How our energy problem leads to a debt collapse problem

Usually, we don’t stop to think about how the whole economy works together. A major reason is that we have been lacking data to see long-term relationships. In this post, I show some longer-term time series relating to energy growth, GDP growth, and debt growth–going back to 1820 in some cases–that help us understand our situation better.

When examining these long-term time series, I come to the conclusion that what we are doing now is building debt to unsustainably high levels, thanks to today’s high cost of producing energy products. I doubt that this can be turned around. To do so would require immediate production of huge quantities of incredibly cheap energy products–that is oil at less than $20 per barrel in 2014$, and other energy products with comparably low cost structures.

Our goal would need to be to get back to the energy cost levels that we had prior to the run-up in costs in the 1970s. Growth in energy use would probably need to rise back to pre-1975 levels as well. Of course, such a low-price, high-growth scenario isn’t really sustainable in a finite world either. It would have adverse follow-on effects, too, including climate change.

In this post, I explain the reasoning that leads to this conclusion. Some back-up information is provided in the Appendix as well.

Insight 1. Economic growth tends to take place when a civilization can make goods and services more cheaply–that is, with less human labor, and often with smaller quantities of resources of other kinds as well.

When an economy learns how to make goods more cheaply, the group of people in that economy can make more goods and services in total because, on average, each worker can make more goods and services in his available work-time. We might say that members of that economy are becoming more productive. This additional productivity can be distributed among workers, supervisors, governments, and businesses, allowing what we think of as economic growth.

Insight 2. The way that increased productivity usually takes place is through leveraging of human labor with supplemental energy from other sources.

The reason why we would expect supplemental energy to be important is because the amount of energy an individual worker can provide is not very great without access to supplemental energy. Analysis shows that human mechanical power amounts to about 100 watts over a typical laboring day–about equal to the energy of a 100-watt light bulb.

Human energy can be leveraged with other energy in many other forms–the burning of wood (for example, for cooking); the use of animals such as dogs, oxen, and horses to supplement our human labor; the harnessing of water or wind energy; the burning of fossil fuels and the use of nuclear energy. The addition of increasingly large amounts of energy products tends to lead to greater productivity, and thus, greater economic growth.

As an example of one kind of leveraging, consider the use of oil for delivering goods in trucks. A business might still be able to deliver goods without this use of oil. In this case, the business might hire an employee to walk to the delivery location and carry the goods to be delivered in his hands.

A big change occurs when oil and other modern fuels become available. It is possible to manufacture trucks to deliver goods. (In fact, modern fuels are needed to make the metals used in building the truck.) Modern fuels also make it possible to build the roads on which the truck operates. Finally, oil products are used to operate the truck.

With the use of a truck, the worker can deliver goods more quickly, since he no longer has to walk to his delivery locations. Thus, the worker can deliver far more goods in a normal work-day. This is the way his productivity increases.

Insight 3. Growth in GDP has generally been less than 1.0% more than the growth in energy consumption. The only periods when this was not true were the periods 1975-1985 and 1985-1995. 

This is an exhibit I prepared using data from the sources listed.

Figure 1. World GDP growth compared to world energy consumption growth for selected time periods since 1820. World real GDP trends for 1975 to present are based on USDA real GDP data in 2010$ for 1975 and subsequent. (Estimated by author for 2015.) GDP estimates for prior to 1975 are based on Maddison project updates as of 2013. Growth in the use of energy products is based on a combination of data from Appendix A data from Vaclav Smil’s Energy Transitions: History, Requirements and Prospects together with BP Statistical Review of World Energy 2015 for 1965 and subsequent.

The difference between energy growth and GDP growth is attributed to Efficiency and Technology. In fact, energy use and technology use work hand in hand. People don’t buy oil just to have oil; they buy oil for the services that devices using oil can provide. Efficiency is important too. If a device is cheaper to use, thanks to efficient use of energy, consumers find it more affordable (if the cost of the device itself is not too expensive). Thus, efficiency can lead to more use of energy.

The period between 1975 and 1985 was the period when the developed economies were making many changes including

  • Changes to make automobiles smaller and more fuel efficient
  • Replacement of oil-fired electricity generation with nuclear (which needed no fossil fuels for ongoing fuel) and with coal
  • Replacement of home heating using oil with more modern heating units, not using oil

Some of this effort continued into the 1985-1995 period, as newer cars gradually replaced older cars, and modern furnaces gradually replaced oil-fired furnaces. Thus, we should not be surprised that the 1975-1985 and 1985-1995 periods were the ones with unusually high growth in Efficiency/Technology.

Insight 4. The value of energy to society is not the same as the cost of extracting it, refining it, and shipping it to the desired end location.

The value of energy to society reflects the additional goods and services that we as a society can produce, thanks to the benefits energy adds to the system as a whole. This value can be either higher or lower than the cost of extracting the energy from the ground, processing it, and delivering it so that it will work in our devices.

If the price of oil, or of other energy products, is low, we would expect the cost of production to be lower than its value to society. We can visualize the relationship to be as shown in Figure 2. It is the low price that provides the leveraging benefit of oil.

Figure 2. Illustration by author.

In the example given in Insight 2 of the worker driving a truck over a road to deliver goods, there are actually many “players” involved:

  • The company extracting the oil
  • The government of the company extracting the oil
  • The business making the truck
  • The government of the country building the road
  • The business hiring the worker delivering the goods
  • The worker himself

The benefit of the efficiency gain is shared among the different players listed above. How this sharing is done is based on relative price levels and government tax levels. Thus, there are many different types of entities (which I refer to on Figure 2 as “consumers”) all getting a benefit from the leveraging impact of the oil products at the same time.

The value to society of oil and of other energy products is pretty much fixed, based on the energy content (in Btus or whatever other unit a person desires). The value to society can change a little with energy efficiency, if we learn to pave roads with less use of energy products, and if we learn to manufacture trucks with less use of energy products, and if we can make the trucks that use it become more efficient per mile.

If the cost of producing oil or other energy product rises (in other words, the left bar in Figure 2 gets taller), then the “gap” between the cost of production and the value to society (right bar) may fall too low. The amount of money to distribute, resulting from the gain that comes from using energy to leverage human labor, falls. None of the entities involved can get an adequate distribution: There is less money to pay interest payments on debt; there is less money to pay dividend payments to stockholders; there is less money to give the workers raises. In fact, it reminds me of the situation described in my post Why We Have an Oversupply of Almost Everything (Oil, labor, capital, etc.)

If there is too little gap between the selling price of oil and its value to society, there gets to be pressure for the price of oil to fall. Partly, this comes from low wage increases (because wages are being squeezed). If workers cannot buy finished products such as homes and cars, the price of commodities such as steel and oil tends to drop. This seems to be the situation today. Partly this pressure come from the fact that society can live for a while with “squeezed margins. Eventually, some of the “pain” needs to go back to the oil producers (the difference between the left bar and the middle bar on Figure 2), instead of only being borne by the oil consumers (the difference between the middle bar and the right bar on Figure 2). This is why we should expect the kind of oil price drop experienced in the past year.

Insight 5. We would expect world economic growth to slow as oil prices rise, because of Insights (1) and (2).

According to (1), we need to make goods increasingly cheaply to support economic growth. Oil is the energy product with the highest use worldwide. If its cost rises, it takes a huge amount of savings elsewhere in the system to allow the combination to continue to produce goods increasingly cheaply.

According to (2), it is the energy content that needs to rise. With higher prices, consumers can afford less. As a result, they tend to consume less, in energy content. This lower energy consumption lowers the leveraging of human energy, so there tends to be less economic growth.

Figure 3. Historical World Energy Price in 2014$, from BP Statistical Review of World History 2015.

Figure 3 shows world oil prices. Given Insights (1) and (2), we would expect the rate of economic growth to slow during the 1975-1985 period and during the 2005-2015 period, and indeed they do, in Figure 1.

Insight 6. Increasing debt seems to be a major driver of demand growth, and thus energy consumption.

There are many reasons why we would expect debt to be hugely beneficial to economic growth:

Debt is used to “smooth” many kinds of transactions. For example, the payment of wages to an individual represents a kind of debt, since otherwise, the employer would need to pay the worker daily, using the type of goods produced by the business–something that would be very inconvenient.

Debt is also helpful in enabling big financial transactions, such as the purchase of a house or a factory or a car. With debt, the amount that needs to be saved up in advance is greatly reduced. Most of the cost can be paid in monthly installments over the life of the item purchased. If debt is used to pay for a factory, the output of the factory can be used to repay the debt.

An indirect impact of adding debt is that it helps raise the price of commodities, such as oil, steel, and electricity. This happens because with the use of debt, “demand” for expensive products like homes, factories, and cars is greater, because more people and businesses can afford to buy them, thanks to the availability of debt. These expensive products are made with commodities like steel, wood, oil, and coal. With more debt, the prices of these commodities tend to balance at a higher level than they would otherwise. For example, oil prices may balance at $100 per barrel, instead of $70 per barrel. At these higher price levels, production from higher-cost sources becomes profitable–for example, oil from deeper wells, water from desalination, and coal transported over longer distances.

