China: Is peak coal part of its problem?

The world’s coal resources are clearly huge. How could China, or the world in total, reach peak coal in a timeframe that makes a difference?

If we look at China’s coal production and consumption in BP’s 2016 Statistical Review of World Energy (SRWE), this is what we see:

Figure 1. China's production and consumption of coal based on BP 2016 SRWE.

Figure 1. China’s production and consumption of coal based on BP 2016 SRWE.

Figure 2 shows that the quantities of other fuels are increasing in a pattern similar to past patterns. None of them is large enough to make a real difference in offsetting the loss of coal consumption. Renewables (really “other renewables”) include wind, solar, geothermal, and wood burned to produce electricity. This category is still tiny in comparison to coal.

Figure 2. China's energy consumption by fuel, based on BP 2016 SRWE.

Figure 2. China’s energy consumption by fuel, based on BP 2016 SRWE.

Why would a country selectively decide to slow down the growth of the fuel that has made its current “boom” possible? Coal is generally cheaper than other fuels. The fact that China has a lot of low-cost coal, and can use it together with its cheap labor, has allowed China to manufacture goods very inexpensively, and thus be very competitive in world markets.

In my view, China really had no choice regarding the cutback in coal production–market forces were pushing for less production of goods, and this was playing out as lower commodity prices of many types, including coal, oil, and natural gas, plus many types of metals.

China is mostly self-sufficient in coal production, but it is a major importer of natural gas and oil. Lower oil and natural gas prices made imported fuels of these types more affordable, and thus encouraged more importing of these products. At the same time, lower coal prices made many of China’s mines unprofitable, leading to a need to cut back on production. Thus we see the rather bizarre result: consumption of the cheapest energy product (coal) is falling first. We will discuss this issue more later.

China’s Overall Historical Production of Energy Products

With the pattern of energy consumption shown in Figure 2, growth in China’s total fuel consumption has slowed, as shown in Figure 3.

Figure 3. China energy consumption by fuel, based on BP 2016 SRWE.

Figure 3. China energy consumption by fuel, based on BP 2016 SRWE.

The indicated increases in total fuel consumption in Figure 3 are as follows: 8.1% in 2011; 4.0% in 2012; 3.9% in 2013; 2.3% in 2014; 1.5% in 2015.

Unless there is a huge shift to a service economy, we would expect the rate of growth of China’s GDP to decrease rather rapidly as well, perhaps staying 1% or 2% higher than the growth in fuel consumption. Such a relationship would suggest that China’s reported rate of GDP growth for 2014 and 2015 may be overstated.

The Problem of Low Coal Prices

Most of us don’t pay attention to coal prices around the world, but according to BP data, coal prices have been following a similar pattern to those of oil and natural gas.

Figure 4. Coal prices since 1999 based on BP 2016 SRWE data.

Figure 4. Coal prices since 1999 based on BP 2016 SRWE data.

Oil prices tend to cluster more closely than those of coal and natural gas because there is more of a world market for oil than for the other fuels. Coal and natural gas have relatively high delivery costs, making it more expensive to trade these products internationally.

Figure 5. World oil prices since 1999 for various oil types, based on BP 2016 SRWE. (Prices not adjusted for inflation.)

Figure 5. World oil prices since 1999 for various oil types, based on BP 2016 SRWE. (Prices not adjusted for inflation.)

Figure 6. Historical prices for several types of natural gas, from BP 2016 SRWE.

Figure 6. Historical prices for several types of natural gas, from BP 2016 SRWE.

The one place where natural gas prices failed to follow the same pattern as oil and coal prices was in the United States. After 2008, shale producers extracted more natural gas for the US market than it could easily absorb. This overproduction, together with a lack of export capacity, led to falling US prices. By 2014 and 2015, prices were falling everywhere for oil, coal and natural gas.

Why Prices of Fossil Fuels Move Together

The reason why prices of fossil fuels tend to move together is because commodity prices reflect “demand” at a given time. This demand is determined by a combination of wage levels and debt levels. When wage levels are high and debt levels are increasing, consumers can afford more goods, such as new homes and new cars. Building these new homes and cars takes many different kinds of materials, so commodity prices of many kinds tend to rise together, to encourage production of these diverse materials.

Why Fossil Fuel Prices Don’t Necessarily Rise Indefinitely

Rising fossil fuel prices depend on rising demand. Wages are not really rising fast enough to increase fossil fuel prices to the levels shown in Figures 4, 5, and 6, so the world has had to depend on rising debt levels to fill the gap. Unfortunately, there are diminishing returns to adding debt. We can witness the poor impact that Japan’s rising debt level has had on raising its GDP.

Adding more debt is like using an elastic rubber band to increase the world output of goods and services. Adding debt works for a while, as the relatively elastic economy responds to growing debt. At some point, however, the amount of debt required becomes too high relative to the benefit obtained. The system tends to “snap back,” and prices fall for many commodities at the same time. This seems to be what happened recently in late 2008, and what has happened again recently. The challenge is to restore world economic growth, since it is really robust world economic growth that allows commodity prices to rise to high levels.

Some Historical Perspective on Rising Energy Prices and Rising Debt 

In “normal” times, a small increase in demand will increase production of fossil fuels by several percentage points–generally enough to handle the rising demand. Prices can then fall back again and there is no long-term rise in prices. This situation occurred for quite a long time prior to about 1970.

After about 1970, we found that it became more difficult to raise production levels of energy products, without permanently raising prices. US oil production began to decline in 1970. This started an energy crisis that has been simmering beneath the surface for 45 years. Various workarounds for our energy shortage problem were tried, such as adding nuclear, drilling for oil in new areas such as the North Sea, and building more energy efficient cars. Another approach used was reducing interest rates, to make high-priced homes, cars and factories more affordable.

By the late 1990s, even these workarounds were no longer providing the benefit needed. Another idea was tried: encourage more international trade. This would allow the world access to untapped energy sources, including coal, in the less developed parts of the world, such as China and India.

This, too, worked for a while, but resource depletion tended to continue to raise the cost of energy extraction. Also, the competition with low-cost labor in India, China, and other countries tended to hold down the wages of the less-educated workers in the developed countries. Higher prices at the same time that wages for some of the workers were depressed is, of course, a bad mismatch.

One way of “fixing” the problem was with cheaper debt, and more debt, so that consumers could buy homes and cars with lower incomes.  This fix of more debt stopped working in 2008, as repayment on “subprime” debt faltered, and all fossil fuel prices collapsed.

Figure 7. World Oil Supply (production including biofuels, natural gas liquids) and Brent monthly average spot prices, based on EIA data.

Figure 7. World Oil Supply (production including biofuels, natural gas liquids) and Brent monthly average spot prices, based on EIA data.

To “re-inflate” the world economy, world leaders began to try to add even more debt. They did this by fixing interest rates even lower, starting in late 2008, using a program called Quantitative Easing (QE). This program was successful in raising commodity prices again, although its effect seemed to diminish with time. China’s huge growth in debt during this period helped as well.

Energy prices turned downward again in mid-2014, when the United States discontinued its QE program, and China (under new leadership) decided not to continue increasing debt as quickly as before. The result was a second sharp drop in commodity prices, without a corresponding drop in the cost of producing these fossil fuels. This shift was devastating from the point of view of energy supply producers.

Impact of Lower Prices on China’s Coal Producers

China has a lot of coal resources, but not all of these resources can be produced cheaply. Generally, the least expensive resources tend to be produced first. When prices are high, it may look like deeper, thinner seams can be extracted, in addition to the easier and cheaper to extract seams, but this is never certain. At some point, prices may fall and thus issue a “stop mining” instruction.

When coal prices drop, producers are likely to encounter debt problems, as loans related to coal operations become due. The reason why this happens is because loans taken out when coal prices were high are likely to reflect an optimistic view of how much can be extracted. Once prices drop, operators discover that they have committed themselves to paying back more in loans than their coal mines can actually produce. This seems to be happening now.

What Are the Implications for Future World Coal Production?

If we look at a chart showing world consumption of energy products by fuel, we see that world coal production has turned down in a similar manner to the downturn in Chinese coal production.

Figure 8. World energy consumption by fuel, separately by major groupings.

Figure 8. World energy consumption by fuel, separately by major groupings.

There are many large areas of the world that seem to be beyond their peak in coal production, including the United States, the Eurozone, the Former Soviet Union, and Canada. Note that the United States’ coal production “peaked” in 1998. This added to pressures for globalization.

Figure 9. Areas where coal production has peaked, based on BP 2016 SRWE.

Figure 9. Areas where coal production has peaked, based on BP 2016 SRWE. FSU means “Former Soviet Union.”

If we consider the rest of the world excluding the areas shown separately in Figure 9 as the “Non-Peaking Portion of the World,” we find that China’s current coal production far exceeds that of the Non-Peaking portion of world production.

Figure 9. Coal production in China compared to world production minus production shown in Figure 8.

Figure 10. Coal production in China compared to world production minus production shown in Figure 8.

Figure 10 indicates that even the non-peaking portion of the world is showing a downturn in production in 2015, no doubt relating to current low prices.

Another issue is that India’s coal production now falls far short of its consumption. Thus, India is becoming a major coal importer. In 2015, India’s consumption of coal slightly exceeded that of the United States, making it the second largest consumer of coal after China, and the largest coal importer. If China should decide to increase its coal consumption by adding imports, it would need to compete with India for supplies.

Figure 14. India's production and consumption of coal, based on BP 2016 SRWE.

Figure 11. India’s production and consumption of coal, based on BP 2016 SRWE.

India’s hope for continued economic growth is also tied to coal, even though it doesn’t produce enough itself. India’s use of natural gas is declining, because its own locally produced natural gas supplies are declining, and imports are expensive.

Figure 11. India's energy consumption by fuel based on BP 2016 SRWE.

Figure 12. India’s energy consumption by fuel based on BP 2016 SRWE.

Imported coal is more expensive than locally produced coal, because of the transportation costs involved. Thus, adding an increasing portion of imported coal will eventually make India’s products less price competitive. India started from a lower wage level than China, so perhaps it can temporarily withstand a somewhat higher average coal price. At some point, however, it will reach limits on how much of its mix can be imported, before workers cannot afford its products made with this high-priced coal.

As noted above, India and China will be competing for the same exports, if they both expect to grow using imported coal. We can modify Figure 9 to show what the size pool producing imports might now look like, if the countries needing imports is “China + India,” and the part with perhaps extra coal to export is the Non-Peaking Areas from Figure 9, less India.

Figure 12. Coal production for China plus India, compared to production from non-peaking group used in Figure 9, minus India. Based on BP 2016 SRWE.

Figure 12. Coal production for China plus India, compared to production from non-peaking group used in Figure 9, minus India. Based on BP 2016 SRWE.

This comparison shows an even worse mismatch between the peaking areas, and the current production of areas that might raise their supply.

Is Future Coal Production a Function of Resources Available, or of Prices?

Future coal production is clearly a function of both the amount of resources available and future prices. If there are no resources available, it is pretty clear that no resources can be extracted.

What most researchers have not understood is that future prices are important as well. We can’t expect that prices will rise indefinitely, because low-paid workers, especially, find themselves in a squeeze. They find homes and cars increasingly unaffordable, unless the government can somehow manipulate interest rates down to never heard of levels. Because of this lack of understanding of the role of prices, most of today’s models don’t consider the possibility that price levels may cut back production, at what seems to be an early date relative to the amount of resources in the ground.

Part of the confusion comes from the view economists have regarding prices, innovation, and substitution. Economists seem to be firmly convinced that prices will always rise to fix the problem of future shortages, but their models do not seem to take into account the major role that energy plays in the economy, and the lack of available substitutes. Certainly, the history of energy prices does not support this claim.

If I am correct in saying that prices cannot rise indefinitely, then all three of the fossil fuels are likely to peak, more or less simultaneously, when prices can no longer stay high enough to enable extraction. The downslope after the peak will be based on financial outcomes, such as the bankruptcies of coal operators, not on the exhaustion of reserves or resources in the ground. This dynamic can be expected to produce a much sharper downturn than modeled by the Hubbert Curve.

If analysts consider the possibility that prices will never again rise very high for very long, they realize such a low-price scenario would be a catastrophe. That is why we hear very little about this possibility.

Conclusion

It appears likely that China’s coal production has “peaked” and has begun to decline. This is especially likely if energy prices stay low, or never rise very high for very long.

If I am correct about energy prices not rising high enough in the future, all fossil fuels may reach peak production more or less simultaneously in the not too distant future. Widespread debt defaults seem likely if this happens.

If we are, in fact, reaching peak coal, even before peak oil, this is disconcerting for those who believe that the Hubbert Model is the only way of viewing the world. Maybe we are expecting too much from the model; maybe we need a model that considers prices, and how prices depend on wages and rising debt. Falling energy prices are especially bad for the system; they seem to lead to debt defaults.

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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1,385 Responses to China: Is peak coal part of its problem?

  1. Stefeun says:

    This comment doesn’t seem to display as a reply, so let’s try alone:

    FE,
    Robert Newman, comedian known for his “History of Oil” (you posted his video a couple of months ago), also has an opinion about robots, namely wether they can be ethical or not; of course not:
    https://philosophynow.org/issues/110/Can_Robots_Be_Ethical

    BTW, here’s a link to an older post from his blog, sort of making-of the History of Oil:
    http://www.robnewman.com/greenguide.html

    • machine says:

      “Delegating ethics to robots is unethical not just because robots do binary code, not ethics, but also because no program could ever process the incalculable contingencies, shifting subtleties, and complexities entailed in even the simplest case to be put before a judge and jury.”

      Yeah, not exactly a star of “AI” philosophy. For a better philosophical understanding and critique, instead read some Searle, Dennett, Hofstadter, et. al. That text was just some ramblings about binary not being compatible with ethics. Yeah, a few logical problems there at once I can tell.

      • Stefeun says:

        Of course, Machine, I agree.
        My comment was rather a veiled reference to Rob Newman.

      • Tango Oscar says:

        Humans have very flawed views of ethics in the first place that come from a place of perspective and privilege. For example, most Americans don’t care that their television has components in it that were likely mined by children in the Congo. Another classic is that most humans find eating animals kosher even though it is destroying the environment faster than fossil fuel burning.

        • common phenomenon says:

          There are plenty of non-human animals who find eating other animals kosher, even though they are not Jewish and can’t even spell “kosher”. Probably they have been a bad influence on us humans and should be kept in isolation from us.

          • Soonverysoon says:

            “There are plenty of non-human animals who find eating other animals kosher, even though they are not Jewish and can’t even spell “kosher”. Probably they have been a bad influence on us humans and should be kept in isolation from us.”

            So because animals eat other animals all animal behaviors are OK for humans? Your comment is a classic in why all “ethics” are justification for entitlement. Humans want stuff. Any argument that jeopardizes that is attacked.

            At the very root of “ethics” is the notion that humans are entitled to pillage.

            • Fast Eddy says:

              “So because animals eat other animals all animal behaviors are OK for humans?”

              What is your argument against humans killing and eating other animals?

          • Tango Oscar says:

            Humans are not innate carnivores but that’s not really the point I was making. I’m not saying we shouldn’t eat animals because it’s cruel. I’m saying that it is a terribly inefficient way to use our resources to feed the world’s population.

    • MM says:

      Robot ethics is like source code documentation.
      First write the code and make it work, later do the documentation when there is still a budget left.

  2. machine says:

    Massive Diesel tax hikes coming in Sweden
    Ignore the part which states $40, it should be translated to 40 SEK, which is about 5 USD.

    (google translated)
    https://translate.google.com/translate?sl=sv&tl=en&js=y&prev=_t&hl=sv&ie=UTF-8&u=http%3A%2F%2Fnyheteridag.se%2Fskattechocken-dieselpriset-kan-bli-over-40-kronor-per-liter%2F&edit-text=&act=url

    Yep, the party is officially over ladies and gents.
    The Swedish age of consumerism and waste ends in an abyss of government assisted affordability plunge.

  3. Pingback: China: Is peak coal part of its problem? | Doomstead Diner

  4. Yoshua says:

    Musk says SolarCity deal about synergy but it may be about debt

    http://www.msn.com/en-us/money/companies/musk-says-solarcity-deal-about-synergy-but-it-may-be-about-debt/ar-AAhu9vZ?ocid=spartandhp

    While SolarCity’s sales have tripled in three years, it has posted losses in all but three quarters since its 2012 initial public offering while investing heavily in future growth. Its negative cash flows have grown worse, while its interest payment obligations keep rising.

    • DJ says:

      Wouldnt it be better to stay in EU then? Live of the others for a while. Maybe even get the Euro and take out NIRP loans.

      • MG says:

        Britain was at the beginning of the coal era, it started using coal in great quantities and became the world power No. 1 for centuries. And created a big bubble of population that needs to be fed.

        If something like isolation comes, then Britain has a big problem, because it became terribly dependent on the import of resources, including human resources.

        https://21stcenturychallenges.org/britains-greying-population/

        With its weaker pound, it will be less attractive for immigrants. It will become something like Japan of the Europe, isolated on its islands and rapidly ageing.

        • DJ says:

          It seems to me one selling point for Brexit is avoiding immigration. (But compared to scandinavia they seems to have had better luck with integration/assimilation)

          • MG says:

            The lack of regulation of immigration or inability to regulate it is a bigger problem, as Britain was open for immigration from its colonies in the past. There is need for human resources, but not for those that are replaced by robots and automation.

            • DJ says:

              I think we agree. They* want to import producers, but not be forced to accept spongers through some EU quota program.

              *the minority who will vote for Brexit. The majority are spongers themselves.

            • MG says:

              Well, I am not sure, whether Nigel Farage understands the problem… that the majority does not understand the problem.

            • Stefeun says:

              MG,
              In your view, what kind of job/task would be impossible to replace with robots?

              Bear in mind that we’re able to give them -substitutes of- emotions, artistic sense, purposefulness, and much more,
              and that a simple set of basic rules is sufficient for self-organization of complex structures and “ecosystems”.

              Humans need not apply… but I doubt they’ll ever be able to manufacture their own microchips from scratch and without any human help, especially in a context of energy scarcity. Let alone the heavy infrastructures required to run all that.

            • machine says:

              There are discussions about regulations/taxation for humanoid robots. It must though, be hard to determine what consists of a humanoid robot or isn’t.

              http://www.businessinsider.com/jobs-robots-are-most-likely-to-take-over-2015-5

        • MG says:

          It is clear that those who benefit from the past voted for Brexit, i.e. oder generations:

          http://www.joe.ie/news/difference-old-young-people-voted-brexit-referendum-says/550477

          And this is not good for Britain.

