, has been made possible by countries working together. With sanctions against Iran and Russia, we are already moving away from this situation. Low oil prices are now putting the economies of oil exporters at risk. As countries try different approaches on interest rates, this adds yet another force, pulling economies apart.

10. The economy begins to act very strangely when too much of current income is locked up in debt and debt-like instruments.

Economic models suggest that if oil prices drop, demand for oil will grow robustly and supply will drop off quickly. If oil producers are protected by futures contracts that lock in a high price, they may not respond in the manner expected. In fact, if they are obligated to make debt payments, they may continue drilling even when it may not otherwise make financial sense to do so.

Likewise, consumers are also affected by prior commitments. If much of consumers’  income is tied up with condominium payments, auto payments, and payment of taxes, they may not have much ability to respond to lower oil prices. Instead of increasing discretionary spending, consumers may pay off some of their debt with their newfound income.

Conclusion

If the current economic system crashes and it becomes necessary to create a new one, the new system will have to deal with having an ever-smaller amount of goods and services available for a fairly long transition time. This is one chart I have shown in the past of how the growth in energy products, and thus growth in goods and services, might look.

Figure 4. Estimate of future energy production by author. Historical data based on BP adjusted to IEA groupings.

Because of this, the new system will have to be very different from the current one. Most promises will need to be of short duration.  Transfers among people living in a particular area might still be facilitated by a financial system, but it would be hard to have long-term or long-distance contracts. As a result, the new economy will likely need to be much simpler than our current economy. It is doubtful it could include fossil fuels.

Many people ask why we can’t just cancel all debt, and start over again. To do so would probably mean canceling all bank accounts as well. Most of our current jobs would probably disappear. We would probably be without grid electricity and without oil for cars. It would be very difficult to start over from such a situation. We would truly have to start over from scratch.

I have not talked about a distinction between “borrowed funds” and “accumulated equity”. Such a distinction is important in terms of the rate of return investors expect, but it is not as important in a crash situation. Similarly, the difference between stocks, bonds, pension plans, and insurance contracts becomes less important as well. If there are real problems, anything that is not physical ends up in the general category of “paper wealth”.

We cannot count on paper wealth (or for that matter, any wealth) for the long term. Each year, the amount of goods and services the economy can produce is limited by how the economy is performing, given limits we are reaching. If the quantity of these goods and services starts falling rapidly, governments may fail in addition to our problems with debts defaulting. Those holding paper wealth can’t count on getting very much. Workers producing whatever goods and services are actually being produced will likely need to be paid first.

 

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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506 Responses to The Problem of Debt as We Reach Oil Limits

  1. Pingback: News update | Peak Oil India | Exploring the coming energy crisis and the way forward

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  3. VPK says:

    Article in Havana Times written by Erasmo Calzadilla
    HAVANA TIMES — It will have been four years since civil war broke out in Syria this March. Unfortunately, it doesn’t look to be the last year of conflict. Hundreds of thousands of deaths, more than two million refugees, fifty thousand disappeared persons, an economic infrastructure that has been razed to the ground and the rise of religious hatred are the most evident results of this bloody conflict.

    Much has been written about the causes of the war, but there’s one fact analysts tend to overlook: in 1996, oil production in the country reached its peak and has been declining unstoppably ever since
    Note: For this post, I relied chiefly on an article by Gail Tverberg published in 2013, “Oil and Gas Limits Underlie Syria’s Conflict”. Tverberg is an expert consultant for energy issues, a member of the Association for the Study of Peak Oil (ASPO) and author of the blog Our Finate World.
    I know Gail will appreciate this credit, going to Cuba soon.

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

    The U.S. uses 3.5 TW on average for ALL energy. Taking into account the fact the sun shine brightly about 6 hour per day we should up that by a factor of four. Taking into account that sometimes it is cloudy let’s use a factor of five, 5×3.5=17.5 TW. Let’s use $1/W, which is far better than today’s rate for PV+mount+distribution+night time storage, it will cost 17.5 trillion dollars to re-power the U.S.. With an investment of 0.1 trillion per year this will take 175 years. Something will give long before this comes to pass.

    • Why would you build solar everywhere? You wouldn’t, you’d build large scale plants in the Sun Belt and use the grid to distribute energy. Then, you would build giant wind farms in the Dakotas. You wouldn’t use 3.5 Tw of power in the middle of the night, you would jack up night time rates five or ten fold.

      The bigger problems I see is that it is not economically viable for private companies to build out with their own money, and if there are government subsidies the projects are built to maximize subsidies and not to be a good investment on their own.

    • clegg5 – USA – Damn your identities, serve me raw and naked truth.
      Josh Lang says:

      “Something will give long before this comes to pass”

      Yes, and it won’t take 175 years. Over time, renewable energy will be cheaper than coal, nuke, etc.. Perhaps 2060-80+. But not yet. And, as you say, economics is the ultimate driver. I do think rooftop PV will be under $1.00/w, all-in, by 2040, but I don’t think it’s going to matter. When we have 9B people striving for economic viability, dwindling raw materials (water, energy, etc.), rising earth temps, and a host of other limiting factors, I will be surprised if “something doesn’t give” by 2040-2050.

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

      The fed could print 20 trillion and create lots of jobs and build out the new system in 10 years?

  5. jeremy890
    jeremy890 says:

    Back to the “real” world. Greece has a plan and it looks like it will go ahead.
    Even if it will not “work”, the show continues.
    http://www.bbc.com/news/world-europe-31599688

    Combat tax evasion
    Tackle corruption
    Commit not to roll back already introduced privatisations, but review privatisations not yet implemented
    Introduce collective bargaining, stopping short of raising the minimum wage immediately
    Tackle Greece’s “humanitarian crisis” with housing guarantees and free medical care for the uninsured unemployed, with no overall public spending increase
    Reform public sector wages to avoid further wage cuts, without increasing overall wage bill
    Achieve pensions savings by consolidating funds and eliminating incentives for early retirement – not cutting payments
    Reduce the number of ministries from 16 to 10, cutting special advisers and fringe benefits for officials
    Source: Financial Times

    The very last sentence of the letter is particularly striking: the government will “ensure that its fight against the humanitarian crisis has no negative fiscal effect”.
    There you have some key priorities for Greece and its lenders expressed very compactly. It will be very difficult to land any significant blows in that fight without extra spending.
    Mr Varoufakis might be able to avoid any negative fiscal effect if he can deliver on all the stuff on improved tax collection. That will take time though, especially the desire he expresses to create a “new culture of tax compliance”.
    Desirable no doubt, but it’s a reminder that in reality the story of Greek economic reform has years to run.

  6. clegg5 – USA – Damn your identities, serve me raw and naked truth.
    Josh Lang says:

    I will take a contrary view. Let’s see if I can get this under the proper post 🙂

    I know of no time in recent history where the perfect storm of cheap energy, cheap money, and cheap commodities has NOT led to accelerated economic growth. It takes 6-12 months for cheaper resources to manifest in the greater economy, so I’ll say that 3Q-4Q 2015 will be the beginning of a marked upturn in global economic performance. As long as money, energy, and raw materials stay cheap, economic growth will (must?) continue to accelerate. I believe this is the main reason we’re seeing a resilient stock market today — smart money knows what’s coming.

    Economic acceleration, over time, will again lead to higher interest rates, which by definition allows old debt to be paid down faster. Traditional economics. The real question is: which comes first? Global implosion due to debt default, or sustained economic acceleration leading to debt relief? My long bet is on the latter. The same powers that hold most of the world’s debt have NO interest in causing a global default, which would hurt THEM the most. This is why the EU was so quick to negotiate with Greece. Default would be far worse than a debt restructuring haircut.

    Finally, I think much of what’s happening today was predicted by peak oil theory. Going forward, as the global economy again heats up, increasingly limited fossil supply will cause an accelerated run-up in energy prices, leading to price spikes we’ve not seen before (think $150-200/bbl oil, etc.), which will cause a slow-down in global economic activity. Rinse, repeat …. with each new boom-bust cycle coming faster and more devastating, ultimately ending in an unsustainable economic system. When I project the 12 (or so) key “sustainability asymptotes” over the next 40 years, it becomes pretty clear that the years 2040-2050 could be humanity’s most difficult ever.

    But in the near-term (2016-2019), I think we’re going to see a sustained economic turn-around. For investors, I would suggest that oil stocks are a screaming bargain right now. And thanks, Gail, for your all your amazing work. Love you, JL

    • Reg says:

      I have worked in the financial markets for 20+ years now for various investment banks.

      The stock markets are hitting new records for two reasons:

      1. Central banks are printing money and corporations are taking this cash at very low rates of interest and using it to buy back their stocks

      2. Central banks are active in the equity markets buying stocks any time the market starts to run downwards

      3. These activities are observed by institutional money managers who see that the market is risk free. They buy the markets knowing the central banks will not allow them to fall

      Oil, even at $50 is way to high to generate any sort of real economic growth.

      You have not the slightest clue what you are talking about

      • VPK says:

        But Reg, don’t you read the MSM and believe the world is washed in oil?http://www.resourceinvestor.com/2015/02/24/where-do-we-look-oil

      • John Doyle – Seeker of truth in a world of falsehoods
        John Doyle says:

        You say that Josh has no clue, but you are not covering yourself in glory either. It’s not even shorthand to say central banks print money. They don’t. They spend money into existence. It’s supposed to benefit the non government sector to add to employment and productivity. The fact that the banks are using it to aid speculation, such as driving up house prices, and all the derivatives market, shows the central banks have no control over such business, little or no control over the money supply [interest rates]. It’s all in the hands of the private banks.
        Under Neo-Liberal policy the banks are deliberately helping to not promote economic growth because it would cause wage rises and that is counter to it. They only want to widen the gap between the haves and the have nots [without admitting it]. As you say real economic growth is not their aim. Is it because they understand real economic growth is barely possible today? It’s not just oil. It’s demographics, looming resource scarcity, overpopulation, environmental degradation all adding to the grim picture we should be doing something about, but aren’t. Rising debt is covering for it, but for how long?

      • clegg5 – USA – Damn your identities, serve me raw and naked truth.
        Josh Lang says:

        “You have not the slightest clue what you are talking about”

        Anyone who says they have an economic crystal ball is either a liar, or diluted. I am expressing an based on 15 years of energy/oil research (APSO member for many years, etc.), multiple business start-up successes (one of which is a household name), and a better-than-average grasp on market dynamics. I appreciate all contrary opinions, but to state that someone “hasn’t the slightest clue” isn’t helpful to the conversation.

        What you say is partially correct, But it’s only a small piece of a much larger puzzle. QE is not “debt” in the classical sense, nor is it accounted by the same actuarial methods (Gail can help you here). Yes, debt levels are high, but not historically high. Oil at $50 is a screaming bargain – we’ll just have to disagree. I personally think it will go lower before it starts climbing again ($35-40), especially in light of OPEC’s statement today. The only reason oil is so cheap is due to a rare confluence of modest global economic growth coupled with artificially-increased supply. Couple this with cheap (free) money and increasingly cheaper commodities. My friend, this is the perfect recipe for accelerated global growth. It’s a law of biology: give virtually any biological system extra fuel and it grows faster.

        Corporate earnings continue to come in reasonably healthy. No warning signs there. Market PE’s are a bit high, but not crazy high. I’m sure we’ll see corrections (Dow 16,000-16,500 perhaps), but there’s no fundamental reason for a “meltdown” – short of a black or gray swan event. If you think we’re headed for a major crash, then I encourage you to invest in CD’s or gold, or start a smart business.

        In reality, global GDP growth has been accelerating y-o-y for the last 4 years. http://www.statista.com/statistics/268750/global-gross-domestic-product-gdp/
        Debt is a b!tch, but it’s not going to kill us in the short-term. And, as I said, the major debt-holders are not going to kill themselves, either. More haircuts are coming, but so is accelerated growth. That’s in the short term.

        In the long term, I’m not optimistic. I think we’re headed for a global train wreck, but not for the reasons on the table today. JL

    • worldofhanuman
      worldofhanuman says:

      There were people in the 1970s believing the mainstream orthodoxy such as inflation can’t never go hand in hand with lower realn income/wages, and it did happen anyway, stagflation.

      Nowadays some people still expect the lower oil prices to jump start the economy, won’t happen again, because the debt saturation for personal consumption is at maximum not only in the west (e.g. Denmark/EU over 500% household debt to gdp!) but it looks like China/Asia is being closer to saturation point as well. Also take into account that as of Q1-Q2 2015 many if not most of the banking houses openly say the cheap oil will not jump start anything, total 180°turnaround from how they massaged mthe arkets towards Q42014.

      The stock market will eventually evaporate as well as the bond market and the major currencies, TPTB are only waiting for some nice cover story how to sell the blame of reset (impoverishement in %% scale) to the sheepled public at large, at the moment the scenario for war with Russia seems among the top contenders. Frankly, this is very close or perhaps even beyond previous historic global meltpoints, in few years time the US spying programme on allies has been revealed, blocks of countries issue threats about kicking the other guy out of financial system etc. Sanctions and contrasanctions declared like in the 1930s, barter like global direct currency swaps announced. The eastern/southern block finally figuring out the root of it all, the “western market” itself is the big illussion and scam, so they plan to no longer participate, meaning no further recirculation of capital etc. Also western states are openely discussing how to censor public opinion, blocking access to competing global massmedia. Simply, unprecedented development for the post WWII generations, something is definately brewing.

  7. Don Stewart says:

    Dear InAlaska
    In response to your question about what the animals were eating before the land became desert.

    The usual disclaimer: I am a gardener, not a rancher. However, since nobody else has responded, I will do my best.

    The desert land that Savory shows as his ‘before’ pictures were once grasslands. Then, humans upset the ecology by killing the wild herbivores and driving away the predators and beginning to raise domesticated cattle. The problem is that grass co-evolved with the herbivore/ predator system, and begins to deteriorate in its absence. The predators keep the herd together, with periodic predation, and they also keep the herd moving. The result is that the herbivores crop almost all of the grass, while fertilizing the land with poop and urine. Their hooves also disturb the soil, and push the stalks into the soil. The herd then moves on in response to pressure from the predators.

    The grazed area is immediately attacked by everything from bacteria to dung beetles, and after a few days the grass begins to regrow. But the herbivores are off cropping a new area, and the grass gets plenty of opportunity to grow again, in renewed soil. After some months, the herbivores return and the cycle repeats.

    However, if domesticated cattle graze the land, they tend to eat only their favorite plants and leave those they don’t like very much. Thus, weeds trend to take over from the more productive grasses. And the cows don’t move anywhere, since the predators have been killed or driven off. The result is increased desertification over time.

    Savory’s system (which was inspired by some French scientific research) uses fences defining paddocks between which the domesticated cattle are moved. Sometimes it is called ‘mob grazing’, because a whole mob of cows are confined in a small area. The confined cows will crop all the grasses, which prevents the weedification. The cows are moved by humans, rather than predators, to the next paddock. The grass thus gets a chance to regrow. A particular paddock may be occupied for even less than one day, depending on how luxuriant the grass is, how many cows, and so on and so forth according to the art of grazing cows. The cows are not returned to the particular paddock until the grass has regrown.

    If drought or winter cause the grass to not grow very fast, then the grazer must reduce the number of cows. In other words, healthy grass is the first order of business.

    What Savory’s before and after pictures show is that the luxuriant grass which was originally there can be brought back with good grazing practices. In places like Jordan, semi-wild goats are allowed to graze at will and eliminate everything except the toughest desert plants. If all the goats were killed, then grasses would re-establish themselves. But the Arabs would also need to begin grazing in the style of Alan Savory, or else the land would not be a luxuriant grassland. The Arabs could, I suppose, graze goats, but they would likely do a lot better with sheep or cattle. Goats would be hard to confine with a simple strand of electrical wire, and are not of the economic value of sheep or cattle.

    I don’t know much about caribou, but I imagine the same sort of ecology plays out on the tundra. Wolves and mosquitoes may keep the caribou moving.

    Don Stewart

    • worldofhanuman
      worldofhanuman says:

      Dear Don, in terms of tundra both in NA and EuroAsia the forage is often based more on various spongy mushrooms (lichen) than grasslands foraging but the animals cover vast distances during yearly migration cycles, so perhaps also tend to cross into some tundra border areas with more grass like forage.

      Prince Charles is practicing Savory’s methods on his estates (ehm his mother’s lol) so chances are it could “eventually” spread to other royaly heads around the globe including ME. However, their plans at the moment seem to more oscilate around hyperBAU, e.g. nuclear and gas plants powering large “chemical” greenhouses under the desert sun..
      But I agree with your point many ME places are valid candidates for such reconstruction.

  8. Pingback: Excelente resumo | Achaques e Remoques

  9. Don Stewart says:

    Dear Gail and All
    To all those doomers who are absolutely certain Elon Musk’s Home Battery can’t work. Here is another heretical solution to our problems…healthy gut biome.

    https://mail.google.com/mail/u/0/#inbox/14bb759b28c0faef

    As a flyer I received for a medical conference stated:
    ‘Emerging science confirms that genes rarely cause disease; rather, they influence disease susceptibility. It’s not nature vs. nurture, but nature and nurture. Our DNA may be fixed, but how our genes behave is profoundly influenced by the environment.’

    And the TED talk indicates that a profound environmental influence is our microbes, which are influenced by what we eat, our chemical exposures, our mental state, and so forth.

    An optimist might think that, perhaps, we might recover the Garden of Eden…while killing the Serpent of Debt. (If you watched all of Nate Hagen’s talk, you know that he recommends optimism. 15 minutes a day of reality is all we can stand.) (For those with no sense of humor, this last sentence is tongue in cheek.)

