Why EIA, IEA, and BP Oil Forecasts are Too High

When forecasting how much oil will be available in future years, a standard approach seems to be the following:

  1. Figure out how much GDP growth the researcher hopes to have in the future.
  2. “Work backward” to see how much oil is needed, based on how much oil was used for a given level of GDP in the past. Adjust this amount for hoped-for efficiency gains and transfers to other fuel uses.
  3. Verify that there is actually enough oil available to support this level of growth in oil consumption.

In fact, this seems to be the approach used by most forecasting agencies, including EIA, IEA and BP. It seems to me that this approach has a fundamental flaw. It doesn’t consider the possibility of continued low oil prices and the impact that these low oil prices are likely to have on future oil production. Hoped-for future GDP growth may not be possible if oil prices, as well as other commodity prices, remain low.

Future Oil Resources Seem to Be More Than Adequate

It is easy to get the idea that we have a great deal of oil resources in the ground. For example, if we start with BP Statistical Review of World Energy, we see that reported oil reserves at the end of 2013 were 1,687.9 billion barrels. This corresponds to 53.3 years of oil production at 2013 production levels.

If we look at the United States Geological Services 2012 report for one big grouping–undiscovered conventional oil resources for the world excluding the United States–we get a “mean” estimate of 565 billion barrels. This corresponds to another 17.8 years of production at the 2013 level of oil production. Combining these two estimates gets us to a total of 71.1 years of future production. Furthermore, we haven’t even begun to consider oil that may be available by fracking that is not considered in current reserves. We also haven’t considered oil that might be available from very heavy oil deposits that is not in current reserves. These would theoretically add additional large amounts.

Given these large amounts of theoretically available oil, it is not surprising that forecasters use the approach they do. There appears to be no need to cut back forecasts to reflect inadequate future oil supply, as long as we can really extract oil that seems to be available.

Why We Can’t Count on Oil Prices Rising Indefinitely

There is clearly a huge amount of oil available with current technology, if high cost is no problem. Without cost constraints, fracking can be used in many more areas of the world than it is used today. If more water is needed for fracking than is available, and price is no object, we can desalinate seawater, or pump water uphill for hundreds of miles.

If high cost is no problem, we can extract very heavy oil in many deposits around the world using energy intensive heating approaches similar to those used in the Canadian oil sands. We can also create gasoline using a coal-to-liquids approach. Here again, we may need to work around water shortages using very high cost methods.

The amount of available future oil is likely to be much lower if real-world price constraints are considered. There are at least two reasons why oil prices can’t rise indefinitely:

  1. Any time oil prices rise, economies that use a high proportion of oil in their energy mix experience financial problems. For example, countries that get a lot of their revenue from tourism seem to be vulnerable to high oil prices, because high oil prices raise the cost of airline travel. Also, if any oil is used for making electricity, its high cost makes it expensive to manufacture goods for export.
  2. When oil prices rise, workers find that the cost of food tends to rise, as does the cost of commuting. To offset these rising expenses, workers cut back on discretionary spending, such as going to restaurants, going on long-distance vacations, and buying more expensive homes. These spending cutbacks adversely affect the economy.

The combination of these two effects tends to lead to recession, and recession tends to bring commodity prices in general down. The result is oil prices that cannot rise indefinitely. The oil extraction limit becomes a price limit related to recessionary impacts.

The cost of oil is currently in the $60 per barrel range. It is not even clear that oil prices can rise back to the $100 per barrel level without causing recession in many counties. In fact, the demand for many things is low, including labor and capital. Why should the price of oil rise, if the overall economy is not generating enough demand for goods of all kinds, including oil?

Oil Companies Can Report a Wide Range of Oil Prices Needed for Profitability

The discussion of required oil prices is confusing because there are many different ways to compute oil prices needed for profitability. Companies make use of this fact in choosing information to report to the press. They want to make their situations look as favorable as possible, because they do not want to frighten bondholders and prospective stock buyers. This usually means reporting as low a needed price for profitability as possible.

Oil prices can be computed on any of the following bases (arranged roughly from lowest to highest):

  • (a) The “going forward” cost of extracting oil from wells that are already in place, excluding fixed expenses that the company would incur anyhow. This cost is likely to be very low, likely less than $30 barrel.
  • (b) The cost of drilling new “infill” wells in existing fields, excluding the overhead expenses the company would incur anyhow.
  • (c) The cost of opening up a new oil field and drilling new wells, excluding the overhead expenses the company would incur anyhow.
  • (d) Add to (c), overhead expenses (but not including taxes paid to governments, dividends to policyholders, and interest on borrowed funds).
  • (e) Add to (d) amounts paid to government, dividends to policyholders, and interest on borrowed funds.
  • (f) The price required so that the oil company has sufficient cash flow so that it doesn’t need to keep taking on more debt. Instead, it can earn a reasonable profit (and from this pay dividends), and still have sufficient funds left for “Exploration & Development” of new fields to offset declines in production in existing fields. It can also pay governments the high taxes they require, and pay other ongoing expenses. Thus, the system can continue to operate, without assistance from other sources.

I would argue that if we actually want to extract a large share of technically recoverable oil, we need oil prices up at this top level–a level at which companies are making a reasonable profit on a cash flow basis, so that they don’t have to go further and further into debt. If they are getting less than they really need, they will send drilling rigs home. They will use available funds to buy back their own shares, rather than spending as much money as is required to develop new fields to offset declines in existing fields.

Required Oil Prices

Many people believe that low prices started in late-2014, when oil prices dropped below the $100 barrel level. If we look back, we find that there was a problem as early as 2013, when oil prices were over $100 per barrel. Oil companies were then complaining about not making a profit on a cash flow basis–in other words, the highest price basis listed above.

My February 2014 post called Beginning of the End? Oil Companies Cut Back on Spending (relating to a presentation by Steve Kopits) talks about oil companies already doing poorly on a cash flow basis. Many needed to borrow money in order to have sufficient funds to pay both dividends and “Exploration & Production” expenses related to potential new fields. Figure 1 is a slide by Kopits showing prices required for selected individual companies to be cash flow neutral:

Figure 1.

Figure 1.See this link for larger view of image.

The problem back in 2013 was that $100 per barrel was not sufficient for most companies to be profitable on a cash flow basis. At that time, Figure 1 indicates that a price of over $130 per barrel was needed for many US companies to be profitable on that basis. Russian companies needed prices in the $100 to $125 range, while the Chinese companies PetroChina and Sinopec needed prices in the $115 to $130 per barrel range. The Brazilian company Petrobas needed a price over $150 per barrel to be cash flow neutral.