          When older generations prevail and do not see that the past can not be returned back (as the domestic resources are spent), then the younger generations will probably react with leaving the country…

    • Tim Groves says:

      It’s OK. Renewables will save the day for the UK.
      I read it in the Guardian.

      BTW, these are some very nice graphs. The first shows UK peak coal and peak oil & gas very clearly. And the second emphasizes how utterly dependent the UK still remains on the “Big 3” fossil fuels.

      How well I remember the day in the early 1970s when the man from North Thames Gas came around to “convert us to natural gas”. And how long ago that seems now.

      From a doomer’s perspective, should we prefer living in the shadow a larger ziggurat or a smaller one. Compared to the UK, the EU pyramid scheme has at least once extra tier of management, coordination and control functions that will be surplus to requirements and a luxury that energy-poor Europe won’t be able to afford. There are also rumors that the thing is jerry built and liable to collapse into a pile of rubble the next time an earthquake strikes. But George Soros, Richard Branson, David Beckham and others tell me the view from the top is spectacular!

    • xabier says:

      I think most people in the UK would be astonished by those charts, even if they could understand them (25% of people can’t understand even simple percentages.)

      Life looks and feels pretty good in most of Britain in terms of material comfort, and formerly run-down districts of London for instance are now very smart and bright.

      I would say that things have never been easier -on the surface – for the mass of people, with dirt-cheap clothing from Asia for even the lowest social strata, (no more rags and bare footed children seen even in the 1930’s) and ample credit availability.

      Not so good, of course, if you happen to live in the former industrial heartlands, but the most energetic of the people there just move to where the action is.

      I am quite sure that almost no one grasps the true energy situation of the UK.

      Churchill famously observed that after the departure of the Romans, it took 1500 years for the rich to have again central, whole-house, heating in England. (I would add that the creation of fireplaces with chimneys took 700 years.) And that was because their American wives insisted on installing it!

      Even then, it took until the roll-out of North Sea gas and oil for the masses to enjoy such luxury and ease, long preceded by mass car-ownership and cheap foreign holidays in the sun.

      Now, they take it all entirely for granted, unaware that the real situation of essential resource exhaustion is behind military and secret service interventions in Syria and elsewhere, and against Russia. Sleep-walking into disaster? You bet!

  5. Ert says:

    Hi all,

    I really don’t get it anymore. Heinberg released today an article: http://www.resilience.org/stories/2016-06-22/renewable-electricity-falling-costs-variability-and-scaling-challenges which contains chapter 3 of his new book – and paints a quite rosy future for the transition to renewables. He cites papers from Siemens and NREL hat a new 60-80% renewable grid (Europe) is possible. Everything is rosy…. demand pricing, smart-grid, and capacity redundancy (cost only money… but “Nevertheless, capacity redundancy is the primary strategy that currently enables intermittent renewables to be integrated into electricity grid systems.”). Then some parts about the cost and up-front investment of (fossil) energy and capital….

    Funny was this: “Utilities are stuck with the bill for grid upgrades and grid-scale energy storage and, absent government subsidies, have no choice but to pass these costs on to customers in the form of higher rates. But then, facing higher grid rates, customers who can afford stand-alone solar systems may see it as being in their long-term advantage to go off grid. This hypothetical self-reinforcing feedback process has been called the utility death spiral.” – but not so much more…. shall the utilities go broke? Who delivers the power in the winter with no wind to people who “produce” their own power? Who pays for the redundant infrastructure which is less utilized, but which is still required unless customers are fully self-reliant (which a storage which is not in sight)….

    At the end Heinberg acknowledges that electrical energy is only a small part of the total fossil energy consumed – but I do get the picture that Heinberg paints the picture overly optimistic – more than I remember from him in the past.

    Does only Gail connects debt, energy and the economy? Or do I see the picture more problematic that it is?

    When cheap coal is gone – and should even be prematurely outphased, other fossils get more expensive and there is no real solution for energy storage – how should that renewable future work without destroying the (shaky) economy or the consumer? Will a much more complex smart-grid and the required upgrades really deliver? or cause even more complexity? In the end – all the costs have to be offloaded at the customer – and If I look at my bill here in Germany, the subsidy to the renewables it a hefty growing position.

    • Fast Eddy says:

      If anyone is in touch with Richard can you please pass this along — tell him it’s from Fast Eddy

      • Duncan Idaho says:

        Haven’t seen him in a few weeks.
        I agree, techno narcissism is a creeping factor in his writing.

        • Fast Eddy says:

          As we can see — the population of DelusiSTAN dwarfs that of RealitySTAN… thus injecting an element of hope into a doomsday book resonates with a massive audience…

          And of course you can only really write the End of Days book once…. follow ups have to offer something different.

          Richard’s got the formula right — I am sure he is aware that what is he spewing is diarrhea for the masses — I bet he gets some of his best ideas from people who have been driven off of FW….

        • psile says:

          WTF happened to him? He use to be beautiful…

          https://youtu.be/jhkzCQ7Dz3A

    • Pintada says:

      Dear ERT;

      I have observed the same thing about Heinberg. His writing was some of the best at the turn of the century and well into the first decade. I finally had to stop getting his newsfeed, it was just too sickening to read the obvious nonsense.

      ERT asked, “Does only Gail connects debt, energy and the economy? Or do I see the picture more problematic that it is?”
      It is easy to get confused when someone lists – in detail – why the train of civilization has left the tracks, and then turns right about, to say that everything is fine. Some of the things that lead to that sort of apocalyptimisim (or is it spelled apocal-optimism) in my view are:

      1. Funding is always keyed to offering a solution – no solution, no money to do the work.

      2. The writer is also human, and it is much easier to live and work in denial than it is to face the truth – even if that truth stares one square in the face daily. Look at this example of massive cognitive dissonance if you dare:
      Here is the latest post by Mr. Robert Fanney. As you can see, everything is fine and we are headed for the ultimate technoutopia through the brilliant and selfless work of Elon Musk —
      https://robertscribbler.com/2016/06/22/in-defiance-of-harmful-fuels-is-teslasolar-city-the-new-model-for-what-an-energy-company-should-look-like/
      Or, have we heated the earth to the point that there are places near the equator that will soon be completely uninhabitable —
      https://robertscribbler.com/2016/06/21/the-increasingly-dangerous-hothouse-local-reports-show-it-felt-like-170-f-77-c-in-bhubaneswar-on-june-13th-2016/

      Two articles written one day apart (1 day) that claim completely different things. Clearly, Mr Fanney is insane. (The example draws from AGW rather than peak oil, but its the same problem.)

      3. Mr Heinberg is an organization, not a person. Since I was one of his fans for such a long time, I hope that it is the Post Carbon Institute that has gone insane, and Mr Heinberg is still among the rational. (I am likely wrong here.)

      Facing the truth is difficult. As insane as certain people (me, FE, others) among us seem to be, is it because they understand the science/economics and its result?

      Perhaps I went off the rails a bit myself. The question can be interpreted not as I obviously did above, but as, “Does only Gail get it?” To that question, I must say, Ms Tverberg is great. Incisive, consistent, logical, and highly principled, her writing is always informative, and always couched in reality.

      Yours in Doom,
      Pintada

      • Ert says:

        Thanks for you long reply and explanation, which I fully agree on.

        Still, i was dazzled on the outpouring of Heinberg in that presented chapter of his book. Lots of ‘somehow’ seemingly interrelated facts – but nothing which binds it really together or analysis / critiques whats said and forms a kinda convincing conclusion of that chapter. The questions he raises regarding the problems / issues are general and are not systematically summed up. Nowhere the issue of ‘affordability’ in an energetic and economic context.

        I mean, Heinberg knows about EROEI, intermittency and out growth system better than most…

        I don’t know what this kind of hopium from Heinberg contributes to the discussion? The question for society as a whole that (in my opinion) has to be raised is how do we do the transition to less – less people, less consumption, less expectations, less mobility, less retirement endowments, less of intensive medical care if one ages, especially for (bad) diet related ‘illness’ (so do something self-responsible for your health!)

        I know that the lasts points are nothing someone will get elected for – but you can only distribute whats there and not more. And if the energy will be more and more expensive, if the debt-pump doesn’t work anymore – it will be harder and harder to consume the future ‘now’.

        But two points of you is very important – “Heinberg is an organization” – and “funding is keyed for solutions” – only in that context the difference in analysis offered by Gail and alikes like (the current) Heinberg can be explained – at least for my part.

        So for me it reads like Heinberg himself graps for the hopium, because he knows “that the party is over”. I can understand that on a personal level – since the other mindset can make you ‘kinda’ depressive….

        • Fast Eddy says:

          “The question for society as a whole that (in my opinion) has to be raised is how do we do the transition to less”

          I assume that by transition you mean to a way of living that is sparse — yet tolerable. Some sort of BAU Lite.

          The thing is…

          That is impossible — we will transition — from this techno society – to a very primitive society.

          There is no in between — the techno society is collapsing because we are out of cheap energy — as we can see the massive machine we refer to BAU that keeps the energy flowing is dying…

          We need finance and equipment and markets to get oil and coal and gas out of the ground — when all of that vapourizes — because the energy is too costly to extract — how can we possibly extract and refine oil and other energy sources to power this BAU Lite?

          Collapsing will not fix that formula…. it will not reset — everything — and I do mean everything that we take for granted — will end.

          One day the lights are on – the next they will go off — permanently.

          So the transition is to a world of darkness.. a world of cold… a world of starvation… a world of violence and disease… a world of total desperation ….

          That sort of situation will not be conducive to managing the 4000+ spend fuel ponds that are ticking away….

          This will not be an adventure as some have suggested — this is going to be hell on earth… it is going to be beyond your worst nightmare.

          Of that I am 100% certain.

          • Ert says:

            There is no in between — the techno society is collapsing because we are out of cheap energy — as we can see the massive machine we refer to BAU that keeps the energy flowing is dying…

            That’s what I assume will happen, too. But I think that it would be possible to ‘extend’ or ‘prolong’ the game via a BAU-‘light’ with reduced resource consumption and less people. Of course one has to devalue all pensions, all money (buying power), etc. pp in that process… and not prolong life of people artificially via intensive medicine.

            But I also see, that most would not do that willingly, because they can’t see the problems at all. Why? Because here is one of the very little places that ‘slow/fast collapse’ or ‘end of BAU’ issue is discussable at all.

            • Fast Eddy says:

              Not possible. Because it would mean the economy would shrink.

              If we shrink that means people are buying less — that means people get laid off – that means those people buy less — more layoffs — corporations collapse into bankruptcy because they are unable to service debts — that collapses the financial system.

            • Tim Groves says:

              We could make an analogy between human beings in society and the cells in an organism — either a human or some other animal or a plant — our society being a kind of super-organism and we individuals being its constituent cells. If or when the organism suffers from shortages of vital nutrients, it attempts to compensate, slowing its metabolic rate or not making needing repairs and renewals, etc. But there comes a time when the shortages of nutrients become too acute, vital organs fail either progressively catastrophically and then the organism sickens and eventually dies. Once the death of the organism takes place, the cells have no choice but to die too on short order, as the organism they constitute is also their own life support system.

            • Fast Eddy says:

              “and the cells in an organism ” cancer cells…

            • Stefeun says:

              Tim,
              A similar analogy:

              “1. Human Society as a Superorganism, with the Global Economy as its Digestive System
              A completely isolated human being would nd it as dif cult to survive for a long period of time as would an isolated ant or bee or termite. Therefore, it seems correct to regard human society as a superorganism. In the case of humans, the analog of the social insects’ nest is the enormous and complex material structure of civilization. It is, in fact, what we call the human economy. It consists of functioning factories, farms, homes, transportation links, water supplies, electrical networks, computer networks and much more. Almost all of the activities of modern humans take place through the medium of these external “exosomatic” parts of our social superorganism.*
              The economy associated with the human superorganism “eats” resources and free energy. It uses these inputs to produce local order, and finally excretes them as heat and waste. The process is closely analogous to food passing through the alimentary canal of an individual organism. The free energy and resources that are the inputs of our economy drive it just as food drives the processes of our body, but in both cases, waste products are finally excreted in a degraded form.”

              The paper is not fantastic, misses quite a lot of things ; nevertheless worth reading:
              http://www.cadmusjournal.org/files/pdfreprints/vol1issue4/Entropy_&_Economics_John_Avery.pdf

              Note footnote #23 is a post by Gail:
              https://ourfiniteworld.com/2011/11/30/thoughts-on-why-energy-use-and-co2-emissions-are-rising-as-fast-as-gdp/

            • OP says:

              “If we shrink that means people are buying less — that means people get laid off – that means those people buy less — more layoffs — corporations collapse into bankruptcy because they are unable to service debts — that collapses the financial system.”

              Not all consumption is by people. Only some 30% of the GO (Gross Output) are done by people. Factor in that in the brittle logic sequence of events of yours.

              Adjusted GO amounted to $39.0 trillion in 2015, and only $12.2 trillion of it is linked to personal consumption expenditures. That means that consumer spending makes up only 30% — not 70% — of the economy. As much as 60% of economic activity is business spending and investment. See the chart below comparing business and consumer spending.

              http://www.eagledailyinvestor.com/20288/consumer-spending-economy/

            • Fast Eddy says:

              At the end of the day ALL consumption is driven by the consumer.

              For example, the mining industry output under GDP is classifieds as industrial.

              If the consumer buys fewer cars what do you think will happen to the output of the mining industry?

              What do you think a mining company will do if the auto industry halves its orders of steel…. of course they will shut mines and lay off workers.

              When people consume less the repercussions reverberate through the entire economy.

              People seem not to understand what is a very simple concept.

              If the economy is growing then for the most part things are good.

              Can people remember what a recession looks like? It’s a time of fear — of losing one’s job…of not being able to put food on the table — of defaulting on the car and house payments… of being out on the street.

              A recession happens when growth stops. When people buy fewer goods and services

              If left unchecked a recession will quickly turn into an economic depression.

              If an economic depression cannot be reversed it will lead to collapse of the economy.

              Have a look at Venezuela to get an idea of what we are facing if the consumer no longer has the means to grow consumption.

              It all unravels — very quickly.

              To suggest that the consumer can reduce consumption without there being a massive impact on the economy …

              Is to demonstrate a total lack of understanding of economics.

              There is an upcoming seminar addressing what consumption looks like post fossil fuels…. the link was posted earlier… if you disagree with my comments you might want to sign up for that….

            • OP says:

              “At the end of the day ALL consumption is driven by the consumer.”
              Apparently only 30% of it is. The rest is business (60%) and government (10%).

              “If the consumer buys fewer cars what do you think will happen to the output of the mining industry? ”

              It is fully automated, it just throttles down a notch. Let’s say from 11 to 10.
              What does your coffee machine do when you are not home pressing it’s buttons?

              Please consider for a while the logical conclusion of fully automated systems, before sending us all on a deflationary death spiral “crash” course, so to speak. 🙂

              Have you recently been inside a modern manufacturing/mining/etc. operation?
              If you have, though, I doubt you do, is the first think that strikes you?
              Let me inform you, it is the absence of people – Workers.

            • Fast Eddy says:

              Yes in DelusiSTAN I suppose that is the way things work….. unfortunately I was turned down by the immigration department because my IQ is above 80….

            • ““At the end of the day ALL consumption is driven by the consumer.”
              Apparently only 30% of it is. The rest is business (60%) and government (10%).

              Why does a business consume? To produce.

              “If the consumer buys fewer cars what do you think will happen to the output of the mining industry?”
              It is fully automated, it just throttles down a notch. Let’s say from 11 to 10.
              What does your coffee machine do when you are not home pressing it’s buttons?

              How does the mine, once it throttles down a notch, continue to service its debts? How does it generate free cash flow to continue buying the energy inputs it needs to extract the ore?

              I think the idea is that declining consumption is a positive feedback loop. If not arrested, that mine will keep throttling back until it shuts down.

            • Fast Eddy says:

              I hope you are either trolling, taking the piss or trying to be funny…. because if you are serious about this I fear for your well-being….

              The Brexit seems to have thrown people off the deep end…. those reeling stock markets are clearly panicking people…. perhaps driving people towards the edge of insanity — towards a state of extreme irrationality … one where the robots step in to save us…

              Calm … calm…. this is not the end…. this is not 2008 on steroids… we are not there yet….

              Take a handful of Abilify and wash it down with some vodka…. and relax… see — it’s better already …

              And now you can see how silly that robot-run world is can’t you — hard to imagine that ten minutes ago you guys actually believed this was possible…. the perpetual motion machine existed in your minds — for a short time…

              But now that you have calmed down — and the Abilify kicks in — we can all laugh hahahahahaha — again — hahahahahahahahaha —- yes it was crazy wasn’t…

              But we are all better now…. everything is good now… we are feel’in groovy aren’t we!

              Now Doctor Fast needs to go …. Mrs Fast is ringing the dingaling bell calling me to dinner….

              Shall I have wine with dinner? Oh why not! Why wouldn’t I? I usually do my best work after a few chalices 🙂

            • Fast Eddy says:

              Yes I am very proud of my 87 score on the DelusiSTAN IQ test.

              Apparently Sarah Palin has the highest IQ in DelusiSTAN – a very impressive 79… she made it just in under the threshold…. and she was able to leverage that score to get elected Queen.

              http://www.resimbul.com/sonuc/bubbles/bubbles-quotes-trailer-park-boys/bubbles-quotes-trailer-park-boys-40db61.jpg

            • OP says:

              Now FE, you still haven’t answered the eternal question:
              Is there a viable BAU without your intellectual omnipotence alive and kickin’?

              http://s1.favim.com/orig/201109/14/coins-fun-game-game-over-gsayour-Favim.com-144415.jpg

            • OP says:

              Matthew,

              Staring blindly at consumer spending and worker salaries only gives so much information. There are clearly other dynamics driving the economy.

              I would say, the day investments in businesses dry up. That would indeed be more worrisome. imagine the ripple effect from building only one of these insanely expensive semiconductor factory, telecom networks, coal fired power plant, Tesla battery factory etc..

            • OP says:

              “And now you can see how silly that robot-run world is can’t you — hard to imagine that ten minutes ago you guys actually believed this was possible….”

              And yet – there it is, right in front of your myopic eyes, put on the glasses and have a cup of morning coffee, let the caffeine induced magic begin.

              For example: How many people do you think works in a modern Swedish hydro power plant? Any guesses? 😉

            • Fast Eddy says:

              How does it work?