    Don Stewart

  10. Don Stewart says:

    Dear Gail and All
    Recommended reading:
    http://peakoil.com/consumption/is-oil-becoming-obsolete

    Elon Musk plans to introduce a new battery for the home. Letting PV panels be more convenient for the average homeowner, as well as saving money.

    Don Stewart

    • “Elon Musk plans to introduce a new battery for the home. Letting PV panels be more convenient for the average homeowner, as well as saving money.”

      We’ll see in 25 years how many times the batteries had to be replaced, how recyclable they are, and what the net EROEI whole life cycle for the system is. Unfortunately, we cannot wait 25 years to find out the answer, and iterate from there.

      The key to the money saving is government subsidies. Whether the system really is economically viable, we again won’t know until the system has gone through its whole life and been taken down and recycled. Same with the greenhouse gas emissions.

    • MG says:

      The trick is in the fact that you alone can have your electricity from the battery, but if others do not have the electricity, our current civilization is finished. Furthemore, it is the cheap oil that actually interconnects all the items of the system. Not electricity or 3D printers. You can not print the plastic material that a 3D printer uses for “printing” or a 3D printer itself.

      Small scale low energy solutions will not save the current civilization. Anyway, all that needs subsidies is not economical, as it takes energy from other parts of the system. The same way as the costly oil takes energy from other parts of the system.

      The surface still may look o.k., but the cracks of the imploding reality under its rosy make-up are widening…

      • “Small scale low energy solutions will not save the current civilization. ”

        I don’t think that’s the goal. The goal is either to make changes to alter the system, or to survive the collapse.

        “You can not print the plastic material that a 3D printer uses for “printing” or a 3D printer itself.”

        You can make plastics from starches. We’ll see, the more time BAU lasts, the more innovations we can develop. There are 3D Printers that can print most of their own parts. We’re pretty close to being able to print memory and processing on paper with special ink. It’s a race against time, between the inevitable collapse, and getting self-replicating machines.

        • John Doyle – Seeker of truth in a world of falsehoods
          John Doyle says:

          Yes, but when all the politicians and the mainstream media and the general public are lost in dreamland there will never likely be enough time. If we lose the grid, or it becomes patchy, we risk all our records and scientific knowledge except those in hard copy and then these will not be generally available. The innovation we need will take a big hit. Few will know how to make plastic from starches, maybe a few dozen individuals [?]. Few will know how to farm, how to raise livestock, where to get seeds. All were once widespread skills. We westerners are far too specialised to become generalists overnight, and even if we could we will face a whole new world, with few ready resources, fewer fish and food of all kinds. Etc.

      • Don Stewart says:

        Dear MG and Others
        I don’t know if the Panasonic batteries will turn out to be some giant leap forward, or not. I know my sister was involved with Panasonic several years ago. She never told me much about it.

        I have said pretty consistently that I think that the best use for our remaining fossil fuels is to enhance the productivity of sunshine. For example, making plastic pipe to provide water to the paddocks in which cows are rotationally grazed. Or making the drip tapes for efficient irrigation systems. Or making the PV panels which pump water into high storage to utilize gravity for irrigation water distribution. All of these are hybrid systems which use both the industrial energy from fossil fuels PLUS the free energy from sunshine along with gravity.

        If you call those ideas ‘half and half’, then Musk’s idea is about ‘three quarters/ one quarter’. That is, three quarters fossil fuel (the PV panels and batteries) and one quarter the free sunshine.

        If the Musk solution is paired with passive solar design, then it gets closer to half and half.

        Don Stewart

        • MG says:

          Dear Don Stewart,

          where will the poor people earn money for the industrial products that support the agriculture? When we start to have problems with the transportation, the food production goes down immediately and there will not be people who will be able to afford the food produced by the famers. Almost everybody must become a farmer himslelf/herself.

          Yes, you can buy some plastic pipes, barrels etc. today when the system works. But that is probably all you can do. Anyway, there will be a lot of rubbish after the collapse of the energy production, so there should not be a problem e.g. to dig some plastic natural gas pipes out of the ground and use them for irrigation purposes etc. I think that the reuse of the elements of todays infrastructure will provide enough construction material for agriculture for surviving people under reduced soil productivity due to the lack of fertilizers.

          What makes the collapse sharper is the belief in the dying system. I. e. subsidized house prices crash, subsidized prices of oil crash, subsidized prices of food crash. When you take away the energy, all falls apart, the bubbles burst, the system atomizes (e.g. a lot of singles, a lot of divorced etc.).

          • worldofhanuman
            worldofhanuman says:

            We have been discussing this from many angles for a while.You have to specify the timelines and regional distribution you have in mind for each argument provided.

            For instance, given the fact demand destruction in frivolous activities have just barely started since 2008 (or 1970s peak of working lower middle class oppulence), there is no urgency for food supply problems yet, and say for next 2decades, speaking about the affluent west/north.

            We can simply will borrow additional time by “allowing for” further demand destruction as described here numerous times in detail (less personal car milage driven, less shopping consumption, less investment/repair into infrustructure, ..)

            You are right there might come a breaking point after which nature of the beast aka dying system will be revealed in plain sight for larger part of given population, but again even this dire situation could be turned over temporarily by TPTB, and some sort of stabilization on lower energy throughput forced on us all for a moment (decades on new plateau).

            I’ve been into “doom” for almost 2decades, lot of things indeed have and many have not happened yet, also the understanding of interplay between basic human nature and TPTB’s acquired skill over milenia how to sheppard sheeple through difficult times somewhat growths on students of these relationships.

            Our current system is a delicate machine developed over centuries, winding it down or crashing it down most likely can’t happen over few years time.That doesn’t mean trying proactively balanced out some of the larger gyrations is meaningless, no but the sky is not falling yet.

            • MG says:

              I always say that we should look to Japan, all the demographic phenomena of the declining population of a highly developed industrial country are happening there. The sky will not fall, but the population will. With an accelerating dynamics all over the world, as the people will be drained out of the energy that is needed for everyday life.

              There is no problem neither with the shelter, nor with the food, but with the energy for everyday life to keep the system together.

          • Don Stewart says:

            Dear MG

            To respond to you, I have to be repetitive of things I have said before. But I’ll try to be brief.

            Let’s put the issues in a Systems perspective. Our system is composed of subsystems (M&Ks Rule Number 1). Let’s consider some subsystems:
            Finance
            Fossil Energy and Nuclear
            Sunshine, falling water, gravity, photosynthesis
            Infrastructure which uses Fossil Energy and Nuclear
            Infrastructure which increases the human usefulness of sunshine, falling water, gravity, and photosynthesis
            Industrial fertilizer
            Recycled nutrients and nutrients produced by photosynthesis
            Population

            Gail recently said to someone that ‘we need to increase EROEI’. My proposal for increasing EROEI is to use Fossil Energy and Nuclear, along with the infrastructure which uses them, to provide infrastructure which increases the human usefulness of sunshine, falling water, gravity, and photosynthesis. We use less industrial, but more natural energy. This is the Appropriate Technology that John Michael Greer is always talking about. It’s not Stone Age, but neither is it Techno-Utopia.

            Appropriate Technology is a branch of Taoism…going with the flow rather than fighting it. Making sure you have south facing roofs (in the Northern Hemisphere) so that you have a good place to put a PV panel. Don’t try to pump sewage uphill. Use natural methods for cleaning sewage very close to the places it is produced. Catch water high up in the landscape and hold it there until you need it, or let it percolate down slowly in the soil. Passive solar design. All these are the design ideas which inspired the first Permaculture books back in the 1970s, and provided the inspiration for homes such as David Holmgren’s Melleodoro in Australia.

            The rebuilding of the home economy, with a proportional shrinking of the industrial economy and especially the financial system are part of the deal, as David Holmgren and David Kennedy and many others teach.

            In terms of climate change, if we adopt sane agricultural practices we can sequester in the soil all of the current carbon emissions. If we simultaneously reduce carbon emissions and adopt sane agricultural practices, then we will steadily reduce carbon dioxide in the air. Over the last 50 years, Polyface Farm (Joel Salatin’s place in Virginia) has sequestered 2 tons of carbon per acre per year. Joel has done this with no subsidies of any importance. I don’t know how much carbon Alan Savory has sequestered, but it has to be substantial. Jean-Martin Fortier in Quebec, on an intensively gardened acre and a half has achieved 14 percent soil organic matter in a little more than a decade.

            You mention fertilizer. If we want to sequester carbon, we need to stop using industrial nitrogen and herbicides and plowing. Which means that we need to put nitrogen into the soil through Christine Jones’ Liquid Carbon Pathway, with hay mulches, with raised bed keyhole gardens which recycle kitchen waste, with legumes, with Holistic Grazing, and so forth. All of these things can theoretically be done with Stone Age infrastructure, but they become vastly easier if we have some industrial infrastructure. For example, Holistic Grazing becomes very much easier if we have lightweight electric fences to define paddocks, and we have flexible plastic pipe to get water to each paddock. If the water is gravity fed from a high pond, then we have achieved an Appropriate Technology.

            Every time I have discussed such stuff with Gail, she comes back with ‘Yes, but the TBTF Banks will fail’. I see the willingness, or unwillingness, of our ‘polis’ to address the financial and political issues as critical, but not something I can do much about. I do not buy the argument that businesses cannot become less complex than they are today…businesses are run by humans who are clever. I would tend to agree that the TBTF banks have gone so far that they cannot reform themselves. But I also think they have become a dead weight on humanity, and we need to kill them as mercifully as possible. Then we get on with life.

            How many people will make it through these changes? I don’t know. I suspect that the limitation on survival is more about the willingness of people to do what they need to do, rather than the limitations on photosynthetic productivity. As Joel Salatin says, he ‘will believe food is in short supply when I see golf courses being plowed under’. As for the oft-repeated idea that we MUST support the old folks in Florida playing golf with the taxes of many young people…whoever came up with such a ridiculous idea to begin with?

            As I said in a recent post, I see two paths. One is some sort of ragged but fairly coherent public response, the other is the path of survival and thriving by the Jewish musician born in Warsaw who found his way to Moscow in the midst of WWII and the Cold War and the collapse of the Soviet Union.

            I don’t know what will happen. Paul Gilding thinks 2015 is the year things start to change:
            http://www.resilience.org/stories/2015-02-24/the-year-the-dam-of-denial-breaks-on-climate-change

            Don Stewart

            • worldofhanuman
              worldofhanuman says:

              Dear Don, we are on the same page regarding the “obvious solutions” you so richly put forward our attention to and explained well enough. However, I also do hear these “near criticality” warning signs by Gail and Nicole (and others) about looming system reset, where I’m interested mainly in the propabilities of diverse scenarios what comes next. It could be wide range of possibilities, ranging from eco-totalitarianism to smaller scale BAU muddlethroughism aka feudal oligarchism. Given the regional differences, I’d say it is “easy” to risk it anyway on the right thing to do in land bonanza places like the US, Canada perhaps even Russia (although even as russian you need permits to settle in the wilder regions), but I’d be a bit hesitant to “bail out of the system” in land space disadvantaged places like Europe, ME and China.

            • Don Stewart says:

              Dear worldofhanuman
              Europe is currently producing more food than it can sell, so it is imposing production restrictions. China has historically produced an enormous amount of food in very close proximity to huge cities such as Shanghai and Hong Kong. That may be changing in the last decade or so, but it is a choice, not a destiny. In the Middle East, food production can increase if they simply kill and eat all the wild goats.

              If you take a look at Geoff Lawton’s video Greening The Desert, you will see that food production is not impossible in the worst place in the world…the Dead Sea Valley with salted up land. BUT, Geoff has access to industrial machinery such as excavators to move the dirt around to make water retention earthworks. If he were trying to do it with Stone Age technology, it might be impossible (without slave labor). Once the earthworks are in place, he does not use artificial fertilizers, he doesn’t use herbicides, and he doesn’t plow. This permits colonization by microbes which sequester carbon in the soil and thus retain water, and also, by methods we don’t understand, immobilize the salt.

              I don’t think the worst places in the Middle East are likely to the cheapest places to produce food, and it may be that they will simply become empty. But producing some food there is not impossible.

              Don Stewart

    • Olsen says:

      Hydrogen to power Shipping

      Ocean tunnels can make electricity cheap at off-peak times. This will reduce the cost of recharging batteries of electric vehicles at night.

      It will also reduce the cost of producing hydrogen at off-peak hours. To power ships crossing the oceans, hydrogen looks more cost-effective, as such ships cannot return to base for a nighly battery recharge. Such ships have plenty of cargo space to carry hydrogen, even when the hydrogen is not highly compressed. Some of the world’s largest ports are close to strong ocean currents.
      http://www.arctic-news.blogspot.ca/

  11. Quitollis says:

    More woes for the EU.

    The leftist eurosceptic Le Pen is now up to 30% in polls for next months nationwide local elections. The euro currency block would surely be over were she to win the presidency in 2017 and withdraw France.

    http://www.independent.co.uk/news/world/europe/frances-national-front-marine-le-pens-farright-party-is-leading-in-the-polls-ahead-of-next-months-local-elections-10064665.html

    And the centre right eurosceptic Alternative for Deutschland party has taken its first seats in western Germany following a string of success in the east.

    http://www.ft.com/cms/s/0/9ea3d780-b5bf-11e4-a577-00144feab7de.html

    http://rt.com/op-edge/232775-germany-elections-alternative-party/

  12. Don Stewart says:

    Dear Gail and All
    Some recent posts here have questioned, ‘What is this Collapse we are talking about?’

    I’ll try to give a few hints about things to think about.

    John Michael Greer likes to talk about the rise and fall of military empires: the Persians, the Romans, the British, etc. I would like to tell a short story which may put military empires in some perspective.

    Yesterday my wife and I went to a concert at Duke. One of the pieces performed was written by Mieczyslaw Weinberg, AKA Moisei Samulilovich Vainberg, born in Warsaw, 1919, died in Moscow in 1994. Warsaw had just become part of the new country of Poland, which was formed from the collapse of the Russian, German, and Austrian empires in WWI. His father was a musician in the Jewish Theater, our hero was a child piano prodigy, and he was active in the Jewish music scene in Warsaw from an early age. When the Germans invaded Warsaw, our hero escaped to Minsk in the Soviet Union. By 1943 he was in Moscow, while the battle between the invading Germans and the defending Soviets was still raging. He became friendly with Dmitri Shostakovich, and was soon writing music for everybody who was anybody in Soviet music. In 1953, Stalin ordered him arrested. Shostakovitch intervened with Beria, the head of the KGB on his behalf. Stalin soon died, and not long after that Beria was killed. Our hero continued to write music and perform. The Soviet Union disintegrated, and then he died at a ripe old age.

    How would you describe our hero’s relationship to the military empires? And what about the Jewish community, which was numerous in central Europe before the Holocaust? I don’t know if he ever made much money, but he was widely admired and his music was performed. He lives on in the performance yesterday at Duke.

    This is not to claim that the wars and collapses and pogroms had no effect on him, and they certainly had an effect on those who died. I use this example merely to make the point that the world can be falling apart around someone, who may nevertheless find a way to live a rewarding life in the midst of history book chaos.

    The second point I would like to recommend for your consideration is the story of this farmer in Tennessee coping with the Siberian Express of the past couple of weeks:

    http://www.resilience.org/stories/2015-02-23/the-master-comes-home

    The threat to modern conveniences prompts the farmer to reflect back on his childhood home, when those conveniences were mostly absent. Would a return to the simpler ways of his childhood constitute a collapse?

    The third point of reference is Nate Hagens’ recent talk in Vancouver, BC:
    https://www.youtube.com/watch?v=U1_dsU1Dx0A

    It’s a very good talk, and I recommend all of it. But for this particular point I call your attention to the section between 36 minutes and 44 minutes. Nate’s conclusion is that humans:
    Turn Energy and Resources into Money
    Money into Feelings Plus Waste

    Our real currency is neurotransmitters and hormones.

    If there is hope for humanity, it must lie in some grand awakening in terms of controlling our neurotransmitters and hormones with much less waste, which implies much reduced consumption of energy and resources.

    If there is no hope for humanity, then we have to look at the example set by Weinberg (and many others) who have managed to survive and thrive in the midst of history book chaos.

    At the recent debate in Australia, a great majority of the activists in attendance voted to try to keep our high consumption society together…rejecting both David Holmgren’s plea to ‘collapse now and avoid the rush’ and Nicole Foss’ bald claim that economic collapse is upon us, no matter what we do.

    I hope this frames the issues in a helpful way….Don Stewart

    • Stefeun says:

      Bonjour Don,
      Nate Hagens’ conference seems to resemble quite a lot to that one RobM posted in 1st page of comments here (Feb.12), from the few minutes I’ve seen of yours. Worth watching entirely, anyway.