Kopits doesn’t show required prices for OPEC countries to be cash flow neutral, but similar price estimates (required funding including budgeted tax amounts) are available from Arab Petroleum Investments Corporation (Figure 2, below).

Figure 2. Estimate of OPEC break-even oil prices, including tax requirements by parent countries, from Arab Petroleum Investments Corporation.

Figure 2. Estimate of OPEC break-even oil prices, including tax requirements by parent countries, from Arab Petroleum Investments Corporation.

Based on this exhibit, OPEC costs are generally over $100 per barrel. In other words, OPEC costs are not too different from non-OPEC costs, when all types of expenses, including taxes, are included.

As more oil is extracted, the tendency is for costs to rise. Figure 3, also from the Kopits’ presentation, shows a rapid escalation in some types of costs after 1999. This is what we would expect when we reach the end of readily available “cheap to extract” oil and move to more expensive-to-extract unconventional types of oil.

Figure 3. Figure by Steve Kopits of Westwood Douglas showing trends in world oil exploration and production costs per barrel.

Figure 3. Figure by Steve Kopits of Douglas Westwood showing trends in world oil exploration and production costs per barrel. CAGR is “Compound Annual Growth Rate”.

What prices do we need on a going-forward basis, to keep the oil extraction system operating on a long-term basis? I would argue that we need a price of at least $130 now in 2015. In the future, this price needs to rise to higher and higher levels, perhaps moving up quite quickly as we move to more-expensive-to-extract resources.

Is it really necessary to include tax revenues in these calculations? I would argue that the inclusion of taxes is especially important for oil exporting nations. Most of these countries depend heavily on oil taxes to provide funds to operate programs providing food and jobs. As the quantity of oil that they can extract depletes, and as the population of these countries rises, the per-barrel amount of revenue required to fund these government programs is likely to increase. If we want to have a reasonable chance of stability within these countries (so that exports can continue), then we need to expect that the tax loads of companies in oil exporting nations will increase in the future.

Also, if there is any plan to subsidize “renewables,” funds to make this possible need to come from somewhere. Indirectly, these funds are available because of surpluses made possible by the fossil fuel industry. Thus taxes from the fossil fuel industry might be considered a way of subsidizing renewables.

Why Production Doesn’t Quickly Reset to Match Prices

Do we really have a problem with oil prices, if oil production hasn’t dropped quickly in response to low prices? I think we do still have a problem.

One reason why oil production doesn’t quickly reset to match prices is related to many different ways of reporting oil extraction costs, mentioned above. A company may not be making money when all costs are included, but it is making money on a cash flow basis if “sunk costs” are ignored.

Another reason why oil production doesn’t quickly reset to match prices is the fact that oil is the lifeblood of companies that produce it. “Cutting back” means laying off trained workers. If these workers are laid off, companies will find it nearly impossible to rehire the same workers later. The workers have families to support; they will need to find work, even if it is in other industries. Companies will need to train new workers from scratch. Thus, companies will do almost anything to keep employees, no matter how low prices drop on a temporary basis.

A similar issue applies to equipment used in oil operations. Drilling equipment that is not used will deteriorate over time and may not be usable in the future. A USA Today article talks about auctions of equipment used in the oil industry. This equipment is likely to be permanently lost to the oil industry, making it hard to ramp back up again.

If a company is a government owned company in an oil-exporting nation, there is an even greater interest in keeping the company operating. Very often, oil is the backbone of the entire country’s economy; most tax revenue comes from oil and gas companies. There is no real option of substantially cutting back operations, because tax funds and jobs are badly needed by the economy. Civil unrest could be a problem without tax revenue. In the short run, some countries, including Saudi Arabia, have reserve funds set aside to cover a rainy day. But these run out, so it is important to maintain market share.

There are additional reasons why oil production stays high in the short term:

  • Some companies have contracts in the futures market that cushion price fluctuations, so they may not directly “feel” the impact of low prices. Because of this, they may not react quickly.
  • Oil companies will very often have debt obligations that they need to meet, and need cash flow to keep meet them. Any cash flow, even if the price covers only a bit more in the direct cost of extraction, is helpful.
  • Large amounts of equity funding have been available, even for companies issuing “junk bonds.” Companies that would otherwise be reaching debt limits have been able to issue large amounts of stock instead. Bloomberg reports that in the first quarter, $8 billion in stock was issued, which is a record.

All of these considerations have allowed production to continue temporarily, but are unlikely to be long-term solutions. In the long run, we know that we are likely to see problems such as defaults on junk rated bonds of oil companies. Futures contracts guaranteeing high prices eventually run out. Also, if prices remain low, government programs of oil exporting countries may need to be cut back, leading to unrest by citizens.

Regardless of what is happening in the short-term, it is clear that eventually production will drop, quite possibly permanently, unless oil prices rise substantially.

Why are Oil Prices so Low?

I see two reasons for low oil prices:

  1. Debt is now not rising fast enough, because debt levels are reaching limits. Increases in debt levels tend to hold up commodity prices because increasing amounts of debt allow consumers to buy additional cars, homes, factories and other goods, thus creating “demand” for oil and other commodities. At some point, debt limits are reached. This can happen because a growth spurt is slowing, as in China, or because governments are reaching limits on the ratio of debt to GDP that they can carry. When debt levels stop rising rapidly, the debt “pump” that has been holding up prices in the past disappears, and commodity prices tend to stay at a lower level.
  2. The wages of ordinary workers are lagging behind. If a young person cannot find a good paying job (or owes too much on college loans), he most likely will live with his parents longer, delaying the purchase of a house and car. If a family discovers that the cost of day care for children plus the cost of commuting is more than the wages of the lower-earning parent, the lower-earning parent may choose not to work. A household with only one employed worker is less likely to buy a house or a second car than a two-worker household. These kinds of responses to low wages tend to hold down “demand” for goods made with commodities. Thus, affordability issues (or low demand related to affordability) tends to hold down the prices of commodities.

The problem of lagging wages of ordinary workers is a very old one. The problem occurs whenever there are issues with diminishing returns. For example, when population reaches a level where there are too many farmers for available land, the average size of plot for each farmer tends to decrease. Each farmer tends to produce less, because of the smaller size of plot available. If each farmer is paid for what he produces, his wages will drop.

We are reaching the same problem today with oil. We continue to produce increasing amounts of oil, but doing so requires increasing numbers of workers and increasing amounts of resources of other types (including fresh water, steel, sand for fracking, and energy products). Workers are on average producing less oil per hour worked. In theory, they should be paid less, because the value of oil is determined by what the oil can do (how far it can move a vehicle), not how much labor was required to produce the oil.