Because of these benefits of debt use, it is hard for me to imagine that fossil fuel extraction could have occurred without the use of very large amounts of debt. I first discussed this issue in Why Malthus Got His Forecast Wrong.

Figure 4 shows an estimate of how world debt has grown, on an annual, inflation-adjusted basis, compared to inflation-adjusted GDP. (See the Appendix for additional information.)

Figure 4. Worldwide average inflation-adjusted annual growth rates in debt and GDP, for selected time periods. See Appendix for information regarding calculation.

Figure 4 indicates that the growth of debt spurted about 1950. One influence may have been John Maynard Keynes’ book, The General Theory of Employment, Interest and Money, written in 1936. This book advocated the use of additional debt to stimulate economies that were growing at below their full potential. We also know that governments with war debts needed to offset the repayment of these war debts with new “peace debts” (debt available to businesses and consumers) if they didn’t want their economies to shrink for lack of debt growth. See my post The United States’ 65-Year Debt Bubble.

Insight 7. Once inflation-adjusted oil prices passed $20 per barrel, a change took place. We started needing much more debt to generate a dollar of GDP.   

This problem can be seen on Figure 4–the lines diverge, starting in the 1975-1985 period. Up until about 1975, the rise in debt levels was similar to GDP growth. In fact, if we look at Figure 1, energy growth also tended to grow with debt and GDP in the pre-1975 time period. After 1975, we started needing increasing amounts of debt to generate GDP growth.

We can understand the need for more debt by thinking about how leveraging really works. Leveraging works because of the energy content of the supplemental energy. To get the desired quantity of energy content, a larger dollar amount of investment is needed to produce the same quantity of energy, if the cost of producing the energy product is higher.

Most people look at debt growth as a percentage of GDP growth, but this misses an important dynamic: is our problem occurring because debt growth is high, or because GDP growth in response to the debt growth is low? When I look at Figure 4, my conclusion is that when energy costs were low–basically at pre-1975 levels of $20 a barrel for oil, and similarly cheap levels for nuclear and other fossil fuels–it was possible for debt growth to approximately match GDP growth. Once energy costs started to rise, more debt was needed. Some of this was additional debt related directly to the process of creating energy products; some of this debt related to international trade and to buyers’ need to finance higher-cost end products.

Based on Figure 4, even the drop back to the $30 to $40 per barrel range in the 1985 to 2000 period didn’t fix the rising debt to GDP ratio problem. To truly fix the situation, we need to get the cost of producing fuels to a low enough level that they can profitably be sold at the equivalent of less than $20 per barrel. With diminishing returns, this seems to be impossible.

Insight 8. Adding more energy efficiency may require more debt growth as well.

The biggest spurt of debt came in the 1975-1985 period. If we compare Figure 4 to Figure 1, and consider what was happening at that time, quite a bit of this additional debt may have related to changes associated with increased energy efficiency: new efficient nuclear electricity generation to replace oil generation of electricity; new more efficient home heating to replace old oil based heating units; and the building of new, more fuel-efficient cars.

Insight 9. The limit we are reaching can be viewed as a debt limit.

If demand really comes from additional debt, then what we need to keep GDP growth high is debt that grows sufficiently rapidly. (An alternative way of keeping demand high would be through rising wages of non-elite workers. Unfortunately, these wages tend to be depressed by diminishing returns–a problem I wasn’t able to cover in this post. See my post, How Economic Growth Fails.)

Many people believe that energy demand can rise endlessly. It seems to me that this belief is very close to the belief that the ratio of debt to GDP can rise endlessly. 

Insight 10. Our debt system is very close to a Ponzi Scheme.

A Ponzi Scheme is a fraudulent investment program in which the operator promises a high rate of return to investors. Instead of obtaining these returns from true profits, the operator funds payouts to existing investors using ever-rising amounts of new investment. Eventually the plan fails, from lack of new investment dollars.

Our economic growth situation is not fraudulent, but otherwise it has uncomfortable similarities to a Ponzi Scheme. Instead of adding new investors each year, our economy needs to increase its amount of debt each year, in order to continue to grow GDP. GDP would not grow on its own, without additional investment funded by debt. To make matters worse, the required amount of additional debt rises, as the cost of producing additional energy products rises.

According to McKinsey Global Institute, global debt amounted to 286% of GDP in mid-2014. It had been “only” 246% of GDP in 2000. A person can see from Figure 4 that even with this rate of debt growth, both energy growth and GDP growth have been slowing in recent time periods. The answer would seem to be to add more debt growth. Unfortunately, adding more debt puts us in a position where debt repayments becomes too high relative to ongoing spending needs.

It is this debt problem that leads to my concern that we are headed for a near-term financial system crash. Even purposely slowing debt growth tends to make the economy slow, and thus lead to a crash. Because of the Ponzi nature of our arrangement, any kind of  slowing of debt growth is likely to lead to a debt crash. There are several reasons to support this contention:

  • With lower debt, commodity prices are likely to stay low, or fall further. Our economy’s long-term tendency toward inflation will shift toward deflation, making all existing debt harder to repay.
  • Without a rapid rise in debt, the price of oil and other commodities will tend to stay low, leading to huge defaults in these sectors.
  • Once debt defaults start, lenders are likely to require higher interest rates to compensate for rising level of defaults.

Appendix

Background on Long Term World GDP, Energy, and Debt Indications

Economic theories have grown up over roughly 200 years without the benefit of information regarding the relationship between economic growth, debt, and the use of energy products, on an aggregate basis. Long-term data are mostly compiled on an individual country basis. Many countries are missing from standard listings, especially for recent years and for distant past years, making unadjusted summations of the amounts shown misleading. Fluctuations in currency levels add to the confusion.

Because of these issues, it is quite possible for economists to develop theories, but never have good aggregate data to test them against. Aggregate data are very important to me, because we now live in a globalized world. It is hard to make sense of the world economy if the group of oil exporting nations shows one pattern, the group of newly industrialized countries shows another pattern, and the US, Europe, and Japan show a third pattern. Analyses limited to a handful of countries “like us” can provide very distorted indications.

Fortunately, there are some data sources that permit aggregation of data for the world as a whole. In particular, the USDA Economic Research Service conveniently “fills in the blanks” with reasonable estimates of GDP, making it possible to sum indications to a world total, at least for 1969 and subsequent. Another source of world GDP data is the  “Maddison Project,” started by Angus Maddison and now updated by Bolt and van Zanden. Long-term world energy data are also available from BP for 1965 and subsequent years, and from Smil, for the years 1820 to 2008, but there are data differences that need to be bridged to combine them.

Figure 1A is a repeat of Figure 1 above, showing the long-term trend in world GDP, broken down between growth in energy use and other changes, primarily related to improvement in technology and greater efficiency.

Figure 1A. World GDP growth compared to world energy consumption growth for selected time periods since 1820. World real GDP trends for 1975 to present are based on USDA real GDP data in 2010$ for 1975 and subsequent. (Estimated by author for 2015.) GDP estimates for prior to 1975 are based on Maddison project updates as of 2013. Growth in the use of energy products is based on a combination of data from Appendix A data from Vaclav Smil’s Energy Transitions: History, Requirements and Prospects together with BP Statistical Review of World Energy 2015 for 1965 and subsequent.

Based on Figure 1A, growth of energy consumption ranged from 52% to 89% of GDP growth. Over the period 1965 to present, growth in energy consumption averaged 68% of GDP. Some academic research gives a similar result. Gael Giraud, who analyzes the results for 50 countries between 1970 and 2011, says that in the timeframe he studied, “The long-run output elasticity evolved between 60% and 70%.” Giraud’s results contrast with an economic theory that says that energy is only responsible for a share of economic growth proportional to its cost as a percentage of GDP–typically something like 8%.

If we look at the Efficiency/Technology piece separately, the only times it contributed more than 1% per year to economic growth were during the 1975-1985 and 1985-1995 timeframes, when GDP growth exceeded energy growth by 1.4% and 1.3% respectively. This was the time when major changes to the economy were being made in response to the price spikes of the 1970s. As indicated in Figure 4A, this was also the time when increases in debt were very high relative to GDP growth, suggesting that very high debt growth is needed to produce these higher efficiency gains.

Figure 2A shows another way of looking at the same data as in Figure 1A. The slope of the fitted line is .97, indicating that energy consumption and GDP have tended to grow at almost the same rate over the long term.

Figure 2A. Data in Figure 1, displayed in X-Y chart format.

Of course, the extraction of energy products is enabled by technology growth. Consumers want the use of end products (like refrigerators and cars), not the use of the fuel itself.  Increased energy efficiency also enables growth in energy use, because it makes products cheaper for buyers, enabling economic growth. For example, Figure 3A shows the rapid growth in electricity usage in the 1900 to 1998 time period, as US electricity prices fell.

Figure 3A. Ayres and Warr Electricity Prices and Electricity Demand, from “Accounting for growth: the role of physical work.”