      I take advantage that you chose to quote “Our real currency is hormones and neurotransmitters” to share some more information about neuroplasticity:

      – First, looks like Norman Doidge’s 2008 book “The Brain That Changes Itself” is available for free on the web: http://www.cesc.co.in/cesc/e-prognya/cms/wp-content/uploads/2012/05/28945157-the-brain-that-changes-itself.pdf

      – Second, I found this blog “The Best Brain Possible” by a Debbie Hampton who introduces herself as follows: “I’m Debbie Hampton. After decades of depression, a serious suicide attempt and resulting brain injury, I not only survived, but went on to thrive by discovering the super power we all have to build a better brain and joyful life. If I can do it, you can too. Let me inspire and inform you to do the same. No brain injury required.”
      I’ve read only a few of her posts, she seems to have really interesting insights about physical exercise, visualization, competitive plasticity (“use it or lose it”), etc . About energy, she writes:
      “The invention of cooking food gave humans the means to power their growing brains because our guts could more easily absorb energy from cooked food.
      Our brains also adapted by learning to become incredibly energy efficient. At any one time, only a small proportion of brain cells are signaling, a process known as “sparse coding”, allowing the brain to use the least amount of energy while transferring the most information. The need to conserve energy resources is the reason that most brain processes happen below conscious awareness and that multi-tasking just doesn’t work. There’s not enough energy available to the brain to focus on more than one thing at a time. (…)”
      More here: http://www.thebestbrainpossible.com

    • Stefeun says:

      Dear Don and others interested in Neuro-plasticity,

      while trying to know more about “Dopamine is the real currency” (to paraphrase Nate Hagens, Norman Doidge, etc..), I found this:

      – Doidge’s 2008 book “The Brain that Changes Itself” is available for free download at http://www.cesc.co.in/cesc/e-prognya/cms/wp-content/uploads/2012/05/28945157-the-brain-that-changes-itself.pdf (247 pdf pages)
      Doidge describes examples of serious troubles that could be fixed with -rather simple- techniques helping the brain to use non-dedicated areas and circuits to acheive purposes that normally used damaged neurons. He starts to draw conclusions that I think are developed further in his latest book. Interesting reading (I just started).

      – a blog called “The Best Brain Possible”: http://www.thebestbrainpossible.com
      The author introduces herself like this: “I’m Debbie Hampton. After decades of depression, a serious suicide attempt and resulting brain injury, I not only survived, but went on to thrive by discovering the super power we all have to build a better brain and joyful life. If I can do it, you can too. Let me inspire and inform you to do the same. No brain injury required.”
      Among many interesting insights (and links) I’ll quote only what she’s saying about energy: “The invention of cooking food gave humans the means to power their growing brains because our guts could more easily absorb energy from cooked food.
      Our brains also adapted by learning to become incredibly energy efficient. At any one time, only a small proportion of brain cells are signaling, a process known as “sparse coding”, allowing the brain to use the least amount of energy while transferring the most information. The need to conserve energy resources is the reason that most brain processes happen below conscious awareness and that multi-tasking just doesn’t work. There’s not enough energy available to the brain to focus on more than one thing at a time.(…)”

      • Don Stewart says:

        Dear Stefeun
        In The Neuroscience of Change, Kelly McGonigal first reminds her audiences that the Wisdom traditions have claimed for thousands of years that the ‘natural’ state of the mind is like a vast and expansive, clear-blue sky. Kelly then invites the audience to spend one minute enjoying the ‘vast and expansive, clear-blue sky’ by thinking about nothing at all.

        After what seems like a long time, she comes back and asks whether the suggestion worked. The answer, for most people, is ‘No’. When we are not focused on something, our brains resort to a ‘default state’ which is rather chaotic. What organizes our mind is some specific action we are trying to execute or problem we are trying to solve or something like falling in love which is managed by our hormones. The psychologist Mihaly Csikszentmihalyi popularized the benefits of focus in his book Flow, a couple of decades ago. The idea is to be doing something which is at the edge of our abilities…not so hard that we are just frustrated, but not so easy that we can let our minds wander. It seems to me that the ancients who developed the practice of meditation by focusing on the breath were doing something similar.

        Kelly never gets back to the question of whether the Wisdom traditions were wrong. My take on it is that it takes a lot of practice in focusing the mind in order to get to any ‘vast and expansive, clear-blue sky’ state.

        I think that Systems Science, as laid out by Mobus and Kalton, is a way of focusing the mind on complex issues. A television ad focuses our mind intently on the things that Nate Hagens talks about as ‘speaking much louder than Climate Change’. If we want to focus our mind on a subject as complicated as ‘human survival in the next hundred years’, then we need a scaffolding such as that provided by Systems Science.

        Don Stewart

  13. Don Stewart says:

    Dear MG
    A little more on climate change. 3 years ago, we had a locally produced one day conference on climate change and farming. About 4 years ago, James Hansen came to the University of North Carolina on a very frigid night and told us that the world was going to get warmer. He rejected the notion that ‘climate change’ was a useful description…things were just going to get warmer.

    I had happened to read an article by a New Jersey high school chemistry teacher named Dan Allen. Allen had examined the ice core record, and had observed that the climate for the last 10,000 years has been stable, but before that it was quite volatile. Allen thought that what would probably happen as we continued to pump CO2 into the air was a return to the volatility. Allen has a farm in New Jersey, so he understood the implications of such a change.

    So I am aware that the ‘steadily warming planet’ story may not be a very good one. I go to the conference, and a lot of the farmers are thinking that climate change is going to be good for us. The USDA had just moved our area from Zone 7B to 7A. Many people thought it was a near term certainty that we would be in Zone 8. Zone 8 would permit use to grow quite a few plants that don’t do well in Zone 7. So…what’s to worry about?

    Well, now we are several years down the road and we see that climate change is producing very volatile springs. In effect, if a farmer waits until warm weather is assured, he will have a very short interval before really hot summer weather gets here. The long spring growing season, aided by starts grown in unheated greenhouses, will no longer be dependable. From a financial standpoint, small farmers can make a lot more money if they are prepared to sell something during the first warm days of spring…not just getting outside to put seeds in the ground.

    So far, our falls are still long and dependable. But we may have lost spring. If any of the local farmers can remember the pleasant thoughts about Zone 8 from 3 years ago, how do you think they feel now?

    Don Stewart

    • MG says:

      Dear Don Stuart,

      I am reacting also to your comment above, regarding the home vegetable gardens:

      There was quite a lot of people who still grew food locally in Slovakia in the 80s. After the fall of the Soviet Union, the economy went down. Do you think that people started to grow more food locally? No. The price of food went up, but the amount of locally produced food went down. Instead, the food started to be imported from the countries with higher food production subsidies.

      The problem is that the agricultural economy before the fossil fuels era was very poor. Today, the people prefer to work abroad and buy imported subsidized food at home. This way it is more economical and their standard of living is higher.

      When the real collapse comes, there will be no fertilizers, no machines available and no imported food. At first the collapse of the food imports must arrive to force the people restart home produced food, as this would mean much lower standard of living, namely the poverty of the 18th century and before.

      • MG says:

        Dear Don Stewart, excuse me for the spelling mistake, the Slovak language has almost idnetical spelling as pronunciation, so I am naturally inclined to make such mistakes like “Stuart”.

        • Don Stewart says:

          Dear MG
          First, my wife is of Slovak descent, as is my brother in law. So all is forgiven.

          Second, have you looked at Dmitry Orlov’s ‘Unspell’ project, for making a written English which looks like the spoken American English?

          Don Stewart

          • MG says:

            Dear Don Stewart,

            that is interesting that you have some close relatives of Slovak origin. My great-grandfather died and is burried in the USA. They were those people who left the Central Europe for working in the coal mines of Pennsylvania, Milwaukee area etc. in the end of the 19th and the beginning of the 20th century.

            I had a look at the project of Unspell. The Russian language has the same very close relationship between spoken and written language as Slovak, so the inspiraton of Dmitry Orlov is quite clear.

            • Don Stewart says:

              Dear MG
              My wife’s mother was born on a farm near the coal-mning area in Pennsylvania. After the initial migration to the coal mines, as the coal mines declined, the people tended to move to Jersey City to work in the factories. My wife’s mother left the farm, which couldn’t support all the children, and moved to the Pennsylvania Slovak colony in Jersey City. There, she met my wife’s father, whose mother had come directly from Slovakia around the turn of the 20th century. The mother had brought several children with her, and married a widower with several children. Then they had more children together. My wife was born and lived all her life in this Slovak enclave, until she met and married this foreigner (much to the dismay of most of the Slovaks).

              My brother in law’s family came to central Texas many generations ago, to farm. As the high plains in western Texas opened for agriculture after WWI, they moved to irrigated farms there. Those farms are now failing as the irrigation water dries up. There is a Slovak colony (not very large) in Los Angeles now, some of whom came from western Texas.

              My wife and daughter were in Slovakia as tourists a couple of years ago. My wife has the cheekbones, and people would speak to her in Slovak on the street. Sadly, although she spoke Slovak as a child, she can’t remember it now…except for a few bad words.

              My wife blames me for the dilution of the pure gene pool.

              Don Stewart

            • MG says:

              From the population dynamics aspect, it is interesting for me that it was Wisconsin, that started to ban discrimination for sexual orientation in the USA:

              http://www.mkelgbthist.org/

              Maybe we can consider this as the sign of the maturity of the population, when such topics start to be taken into consideration.

      • Don Stewart says:

        Dear MG
        I remember reading at the time of the collapse of the Soviet Union how much Poland would be able to get in agricultural subsidies from the EU.

        Now, according to what I read yesterday, Russia (which has placed restrictions on EU agricultural imports, is talking with Argentina about a fighter planes for food trade. Meanwhile, the EU is trying to think of ways to cut down their surplus of agricultural products and the cost of the subsidies.

        Argentina wants the fighter planes to restart the Falklands War from the 1980s.

        If any of the above makes any practical sense, would you please explain it to me.

        Don Stewart
        PS I did see a funny movie from Argentina, about 10 years ago. It was titled F*ckland…about a virile man from Argentina who travels to the Falklands and finds that the women are all sex starved due to the advanced degenerative state of English males. He has fun with the locals and then goes back to Argentina. I’m just not sure that sex starved women in the Falklands are worth starting a war for.

        • MG says:

          Lowering the food production subsidies will bring the food production in less fertile regions further down. And the food prices in general must go up. Lowering the food production quotas is the solution for too high food production.

        • worldofhanuman
          worldofhanuman says:

          Dear Don, as described above, the subsidies in Europe are twofold. CAP, common agri policy by the EU, and direct state support via local gov. So for instance, France and Austria gets (with sky high acreage price) tons of money from both streams, while the new member states from CEE get far less from CAP and must ponny up funds on their own, I gather that’s the case with Poland, however I think there are even some cretineous examples like the Czech rep. and couple of others who are deficient on both accounts on their own volition to enjoy their colony status to the fullest potential.

  14. Don Stewart says:

    Dear Gail and All
    Recommended viewing:
    http://www.theautomaticearth.com/2015/02/sucking-beer-out-of-the-carpet-nicole-foss-at-the-great-debate-in-melbourne/

    This consists of 6 eminent authorities speaking for 10 minutes each on questions around climate change, financial and resource collapse, what the appropriate response is, etc. I think you will find that the six speakers cover a wide variety of viewpoints, many of which have been represented here.

    Don Stewart

    • worldofhanuman
      worldofhanuman says:

      Yep, that’s what I linked previously, mostly about Nicole Foss segment. Also read it the discussion bellow the video from the conference, there is a link explaining why Nicole urges people not to buy ANY property at the moment, expecting brutal asset price destruction in the near term.

      Not explicitly stated there she is perhaps also thinking about re-populating/reconstructing the lands, either by some sort of non violant squatting, land reform when the system breaks down etc. Obviously your milage may vary, there could be good deals today.

      Nowadays with the agriculture sector sanctions EURussia in place we can see rather strong deflationary push inside Europe, dairy is being produced quite bellow production costs, some sectors of fruits as well etc., and it all floats on both local government and EU subsidies for farmers, which can be as high as 30-40% in Austria/Germany etc. Farmland prices in EU are beyond bubble high from this multidecade subsidy process (incl. increasing rationalization through technology) anyway, young people not interested to replace the current aging generation of farmers. Now add the factor of EU policy “set aside” which mandates setting large %% of land for not cultivation in order to support price levels. That all spells acreage price crash in the future of massive proportion, albeit temporary see bellow.

      Another factor, perhaps as counter current might be the proposed hispeed railway link from China to Russia and extended via Turkey to the EU, in that fashion you can export even perishable food segments to China easily. That would be a rehash of the producing colony-consuming center of the Roman Empire. Not sure how realistic it is, but worth mentioning.. If this is the case, land pricing will eventually go even more bizzarly high, so watch the positioning of key players, might be a hint which scenario goes eventually forwards.

      • MG says:

        ” If this is the case, land pricing will eventually go even more bizzarly high, so watch the positioning of key players, might be a hint which scenario goes eventually forwards.”

        This is not possible, when we lose low priced oil. First the production becomes uneconomical (which is now hidden using subsidies), then also transportation. All food will be grown only on a very local basis. The productivity will go drastically down, which means that a lot of agricultural land will be simply abandoned.

        • worldofhanuman
          worldofhanuman says:

          ?Again it was just a sub scenario for mid term future (say till 2045) put forward, I think you did not address the arguments very much.

          So, I’ll repeat the score, China has money/reserves to burn (while the current IMFs USD regime lasts), related industrial capacity ready, desire to move up the living standard quality ladder incl. food variety etc. Therefore they can for such strategic plan easily drop few hundred billions on such “Silkway v2.0” railway project on route form EU via Turkey and Russia to China, which they already announced anyway. Given the short time distance (as opossed to very slow container ship or expensive air route) they can load up foods-produce along the rail way stops, both in Russia and Europe. As mentioned before, Europe is in demographic decline and large %% of land is on purpose not cultivated today, thus some %% of Europeans can go back into agriculture and export some surplus to China. So, should this go forward, price of land could at the minimum stabilize (after previous slump if there was any) or even increase as insiders will frontload the process.

          • worldofhanuman
            worldofhanuman says:

            Sorry didn’t stress the fact we were with Don mainly discussing “biologic” agriculture, i.e. method which increases yields on marginal land as opposed to “chemical – industrial” which goes bust, current model of agriculture you probably had in mind. So it was probably apples/oranges type of misunderstanding in your reply.

            • MG says:

              I have written here about a project of big greenhouses built in my area when the price of oil was above USD 100. This project was based on the fact that they could grow cheaper cherry tomatoes for local market locally when the transportation costs went up.

              I am affraid that now, with lower oil prices, this project has got a problem to compete with the imports. What will happen when there is lower and lower purchasing power due to the deflation? Will anybody buy cherry tomatoes grown locally or imported?

              When the governments fall, there will be no one to provide subsidies for food growing. The system will be full of holes that will make large scale food production and transportation impossible. That is the nature of the deflating, imploding economy: the lack of energy for food production and interconnecting the provider with the supplier.

              Will it be more economical to inject energy into food production in the distant regions rather than intensify the local production as much as possible? There must be a lot of energy subsidies to keep the system operating in both cases, not just money.

            • Don Stewart says:

              Dear MG
              From David Kennedy’s Eat Your Greens:
              ‘the average lot size is 15,000 square feet, and this is 12,000 square feet larger than the average house size. This allows plenty of room for a productive kitchen garden. The current average home vegetable garden takes up 600 square feet, or just four percent of the average lot. Should we decide to get serious about local food, we could potentially double the size of our kitchen gardens and still leave nine-tenths of our housing lots for other uses.’

              I think it is fair to say that, in the US overall, we have plenty of land to grow food. If we grow the perishables close to home, and use farms to grow dry staple crops which are easily transported, then the basics of land availability and transportation are not insuperable obstacles. There are many other problems which we will either have to solve or else starve: use corn and corn land for food rather than fuel; reduce the population density of very dense cities; rebuild gardening skills in the population; deal with climate change, etc.

              Let me elaborate a little on the climate change issue. In the eastern third of the US, which is the part that gets plenty of rain and thus is most amenable to gardening, we have had a succession of chaotic spring weather. This year, we have the Siberian Express which has caused us in North Carolina to shatter old cold temperature records by 8 degrees F. Most new records are a degree or two warmer or colder. So you can see that things are now very different. The local gardening scene is heavily dependent on a few farmers with unheated greenhouses planting ‘starts’ which they sell at farmer’s markets. The home gardeners buy the starts and transplant them into their gardens. (There are other ways to do it, but I have just described a very popular way.)

              But, this year, the unheated greenhouses are being asked to cope with temperatures in the single digits. And for weeks in a row, so that it is not just a one-night stand with the warm soil keeping the temperature in the greenhouse much warmer than the air…the soil is really cold. Recently, the soil temperatures in February have been less than the soil temperatures in January.

              In addition, any blooming perennial, such as a fruit tree, and their pollinators are shocked by their inability to cope with the chaos. 3 years ago I had a good peach crop, 2 years ago I got not a single peach, last year I got a good peach crop, with frosts both before and after the blooming period. Last year we saw very few butterflies.

              In short, the natural cycles which we had come to depend on have been disrupted.

              It is always possible to offset natural cycles by building expensive infrastructure. One can build gigantic heated greenhouses and grow tomatoes in Ontario in January and ship them to North Carolina, using natural gas to heat the greenhouses. The tomatoes taste like cardboard, but it is technically possible to do it. California can truck 75 percent of all the bees in the US to California to pollinate the almonds. You can easily imagine the flaws in the ‘just build fossil fueled infrastructure’ strategy, so I won’t belabor the point.

              What we have, in 2015, I think is this:
              *The climate has become unstable, challenging plants and their small critter partners.
              *The challenges to plants and small critters also pose a challenge to small farmers and gardeners.
              *It’s easy to visualize ‘farming in skyscrapers’ and ‘giant heated greenhouses’, but the practicality of such schemes is usually an illusion.
              * The best solution I can think of is home gardens, very localized trade among gardeners and others, and the rebuilding of our dry staple system. And, as I indicate, climate change makes that harder. Cooking is one of Gail’s hot buttons, and for that I think that PV panels operating something like a rice cooker would be the ideal. If we can’t make the PV panel solution work, then we will have to fall back on passive solar cookers.
              * I visited a farm recently which had been an off-grid farm with both solar hot water and PV panels with batteries. The old owners sold it to a couple who had been in the horticulture business for several decades. The horticulture couple have tackled all the farming and gardening tasks with enthusiasm, but they just didn’t want to mess around with the solar electricity. So they connected it to the grid. The moral, I think, is that there are limits to what any family can do. Most families will either be good farmers or good electricians, but not both. Therefore, we will have to painfully construct a local economy which involves specialization.