The same problem is occurring in other areas of the economy, including natural gas production, coal production, electricity production, medicine, and higher education. At some point, we find the economy as a whole becoming less efficient, rather than more efficient, because of diminishing returns.

We know from Peter Turchin and Surgey Nefedov’s book, Secular Cycles, that low wages of common workers were frequently a major contributing factor to collapses in pre-fossil fuel days. With lower wages, workers were not able to buy adequate food, allowing epidemics to take hold. Also, governments could not collect adequate taxes from the large number of low-earning workers, leading to governmental financial problems. A person wonders whether today’s economy is reaching a similar situation. Will low wage growth of common workers hold down future GDP growth, or even lead to collapse?

Are the Projections of EIA, IEA, BP, and all the Others Right?

Perhaps these projections would be reasonable, if oil prices could immediately bounce to  $130 per barrel and could continue to inflate in the years ahead.

If, on the other hand, low oil prices are really being caused by lagging wages of ordinary workers and the failure of debt levels to keep rising, then I don’t think we can expect oil prices to reach these lofty levels. Instead, we can expect oil production to fall because of low prices.

The amount of oil available at $60 per barrel seems to be quite low. Perhaps a little low-priced oil would be available from Kuwait and Qatar at that price, but not much else. Some additional oil might be obtained, if governments of non-oil exporters (such as the USA and China) choose to cut back their tax levels on oil companies. Even with the additional oil made possible by lower taxes, total oil supply would still be far less than needed to run today’s world economy.

The world economy would need to contract greatly in order to shrink down to the oil available. Such shrinkage might be accomplished by a cutback in trade and loss of jobs. Debt defaults would likely be another feature of the new smaller economy. Such a scenario would explain how future oil production may deviate significantly from the forecasts of EIA, IEA, and BP.

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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904 Responses to Why EIA, IEA, and BP Oil Forecasts are Too High

  1. Fast Eddy says:

    Jan – can you show me where the electricity has been off for a week at a time where you are?

    https://www.bchydro.com/outages/orsTableView.jsp

    • Jan Steinman says:

      When your only tool is a hammer, all the world looks like a nail.

      When your only tool is Google, nothing outside of Google is possible.

      I’m done with this thread. It’s sorta fun and interesting to play with the doombots, much as it is playing with a trapped insect: making it run a maze to get the food of attention it craves, poking it with a stick to make it move in a different direction, shining the light to make it scurry for the comforting darkness. But this has grown tiring, and I really do have better things to do with my time, like caring for 23 new baby chicks and nine new baby goats and thousands of greenhouse starts. That’s next year’s food, even if the electricity and the fuel stops tonight.

      The real prisoners of BAU are those who have no ability nor willingness to do anything more than to take cheap pot-shots from their keyboard.

      Those who say it cannot be done should not interfere with those who are doing it.

      I’m still willing to engage those who are interested in coping strategies. But I’m just deleting postings from the doombots without even looking at them.

      • doomphd says:

        Jan, I think Fast Eddy is preparing a farm in New Zealand that can provide much as you are doing in Canada. His many posts point out the simple fact that most if not all trying to live a more sustainable lifestyle are still benefitting from the status quo system known as BAU. Anyone commenting here is by definition plugged into BAU.

        Once the grid is permanently gone, it’s going to get interesting in a lot of places. IF one can survive through the “interesting period” of unknown but perhaps reasonably short period, then, with a much lower population, there can be a reset, but to a much simpler social system. Students of history like Prof. Tainter have described the process. What comes after is always different, but not necessarily better. I think the only big differences from pervious cycles will be the scale and the climatic aftermath from burning so much fossil fuel. Pollution, especially from poorly to unattended nuclear fission plants, could also be a factor restricting any attempts at a reset of BAU, even at a lower level of complexity, in the Northern hemisphere.

        Note that Fast Eddie has chosen the Southern hemisphere to relocate his farm, a wise move.

        • Fast Eddy says:

          The South Island of New Zealand surely surely ranks highly in terms of survival — low population — strong, generally small communities — can-do people, mostly farmers where I live — and a climate that allows one to grow food right through the winter.

          But even so — I am not optimistic — if radiation from fuel ponds is somehow contained — and we are able to raise enough food to live — I am under absolutely no illusion — I will NOT be living a life anywhere near as cushy as the Nearings.

          I will have no pick up truck — no electricity…

          I really have no desire to live in ‘1880’ (and anyone who thinks that would be wonderful … well… they have not thought this through very carefully) … but there will be no choice…

          • Michael Jones says:

            I am CERTAIN you won’t be living another like the Nearings because you like their true grit and fortified to tell TPTB to take their BAU and stick it where the sun don’t shine.
            What excuse will you use when you hightail out of NZ I wonder?
            Like me guess, you are allergic to SHEEP! Pack it in Highway Eddy and fly back to Hong Kong and order take out.
            https://m.youtube.com/watch?v=u7xW4OJpHtY

            • Fast Eddy says:

              Michael — I picture you typing this post — foam is running from your mouth… nostrils flared like a Seville bull….. eyes wide like Charlie Sheen on a coke/crack bender… your wife is calling you to dinner and you scream “f%$# off – can’t you see i am BUSY!!!!’

              If I can find a way to keep my truck going … and the electricity on .. and the concrete pouring… I suspect I could emulate your hero Mr Nearing… having those 3 things would most definitely go a long ways towards living ‘The Good Life’

              Speaking of true grit — let’s remember another American mythical hero ….

          • Michael Jones says:

            Easy enough to shot your trap here, Highway. East enough to throw dirt without them to defend themselves. See how long you last with partial BAU and no Bennie Bernanke Free Cash to throw around.

      • Rodster says:

        “I’m still willing to engage those who are interested in coping strategies. But I’m just deleting postings from the doombots without even looking at them.”

        Gotta love censorship ! 🙂

        • Jan Steinman says:

          “I’m just deleting postings” from my email in-box, not from the blog. The rest of you can read all you want.

          Unwillingness to spend my time on ossified thinking is not censorship.

        • Fast Eddy says:

          Otherwise known as Cognitive Dissonance.

          Better just to hit the delete button if something someone posts threatens to interrupt the sweet sweet sounds of Koombaya.

          Kinda like sticking fingers into ears and shouting ‘I can’t hear you – I can’t hear you – I can’t hear you’

          Kinda like refusing to trying unplugging from BAU for a few days because one fears that the reality of that would drive home how difficult post collapse survival will be

          Of course turning off BAU now as a trial does not really convey the true essence of what is coming — because everyone else would still be plugged in — they still be buying food at Wally’s World instead of raiding your garden and putting bullets in the heads of your animals then roasting them over a fire

          • RohGah says:

            “nstead of raiding your garden and putting bullets in the heads of your animals then roasting them over a fire”
            Getting personal now FE? But you are the champ. Why would the champ have to resort to getting personal?