Another thing besides technology and energy efficiency that enables the extraction of fossil fuels is growth in debt. Here again, there is a problem with inadequate data, on a long-term worldwide basis. We have some information about recent global debt ratios to GDP based on a McKinsey study. In addition, Bawerk provides a graph showing a long-term rise in the ratio of US total credit market debt to GDP. Longer-term debt patterns related to US Federal debt by itself are also available. One thing that becomes clear is that there has been a strong upward trend in debt levels, relative to GDP, for the US and for the world, for a very long period.

If we use worldwide data to the extent it is available, and substitute US total debt ratios on early periods, it is possible to make a reasonable approximation as to how this growth in debt must have taken place. To correct for inflation, I have applied these debt to GDP ratios to the inflation-adjusted GDP amounts underlying Figure 1A. Once we have debt amounts on an inflation-adjusted basis, it is possible to calculate average annual growth rates in this inflation-adjusted debt. This is what I show in Figure 4A.

Figure 4A. Worldwide average inflation-adjusted annual growth rates in debt and GDP, for selected time periods.

Since 1975, energy has gradually been changing to require much more debt per unit of energy produced, for three reasons:

  1. The overall cost of production of these energy products rose starting in the mid-1970s. As a result, debt went “less far” when it came to producing additional barrels of oil or kilowatt-hours of electricity.
  2. The nature of energy production began shifting toward greater use of front-end investment compared to ongoing expense. This change led to a need for more debt, because front-end investment tends to be financed by debt, while ongoing expense does not. Examples requiring heavy front-end investment include oil sands, oil from shale, deep-sea oil projects, wind turbines, and solar PV.
  3. If investment costs are low, oil and gas companies can often use profits from prior projects to finance new projects, so there is no real need for borrowing. When profits are squeezed by rapidly rising extraction costs, as has been the case in recent years, oil companies begin to borrow to pay ordinary expenses, such as paying dividends. They are so cash-strapped that almost any expense needs to be accomplished using debt.

The rest of the economy has also experienced a greater need for debt as energy prices rise. For example, oil imported at a high price requires much more debt than oil imported at a low price. A house built using expensive oil and other energy products is more expensive to purchase, and so requires a higher mortgage. When automobiles are made to be more fuel efficient, this tends to raise their cost and thus, the amount of debt required by those purchasing those automobiles.

It is clear that this increase in debt ratios cannot continue endlessly, for reasons discussed in the main text. Perhaps those evaluating alternative energy sources should be computing estimated “energy return on debt investment” ratios for these new sources. The ideal new energy source will be very close to self-funding, with little build-up of debt.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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1,447 Responses to How our energy problem leads to a debt collapse problem

  1. Pingback: Low Oil Prices: Why Worry? | Enjeux énergies et environnement

  2. daddio7 says:

    Most factory owners are penny wise and pound foolish. I worked at a produce packing plant that had 3 $250,000 automated packing machines. The maintenance supervisor liked to keep several spares of each critical part. The owner hated to have thousands of dollars tied up in spare parts. He figured with three machines we could get by with having a part shipped over night. Every few months the supervisor would sneak a part order in.

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

      It depends how reliably you can get your spare parts. Once they stop coming, work stops fairly quickly.

    • 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 certainly seem to be headed in a downward direction.

      You may have seen the predictions associated with Sunday’s lunar eclipse. According to the Guardian http://www.theguardian.com/world/2015/sep/27/blood-moon-apocalypse-nasa-lunar-eclipse-supermoon

      Sunday will be the fourth appearance of a blood moon over the last two years, in what is known as a tetrad series. The last time was in 1982; the next will be in 2033.

      If some religious leaders are to be believed, none of us will live to enjoy that next blood moon. Most such leaders are of groups on the fringes of organized belief, although this week leaders of the Church of Jesus Christ of Latter-day Saints felt moved to reassure those among its followers who are worried.

      One Bible reading underlying this belief is

      “Joel 2:30-31 states: ‘And I will show wonders in the heavens and in the earth, blood, and fire, and pillars of smoke. The sun shall be turned into darkness, and the moon into blood, before the great and the terrible day of the LORD come.’”

      Mark Blitz of El Shaddai Minisitries is quoted as saying,

      “My interpretation is that we have at least another 1,000 years. But I do believe these signs portend major changes, including a possible major war involving Israel and an economic collapse.”

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

        On this note. does anyone reading Gail’s blogs know about Harry Dent?
        http://pro.dentresearch.com/BNB5TH2/EBNBR962?email=ejhr%40ozemail.com.au&a=10&o=116735&s=125490&u=2294690&l=344307&r=MC&vid=VuKBBR&g=0&h=true
        I’m not sure this will open immediately. You might have to register. As usual trying to quit will bring up a transcript option.
        His work is based around demographics. He says it’s about a 40 year cycle, and right now the baby boomers are leaving their spending days behind. Millennials however are decades away from peak spending. This is one downturn event affecting the western economies.

        Coinciding with this is the Innovation Cycle, on a 45 year timeline. Right now we have passed the 2010 peak, internet saturation. Before that it wasAutomobile and TV saturation in 1965, and so on back to canals in 1830.

        Again coinciding with the other downturns is the geopolitical cycle a 34-36 year timeline. This latest cycle began with 9/11 and is now into terrorism etc. Before that it was the Opec embargo and the Cold War and before that Hitler and WW2. etc

        The 4th timeline also on the down turn is the 9-13 year Business cycle, averaging 10 years, like clockwork back to Napoleonic times. There will be no turnaround here before 2020.

        So right now we are in a perfect storm of 4 cycles trending down, combining to make a superstorm.
        I don’t think it takes a lot of imagination to see he’s right.
        I doubt he’s right about the turnaround after 2020. I think he’s ignoring limits to growth. Either that or he wants to push a positive message for his business[?]

        But he makes a lot of sense.

  3. SymbolikGirl says:

    Here is one of my favorite quotes, it’s from a fictional character but it is still relevant to what we are seeing in the world today:

    “Face the facts. Then act on them. It’s the only mantra I know, the only doctrine I have to offer you, and it’s harder than you’d think, because I swear humans seem hardwired to do anything but. Face the facts. Don’t pray, don’t wish, don’t buy into centuries-old dogma and dead rhetoric. Don’t give in to your conditioning or your visions or your fucked-up sense of… whatever. FACE THE FACTS. THEN act.”

    ― Quellcrist Falconer

    • Fast Eddy says:

      The thing is…

      Most people reading this blog have kids and grandchildren… if they face the facts that requires that they admit that not only they themselves is going to suffer and die soon … but also their darling offspring are also facing the same fate.

      Therefore they refuse to face the facts and instead smoke the hopium pipe — deep down they know there is no way out…. but it makes them feel better

  4. Pingback: Low Oil Prices – Why Worry? | Our Finite World

  5. Stefeun says:

    The collapse of Saudi Arabia is inevitable
    by Nafeez Ahmed – Sept.28, 2015

    http://www.middleeasteye.net/columns/collapse-saudi-arabia-inevitable-1895380679

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

      I am so looking forward to the day those evil zealots go out of business. I will buy a bottle of Champagne and drink it while eating a plate of pork chops. 911, 28 pages, Bandar Bush, Dick Cheney.

  6. Fast Eddy says:

    India slashes rates by 50 basis points

    Weakening global economic conditions pushed India’s central bank to slash interest rates by a larger-than-expected 50 basis points on Tuesday, raising hopes that lower borrowing costs would finally jolt the private sector back into investment mode.

    “More domestic demand is needed to substitute for weakening global demand, so that domestic investment cycle can pick up,” he added. “We need to restart investment, corporate investment has been weak.”

    http://www.ft.com/intl/cms/s/0/6eaa91a8-6673-11e5-a155-02b6f8af6a62.html#axzz3n701FRJY

    Another flailing nation…

  7. Fast Eddy says:

    Did Charlie Rose look like a fucking idiot last night on 60-Minutes, or what, asking Vladimir Putin how he could know for sure that the US was behind the 2014 Ukraine coup against President Viktor Yanukovych? Maybe the idiots are the 60-Minutes producers and fluffers who are supposed to prep Charlie’s questions. Putin seemed startled and amused by this one on Ukraine: how could he know for sure?

    http://kunstler.com/clusterfuck-nation/tick-tick-tick/

    Charlie Rose IS a fucking idiot, a fool and a presstitute… an ass-kisser extraordinaire — never a tough question from Charlie eh….

  8. Great news as of an article out today that Shell loses on gamble to drill in Chukchi Sea. I consider this good news because I don’t think we should be drilling in the Arctic, period.

    http://fuelfix.com/blog/2015/09/28/shells-arctic-oil-well-comes-up-dry/#34370101=0

    Shell abandons Arctic oil quest after $7 billion bid yields ‘disappointing’ results
    Posted on September 28, 2015
    WASHINGTON — Royal Dutch Shell on Monday said it was abandoning a $7 billion, seven-year quest for crude under Arctic waters, after an exploratory well failed to find significant amounts of oil and gas.

    Shell’s exploratory oil well in the Chukchi Sea north of Alaska encountered “indications of oil and gas” but the company said they were “not sufficient to warrant further exploration” — a significant blow for the Anglo-Dutch firm that had hoped to find a multibillion barrel crude reservoir in those remote waters.