              Don Stewart

            • worldofhanuman
              worldofhanuman says:

              I’m afraid current model of government can’t fall at least till current legacy infrustructure has not completely rotten away, coal mines, gas pipelines, hydrodams are working etc. Hyperdeflation, widespread poverty, insecurity, you name it, but for the next couple of decades there will be crushing fist governments and rent seeking parasites (aka elites) around. That’s the way world is, sadly.

            • “I’m afraid current model of government can’t fall at least till current legacy infrustructure has not completely rotten away”

              Yemen and Iraq are contrary to your claim; Iraq due to war, and Yemen due to passing peak oil production. As soon as there is a decline in energy and/or money, it becomes harder and harder for governments to suppress regional uprisings. I guess it really matters the particular country and all of its specific details as to how long a strong central government can persist under declining energy.

            • Don Stewart says:

              Dear Matthew Krajcik
              I took a look at Al Jazeera yesterday. Article describing the conflict between Baghdad and the Kurds over the split of the oil money. The Kurds have resumed talks with Turkey about getting the oil to market through that country. Scottish Independence was, to some extent, about oil money. Libya seems to be about oil money. Even the Texas Secession movement in the US was to some extent about the oil money.

              Don Stewart

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

              Worldof, I agree. Until it is 90% gone the parasite of government of rich will continue their roles.

          • Don Stewart says:

            Dear world of hanuman
            I don’t know how I missed your reference to the Australian debate. Sorry.
            Don Stewart

        • “All food will be grown only on a very local basis. The productivity will go drastically down, which means that a lot of agricultural land will be simply abandoned.”

          Do you think there is enough green space in most major cities to grow all their own food locally?

          I think it is more likely that lots of people will have to move from the cities to the farm land, and work that land manually, than it is that the farms will be abandoned.

          • MG says:

            Dear Matthew Krajcik,

            I think that the cities will be hollowed out like Detroit, i. e. people will move from the centers to the outskirts, where more land for cultivation is available. The basic problem of the lowering productivity of the agriculture due to the lack of energy will bring the population down everywhere. There will be a surplus of the land with low productivity that we will not be able to make productive again. Much of our todays agricultural land was created based on the inputs from the cheap fossil fuel energy.

            • richard says:

              “I think that the cities will be hollowed out like Detroit, i. e. people will move from the centers to the outskirts, where more land for cultivation is available. ”
              My expectation is that the centre of the cities will remain, if the reasons the cities formed in the first place are still there. Only the cores of these cities will have electricity and water 24/7 and perhaps 365. I’m hoping to be long gone by the time that happens.

  15. MG says:

    The process of colonization of the Eearth by the human species consists of creating new man-made ecosystems based on the available energy and resources. These new man-made ecosystems are subsequently filled with the new people. The real reason for exponential growth in the resource depletion is the fact that we not only create new man-made ecosystems, but also need to operate and maintain the man-made ecosystems that were built previously.

    The fossil fuel era allowed the mankind to add new man-made ecosystems in a very fast pace. As we reach the limits, the Seneca cliff is inevitable, as these man-made ecosystems will crash more or less simultaneously. Not due to the lack of resources, but due to the lack of energy, as the energy allows us not just mining new ores, but also rebuilding the existing man-mad ecosystems using reprocessed resources.

    The rising debt allowed us not only building new man-made ecosystems, but also rebuilding the existing ones. The mortgage crisis that peaked in 2008 was not mainly about the too hight debt regarding the houses itself. As we started to use more expensive energy, it was still quite easy to build new houses using new long-term debt.

    The crucial is the fact that THE ENERGY FOR OPERATING these MAN-MADE ECOSYSTEMS MUST BE CHEAP. That is why the houses were built faster than it was possible to fill them with new people: we started to experience the lack of cheap energy that would allow the people to use these houses, i.e. to be able simultaneously repay the debt and secure everyday operation costs of their lives in such new dwellings and environments. While the mortgage, i. e. a one-time long term debt, can allow one-time use of costly energy for building a life-long dwelling, the debt for everyday expenses can not rise constatly with higher energy costs.

    That is why we come to the point, when the prices of oil, and of energy in general, crash. We also do not need new resources for new man-made ecosystems, as it proved that the system reaches its limits, the building of new houses with high energy costs is uneconomical. So the prices of commodities go down, too.

    What we experience now are the limits of the expansion of the mankind: we are not able to build and operate new man-made ecosystems and fill them with new people, as we lack the cheap energy for operating these man-made ecosystems. The rising debt brought us new amounts of unconventional oil, but we do not need this costly oil, as we do not need building new man-made ecosystems using long-term debt.

    What we really need is the cheap oil for the operation of already existing man-made ecosystems.

    • 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:

      Right. And we need to be able to produce the oil cheaply, not just sell “expensive to produce” oil at below production costs.

  16. Don Stewart says:

    Dear Gail and All
    I would like to try to tie a few things together.
    First, Ron Patterson’s blog has a story on, among other things, Jean Laherrere’s predictions in terms of conventional oil production. There are some interesting comments, and i particularly call your attention to the Lawrence Livermore chart which is a moderate scroll down. The chart shows the sources where we get industrial energy, and the sinks for the energy. A great deal of the energy disappears as waste heat.

    As a question of curiosity, I worked out, very roughly, the relationship of the dietary calories required by Americans to the quadrillions of BTUs that the US consume on the Lawrence Livermore chart. It is 1 times E to the minus 9. Minuscule, in other words. (You shouldn’t trust my math).

    A number of the commenters on Ron’s blog pursue thermodynamic solutions to our problems, some arguing that moving toward solar PV will be essential.

    Second, this got me to thinking about my favorite solution, which is using the remaining fossil fuels to enable humans to get maximum benefit from natural energy such as solar irradiation and gravity and by using the built environment to do things like moderate the environment (e.g., passive solar designs, earth for thermal moderation, the sorts of earth works favored by biological farmers, etc.)

    Third, how might one go about persuading anyone to adopt the sort of ‘green’ solutions implied in the preceding paragraph. And, lo and behold, I happened on:
    http://scienceblogs.com/thepumphandle/2015/02/06/study-self-affirmation-targets-the-brain-in-way-that-makes-us-receptive-to-health-messaging/

    In a nutshell, everyone knows that smoking is not good for you. But public health messages are not really as effective as a rationalist might think. The answer seems to be to
    *find out what the values of the target person are
    *prime those values with a reminder
    *deliver the public health message while the target is still primed.

    Is it possible to frame a sort of ecological and economical ‘public health’ message that actually changes public behavior, one person at a time?

    Perhaps….Don Stewart

    • worldofhanuman
      worldofhanuman says:

      I think the best approach is to drag a politican (or entire delegation) on site of actual (100acres plus) functioning biologic farm be it in the US/EU/Australi-NZ, give him on the spot “101” basic lecture including current surplus/output production, so they can easily estimate what could be done on large scale by giving/allowing acreage to people, i.e. land reform. That would give them some ideas and how face deep state actors and other obstacles for swift implementation.

      Obviously this will never happen under current circumstances.
      Perhaps it could proceed only at some future distant point when depletion hits very hard and real (frivolous) demand destruction would be exhausted already, let say that’s still 5-25yrs away, depending on country/region.

      I’d give it a small chance anyway, as described in my previous comments.

      I think it’s not hard to smell the powder afterall, the probability that upgraded caveman aka hunter gatherer apeman goes in just in ~10K years from firewood, stone and basic metals into “hitech” terraforming act of the entire planet and its ecosystem somehow in natural way of progress/evolution is beyond ridiculous. That’s a topic for different perhaps more abstract discussion though, but we – domesticated people are either product of some genetic or other external reprogramming project to terraform the planet relatively quickly in the timeline of some “macro species” of the universe for reasons to me unknown(able) or some variation of similar scheme (plaything ants colony) etc. That’s very rational thought, what brought me up to this point was previously held naive idea that perhaps “nature” just wanted to push the 6th extinction wave and used the homoape as the fossil fuel eneregy storage releasing agent, but that’s not fitting rational scrutiny anymore..

    • 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:

      Besides eating, we have to cook our food. We also have to keep warm, if we live in a cold climate. It might be helpful if we could heat our water to sterilize it as well. I expect we would have to find a way to get sufficient fresh water for folks as well, in many parts of the world, using energy.

      The big energy waste that we have now is all of the heat that is lost when we make electricity from various sources. Russia, Sweden, and perhaps other countries have pursued co-generation, but we have not. One comment I heard regarding why we ignore this lost heat energy is because it would create a natural monopoly

      • Don Stewart says:

        Gail
        The calculation of how much industrial energy we are using is mostly to jolt oneself out of the rut of thinking that everything has to go on as it is now. It is like zero based budgeting. When David Kennedy shows that the current food system is not sustainable, he then begins an exercise in zero based budgeting…building a diet from needs, rather than wants or whims or custom.

        Humans mostly tend to want to start from what they have, and then do more of it. I saw a video from the village in Ukraine which was recently captured by the Eastern Ukrainian forces. The residents emerge out of cellars and places they have been hiding. One lady says that she hopes what has happened to them happens to Poroshenko’s family. I am sure a few people thought about their luck in having survived, but most of what i heard was just complaining about what the Kiev government had taken from them.

        In a fast collapse, we won’t have a lot of time to sit around and complain. There won’t be any ‘humanitarian aid’ coming from Russia. We will need to be able to do a zero based budgeting exercise quite rapidly, without sitting around complaining about the evil banks, the idiotic politicians, or our neighbor.

        It seems to me that the finding on reinforcing an individual’s values is important. I need to meet people where they are, not try to convince them that my values should be their values….or pretend that our group has some distinctive values which make us exceptional. There are lots of reasons why, in a collapse, it is important to find seeds and grow food. The motivations to do it will come from the many different values that people have. I think the same is true of a Transition group or a prepper group or a community garden group.

        For these latter kinds of groups, it is worth noting some experiments with rats. Rats can be offered two options: food for free or food for work. The rats will choose a mix of food for free and food for work. Why would a rat choose to work when they don’t have to? One reasons is probably that we are rewarded with dopamine as we get nearer a goal we are working toward. A rat that doesn’t work never has a goal, and so never gets any dopamine. There are profound implications in that finding.

        Don Stewart

        • Don Stewart says:

          Dear Gail and All
          Here is The Automatic Earth saying what I am trying to say about zero based budgeting in terms of collapse…Don Stewart

          People need to think about how much energy use and how much complexity is involved in what they would like to see as their way forward. If there’s too much of either, let alone of both, that way is simply not viable, and it’s back to the drawing board.

          I’m not going to transcribe too much of her talk, it’s well worth watching the few minutes she talks. Still, here’s one quote from Nicole:

          Our society will be forced to simplify. The paradox with low-energy-profit-ratio energy sources is they cannot sustain the level of complexity necessary to produce them. [..] If your solution rests on complexity, it’s not going to work. We’re going to contract and simplify, like it or not.

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

          Don,, the point about the rats working some explains why I enjoy work some. Especially and intense push to a goal.

        • worldofhanuman
          worldofhanuman says:

          You are hitting at the same reason I posted the video from E. Ukraine, although it’s a perifery, it is not Balkans, NAfrika or Middle East, it was/still partially belongs to civilization circle, which deals with hitec in nuclear civil/military, space programme, jets, biochemistry etc.

          That’s what is shocking about parts of Ukraine falling into 3rd world status in few months time, and they can still fall back on larger Russsia for humanitarian aid in the long term. Imagine situation you don’t have this option anymore, scary.. As if we can see the process of vector pushing from perifery -> core destruction, so next in line “must be” some EU country, NAmerika etc.

          I posted from RT, now same topic from UK channel:
          http://blogs.channel4.com/alex-thomsons-view/life-debaltseve-digging-pasta-debris/9067

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

          Don, this explains why the super rich keep going to the office every day. It is not more money they crave it is dopamine.

          • Don Stewart says:

            Edpell
            I recently read an interview with Boone Pickens. He said that he and his partners meet every afternoon to figure out how much money they made that day.

            Don Stewart

      • worldofhanuman
        worldofhanuman says:

        Yes, we can prepare a very long list contributing to future demand drop, co-generation, personal car-share, bicycles, public transport light-rail/trolleybus, trains, solar hot water and space heating, low watt computers/personal electronics (although power consumption increases at the centralized cluster/server side), megafarmed insect proteins, homescale permaculture proteins/carbs/oils, fewer workhours/days at office/industry, less healthcare and frivolous consumption support, .. on and on..

        So the end of current energy/debt plateau could be not only postponned a bit but also make at least for several decades the following descent in “organized” fashion.

        Therefore now here comes the clincher, by rational estimates the current debt (and overal political system) in theory should not survive such phase shift onto permanently new lower energy flow base. The problem is that we live in real humans world, so in my book it is quite possible to imagine a society doing the “good transitional things”, while still being subjected under the yoke of opressive government/owner class power structure. Hence my often repeated reluctance to call a full crash in the short term. Because what we are aparently getting is western societies increasingly adapting the open authoritarian rule of government as seen in Russia/China.

      • richard says:

        Co-generation (combined heat and power)
        Historically, coal burning power stations were built in the middle of cities (eg Battersea, London) and the surplus heat (and perhaps some steam) pumped to local industry and housing. That changed in favour of economies of scale and less pollution.
        Recently I looked at installing CHP in my home, but with efficiencies of the order of 55% for nearby gas fired CCGT versus ~<50% Electricity and overall efficiency of maybe 70%, looking at a return on my investment, it just wasn't worth the effort, and the putative equipment is still not on the market three years later.
        I have also some experience of industrial scale CHP, and maintenance costs are a killer.

        • 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 devil is always in the details, like maintenance costs.

          I noticed in China that a lot of power plants are in the middle of cities. I am sure it is more convenient that way–employees can walk to work, and transmission lines don’t need to be as long. Can even use cogeneration, if they like. But it contributes to the pollution problems.

          • richard says:

            I read a while back that China has numerous inefficient coal fired district heating schemes, especially in the north. They are steadily replacing the older coal-fired electricity generation even though that means job losses both for the power stations and the local coal mines labour. Modern gas-fired plant will help, but particulates from diesel fuelled transport are the problem they need to solve. It’s hard to know what will happen if and when the next financial crisis bites.

  17. worldofhanuman
    worldofhanuman says:

    Regarding recent questions and debate here about Greece, Eurozone, EU, global debt etc. You might find quite educative the following articles and posts aiming closer to the very core of the problem..
    Long term perspective finite world issues aside these musings are important from the near-midterm perspective, because TPTB and their (new) games are going to stick around for at least significant portion of our lifes.


    http://www.zerohedge.com/news/2015-02-20/why-european-bondholders-refuse-sell-ecb
    Fri, 02/20/2015 – 22:10 | 5810877 NoDebt

    If you made commitments based on 4-5% returns assumptions you CAN NOT ACCEPT 1% yields. Even if the short term gain from selling your current bond porfolio to the ECB is significant.

    Please do not mistake this for some return to rational (significantly above zero) interest rates. THIS ISN’T THAT. This is contractual obligations feeling the strain of YEARS of central banks repressing interest rates. Not to mention that we’ve been in a depression since 2008.

    Pension funds, annuities and their ilk make benefits commitments built on interest rate assumptions. Commitments and assumptions were set years ago. Reality has come in well below those assumptions.

    This will never grab big headlines and few will understand it until pension funds start getting ‘Detroit-ed’. Not just in broke, corrupt, terminally-under-funded shit holes, but across large swaths of the “defined benefit” world, both private and governmental.

    This is how things come apart when long term promises can’t be met. This is when “but I was promised!” starts to meet the brick wall of reality.

    To MILLIONS of people this is actually a very big, very important deal. It’s a shame nobody will remember this article, nor my tiny spit of a comment on it by the time reality bites them in the ass.

    +

    If you’re depending on the past promises of others in todays world, yes, you are well and truly screwed.


    http://philosophyofmetrics.com/2015/02/18/development-goals-of-the-new-world-order/#comments
    beachdude2

    February 18, 2015 at 4:20 pm

    Deflation destroys debt which is clearly not the long term goal of the International Bankers, but it can be used as a tool to force the restructuring of debt.

    Pure fiat is a fascinating concept and a confidence based Ponzi scheme, IMO (paper currency backed up by paper bonds that promise to pay out with more paper). Many influential bloggers (e.g. Martin Armstrong, David Stockman, Jim Rickards, etc.) seem to think the elites have bungled this and we are headed for a sovereign bond bubble implosion because of their incompetence. JC Collins, on the other hand, provides an alternate view that confidence will be restored as part of a broader debt restructuring plan based on a new “asset backed” SDR currency regime.

    If you reflect back on various debt restructurings over the past 30 years, Naomi Klein’s seminal work “The Shock Doctrine: The Rise of Disaster Capitalism” is very instructive.

    Essentially, global bankers restructured the debt of various countries (e.g. Latin America, Asian Tigers, South Africa, Russia, Eastern Europe, etc.) by exchanging new paper bonds for “privatization” of any and all public assets. I view this technique as the new “Toll Booth” form of Feudalism by the “rent seeking” elites.

    So, where does the new SDR fit in? I see it essentially as a bait & switch to restore “confidence in a new and improved Fiat regime” that is partially backed by tangible assets and production based economies (i.e. Resources and commodities like Gold, Oil, Wheat, etc. along with country level GDP).

    If this is the end game, it would seem to me that the value of the new paper based SDR regime can best be maximized by driving down the value of tangible assets using Deflation as the mechanism. It would also seem to me that each countries resources and/or commodities now become a kind of “collateral” for the SDR restructuring thus privatizing the tangible assets at their lowest possible value.

    Scary shit when you think about it….