            • Fast Eddy says:

              Are here we have a series of excellent examples of what happens when one destroys the false gods of the Koombaya Krowd.

              When the weaknesses of their positions are exposed by an endless stream of cold hard facts they become hysterical… angry… insulting…. flustered…. even crazed…..

              Well too bad

              If you want a sugar coated collapse discussion there are plenty of places to get it … Doomsday Diner… Peak Prosperity… even most people on Zero Hedge would disagree with my take on this

              Because most people like to take their doom with a little hopium on the side….

              Don’t worry — I don’t follow the first two … and I do not participate on Zero Hedge… so no need to worry about Fast snatching away the hopium pipe …. you are on safe ground on those sites.

            • RohGah says:

              “Are here we have a series of excellent examples of what happens when one destroys the false gods of the Koombaya Krowd. ”

              Oh I see. Anyone who calls you on your BS is a drum beater. You know Fast if the shoe was on the other foot and someone was making references to “bullets in the head” to somone or something close to you id be calling them on their BS too.
              A champion has style. A champion has grace, A champion has respect for his art.
              Then theres the guy who stabs you while your asleep. He gets the job done but hes very far from a champ.
              Things were pretty boring around here when you took your time out. I respect you for your intellect and tenacity. lately those qualities have been replaced with foam at your mouth.

        • Each of us has to choose what to read. There is a lot that comes through our inboxes.

      • Fast Eddy says:

        Google is your friend — or it’s your enemy….

        So I guess you actually don’t regularly lose your electricity for a week at a time?

        I kinda assume that claim would not hold up to scrutiny … BC Canada surely has one of the most reliable electricity supplies on the planet given it’s a huge producer of hydro power…

        I lived in a village in the 3rd world for many years — and the power never went off for more than half a day or so in all the time I was there….

        It’s all fine and dandy to claim that you are ready to roll once the grid goes down.

        So what are you afraid of — why not step out back and throw the switch — then come back in a few days and tell us how you can’t wait for BAU to collapse.

        I think I know exactly why — because the Koombaya dream would be shattered into a million pieces.

        You’d get a faint whiff of the true nature of what you will be facing post collapse — and you’d be in the same position as most of the rest of us — dreading the end of BAU — fearing what happens when billions of people have no means of survival — and show up at the farm gates demanding to be fed…

  2. Rodster says:

    “UK Government Study Finds: If Nothing Is Done, Expect Civilizations’ Collapse By 2040”

    View at Medium.com

    • edpell says:

      I would love to see the results of those models.

    • doomphd says:

      Can you provide a link to that study? Thanks.

      BTW, for those thinking of hoarding gold or silver, I read that archeologists studying remote Roman farm sites in Great Britain always find a ceramic pot or metal container with gold and silver coins of the period buried just below the burned remains of the estate, usually in some corner.

      • Kulm says:

        Click at the picture.

      • Fast Eddy says:

        New scientific models supported by the British government’s Foreign Office show that if we don’t change course, in less than three decades industrial civilisation will essentially collapse due to catastrophic food shortages, triggered by a combination of climate change, water scarcity, energy crisis, and political instability.

        More http://www.zerohedge.com/news/2015-06-21/uk-government-study-finds-if-nothing-done-expect-civilizations-collapse-2040

        In less than 3 decades? How about in less than 3 years… or even 3 months…. Perhaps that’s what they really mean — but can’t say it otherwise the sheeple panic…

        • Fast Eddy says:

          Last year, Dr. Graham Turner updated his CSIRO research at the University of Melbourne, concluding that:

          “… the general onset of collapse first appears at about 2015 when per capita industrial output begins a sharp decline. Given this imminent timing, a further issue this paper raises is whether the current economic difficulties of the global financial crisis are potentially related to mechanisms of breakdown in the Limits to Growth BAU [business-as-usual] scenario.”

          http://espas.eu/orbis/sites/default/files/generated/document/en/MSSI-ResearchPaper-4_Turner_2014.pdf

          • As I understand the paper, what he is saying is (1) current experience tracks the original “base model” with respect to Limits to Growth, and (2) the original base model would suggest that the general onset of collapse first appears at about 2015 when per capita industrial output begins a sharp decline. Thus, what he is saying is true–it is simply an outcome of the model “seeming to be right” so far.

            The thing the model does not take into account is the details of the economy. How does the economy repay debt with interest per capita industrial output begins a sharp decline? How do governments collect enough taxes, if industrial output begins a sharp decline? How do banks continue to function? What do all of the laid-off workers do, when they no longer have jobs? Beyond 2015, the model is not “robust enough” to really forecast what would happen, IMO.

            • Fast Eddy says:

              The author needs to review the articles on FW to get a better understanding of the situation (as do all other researchers and journalists who are attempting to fully understand the energy and financial convulsions we are experiencing)

      • xabier says:

        Even more illuminating and suggestive as to the dangers and chaos of that time are the hoards of ‘hacked silver’: that is, someone looted the silver plates, goblets, etc, chopped it up for trade or distribution among their hairy followers, and then didn’t collect……..

        Roman saying: ‘Put as much fine old wine in your cellar as you like, but most likely someone else will be drinking it…’

    • Stefeun says:

      Rodster,
      Thanks a lot for this new article by Nafeez Ahmed. Very good quality as usual.
      However, I went through the various links he provides, to insurance reports and older articles, and was surprised to find very few mention -if any- to the threat Number One (in my opinion), namely the fact that our economy is now globalized and financialized.

      Global finance is the glue that holds everything together, it has invaded nearly all of our wants and needs and thus became necessary to the very existence for most of us. Because of its mandatory growth on the one hand, and the declining resources and other various diminishing returns on the other hand, this glue is less and less efficient and we have to put more and more of it, for a result that keeps getting worst (maybe because at same time we have to generate waste at an exponentially increasing rate).

      This addiction is what I think will kill us (at least, BAU, but who can cope without?), because we won’t be able to add sky-rocketing amounts of debt forever (see for example: We Might As Well Face It – America Is Addicted To Debt, by Michael Snyder, June 15th, 2015 http://theeconomiccollapseblog.com/archives/we-might-as-well-face-it-america-is-addicted-to-debt, and the linked USA-Today charts at http://americasmarkets.usatoday.com/2015/06/11/5-8t-companies-up-to-their-ears-in-debt/).