              A neighbour of mine is a retired engineer — he was the big cheese in charge of the building of massive hydro electric and coal plants… he had teams of engineers and other people working under him on these projects…

              Many of these projects take many years to complete….

              The funny thing is that even though he is retired — his phone keeps ringing … his former company keeps begging him to step in to consult on these mega projects…. and like a loyal company man he jets off to where he is needed to provide expertise on how to get the project built.

              I don’t think he is overly keen on this because he wants to enjoy his retirement….

              The next time I see him I will suggest to him that when the phone rings next time he tell the CEO to instead call the robot ask the robot to fix the problem. I will also tell him to suggest to the CEO that he fire all the engineers on the team because they are no longer necessary – the robots will do their jobs.

              All the workers at the power plant can go as well — no need for maintenance and operational engineers — robots.

              Then I will suggest that he call the mines where all the materials for the plant are extracted — fire the engineers there as well and all the other workers — thanks gents – the robots will do everything.

              Likewise at the smelter —- of course everyone at the factories that make the turbines and thousands of other parts for the plant will be fired – robots can do the lot…

              And the supply chain can be completely operated by robots too —- no need for humans…

              I can imagine his reaction would be something like this …..

              https://i.ytimg.com/vi/IH8K0bPc-BE/hqdefault.jpg

              Then he ask me if he can come over to borrow some of what I am smoking…

              http://www.jarofquotes.com/img/quotes/11f22e8f218d0b549eeb51d4820b49d0.jpg

        • heinbergs problem—which almost no-one latches onto—is that he is ultimately a ”nice guy”., and i’ve pointed this out in comments on his writings before.

          unfortunatly this niceness colours his thinking on downsizing—he blanks out the fact that the majority of people are not going to be as nice as he is to his fellow man.

          Listen to how he puts stuff over in his lectures—basically that we will be content to live in a society where we all take in each other’s washing or repair each other’s bicycles.
          No mention of the fact that the slightest downturn in the economy produces instant unemployment, a big downturn produces economic chaos and violent insurrection.

          No matter says Heinberg–everybody can retrain—(see above for job vacancies)

          Heinberg is an intellectual—unfortunately he is in the minority.

          • Fast Eddy says:

            He will be one of the first to be yoked and marched into the field in Year Zero (ABAU)

          • Ghung says:

            What Heinberg refuses to admit is that the worst consequences are already baked in. It doesn’t do much good to quit smoking after you’ve been diagnosed with multiple cancers, cardio-vascular disease, emphysema, and you can’t afford any treatments.

          • Pintada says:

            Dear Norman Pagett;

            Good points.
            Pintada

      • MM says:

        The key point about your two referenced articles ist that they convey two opposite positions. If I were to randomly stumble over these on the internet, what should I thinlk? What is my conclusion? Both of them can not be true. I bet that is the core reason why societies collapse because the people get confusing views about the reality and the only solution to this dilemma is not to believe either and just keep living on as if there was nothing wrong.
        These opposite positions also tend to become ever more radical by the day, First we had AI will be there in 2100 now we see, it will be here in 5 years. The proposals for all renewables get more exaggerated by the day: all renewables is possible in 2030 not 2100 as proposed some 20 years ago.The only truth you might find is that climate science comes to grip to the fact that it is much faster than everybody anticipated. But even in these articles they can not refuse to say something like “if we do this in the next 10 years….” there will be no problem.
        Guys, when will we accept that all these doors are closed already. And even if we did, why not continue living as Fast Eddy does.
        So the possibility to avoid a desaster is nill, has been nill and will be nil.

        • Stefeun says:

          Yes MM,
          We should accept the fact that the doors are already closed anyway.

          Personally I don’t even see the point in prepping, in trying to survive this bottleneck. What for??
          Shouldn’t we accept the world as it is and as it goes, and focus on our present instead?
          If survival is to be dictated by our DNA, then let it be!
          DNA will take over when it’s its turn, and its reactions will then be likely very different of anything our rational brains had previously imagined (hence in vain).
          Enjoy your present time, and give up with this stupid illusion of control!

          • Fast Eddy says:

            +++++++++++++

            The only good prepping is prepping that involves a Turn Out the Lights Party.

            Now how can I ring the most of this BAU rag while it’s still wet. How can I realize more joy … more fun … more more more … before it all ends… I know — add a week to the July ski trip…. but even that is not enough — I want MORE MORE MORE!!! Time is short….

            I really need that private jet… when is Westpac going to call with the billion at 0.5%????

            They clearly do not understand the URGENCY of my situation…. they clearly do not recognize my personal commitment to doing whatever it takes to keep BAU humming along a little longer…. perhaps they do not believe I am committed to wasting that billion and coming back for more (more MORE) …. perhaps they believe someone else is more deserving ….

            I aspire to be the most wasteful person on this planet — just give me a chance… give me that first billion and I will prove myself!

            http://blogs.perficient.com/perficientdigital/files/2015/11/One-Billion.jpg

            I am working on the play list for the Blue Door End of World Party …. I am thinking this might be the final song played — if necessary we will use the battery pack and turn it up very loud…

            Then I will pass out the purple kool aid….

          • OP says:

            “If survival is to be dictated by our DNA, then let it be!”

            Using the word “DNA” is just a metaphor of determinism – the rejection of free will.
            BAU or not, collapse or not. The same question still arises for any moderately intellectual individual.

            I’m asking, what difference will “collapse” make? For all intents and purposes, you could be dead by tomorrow, old age, accidents, diseases, make your pick. Which is the same as if collapse would happen. Ultimately you cease to be.

            Just ignore the cheap snake oil hedonism and instead make your own way. It is a bit tacky and boring to tell the truth.

            If you are going down, do it in style.
            http://www.jack-donovan.com/axis/wp-content/uploads/2015/11/Mishima-Tribute-2015.jpg

            • Stefeun says:

              OP,
              I’m not sure that by “DNA” I meant “determinism”.
              Rather the limbic brain, which takes control over our rational neocortex when the urgency of the situation requires it.

              As for my own end of life, don’t worry, I already have (got) my plan and it’s fortunately much better than anything I could have tried to implement by myself: incurable sickness. I’m therefore very serene about myself, and can focus on really interesting things, as well as -try to- enjoy the present time with relatives and close acquaintances ; and not waste time in pointless fight against the ineluctable.

            • OP says:

              Well, we all have this incurable sickness programmed into us. It is called aging.

              As for timeless ever lasting joys. Well, apart for first having enough health to appreciate them. It must be the one of intellectual pursuits. One of the reasons we are all here posting and reading is because of our curiosity and courage of challenging our beliefs?

        • Pintada says:

          Dear MM and Stefeun;

          We are all three on the same page here – quite a nice feeling to be agreed with …

          I occasionally ask myself what I would do if I were to receive a large sum of money from the blue. Maybe I could win the lottery. When I daydream about spending a large sum of money, I always imagine doing more/bigger/better of what I am doing now. I truly love gardening, and working on my little homestead. If I had a billion dollars, it would look more like Ted Turners place ( http://vermejoparkranch.com ), but I would still be gardening on a bigger scale. (His house is too big, IMO.)

          I think at this late date, if you cannot do that, you are wasting your time. I pity the poor fool that is doing a job he hates to build some sort of future since, of course, there will be no future beyond a few months/years.

          Yours in the Present,
          Pintada

      • Tango Oscar says:

        Bob Scribbler is insane and lives in a 100% cognitive dissonance induced reality. I tried posting some nice, informative information a few times on his comments section which clearly refuted his unending positivity about renewables and he simply bans the posts or deletes them.

      • The “Post Carbon Institute” – from its very name–is trying to make the point that we can make it without fossil fuels.

        Heinberg’s writing has to align with that goal.

        • i thought it was just me

          Thanks for reassuring me about Heinbergs writin/lectures—just goes on and on repeating the same stuff—with the rest of us screaming —“it won’t bloody work”

  6. Stilgar Wilcox says:

    http://www.zerohedge.com/news/2016-06-22/something-strange-emerges-when-looking-behind-brexit-bookie-odds

    Those betting on ‘No Brexit’ average 450 pounds sterling and those betting on ‘Brexit’ avg. 75 pounds, therefore there will be ‘No Brexit’, because the wealthy get the advance information. Same on stocks, real estate, everything where big money goes to make more money.

    • Stilgar Wilcox says:

      Just so it’s not misread that my previous post was unrelated to peak oil, it was posted because surplus energy along with other factors led to globalization. A sign of net energy decline would be any move away from globalization, which would be the case (in my opinion) if Britain exits the European Union.

    • wratfink says:

      Isn’t this a non-binding referendum ?

      When the referendum in Greece was held, the parliament nixed the idea. I’m assuming that even if it passes, the City will have Parliament approve the outcome THEY wish to have.

      Voting…how quaint…

    • Yoshua says:

      The coal mines are stripped and the oil wells are depleted in Great Britain. A Brexit would cut off Britain from the European market. Despite the imperfection of Europe it might feel safer to sink together with the rest of Europe, than to sink alone.

      But then again, Great Britain could turn to trade with the rest of the world without any restrictions from Brussels.

      So… how to vote ? How about just roll the dice ?

      • ” A Brexit would cut off Britain from the European market.”

        You think a “Leave” vote would result in 100 percent of all trade being completely shut down? somehow, I think the Bremainers are dramatically exaggerating the consequences. Europe does business with their mortal enemies, the Russians. Most of the dire warnings against Brexit seem to be based on the idea that coming to new agreements is entirely impossible.

        • Yoshua says:

          Sure. I went off the cliff there. GB is not part of the Eurozone or the Schengen zone either today. And not all European nations are part of the EU, but still trades with the EU.

    • MM says:

      There will be no Brexit because the majority of people hates change. They want BAU as long as possible. Think if you had children and your labour situation might be at risk. No way. There wil be neither socialisem or brexit or what have you ever,

      • Tim Groves says:

        Famous last words?

        The BBC has just informed me that “Leave” has won.
        And very possibly because the majority of people hate change.

        • Fast Eddy says:

          And BAU rumbled on …. because there is no way in hell the ‘people’ will be allowed to kick over this apple cart

          • Tim Groves says:

            II wonder if George Soros is laughing? Did he and the rest of the financial elite warn the voters to back Remain or else, while at the same time were secretly betting on a Leave victory forcing down the pound and the stock market?

            And did they encourage rumours that the vote was going to be rigged one way while they surreptitiously rigged it the other?

            All that value wiped off Sterling and off the world’s stock markets in the wake of the result, some of disappeared down a black hole created by a change of “sentiment”, but a fair chunk of it may have ended up in the pockets of savvy speculators. A vote like this would have been a golden opportunity for people in the know.

  7. psile says:

    Climate Catastrophe Will Hit Tropics Around 2020, Rest Of World Around 2047, Study Says

    The first study to integrate all prior scientific research in order to project approximately when climate change will produce permanent catastrophic consequences has been accepted and will soon be published in the scientific journal Nature, and it finds that things will start going haywire in the tropics at around the year 2020, and in our part of the world at around 2047.

    Nature shares with Science and PNAS (Proceedings of the National Academy of Sciences) the distinction of being tied as the world’s three most prestigious scientific journals, and an article is not published in these journals unless it has undergone extremely rigorous scientific peer-revue…

    http://cliparts.co/cliparts/Aib/Koo/AibKoo7rT.png

    • Thomas John Irwin says:

      I am anxious to read that article. let me know when it’s available. It seems odd to me that the tropics get hit first when you get higher than normal temperatures the further you get from the equator.

    • Pintada says:

      Dear Thomas John Irwin;

      The article is available now:
      http://www.soc.hawaii.edu/mora/PublicationsCopyRighted/Mora%20038.pdf

      This is the answer to Mr. Irwin’s question from the article:
      “We also found that the tropics will experience the earliest emer- gence of historically unprecedented climates (Fig. 2a, b). This prob- ably occurs because the relatively small natural climate variability in this region of the world generates narrow climate bounds that can be easily surpassed by relatively small climate changes. However, small but fast changes in the climate could induce considerable biological responses in the tropics, because species there are probably adapted to narrow climate bounds5,33–35. This is a prime explanation for the decline in the range sizes of species towards lower latitudes (Rapoport’s rule): having narrower tolerances, tropical species are largely restricted to the tropics; in comparison, the broader physiological tolerances of temper- ate species allow them to survive across a broader latitudinal span33. Furthermore, empirical and theoretical studies in corals5,36,37, terrestrial ectotherms34 and plants and insects35 show that tropical species live in areas with climates near their physiological tolerances and are therefore vulnerable to relatively small climate changes.”

      Enjoy,
      Pintada

    • Tango Oscar says:

      2020 might be a realistic extinction date for humanity from climate change. By 2047 we will be long gone. There are already extreme weather events happening everywhere.

      • Rodster says:

        What makes you so sure we’ll all be gone by 2047? Guy McPherson says we’re off this planet by 2030. This is a slow train wreck in the making or to quote a former White House official a “slow burn”.

        • Global dimming seems to be tied to the recent lull in the rise in temperature, according to this recent article. http://www.carbonbrief.org/aerosol-emissions-key-to-the-surface-warming-slowdown-study-says The big increase in growth of emissions in the period studied (1998 to 2012) comes from China (big surprise given the time period!!).
          trend in concentration of aerosol emissions

          Let’s all guess what happens as China’s coal emissions decline.

        • What makes the situation scarier is a recent article on the effect of global dimming. It says that the reason that the advance in temperatures slowed is an increased in aerosol emissions during the period studied (1998 – 2012). These came primarily from China, and its coal usage–big surprise.
          aerosol emissions changes

          Any guesses as to what happens with peak coal in China? Could it already be happening?

          • Tango Oscar says:

            Excellent to see you posting information on global dimming! I believe that not a lot of people have learned about what this does or how it interacts with the global economy; Judging by the colors on that map I’d say we’re in a global depression outside of China.

            I think that the theory of global dimming has not been added or subtracted to many predictions for how the climate will change in the not too distant future. I tend to favor the more extreme situations where a dying global economy heats the planet up much faster than current guesses. Most people think that less fossil fuels burned today equals a cleaner more stable environment today when in fact that probably isn’t true and can’t be accurately determined. Ironically it might be the exact opposite.

            • Ert says:

              Global dimming is one of the “love stories” of McPherson (which I listen to, but take with a grain of salt) – he always mentions that… aka even if we would kill industrial civilization tomorrow, then the effects of the missing global dimming would put us over the edge immediately.

              “You are dammed if you do – you are dammed if you don’t…”

            • Tango Oscar says:

              We would probably be extinct anyhow even if you disregard global dimming. The CO2 in the atmosphere is from activity that occurred a decade ago. Our extinction and a temperature rise well beyond our ability to survive are already baked in. The economy is collapsing and temperatures continue to break records month after month. We appear to have set forward an unstoppable force. The recent high temperatures in the Arctic and Greenland combined with a CO2 level that almost hit 410 PPM in April should be enough to horrify anyone who is paying attention.

            • Ert says:

              “We would probably be extinct anyhow even if you disregard global dimming. The CO2 in the atmosphere is from activity that occurred a decade ago. “

              Oh no – I’m totally aware of all what is going on with Beckwith, McPherson, Wasdell, Hansen and a frequent listener of Radio Ecoshock, etc. pp. So I’m on the top regarding the possible doom scenarios regarding climate – and fully discount them.

              I 100% absolutely believe that within my lifetime we have a blue ocean in the arctic (approx. 2020) and then hell breaks loose, as people fully disregard the buffering capacity if ice. When the first global synchronized bad harvests are hitting – the game is basically over. Mass migration, starvation, desperation, wars, etc. and the like. You can’t print food…. or change the “food rules” – if it is not there – its not there.

              When I see how much food – even the basic staples like grains, onions and potatoes – come from around the world – its mindblowing!

            • Tango Oscar says:

              Remember that an ice free Arctic is only a symbol. The unstoppable methane nightmare has already been unleashed.

          • Tim Groves says:

            We experience “global dimming” here in Japan when the wind is blowing from China — and it can be quite severe in the late winter and early springtime. Depending on what the jet stream is doing, we are on the edge of “the Great Asian Brown Cloud”. My personal rule of thumb estimate that on days when the pollution is bad, the maximum temperature is up to 5 degrees C cooler than it otherwise would have been if the skies had been clear.

            The pollution includes sand from the Gobi Desert and dust from soil erosion in Northern China, as well as tiny particles of soot, etc. (collectively known as PM 2.5), from factories, coal-fired power stations, automobile exhausts in China as well as — and this is a biggie — burning of forests, agricultural waste in fields, and biomass including wood, charcoal, bamboo and cow dung for cooking and heating in winter in China, parts of Southeast Asia and as far afield as India.

            Come the end of BAU, burning of biomass is bound to increase, at least temporarily, as billions of people in the region struggle to survive without access to fossil fuels or electricity. By the time that happens, “global dimming” will be well down on their list of concerns or ours.

        • Tango Oscar says:

          There’s wildly varying scientific opinions, many of them extremely conservative in their estimates, on how severely and how soon abrupt climate change will do us in (and varying opinion on what specific criteria, like temperature fluctuations, reach that threshold). Research exists if you want to read it and extrapolate.

          Look at the current rate of CO2 growth rate. It was just recently growing between .7 to 2 PPM increase per year. Right now we’re hovering around a 5 PPM increase. So it basically just doubled in a year. If that happens just a few more times we would blow beyond 450 PPM in the next 4 years!

          CO2 showing up in our atmosphere now is likely from human activity 10 years ago. When the CO2 level was last at 415 PPM the oceans were 15 to 130 feet higher and temperatures were higher than 2C above baseline. In sum, there will be no habitat that is capable of supporting human food sources. Evolution trails this pace of climate change by a ratio of 10,000.

      • psile says:

        Nah. Humans will still be around in 2050, although most of them will probably wish they weren’t…

        • 2020 won’t be our extinction date, more the date people will look back as a tipping date—–much as we look back on 1914 as a tipping date for the wars of the 20th c. in 1914 nobody could guess the outcome of ww1—or that it would spawn ww2 and kill off 100m people one way or another

          personally i put the tipping year at 2022—though dont come complaining on here on jan 2nd 2022 if nothing has happened

          why2022?
          several reasons.—any or all of which might be nonsense—in no particular order of importance, all these points hinge on the universal law of politics, that leaders do irrational things rather than face failure and collapse and the wrath of the proletariat.
          (doubters–check your history books):

          1 You have a bigger lunatic than usual after the POTUS job, with millions of equally crazy folks willing to vote for him and his equally crazy promises to make America great again. It ain’t gonna happen but those gullible people are armed and dangerous—particularly bad tempered when promises are not met about jobs and prosperity.
          I’m guessing Clinton this time–who won’t be able to deliver either, for reasons beyond her control.
          So come 2020, Clinton will be out—and you’ll get a Trump-type on steroids, and I’m guessing a godbotherer of the worst kind, blaming anything and everyone and a lack of prayer for the nation’s malaise.
          As the nation spirals into economic decline, there will be violent unrest. This will lead to the POTUS taking “emergency measures”. The military will have no choice but to support him, and suddenly you have a theocratic dictatorship.
          It will take 2 years after the 2020 election for the realisation to dawn–that things are not going to get any better—only worse. By 2022, the Trumpcrazies are going to be even more unhinged..