    • worldofhanuman
      worldofhanuman says:

      Also adding into the bowel some spice of Nicole’s recent (video) summary presentation about likely future scenarios:
      http://www.theautomaticearth.com/2015/02/sucking-beer-out-of-the-carpet-nicole-foss-at-the-great-debate-in-melbourne/

      People of Eastern Ukraine looking for scraps after the invasion force retreats.
      Bottom line, people used to civilized life and certain comfort level are suddendly hidding like rats in basements, understandably even after 3/4year they still can’t mentaly process the change before/now. RT Video: http://rt.com/news/234323-ukraine-troops-pullout-civilians/

      My conclusion from it all, the next 10-30yrs are absolutely unpredictable in the final outcome and possible solution path choosen/forced upon us, not mentioning how to select the correct or “optimal” way how to proceed, so don’t be too hard on yourself for likely failure, most people won’t make it as well in terms maintaining their current living arrangements, social niveau, wealth, ideas and believes.

    • richard says:

      This link seems to need a bit of work to download:
      http://www.golemxiv.co.uk
      See “The next Crisis – Part three – The world turned upside down” from sep 2014
      Summary : The end of democracy and sovereignty and its replacement by international treaties, corporate governance, and Fascism.
      Greece brings this into sharp focus by its attempt to assert the sovereign’s historic way of restoring solvency by debt renegotiation and ultimately, debt default.

    • 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:

      Of course, if the economy isn’t growing by much, you can’t pay much interest. And if interest rates are very high, with as much debt is currently outstanding, everyone is broke. So higher interest rates don’t work.

      I would argue that actuaries quite a while ago should have figured out that the high rates they were forecasting wouldn’t work for very long in a finite world.

      • worldofhanuman
        worldofhanuman says:

        TPTB will rather #1 reset the system and start on clean table, be it debt jubilee or other forms how to dislock the system then #2 let unconditionally collapse their power/wealth and instruments (toys=war machine). By many accounts option #1 is in the late stage works, perhaps few months/years away from conclusion.

  18. US oil and gas EROI is rising due to “shale revolution”:
    http://world-around-us.org/2015/01/us-eroei/

    • “US oil and gas EROI is rising due to “shale revolution”:”

      Rising from 8:1 to 11:1. I wouldn’t get too excited about that. It looks like in 1971 the United States would produced 10 million barrels per day, and reinvest 500 thousand barrels to get the next 10 million the next day. Now they have 9 million, reinvesting 800 thousand per day.

      In addition, look at the figure of $299 of debt for each barrel produced, and consider Land-Export Model for oil exporting nations. Even if the previous figure of $100 break-even for shale is true, if these wells decline 40 to 65% in one year and they are funded with 30-year debts, it does not look so good.

      Finally, keep in mind that even if EROEI climbs, if flow declines total available energy can go down. Likewise, if total production increases but EROEI goes down, total energy can decline as well.

      At least this article tries to get closer to real total EROEI, instead of extraction-only EROEI.

    • richard says:

      I am still surprised when I look at data and find a diametrically opposed view to that of the writer. That said, it was interesting to see EROEI around 25 in the 1920’s when I had expected values closer to 100. The writers also suggest that EROEI outside the USA could be higher than their figures, but I do not follow their logic. I suspect that the reason for my pessimistic view of the outcomes, is that the writers expect that a linear approach will overcome obstacles in the way to sustaining EROEI above 10 indefinitely, whereas I see the problems becoming exponentially larger with time.

      • “That said, it was interesting to see EROEI around 25 in the 1920’s when I had expected values closer to 100.”

        The 100:1 EROEI is based purely on energy in to energy out per barrel at the wellhead. These lower numbers of 25:1 and now 11:1 claim to include all the embedded energy in the equipment, transport, refining and distribution as far as I can tell; a more realistic whole-life-cycle EROEI that is much more meaningful and comparable to the numbers people produce when studying wind and solar.

    • 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 big issue I see is what EROI we can live with. I think we have been aiming way too low, in terms of EROI. In a global economy, we have to compete with China and India. They are using primarily coal, plus cheap labor. The EROI of conventional oil was too low below shale passed it. We were in deep trouble, as oil prices were rising in the 2004 – 2005 period. I think we need oil and gas in the 16 to 20 EROI range, and any competing renewables up there as well.

      When you aim too low, you can prove anything works.

      • richard says:

        “The big issue I see is what EROI we can live with.”
        There are two issues – oil as a dense source of energy, and oil as a hydrocarbon resource, but if we can find an alternative energy source for transportation “soon” then we can make sensible decisions about other uses for mineral oil.
        I’ll suggest that I could live with an EROEI of 10, though that might mean ice patterns on the inside of single-glazed windows in my relatively mild climate, and some of the other things recently posted on your blog. It probably means per-capita GDP’s last seen in the 1950’s.
        If that is where we will be on the other side of the next financial crisis, it may be time to think about how to preserve our way of life beyond growing fruit and vegetables.
        Hopefully, data storage will not be a problem:
        https://en.wikipedia.org/wiki/Mark_Kryder#Kryder_rate

        • 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 have much of a choice on economy–we have the economy we have. It doesn’t have enough cheap (high EROEI) energy it collapses. There have been a lot of mistaken statements made about economies living with lower EROEIs, or transitioning to such economies. As far as I am concerned, they simply represent a misunderstanding of what we are up against. The idea of dissipative structures, and the economy being a dissipative structure, is a new one.

          The competition against other countries is price competition. Governments tend to take greater and greater shares of the economies over time though taxes. Diminishing returns of many sorts (water, metals, poorer soil) also hurt the economy. The net result seems to be that required EROEI goes up over time, not down. It is not exactly EROEI either–it is the cost of workers’ energy leveraged by a mix of energy from a variety of sources. The costs are truly low when you are using workers from Bangladesh and from Afric, leveraged with hydroelectric and coal.

          • richard says:

            Sometimes the word “collapse” needs further qualification. I tend to expect collapse to mean catastrophic collapse, moving from one stable state into another stable state, often with some form of positive feeback as part of the process. That can be seen in financial markets. Sometimes “collapse” means decline or terminal decline, and I would put EROEI into that category. Will EROEI stabilise at say, 5? or will other events ensure it stays above 10?

            • EROEI seems a weird way to put it; you’re basically saying, will things stabilize at 80 or 90 percent efficiency?

              Total throughput of energy is the big limiting factor, the ceiling we are close to hitting. The problem is the complexity of getting oil from deep under the ocean, or from oil sands. Collapse to me means loss of complexity, loss of total energy, as we have to fall back to simpler energy.

              That’s the two possibilities of “degrowth” versus “collapse”; either a gradual reduction in total energy and complexity, or a sharp, rapid decline with negative overshoot.

            • 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:

              EROEI, as far as I can see, needs to rise. The idea it can fall, to say, as low as 10, is nonsense. This is part of what underlies the collapse we are facing. All that happens is that production switches to countries with higher EROEI fuels (and lower wages). This is why we are facing near-term collapse.

  19. Quitollis says:

    (Yemeni peak oil, peak water, US regimes, etc.)

    An interesting piece by Nafeez Ahmed who used to write for the Guardian. I will quote some but the whole article is worth reading.

    http://www.middleeasteye.net/columns/yemen-s-collapse-taste-things-come-456530551

    Yemen’s collapse is a taste of things to come

    Yemen’s crisis serves as a grave warning for the looming risks to states in coming years and decades, not just in the region, but around the world

    […]

    Welcome to the post-oil future

    Yemen’s story is one of protracted, inexorable collapse. Around 2001, Yemen’s oil production reached its peak, since then declining from 450,000 barrels per day (bbd), to 259,000 bbd in 2010, and as of last year hitting 100,000 bbd. Production is expected to plummet to zero in two years.

    This has led to a drastic decline in Yemen’s oil exports, which has eaten into government revenues, 75 percent of which depend on oil exports. Oil revenues also account for 90 percent of the government’s foreign exchange reserves. The decline in post-peak Yemen revenues has reduced the government’s capacity to sustain even basic social investments.

    Things are looking bad now: but when the oil runs out, with no planning or investment in generating another meaningful source of government revenue, the capacity to sustain a viable state-structure will completely collapse.

    Water woes

    It’s not just oil that’s disappearing in Yemen: it’s water. Yemen is one of the most water-scarce countries in the world. In 2012, the average Yemeni had access to just 140 cubic metres of water a year for all uses, compared to the regional average of less than 1,000 cubic metres – which is still well below adequate levels. Now in 2015, Yemenis have as little as 86 cubic metres of renewable water sources left per person per year.

    The water situation in Yemen today is catastrophic by any reasonable standard. In many cities people have only sporadic access to running water every other week or so. In coming years, Sana’a could become the first capital in the world to effectively run out of water.

    Climate change has already played a role in aggravating regional water scarcity. From 1974 to 2004, the Arab world experienced rises in surface air temperature ranging from 0.2 to 2 degrees Celsius (C). Forecasting models generally project a hotter, drier, less predictable climate that could produce a 20-30 percent drop in water run-off in the region by 2050, mainly due to rising temperatures and lower precipitation.

    According to the World Bank, while “climate change-induced alterations of rainfall” have worsened Yemen’s aridity, this has been compounded by the rapid growth in demand due to the “extension and intensification of agriculture; and fast growth in urban centres.”

    Demographic disaster

    At about 25 million people, Yemen has a relatively small population. But its rate of growth is exorbitantly high. More than half the population is under the age of 18, and by mid-century its size is expected to nearly double.

    Last year, at a conference organised jointly by the National Population Council in Sanaa and the UN Population Fund, experts and officials warned that within the next decade, these demographic trends would demolish the government’s ability to meet the population’s basic needs in education, health and other essential public services.

    But that warning is transpiring now. Over half the Yemeni population live below the poverty line, and unemployment is at 40 percent generally, and 60 percent for young people. Meanwhile, as these crises have fuelled ongoing conflicts throughout the country, the resulting humanitarian crisis has affected some 15 million people.

    A major impact of the high rate of population growth has been in the expansion of qat cultivation. With few economic opportunities, increasing numbers of Yemenis have turned to growing and selling the mild narcotic, which has accelerated water use to around 3.9 billion cubic metres (bcm), against a renewable supply of just 2.5 bcm.

    The 1.4 bcm shortfall is being met by pumping water from underground water reserves. As these run dry, social tensions, local conflicts and even mass displacements are exacerbated, feeding into the dynamics of the wider sectarian and political conflicts between the government, the Houthis, southern separatists and al-Qaeda affiliated militants.

    This has also undermined food security. As around 40 percent of Yemen’s irrigated areas are devoted to qat, rain-fed agriculture has dropped by about 30 percent since 1970.

    Like many other countries in the Middle East and North Africa, Yemen has thus become evermore dependent on food imports, and its economy increasingly vulnerable to global food price volatility. The country now imports over 85 percent of its food, including 90 percent of its wheat and all of its rice.

    Between 2000 and 2008, the year of the global banking collapse, global food prices rose by 75 percent, and wheat in particular by 200 percent. Since then, food prices have fluctuated, but remained high.

    But rampant poverty means most Yemenis simply cannot afford these prices. In 2005, the World Bank estimated that Yemeni families spend an average of between 55 and 70 percent of their incomes just on trying to obtain food, water and energy. And while 40 percent of Yemeni households have got into food-related debt as a result, most Yemenis are still hungry, with the rate of chronic malnutrition as high as 58 percent, second only to Afghanistan.

    Slow collapse

    For more than the last decade, then, Yemen has faced a convergence of energy, water and food crises intensified by climate change, accelerating the country’s economic crisis in the form of ballooning debt, widening inequalities, and the crumbling of basic public services.

    […]

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

      It will be interesting to see what it takes to stabilize the population of Yemen and what population number that will be. Five million?

      • Quitollis says:

        I have no idea how many people Yemen could/ will support but seeing as they import 85% of their food and likely over 95% of their carbs, not many.

        Much of the place is desert.

        http://upload.wikimedia.org/wikipedia/commons/thumb/4/41/Yemen_Topography.png/220px-Yemen_Topography.png

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

          Good data, so more like 1 or 2 million remaining from a high of 25 million.

          • “At about 25 million people, Yemen has a relatively small population. But its rate of growth is exorbitantly high. More than half the population is under the age of 18, and by mid-century its size is expected to nearly double.”

            I wonder who came up with that projection, and what methodology they used …

            • Quitollis says:

              Yemen has a population growth rate of 2.72% per year compared to 0.4% in the UK — SEVEN times as much.

              Yemen has a birth rate of 31 births per thousand persons a year compared to a death rate of 6.45. The UK has 12.22 births per thousand and a death rate of 9.34.

              Over 60% of Yeminis are under 25 yro with a median age of 18 yro. The UK under 30% are under 25 yro with a media age of 40.

              Yemen has a life expectancy of 64 yrs, the UK 80.

              In summary, Yeminis are breeding at one of the fastest rates in the world. They have a young population which is breeding fast and is “expected” to live long. At a present growth rate of 2.7% per year, their population would about double in 35 years.

              https://www.cia.gov/library/publications/the-world-factbook/geos/ym.html

              https://www.cia.gov/library/publications/the-world-factbook/geos/uk.html

            • “In summary, Yeminis are breeding at one of the fastest rates in the world. They have a young population which is breeding fast and is “expected” to live long. At a present growth rate of 2.7% per year, their population would about double in 35 years.”

              If they can eat sand, sure. In real life, they would have to receive food and water for 48 out of the 50 million people, which seems unlikely. I think it is more likely there will be 1 million people in Yemen in 35 years, than 50 million.

            • Quitollis says:

              Matt, yes that seems realistic.

          • Quitollis says:

            Ed, Yemen is mostly desert and only 2.2% of the land is arable. The land is already overgrazed, eroded and desertified. After oil, their main natural resources are fish and rock salt. It seems that not many will survive in Yemen once the oil (and water) is gone in a few years.

            The US-friendly regime has bred a massive and totally unsustainable population based around oil exports. When the oil is gone, the people will largely be gone too. Of course the same is true in the developed world but the collapse is likely to be dramatic and soon in Yemen.

            https://www.cia.gov/library/publications/the-world-factbook/geos/ym.html

            Climate:
            mostly desert; hot and humid along west coast; temperate in western mountains affected by seasonal monsoon; extraordinarily hot, dry, harsh desert in east

            Natural resources:
            petroleum, fish, rock salt, marble; small deposits of coal, gold, lead, nickel, and copper; fertile soil in west

            Land use:
            arable land: 2.2%
            permanent crops: 0.55%
            other: 97.25% (2011)

            Environment – current issues:
            limited natural freshwater resources; inadequate supplies of potable water; overgrazing; soil erosion; desertification

    • Quitollis says:

      Oh why not, a Yemeni knees up, no booze allowed. LOL

    • Quitollis says:

      “The 1.4 bcm shortfall is being met by pumping water from underground water reserves.”

      … which makes the situation all the worse in the long run.

      We could call this a Quitollis Law. Faced with a demographic collapse caused by economics and environment, a population will tend to act only with a view to short term survival, which will tend to make the long term situation as BAD as it can POSSIBLY be.

      The same law is active in the West: economies will import more and more cheap labour to maintain profit/ debt and will use up domestic and international resources faster and faster, the end result being that collapse is made all the worse in the long run, with more people dead and less to sustain those who survive.

      Clearly the profit motive and the survival instinct ensure at this juncture that human history is driven by appetite rather than reason.

      Plato surmised that we would need a caste of philosopher rulers in control to mitigate this tendency; democracy will only serve to give appetite full expression.

    • 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 that Yemen has a huge problem. For the amount of resources it has, its population is high. If I believe EIA numbers, in 2011, Yemen had 24.1 million population. Saudi Arabia had 26.1 million and Syria had 22.5 million. Iraq had 30 million. I think of any of the other countries I mentioned as having a lot more resources than Yemen. Of course, Syria has a very similar oil problem to Yemen.

  20. VPK says:

    Germany has a right to be worried. It is not so much Greece that is problem, but the other “PIGS” that will follow suit with debt “forgiveness” as a means to avoid paying the”piper”, and robbing the Peter.

    • 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!

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

      There is no reality to the system at this point. So why doesn’t the ECB just print and buy all the bad debt. They can pay the interest by printing more and so on.

      • richard says:

        From the comments on ZeroHedge:
        http://www.zerohedge.com/news/2015-02-20/why-european-bondholders-refuse-sell-ecb
        comment“If you made commitments based on 4-5% returns assumptions you CAN NOT ACCEPT 1% yields. Even if the short term gain from selling your current bond porfolio to the ECB is significant. Please do not mistake this for some return to rational (significantly above zero) interest rates. THIS ISN’T THAT. This is contractual obligations feeling the strain of YEARS of central banks repressing interest rates. Not to mention that we’ve been in a depression since 2008. Pension funds, annuities and their ilk make benefits commitments built on interest rate assumptions. Commitments and assumptions were set years ago. Reality has come in well below those assumptions. This will never grab big headlines and few will understand it until pension funds start getting ‘Detroit-ed’. Not just in broke, corrupt, terminally-under-funded shit holes, but across large swaths of the “defined benefit” world, both private and governmental. This is how things come apart when long term promises can’t be met. This is when “but I was promised!” starts to meet the brick wall of reality. To MILLIONS of people this is actually a very big, very important deal. It’s a shame nobody will remember this article, nor my tiny spit of a comment on it by the time reality bites them in the ass.”
        I seem to remember another comment – Reality is coming into the room with a steel gauntlet and bitch-slappin’ right and left …

  21. Quitollis says:

    Germany told Greece, sorry pal, pay your debts! The US is not too happy because it may mean that the NASDAQ falls by 1% for a day. It is unbelievable seeing all the American MSM news outlets siding with Greece. All they care about is money and they have less foresight than a bumble bee, Germany needs to tell Obama where to shove it! No wonder all the Yankees side with Greece. The Tories are just as arrogant toward Germany but our own MSM are not so bad as the US, obviously, the far leftist BBC excepted. Cameron looks like he is on drugs telling the Germans to throw hundreds of billions at Greece just because it suits the FTSE. The BBC should never have been let out of the nursery.