    “Shell continues to see important exploration potential in the basin, and the area is likely to ultimately be of strategic importance to Alaska and the U.S.,” said Marvin Odum, the Houston-based director of Shell Upstream Americas. “However, this is a clearly disappointing exploration outcome for this part of the basin.”

    Shell said in a statement that it would cease further exploration activity off the coast of Alaska “for the foreseeable future.” “This decision reflects both the Burger J well result, the high costs associated with the project and the challenging and unpredictable federal regulatory environment in offshore Alaska,” the company said.

  9. ktos says:

    I think that required EROEI rises as our civilization becomes more complex. At the same time EROEI of our energy sources drops. But required EROEI cannot drop – it’s a one way street, because we need this complexity to extract energy sources at sufficient quantity.

  10. Fast Eddy says:

    How our energy problem leads to a debt collapse problem

    And this is how it plays out … slow … then very rapidly …. like dominoes falling…

    This is When Bonds Go Kaboom!
    http://wolfstreet.com/2015/09/27/junk-bonds-distresses-debt-ratio-spiking-spreads/

    • B9K9 says:

      Why something so obvious is seemingly a mystery is a question in its own right. Once again, let’s try to go through first principles:

      1. Modern central banking was developed with the formation of the bank of England in 1694.
      2. England has been described as an island of coal floating off continental Europe.
      3. The first practical steam engine – Newcomen – was developed in 1712 for use in England’s coal mines.

      All three elements are co-dependent on the others: fossil fuels, industry (machine) and finance. Take away one, and the others cease to function. The entire system that we were born into – the basis for our “reality” – is in actuality only 400 years old!

      On the other hand, human civilization since the neolithic (agricultural) revolution is around 12,000 years old. For practical purposes, we can date the creation of the state, including religion, military & social control to this era. So, our so-called modern
      “way of life” comprises only 3.3% (400/12,000) of our elapsed time-line. For 96%+ of our collective history, the state functioned perfectly fine without the triple inputs of finance, fuel & industry.

      But you continue to insist that the entire edifice will fail without these inputs, which simply beggars belief.
      (Some) people are drawn to power, regardless of circumstances; the underlying inputs of civilization are of no matter to their objectives. Just because the tripartite system is in effect today does not mean it will be in effect tomorrow.

      Any PTB worthy of the name knows that they will not be dragged down by something as mundane as physics. If finance no longer provides an effective input to maintenance of the status quo, then it will be discarded. Neutralizing a sclerotic segment is as simple as wishing it away aka devaluation. When that decision is made, other elements of control will be introduced to ensure continuity of governance.

      The smart operator ie someone who understands where this is going, will simply position themselves for this eventuality.

      • project wis.dom
        kesar0 says:

        I disagree with your statement.
        You know the concept of complexity. It is not just a energy/systems theory term. It symbolizes the social model interconnections, number of bits of information processing, energy comsumption, etc. It also illustrates the geographical range of single organizational unit. In “world of less” the area you can control will fall significantly.
        How do you want to control the currency, military power, production/economy, law and order? When your only means of communication will be horses at best. And even that, only after reset and at least 4 generations building the skills and knowledge to feed themselves?
        I don’t buy your Illuminati NWO. The only option I see is Ayn Rand Atlas Shrugged modified version, when the “well-informed and wealthy enough” will start civilization 2.0 in the best place to survive. And they only can achieve XVI-century style of living in the long run. The coal is gone, so forget pre-oil, XIX-century civilization.

        • Fast Eddy says:

          The thing is…

          B9 is a ‘USA groupie’ — kinda like some people are solar groupies…. some are permaculture groupies…

          He believes the USA is special — that it is the ‘can do’ nation — and because of this the USA will suck it up and make it happen post collapse.

          I — on the other hand — see exactly the opposite. The USA is not special at all — it is a country that was first built upon the good fortune of a land that had massive resources — it was the Saudi Arabia of oil timber coal water and just about every other resource — and when it ran low on many resources – particularly oil — it used its wealth and power to pillage other countries resources.

          Nothing special about this. Any fool would have done what the USA has done — gorge on resources — become a fat bloated pig — a sick pig actually …. a dying pig shot through with heart disease and cancer….

          The USA and the owners of the Fed will soon be joining the rest of the world as we enter the gutter.

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

            Fast, you have to know by now that I love to argue the point.

            I agree with you completely the folks from England lucked into a continent of unused resources that they stole from the locals. Just as the English did in New Zealand by the by. The English (the distillate of centuries of invading, viking, stealing hordes) then robbed the whole planet, agreed. But here we part ways. You have pointed out the winning ways of the ruthless. Well, the US is ruthless. If someone is going to win who should we pick? The folks with 400 years (Plymouth Plantation 1620) plus 1000 years (Viking, Saxons, Angels, etc) of practice and genetic winnowing or some nice guy in New Zealand?

            We all agree that Mr. and Ms. Welfare Check will not be out a viking. But those folks in San Diego and Newport News along with the folks in Highland Falls, NY, and elsewhere will be out being a new world order (taking). What do you have to pay your global development (protection) tax with? I do not expect I will be one of the gang both for not being so now and for not really choosing that life style.

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

            Well, FE, if this blurb is true the USA has more gas in its bag than we thought.
            Petrol back to 0.58 cents a gallon. Sounds like a return to Gail’s prescription of an ERoEI of over 35 which she says is required.
            It’ll add another decade onto BAU?

            http://pro.oxfordclub.com/GAS49PESDBNBRKCAIUPS4/MORER921/?a=19&o=6934&s=7216&u=276723&l=58978&r=MC2&g=0&h=true

            • 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:

              Your comment is a good introduction to my next post. There are a lot of folks who don’t have the story correct.

            • madflower69
              madflower69 says:

              Here is the real story behind that ad John posted:
              (I’m just pointing this out, because now it means we can stop importing oil from China like the ad said. )

              http://www.stockgumshoe.com/reviews/oxford-resource-explorer/real-gasoline-without-oil-for-90-returns/

              Essentially they are plugging Sasol who canned their Gas to liquids plant like a couple of years ago. Using the Fischer tropsch reactions, which are far from forgotten. In fact they are used in most of the bio fuel techs selling jetfuel right now, etc.

              I also don’t think fracking will continue to be an allowed practice, thus we will be short of NG.

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

              I do not watch videos I can not fast forward. What does the video claim?

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

        B9K9, I am not so sure there is any disagreement here. Yes, the “state” can continue after “BAU” ends. Even if BAU ends abruptly. Many have said the guys with the guns will rule. How far up the parasite load (generals, congress, senate, president) will be able to ride the tiger is an open question. But of course continuity of government can continue in some form without any fuel just clubs and spears and organizational skills.

        The fact that the parasites will still be here is no consolation.

        It is BAU that crashes, Starbucks, gas stations, electric lights, grocery stores, etc….

        • Fast Eddy says:

          Barring an extinction event…. there will not be a vacuum … like a pack of dogs whose leader is killed… another will step up…

          I cannot see how whatever comes next looks at all like what we have now — look at other chaotic failing states around the world — gangsters run the show….

          Of course the PTB are gangsters …

          But gangsters who enforce not by busting knee-caps (unless absolutely necessary)…. they use their wealth….. wealth = energy — no energy = no wealth = no way to enforce…

          Those who previously took orders from the PTB will be giving the orders…. they will spit in the face of their previous overlords — they will bust their knee caps… and anyone else in the neighbourhood who is vying for the very limited amounts of food and other resources that are available….

      • Fast Eddy says:

        First off… you have failed to address how we avoid likely extinction because there will be no way to grow food when the collapse hits… nor will there be any way to maintain the thousands of spent fuel ponds once the electricity goes out…

        Yes I know some people believe we can still pump and refine oil post collapse… that the rich will still have cars – and private jets – and computers — and electricity — while the masses starve and die…

        Let’s just conveniently ignore those things…

        Assuming some people do survive — I do not rule out that down the road there will be some sort of primitive civilization emerging from the ashes…

        But two things:

        1. This will definitely not be in the life time of anyone on this site — nor their kids —and probably not their grand kids…. billions will die … that is guaranteed. To believe there will suddenly emerge some sort of ‘new normal’ is absurd. We are talking about a calamity beyond anything in the history of the world…. WW1 and 2 are nothing compared to this …. the Great Depression is a flea bite compared to this….

        2. We have consumed the low hanging resource fruit. We will have the scraps of BAU for some years but there will be no energy — other than trees — there will definitely be no oil because you NEED BAU to extract and refine oil…. good luck with achieving any sort of civilization when you have the combination of total chaos — and no energy. Burning wood and left over plastic shopping bags won’t get you very far.

        I am a dead man corresponding with dozens of dead people on this site.

        These posts remind me of the financial ‘experts’ who are constantly suggesting strategies to profit from the coming turmoil….. They completely underestimate the situation — they see it as just another opportunity — like 2008 was an opportunity (I know a few people who made many millions off of that crisis — they are licking their chops waiting for the next one — 100% confident that the Fed has their back….)