          2. The Saudi energy princeling said “if” we have no oil by 2020–“we can do without oil”
          this will be disbelieved of course, but it’s the first time “if” has been used.
          Saudi needs 3m barrels of oil a day (out of 10m) to keep its people alive (literally). When the oil stops, (or more accurately their EROEI on it) they stop breathing. So as their 10m barrels squeezes down towards that 3 m, the saudis will have the truth forced upon them, that they have no future. It will take a year or two after 2020—give it 2..3 years—we arrive at 2022 again.
          Then their godcrazy society will implode—and another oilcard goes down in riot and mayhem and denial. Then the middle east ignites in a bigger conflagration. (leaders go irrational again).

          3 China more than anyone, has based its wellbeing on the notion of insane infinite growth, without troubling themselves with the use of an abacus.
          Rather than write all that out again, I set it all out here for anyone interested
          https://collapseofindustrialcivilization.com/2015/07/29/and-you-thought-greece-had-a-problem/
          When it’s SHTF time in China–its leaders will find employment for its unemployable young men,by finding a war for them to fight to take their mind off immediate problems. China will last a few more years–a destabilised saudi will reflect in China and act as a trigger point.

          4 Russia will follow much the same path as China. Already Putin is sabre rattling, in response to his tottering oil dependent economy. With a destabilised Saudi and USA by 2022, they will go the same way and use war as an excuse for overall privation.

          • Fast Eddy says:

            2022 would be a fantastic result! I’ll even take 2020.

            However I am still leaning towards a near term deflationary collapse scenario …. if corporate profits continue to slide there must be layoffs… which of course means less consumption and so on….,

            I read Orlov’s article… so interest rates go NIRP… so I will go down to Westpac and they will say Fast — we are going to loan you $5M — go out and splurge — you never have to pay it back — you don’t even have to pay the interest on that money — in fact we will pay you 0.5% on that money every year guaranteed for 30 years….

            This smells like at attempt at a perpetual economic motion machine — I fail to see how we kick the can by paying people to take out loans….

            But hey — it’s already started — and the central banks are NOT fools…. they are not stupid. They will have thought this out….

            Then again — the level of desperation is extreme now — so perhaps they expect this to explode the system — but they feel they have no options left….

          • psile says:

            “When God hath ordained a creature to die in a particular place, He causeth that creature’s wants to direct him to that place.”

            Sayings of Arrakis (Dune)

          • Ert says:

            Kinda matches with my perception…. I always say that I hope that Europe will be half-way stable/surviveable up to 2025, having a good life up to 2020.

            The disintegration is becoming more clear every day – and the only one which really prolonged the game since 2008 was China. If China “fails” then its done… big chain reaction.

            This is especially true for Germany, with 75% exports of all the manufactured (luxury) cars. If the car market shrinks or fails – Germany is toast. Everything is coupled to the automobile sector. Even if companies have other sectors as customer… the automotive sector is to big to choke when it fails….

            The migration issue is another big whammy for the EU. Won’t go into details here…

  8. Yoshua says:

    Russia’s exports are down to levels last seen in 2008. Russia’s main exports were: fuels and energy products 63 percent of total shipments.

    http://cdn.tradingeconomics.com/charts/russia-exports.png?s=rutbex&v=201606161815n&d1=20060101&d2=20161231

  9. Christian says:

    Many european countries elites are planning for a “ban” on (sometimes only old) diesel cars, or for completely banning cars (excepting electric ones, which they would use themselves)… They usually mention 2025 as a deadline. Not sure they truly belive there will still be a world, but it seems they still have hope (mostly for themselves)

    • xabier says:

      I look forward to saluting the politicians and mafia bosses as they glide past in their silent electric vehicles.

      They might even wave, as the dear Queen of England now does…..

      This is magical thinking as Greer would say: talk about the wonderful future, and it will happen!

    • Ert says:

      I makes sense in a context to push for more infrastructure- and development spending – aka “growth”, “growth”, “growth”.

      I don’t think that anyone thinks that this is possible – maybe the politicans which can’t calculate the numbers… but behind them is lots of staff that isn’t that stupid. Its even implausible to get / build the manufacturing capacities for the batteries required, since even Teslas MegaFactory – which may double world-output – only produces batteries for 500.000 cars a years.

      For Volkswagen’s current (global) car production – they had to build 20 Gigafactories alone…. and the corresponding mines for the required resources!

      But hey – there are still 9 years left!

  10. psile says:

    California In Power Grid Emergency: “All Customers Should Expect 14 Days Without Power”

    The entire Los Angeles metropolitan area and most of Southern California can expect blackouts this summer.

    The power grid is under direct threat as a result of the unprecedented, but little reported, massive natural gas leaks at Alisco Canyon that was ongoing for four months as an intense summer heat wave sets in.

    http://imageserve.babycenter.com/18/000/221/40jYSPYxiAZiceuEgZa1Adpl5Rn25I35_lg.jpg

  11. Pingback: China: Is Peak Coal Part Of Its Problem? * LC News

  12. Stilgar Wilcox says:

    Go to 21:49 in that video and the CEO speaking says, “In the future we will be using I.A. to help the humans that will remain in charge.” When he says the latter part of that sentence you’ll see a lot of negative body language by the moderator and the audience. It’s called fear, because they realize the development of A.I. leads to their obsolescence.

    • Stilgar Wilcox says:

      Just following the above statement is followed by another scarier one, “I see some frightening shake ups in the population.”

      What’s happening is technology is evolving much, much faster than human evolution and it is in the process of passing us. Those developing this are engineering replacements for most people. How the system pays for itself without as many consumers is a good question.

      • OP says:

        We are ultimately automatons for the elite.
        Workers and consumers for the capital.

        They want to live large with no strings attached.
        Just as I, just as you, just as Fast Eddy want! 😉
        Just as the citizens of Isaac Asimov’s “Solaria”

        I want to experience where this rabbit hole leads.
        How hard the hammer will hit the anvil when push comes to shove.

        • Fast Eddy says:

          We’ll miss out on being able to see what is going on beyond the initial stages (hammer on anvil stages) because communication will cease when the power goes out.

          No TeeVee – no internet – no newspaper. Nothing. From 100 to 0 in the blink of an eye.

          Then things get very local — as in right outside your door…. you’ll be completely cut off from what is happening even a few miles away…. this will be the time when you hunker down in the dark waiting to see what happens next — to see who walks up the driveway…

          This will be the time of fear and uncertainty…. realization that the only food you can get is what is in the cupboard…. or what’s ready in the garden …. no heat… no AC… no phone.. no police….

          This will be the time when Mr DNA begins to panic… he will sense that his survival is threatened… the veneer of cordiality that most people present —because they have ‘enough’ to keep Mr DNA relaxed… will be stripped off at this point — Mr DNA will step up — he will force you to act out of desperation — to do things that you could not imagine doing only a few hours before…. you will be willing to kill – to steal food — ‘whatever it takes’ to satisfy Mr DNA….

          Prepper Tip of the Day: buy caffeine pills – speed — meth – amphetamine ‘whatever it takes’ to keep your night watch awake. They will be coming….

          Prepper Tip of the Day 2: if you must burn a candle or turn on a flashlight at night — make sure all windows are blacked out by taping paper onto them —clothes curtains tightly – like moths to the light…They will be coming.

          Prepper Tip of the Day 3: never use the fire place in the day time — keep warm by wearing more clothes — smoke means warmth and maybe food —- They will be coming….

          Fortunately this state of affairs won’t last too long — you will run out of food — but also the spent fuel ponds will likely explode and start to poison the planet…. the radiation poisoning should start within a month — the cancer epidemic not long after….

          Oh did I mention that I have another book recommendation http://www.goodreads.com/book/show/23995336-the-tsar-of-love-and-techno I am not finished it but so far it lives up to the reviews. Add it to your post Doomsday Must Read list.

      • OP says:

        Lights out manufacturing:

        Fanuc, a brand of industrial robots – manufactures the product, industrial robots, using factories automated with the same robots they sell, and with no humans in the production line.

        https://en.wikipedia.org/wiki/Lights_out_(manufacturing)

        I saw one of these in an Industrial automation fair. Impressive to watch the robot throw a car chassis about as if it were made of cardboard.

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

        Later on I headed off for some robot fun.

        https://www.youtube.com/watch?v=bxbjZiKAZP4

        😉

        • doomphd says:

          the robot strategy is basically “beggar thy neighbor”. the automating company assumes the buyers of its products have good paying jobs elsewhere in the marketplace. of course, when enough automation and offshoring of jobs to cheaper paying countries takes place, demand shrinks, sales and commodity prices drop, and deflation is king, like what we’re presently witnessing.

          • daddio7 says:

            Businesses convert to robots to remain competitive. I worked at a potato packing plant where bulk potatoes are measured into 5 lb bags. The old system used 16 hoppers hanging from clock face spring scales. The hoppers where mounted on a chain that circulated around. Two people hung individual bags as the hopper went past. One person controlled the machine and helped direct potatoes off a belt to fill each bag. When the weight pulled the suspended hopper down enough the fill chute popped up so no more potatoes would go in. This was an approximate weight so two more people would look at the scale and add or remove a potato to get the correct weight. A final person grabbed the full bag and ran it through a closing device that clamped a wire staple around the neck. The machine had a speed control and was usually ran at 50 bags a minute. Accuracy was +5%, most bags had 5 lb 4 oz.

            The new Volm automatic bagger used 12 hoppers mounted on load cells. A computer controlled the fill lanes and dump gate. The computer calculated the best combination of hoppers to make 5 lb and then dumped them into a bag. A grab arm pulled the filled bag through a closing device. Again at 50 bags a minute. One person monitored the machine and hung collated bags 100 at a time. Only one person was needed but more importunately the computer controlled machine did not over fill the bags, saving 2000 lb of potatoes on every load. We ran three machines and did 10 loads a day. We paid $.40 a pound for new red potatoes. This saved $1200 a day in labor and $8000 a day in product. Even at $250,000 each it didn’t take long to pay for those machines.

            Before you say the owner was making a killing our competition did the same thing so they could sell their product cheaper and still make a profit so we had to lower our prices. In business you have to run twice as fast to stay in the same place.

        • Thomas John Irwin says:

          How much electricity does it take to have robots make robots. My guess is that it costs more than my lunch.

          • OP says:

            Well, much, much, much less than running and maintaining humans, with their associated petty little lives engulfed in banalities and superficialities, eventually getting off and on their asses from home in their Priuses and starting making robots. Thats 10000% sure.

            • Thomas John Irwin says:

              Some numbers for comparison would be nice. I try to stay under 2500 kcals per day with maybe 3 kw of electricity thrown in. Transport is mostly shoe leather express but I may use a public diesel bus 2-3 times per week. I think I pound robots to dust from an energy standpoint. I also don’t think you can program one to know what I have in my head and use that information in novel and creative ways.

            • ” I also don’t think you can program one to know what I have in my head and use that information in novel and creative ways.”

              Yet. We’re a few years away from synthetic general intelligence, but it seems unlikely we’ll make it there.

            • you could be a cereal killer

              we don’t want robots programmed that way—look what happened with terminator

            • Thomas John Irwin says:

              I am sorry, I can’t help it. I have always loved Cherrios. I am guilty of not just cereal killing but cereal eating. Something like 3 times a day of such comsumption. Cerealously.

            • “Something like 3 times a day of such comsumption. Cerealously.”

              Great recipe for becoming malnourished, eating the same thing thrice a day, particularly something like Cheerios.

            • lets hope your EROEI makes a good return on the cereal harvest

          • Do you mean all parts of the chain? Getting the coal out of the ground, and transported to the electrical generating unit, for example? I expect robots can’t do it. Their role is rather minor at the end of the chain.

          • “How much electricity does it take to have robots make robots. My guess is that it costs more than my lunch.”

            If your lunch costs $1 and electricity is $0.10 per KwH, if the robot runs on 1 Kw, it can run for 10 hours for the price of your lunch.

            • running robots is not the same as making robots

              but im just bein picky

            • “running robots is not the same as making robots”

              I guess it depends on whether the original person was comparing the costs of employing a human to make robots, versus a robot to make robots, or the whole chain of using robots at all. Then the question is, how far back do you go? How much automation do you consider “robot”? All the way back to the conveyor belt?

            • Fast Eddy says:

              On the positive side of the ledger — it is 7am — the internet is still functioning… so it looks like we will get another day of BAU

              On the negative side — we are looking at the end of the world – a situation where there will be no way to even buy a toothbrush — and here I am looking at comments suggesting there will be robots…

              Would the world be like … full of Terminators…. would we like be fighting them …. sounds cool!

            • Stefeun says:

              FE,
              Rob Newman, comedian known for his “History of Oil” (you posted his video a couple of months ago), has an opinion about robots, wether they can be ethical or not:
              https://philosophynow.org/issues/110/Can_Robots_Be_Ethical

              BTW, I also link, from his blog, an older post, sort of making-of the History of Oil:
              http://www.robnewman.com/greenguide.html

            • Stefeun says:

              FE,
              Robert Newman, comedian known for his “History of Oil” (you posted his video a couple of months ago), also has an opinion about robots, namely wether they can be ethical or not; of course not:
              https://philosophynow.org/issues/110/Can_Robots_Be_Ethical

              BTW, here’s a link to an older post from his blog, sort of making-of the History of Oil:
              http://www.robnewman.com/greenguide.html

            • Thomas John Irwin says:

              Well, that is a number I suppose. Which orifice did you pull it from? My old vacuum cleaner pulls 1000 watts and it can only suck up dust. I have reduced my carbon footprint by using a broom and a wet mop. Of course, my waste heat is on the order of 100 watts so basically .2 kwh.

            • “Well, that is a number I suppose. Which orifice did you pull it from? My old vacuum cleaner pulls 1000 watts and it can only suck up dust. ”

              Well, Baxter uses a max of 720 watts: http://www.rethinkrobotics.com/baxter/tech-specs/

              “I have reduced my carbon footprint by using a broom and a wet mop. Of course, my waste heat is on the order of 100 watts so basically .2 kwh.”

              Yes, assuming a robot is a few times less efficient than a human seemed a good basis point. Keep in mind the amount of energy (hydrocarbons) that goes into growing your food; your 100 watts of body heat costs probably the same amount of fossil fuels as 1 Kw of electricity, unless it is hand grown in a garden.

        • James says:

          Humans are at the pinnacle of the ecological pyramid. From that pyramid comes a second technological/civilizational pyramid whose broad base rests upon the tip of the ecological pyramid. Robots rest upon the pinnacle of civilization, one pyramid stacked upon another. The growth of the technological pyramid is collapsing the base pyramid of life. Technological civilization cannot exist without the humans that are dependent upon the base pyramid of organic life. The more the technological system grows and puts humans at risk ( the essential information reader and tool maker in the technological system) the more it puts itself at risk. If the technological system, at some point, were to replace the human RNA with machine RNA, then the biological pyramid could be collapsed and a new techno-system could evolve through the same mechanisms as did the ecosystem. Predation, competition, warfare. The engineers have that sweet Jesus dopamine/opioid smile on their faces like they’re headed for some kind of nirvana, but as in so many cases they know not what they do. Just give that robot a hand like a human hand and put some electronic dopamine in their chips and then see what happens. AI its the wave of the future and lambs will lay down with lions.

        • xabier says:

          Interesting picture of advanced technology, and a degraded and trivial human being.

          If we have evolved into mere adult children, it is Time to Go……

    • Good point!

  13. Fast Eddy says:

    http://wolfstreet.com/2016/06/21/ny-fed-warns-government-insured-subprime-mortgages/

    Warns???? Um…. after seeing what happened the last time this happened – they are warning?

    Of course the Fed green-lighted this stuff — they not only allow it to happen — they mandate it.

    And then they warn… to give the appearance that they are an innocent bystander… the banksters get the pitchforks… truly hilarious

    When the magician runs out of new tricks — reach into the bag for an old one…. desperation at its finest

  14. Pingback: China: Is Peak Coal Part of its Problem? – Enjeux énergies et environnement

  15. Yoshua says:

    The depletion of our coal reserves has left us with harder to extract, more expensive to extract and lower quality coal to extract. Peak Coal takes place when the economy is at its highest point and is as energy intensive as ever.

    • Yoshua says:

      At some point the central banks will lose control over the markets and then the markets will self correct.

      The central banks are now fighting against this self correction, or price deflation, through QE’s and NIRP by pumping in trillions of dollars into the markets to inflate the stock markets, to keep over indebted companies that no longer can’t make a profit from defaulting and over indebted governments from collapsing.

      The governments and central banks know of course that a self correction of the markets, where the markets try to find a new equilibrium, would suck in the global economy into a black hole.

      • Fast Eddy says:

        Meanwhile they are also fighting to keep the oil industry alive …. knowing that prices cannot be anywhere near the break-even point of $100+ without tipping the cart over.

        This has to be the most complicated game of chess ever played…. I can imagine a war room of PHDs working round the clock…. this is the lunar landing + Manhattan Project + WW2 x 1,000,000,000. Survival is at stake. Extinction is looming over the heads of those people…. they understand that they and their families die when they fail.

        Imagine the intensity … the laser focus…. the desperation ….

        A typical conversation: hey Jane what do you think about these numbers …. well Bob…. I think they are pretty bad …. what do you think we should do …. I think it’s time to re-introduce the subprime mortgage — I agree – let me get Wells Fargo on the phone….yes you do that….

    • I agree! We started with coal, and when it gives out, it looks like the game soon will be over.

  16. MG says:

    In the comments to the previous post, I have written something about the slavery as the temporary solution to energy deficits.