      We’ve seen in 2008 that a financial disruption can happen anytime, when there are tensions somewhere in the system, and today we have many more -and increasing- tensions than before the GFC, as stated in the various reports above mentioned. Next time, the global interdependance and tight-coupling (hence brittleness) of all parts of the economy will insure a widespread undampened shock that may very well put it down entirely, in quite short timeframe.

      So, imho the evoked 25 years before collapse is the best case, i.e. if there isn’t any major disruption, financial or other, in the meantime. We all know the next 25 years will be anything but smooth…

      By the way, thanks also to Fast Eddy for reminding the excellent LTG update by G.Turner, whose conclusion was also promising a further paper about financial risk, not published yet, afaik.

  3. Don Stewart says:

    Response to Stefeun and Edpell and perhaps others

    The question of what happens when growth goes negative and the repercussions on the financial system, plus the question of how many humans are really needed, needs, in my opinion, a nuanced answer. Here is either an obscure answer or a nuanced answer, according to your lights.

    Humans exist because of a very long string of contingencies. For example, the eukaryotic cells which make up humans came to pass through the fusion of a prokaryote with another microorganism in a kind of physical cooperation initially, which eventually gave rise to a new form of life (an emergent property) that could reproduce more efficiently. Likewise, the chloroplasts in modern plants are the descendants of ancient symbiotic cyanobacteria, which installed themselves in plant cells about a billion years ago. In addition, the higher animals formed symbiotic relationships with the gut bacteria.

    We also exist because humans evolved the ability to form cooperative groups as opposed to free individuals, because the groups give more security and enhance the probability of survival.

    If we look specifically at ‘modern Western man’, we find numerous ways that MWM has evolved to take advantage of the generally increasing amount of work that energy has made available to him. The energy can be seen as originating basically from the sun (some of it through photosynthesis in plants), from fossil fuels, and from nuclear. Increases in plant photosynthetic output helped our distant ancestors to multiply. Learning to use heat from the sun also helped us multiply and occupy new niches. An explosive boost was delivered by fossil fuels. Nuclear is unclear, but may have delivered no net work at all, but rather served as an energy carrier.

    With each increase in the work which could be done with the increase in energy, new adaptations in terms of infrastructure and social behavior became possible. Thus, we began to build permanent houses in settled villages, and later we began to let money be the grease for trading goods and services globally. At the present time, we have an enormous built infrastructure (including domesticated animals) and debt-money is the grease for the global economy.

    Suppose the debt-money system fails, for whatever reason. And we can think of a number of reasons why it might. But let’s assume that, along with whatever purely financial instigations cause the failure, we are also looking at a reversal in the long upward trajectory of work which can be accomplished with the energy we can control.

    Let’s assume that we have a financial Deux ex Machina, and the BRICS bank manages to survive the financial catastrophe, and the settlement process worked out by the Russians also survives. So, purely in financial terms, we have a way to finance global trade. Any debt would be strictly short term. Lot’s of previously rich people would lose their paper assets, but, in principle, the real production system could operate.

    What sort of problems might we expect to encounter, as we review how humans have evolved and how they might need to evolve to adapt to the much more challenging environment of reduced work from energy?

    First, we make the simple observation that the symbiosis with the gut microbes is currently under attack with antibiotics all across the West. We would expect that poor health will kill many people, as a result. In addition, we have formed the habit of growing and processing foods which our gut bacteria are not adapted to. We would expect that we cannot spin our agriculture on a dime, and that more people will die as a result.

    Second, when we look at the built infrastructure and think about it from an evolutionary perspective, we see a lack of symmetry. When we gained more work from energy we controlled, we could continue on with the less work-intensive methods while new methods replaced them. Cars did not replace buggies and walking overnight. But if we lose cars on Black Friday, we cannot all immediately revert back to buggies and walking. A chip factory is of no value if there is no electricity. And so forth. Because much of the infrastructure would be useless, we can expect yet more people to die due to lack of production.

    Third, when we look at the social skills which we have evolved to live in a high work from abundant energy world, we see that they are ill-adapted to a low work from scarce energy world. For example, we now count on doing business with people we will never know or see…all mediated by fiat money. While the BRICS bank might keep us alive for a short while, it is very likely that we will be forced to adapt to a much lower work from energy world. Exactly how much lower and exactly what the resulting arrangements might look like are speculative. We can get some ideas by looking at societies which have lived with much lower fossil fuel budgets, or societies which lived with no fossil fuels at all. But it seems to me that the population is going to have to shrink.

    But what percentage of the population is REQUIRED to survive? There, I suspect the answer is ‘very few’. The basic social mechanism is the band of perhaps 150 humans. So, each of us who plans to survive really needs 149 other people with whom we can form cooperative units. There can be multiple bands, but humans have gone through very narrow bottleneck events in the past, and survived.

    Fourth, similar to social skills and infrastructure, the question of knowledge and manual skills exhibits a similar problem if we try to reverse it. The Plains Indians and the Australian Aborigines both found abundant food, but neither farmed or worked very hard as we understand those terms. They had an astonishing amount of knowledge, much of which has been lost, and they had manual skills that let them catch or gather and eat a huge variety of foodstuffs, and survive in hard climates. Western Man has mostly destroyed the environment that hosted the Plains Indians and the Aborigines, so even if we had the knowledge and skills, it wouldn’t give us the same return. Expect more deaths.

    Don Stewart

    • Jan Steinman says:

      humans have gone through very narrow bottleneck events in the past, and survived.

      As few as 1,000 breeding pairs, some 100,000 years ago. (Wikipedia)

      That would rule me out. How many of us have been “snipped” and voluntarily removed ourselves from the gene pool? I’ll have to find some other use than as half a “breeding pair.”

    • Artleads says:

      “A chip factory is of no value if there is no electricity. And so forth. Because much of the infrastructure would be useless, we can expect yet more people to die due to lack of production.”

      I’m not aware of any infrastructure that can’t “produce work.” For instance, glass windows can magnify heat. Plants can grow up the walls of tall buildings. Food can be grown on roofs. Water can be heated on roofs. Forests can be planted on highways. Every piece of infrastructure I know of can be repurposed or recycled. And lets say we needed to plant wood forest throughout a million miles of interstate highway. Would that not require a huge labor force? How do we know that we don’t need more people rather than fewer to make the future work?

      • Don Stewart says:

        Artleads
        Good points. In a hot sunny climate, the north side of a building is useful for growing plants in the summer. In the winter, the south wall reflecting heat is similarly useful.

        I just wasn’t thinking broadly enough.