        For those who may have read The Big Short —- the biggest fear of men like Kyle Bass pre-2008 was that the coming crisis was so massive that even though they had bet correctly — they would never collect….

        The central banks fixed that for them ….. but I very much doubt the central banks will help the shorts this time —- 2008 was a big deal — but compared to where we are now — it was a tempest in a teacup.

        • liamlynch101 – I am an amateur Photographer and Writer. I take various Photographs for the purpose of art and journalism. I also do news writing along with fiction.
          liamlynch101 says:

          Woah man, I think you are overplaying the situation a little. You don’t have facts that can say for definite that things will be hopeless. The chaos Will cause a lot of death, but things can be done at smaller scales when communities band together and people try to grow their own food, to say that is impossible is foolish unless you are talking about arid climates where there is no rain.

          • Fast Eddy says:

            No – what I am talking about (for perhaps the 1000th time) is that virtually all arable land on the planet if farmed using industrial methods i.e. we use petrochemical fertilizers to grow crops.

            I think most of us are agreed that oil will not be available post collapse.

            Therefore petro chemical fertilizers will not be available (nor will pesticides nor pumps for irrigation)

            Land that has been farmed using petrochemical inputs is DEAD. It will grow nothing without years of organic inputs (I will not be reposting the research articles that I posted about this in the past — if you doubt this then http://www.google.com it)

            So we will have 7.3B people —- and we will have no food.

            • liamlynch101 – I am an amateur Photographer and Writer. I take various Photographs for the purpose of art and journalism. I also do news writing along with fiction.
              liamlynch101 says:

              That’s pretty major, I will have to look at your research, but I will say that such a fact still doesn’t prevent small scale organic farming, especially in places where people have already started to do some farming in greenhouses or in back gardens. Large scale agriculture is difficult now like your research suggests, but foraging and small scale organic agriculture should work until.Large scale can be implemented.

            • Fast Eddy says:

              Yes of course….

              But the thing is….

              1. It is difficult to feed a family using such methods — one crop failure and you are dead.

              2. There are 7.3B people — they will be hungry — how do you keep them out of the garden

              3. What about your neighbours — do they all have such gardens? They will be wanting you to share

              4. There are many violent people in our midst – with weapons — they will be hungry — they will go to where the food is — and take it…

              5. What if the collapse hits in the middle of winter…. do you have enough food to make it to the next crop?

              I have been down these roads already — and these are just a few of the concerns I have….

              I do not think organic farming offers much hope… there are too many people.

            • liamlynch101 – I am an amateur Photographer and Writer. I take various Photographs for the purpose of art and journalism. I also do news writing along with fiction.
              liamlynch101 says:

              Yeah, there are countless problems associated with small scale farming, but to try to answer your questions, a combination of foraging and small scale agriculture in some regions is possible, the smaller the population density of a country, the easier it is to implement. Also, renewables, although they don’t work on a large scale, small scale works well, and using them for greenhouses could work or using them to preserve food.

              Crop failures are inevitable and are a complication that any have faced before oil, preservation of non perishable goods can work, but that would last for maybe a year perhaps…

              My neighbours don’t have a garden, but various people and groups have set up their own gardens that grow veg.

              So generally, we are facing a lot of challenges but to me, that is no reason to just throw in the towel and just tell myself that all is for naught and I may as well accept death. It’s possible, but I would rather go through post collapse in hope of achieving something rather than etching out each day to see the next sunrise.

            • Fast Eddy says:

              I have a pretty intensive organic set up here in NZ…. but the purpose is to give me something to stick in my hopium pipe…

              Try turning off the power for a weekend and using no gasoline — just to get a hint of what the future will be like — even if you can grow enough food.

              Then there is the elephant that nobody wants to see — thousands of spent fuel ponds that will explode when the power goes off and the water that cools them burns off…

              A typical 1 GWe PWR core contains about 80 t fuels. Each year about one third of the core fuel is discharged into the pool. A pool with 15 year storage capacity will hold about 400 t spent fuel.

              To estimate the Cs-137 inventory in the pool, for example, we assume the Cs137 inventory at shutdown is about 0.1 MCi/tU with a burn-up of 50,000 MWt-day/tU, thus the pool with 400 t of ten year old SNF would hold about 33 MCi Cs-137. [7]

              Assuming a 50-100% Cs137 release during a spent fuel fire, [8] the consequence of the Cs-137 exceed those of the Chernobyl accident 8-17 times (2MCi release from Chernobyl). Based on the wedge model, the contaminated land areas can be estimated. [9] For example, for a scenario of a 50% Cs-137 release from a 400 t SNF pool, about 95,000 km² (as far as 1,350 km) would be contaminated above 15 Ci/km² (as compared to 10,000 km² contaminated area above 15 Ci/km² at Chernobyl).

              http://belfercenter.hks.harvard.edu/publication/364/radiological_terrorism.html

              Once the fuel is uncovered, it could become hot enough to cause the metal cladding encasing the uranium fuel to rupture and catch fire, which in turn could further heat up the fuel until it suffers damage. Such an event could release large amounts of radioactive substances, such as cesium-137, into the environment. This would start in more recently discharged spent fuel, which is hotter than fuel that has been in the pool for a longer time. A typical spent fuel pool in the United States holds several hundred tons of fuel, so if a fire were to propagate from the hotter to the colder fuel a radioactive release could be very large.
              http://www.ucsusa.org/nuclear_power/making-nuclear-power-safer/handling-nuclear-waste/safer-storage-of-spent-fuel.html#.VUp3n5Om2J8

              According to Dr. Kevin Crowley of the Nuclear and Radiation Studies Board, “successful terrorist attacks on spent fuel pools, though difficult, are possible. If an attack leads to a propagating zirconium cladding fire, it could result in the release of large amounts of radioactive material.”[12] The Nuclear Regulatory Commission after the September 11, 2001 attacks required American nuclear plants “to protect with high assurance” against specific threats involving certain numbers and capabilities of assailants. Plants were also required to “enhance the number of security officers” and to improve “access controls to the facilities”.

              The committee judges that successful terrorist attacks on spent fuel pools, though difficult, are possible. If an attack leads to a propagating zirconium cladding fire, it could result in the release of large amounts of radioactive material. The committee concluded that attacks by knowledgeable terrorists with access to appropriate technical means are possible. The committee identified several terrorist attack scenarios that it believed could partially or completely drain a spent fuel pool and lead to zirconium cladding fires. Details are provided in the committee’s classified report. I cannot discuss the details here.

              http://www.cfr.org/weapons-of-mass-destruction/nuclear-spent-fuel-pools-secure/p8967

              “Details are provided in the committee’s classified report. I cannot discuss the details here”

              The PTB will have that report — substitute collapse of BAU for terrorism…

              That is why the PTB are so desperately trying to fend off collapse…. they be dead —- you be dead… we all be dead.

              Kinda cool actually…. group death … aka extinction

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

              I read recently the French dump their spent rods in deep ocean trenches.

            • Fast Eddy says:

              Where did you read this? Google can help you find it….

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

              I don’t remember but I’ll see if I can find it. It was a one liner in a longer blog.

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

              Wikii has an article “Ocean Floor disposal” Not sure if that’s what the French are using. The Brits use concrete “torpedoes” which bury it in the sediment.

            • Fast Eddy says:

              Disposing of nuclear waste in the ocean is banned.

              There are something like 4000 spent fuel ponds on the planet — if we dumped all of them into the ocean I suspect we’d sterilize them in short order….

              Which would mean not only could we not grow food in the petrochemical poisoned soil — we’d also not be able to obtain food from the oceans…

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

              Liam, don’t worry Fast’s bark is worse than his bite. I am curious how many food calories do you currently grow per year? How many does your family need per year? If you pushed how many could you grow next year if needed? Thanks. Oh what are you growing?

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

              Fast radiation release does not equal death. Radiation release equals higher cancer rates and suppressed immune system with concomitant disease. In NZ far far away likely not too bad an increase in cancers.

            • Fast Eddy says:

              You think Fukushima is bad now? See what happens when TEPCO is no longer able to spray water onto the melted cores…

              And the fuel ponds are far more dangerous — because they hold far more rods than a reactor

              Enjoy your wishful thinking moment

  11. Fast Eddy says:

    http://www.zerohedge.com/news/2015-09-27/chinese-gdp-propaganda-full-frontal-plunge-key-data-points-pitched-bullish

    We are really entering the silly phase with this statement….

    China’s industrial restructuring has helped cut electricity consumption and freight transportation, while the economy has maintained a medium-to-high growth rate in the first six months, said Zhang Xiaoqiang, executive deputy director of China Center for International Economic Exchanges.

    Zhang admitted that there were some doubts about China’s economic growth rate in the first half (H1), as two key indicators of economic growth, namely power consumption and freight volume, dropped remarkably.

    China’s GDP expanded 7 percent in the first six months this year from the same period last year, slightly down from 7.4 percent in 2014.