    The interesting fact is that the etymology of the word “robot” reflects the forced nature of the work. The robots are in fact the replacements of slaves or serfs:

    “Etymology of robot

    The word robot comes from the word robota meaning “drudgery”, “forced labor” in literary Czech and “work”, “labor” in literary Slovak.
    While Karel Čapek is frequently stated to have been the originator of the word, he wrote a short letter in reference to the Oxford English Dictionary etymology in which he named his brother, painter and writer Josef Čapek as its true inventor. [1] In an article in the Czech journal Lidové noviny in 1930, he also explains that he originally wanted to call the creature dělňas (a substantive derived from the Czech verb dělat- to work, to do).
    However, Josef did not like dělňas and advised Karel, who was writing the play R.U.R. in Trenčianske Teplice in Slovakia, to use a word from the local Slovak language, in which “work” is robota, (as it is also known in the Czech language). The origin of both the Czech and the Slovak word is the Old Church Slavonic rabota “servitude”, which in turn comes from the Indo-European root *orbh-. Robot is cognate with the German word arbeiter (worker).”

    Source: http://www.worldwizzy.com/library/Karel_%C4%8Capek

    The increasing number of robots is just the sign that the human population is faced with unsurmountable obstacles, deteriorates or lacks enough appropriate human workforce for solving increasingly hard and complex problems. Without the cheap energy, the human population can neither grow, nor be sustainable.

    • OP says:

      “The increasing number of robots is just the sign that the human population is faced with unsurmountable obstacles, deteriorates or lacks enough appropriate human workforce for solving increasingly hard and complex problems. Without the cheap energy, the human population can neither grow, nor be sustainable.”

      The increasing numbers of computers connected to machinery (robots/automtion), it is a sign of increasing productivity, efficiency and quality. Nice stuff indeed.

      The realization that the regular corpo-drone slackployee is becoming the manifestation of massive economic interventions is indeed liberating and also sickening for workers actually doing something of value to keep the Beast churning out real economic growth.

      With or without cheap energy, the human population and life on earth is unsustainable. At any moment, it is inevitable to eventually happen, a large comet will strike earth and vaporize a large piece of the crust blasting it to space while sending shockwaves of such a magnitude that it makes tsunami-waves of the continental plates themselves.

      If this were not to happen, the thermodynamics will get us all eventually. The universe and our solar system will end as a pitch-black vast void of nothingness.

      If you don’t like the game, stop playing it:

      http://www.demotivation.us/media/demotivators/demotivation.us_The-Cure-For-all-diseases.jpg

      • Fast Eddy says:

        That is a magnificent use of imagery!

      • MG says:

        Well, the comming of computers and the automation of the intellectual work makes many managerial jobs superfluous, too, i.e. not only low-qualified jobs are endangered, but also high-qualified jobs.

        The truth is, that we are faced with huge numbers of superfluous people on various levels of the population. The production of goods and services is more and more automated. The robots become much more reliable partners to people than other people can be…

        The increasing integration of machines into the population prevents its immediate collapse. The machines and technology are the only way to sustain the life of human species.

        • OP says:

          Yes, among the regular corpo-drones are the imminently superfluous managers. The office-bound TPS-report banality shuffling middle class will feel the squeeze the hardest.

          There is no fundamental reason to assume that this system can not be completely self-sustainable.

          The elite reap the benefits.

          http://wiki.secretgeek.net/Image/3d_printer_factory.jpg

          • Fast Eddy says:

            Finally! A perpetual economic motion machine!

            I assume the ink also self-replicates…. that would be great — because we could just print infinite money and all our troubles would be solved….

            • machine says:

              The feed material is produced in a lights-out factory across the street.
              All it needs is electricity and raw materials.
              Humans – not so much.

            • ejhr2015 says:

              Your hopes are realised! Ben Bernanke and Alan Greenspan tell us we can never run out of money. Of course you need the debts first.

            • machine says:

              Let’s call this system the “coffee machine” of the elites.
              Just to make it easier to comprehend for the intellectually challenged.

            • in holland and elsewhere—they’re introducing schemes where money is just handed out irrespective of work done

              my ultimate idea is to print money on rolls and put them in public toillets—you then tear off as much as you want when you want.

            • OP says:

              “my ultimate idea is to print money on rolls and put them in public toillets—you then tear off as much as you want when you want.”

              Are you speaking about the shitter’s of the elite?

              http://www.therichest.com/business/technology/the-worlds-five-most-advanced-toilets/

              They got it all covered.

            • machine says:

              It inputs energy and raw materials and outputs Teslas for the rich dudes who own this place. Is it very hard to comprehend? Too little drama? You need some more jargon and econo-smoke-and-mirrors to be content?

        • Stefeun says:

          MG, you say:
          “The machines and technology are the only way to sustain the life of human species.”

          That is counter-intuitive (at least don’t I get it) ; could you please develop and give some more details about the flows in such an economy?

          • MG says:

            Dear Stefeun,

            I meant that the machnies and the technology sustain the current life of human species, but can not prevent the extinction of it, when they fail due to the collapse of the whole system.

            The pollution problem is widespread, especially when we take into account the possible spread of radiation from uncontrolled spent fuel ponds etc. So, in the end, there are low chances for survival with the lack of energy for the containment of the pollution and fighting other species.

            • Stefeun says:

              OK MG,
              I understand it’s only temporary.
              The machines helps us increase our energy dissipation, which is actually what we’re running out of, so it can’t last very long.

              As per AI a.s.o., I agree with Gail that robots would hardly be able to build-up whole supply-chains from mining ores etc.. and coordinate so it could work all together.
              It would be a redundant system, at least during all the time required for its implementation, and in that reminds the problems met with -allegedly- renewable energy (really: high-tech converters). Very big upfront investments that we cannot afford, because of lack of energy and other entropic issues.

              However, it looks feasible, in theory, but as often, many neglect the very important question which is “How do we get from here to there?”.
              And, additionally: “What exactly is this “there” where we’re willing to get?”

              Instead, we go with the flow…
              Iow, to be flushed off.

            • machine says:

              “As per AI a.s.o., I agree with Gail that robots would hardly be able to build-up whole supply-chains from mining ores etc.. and coordinate so it could work all together.”

              No need to build it up. It is mostly already in place. Automate it.
              Have any of you ever been inside a modern mining operation?

              As you walk inside the vast processing plant, the eeriness of the whole thing. You notice the intensely loud racket from the machinery chugging away on the rocks as they appear from the bowels of the mine. Pipes, pumps, motors, tumblers, separators, sieves, shakers. And yet not a single human in sight. Totally devoid of people. Inside the mine, Trucks remote-controlled and semi-automated loaders feed the conveyors to the processing plant. The few emergency repair workers there only guarantee the machine keeps on churning out product. A modern mine is indeed a highly specialized machine.

              “However, it looks feasible, in theory, but as often, many neglect the very important question which is “How do we get from here to there?”.”

              One step at a time. We are making ourselves redundant. AI will accelerate the process.
              The problem as I see it, is that we think we are indispensable to the system. We are not, the elites are in charge of this operation. As they see fit, human automatons will be phased out at their command.

              Game over.

            • Fast Eddy says:

              This discussion is total utter nonsense. It is beyond ridiculous.

              Have I gone insane? Time is short. Why am I wasting 30 seconds typing this response to this.

            • in here—nobody don’t believe in sanity claus no more

            • Fast Eddy says:

              Insanity clause 🙂

              Which is something I may have to invoke — when I check myself into the coo-coo house — if I am forced to read more about how the Year Zero is what the robots will refer to as the beginning of their reign on earth…..

              We got from too many reruns of Little House to Terminator movies….

              Can we just stick with Mad Max, The Road and Apocalypse Now?

            • Stefeun says:

              FE the Censor, now ??!?
              (how disappointing 🙁 )
              Excuse me Sir, I claim the right to think and give my opinion about anything, included topics that seem insane at first glance.

              That said, automation is not a unicorn & rainbow stuff as you seem to think, it’s already necessary to run huge parts of our system, basically, everything that involves computing tasks.
              That means we ALREADY have lost control over those parts, which most people don’t seem to realize, and it’ll cause big surprises once things start to unravel, we’ll be much more powerless than we thought.
              AI is progressing fast, and could render things even worse ; why not even trigger a cascade of shut-offs or whatever, with some virus going wild..?
              It’s fermly plugged into reality, imo, not pie in the sky.
              / end of rant / 😉

            • Fast Eddy says:

              That comment was not directed at you ….

              But anyways…. I am sure that when the age of humans ends the age of robots will begin…. they will mine and smelt the melts that are used to make them… they will run the factories that make the components… they will raise unicorns and ride them…. and so on

            • Stefeun says:

              Yes FE,
              There are still some gaps in the supply chain I can’t see how they’ll fill up…
              And if the main purpose remains to dissipate ever more energy, then we can consider it’ll never be acheived.
              Still, I consider as not futile to speculate about the impact of automation and AI during the collapse phase ; likely will worsen things, not help.

            • I hope you are kidding!

            • either kidding or watch too many repeats of terminator

            • Fast Eddy says:

              Fortunately … I have acquired the rights to a technology that allows anyone who will give me a great deal of money to become a robot… a … machine….

              http://www.startrek.com/uploads/assets/articles/cliff2.jpg

              Go to http://www.fasteddyborgproject.com/immortality and sign up within the next 5 minutes and I will give you a free ride on my pet unicorn!

              http://cdn2.hubspot.net/hub/467612/file-2533658730-jpg

            • “But I don’t want to go among mad people,” Alice remarked.
              “Oh, you can’t help that,” said the Cat: “we’re all mad here. I’m mad. You’re mad.”
              “How do you know I’m mad?” said Alice.
              “You must be,” said the Cat, “or you wouldn’t have come here.”

              ― Lewis Carroll, Alice in Wonderland

            • Not a very sustainable system either. And we are making ourselves redundant.

            • machine says:

              Oh yes FE, I sense a strong feeling of hurting the human-chauvinism inside of you.

              Yet another appeal to a fallacy.
              https://en.wikipedia.org/wiki/Appeal_to_ridicule

              Will those logical banalities eventually cease?

            • machine says:

              First FE writes this pointless drivel:

              This discussion is total utter nonsense. It is beyond ridiculous.
              Have I gone insane? Time is short. Why am I wasting 30 seconds typing this response to this.

              And then goes on with this:

              But anyways…. I am sure that when the age of humans ends the age of robots will begin…. they will mine and smelt the melts that are used to make them… they will run the factories that make the components… they will raise unicorns and ride them…. and so on

              HEY FE! NEWSFLASH!
              THEY ALREADY DO!

              Well, except for the unicorns. Which is the usual FE drama-drivel.

              Makes me wonder, how old are you? Something close to 90 years perhaps? Been living under a rock for the past 50 years? Time to wake up and smell the morning coffee?

            • Sarcasm – clearer to some than others.

            • Fast Eddy says:

              Hammers have existing for a long long time.

              I still haven’t seen one lift itself up and build a house.

              Nor have I seen a hammer make a hammer.

              Can you point me to a mining operation that was conceived of by robots — that was built by robots — that is mined by robots — without a single human being involved.

              Ya I know — when BAU collapses the robots will take over….

              You should write the script for the next Terminator movie….

            • machine says:

              FE writes this:

              “Which is something I may have to invoke — when I check myself into the coo-coo house — if I am forced to read more about how the Year Zero is what the robots will refer to as the beginning of their reign on earth…..”

              10 seconds later, goes on a rambling about how people will be eating rats in the imminent future. How it all crashes down because… Some complex series of events no one can fully understand and even model. But it “surely” leads to collapse and extinction.

              Doomster drama and magnificent inconsistencies in one fine old and wretched package. Yep, that’s FE for you folks.

            • Fast Eddy says:

              As I have stated on numerous occasions I am playing along …. because if I did play make-believe…. then there would be nothing much to discuss … other than what triggers the end.

              There are two certainties that I am operating off of:

              1. There will be no food very soon after BAU is dead. Because almost all food produced relies on chemical fertilizers. The soil is dead with out it. What little amounts of food that can be produced (the few organic farms around the world) will quickly be overrun. All animals will be eaten within weeks.

              2. 4000+ spent fuel ponds will spew endless massive amounts of radiation into the air which will kill everything that has not already starved to death

              So we can end the conversation there… or I can terrify and amuse you with photos of boiled rats and hippies dancing about the fire.

              But make no mistake — I have reached my conclusions — and I have seen not a shred of evidence that elicits even a sliver of doubt

              This is an Extinction event.

            • Ed says:

              machine, yes complete automation. For the benefit of the owners. Non owning humans need do apply.

            • Stefeun says:

              Ed,
              What can “own” mean, for a robot?

            • Ed says:

              On the mining machine in mine still remote controlled by humans in control center distributed around the planet so the humans always work first shift.

            • machine says:

              “machine, yes complete automation. For the benefit of the owners. Non owning humans need do apply.”

              Yes, nice wording.
              That’s what I think is going down right now.

              Though, building these systems still require engineering/engineers.
              At least for now. But give AI another 10 years.
              Then, that would be about it for my “profession”.

            • Fast Eddy says:

              I disagree with that — the ignorant/stupid resort to insults … mockery is what the clever use when repeatedly having to listen to the thoughts of the ignorant/stupid…. when ignoring them does make them go away

            • machine says:

              Complexed ignoramus’ – What a fantastic choice of words.

              I get the cringes reading comments from every bookworm forum-crawling semi-aware bean counter trying to mock an engineer working in the field regarding the capabilities of current technology.

              http://cdn.slowrobot.com/62920142008105.jpg

              Hey, yeah you. Go study some James Clerk Maxwell instead of persisting in reading that literary bovine excrement output of the semi-conscious liberal arts clientele.

              https://en.wikipedia.org/wiki/James_Clerk_Maxwell

            • OP says:

              “As I have stated on numerous occasions I am playing along …. because if I did play make-believe…. then there would be nothing much to discuss …”

              How about criticizing your own beliefs? What’s your attack vector? Be a little scientific. A few shoddy webpages/news sites produced basically by the same people who control mass media. Is that your “evidence” it is all is crumbling?

              Or could there be another explanation, a much simpler one? How about introducing a little schizophrenia in your belief system? Perhaps a few extra UN’s just for the heck of it 😉 !

              The big fish is moving, and all you see FE is the ripples on the surface. Don’t make too broad conclusions based on rigged, manufactured and sparse evidence.

            • Fast Eddy says:

              On the contrary — unlike the jackasses from DelusiSTAN who spew the first idiotic thought that comes into their feeble minds…. I do my research before posting.

              And when it comes to the topics of food and nuclear power power plants — I have spent many hours on both of these issues.

              The reason I have done this is because having an understanding of what are by far the most important problems we will face post BAU helps me make decisions on how to use what is left of the meat on the carcass we call BAU.

              And since I am 100% this is an extinction event — I am living my life as I would if a doctor gave me a death sentence. I am cramming in as much down as I can. Because I know with great conviction… once BAU is gone — there is nothing but darkness.

              As for these two extinction triggers:

              I don’t think you will find a farmer on the planet who believes you can grow food in soil that has been farmed using petrochemical fertilizer — without many years of organic inputs… so shall we agree to agree on that one? Nearly 100% of all agricultural land uses petrochemical fertilizers.

              As for the spent fuel pond issue I have posted summaries of my discussions with a cousin who has 20 years as a safety engineer at a southern Ontario nuclear power facility…

              Here are a couple of ‘shoddy’ references…. you’ll have a hard time finding them referenced in the MSM … but feel free to search:

              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

              The problem is if the spent fuel gets too close, they will produce a fission reaction and explode with a force much larger than any fission bomb given the total amount of fuel on the site. All the fuel in all the reactors and all the storage pools at this site (1760 tons of Uranium per slide #4) would be consumed in such a mega-explosion. In comparison, Fat Man and Little Boy weapons dropped on Hiroshima and Nagasaki contained less than a hundred pounds each of fissile material

              http://www.dcbureau.org/20110314781/natural-resources-news-service/fission-criticality-in-cooling-ponds-threaten-explosion-at-fukushima.html

              Now we return to our regular programming where we discuss the post BAU world run by self-manufactured robots who worship Elon Musk

            • There is also a recent news article in Science by Richard Stone called “Near miss at Fukushima is a working for U. S.: Panel says spent reactor fuel in a storage pool could have boiled dry and caught fire.” They say that US Nuclear Regulatory Commission (NRC) modeled four “Nightmare Scenarios” of a spent fuel fire at a Pennsylvania nuclear plant. Depending on the weather and time of year, the Cs-137 plume displaces up to 41 million people and contaminates up to 274,000 square kilometers of land.

            • Fast Eddy says:

              Thanks for reminding me of this…

              Japan’s chief cabinet secretary called it “the devil’s scenario.”

              Two weeks after the 11 March 2011 earthquake and tsunami devastated the Fukushima Daiichi Nuclear Power Plant, causing three nuclear reactors to melt down and release radioactive plumes, officials were bracing for even worse. They feared that spent fuel stored in the reactor halls would catch fire and send radioactive smoke across a much wider swath of eastern Japan, including Tokyo.

              http://www.sciencemag.org/news/2016/05/burning-reactor-fuel-could-have-worsened-fukushima-disaster

              There are 4000 spent fuel ponds around the world.

              Our death warrant has been signed, sealed — and is about to be delivered.

              http://www.sfei.org/sites/default/files/styles/large/public/signed-11_8.png

      • “The realization that the regular corpo-drone slackployee is becoming the manifestation of massive economic interventions is indeed liberating and also sickening for workers actually doing something of value to keep the Beast churning out real economic growth.”

        The most important thing people need to do is keep spending. Soon enough, robots and algos will be able to do everything better than everyone, provided the system keeps running for that to happen. Since robots and algos do not spend, it seems things must break down one way or the other relatively soon.

        “If this were not to happen, the thermodynamics will get us all eventually. The universe and our solar system will end as a pitch-black vast void of nothingness.

        If you don’t like the game, stop playing it:”

        There is a bit of a difference in things coming to an end in the next few years, versus the sun dying out in a few billion years.

        • machine says:

          “Since robots and algos do not spend, it seems things must break down one way or the other relatively soon.”

          They need not spend. My coffee machine at home does not “spend”. It takes in energy and produces coffee without protest.

          To the elite owning it all, You and I are just two bothersome energy wasting humanoid automatons. The sooner they can rid themselves off humans, the goddamn’ better. They care about as much of us as we care about poor kids in India – Pretty much nonexistent.

          http://www.theverge.com/2016/6/22/11999458/eu-proposal-robots-electronic-persons-liability

          When can we agree on dropping the schtick that we should spend willy-nilly to keep the system running? It sounds like a morbidly obese person arguing that his bad eating behavior is necessary for the food industry to prevail. After a while, it becomes, you know, a bit echo chamber.. a bit choir.. a bit.. dum-b.