        Don Stewart

        • Artleads says:

          Thanks, Don. I can always count on you to present something interesting/thoughtful that stimulates response. 🙂

      • sheilach2 says:

        Before OIL, glass was a very rare item, only the rich could afford glass ware.
        Without oil or natural gas, we won’t be able to make such glass. Early glass was thick & formed around a core. Sheet glass was difficult to make.
        Sure you can grow food on top of your roof, but you would also have to haul water up to your roof in a bucket, groan!
        Without those black plastic pipes, how can you heat water on your roof?
        I guess after the collapse, there will be far fewer people so the survivors could recycle the black plastic piping from their now dead neighbors.

        We will need to relearn how our ancestors lived without electricity or fossil fuels & there are books that show many of the crafts & skills they needed to produce everything they needed. Young people need to learn these skills now, while there is time while we still have the books & teachers to show them how it was done. Hunting, trapping skills without modern weaponry would also be of value.
        Those that survive the approaching bottleneck, will find there will be plenty of work that needs to be done, there will be few idle hands.

        What I fear is that during the turmoil of collapse much knowledge will be lost, libraries could be burned, museums destroyed etc.
        We can’t allow this to happen, books must be saved that have the knowledge we will need afterwards, we must save as much non fiction works as possible.
        The future will not be a rerun of the past, the environment is very different, the rich ores, soils, abundant wildlife & fish are gone.
        It will be an impoverished future with no hope of advancing much beyond what the Romans had accomplished, if we are lucky & don’t go extinct.

        • Jan Steinman says:

          during the turmoil of collapse much knowledge will be lost, libraries could be burned, museums destroyed etc.
          We can’t allow this to happen, books must be saved that have the knowledge we will need afterwards, we must save as much non fiction works as possible.

          Yea, I have a searchable collection of over 1,200 paper books, and a lot more on Kindles, which I think is the most likely technical artifact to survive (low power drain, no-power static display).

          I highly recommend the Foxfire series of six books, if you get nothing else. In the 70s, anthropologist Eliot Wigginton and his students interviewed dozens of Appalachian people, living in primitive conditions in the mountains. None of them had electricity nor running water back then — amazing to the Doombaya crowd, but true!

        • Artleads says:

          sheilach2 says:

          “We will need to relearn how our ancestors lived without electricity or fossil fuels & there are books that show many of the crafts & skills they needed to produce everything they needed. Young people need to learn these skills now, while there is time while we still have the books & teachers to show them how it was done. Hunting, trapping skills without modern weaponry would also be of value.”

          I agree entirely. Any teacher, school or school district that isn’t *trying* to do some of these things NOW is irresponsible and/or misguided. But all these educational entities have more problems than Job…

          “Those that survive the approaching bottleneck, will find there will be plenty of work that needs to be done, there will be few idle hands.”

          Herein lies the argument for a larger rather than smaller population. BTW, I’ll take Fast Eddy’s clarification on one thing: I’m only talking in the context of some form of BAU continuing. I also value Gail’s point that we need to know where the resources used come from.

          What I see as a bottleneck is oil and gas going away. So no more industrial society run on fossil fuels. So I’d propose instead a kind of information society, using all those books and libraries mentioned, and much more. Inventorying what materials are here now, toward repurposing and rationing their use. Since there would be no work to be had from fossil fuels, work would have to be devised by the remnants of earlier civilization. And we’d have to behave and organized ourselves very differently.

          Of course, we could refuse to refashion our behavior, and that will speed up our extinction considerable. It’s up to everybody out there to decide whether they want to be stupid and self indulgent, and die unpleasantly and swiftly, OR whether they want to be stoic and cooperative so as to live to fight another day.

    • Stefeun says:

      Don,
      sorry for the delay of this reaction.
      No doubt that Gaïa will find its way out of this mess, life also, very likely, but for the human race it’s less clear, although not impossible. Our species has unsuspected survival abilities, and very few individuals are sufficient, so who knows?

      In the scenarios you describe, you seem to consider that some parts of our current system can survive, at least for a while. That’s where we differ; my opinion -which maybe will be proved wrong- is that our obese human organisation is in so big overshoot at all levels, that it’ll have to crash as soon as some key parameters turn negative due to lack of net energy (shrinking is not an option), and moreover today all our sub-systems are so interconnected, interdependant, that we’re in a kind of All-or-Nothing situation.
      The big old rigid structures have to die in order to give way to new smaller flexible ones that will thrive (or not) in the new environment.

      IMHO the next crash will have very damaging consequences, spreading far beyond strucures directly plugged into BAU, and reducing even more the already very depleted carrying capacity of the environment, littered with our wastes (some of which are radioactive…).

      Again, this is my own conclusion, and I don’t want to convince anybody. I’m unable to see beyond that point, and am more interested in investigating the present situation and search if I missed something that coud change the outcome, than trying to imagine a possible future, which will inevitably differ a lot from all speculations, even if basic survival skills are likely to be useful, in case survival is possible. That’s not doomerism, just cold evaluation (well, as cold as I can…).

      • Don Stewart says:

        Dear Stefeun
        Taking my walk this morning, it occurred to me that we are faced with:
        *Declining exergy available to us
        *Loss of natural capital (in the sense of Herman Daly)
        *Pollution which must be dealt with

        So, at the time when we need exergy to deal with numbers 2 and 3, it is declining pretty rapidly. Sort of a Limits to Growth scenario.

        Don Stewart

        • Stefeun says:

          Don,
          Let me disagree on this.
          It’s the very fact of dissipating energy that produces waste (pollution and waste heat, besides what we call Capital). And we’re using net energy to transform raw material (natural capital?) into things that are useful to us.

          So in my view, using more exergy can only lead to deplete natural capital AND increase pollution levels. And even more along with decreasing EROI, ie when more primary energy is needed to get a given amount of usable exergy.

          Which means that in order to preserve the natural capital and reduce pollution, we should drastically reduce the total amount of primary energy we’re using. This is of course totally impossible in our current system. It will happen anyway, but not because we -allegedly Sapiens- will have worked on it consciously, rather because we’ll have pushed the Maximum Power Principle towards its last limits.

          • Don Stewart says:

            Dear Stefeun
            (I wrote this before I saw your second response.)
            Stefeun

            Taking things one at a time. Some of the simplest structures in nature are liposomes. Capra and Luisi talk about them on page 233 with the section titled On the Origin of Cellular Metabolism.

            ‘The procedure is to start from an aqueous solution containing the biomolecules as solute, and then to produce the vesicles in situ—that is, in the same solution—so that during their formation and closure, they entrap part of the solution and hence part of the solute In this way, the entire biochemical apparatus for expressing a protein is entrapped inside the liposomes. The protein chosen in the first experiments is the green fluorescence protein. When the protein is produced, a characteristic green color appears, and the corresponding vesicles turn green.