    Syriza likes to talk about a “democratic deficit” as if they can negate a financial deficit through the ballot bollox. The world does not work like that. Dumocracy is obviously a load of rubbish anyway. First they vote blue, then red, then blue, then red, and if they get really adventurous some of them might vote yellow. Who even gives a damn who they vote for? If the Greeks want to pull that democratic rubbish in their own country then that is up to them but don’t try to pull that one with other peoples money. Can you imagine, they all vote to cancel their debts, what a surprise. Of course no one will ever lend to them again.

    Germany never wanted a Euro zone in the first place. It was forced on Germany by Britain, France and the US as a condition for the reunification of Germany in 1990. Obviously the idea was to keep Germany weak and so that the southerners could sponge off Germany ever more. Now the British establishment wants to shut the EU down for the sake of the financial City. Bloody idiots have done more harm to European history than anyone else.

    http://www.krasser.nl/wp-content/uploads/2012/05/grexit.jpg

    http://media.cagle.com/21/2015/01/28/159251_600.jpg

    http://data1.ibtimes.co.in/en/full/554982/charlie-hebdo-cartoon-isis-chief-abu-bakr-al-baghdady.jpg

  22. Jan says:

    Money also means power, property, protection of property, weapons, skills, knowledge and lots of more… If the economies shrink there will be a new balancing of powers: amoung states, amoung the classes, amoung neighbours – complex to think of. In these re-balancing processes new approaches that might be of advantage in a “new economy” are disadvantaged in respect to approaches that are the winners in the “current model”. A “new economy” will not have the energy, steel and industry to produce weapons as all existing resources must concentrate on supporting people. The “current model” still has all this. Thus a “new economy” could only develop outside from the “current model” – that makes the “current model” sticky and unflexible and it is more likely we will face sudden change instead of any smooth transition. It also means that people having some power now can expel those from the “current model” that otherwise would destroy the functioning of the remaining areas of the “current model”. I think this is happening already. All that means we should expect long years of denial – and then a sudden collapse of the “current model” when its recepes have proven their failure.

  23. Don Stewart says:

    Dear Gail and All
    Regarding Cuba, and tropical areas in general. Eric Toensmeier has put together a list of tropical perennial staple crops.

    http://www.perennialsolutions.org/wp-content/uploads/2014/11/selected-tropical-perennial-staples.pdf

    Willie Smits, from Indonesia, has given impassioned talks about the many benefits of sugar palms…as opposed to the detestable and destructive oil palms.

    My point is that a sustainable, or better yet, regenerative, agriculture in the tropics would probably not focus on irrigated rice, but instead on a selection from the perennial list. That is a complicated task, not only because of the horticultural challenges, but also the conservative nature that people exhibit when they are asked to change what they eat. If the diet is predominately processed food, then the entire processing chain must retool to make use of the perennials rather than their accustomed feedstock. For example, in the United States, much of the corn and soybeans are used either for fuel or for animal feed. The remainder of the corn and soybeans are mostly fractioned and sold to the food companies which combine it into frankenfoods, package it, and sell it. To substitute, say, hazelnuts, for the corn and soybeans is not impossible, but it requires a lot of changes…all for ‘sustainability’ or ‘regeneration’, not words that trip lightly off the corporate tongue.

    Don Stewart

    • worldofhanuman
      worldofhanuman says:

      Dear Don, the “perennial way of living” was known, understood, used (+plus hunter-gathering techniques) by our ancestors up to a point from which it went all dowhill to this present moment of time. We can speculate about this trigger point or combination of more factors, like the end of iceage, migrating north to winter climates, therefore requirements for more tools and specialization, first civilizations around the ME etc.

      The bottom line is that this change brought overuse of local resources, mainly timber and soil, novelties like grains and their storage system with abstract acounting, and lets not forget the impact of domesticated farm animals. Suddenly, you can run and relocate during/post war and still enjoy the “technologies” because you saved some grains and stock animals aside. Since that time we never left this doomed cut and run circle and in the process of only few thousand years forced “our ideas” on ~50% of the average global ecosystems, in some segments rather closer to 100% of terraforming rate.

      This human culture has not changed, should I venture for some perennial farmstead-homestead it will take at the minimum 7-15years to mature these systems to some solid starting point of stabilized diversity with possible overproduction of edibles, animals etc. But at the same time it will take ONLY few dozen minutes to destroy it all by a government/warloardy hack knocking on the door one day, mandating that they need more taxes and or share of my production beyond normal levels, which would cripple the delicate balance and in fast or slow fashion destroy the little paradise I helped create.

      In the end is it worthy effort at all?
      Knowing human nature you either must believe (self indoctrinate) that NOW this very CYCLE of crisis will change it, so people will evolve past their old failures, or proceed with the plan as informed pesimist and risk it anyway. Or not attempt the impossible task anyway.
      Pick and choose or rather roll a dice..

      • VPK says:

        That is why in Late Roman times peasants sought “protection” from villa estate owners, later called “Dukes” and provided labor for room and board. Others by became bandits and robbers that were troublesome or sought spiritual solitude as hermits in isolate places, the “Desert Fathers”.

  24. Don Stewart says:

    Dear Gail and All
    A question arose as to the water cut as a limit to the production life of an existing oil well. This was posted today on Peak Oil…Don Stewart

    rockman on Wed, 18th Feb 2015 2:31 pm

    Craig – Getting rid of water is just one portion of production costs. But I know operators who were making decent net incomes at 97 – 98% water cut…@ $100/b. But even then you needed a lot of those wells to make a company because you’re likely making less then 10 bopd from each well

  25. #SaveUS says:

    Hello Gail,

    Thanks for Part 3 of this interesting sequel that has brought some clarity in our current “Hunger Game”. Glad also to see many comments as always and many interesting suggestions. I will also throw in couple of my “Joseph’s solutions proposal” to this game that is increasingly becoming similar to Pharaoh’s famine nightmare. Below are my proposed solutions.

    * From the graph of Gov. Receipts vs Gov. Expenses:
    To reverse the current trend, we will need to increase Gov. Receipts and decrease Gov. Expenses. Which will require a thorough review of each part. The decrease on Gov. Expenses should be well planned so it will not create a negative effect of unemployment. We may want to revisit how Calvin Coolidge Jr. did it back in the days.

    * Debt: Although not a big fun of debt, I came to the conclusion that we need debt to keep the economy going, but we should put some limits on it, to keep it from going to infinite and becoming unsustainable. You mentioned the biblical rotation of 7 years in some of your comments. I think that can be used to set those limits. Instead of MORTgages of 30 years, launch VIVREgages of 6 years, with a max compound interest rate of 6.2% which will keep the overall interest after 6 years to 20% (which is also a biblical interest rate.) With a system like this, you are rolling the 7 years jubilee rotation wheel, and you don’t need forgiveness or Bankruptcy, since the debts will be paid off. A debt system following these limits will be biblical and easier to manage.

    * Inter-generation Debt: I have never believed in 401-K and other pension funds, I grew up with a mindset that I should have a better control on how to invest for my retirement days. To tackle this issue, we will need to rebuild family values. Children will need to follow “Honor your parents” and learn to take care of them at their old ages. I propose to restructure Pension Funds etc… to many smaller mutual funds that communities will build based on their ideas of investments.
    For example: My siblings and I launched our family 104 retirement mutual fund and we are investing to strengthen the Family farm, by each of us investing a cow or 2 per year, which is the price of what I could have contributed to a 401 K or IRA. The vision is that by the time we retire, the farm will be strong and will generate strong income for our retirement. Our retired parents are already living from the income generated from that farm. My siblings who live close to the farm, keeps an eye on it to make sure that it is well managed and operate well. Once we reach the number of cattle that we have planned, we plan to invest in a different business to diversify our investments.

    * Social Sec. fund, Healthcare, Education loans: With the above Retirement strategies, Gov. will not need to worry about Pension Funds anymore. We can then reduce our tithing (tax) to the gov. to a fixed 10% and may be an additional 3% to 4% to Social Sec. Fund to help the elderly and less fortunate. Launch 925 College Funds, again following the similar 104 Farm Fund philosophy presented above. Also launched similar concepts for Healthcare. With Such mechanism, we will be handling things on our own, and Uncle Sam will have less things to worry about, which will help in our strategy of decreasing Gov. Expenses. This will also decrease the dependence of those Funds to the speculation of Mur St. Financial Center. Ultimately we will have many Porte & Fenetre St. Finincial Centers spread out in the country, made up of many small 104 mutual funds that are well organized and decentralized with less speculation, and more local business investments.

    *Energy and Oil Shortage: To get your graph move upward, we will indeed need to review our priorities and redirect many of our defense (killing-each-other) expenses toward producing affordable energy and Oil. The Energy system will have a mixed of all those great technologies discussed in details in this blog. Each region will develop the technology that is suitable to her with available resources (Hydro, Coal, Solar, Nuke, Wind, Biofuel, Natural Gas, Lithium Batteries (Tesla), etc..). As we redirect those defense expenses, launching an Aikido self defense philosophy in High Schools PE(Physical Education) that will teach all of us on how to restrain attackers by trying our best not to harm them. Because the philosophy of Kumite(war), Eye for Eye, Nuke for Nuke, will make all of us broken, blind and dead. Survivors will inherit an unlivable radioactive world! With this better approach of respecting one another, we can then redirect our energy toward building the infrastructure needed for the future!

    * Currencies and the Big Dome of Leonardo sticks: I think this big dome of Leonardo sticks is a great idea, but with many risks associated with it. Because once it collapses, it breaks all the sticks! I don’t think they will be a stick standing at the end!
    Someone mentioned that debt is like sugar, and I think that the sugar running the whole Big Dome, eventually can reach a high level and bring a diabetes to the whole system. I believe it will be easier to have a set of many small domes interacting with each other and exchanging sugar and other products easily. This will also help whenever there is a need of going to SAVE an healed dome. The domes that are doing well can go and give some insulin (QE), but overall each dome will need to know that too much sugar leads to diabetes, and each dome will need to keep on working out to stay financially fit.

  26. Olsen says:

    Urban Organic Gardens in Cuba…. …

    • 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 think the key to this though is the irrigation water shown in the very last screen of the film. That is one thing that I am concerned is not sustainable.

      • Don Stewart says:

        Dear Gail and All
        I will suggest a few things based on a cursory examination of the issue of irrigation in Cuba. I have never been to Cuba. When I worked at a small farm, we had a drip irrigation system fed by an electricity powered well. I don’t know much about the tropics, as opposed to the temperate zone.

        A quick Google search turned up these articles:

        http://www.ofid.org/NewsPress/tabid/87/ArticleId/490/OPEC-Fund-extends-US-10-million-loan-to-Cuba-for-irrigation-systems-modernization-project.aspx

        http://www.gbm-inc.com/Irrigation-Systems.html

        http://sri.ciifad.cornell.edu/countries/cuba/CubaRiceIrrigationWorkshop1109.pdf

        My thoughts:
        *The OPEC funds will be used to convert the big rice farms from diesel to electric in terms of pumping water. For small volumes of water, PV panels work very well. When the sun shines, they pump water. When the sun doesn’t shine, they don’t pump water. I don’t know if they are a reasonable solution to flooding a rice field.
        *You will see that all the usual bases are covered by the irrigation equipment suppliers.
        *You will see that, a decade or more ago, the big rice fields were not very productive. You will also note that vegetable irrigation is a small percentage of the total water use in Cuba. However, the ‘urban plus industrial’ use is a good chunk of the total. My guess is that the small urban plots use urban water, and so are not explicitly recognized on the slide.
        *The situation with regard to large scale production of staples is not much different from what you would see discussed in an agricultural meeting in the US.

        There is a considerable difference between urban vegetable gardening in the US and in Cuba. Part of that difference springs from the decision by the Cuban government, at the time of the Soviet collapse, to give every citizen an allotment of staples, but to place the responsibility for vegetables on the individual. Small urban gardens were the least expensive way to get vegetables, and the government wasn’t offering food stamps to get them.

        What would it take to make a small tropical island ‘sustainable’?

        I obviously don’t know…but that doesn’t prevent me from mouthing off. None of the Carribean islands are anywhere near sustainable food. Cuba does better than anybody else I know of. As I never tire of pointing out, food needs to be seen through at least two lenses: calories and nutrients. The rice which is a Cuban staple, along with beans, is not very high in nutrients, but it is high in calories. To have a healthy population, they also need vegetables, which are low in calories but high in nutrients. Rice and beans can both be dried and stored and easily shipped. Vegetables, particularly if refrigeration is scarce, need to be eaten promptly once harvested. Therefore, the neighborhood gardens make eminent sense.

        I understand that Cuba sees itself as an outpost of Europe. They eat European foods. I suspect that a serious effort at sustainability would have to begin by asking how tropical, seasonally dry, agriculture is different from European agriculture, and what those differences require. My guess is that the answer will be ‘more tree crops, less annual crops’. We get the same answer, of course, just to different issues, in Wisconsin.

        If agriculture is made sustainable, how many people can it feed? I don’t know. I do know that whatever agriculture we end up with will be resource limited and specific to a particular place.

        Don Stewart

        • You’ve posted the same video at least three times now.

          • Olsen says:

            Uploaded on Nov 3, 2010

            The greening of Cuba: Cuba is well-known for its successful urban food-producing allotments program and is currently held up as a model of sustainable development with its serious implementation of environmentally friendly policies.

            A public meeting on the environment and Latin-America was held in Partick Burgh Halls, Glasgow, Scotland on15th October 2010. Hosted by the SSP and chaired by Bill Bonnar, there were two speakers, Brian Pollitt, known for his Cuban solidarity work, and Peruvian guest speaker Hugo Blanco, well-known campesino leader, whom you can hear in another video in 4 parts in Spanish with interpretation by Ian Bruce. In this video, Brian discusses the origins and economic necessities of the moves towards a greener Cuba.

            He describes how in the 80’s Cuba relied on the Soviet Union for fuel, fertilisers etc and Cuba in turn exported sugar at a fair price, but after the collapse of the Soviet bloc there was a shortage of fuel and agricultural chemicals, as Cuba has no coal. There was not enough fuel to power the machinery for large-scale state farms and not enough fertiliser or machinery as this was previously imported. The US has a blockade on Cuba so Cuba had been reliant on trade with the Soviet Union, so after the Soviet Union was no longer in a position to trade with Cuba as before, Cuba suffered economically. The government had to find ways of producing enough crops and food without relying as much on fuel, machinery and chemicals as they did before. There was also a downturn in employment, but now more labour-intensive farming was needed and large scale state farms were broken down into smaller more manageable ones. Workers and peasants’ cooperatives were formed. People were encouraged to grow food in every space that they could in the towns. It has been hugely successful. People have taken well to the food-growing programs. Apart from obviously enjoying more food after the shortages, some people are happy that gardening has made them fit, others are happy to be able to sell their own produce or that of their small cooperative, others simply happy to do their bit to help the country out of a sense of community and collectivity. Other ways that the government has reduced the need for fuel consumption has been to offer free more energy-efficient replacements of household appliances such as cookers, refridgerators, kettles with imports from China. Pressure cookers for example have been encouraged, which cook more quickly, efficiently and less energy-intensively.

            Economically, the switch from primarily inorganic to organic is not as productive. It is extremely difficult to yield the same amount of crops as with inorganic but by encouraging as much small farming as possible a tremendous amount has been produced creating a revenue that matched the earnings from the expanded tourism, an economic victory in the face of a blockade and a lack of former subsidies, and a winner for health and ecology at the same time.

            • 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 plan to visit Cuba in May. I will see for myself what is happening.

          • Olsen says:

            I had problems with the links ….. the last one is the one I wanted to post I also want to find newer ones.

            • I saw a movie that showed Cuba as most there live it and it is really bad. I worked with some Mexican’s, many of whom had lived in poverty in Mexico before coming to the US, and this one guy who had been to Cuba was telling them it is really bad. It’s one thing to be alive and a whole different thing to prosper.

              Gail, when you are there I suggest taking a cab away from the fancy hotel/restaurant areas and see what it is really like. Try to go in one of those houses to see their stoves and refrigerators. I mean they still have Philco frig’s from the 50’s.

            • “I saw a movie that showed Cuba as most there live it and it is really bad.”

              Without abundant energy, how do you think things would be here?

              ” I mean they still have Philco frig’s from the 50’s.”

              You make it sound like not replacing your appliances every 5 years is a bad thing.

            • 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 the suggestion!

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

    The propaganda machine is in high gear. Someone wants something. Who? What?

  28. Don Stewart says:

    Dear Gail and All
    Suggest take a look at
    http://peakoil.com/consumption/get-ready-for-10-oil

    Go to shortonoil’s two comments. Some good information about lifting costs and water cut, and also about the capital expenditures per barrel of tight oil produced.

    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:

      I agree that light tight oil is very cash flow negative. It is not the oil with the high water cut (yet). In fact, the comment is clear that the discussion is about conventional oil tending to have water cuts above 90%.

      Perhaps lifting costs are as high as $20 barrel for oil with a 98% water cut–I don’t know the source of that figure. It seems like there is more than one way of doing the lifting, and that would influence the costs. If electricity is used, from some cheap source, the costs will be much better than if oil is burned to run motors, for example. I would be interested in seeing how the $20 barrel figure was derived at 98% water cut.