          On the contrary, instead on buying high-entropy consumerist crapware from the next container ship from China, or that next car you “obviously” “must have”. Do us all a favor and instead save the money, in the process make BAU running more energy effective, high-tech and less polluted.

          Then, perhaps then can we ride the dragon some longer, before it finally shakes us off like a bad case of fleas and then roasts us with the fires from the MIC.

          “There is a bit of a difference in things coming to an end in the next few years, versus the sun dying out in a few billion years.”

          Wasn’t oil going to last “forever”? Now we only have a few years left, orly?
          Hey, FE, how’s that Sun-Pipe of yours coming along? 😉
          When can we start pumping you expect?

          What else do us intellectual halfwits have gotten completely wrong you might ponder? If you don’t, well. Anyway, let me inform you – pretty much everything.

        • doomphd says:

          and the Lord said: “Let there be Maxwell, and his equations.”

  17. philsharris says:

    Gail
    You raise another useful set of questions.
    Gail wrote:”If we are, in fact, reaching peak coal, even before peak oil, this is disconcerting for those who believe that the Hubbert Model is the only way of viewing the world.”

    I agree. It must tell us something, especially given that coal in the USA is said to be the lowest-cost form of energy obtainable just now (strip-mining in Appalachia?) and has been cheap enough in China to promote something like a sudden 3-fold increase in coal production after China joined WTO at the end of 2001 (https://en.wikipedia.org/wiki/China_and_the_World_Trade_Organization ) . It is worth noting the fast growing trade with China in USA exports of goods and services as well as doubling of imports from China into USA that preceded the deal.

    Something however has changed. We can see that ‘useful’ coal production in China has peaked between 2010 and 2015 as you show and which can also be seen here http://mazamascience.com/OilExport/ . I suspect it is something to do with the so-called ‘Red Queen’ effect. The bigger and/or more dynamic the flow of energy in a trading system then the faster that the energy system has to run just to stay where it is, (i.e. to recruit resources into production) let alone grow.

    Coal fuelled the earlier industrial expansion and has been critical recently in China’s expansion but it is chiefly used in modern times as a major source for electricity. Attempts to allay the very real costs of transporting coal, not to mention alleviate city air-pollution, it has been proposed to transmit the energy from mine-mouth in the form of electricity. This project and coal to gas conversion appear though to make for only marginal changes in profitability of extraction and use. Watch this space, but China’s consumption of coal appears to have peaked along with coal production: see my link above to mazamascience.

    Round the world we have seen astonishing reductions in official posting of coal reserves apparently still available for production; Germany and UK are two prime examples. There is no prospect under any circumstances of UK for example reviving large scale coal production.

    best thanks
    Phil

    • Thanks for your thoughts. There is a big difference between the amount of coal in the ground, and the amount that can be economically extracted and shipped to distant locations.

      • Hans Verbeek says:

        Indeed, Gail, importing coal from overseas is cheaper and easier for China’s industrial coastal region than getting the coal from Mongolia via rail or trucks

      • xabier says:

        On the question of viability of extraction and shipping, I’ve just been handed a late 17th c book on natural history to repair, and you may imagine my amusement when I read on the first page to fall open something that shed light on this aspect of energy in the Wood Age: it described how people in the 1680’s in England were surprised to find time and again lots of full tree trunks buried under fields when they dug into them.

        How and why had this happened?

        A ‘very ancient man’ described how his grandfather had told him that it was the practice in his day ( mid 16th c?) to dig a deep trench alongside trees that were being felled to create fields, into which the tree trunk was rolled and buried.

        The reason?

        The cost of the labour in slowly cutting up the trunk, and the transport of the wood by ox cart, was simply not viable.

        So, the wood ‘stayed in the ground’ as the Green campaigners like to say. Interesting, given the very high value of wood both for fuel and construction at that time.

  18. The Goat says:

    FE your going to love this! Haha.

    https://m.youtube.com/watch?v=xDF8VSRgapI

  19. Fast Eddy says:

    US Freight Drops to Worst May since 2010

    Goods economy sinks, drags down trucking & railroads.

    “May is usually a relatively strong month for freight shipments, but given the high inventories with ever slower turnover rates and the decline in new production orders, May could be another soft month,” predicted Rosalyn Wilson at Cass Transportation a month ago. It has now come to pass – only worse.

    Freight shipments by truck and rail in the US, excluding commodities, fell 5.8% in May 2016 from the already anemic levels in May 2015, and 7.0% from May 2014, according to the Cass Freight Index, released today. It was the worst May since 2010.

    “This year we have failed to see the robust growth in shipments that we expect to see this time of year,” Wilson lamented.

    In fact, aggregate shipment volume over the first five months, according to the index, was the worst since 2010. And freight is one of the most reliable gauges of the goods-producing economy.

    “May is usually a relatively strong month for freight shipments, but given the high inventories with ever slower turnover rates and the decline in new production orders, May could be another soft month,” predicted Rosalyn Wilson at Cass Transportation a month ago. It has now come to pass – only worse.

    Freight shipments by truck and rail in the US, excluding commodities, fell 5.8% in May 2016 from the already anemic levels in May 2015, and 7.0% from May 2014, according to the Cass Freight Index, released today. It was the worst May since 2010.

    “This year we have failed to see the robust growth in shipments that we expect to see this time of year,” Wilson lamented.

    In fact, aggregate shipment volume over the first five months, according to the index, was the worst since 2010. And freight is one of the most reliable gauges of the goods-producing economy.

    The Cass Freight Index is based on “more than $26 billion” in annual freight transactions by “hundreds of large shippers,” according to Cass Transportation. It does not cover bulk commodities, such as oil and coal and thus is not impacted by diminished oil-train activity and collapsed coal shipments.

    The index is focused on consumer packaged goods, food, automotive, chemical, OEM, heavy equipment, and retail.

    More http://wolfstreet.com/2016/06/20/recession-watch-us-freight-drops-to-worst-may-since-2010/#comment-44939

  20. Just to pitch in another factor in play with coal as opposed to Oil & NG, it’s a physical component of Steel, besides an energy source for making the steel. Coal is used to make Coke for steelmaking.

    So, as demand for Steel drops because Konsumers can’t afford new Carz, you necessarily get less demand for Coal.

    The Chinese are vastly overbuilt on their steelmaking capability, so as the demand for steel dropped, so also dropped the demand for coal to make the steel.

    They kept up the demand for steel by building Ghost Cities & Bridges to Nowhere on self-financed credit for the last decade or so, and besides that used up a shit load of concrete also. You just can’t get more energy intensive in building stuff than ferrocement.

    The ability to self-finance does have limits though, and the Chinese have about hit the wall on this one. It’s a hyperbolic (not parabolic) function for you math afficionados out there. You get the discontinuity when the Taylor Series goes to Zero. We appear to be at this point now, or very close.

    RE

    • Good points. I hadn’t thought about the direct connection to steel making.

      Dmitry Orlov in a Facebook comment pointed out that since coal is shipped with oil, and it is so expensive relative to coal, the need to ship longer distances has a big impact on shipping costs, especially as the price of oil rises. (Or something related to that.)

  21. GGWP says:

    Your hypothesis is false.
    Please revise it.

    • bandits101 says:

      lol

    • Stilgar Wilcox says:

      No, it’s not. Everytime lately I post anything longer than a couple of sentences, it never shows up. So the hypothesis is at least partially accurate.

      • Stilgar Wilcox says:

        Example: I replied to dolph’s post of 6:55 pm and it never showed up. Past week – same thing over and over again. I’m restricted to two lines max.

      • xabier says:

        Stilgar

        Happened to me, too, always with slightly longer posts. Then they sometimes turn up on random pages much later, just the way the system malfunctions. Length seems to be a factor, not content.

        • Stilgar Wilcox says:

          Ok, good to know, xabier. I think that may be why we don’t see don stewart any longer. His posts were most times very long – maybe that’s why he moved on because they wouldn’t post.

          • I think Don is unhappy with me. There is no length check, other than “too many links”, which WordPress seems to see as a signal for spam.

        • Part of the issue is the depth of comments allowed, so that they don’t get too narrow to read. Comments seem to end up in the wrong place. I can increase the depth of comments, but then I get complaints about readability.

  22. GGWP says:

    Fast Eddy:
    https://ourfiniteworld.com/2016/05/31/50-oil-doesnt-work/comment-page-21/#comment-91467

    “How about this:
    Countries that do not matter – Conthdonmat – but that have significant oil reserves such as Brazil Venezuela Iraq Saudi Arabia Syria Libya etc….
    Get bombed into the stone age by Countries that do matter (OECD) ”
    (…)

    Not by countries, but by actual real-world energy-military doctrine devised by TPTB/Elders.
    Plugging the goddamn’ pesky useless energy leaks with them ‘munitions.
    The Beast need Moar energy! Send in the “technicians” to seal the sucklings destiny.

    http://cdn2.hubspot.net/hub/132341/file-557009269-jpeg/images/leak-resized-600.jpeg

    • Fast Eddy says:

      I know this will be perceived as politically incorrect — right up their with the space shuttle comments — but I am all for stomping on the fingers of those trying to get into the life boat…

      Because I guarantee you — if the table was turned — they’d be doing he same to me.

      • GGWP says:

        Nope, I’m with you on this one, either it’s them or me.
        It does not have to be pretty, so you keep on stomping.
        I’ll look the other way while I row like mad.
        But no goddamn giggles. 😉

        BAU has to prevail.

  23. GGWP says:

    “The less coal used now, the more available later.”
    A common fallacy. It is an exponential system.
    Either you consume it as fast as possible or you collapse as the momentum crushes you.

    Though, ditching nonproductive consumers seem sensible to maintain an exponential growth.
    Sending off surpluses to train for, and ultimately die either mentally or physically, in war, also seem logical.

  24. dolph911 says:

    The less coal used now, the more available later.

    The system has a whole is peaking, yes. No worries. The powers that be are totally in control, what they have done over the past decades is lay the foundations for their endgame strategy. What you do is:
    1) create new currency
    2) keep people’s eyes off the inflation with entertainments, propaganda, war, etc.

    Who needs all of these sick and old people anyway? Ration healthcare. Send the young off to war so they don’t turn into old people.

    That’s it. Problem solved in two steps. You have to remain ahead of the game, anticipate what’s going to be done.

    • Stilgar Wilcox says:

      I like your #2 dolph. They have done a magnificent job of distracting the masses from realizing they are being bilked via inflation. People accept new increases in pricing now without blinking an eye. I feel dated that I even notice it and mention it to others. People have lined up for this system without protest on a grand scale. Bananas could go to 12 dollars a pound tomorrow and people would just shell it out.

      There was a bridge I crossed decades ago – a really nothing little bridge that cost .35 cents. It’s just the Carquinez bridge, but they charge the same as the Bay Bridge that connects Oakland to SF. $5 bucks. I crossed it today. They have people from India working the toll booths. SLOW as molasses. They do everything in slow motion.

    • Fast Eddy says:

      Your brother in arms B9 seems to have deserted you …. perhaps he came to his senses on this and has retired … and has reincarnated under a new, improved and enlightened UN?

    • The less coal used, the more coal that we will never get out of the ground. The cost of transporting it to its designation is becoming prohibitive, thanks to higher required (true) oil prices. It needs to be trucked long distances, then carried by train. Sometimes it gets shipped by boat as well.

      If our current high-tech system of extracting and transporting coal doesn’t work, we can perhaps get 1% or 2% of the remainder out and transported to the place of use.

  25. sven says:

    Gail, thanks for the new article.

    I wonder if you have looked at the reasons for diminishing worker productivity? For example, are we hitting hard limits on human labor efficiency? Which those limits are and if they can be overcome. If so, how, or possibly not at all?

    Have you considered to extend your affordability theory with a (speculative) mechanism(s) that could allow for increasing prices of goods and services thus enabling higher energy prices. Thus fundamentally keeping the economic growth going without interventions?

    I’m also curious on the temporal effects of economic output which is ”consumed” by the economy excluding the goods and services for humans. For example, Linear Technology estimates that some 70% of their product never ends up in the hands of a human. They also have noted that this number keeps on increasing for every year. I’m assuming it is the same for most semiconductor manufacturing. Any thoughts on this?

    Energy goods and services is at about ~10% of GDP, but the products are indispensable for operating the economic machinery. Thus I wonder, how much (%) of the economic output is fed back into the economy without ending up as a human goods and service. That is, are us humans becoming increasingly irrelevant but yet indispensable(?) in the grand scheme of economic things?

    • Thanks for your suggestion.

      I don’t quite understand what you mean by ” Linear Technology estimates that some 70% of their product never ends up in the hands of a human. They also have noted that this number keeps on increasing for every year. I’m assuming it is the same for most semiconductor manufacturing.”

      What exactly happens? Are you talking about the system becoming more complex, so that we have additional layers of complexity? It so, the materials are going into creating those layers of complexity, not into making finished products that people use.

      • sven says:

        It is inevitable that an ever larger part of the production of goods and services will not reach the hands of the people as the economy advances.

        http://www.eagledailyinvestor.com/20288/consumer-spending-economy/

        A bit far-fetched speculation; can it ultimately function without humans altogether as a self-sustaining entity?

        • machine says:

          Well, obviously are workers squeezed out as the automation progresses. There is little evidence of it to be any other way.

          Humans are increasingly obsoleted and placed in the dust heaps of history. The ruling class, the owners, had plenty of utility from human automatons throughout all history. Though, our times are coming to an end as science soon can replicate every aspect of a human being and improve upon it. There is only one logical outcome of this process.

          This is the end folks.
          Kiss goodbye to what was and enjoy the end of days.
          It was nice talking to you at OFW 🙂
          Signing out.

  26. name says:

    China’s May coal production down 15.5% year over year. That’s 2% of world economy primary energy consumption!
    http://en.sxcoal.com/165/147704/DataShow.html

    • Wow! And it is some of the lowest-cost energy available, so the average cost of the remainder is going up. With less energy from coal, we can smelt less in the way of metals, and build less capital goods. Doesn’t sound good.

    • Fast Eddy says:

      I like that handle….. are you Prince reincarnate?

    • Wow! If that pattern holds up, I am wondering if total energy consumption for China will shrink for the year. It will truly mess up economic growth if this is the case. Lots of unemployed people. Lots of debt defaults to be hidden as best possible. I noted that one article talked about 1000 mines were to be closed this year for economic reasons.

  27. Stefeun says:

    * Nuclear spent fuel ponds *
    – for information only –

    Recently ran across several pieces about this topic recently, which I didn’t report here because I thought they were too uncomplete and would only fuel pointless polemics.
    Now this article on Energyskeptic seems to gather serious updated info and contains many links and references, thus worth posting (hopefully):
    http://energyskeptic.com/2016/spent-fuel-fire-on-u-s-soil-could-dwarf-impact-of-fukushima/

    • Artleads says:

      “At most U.S. nuclear plants, spent fuel is densely packed in pools, heightening the fire risk.”

      I’ve been wondering for some time why all nuclear waste and units of transportation aren’t divided into the smallest feasible segments, and distributed and stored in vast areas, each unit posing relatively small risk. Hmmm. Maybe Donald Trump will store them a mile apart over the entire southern border! That might discourage migrants! 🙂

      • Ed says:

        Artleads, yes a simple increase of the pool area from one pool to four pools would likely do it. It is the greed for more profit that leads the greedy pigs from storing the spent fuel at a responsible density.

        • Fast Eddy says:

          Funny how the nuclear engineer that commented on this issue did not suggest that as a solution…

          How elegant — just build bigger pools!

          Makes complete sense….

          • Fast Eddy says:

            Observing the two of you discuss this is like watching children dueling with plastic light sabres… very impressive

        • calista says:

          Near where i live spent fuel storage is limited by law. State law if i have it correctly. They are overpacking storage beacuse no new storage will be licensed. The enviros were sold a line about limiti g storage limiting nuclear waste. And bought it had hook line sinker. We are dealing with the faulty logic sold to a scared public 40 years ago

      • Fast Eddy says:

        Let me think….. Eureka!

        And the answer is: if you did that then you’d need to manage tens of thousands of pools instead of 4000….

        • Artleads says:

          Absolutely. Take your pick.

          • Fast Eddy says:

            Perhaps we could distribute the spent fuel rods to schools …. the children could be taught to care for the rods… to keep them cool… and happy …. ‘a cool rod is a happy rod’ — the children could line up at the water fountain every morning to replenish the water that surrounds their personal fuel rod because heaven forbid it should boil off!!!

            Or why not apply a bit of capitalism and make us some MUNNY HUNNNY…. remember Chia Pets? Pet Rocks? How about Pet Fuel Rods?

            Distribution would be via Late Night infomercials URGING people to save the world by purchasing a rod.

            And if they call within the next 5 minutes they get 100 bonus rods at absolutely no extra cost — along with free shipping. ACT NOW! Dial 1800spentfuelrods.

            Operators are standing by :

            http://i.kinja-img.com/gawker-media/image/upload/t_original/q1hnjveazbftfbj0nl0o.jpg

    • The title of this article is, “A Nuclear spent fuel fire at Peach Bottom in Pennsylvania could force 18 million people to evacuate.”

      Sort of makes a point right off the bat.

      • Fast Eddy says:

        I neglect to thank you for the new article Gail. Your are the super glue that holds this tiny global community together.

        • “I neglect to thank you for the new article Gail. Your are the super glue that holds this tiny global community together”.

          Thanks for saying that FE.
          I’m not a regular poster here,& don’t have the scientific knowledge, nor can I say I’m part of the community here, however I can relate so very much to the comments here………………………..

          I’ve never seen a site where although there’s difference of opinion there’s also so much consensus & focus on what is really going on & everyone here appears to see it.

          I relate to the discussions & it does have a community spirit about it.

          It even reminds me of my own family where certain members just tolerate each other…………………………..

          Apart from the wealth of information what I also find so engaging here is the discussion of collapse, slow/fast etc……………….I’ve always been in the fast camp but here there’s been arguments that do make me think……………………….
          It’s an impossible call I guess & what constitutes fast or slow?

          Considering how long Homo destructivous has been on it’s one species conquest of destruction 200 years could be considered a slow collapse in the big scheme of things……………..

          Probably better if our self indulgent, arrogant & navel gazing species vanished to the ether’s……………………………………………….

        • Thanks!

    • Fast Eddy says:

      Thanks Monsieur Stefeun…. let me copy and paste this so that the denial crowd cannot ignore your link and continue to live in a delusional state.