            As beautiful as these experiments are, there is something very odd in them. According to common-sense statistics, they should not work.’

            Now, in my words. If the solute appeared in the vesicles as random particles, then a Poisson distribution should describe the appearance of particular particles inside the vesicle. The Poisson distribution, however, predicts that it is virtually impossible for all the needed particles to actually appear in the tiny vesicles. Studies show that the distribution of particles is binary…some vesicles have nothing, while other vesicles have plenty. Which means that the distribution is not one of independent particles. The actual distribution inside vesicles with particles is actually a power law. ‘The overcrowded vesicles have a concentration that is more than one order of magnitude higher than that of the bulk solution.’ Isn’t this as puzzling as the force of gravity between two very distant heavenly bodies?

            Also, the vesicles have the ability to ‘capture’ new solutes as they are added. They create entropy along with structure.

            It seems that the formation of order and the consequent entropy is a very deep principle for the way nature works. Humans are a peculiar example of the principle, but we are still exemplifiers of it. Pointing out that humans are dissipative structures just puts us in the same class as everything from non-living liposomes in a solution to whales in the ocean to water going down a drain to a branching river.

            I don’t think humans are inherently more destructive than a weasel in a chicken coop. What makes us different is the scale of the destruction we can make, and our ability to leave pollution which can take nature a very long time to recycle. Weasels and chickens are recycled very rapidly. Carbon in the atmosphere very slowly.

            Second, ‘using more exergy can only lead to deplete natural capital AND increase pollution levels’. One of the things I had in mind is doing Agroecology. (which is related to all other biological farming methods) We set out to restore the fertility of the soil, and to make topsoil very rapidly. It’s easier to do that if one has access to some industrial equipment (such as subsoil plows and PV electric fences for cattle) and some fossil fuels to power the equipment. In a sense, we would be using fossil fuels to undo the damage done by fossil fuels…breaking up compaction layers and restoring the natural cycle of grasses and large herbivores. Once the compaction layer is broken up, it is never created again by running heavy equipment over it. The natural cycle of grass and grazing animals will build very deep topsoil for a very long time.

            Third, ‘And even more along with decreasing EROI, ie when more primary energy is needed to get a given amount of usable energy.’ Herman Daly in his latest essay:
            http://www.greattransition.org/publication/economics-for-a-full-world

            refers to rebuilding natural capital with practices such as Agroecology. Yes, it does require sapience. Many despair. George Mobus, in his previous post, lamented the decline of teaching and learning and announced his plan to retire in about one year. I asked him if, in the environment he describes, it will be possible for ‘broad focus courses such as Systems Science’ to survive’? He answer, ‘In a word, No.’ He then explains that one of the reasons he wrote his book is to preserve knowledge for a future with a whole lot fewer humans. His current post describes a series of books he hopes to write, offering a foundation for rebuilding after the collapse.

            So I guess everyone has to make some decisions. Do they try to grow some topsoil and build a water system now in anticipation of hard times? Do they essentially give up on humanity and aim at leaving some legacy for a very different future?

            This was one of Francisco Varela’s favorite poems (the Chilean neuroscientist):
            Wanderer, your footsteps are
            the road, and nothing more;
            wanderer, there is no road,
            the road is made by walking.

            Don Stewart

            • Artleads says:

              “So I guess everyone has to make some decisions. Do they try to grow some topsoil and build a water system now in anticipation of hard times? Do they essentially give up on humanity and aim at leaving some legacy for a very different future?”

              I don’t know…although I don’t quite understand the question–like who is “we.” My community is fairly small. There is one public water well. The level of the well is so low, that the water board oldtimers say that they are “mining” the remaining water. I ask about collecting floodwater in ponds to replenish the aquifer, and they roll their eyes and say that this would require geologic time to replenish that way.

              OTOH, I’m personally trying for a low-effort, no till way to garden that offers no prospect of food self-sufficiency. By layering the soil with different types of organic material, water seems to stay in the ground, which is also amenable to drip irrigation. I also try to slow water run off from floods. Many residents are doing something similar, and a few are way more productive in growing food.

              Then there is the larger county, and the budding metropolis fueled by the city’s sprawl. Then there are any number of water-related organizations, some of them statewide or even federal. “We” comprises all these levels. Cutting through the complexity would be nice. Something like ‘keep the water where it is.’ Don’t transfer it between watersheds, which should live within their water budgets. But things are WAAAAAAAAY more convoluted than that here. I can sort of get my head around my community water issues. Beyond that, things are murky.

            • Don Stewart says:

              Dear Artleads
              Water laws in the West are byzantine.

              One thing about compaction layers and water. If you have a compaction layer (e.g., a plow pan), then roots hit the compaction layer and go sideways. Roots of ordinary annual veggies can go several feet into the ground, which obviously makes them more resilient to water shortages. Trees can put roots down many dozens of feet, IF there are no compaction layers.

              When Albert Bates set out to restore a pasture at The Farm in Tennessee, he used a subsoil plow to create an on-contour pattern with inoculated biochar going down into the soil with the plow. So the water holding capacity of the land should have multiplied several times, and if he grazes it using holistic methods, it will just get better with time.

              But New Mexico is obviously not Tennessee, and your mileage may vary.

              Don Stewart

            • Jan Steinman says:

              When Albert Bates set out to restore a pasture at The Farm in Tennessee, he used a subsoil plow to create an on-contour pattern with inoculated biochar going down into the soil with the plow.

              This is also called a “Yeoman plough” or “keyline plough,” and is part of the keyline system for water management.

            • Stefeun says:

              Don,
              “the road is made by walking”
              Excellent! surprisingly we seem to have rediscovered this basic principle only very recently. (also, it reminds me of Nancy Sinatra’s song “These boots are made for walking”)

              Two words about your response: I think useful to precise the space and time frames of our mutual statements. I’m talking of the whole humanity (whose metabolism is currently much bigger than that we can get from “fresh” photosynthesis) and events in the relatively close future.
              In your first example, you describe a result of the biological evolution, i.e. a general feature that took very long time to stabilize (btw I notice that Capra and Luisi seem enthusiastic about MEP-principle, order inside / entropy outside),
              and your second example (Agroecology) is about initiatives at human size (individual), both in time and space. These initiatives, although highly laudable, are not scalable in our current system (to say the least, think Monsanto and Syngenta merging together…), and are potentially to be wiped off in the collapse, whose damages might imho very well be global and overwhelming (and happen mostly in quite short time-frame).