    Power consumption, however, only expanded 1.3 percent in the first six months, sharply lower than 5.3 percent posted last year. Freight volume expanded 4.2 percent, down from 7.5 percent last year.

    The industrial sector grew at a slower pace in H1, while the service sector has become a major engine for the economic growth, said Zhang, adding that the industrial sector consumes more energy per unit of GDP than the service sector.

    In freight transportation, China’s coal, steel and cement industries have been subject to restructuring and, thus, their output has dropped, leading to slowdown in growth, he said.

    The discrepancy between economic growth and the two key indicators’ growth in the first six months did not fit with previous patterns, but industrial restructuring is a new factor, and should be taken into account when analyzing the new situation, he said.

  12. sELASSIE says:

    Catalonian nationalists have won a majority of seats if not of votes (48%) in regional elections. They have said that they will now push ahead with independence after the government in Madrid refused them a referendum.

    http://www.ft.com/cms/s/0/1f551bec-655a-11e5-9846-de406ccb37f2.htm

    It is tempting to interpret that as an effect of the 2008 banking crisis and as a precursor of the institutional decomposition of the status quo that we can expect with financial collapse.

    Will Scotland go next? Support for independence is currently ahead in polls. I would love to see the British state lose Scotland. I think that the British establishment is arrogant beyond belief, that it severely overestimates its own competence to secure the good of the peoples of this island and that such a wakeup call could be the best thing for it. I hope that the collapse holds off for another 5 years so that I can see that happen first.

    http://news.stv.tv/scotland-decides/news/1328355-support-for-independence-ahead-but-snp-backing-down-poll-finds/

    http://www.telegraph.co.uk/news/uknews/scottish-independence/11862457/Nicola-Sturgeon-SNP-to-name-conditions-for-second-independence-referendum-in-2016-manifesto.html

    Meanwhile, the EU referendum in the UK is on a knife edge with support for independence at the highest that it has been in decades. The ‘refugee’ spectacle on the continent can only add further impetus to the OUT campaign. It would be a massive two fingers to Merkel and Juncker.

    http://www.express.co.uk/news/politics/605572/EU-referendum-40-per-cent-want-OUT

    Interestingly, in each case, as with Flanders, it is the north that wants to separate from the south. Only in the case of Ireland LOL is there a movement that wants to unite with the south but there are historical reasons for that.

  13. doomphd – Honolulu – I really hold a doctor of philosophy (phd) in geological sciences and study pretty doomy topics like giant landslides, volcanic eruptions and megatsunamis.
    doomphd says:

    Eddy (Paul) is trying to identify the group of string pullers that run the American (or Western) World Empire (AWE). They are a clever group that do not want publicity or their members identified. They will stop at nothing to get their way, so it is best to exercise extreme care when discussing them, as unfortunate things happen to those who even acknowledge their presence in public, much less threaten them or their plans. There are plenty of examples.

  14. sELASSIE says:

    It is interesting to see one renegade bishop speaking out about the ‘refugee’ invasion of Europe. The situation that he describes sounds much like a precursor to the collapse; the disintegration of border controls and the collapse of law and order in the face of ‘humanitarianism’, the locals left to defend themselves without the support of the state, even against the state. I guess it remains to be seen how the state will react when the time comes.

    Bishop Williamson does not appear to be aware of energy issues at this point, he interprets the situation in terms of psalmodic exegesis. Given history, Christianity clearly could have had a positive role in local defence upon the collapse but it is so weak now in many countries that it seems doubtful that its use will be more than patchy at best. (Interesting, Google has only two references to the phrase ‘psalmodic exegesis’)

    Europe, Awake!

    Europe, you’re being invaded with great skill.
    Return to God, or be invaded still.

    If any readers have not yet woken up, let them wake up. A report of a few days ago from a reader in Germany tells of news never reported in our vile media, vile precisely because they tell so many lies and so little truth (but is it not we the people who are essentially responsible for our media . . . ?).

    “Germany, Austria and neighbouring lands to the south-east have been undergoing for the last few months an aggressive invasion of foreigners disguised as ‘refugees,’ a large majority of whom are young men, spoiling for a fight. Bavaria’s Minister-President Horst Seehofer, looking as pale as a sheet, said on local TV last Sunday that law and order were on the brink of collapse. Yet our puppet-governments and our mass media, at the service of the enemies of God, support this invasion by all means at their disposal, including misused State force, such as the police and the army. These puppets also lie in print, to hide the invasion from the people and thus cause as much damage as possible.

    “The mass of people are still asleep, although more and more men of the land around here and elsewhere are speaking openly of civil war. In outlying regions of Bavaria things are coming to a halt. Residents and goods can no longer move, or only with long delays. About the hordes of invaders – not yet grouped together – ranging freely through the countryside and stealing, the mass-media breathe not a word. The local authorities – under orders from above – have lost all control, and the police advise the victimised population to look after themselves and eventually form civil defence groups – after we were completely disarmed a few years ago.

    “Croatia has called for mobilisation of its army, which is everywhere getting on its feet. I want to see what I can do locally, but I am afraid that most of my fellow-countrymen still have no idea what is happening. If jus t a certain number of them wake up, they will fight like lions, which is why our so-called government, and the enemies of God who control it, are lying and deceiving at all levels to put off that moment of awakening. It is going to be bad . . .” (End of reader’s report)

    The emergency described here is not of course confined to Germany. A similar disaster is afflicting many other Western nations as well. It is unbelievable, unless one looks at it from a religious point of view, and then it all makes sense. Look up the whole of Psalm 105 (106, new numbering). God gave to the Israelites gifts and corresponding responsibilities to which they were repeatedly unfaithful. If he loved them, he could not leave them unpunished (Heb.XII, 7–8). Here are verses 35 to 41 of the Psalm, adapted to our own time:—

    “And the Christians were mingled among the heathens, and learned their works, and served the same idols of liberalism, and it became a stumbling-block to them. And they sacrificed their sons and their daughters to the devils of contraception and abortion and they shed innocent blood: the blood of their sons and daughters which they sacrificed to the idols of self-centred pleasure-seeking. And the land was polluted with blood, and was defiled with their works; and they went aside after their own electronics. And the Lord was exceedingly angry with the people: and he abhorred those whom he had specially gifted. And he delivered them into the hands of their age-old enemies: and those that had hated the Christians for 2000 and 1400 years had dominion over them.”

    Europe’s disaster is by God’s permission. The solution is of course to turn to God: verse 44, “And he saw when they were in tribulation, and he heard their prayer, (46) and he gave them unto mercies, in the sight of all those that had made them captives. (47) Save us, O Lord, our God, and gather us from among your enemies . . . . ”

    Kyrie eleison.

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

      “I come with a sword to divide.” Richard Rohr a Franciscan Friar speaks about this line. The point being there is a difference between good and evil. The sword cuts divides good from evil. Unfortunately the west and maybe the world has no idea of good nor of evil. The people have no point of view to stand on. They can make no distinction between any two choices because they have no standard, no goal, no values, no world view, no God, no ethic, … Some believe dog eat dog, I take I have, more more more. Some believe whites are the source of all evil whites must die. Some believe, we in country x have infinite wealth and must share with all (if their premise were correct their conclusion would be correct).

      Personally I like Jesus’ program of radical egalitarianism. Am I participating? No. I am holding on to my land and house and cars and bank accounts so hard my hands bleed.

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

      Kyrie eleison.

      • Fast Eddy says:

        Coal Miner in China Plans to Slash Workforce by 100000

        http://english.caixin.com/2015-09-24/100856185.html

        For those who believe the final chapter of the End of Civilization will be long and slow …. ask yourself… what will the companies and America and elsewhere … that have declining revenues and profits … that have no prospects for improvement …. what will they do as their slide continues?

        See above for your answer.

        They will slash and burn in a desperate effort to remain solvent.

        Of course that will make the problems worse because that will result in fewer people with money to spend on their products….

        That is how a deflationary death spiral starts… and once it gets going it results in a collapse of the financial system

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

          Contraction versus death spiral to zero? We all understand that as the amount of “free” wealth delivered by Gaia, nature, the discovered oil fields declines the amount of wealth in human society declines. But a decline by 10% is not the same as crash to zero. Yes, we have a large complex system. Yes, we will need to make a smaller. simpler, more frugal system. Yes, after 10% decline we get 20% decline and eventually 80% decline. Yes, if we fail to manage the contraction we can jump from 10% decline to system broken 99% decline. If (OK not likely but a theoretical possibility) we (five friends, English speaking nations of the Monarchs Commonwealth) manage contraction we could maintain civil order (longer than the EU has!) for 50 years.

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

            Sorry to our EU friends in OFW land but EU has declared its unilateral giving up.

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

              I don’t think it’s difficult to forsee a large scale emigration from Europe as citizens there do battle with the migrant hordes, for which nothing has prepared them. And they need camps instead of letting them roam around at a loose end getting into trouble. So I suggest the US, Canada, Aus, NZ etc get ready!