      Alas — some will sink into their chairs in dismay upon reading this…. the preppers in remote locations like NZ and Alaska and Salt Spring Island will lose their will to compost and pull weeds….(I lost the will some time ago — I just want to go skiing now…)

      But let us look at the bright side of this …. this is absolutely conclusive evidence that the end of BAU means freedom from living….

      This is powerful knowledge that you have — be all that you want to be in the short time that remains…. eat drink and be merry – for tomorrow we die… all of us

      [If electric power were out 12 to 31 days (depending on how hot the stored fuel was), the fuel from the reactor core cooling down in a nearby nuclear spent fuel pool could catch on fire and cause millions of flee from thousands of square miles of contaminated land, because these pools aren’t in a containment vessel.

      This could happen from the long power outage resulting from an electromagnetic pulse, which could take the electric grid down for a year ( see U.S. House hearing testimony of Dr. Pry at The EMP Commission estimates a nationwide blackout lasting one year could kill up to 9 of 10 Americans through starvation, disease, and societal collapse.

      At this hearing, Dr. Pry said “Seven days after the commencement of blackout, emergency generators at nuclear reactors would run out of fuel. The reactors and nuclear fuel rods in cooling ponds would meltdown and catch fire, as happened in the nuclear disaster at Fukushima, Japan. The 104 U.S. nuclear reactors, located mostly among the populous eastern half of the United States, could cover vast swaths of the nation with dangerous plumes of radioactivity” )

      After the nuclear fuel that generates power at a nuclear reactor is done, it’s retired to a spent fuel pool full of water about 40 feet deep. Unlike the nuclear reactor, which is inside a pressure vessel inside a containment vessel, spent fuel pools are almost always outside the main containment vessel. If the water inside ever leaked or boiled away, it is likely the spent fuel inside would catch on fire and release a tremendous amount of radiation.

      Nuclear engineers aren’t stupid. Originally these pools were designed to be temporary until the fuel had cooled down enough to be transported off-site for reprocessing or disposal. But now the average pool has 10 to 30 years of fuel stored at a much higher density than the pools were designed for, in buildings that vent to the atmosphere and can’t contain radiation if there’s an accident.

      There are two articles from Science below (and my excerpts from the National Academy of Sciences these articles refer to in APPENDIX A)

      http://energyskeptic.com/2016/spent-fuel-fire-on-u-s-soil-could-dwarf-impact-of-fukushima/

      • GGWP says:

        Ain’t it possible to truck those spent fuel assemblies to the nearby sea and dump em’ into the water if SHTF? Usually nukes are nearby water for the cooling. Just like the Japs now are/were dumping seawater into the simmering corium pit at Fukushima.

        I know that radioactivity eventually would leak out, but so what.
        That’s a later problem.

        For the serious and nerdy prepper. One of these might come in handy:
        https://www.sparkfun.com/products/11345

        • Curly says:

          Grid goes down. Are any personnel going to be able to make tit to the plant? Gas pumps use electricity.

          Lets just say the personnel are at the plant.

          “Ok guys we have to take the backhoe and load the 2000 spent fuel rods onto your pickup trucks. Drive to lake Sievertacaca and dump them. There is no way to unload them there so improvise. Lets GOOOOO team!”

          Would not dry casking them now make more sense?

          Why is this not being done?

          Since the reactor makes electricity why is it not designed to use the electricity it creates to function?

          • Fast Eddy says:

            You cannot dry cask spent fuel unless it has been in the ponds for multiple years… we are loading more spent fuel into ponds on a constant basis.

          • GGWP says:

            “When you surround an army, leave an outlet free. Do not press a desperate foe too hard.”
            ― Sun Tzu, The Art of War

            Though, you might ponder why, I leave that exercise to you. Though, perhaps you lack some mental abilities, so I’ll give you a nucleus of a clue below. There are of course other examples.

          • GGWP says:

            I wonder what will happen to the electricity generating steam pressure when those control rods are pushed back in for maximum neutron absorption. And at the same time the grid goes down.

            Anyone care to guess the sequence of events after that?
            Actually, no need to guess. We know. It is called Fukushima Daiichi nuclear disaster.

            http://s2.quickmeme.com/img/b5/b52f5e0ddf21ef8595a740949c4a4fd8629e4f0bb53914d4d03b5674d0a8faff.jpg

    • Froggman says:

      Yes, thank you for this link. Every once in a while I argue with someone about nuclear not being a solution and these citations make that argument about as succinctly as possible.

  28. Yoshua says:

    Peak Coal.

    Great Britain is the home of industrialization and the first nation to use of coal in industrial scale. Today the coal mines are depleted and the industries are gone. Great Britain was fortunate enough to “collapse” in world with coal reserves. Capital has since then moved around the world in search after coal reserves to exploit. Globalization opened up the world and its coal reserves for starving capital. The industrialization of China with its enormous coal reserves was the last resort for capital to find a home.

    By moving the entire global industrial capacity to China, the Chinese coal reserves turned into smoke within a decade. With the worlds coal reserves depleted there is nowhere to go anymore. King coal is dead and now the final collapse can begin.

    • That is about the way the story goes, unfortunately. Our use of fossil fuel products seems to start and end with coal.

      • Yoshua says:

        Peak coal is such a new concept to me that I actually missed its significance at first.

        • There is no group talking about this issue. Coal peaked in the UK ages ago, and in the United States in 1998. No one publicized this, or its significance.

  29. Many graphs on Chinese debt saturation:

    • Thanks! I got through part of the video, and saw some of his graphs. He does a good job. I find it hard to find time to listen to video presentations. There is also the issue of needing to take notes by hand, and not being able to copy graphs. I don’t trust my memory, especially a month later.

  30. Fast Eddy says:

    Need to fix…. Because of this lack of understanding of the role of prices, most of today’s models don’t considered the possibility that price levels may cut back production

  31. Fast Eddy says:

    For those who have stated on the previous article that ‘we are and can shrink’ that is simply not true.

    We are not shrinking — the global economy continues to grow – however at some point….

    ‘Rising fossil fuel prices depend on rising demand. Wages are not really rising fast enough to increase fossil fuel prices to the levels shown in Figures 4, 5, and 6, so the world has had to depend on rising debt levels to fill the gap. Unfortunately, there are diminishing returns to adding debt. We can witness the poor impact that Japan’s rising debt level has had on raising its GDP.

    Adding more debt is like using an elastic rubber band to increase the world output of goods and services. Adding debt works for a while, as the relatively elastic economy responds to growing debt. At some point, however, the amount of debt required becomes too high relative to the benefit obtained. The system tends to “snap back,” and prices fall for many commodities at the same time. This seems to be what happened recently in late 2008, and what has happened again recently. The challenge is to restore world economic growth, since it is really robust world economic growth that allows commodity prices to rise to high levels.’

  32. Jane Nielson says:

    Could China finally be worried about the effects of terrible pollution from coal burning on the health of its exposed populations?

    • Yes, somewhat, but the timing is wrong.

      The reduction in the growth rate of coal started in 2012, which is the year coal prices started dropping.

      The new leader took over in March 2013, which is about the time that more mentions of the pollution problem start coming up in Google, according to its summary of mentions of “China pollution.” I seriously doubt that the previous leader would have suddenly have changed course, just before leaving office.

      Also, I mentioned in a previous comment, this recent article from Reuters says:

      China will aim to close more than 1,000 coal mines over this year [2016], with a total production capacity of 60 million tones, as part of its plans to tackle a price-sapping supply glut in the sector, the country’s energy regulator said.

      China is the world’s top coal consumer but demand has been on the wane as economic growth slows and the country shifts away from fossil fuels in order to curb pollution.

      In my view, the leaders have profitability high on their agenda. If “pollution control” will help sell the changes that need to be made to the population, then they will mention pollution control as the reason for the change. Ultimately, their concern is profitability, however. There will be a lot of job loss with closing 1000 mines; it will not necessarily be popular. China does not have unemployment insurance, and there are not necessarily other jobs available for these workers.

  33. Thomas John Irwin says:

    It seems like we have a new definition of “peak” that includes prices to extract and debt. Peak Debt seems to be the problem that collapses the system first. Illargi was right so many years ago.

    • I have been saying that debt is a form of entropy. We need debt to make the economy operate, and to build new capital goods of all kinds. The people who have been modeling Peak Oil and the other peaks have been forgetting the entropy that is necessarily attached to the process.

      Debt is what “brings forward” the benefit of an energy product, so that it can be used to pay workers, and make other payments, long before the system would otherwise allow those profits to be utilized. EROEI analysis strips out timing, so misses this impact.

      I am afraid I am not aware of what Illargi has been saying. I know when I look at my first articles back in 2007, I was talking about the collapse of the financial system likely being the outcome of peak oil. https://ourfiniteworld.com/2007/04/22/our-world-is-finite-is-this-a-problem/

      • Stefeun says:

        “The people who have been modeling Peak Oil and the other peaks have been forgetting the entropy that is necessarily attached to the process.”

        I’m increasingly amazed by the extent at which this is true. Yet, it looks like we were fully conscious of this “other side” of the problem since the beginning of the discussions around conservationism.
        Here’s an excerpt of a speech Theodore Roosevelt gave in 1908 (notice the end of his sentence):

        “We have become great because of the lavish use of our resources. But the time has come to inquire seriously what will happen when our forests are gone, when the coal, the iron, the oil, and the gas are exhausted, when the soils have still further impoverished and washed into the streams, polluting the rivers, denuding the fields and obstructing navigation.”

        https://www.nps.gov/thro/learn/historyculture/theodore-roosevelt-and-conservation.htm
        Georgescu-Roegen was, if I’m right, the first to make connection with Thermodynamics 60 years later, and label it “Entropy”, but still, we’re talking about the same thing, that we keep on ignoring although it’s currently killing us all.

        • Unfortunately true!

        • InAlaska says:

          Teddy Roosevelt was a visionary in so many ways, and certainly one of the greatest of the U.S. Presidents. His vision can still be seen in the National Park Service, which celebrates its 100th Anniversary this August. He was also a trust buster and an enemy of corporatism. Roosevelt could see all of this coming a century before anyone else even thought of Globalism, Peak Oil and limits to growth.

      • These two top paragraphs are excellent short summary, however still bear in mind that debt is also a social construct, so while sort of final disorderly debt deleveraging has got the highest probability in our eyes here, we don’t know the future event sequencing, there still could be further row of can kicking periods interjected for the near/mid term.

        • Tim Groves says:

          however still bear in mind that debt is also a social construct

          Wonderful!
          I must remember to tell that to my bank manager.

          • Exactly. Also, try to build a new factory without debt, or without selling shares of stock. The need for capital appreciation and dividends make funding through the share of sales of stock pretty much equivalent to debt.

            • richard says:

              Investment in the future is not the same as debt-fuelled consumption.
              Rant over. Phew!

            • No, it is the same as debt-fueled business expansion. You have noticed that oil and gas companies that can’t access debt markets are issuing a lot of new stock instead–The reasoning is “just see our stock soar when oil and gas prices go up.” Other companies are using new debt to buy back stock, since the interest rate is so low.

              A Wall Street Journal Article is titled, “Finance’s Hot New Metric: ROIC”. The return is on the sum of debt and equity, which is called invested capital.

              The two are essentially the same. They are a way of buying capital goods in a way that allows payment over a long period, often over the lifetime of capital goods. Consumers need this service as bad as producers, or the system fails.

            • Stefeun says:

              Maybe we’re not talking about the same aspect of things, but I too tend to think that debt is also a social construct, be it only because it’s what binds the whole system together.

              Therefore, I wouldn’t disregard the purely social movements as being mere consequences of a failing economy, I think they could very well be the trigger of collapse. So many people are really and increasingly upset, both in poor and rich countries, as they realize they’ve been fooled.

              Moreover, we’re seeing that things don’t happen/unravel exactly as expected (“energy sinks filling up faster than wells exhausting”, low commodity prices, early peak-coal and peak-industrialization, etc…).
              Right now we’re focusing on global finance to derail, because it looks like most probable option, but nothing prevents the black swan to be some hard strike with bad issues, anywhere. Or another social disruption, as evoked by visionnaire Ivan Illich some 45 years ago:

              “The impact of industrially packaged quanta of energy on the social environment tends to be degrading, exhausting, and enslaving, and these effects come into play even before those which threaten the pollution of the physical environment and the extinction of the (human) race.”

              – Austrian philosopher Ivan Illich, 1973 article in Le Monde
              http://www.truth-out.org/news/item/27477-climate-disruption-depression-and-2013-emissions-set-new-records (link for example, old source, not related)

            • You are right–things don’t happen as we expect.

  34. Engineer Earl says:

    I wonder if the effect on an economy is more related to the total cost of producing that energy, than to its price. In the case of shale (tight) oil, the economy and consumers will ultimately bear the costs of all those hundreds of billions of dollars bad business loans. Banks will downsize or fail, loans will be harder to come by, and monies that could have been used to increase the productivity of our economy will have been wasted. Of course, we outsiders don’t know the true costs involved as they are closely guarded secrets — as opposed to the propaganda that various companies tell potential investors. World-wide average costs are even harder to surmise. But I am certain, as you and many others have pointed out, that they are going up for conventional sources.

    By outsourcing so much manufacturing to China and other low-wage countries, the increased costs of energy production are temporarily hidden from the American consumer. But the result is lower and even negative wage growth. In fact, the effect of all this outsourcing on the average worker is similar to high inflation where wage increases do not keep up with the increasing cost of living. So I see the effect on worker livelihoods is similar to what the effect would be if energy prices were increasing.

    If I were in charge, I would concentrate on improving energy efficiencies and manufacturing productivities here in this country (or the home country of any reader). The shortages are going to bite, sooner or later, and it’s best to prepare ahead of time. That, at least, is what I am trying to do in my own tiny little area over which I have some control. But hey, I’m just an engineer. I don’t control much at all.

    • For a long time, people have assumed that prices would always rise in such a way that producers of energy products would receive a fair profit. Unfortunately, the it has become increasingly clear that “costs” are one thing and “prices” are something, that can be quite different.

      The question I have is whether all of these debt defaults will lead to the failure of the financial system. Alternatively, if the debt defaults simply lead to a huge reduction in fossil fuel energy extraction, this could be an equally large problem. We need to have debt to get fossil fuels out of the ground, because businesses need to finance new investment. If the debt system isn’t working, this becomes a huge problem.

      Efficiencies sort of work, but they need the whole system to work, including grid electricity. Having a system that doesn’t depend on the world’s manufacturing capability would theoretically be better, but it is hard to get such a system to work.

      • Engineer Earl says:

        I don’t know where we will wind up with debt. I do like your analyses because you are trying to make sense of the worlds of energy and finance, which seem to defy conventional models. I suspect that there is at least one major factor that is not being included, that something other than the “invisible hand” of economics is at work.

        As for myself, I do what I can. I use debt sparingly. I invest in efficiency upgrades, such as a high-efficiency furnace and insulation. My car is a plug-in hybrid. Most days I don’t burn gasoline, and on long trips I get 45 – 47 mpg. My want-to-do list is longer than my I-have-done list, but the point is that the I-have-done list is getting longer. I enjoy working on problems, even on a big, humongous one.

        • Bahamas Ed says:

          Thank you,

          I can live large another day

        • GGWP says:

          I’m always amused by brainless micro-optimizations. As in purchasing hybrid cars and other types of feelgood technology, instead of perhaps saving the money and instead using more efficient means of transportation.

          Hey you, yeah you, since you obviously intend on Living Large, at least be honest about it, as Bahamas Ed seem to be. Though, I got some news for both of you, a satori of sorts:

          http://farm6.static.flickr.com/5013/5526555972_6c8ece8933_o.jpg

          • Fast Eddy says:

            Heaven forbid you ever suggest that a Green Groupie take the bus instead of their Tesla…. and walk? Are you kidding!!!

            Can you imagine actually walking up the 6 buck a cup organic coffee flown by helicopter from a remote village in Papua then overnight on DHL to the shop where it was ground fresh just for you —- instead of your Tesla?

            The faux hippies would ignore you — you need to your street cred man — you need your two tonnes of plastic, steel, and massive toxic battery pack in tow to make the right impression ….

            I find it difficult to express my level of disgust for such people…. nothing amount of condemnation and mockery could ever be enough.

            • obnoxious says:

              BAU can indeed produce some quite sophisticated and energy efficient self-propelled transportation machinery.

              https://www.youtube.com/watch?v=IBitle48_LM

              Long live BAU.

            • Tim Groves says:

              The faux hippies would ignore you — you need to your street cred man — you need your two tonnes of plastic, steel, and massive toxic battery pack in tow to make the right impression ….

              And whatever else you do, don’t dare put a scratch on their paintwork when you collide with their rig on your mountain bike. They’ll never forgive you.

            • Fast Eddy says:

              They’d throw their organic falafel sandwich at you

            • Engineer Earl says:

              I should also add that I made a conscious decision to move to a walkable neighborhood over 30 years ago. I walk to most destinations — grocery store, restaurants, library, church, hardware store, etc. I do about 5 miles per day, on average, walking. And yet there are some who complain about the plug-in hybrid I use. I need a car for my work. Don’t trash people who are doing the best they can under the current circumstances.

            • Fast Eddy says:

              I on the other hand have taken NINE long haul flights since December. I am probably going to take 2 more in September.

              Not only will I trash anyone who is ‘doing their best’ I will urge them not to do their best. Do their ‘worst’

              Imagine if the Green Brigade were not hypocrites — oh I can’t take the bus because I need a car for my work — oh I can’t take a bike because it’s too far — oh but I have a Tesla so see how I am green and I do walk to the shops…. always an excuse…. fortunately

              If people actually tried to walk the walk of sustainability that would mean returning to the life of a hunter gatherer (that’s about as close as one could get to sustainable)….

              Then imagine what would happen — the global economy would collapse — if we stop buying stuff the factories close and the banks would explode.

              Fortunately everyone has an excuse to keep on going to the Mall (walk drive it’s all good!) — fortunately people buy into Don Draper’s siren song telling them they are what they own…. everyone loves that adrenaline rush that the purchase delivers….

              It’s great that you walk 5 miles per day — it will keep you healthy …. but you are in no way accomplishing anything in terms of a contribution to keeping BAU rolling along …

              Unless you are of course walking to the Mall to buy more stuff.

          • I like your image. We need the bicycles.

            • Unfortunately, even making bicycles in quantity requires business as usual. Also, keeping up roads will be difficult for the long term. Once spare parts are used up, ridership will be way down, I expect.