              On the other hand, one can argue that the seeds have to be sowed if we want to give them a chance to thrive one day. Perhaps, and perhaps the thriving ones will not be the ones we sowed, given the many possibilities Mother Nature has developed along time. The big dinosaurs couldn’t imagine (admitting they could imagine something) that the mammals could take the upper hand after them. There also, the collapse phase was short, and the recovery (of biodiversity) took a very long time, and was shaped by both the set of genetic possibilities and the environmental conditions.

              What I mean is that both of us can be right or wrong, saying the same thing or something totally opposite, depending on the context of our statements,
              and secondly, that prediction is very difficult, especially if it’s about the future (Niels Bohr), and especially in troubled times (D.Meadows’ river-rapids).

            • xabier says:

              From the poem by the great Antonio Machado, who died an exile from the Spanish Civil War: ‘Caminante no hay camino…’ Adn which ends: ‘And when you look back, you see the path which cannot be trodden again.’

            • Artleads says:

              John Jeavons’ bio-intensive minifarm methods (with which I’m familiar) depends on a system called ‘double digging’–shovel-depth and another shovel-depth. It is a very productive method. A heck of a lot of digging though…

              But I find it easier and more intuitive to do no-till, (using worm castings too inconsistently) hoping that roots and worms over time will change the soil at depth. It works well for primitive (end of hose) drip watering. You can plant anywhere in bed–no rows–and the drip water spreads out peripherally. Problem so far: I can’t get seed to germinate in the ground, and seedlings (which can MOL work) costs are much higher.

      • Fast Eddy says:

        Everything points to this sort of outcome

        See: Trade-Off
        Financial System Supply-Chain Cross-Contagion:
        a study in global systemic collapse.
        David Korowicz

        Or see Gail’s stick diagram… you pull one key component out and it all falls…

        When the oil stops the grid goes and we will have no electricity — try making a list of what we lose when that happens:

        – sewage and water system pumps stop — cities immediately become uninhabitable – cholera dysentery and other diseases overwhelm populations
        – irrigation pumps on agricultural land stop — crops die
        – in cold regions people freeze
        – no lighting which leads to security issues
        – all manufacturing stops
        – there would be 100% job losses as a deflationary spiral would tear through the world in days (people are laid off and buy nothing causing an unstoppable cascade in layoffs)

        I can see no way that the crash — once the central banks lose control — can be anything but lightening fast. At some point the system breaks — and the masses recognize that the can cannot be kicked any further — and the soothing words of the MSM can not hold them back — the panic will begin when the lights go out.

  4. Fast Eddy says:

    When the bankers do this in the open… surely this is a sign that the Apocalypse is Near http://www.zerohedge.com/news/2015-06-22/let-them-snort-coke-subway

  5. Fast Eddy says:

    The net effect of all that will be the disappearance of nominal wealth — it crosses an event horizon into a black hole never to be seen again. The continent discovers it is a lot poorer than it thought. Fifty years of financial engineering comes to the grief it deserves for promoting the idea that it’s possible to get something for nothing.

    The same thing more or less awaits the USA, China, and Japan. For the USA in particular the signs of bankruptcy have been starkly visible for a long time outside the bubble regions of New York, Washington, and San Francisco. You see it in the amazing decrepitude of the built environment — the cities and towns left for dead, the struggling suburban strip malls tenanted if at all by wig shops and check-cashing operations, the rusted bridges, pot-holed highways, the Third World style train service. Most sickeningly you see it in a population of formerly earnest, hard-working, basically-educated people with hopes and dreams transformed into a hopeless moiling underclass of tattooed savages dressed in baby clothes devoting their leisure hours (i.e. all their time) to drug-seeking and the erasure of sexual boundaries.

    More http://kunstler.com/clusterfuck-nation/history-in-free-verse/

  6. Don Stewart says:

    Dear Gail and Finite Worlders
    Here is an interesting interview with Dennis Meadows. Among other things, he explains that Climate Change is now under the control of feedback loops. Agreeing to cut fossil fuel use in the future, as the G7 agreed to do, is largely irrelevant. Also see his analysis of unconventional oil, which doesn’t have the energy return on investment needed to fuel economic growth.

    Don Stewart
    http://www.greattransition.org/publication/growing-growing-gone

    • Jan Steinman says:

      Here is an interesting interview with Dennis Meadows.

      For those who don’t recognize him, Dennis (along with his wife Dana and Jørgen Randers) was one of the co-authors of the ground-breaking 1970 book, Limits to Growth, which was the first wide-scale application of computers to resource modelling, and which has recently been vindicated as being “on track” in its predictions.

    • Stefeun says:

      Thanks Don,
      especially liked “The dominant drivers of the system are not people sitting around trying to reach a consensus about which of several different possible outcomes they most prefer.”
      (even more with uncomplete inputs and wrong model!)

      On this same website you can find an essay by Herman Daly, Economics for a Full World (http://www.greattransition.org/publication/economics-for-a-full-world). I mention it because I very much agree with the analysis in its first part (albeit lacking important factors such as Max.Power principle and MEP), but wasn’t able to read until the end, as the proposed solutions sounded to me like irrealistic wishful thinking, and let me puzzled. Maybe it’s only because I consider the concept of “Ultimate End” as a nonsense…

  7. Artleads says:

    Thanks Jan,

    I know. Just used the wrong term to cut things short. Will inquire locally if anybody can advise re: controller/electronic package.

  8. Pingback: Why EIA, IEA, and BP Oil Forecasts are Too High...

  9. richard says:

    Politics in action: Westminster praised the renewables industry prior to the Independence vote. Now, if the SNP is for it, Westminster is against it:
    http://www.telegraph.co.uk/news/earth/energy/windpower/11684480/Rural-Scotlands-delight-at-wind-farm-subsidy-axe.html
    “Mr Ewing said repeated the wind farm companies’ claims the move could cost consumers £3 billion, adding: “We have warned the UK Government that the decision, which appears irrational, may well be the subject of a judicial review.” But Murdo Fraser, Scottish Tory energy spokesman, said: “This is a Conservative Government standing up for communities that the central belt SNP couldn’t care less about.” He added: “The latest figures show that, with all the wind projects already constructed, those under construction or given consent, we have already met the SNPs 100 per cent target for renewable electricity.”“

  10. richard says:

    http://www.ruralenergynews.co.uk/archives/28880
    “Eurofuel’s apparent concern follows Denmark’s decision to effectively outlaw oil heating in 2012. Since January 2013, the installation of oil and gas fired heating systems in new buildings has been banned. Next year, as Danes seek to reduce their fossil fuel consumption by 33% over the next 7 years – the installation of oil fired boilers into existing buildings where district heating or natural gas is available will be prohibited.”

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