          • liamlynch101 – I am an amateur Photographer and Writer. I take various Photographs for the purpose of art and journalism. I also do news writing along with fiction.
            liamlynch101 says:

            I feel that 50 years might be a little too conservative, but I generally agree that global civilisation will still be alive when we hit this economic contraction. Yes our system is complex and interconnected, but the most important aspect that keeps it from falling is that it is large and thus it is likely that as a whole, it could survive for another five years, as that would generally be the timeframe required for something significant like a whole global civilisation to collapse. We need worst case scenario events to happen in order for the whole thing to collapse.

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

              I have about 30 years of life left. I am curious to see where it gets to in my life time.

            • Fast Eddy says:

              You need to review Gail’s previous articles — particularly those with the stick figure — the complexity of BAU does make it stronger — it makes it far more fragile. One stick comes out the entire system goes to pieces.

            • liamlynch101 – I am an amateur Photographer and Writer. I take various Photographs for the purpose of art and journalism. I also do news writing along with fiction.
              liamlynch101 says:

              It still takes time for the entire system to break apart though, stopgap measures will probably be put in place, some places descending into civil war, others into police states; once the residual oil after the economic collapse is gone, there goes the rest of civilisation.

              Also, I wasn’t saying that our complexity gives us resilience, I was just kind of comparing civilisation to a large train and that even if it goes off the rail, it still bounces around for a time before it comes to a complete halt.

            • Fast Eddy says:

              Yes – like a train … speeding along at 250km per hour… the patrons in first class are having a glass of Krug… all is well…

              Then suddenly — it slams into a mountain…

            • liamlynch101 – I am an amateur Photographer and Writer. I take various Photographs for the purpose of art and journalism. I also do news writing along with fiction.
              liamlynch101 says:

              The train is running out of energy though, it can’t run for very long before coming to a complete halt. Hitting the mountains are just sheer bad luck, black swan events popping up in reality due to certain events occurring.

          • madflower69
            madflower69 says:

            “Contraction versus death spiral to zero? ”
            This is actually a really good article:

            http://www.forbes.com/sites/mclifford/2015/09/03/chinas-economic-slowdown-we-may-have-seen-peak-coal/
            “Every new data set suggests that the economy is weaker, and the transition toward renewable energy is happening faster, than the consensus view has expected.”

            “Renewable energy is also key to China’s transition away from coal. China invested $90 billion in clean-tech investments last year, according to Bloomberg New Energy Finance, far more than the U.S. Non-fossil fuel sources – solar, wind, hydro and nuclear – are expected to make up 20% of China’s energy mix in 15 years. China already has more wind-generating capacity than any country in the world and it is likely this year to overtake Germany as the world’s largest solar country, measured by installed capacity. By 2030, China’s non-fossil-fuel energy base alone will be almost equivalent to the total electrical capacity of the U.S. today.”

          • Fast Eddy says:

            It is not possible to manage a decline.

            When companies shrink they are unable to meet debt repayments — and they go bankrupt and default

            A shrinking economy — if left unchecked — will bankrupt the financial system.

            Remember what a recession looks like? Pretty bad eh…

            But that ain’t nothing like what is coming our way …

    • 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 see–you have translated my article into French. Thanks!

  15. Fast Eddy says:

    Comprehensive Religious-Environmental Training Program

    “This is a fantastic program, it’s well suited for clergy or lay leaders.” LeeAnne Beres, Director, Earth Ministry

    Learn Together: Resources, webinars, and a virtual community space.

    Interested? Visit the Certification Program homepage.

    GreenFaith Believes …

    GreenFaith believes that all people deserve a healthy environment, regardless of their race or income. To learn more about what GreenFaith believes, click here.

    Take the GreenFaith Pledge!

    Join thousands of others throughout the world in taking the GreenFaith Pledge, “I pledge to make my life a blessing for the Earth.”

    http://www.greenfaith.org/

    For those who endlessly pollute FW with this koombaya garbage — and taking endless punches that are sure to result in brain damage…

    Now you have the ultimate solution …. now off you go … there are solar panels that want you to pray to them…

    https://every1matters.files.wordpress.com/2010/05/281928443_ef9148c33a.jpg

    • Fast Eddy says:

      Blessing prayers for solar panels and wind turbines

      O Source of Light, by Your light we see light. (Psalm 36:10)

      “And God made the two great lights…and God set them in the firmament of
      heaven to give light upon the Earth…and God saw that it was good.” (Genesis1:16-18)

      Creator God, may we have the wisdom to appreciate the goodness in Your creation.

      All: O Source of Light, by Your light we see light.

      “Give thanks…to the maker of the great lights, whose loving kindness
      extends eternally.” (Psalm 136:1,7)

      Gracious God, may we experience Your ever-renewing bounty with awe and gratitude, and may we use it wisely.

      All: O Source of Light, by Your light we see light.

      “With a rising-place at one end of heaven, and a circuit that reaches the
      other, nothing escapes [the sun’s] heat.” (Psalm 19:7)

      Holy God, may this simple act of harnessing Your eternal light help us escape the global heating that our generation is causing over Your creation.
      All: O Source of Light, by Your light we see light.

      “Arise, shine, for Your light has dawned — the presence of the Eternal will
      shine upon you.” (Isaiah 60:1)
      Loving God, Your gift of light enables us to shine.
      May we, created in Your image, be worthy reflectors of Your glory.

      All: Amen.*

      From Rabbi Fred Scherlinder Dobb, Adat Shalom Reconstructionist Congregation, Bethesda, Maryland

      Blessing for Wind Power

      O Source of breath and life, renew the face of the Earth.

      “O Lord, how manifold are your works! In wisdom you have made them all; the earth is full of your creatures. When you send forth your breath, they are created; and you renew the face of the ground.” (Psalm 104: 24, 30)
      Gracious Lord, may we and our world be revived and restored by
      your breath of life.

      All: O Source of breath and life, renew the face of the Earth.

      “In the beginning when God created the heavens and the earth, the earth was a formless void and darkness covered the face of the deep, while a wind from God swept over the face of the waters.” (Genesis 1: 1,2)
      God of heaven and Earth, send again your creative wind to inspire
      many to accept your free and renewable gifts of energy to light our lives.

      All: O Source of breath and life, renew the face of the Earth.

      All: Amen

      http://ncronline.org/blogs/eco-catholic/blessing-prayers-solar-panels-and-wind-turbines

      Hot DAMN!!!! Move over Ron L Hubbard … Fast Eddy is the new High Priest… the Solar High Priest…

      Step right up — Fast Eddy offers salvation — solar packages starting at $9999…. Fast is the son of the Solar God ….

      In the name of the Solar God — the Solar Spirit and the Son (Fast)…

      $9999. Salvation was never so cheap.

      Hallelujah…. Hallelujah… Halle —- luuuuu — jah!

      https://tabernaclefortoday.files.wordpress.com/2013/01/church-offering-plate.jpg

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

        As L. Ron Hubert said there is more money in starting a religion than in writing science fiction at 3 cents per word. New Zealand is ripe for a green religion. They hate nuclear. Think they have renewable energy because much of their electric comes from RE. You can start the Gaia Institute. It will have unheated cabins. It will serve vegetarian food. It will have guest speakers that BELIEVE. It will be not for profit but as the director you can pay yourself 2 million per year. The hidden mystical slogan “Monetizing Gaia”.

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

          You will have to get a round of Kumbaya in around the campfire.

        • Fast Eddy says:

          I doubt I’d get much traction here…

          The government does not subsidize solar like it does in places like America and Europe — creating this delusion that it actually makes sense.

          I live in one of the sunniest parts of the country and I almost never see a solar panel — because when you have to pay the full cost of the gear you realize it is just plain stupid.

          Bang the Koombaya drum all day — ain’t nobody feel like dancin.

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

            The complete lack of reference to PV in New Zealand government energy policy is glaring. They are correct land based wind which they do mention, is far batter. On the other hand their assumption of a growing supply of oil and nat gas for New Zealand seems unlikely. If cost remained constant maybe. But the ratio of cargo container ships of lamb to oil for 4 million first world people is likely to raise dramatically. Too say same number of container ships to oil for 1 million first world people. New Zealand does have a wonderful positive of potential sail boat substitution for in country transportation. Makes we want to buy a hauling sail boat.

  16. Ed – I am interested in energy issues.
    Ed says:

    I am planning my New Zealand homestead. I plan to fly-in in my airbus electric airplane. I will then drive home in my electric car. To my house heated with the electric heat pump. New Zealand has ideal weather for a heat pump. Then it is out to hay the back 40 with the electric tractor. Finally retire for the day watching the TV about the fires in US and EU cities.

  17. Ed – I am interested in energy issues.
    Ed says:

    As long as the PTB do not force the nuclear industry to create safe long term nuclear storage we are safe. When they do it is a sign they have a plan.

  18. Ikonoclast says:

    Gail’s and Hall’s thesis about the Irreplaceability of fossil fuels is incorrect. There is one key fact which very simply demonstrates their thesis is incorrect. This has to do with end-use efficiency or the conversion of energy into useful work.