      Also, the figure would be considerably lower at, say, 95% water cut, since this would by 5% oil, instead of 2% oil. Only 40% as much oil + water mix would need to be lifted, to get an equivalent amount of oil. It is the exponential at work here–the last couple of percent are the killers. So if most of the conventional oil wells are between, say, 90% and 95%, (Shortonoil says the majority of conventional wells are “over 90%’), cost may not be as big a problem as this analysis would suggest.

      • Don Stewart says:

        Gail

        Quote from bwhill:
        ‘Most of the world’s extractable conventional crude deposits lies in the 3500 to 4500 foot range. The lifting cost for a 4000 foot well with a 90% water cut is about $20/ barrel. If prices fell to $20/barrel it would shut in at least half of the world’s production. ‘

        So Mr Hill is saying that the lifting cost of the water in most of the words conventional fields is 20 dollars per barrel of oil. As the water cut increases, the problem gets exponentially worse.

        You have stated that industrial civilization needs 20 dollar oil to function. But if Hill is correct, we aren’t likely to ever see 20 dollar oil again, except in some sort of government rigged system which steals from someplace else trying to subsidize oil.

        Can tight oil make up the deficit? And Hill quotes some numbers on the debt which has thus far been required to get tight oil production to the current level, and finds that the amount is 300 dollars of debt per barrel. Some have objected that a capital asset can be used to continue producing oil. I think that, roughly, a tight oil well can produce about 3 times the initial years production over its life. Which would imply that the debt per lifetime barrel is around a hundred dollars. That, of course, doesn’t count non capital expenses. So, without making a detailed study, it doesn’t look like tight oil is going to be able to fill the shoes left by the depleting conventional fields.

        Don Stewart

      • Rather than concern with lifting costs, maybe the concern should lie with the fact the water cut is that high. How much oil can be left in a reservoir at 90-98% water cut?

        I keep wondering if people are taking their eye off the elephant in the room, i.e. what will happen when all these older giant oil fields with high water cuts begin to get shut in. We could go from a world of oil companies and govt’s in an oil market share war to supplies no where near meeting demand over a short period of time.

        • Don Stewart says:

          Dear Stilgar
          ‘the elephant in the room’
          That’s the gist of the Hill’s Group message, as I understand it. We are nearing the end of the oil age for two reasons:
          1. The thermodynamics are increasingly unfavorable.
          2. The net energy and debt issues and the resultant inability of society to support high oil prices.

          They have some scary charts showing where the cost line (from thermodynamics) and the ‘ability to pay’ derived from net energy and the inability to support debt….at least as I understand their models.

          Don Stewart

          • Don Stewart says:

            Dear Gail and All
            I am pretty sure the US government and Canada both think they can print unlimited amounts of money to cover deficits. Do you think they believe the arguments of the Hill’s Group about the thermodynamics issues? Well, consider this quote from Zero Hedge:

            “Karl-Georg Wellmann, a lawmaker in Angela Merkel’s Christian Democratic Union has warned that, despite its efforts to avoid arms being provided to Ukraine, Germany “will no longer be able to stop weapons deliveries from from the U.S. and Canada.”

            Ukraine has no oil. Russia does have oil. Eastern Ukraine has russians (with a small R), which Russia doesn’t want to see slaughtered. Can you connect the dots?

            Don Stewart

            • “Ukraine has no oil. Russia does have oil. Eastern Ukraine has russians (with a small R), which Russia doesn’t want to see slaughtered. Can you connect the dots?”

              Eastern Ukraine has large deposits of coal and natural gas, much of which has not yet been developed due to lower cost imports from Russia, and due to the general levels of corruption and inefficiency in the Ukrainian economy.

              Ukraine’s debts are in part backed by the resources and assets in Eastern Ukraine; if they lose those areas and their accompanying tax base, suddenly they are more insolvent.

            • Don Stewart says:

              Dear Matthew
              The deal that Putin brokered a couple of days ago provided that Eastern Ukraine would gain some measure of self-government, and also have the right to establish commercial relationships with Russia. But the Kiev government would control the border between Russia and Ukraine (including East Ukraine). The US and Canada pay lip service to a peaceful settlement, but their actions indicate that they want war. If the Kiev government were concerned about keeping the industrial and natural resources in Eastern Ukraine for their tax base, they would eagerly accept the Russian deal. As Putin observed when he described the 17 hour marathon, ‘if Kiev had been willing to negotiate directly with the leaders of the East, they could have had this agreement months ago.’

              One has to believe that either the Kiev government is just stupid, or else that the US and Canada are telling them ‘we have your back’ and to go for broke.

              I began to detect that the US had some plan in mind when the media here were flooded with anti-Russian propaganda at the time of the winter Olympics. Once Wikileaks made public the transmissions to DC about the Russian’s inability to tolerate repression of the russians in East Ukraine, and the Russians made public Victoria Nuland’s phone calls, it became clear to me that the US wants a war with Russia.

              While it may be irrational to want war with a nuclear power, I think that the fact that the war party is being led by the US, Canada, and Australia is indicative. Besides some Middle Eastern countries, these three consume more oil per capita than anyone else.

              I think that, by last winter, the US had figured out that tight oil wasn’t going to save anyone, and Canada had figured out the same for tar sands. So the playbook is to continue to publicly proclaim ‘Saudi North America’, while the real agenda is getting control of Russian oil (and other resources).

              For Obama, it’s also personal. Putin speaks fluently and makes sense. Obama has to read off a teleprompter and doesn’t make any sense. Putin tries to make peace in places like Syria, while Obama only wants a victorious war in Syria. I think that Obama has to read everything off the teleprompter because, while he can sound very sincere while he is lying, he can’t remember exactly what lies he is supposed to be telling.

              Don Stewart

            • Olsen says:

              Putin did not start the civil war in Ukraine In December 2013, Assistant Secretary of State Victoria Nuland, a neocon holdover, reminded Ukrainian business leaders that the United States had invested $5 billion in their “European aspirations.” In early February, she discussed with U.S. Ambassador Geoffrey Pyatt who the new leaders of Ukraine should be. “Yats is the guy,” she declared, referring to Arseniy Yatsenyuk. [See Consortiumnews.com’s “Who’s Telling the Big Lie on Ukraine?”]

              ..

  29. Looks as if Greek game theory is going off the playing board and headed for the cliff.
    Talks break up and maybe this is it…for now
    http://www.theguardian.com/world/2015/feb/16/greece-fails-rescue-package-eurozone-finance-ministers

    • Quitollis says:

      [quote][I]However, the Greek delegation was told in no uncertain terms that talks would recommence only if the country was willing to extend its bailout package, which carries a list of austerity measures that the new left-wing government in Athens has vowed to pare back.[/I][/quote]

      By the sound of it the EU told Syriza to get stuffed!

      The EU is not willing to continue to chuck hundreds of billions at Greece so that Syriza can dress up in che guevara t-shirts.

      Syriza’s “game theory” seems to be more like a prayer theory. Just close your eyes, pretend that the big nasty world does not exist and ask for your shopping list from the great beyond.

      The lefties in Greece are finding out the hard way that the world does not work like that. The EU are not gullible kids waiting to be “beaten” in some game theory so that the Greeks can run off with their wallets.

      Greece has attempted to mug the EU yet again and really they must be having a laugh if they thought that they were going to get away with that.

      This was all totally predictable from the outset.

      Either Greece will accept the bailout terms, balance the books and implement “austerity” and structural changes or else they wont get another euro, they will be out of the zone and shut out of the international markets.

      They will be out on their ear and then the Greeks really would suffer.

      All that Syriza has achieved is to totally discredit the leftists.

      The first lesson has to be that you have to accept the world as it really is before you can hope to achieve anything. Syriza cannot expect to just have a tantrum like a spoilt child and expect the adults to give in.

  30. Don Stewart says:

    Dear Gail and All
    This will be a note about good health and gardening. Those who are allergic are excused.

    The first thing to understand is that leafy greens are health elixirs, not calorie dense foods. While calorie dense foods are not without some health benefits (beyond prevention of starvation), it is leafy greens that shine when it comes to preventing chronic diseases and boosting our immune system. Here is George Mateljan’s write up on one specific green…brussels sprouts.

    https://mail.google.com/mail/u/0/#inbox/14b921a56eb2480f
    Did you know that the phytonutrients found in cruciferous vegetables, such as Brussels sprouts, cabbage, broccoli and kale, actually signal our genes to increase production of enzymes involved in detoxification? For about 20 years, we’ve known that many phytonutrients work as antioxidants to disarm free radicals before they can damage DNA, cell membranes and fat-containing molecules such as cholesterol. Now, research is revealing that phytonutrients in cruciferous vegetables, like Brussels sprouts, work at a much deeper level. The phytonutrients in crucifers initiate an intricate dance inside our cells in which gene response elements direct and balance the steps among dozens of detoxification enzyme partners, each performing its own protective role in perfect balance with the other dancers. The natural synergy that results optimizes our cells’ ability to disarm and clear free radicals and toxins, including potential carcinogens – one reason why cruciferous vegetables appear to lower our risk of cancer more effectively than any other vegetables or fruits. So, while Brussels sprouts may be miniature in size, they are giants when it comes to helping to protect cellular structures and DNA from the damage caused by free radicals.

    And see this link:
    http://whfoods.org/genpage.php?tname=foodspice&dbid=10

    Now, if you want to know how to grow leafy greens in your own garden, see this video interview with Carol Deppe. Carol is a PhD in biology from Harvard, who has lived and gardened for many years in Oregon. The entire interview is 30 minutes. If you are pressed for time, start at 10 minutes where she talks about her effortless leafy greens garden.

    http://www.resilience.org/stories/2015-02-16/join-the-eat-all-greens-garden-revolution

    As Carol points out, everyone wants to grow tomatoes…and we should, because we love them. But it is the leafy greens which make the most impact on our health in the smallest garden space. By harvesting the water-rich leafy greens just before we eat them, we are maximizing the nutrient value to our bodies. We are also minimizing the carbon footprint as we stop shipping refrigerated water around the country, saving money, and satisfying our ancient hunter-gatherer instincts.

    (Note: Brussels Spouts greens are not usually sold in grocery stores. What you see in grocery stores are the heads that Carol somewhat denigrates. But the health benefits that are in the head are at least as concentrated in the leaves, so the main points I make are still valid. I just used the Brussel Sprout link because it appeared this morning, at the same time as Carol’s interview. If you are at a farmer’s market, look for ‘Brussel Greens’…cheaper than the cute little heads.)

    Don Stewart

    • Quitollis says:

      LOL You seem to be talking about brussel tops. They are our favourite boiled green with a roast chicken/ beef dinner. Or else spring greens (don’t ask me for the latin name.) We had brussel tops tonight, large portions because they are great. They add moisture to a roast – along with a good gravy lol. Boiled brussel sprouts are also among our favourites with a roast too, also roast potatoes (obviously), carrot and swede mash, roast turnips, sausage meat-and sage onion stuffing etc. By the sound of your post, you would love a traditional English roast. If you cant get brussel tops in Canada then you should definitely move to England. Each roast is the best dinner that I have had since the last roast. But don’t forget the meat, the nutrients are 100X as assailable by the human body as vegetables.

      OK this is what wiki reckons spring greens are, they may be right. These are old fashioned cheap basics to us rather than fancy health foods.

      Spring greens are a cultivar of Brassica oleracea in the cultivar Acephala Group, similar to kale, in which the central leaves do not form a head or form only a very loose one. It is considered to be closer to wild cabbage than most other domesticated forms, and is grown primarily in northern Europe, where its tolerance of cold winters is valued for an early spring supply of edible leaves. The Cultivar Group Acephala also includes curly kale and collard greens, which are extremely similar genetically.

      • Don Stewart says:

        Dear Quitollis
        Collard greens and mustard greens are the traditional leafy brassica here. Leaf broccoli and kale have become popular in the last couple of decades. Brussels sprouts, as described in the article, are harder for a home gardener to grow. They look like small cabbage heads.

        Don Stewart

        • Quitollis says:

          Btw, if you are into that sort of thing, have you tried sprouting seeds and beans? They are really cheap and easy to grow and the nutritional value goes up 1000 fold. You can sprout alfalfa, mustard, sunflower seeds, pumpkin anything. Lentils produce huge sprouts. You wet them in a tray or an open jar with muslin over the top in a dark cupboard and keep them slightly moist. You then eat them raw. You can find the more technical articles on google. I have not done it for many a year but they are good fun for a kitchen garden.

          • Don Stewart says:

            Quitollis
            After years of using mason jars and cheesecloth, I bought a device called a Bioset from Johnny’s Seeds in Maine. I think the Bioset is made in Belgium. It works really well.

            Imagine 5 circular dishes stacked. The bottom and top are the same size. You pour water in the top one and it runs to the bottom. Twice a day, you empty the water from the bottom and pour more in the top.

            In the middle are three dishes in which you can sprout anything you want to. Just spread the seeds out. Since the three inner dishes are independent of each other, they do not have to be on the same schedule. There are little plastic controllers in the top dish and each of the three inner dishes which slowly trickle water down to the next level.

            A very convenient, foolproof way to sprout.

            Don Stewart

      • xabier says:

        Three cheers for Quitollis

        Brussel sprouts + bacon (for instance) = Food of the Gods!

        In a damp and chilly Northern climate, of course.

        It needs a good English ‘chilled to the bone’ day to savour such a dish at its best – but then it is something to eat and afterwards to dream of…….

        Next: In Praise of ‘Toad in the Hole’. Culinary Glories of England, Part 2.

        • Quitollis says:

          Xab, I could do better. You will have to give me the recipe for potato omelette and maggoty cheese. I know, just chuck in paprika and it becomes a delicacy.

          Seriously though, my nan used to do an amazing toad in the hole, with onions and herbs in the Yorkshire pudding.

          My own cooking is pretty eclectic, British, Germanic, Med, near east, north African, pretty pan-Caucasian and even a touch of far east. Yea I can fit all the elements in a single casserole.

  31. Don Stewart says:

    Dear Gail and All
    Did anyone else read this?
    http://www.zerohedge.com/news/2015-02-15/only-question-about-so-called-recovery

    As I understand the charts, they show that there is no net debt entering the system at the present time. Only central banks are taking on new debt. (Governments run deficits, but sell the bonds to the central banks…not the public).

    This looks like a desperate situation…but perhaps I don’t understand it….Don Stewart

  32. Don Stewart says:

    Dear Stefeun
    One more observation about Doidge’s book. 40 years ago one of our children had ‘lazy eye’. The pediatrician put a patch on the good eye to force the lazy eye eye to become more active. So pediatricians knew about that sort of thing 40 years ago. But when my wife’s brother had a stroke about 15 years ago, we got the story that neurons, once destroyed, can never be replaced and that the ability of the brain to adjust was very limited and all happened in the first six weeks after the stroke. That is the story that Doidge says is still the conventional wisdom in the medical business. But he offers evidence not only from stroke victims, but also the Parkinson’s victim, that we have underestimated the brain. The Parkinson’s victim developed a method of walking which is very similar to Tai Chi walking…that is, it is deliberately controlled by the conscious brain rather than the unconscious brain.

    Should that shock us? Well, the Buddhists have said for thousands of years that the breath is a good object of meditation. The breath is one of the few bodily functions that shift easily from unconscious control to conscious control, and that has something to do with their value as an object of meditation. The Buddhists thought that learning to focus on the breath was the first step in learning to focus the brain. But few doctors would have believed that anyone would be successful with ‘conscious walking’…at least nobody was prescribing it. The patient demonstrated that he COULD do it, by focusing on his walking. He couldn’t simultaneously carry on a complicated phone conversation on a mobile phone…but then most off us can’t drive and talk at the same time. What the patient showed was that by directing his consciousness to the mechanics of walking, he maintained his physical abilities far longer than the average patient who is told that things are just going to get worse. Neither the patient nor Doidge claims that the Parkinson’s was ‘cured’. The senior medical fraternity accused the patient of ‘not having Parkinson’s at all’. Yet the patient’s actions showed that when he failed to focus on the mechanics of movement, his disease quickly reasserted itself.

    The reviewer seems to want the doctors to continue to tell people it is hopeless.

    Don Stewart

    • Stefeun says:

      Bonjour Don,
      as a kid I also had a lazy eye that has been somewhat reactivated by same technique as you describe. That was 45 years ago, and it looks like not much progress has been made in that direction, until very recently, mainly thanks to the fantastic improvements of medical imagery.

      IMHO, the real obstacle was dogma, which helped maximize profits (and minimize risks by intervening on narrowest possible fields). A patient is considered as a machine with some defective part to be identified and repaired or replaced, not as an entire living individual with its many internal and external interactions. Where’s the profit when the body is able to cure itself most of the time?

      Back to neuroplasticity (and buddhism), there’s still a lot to discover in the mind-brain-body connections. One of the biggest areas of investigation here is related to consciousness.
      Benjamin Libet already discovered in the 1960’s that consciousness was a process aiming to establish a coherence between memories and feelings, afterwards (ie first is the action, then it takes half a second to the brain to create a plausible story for it ; note that with such findings, the concepts of intention and responsibility become quite hard to define).

      Then it’s only in recent years that people like Stanislas Dehaene, with sophisticated equipment, were able to make conclusions like: unconsciousness has a very short response time, and is therefore more efficient than consciousness that is very slow in comparison (that’s only half the way to Libet’s findings, and… how much longer to buddhist principles?…).
      Here’s an interested review of Dehaene’s book “Consciousness and the Brain”, with links at its end (that I didn’t explore):
      http://blog.brainfacts.org/2014/07/book-review-consciousness-and-the-brain/#.VOHmf2K9KSM

  33. Don Stewart says:

    Dear Gail and All

    I am reading a remarkable book about neuroplasticity and the brain…the ability of the brain to continue to learn and to reconfigure itself as we age. The author is Norman Doidge, MD and the title is The Brain’s Way of Healing.