    Renewable energy (particularly solar power and wind power) is getting cheaper and more efficient all the time. With latest developments it produces an adequate EROEI when end use efficiency is taken into account. Taking Hall’s figures so that I am not accused of biasing the debate. (From “EROI of different fuels and the implications for society” – C.A.S. Hall et. al.)

    Coal – 50:1 in round numbers. (Within the range Hall gives)
    Oil – 25:1 in round numbers, (Slightly better than the top of the range Hall gives.)

    Of wind power, Hall says;

    “Wind power has a high EROI value, with the mean perhaps as high as 18:1 (as derived in an existing meta-analysis by Kubiszewski et al., 2010) or even 20:1 (n of 26 from 18 publications) (see Lambert et al., 2012 for references) (Fig. 3). The value in practice may be less due to the need for backup facilities.”

    Let us assume a tough standard for wind after allowing for storage losses and other inefficiencies. Let us actually assume only 15:1 for wind.

    Hall gives figures of of 12:1 to 6:1 for solar PV. I think these figures do not take into account recent developments in solar power but let them stand. Indeed let us take the lower one of 6:1.

    Hydro is much better in EROEI than either wind or solar but it will not have much influence due to the relative rarity of good sites for hydro.

    Let us assume that current fossil fuels (averaged with more weighting on the more prevalent oil) deliver an EROEI of 31 to 1 to make the math easier. Let us assume the renewable energy economy returns an EROEI of 8.5 to 1 as an average.

    2. The electric motor is 80% efficient on a bad day. The internal combustion engine is 20% efficient on a good day. That means the electric motor does 4 times the amount of useful work of an IC engine on the same energy input. Let this efficiency stand as a proxy for the efficiency of a full electrical economy compared to a full fossil fuel economy.

    Thus while a fossil fuel economy (with current reserve qualities) delivers an EROEI of 31:1, it only uses that energy with 1/5 of the efficiency of an electrical economy. Thus we get an energy profit of 30 units of energy. But 4/5 of these are wasted. Only 1/5 is turned into useful work to make and move things. Thus we get 6 units of useful work.

    Now, take the pure electrical economy. Assume it produces an EROEI of 8.5:1.This includes very tough assumptions against wind power, Hall’s tough and outdated assumptions against solar PV and little allowance for hydro. For one unit of energy input we get 7.5 profit. But it is 80% efficient at producing useful work. Thus we get 6 units of useful work.

    If the renewable economy can get to an EROEI of just 8.5:1 it matches and is equally as viable in energy terms as a 31:1 EROEI fossil fuel economy.

    Therefore, the chances are very good to the point of certainty that we can power our whole economy by renewable energy. We cannot ignore the importance of end-use efficiency by merely making EROEI calculations and comparisons. Ignoring end-use efficiency is THE key fallacy in current renewable energy criticism.

    • madflower69
      madflower69 says:

      “There is one key fact which very simply demonstrates their thesis is incorrect. This has to do with end-use efficiency or the conversion of energy into useful work.”

      The other has to do with once you get the system paid off. The energy is almost free from solar/wind until you EOL the equipment. Since they both can pay for themselves before EOL now, they will end up providing the free energy. It might only be part time, but it can’t possibly hurt.

      • 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:

        There is a big part of the cost that never gets counted, and that is the cost of both new transmission lines and maintaining transmission lines, when intermittent renewables get discussed. Once it becomes impossible to maintain transmission lines (even if it is because banks fail, and it is not possible to pay workers), then all of the embedded costs are simply lost.

        The idea that grid tied renewables will remain useful depends on the whole system being useful. The cost of the renewables is really their cost, including their share of the transmission line costs, plus the costs of ramping up and down fossil fuel plants more, and using them less.

        It is possible that adding intermittent renewables makes the system last less long than it would otherwise, if requirements that wind or solar be used in a priority basis contribute to the bankruptcy of other parts of the system. It is really the system that is important, more than individual parts.

        • madflower69
          madflower69 says:

          “There is a big part of the cost that never gets counted, and that is the cost of both new transmission lines and maintaining transmission lines, when intermittent renewables get discussed. ”

          I agree that there is an issue, not with renewable energy itself, but with the cost structures you get charged. Sometimes it is buried in the cost of electric, and in other cases it is a higher monthly line charge. It isn’t consistent between electric distributors and it varies by delivery utility. There are a lot of state, local and utility regulations that need to change in order for this to fix itself.

          Commercial units have to pay line charges, and paid for the lines to be run to their projects, or pay for the lines. In some cases they are subsidized if the project is one of the already “proposed” utility lines. But this is the same for any power plant.

          • 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:

            There are the long distance lines as well. The whole system doesn’t work unless the transmission lines work.

            There are at least two places where the transmission costs are an issue:

            1. When homes get “net metering” to compensate for having solar PV. The homes need to pay as much transmission charges as anyone else–perhaps more, given the additional amount of balancing needed. Net metering doesn’t give electric companies enough of a charge for the line costs.

            2. Once we are unable to maintain the electric transmission system, then the delivery of all kinds of electricity, including solar PV, will stop. This is not included in cost models. Admittedly, some of the solar PV can be repurposed for individual use. But without pre-planning and setting aside of the materials needed for this transformation, I doubt it will happen. Many people will abandon their homes (no water in California, for example), and leave their solar panels in place.

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

              Gail, you are right that transmission costs need to be included in cost calculations. My feeling is that transmission is expensive to build, 10 million dollar per mile per GW, but cheap to amortize and maintain. About 2 pennies per KWHr per 1000 miles.

              The 10 million per mile includes system costs like the need to feed union bosses, politicians, and various other parasites. The cost can be 2 million per mile in flat not rocky land buried underground. It can be even lower in countries with less overhead.

            • madflower69
              madflower69 says:

              “The homes need to pay as much transmission charges as anyone else–perhaps more, given the additional amount of balancing needed. ”

              yes, I alluded to this before, with the various rate structures. Some utilities bury line charges in with the per kwh charge, some charge a line fee, some do both.

              It is hard to justify paying more because you use less.

              The voltage regulation is an issue, but it is also an outstanding issue, and the fault of the grid design itself. The real solution is to fix the grid design. It isn’t a viable solution to blame renewable energy for problems inherent in the grid design, and have been known and not addressed for 80 years.

              ” Admittedly, some of the solar PV can be repurposed for individual use.”

              It depends on the inverter system. A lot of them now, will handle power outage situations and provide house power when the grid is down, and won’t backfeed the grid. You can add batteries, or a generator as well if you want to be completely off-grid, either because you want to, or because the grid is down.

              Some of the inverters just shut off when the grid goes down, so you get nothing so they don’t backfeed the grid. It is a safety feature.

              If the area totally tanks and the grid goes out. The availability of water will drastically increase because both refineries and power plants require vast amounts of water.

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

      Ikonoclast, thanks for hard numbers. In many locations a heat pump will get a 300% return versus burning oil at 100%. Triple the value.

    • Fast Eddy says:

      The German Solar Disaster: 21 Billion Euros Burned
      http://www.thegwpf.com/german-solar-disaster-21-billion-euros-burned/

      Spain’s disastrous attempt to replace fossil fuels with Solar Photovoltaics
      http://energyskeptic.com/2013/tilting-at-windmills-spains-solar-pv/

      High-Tech Solar Projects Fail to Deliver
      http://www.wsj.com/articles/high-tech-solar-projects-fail-to-deliver-1434138485

    • tim – Florida, USA
      timl2k11 says:

      Well when will EV’s become as cheap as ICE vehicles? When will the great RE switch take place? Like cold fusion, always seems 10 years away. Switching all of civilization to renewables sounds like pie in the sky nonsense. Where do we get the resources? Your EROEI calculations leave out way too much and grossly oversimplify the comparison. Gail has demonstrated time and time again the deficits of EROEI comparisons across different fuels sources. Apples to oranges.

    • 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 is only a very small piece of the total picture. Debt requirements are more important. So is the total costs of production, including balancing and transmission–things that are left out of EROEI calculations.

      The whole idea that net energy is important is not even true. Energy of EROEI of 8.5 to 1 can in no way replace energy with an EROEI of 50:1. The threshold for EROEI that Hall tried to create in his article, “What is the Minimum EROI that a Sustainable Society Must Have?” is improperly computed, in my view. My current post basically implies that an EROEI of 35:1 or 50:1 is required; anything less than this adds too much debt to the whole system, especially if it is a front-end investment type energy source. Such an investment is much worse than an energy source that can be funded on an ongoing basis.

      What we need is cheap energy, that requires practically no debt to create. This would be comparable to less than $20 barrel oil. For electricity, it would probably be a wholesale cost of something like 2 cents per kWh.

      • madflower69
        madflower69 says:

        “What we need is cheap energy, that requires practically no debt to create. This would be comparable to less than $20 barrel oil. For electricity, it would probably be a wholesale cost of something like 2 cents per kWh.”

        We can’t do either with fossil fuels. We can possibly get there with something else, but we have to get better at it to get to that point. and maybe even a few small technical break throughs. Which means we have to spend money to do it.

        It isn’t an easy problem.

        I do think you can take on limited debt in doses to achieve it since you will be making your money back. It is an investment.

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