    I call your attention to pages 90 and following, in particular. People with Parkinson’s have trouble moving. They also have a deficit of dopamine. Dopamine is generally seen as essential to movement.

    ‘Dopamine has at least 3 characteristics relevant to Parkinson’s Disease: first, it enhances motivation to move; then it facilitates and quickens that movement; and finally it neuroplastically strengthens the circuits involved in the movement, so that movement will be easier next time. But if there is no motivation, no movement will occur.

    A recent study shows that the ‘motivation to move’ goes awry in PD, and that PD patients, if they are motivated, can often move….as accurate and fast as normal subjects, but they need more practice to do so.

    …explain their remarkable findings in this way. When a person is about to move, the brain first estimates and weighs how much effort that move will require compared with the reward it estimates will be obtained from the movement. In normal circumstances, the dopamine system is necessary for us to perform this ‘weighting’ function. When dopamine is low and the person moves, he does not experience the pleasure of reward….the system simply assumes that the benefit will be negligible and that the opportunity cost of the movement will not be worth the effort. Since the speed with which the PD patient performs a movement is in part related to how much reward is anticipated versus the energy cost of the movement, the result of low dopamine is very slow movement.

    It may seem remarkable that few if any neuroscientists or physicians have intuited that much of the PD problem has to do with the chemistry of movement motivation, particularly because scientists have known for decades that dopamine is an essential part of the reward chemistry. But the oversight is understandable because this weighing function operates outside awareness and is largely unconscious.

    The importance of the findings for understanding Parkinson’s cannot be underestimated: it is NOT simply that PD patients have an inherent inability to move normally and at a normal speed; the motivational component of their motor system is also fundamentally compromised. Mazzoni and colleagues write ‘We propose that striatal dopamine also energizes action in a more literal sense, namely by assigning a value to the energetic cost of moving’…as much a mental as a physical disorder’

    This is from the chapter titled A Man Walks Off His Parkinsonian Symptoms. You can buy the book to get his complete program, along with current recommendations from the medical establishment…but walking and getting rid of chronic stress are key elements. You will learn that the Medical Establishment mostly ridiculed the man. Those who believed were those who were his personal physicians and saw his results with their own eyes. Now, unarguable evidence has emerged from traditional bastions of medicine such as the Mayo Clinic.

    How does this relate to Peak Everything? First, I think it is important to note that Global Financial Capitalism wants you to be under chronic stress and to be sedentary. Reward chemicals are supposedly released by ‘consumption’, not walking from place to place and closely observing your environment. The ideal job is someone who sits at a terminal all day and trades millions of dollars in a pressure cooker. The Peak Everything orthodoxy also wants you to think that doing things by hand has no dopamine reward, that everything is hopeless unless some wonder drug or genetic engineering or new source of oil is discovered.

    It’s a mistake to make too close a connection between the Global Financial Capitalism/ Peak Everything orthodoxy and the medical orthodoxy which was blind to the real treatment for Parkinson’s for so long. But the parallels are too strong to be ignored.

    It’s also a mistake to think, as one Green activist recently said, ‘we must all be in this together’. The South African who discovered how to deal with his Parkinson’s went around the country and around Africa telling his story. He estimates that perhaps a quarter of the people he talked to were willing to do anything to help themselves. We are not ‘all’ in the Peak Everything survival mission, we are in it with those who are willing to act to save themselves.

    Don Stewart

    • Stefeun says:

      Thank you Don, very interesting.
      Findings in neuro-plasticity are surprising, such as to realize that the brain is a sort of muscle, in which circuitry gets reinforced by the number of iterations of a given “operation”, and can create new paths when necessary in order to achieve it.

      Also amazing to notice that the most advanced brain science is getting closer to ancient buddhist principles and practices (I know the Dalaï Lama discusses with neuro-scientists).

      I didn’t know that the simplest movement was using the reward circuit, and I like the idea very much; so simple! Also like the dopamine “assigning a value to the energetic cost of moving”. Looks like we have totally misunderstood what the reward really is and means (and how about the cost!).
      Found this review by the Guardian, worth reading: http://www.theguardian.com/books/2015/jan/23/the-brains-way-healing-stories-remarkable-recoveries-norman-doidge-review

        • Olsen says:

          What we should do is recognize that Cuba confronted in 1991 precisely the kind of Apocalypse that looms before us today — the sudden loss of external inputs to the economy — things such as oil, heavy equipment, cars, and did we mention oil? — and handled it. We have more to learn from them than there is likely time to learn before we are in the soup, but we should do the best we can, because there is no better example in the world for meeting and besting such a crisis.

        • 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 was 2006. What about now? The story talks about not using oil, but it does not talk about not using non-renewable resources–namely water pumped from the aquifer beneath Havana. The pumps are no doubt electric.

          I would like to know how much of the story is real, and how much is hype.

          • “I would like to know how much of the story is real, and how much is hype.”

            They seem to be moving away from resilience, the people got tired of bicycling and prefer cars and buses. As relations normalize with America and more hotels and other companies move in, we’ll see how resilient they stay.

      • Don Stewart says:

        Dear Stefeun
        Thanks for linking to the review. Here is my reaction to the review.

        Of course wise physicians always knew there was more to medicine than drugs and surgery. But every old time doctor I know thinks that the modern focus on ‘evidence based medicine’ has some serious downsides. We get the insurance companies and their permission of very limited contact between doctor and patient. It all becomes about getting out the prescription pad and scribbling something to get the magic pills.

        Personally, I think Doidge hits about the right balance between research rigor and popularization. Read his description of the South African with Parkinson’s, the evidence from the patients own doctors, and the indictment by the senior medical fraternity. Unless Doidge is out and out lying, the senior medical fraternity just wasn’t paying attention.

        The reviewer seems to accuse Doidge of saying that ‘the body knows what to do’ in terms of things such as recovering from the damage done by strokes. That is not true. Doidge makes it clear that the instinctive reaction…to not require the injured limb to function…is the wrong response. The correct response is to immobilize the uninjured limb and ‘force’ the injured limb to function as well as it can. How the reviewer can twist that around to imply that Doidge is ‘blaming the victim’ is a mystery to me.

        I think Doidge’s point is that, once we accept neuroplasticity, additional options open up. Some of those options will turn out to be very good ideas.

        I suppose it is a true statement that Doidge doesn’t use dry medical journal language. But…he is writing for a general audience…not doctors or medical researchers. None of what he says should be news to doctors and researchers who are paying attention. Do a quick PubMed search on low-intensity lasers and you will find an awful lot of articles describing how light from these lasers can penetrate the skin and promote healing…just as Doidge claims. Yet the typical prescription is still knee replacement surgery…which probably makes more money for everyone concerned. I’m not making accusations, but what Doidge has to say bears consideration if you are a potential patient.

        His remarks about how hospitals and school rooms became dark, sunless places also bears consideration. Some time ago, a sunlight advocate wanted school room walls replaced with glass, so the children could see the natural world. One of the local hospitals now has a children’s ward which puts some of those ideas into practice. For adults, it is now well-accepted that a room with a window looking out at trees and flowers speeds healing.

        I want to come back to the mental focus required of the chronic pain victim. The point there is ‘crowding out’. It has been known for ages that severely wounded people often do not feel pain. Which led doctors to understand that pain is not so much a matter of injured flesh as it is the brain’s interpretation of injured flesh. Once we understand that the brain can only pay attention to one main thing at a time, and that sections of the brain tend to do multiple functions, then the notion that we might be able to ‘distract’ the brain from chronic pain (from, let’s say, an injury to a phantom limb), and if we understand that ‘neurons that fire together wire together’, then the possibility of using the ability of the mind to direct attention (which is at least as old as the Buddha) should suggest itself to us. Not everyone will be able to do it…just as everyone cannot bring themselves to meditate on their breath. But a significant number of people can bring themselves to do it. The pain victims that Doidge describes successfully retrained their brains to eliminate the pain from acute injuries which should no longer be causing pain. That’a a pretty good accomplishment.

        Don Stewart

        • Stefeun says:

          Don,
          the alternative to the “magic pill” is to make an effort.
          Note that both techniques can successfully work together, but due to the nature of the choice, there’s no wonder why Big Pharma has been so successful at promoting the former at 100% and discarding the latter.
          (more after your next comment below)

          • Don Stewart says:

            Dear Stefeun
            I was talking over the phone with my daughter yesterday. I reminded her of the ‘lazy eye’ experience she had as a child, then talked about the ‘immobilize the good arm’ treatment for stroke victims. She wasn’t enthusiastic. She said ‘there is no doubt it works, but it’s really hard on a lot of patients’. She described one of her neighbors who was out planting peas in his garden with his bad hand. She said it took him two hours to plant one row.

            I wouldn’t talk about this over the phone with anyone who hasn’t thought about Peak Everything. But the way I look at it, a society living with about the resource level of Edo Japan simply can’t afford too many people who aren’t producing anything. If you had the misfortune to be born as the third or fourth or fifth child in Edo, you were likely ‘sent back’ by the midwife…because the farm had to support the family plus pay the taxes in rice and choices had to be made.

            Consider an older person who has a stroke, but makes a strong effort to regain some function in the damaged limb. That person can do quite a few things around the farm and the house. Not as elegantly as a teenager, perhaps, but well enough. Then consider someone who expects to be sent to an intensive care place and waited on hand and foot. Which of these two hypothetical people do you think will actually be selected for survival by the society?

            I think we are going to go through a selection event (or bottleneck, if you prefer Catton’s phrase). The selection event simply invalidates much of the way we think today.

            Don Stewart

  34. Don Stewart says:

    Dear Gail and All
    Article showing that the dominate use of derivatives is now to gamble…not to hedge. Also that the financial powers that be are ‘not concerned’ about the huge volumes of money being gambled.

    Because they know that the governments will sacrifice the taxpayers to save them?

    Don Stewart
    http://www.zerohedge.com/news/2015-02-14/derivatives-no-longer-used-hedging-exclusively-alpha-generation

    • 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 the link. I had sort of suspected this, but never seen a survey of this type done. There probably is additional buying of derivatives to support ETF positions–for example, to follow the price of oil. I am not sure how this is classified, but we know that this type of buying dominates the market.

      • worldofhanuman
        worldofhanuman says:

        http://www.acting-man.com/?p=35687
        The system is clearly overstressed, but we can’t discount the “creative ways” how to prop it up further. For instance this link claims Denmark is in houshold debt per gdp in it for roughly 550% ! Does it matter at all, could it reach 1500% level after the next crash or bump along at decreased level of 350% for another decade? We know for sure that the recirculation debt channel is no more functioning as designed, producing (&extracting) regions-countries like Gulfies and China apparently don’t want to play ball anymore, however still many other countries continue as well as many pensions funds, swfunds, banks, hedgies..

        Recently both IMF and BIS openly questioned the unstable systemic situation, which is kind of spooky and freaky in itself beside their obvious point of having alibi beforehand.

        However, it can go pufff next week or in 2022, perhaps the “pufff” dislocation to be linked/hidden under more visible diversion like big war, natural event etc..

  35. Daniel Hood
    Daniel Hood says:

    Hi Gail, OFW community. Things are happening as expected. We’re starting to see alignment now and more refined predictions re: Peak Oil.

    When you get a moment please read through the latest piece of analysis by Dr Kjell Aleklett on their ASPO site.

    http://www.peakoil.net/headline-news/the-crash-in-the-price-of-oil-may-change-the-oil-market-a-look-at-the-iea-s-oil-medium

    “According to Aleklett, there is excessive belief in shale oil’s possibilities. Its production requires the continuous drilling of new wells – something that the price fall is now putting an end to.

    The price fall involves two things. One consequence is to freeze investment in discovery of new oil the world over. The other is that it hits US shale oil production hard. I believe we will see a top in shale oil production already this year. Ironically, the fall in the oil price may bring forward Peak Oil. I would not be surprised if maximal world oil production ultimately occurs this year or next year, said Aleklett.”

    “The year that we reach ‘Peak Oil’ we will produce more oil than we have ever done previously. We may well feel that the market is oversupplied with oil in that year, just as we do now. The Peak Oil that we now discuss is the peak of unconventional oil production. Since production of this type of oil is very price sensitive the oil market will be a factor contributing to when we reach the global peak of all oil production. There are strong indications that 2015/2016 may see this global peak. In any case, we are certainly on a production plateau compared with the increase in oil production that we saw from the 1980s until 2006.”

    Everyone seems to be predicting 2015/2016 – 2020 range exactly as Gail’s chart shows. ‘Tverberg’s Estimate of Future Energy Production’ with the cliff edge in 2015.

    So now in 2015 we’re super close and by observation it seems to be evident we’re rapidly approaching the cliff. It will be interesting to keep an eye out for the effects of declining energy production rates and of course the speed of decline!

    There are those however that see this as positive…

    “I agree with Aleklett that there is excessive confidence around shale oil. And I think that he has a number of valid points with his analysis of Peak Oil. But I believe that the market shift we are now witnessing is fundamentally due to that alternatives to oil are becoming increasingly cheaper. And that is a revolutionary development that in principle is impossible to stop, asserts Kåberger.”

    As ever let’s get the debate flowing!

    Dan

    • 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 hadn’t seen that. I know in personal correspondence I have seen others talking about peak about now. There are many who believe that peak oil has to come with high prices, but if you think about it, low prices are really more likely to bring peak oil.

      • Daniel Hood
        Daniel Hood says:

        Well you consistently called it Gail, you were bang on with your predictions. I’ve just picked up this interesting article, 16th Feb 2015…

        Health Minister Beatrice Lorenzin told a press conference, “We are at the threshold where people who die are not being replaced by newborns. That means we are a dying country. This situation has enormous implications for every sector: the economy, society, health, pensions,” he said.

        Italy has now entered the same territory as Japan, more people are dying than being born. We’re facing the start of a demographic implosion and now we’re entering declining rates of energy production off the plateau down the other side things are going to accelerate.

        https://www.lifesitenews.com/news/italys-dying-health-minister-laments-lowest-ever-number-of-newborn-babies

        It’s really simply, people don’t want children because of the economic costs, given the depression Italy is in. Children are lifetime commitments and most average citizens are under enough strain as it is in a collapsing economic environment.

        I don’t think I’ll ever forget your quote “overpopulation has morphed into both an energy & financial crisis” which is now leading to a demographic crisis and thus populaton implosion.

        More people are going to die than are going to be born in those nations that lack energy/resources and thus sustained growth. Who would want to have children knowing it’s impossible to afford them?

        • John Doyle – Seeker of truth in a world of falsehoods
          John Doyle says:

          I lived in Italy through the 1970’s. To see an african face was a rarity. It’s not like that now, and immigrants are keeping the population rising, even though the native birth rate is well below replacement.
          The prediction is also written up by Harry Dent. He forecasts that an ageing US population will cause deflation and weaken the economy over the next 5 years. Dyers are outweighing buyers.
          The US reached its demographic “peak spending” from 2003 yo 2007 and is heading for a demographic cliff. China is close to it’s own. All the european nations are there as well. Retiring boomers are cutting back on spending and the young are too strapped to take over.
          Demographics is another elephant in the room.

        • Don’t worry, Italy can more than make up for the shortfall in births with immigration, whether they want to or not.

        • 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 people were able to hold good-paying jobs until the day they died, there would be no problem with the elderly. The problem with the elderly is that they are paid for out of today’s resources, on a “cash flow” basis. Thus, the young must pay higher and higher taxes to support elderly, at the same time they have too much debt.

          • richard says:

            I am reminded of the tale of a small household in the late 1940’s where the father and three grown children were in full-time work and working overtime. The comment from the woman of the houde was that the cashflow “took some spendin'”
            In those days, a house could be bought for 2x annual wage and paid for in ten years if the economy was in full flight. Today’s “grey power”, bogus ‘AAA’ rated debt, and the fantasies of the financial system have improverised the unborn.

        • MG says:

          In fact, the society does not need children, as there are increasing numbers of the unemployed. There is a surplus of human energy, but th decreasing amounts of cheap energy for powering the man-made ecosystems.

          • 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 have enough cheap fossil fuel energy to lever the productiveness of the many people who cannot find jobs. The fuel we have is too expensive to make our current economy work.

          • MG says:

            New law in Japan would force overachievers to take more vacation

            http://mashable.com/2015/02/06/japan-work-culture/

  36. Creedon says:

    I’ve been reading a lot of good stuff lately about the world economy and the world situation but this is right up there with the best. None of us are going to escape this unscathed. http://peakoil.com/generalideas/fourth-turning-the-shadow-of-crisis-has-not-passed

  37. Just read Bank of America has determined peak oil will be be in check until 2030!

    http://mobile.reuters.com/article/idUSKBN0KZ28X20150126?irpc=932

    Now what are we going to worry about, ugh!?

    • Creedon says:

      I don’t expect oil to be part of the world energy picture by 2030. http://www.thehillsgroup.org/depletion2_022.htm

    • garand555 says:

      I know you’re being facetious here, but BofA thought that purchasing Countrywide was a good idea. They’re not always the brightest.

      • “I know you’re being facetious here, but BofA thought that purchasing Countrywide was a good idea.”

        Right there you have a significant piece of evidence against there being a single giant conspiracy of all the rich people plotting to control the world / exterminate the poor / whatever nonsense. Not everything goes according to plan, and rich people make mistakes just like everyone else. Corporations are not all powerful or omniscient. Shit happens.

      • My Dear Sir, Are you not aware the BOA was “forced” to acquire insolvent firms by our very own treasury and central bank? Perhaps they are being “forced” to issue this report by the same to calm the jettery markets and maintain the “robust” growth of the US economy. Hey, when does anyone remember the predications made long ago anyway?

    • 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 we have that figured out.

Comments are closed.