            • noooooo

              according to certain unnamed (to protect the guilty etc) doomerologists, you can make bicycles from solar panels and wind turbines

            • Fast Eddy says:

              During my doomsday prepper phase on my path to enlightenment and recognition that there is no way out other than death

              I bought an extra mountain bike … I had one rig already that I ride regularly … thought it would be good to have another just in case…

              The shop sold me tubeless tires that self-repair punctures…. sounds really good no?

              So the bike that I don’t ride had flat tire… I tried to pump it up but it won’t take air… so I bring it in and the guy says — ya — you need to replace the goop inside the tire every 6 months or so because that seals the bead of the tire to the rim … then you usually need to hit it with a compressor to get it to seal and fill — a normal hand pump won’t do it.

              Needless to say I put tubes into the tires and bought some patch kits ….

              The high tech world works… while energy is available… as we can see from this …. but once the energy is gone … it unravels quickly … and everything high tech becomes a pile of junk

          • Engineer Earl says:

            I was giving some practical examples. A bicycle is pretty ludicrous to use in a hilly area in winter, hauling tools and supplies. Or young children. As for mass transit, it hardly exists in my area and certainly not at the times I need it. And I do press for improvement, but there is extreme push-back from city hall about improving service outside a small, core area. Can’t have people without cars traveling to neighborhoods which are designed only for the relative wealthy with cars, you know. It never ceases to amaze me how many people say we are all doomed because one can never do enough. So let’s party on!

            Me, I would prefer to use some temperance and prudence, with a dash of fortitude, in the hope of avoiding the grave injustice of invading another oil-rich country. I also help others reduce their energy usage, at my expense. Yes, by doing that I am exercising my faith. Silly me, thinking that charity means anything to some people.

  35. For those of you who missed it, here’s the recent Renewable Energy Survey discussion with Gail and Ugo Bardi.

    https://www.youtube.com/watch?v=EH5lwXYb2p8

    RE

    • Thanks. I hadn’t run across a link yet.

    • interesting comments and discussion
      Ugo’s thoughts on continued availability of electricity as being somehow supportive to a future existence leaves a few unanswered questions;

      The purpose of electricity in the context that we use it, seems to be twofold:

      1 making things rotate to do work

      2 to create heat/light.

      I am always curious about how we will make the sophisticated equipment necessary to use electricity in any functional way

      Just how we will we make a relatively simple object like a lightbulb?

      • We also use it for communications. Radio, TV, Cell Phones, the Internet. Also useful for arc welding and manufacturing. Also useful in rendering aluminum from bauxite. Also useful in medical diagnostics in gel electrophoresis. It’s a handy form of energy with a lot of applications.

        Just to play devil’s advocate here, it would certainly be possible to produce just about anything with a source of renewable electricity together with Solar and/or Geo Thermal. All your products currently made from oil polymers could be made from organics you grow. All the motive power you need for mining could come from electricity. All the water you need could be desalinated and pumped to where it was needed.

        The problem mostly is in making the system self-replicating. In theory, if the EROEI is positive enough, that is possible. However, despite some of the graphs and studies that Ugo cites, nobody has yet demonstrated a completely self-replicating Renewable Energy system that has sufficient surplus to both replicate itself and provide power for other purposes. So a bit like Fusion Power, it is a theoretical, pie in the sky solution that technophiles hope for, but is unlikely to come to pass.

        RE

        • GGWP says:

          “The problem mostly is in making the system self-replicating. In theory, if the EROEI is positive enough, that is possible.”

          Nature has proven it to be possible, it is called Life.
          Key dynamics: Photosynthesis and Evolution

          Though, it is ultimately dependent on the nonrenewable sun and limited to only chemical reactions at a fairly narrow temperature range.

        • My point about using electricity to make machinery rotate, was meant to apply to most of the products and applications cited. Radio, TV medical gadgets—a million other gizmos we take for granted.
          A computer uses electricity to move electrons around to give us images, and in the process produces heat and light. I don’t know enough about computers to go into the inner components, but I can’t imagine one being made without lots of whizzy machines doing most of the work, and the concept of “growing” the necessary polymers to produce the non metallic parts might leave a lot of people hungry. Diverting corn into biofuel causes enough problems as it is.

          A competent technician could certainly make all the bits necessary to produce an arc welding system, (heat) until you begin to follow every component back to source, and define the mechanisms necessary to produce everything.
          The equipment has to be manufactured and moved around, almost invariably with machinery that rotates/reciprocates under some applied force.

          Take pumps for desalination/water movement: (rotary motion this time). An electric motor/pump assembly runs to fine tolerances, and needs refined metal components and manufacturing factory systems. Electrical input will only work if those fine tolerances are maintained.
          Rather like the lightbulb I quoted, the need is to produce pumps in thousands, lightbulbs in billions. And cheaply
          All theoretically possible, but as you say RE, such systems do not have sufficient surplus to replicate themselves and to allow the excess necessary to allow our current civilisation to function as we expect it to be.

          The general consensus seems to be that we require an EROEI of at least 12:1 on our energy systems to sustain our existence. Trouble is we built our current civilisation on an energy system that delivered 100:1. That is no longer available to us. Our fear should be rooted in the simple fact that not 1 person in 100,000 or more actually grasps that, and the significance of it. (or is even interested )

          Right now, we are down to 20:1 and struggling, yet the vast majority are convinced that all we have to do is vote for prosperity and we can have growth into infinity.
          Even on here, Doomsterville, there seems little awareness of the part politics is going to play in all this, where everyone promises growth and jobs in return for your vote, knowing full well that it is impossible, and when SHTF time comes, all hell is going to break loose, because all those promises about renewables and whatnot didn’t work after all, and our plates and fuel tanks are empty and nothing happens when we flick lightswitches.

      • We will have to send an e-mail to Ugo. Doesn’t sound likely to me either.

        • I think Ugo could argue this is possible pretty well. Similarly, Nuke proponents either Thorium based or Fusion based can make these theoretical arguments in a similar fashion.

          However, until somebody promoting any of these possible Techno-Solutions actually demonstrates a self replicating system that essentially “creates” or “accesses” more energy than it dissipates, it is a no-go.

          As of right now, all renewables are dependent on fossil fuel input. Until you remove them from that subsidy and see if they can replicate on their own, it is a no-go, at least long term with this population base.

          Many other possibilities exist though with a high reduced population base.

          RE

      • xabier says:

        At present, Prof. Bardi has taken to whistling in the dark, the very dark, night to cheer himself up. I can’t blame him for that!

      • Fast Eddy says:

        Norman — I’d like to see you debate Ugo …. perhaps you can ask Gail to arrange an intro…

        I’d pay good money to see those fireworks!

        • Reverse Engineer may be looking for more good people to talk on his videos. He has a bunch of survivalists he can call upon, but they don’t make good debaters on some topics.

        • Curly says:

          Why not you FE? You have the means to travel. Time to step up your game.

          • Fast Eddy says:

            Time is short — and I don’t see a podcast with Ugo Bardi on my bucket list….

            • Mostly talks about how peak oilers see renewables. Ugo had done an earlier survey of college professors (or some other general group), and they saw renewables as saving our current economy–no problems. Those responding to the current survey mostly thought population would decline a lot. A rather ambiguously worded question was included about which renewable was best. In what context? This list included human slaves. Perhaps the most sustainable of the renewables. The demographics of the responders showed the age groups most represented were 50-60 and 60 -70.

            • in every era of history, owners of energy resources could command the labour of those who did not own energy resources, for the simple reason of needing to eat.

              ie you worked for sustenance, while the energy/resource owner creamed off most of the profits while giving you–the mere serf—just enough to live on in order to keep the system functioning.

              in return you had lots of kids to maintain the workforce.

              If you were male, you were effectively worked to death (dead before 50) —or used as cannon fodder once every generation. (same result)
              if you were female, childbearing had the same result

              Only in our own era has there been a difference to this routine. Hydrocarbon fuels provided excess for everyone. When that is used up, we will return to what was.

            • machine says:

              Norman,
              “Hydrocarbon fuels provided excess for everyone. When that is used up, we will return to what was.”

              An excess for “everyone”?
              Why don’t you go ahead tell that to the billions of poor and starving people on this planet.

              So nope Norman, you got that one backwards, hydrocarbons will continue to provide an excess to a shrinking minority. And soon now, the people you refer to as “everyone” will be on the chopping block.

              https://s-media-cache-ak0.pinimg.com/736x/1c/98/7f/1c987f5ae84e7abd33f41e634d1bda28.jpg

            • “An excess for “everyone”?
              Why don’t you go ahead tell that to the billions of poor and starving people on this planet.”

              Much of those billions only exist because of hydrocarbons. Their people chose to use the wealth of hydrocarbons to increase their populations ten-fold while remaining poor, instead of only increasing their populations quadruple and enjoying higher standards of living.

              How do you think all that food flows in when there is famine? How they receive mosquito nets, pesticides, medical care to have lower infant mortality? How they made the deserts bloom by burning oil to run pumps to suck water out of deep down aquifers or make fresh water from the oceans using reverse osmosis?

              Without the fossil fuels, there probably would not be much more than two billion people in the world today.

            • I could have made my “excess” point clearer—I try to keep posts short where possible.

              Yes—there has been an excess for everyone–though of course excess is relative.
              Excess on my terms is having reared successful kids and grandkids, taking holidays when I want, and running a nice car on smooth roads. 4/5 generations back (pre oil input) my ancestors lived in by the light of a naked flame and walked everywhere and mostly died young.
              To them, my lifestyle would have been beyond belief—but to me my “excess” is normal. Yet I am looked on as an oddball because I don’t expect it to continue.

              Excess for someone in sub saharan Africa is being alive at all.
              The billions of poor and starving got born and are kept alive by our “excess”. (ie the wealth of the developed world) Not a good arrangement I admit, but there are now refugee camps in Africa with no access to food or water at all—they are kept alive by food/water trucked in daily.

              When hydrocarbon fuels are no longer available, they (and we) will cease to exist. We revert to “what was”—a primitive “naked flame” society.
              Hundreds of thousands sitting in a desrt waiting for sustenance to arrive that doesn’t arrive is not going to be pretty, but I fear that it is inevitable—as will the hand wringing impotence of the global community when it does happen.

              Or maybe not. We will have our own sustenance problems to face. Already millions in the developed world are on food aid. That situation can only worsen as we lose the means to produce food for 90% of people (our excess)

            • machine says:

              Matthew,

              I don’t consider poor and starving people as living in an excess. Owning and driving a Tesla while texting on the iPhone, on the other hand, is.

              What you are talking about is an excess of people enabled by cheap FF’s.
              Closely related, but fundamentally different.

            • Fast Eddy says:

              Is the lion who eats the most meat from the kill — and slashes any that challenge him on that — living to excess?

            • machine says:

              Appeal to nature fallacy.
              Give em’ up FE! You can do better.

              https://en.wikipedia.org/wiki/Appeal_to_nature

  36. snolken says:

    Reblogged this on snolken.

  37. Yoshua says:

    Thanks Gail !

    Peak Hydrocarbons. Peak Energy. Peak Industrialization. Peak GDP. Peak Debt. Peak Globalization. Peak Science. Peak Technology. Peak Food. Peak Water. Peak Humanity.

  38. Ajay Gupta says:

    Great piece! I am sad I won’t be able to make it to the conference in DC and speak in person.

    I also appreciate the simple and succinct explanation of post 70s trade schemes relative to energy and prices. I have also never taken the time to see it that way.

    In the past I discounted the long term affects of prices on these commodities and their production/consumption curves because of options such as: nationalization of resources and industry-wide re-pricing agreements. I suppose those are policy items of the past.

    I’m working on some Canadian models this summer and find your work to be very useful. Thanks again!

    • Glad you find them useful.

      Nationalization of resources only “works” when energy companies are developing large surpluses, and governments want to get as much tax revenue as possible. As soon as we reach the problems we have now, governments want to spin off these companies, to any buyer they can find. A very recent story says, “Putin said to weigh $11 billion Rosneft sale to China, India.” We have also heard, Saudi Arabia to Sell Stake in Parent of State Oil Giant by 2018.

      Basically, governments of energy producers need these companies to be successful if governments are to survive. I think of “energy surpluses” as meaning, “having money to pay governments surplus revenue as taxes.” Governments of oil exporters collapse when oil prices fall too low; the fall of USSR in 1991 was the most recent example of this.

      Most of us don’t appreciate the very subtle role our financial system plays in allocating resources. We assume that governments can fix prices however they like. In real life, it doesn’t work that way. Adding subsidies for renewables soon means that fossil fuels soon need subsidies as well, or your electricity system collapses. I know that Denmark has cancelled orders for offshore wind, because subsidy needs kept rising rapidly, both as percentages and as dollars. A few articles of interest:

      http://pfbach.dk/firma_pfb/references/pfb_towards_50_pct_wind_in_denmark_2016_03_30.pdf

      https://solarthermalmagazine.com/2016/06/09/danish-government-u-turn-clean-energy-climate-change-deterring-investors/

      http://www.reuters.com/article/us-california-energy-analysis-idUSKCN0YV0BX

      • gerryhiles says:

        Thanks as usual Gail. I’ll add a possibly useful anecdote.

        Firstly I’ll note that, though in Australia since 1971, I was born in England and grew up (?) in Folkestone, Kent, not far from some coal mines and, around 1956, I went down one on a school trip … we only went down half way, but the deepest seam was a mile deep and extended under the English (?) Channel a mile or so away from the pit head.

        I’ll add context by saying that England was “first cab off the rank” with the Industrial Revolution c. 1780 (say), i.e. only about 240 years ago when coal exploitation got seriously underway. Also the County of Kent is known as the “Garden of England’ and hosts the “typical” English countryside … BUT it wasn’t always that way, because previously there were dense forests which got felled to produce charcoal (amongst other things) to smelt iron ore, prior to the Industrial Revolution proper. So one could say that the exploitation of coal “saved the day”, depending on how you look at it.

        However, as I illustrated, “peak easy coal” had long-since arrived by 1956 – actually probably about 1900, thus little more than a century into the Industrial Revolution.

        During the 1960s the nationalized coal mines were in trouble and, if North Sea oil and gas had not been discovered, the British economy would have been toast. The neo-liberal “Thatcherism” would have been impossible, but that brand of economics lasted less than 50 years in reality, as witnessed by the current economic mess … now globalized, as you explain.

        I’m just adding some detail from personal experience, mainly to illustrate how rapidly events have unfolded, relative to the first emergence of empires about 5-8,000 years ago, let alone the c. 250,000 years our species has existed. Indeed we are cursed to live in interesting times!!

        • Thanks! I know Dave Summers who wrote as “Heading Out” on TheOilDrum.com came from a long line of British coal miners. He was determined to go to college to find a way out of working in the mines himself. He has said that the mines were very exhausted.

          I think that exhaustion is happening a lot of places. Coal from US Appalachia is becoming exhausted. Consumers aren’t willing to pay the higher price for it either.

        • Fast Eddy says:

          Gerry – I posted this a couple of articles ago — not sure if you saw it …

          But my neighbour is a recently retired engineer who headed up a very large coal mine … short story long — he told me that all coal mines MUST be pumped to get rid of water…. pretty much all of them are below the water line so they fill up very quickly with ground water ….. and the open pit mines of course get filled with rain water….

          For those who think we can run BAU Lite on coal post BAU — think again … and again… and again … and again…. and if you still think that will be possible… think more

          • GGWP says:

            I would say pretty much all mines. Speaking from my own experience, when I made a tour into a particular northern Swedish iron mine, the windscreen wipers had to be on as the groundwater rains down heavily from the ceiling onto the traffic a few hundred meters into the mine. So yep, those pumps, both air and water has to operate 24/7.

            The main operation are now some 1.250 meters below the surface. Imagine trying to resurrect that beast if abandoned for a couple of years. Ain’t happening.

            As a matter of fact, some old shafts of the mine are now quite beautiful and extremely deep lagoons.

            http://cdn07.dayviews.com/59/_u2/_u1/_u3/_u0/_u5/_u3/u2130536/62450_1244148219.jpg

            • right where i live, the original form of mining was a ”bell pit”—ie you dug a shaft about 30ft deep to reach shallow coal, then hollowed outwards to form a self supporting bell shape.
              you then extracted the coal thus exposed, using a horse and bucket and windlass. After that you moved on a few yards and dug another shaft and repeated the operation,
              This left the landscape littered with collapsed “bells” but water ingress prevented anything deeper

              deep mining wasn’t feasible until the invention of of the viable steam engine to pump water

            • Fast Eddy says:

              I’ve actually seen this sort of thing in action …. a few years ago I financed a small gold mining operation in a third world country.

              Don’t ask he me how I got into that … consider it a charity contribution….

              By small I mean 4 guys working in an abandoned shaft that has low grade ore left over from once large scale commercial gold mines…

              I went there out of curiousity to have a look at the operation ….

              The main shaft was large enough to drive a small car into …. so I walked in somewhat concerned by the rickety old support beams … about 50 metres into the tunnel we came to the extraction site…

              This was a hole barely wide enough for a man to climb into … there were two guys taking turns pedaling a winch that would haul buckets of ore from the hole… it was very hot inside that tunnel — the workers were in shorts — no shoes – no hard hats — just pedaling away furiously on the contraption ….

              I walked a little closer and I peered down into the hole expecting to see the devil himself down there….

              I don’t think we were quite deep enough for that….

              But what I observed was very similar to what some might call hell on earth… there was a guy maybe 25 metres down this tiny crevice…. water was continuously pouring into the bottom of the hole because it was well below the water table…. there was a small pump humming away … and he was using a small shovel to fill the buckets with rock that was loosened using a small charge some days earlier….

              Just watching that gave me an intense feeling of claustrophobia ….

              Anyways…. the point here is that without the electric pump this operation would not be happening — the gold that is in that hole would remain in that hole — forever.

              Because that hole would fill to the brim within a few hours of the pump being shut down.

              Likewise…. the coal that is in the ground when BAU finishes up …. will be flooded very quickly … and it will remain deep in the ground — forever.

            • Good example!

            • Fast Eddy says:

              see the pic http://assets.atlasobscura.com/article_images/8482/image

              Anyone who thinks coal will still be around post BAU…. needs to do the following:

              Go into your back yard with a shovel — did a hole 2 metres deep — then come back a week later and observe the amount of water in the hole….

          • Good point–thanks for mentioning it again.

          • xabier says:

            I believe that without steam pumps mining would already have stopped in Britain in the early-ish 19th c due to the water problem, they had already gone so deep.

  39. richard says:

    Thanks Gail. Peak Coal now – who would have thought? I think that may be part of China’s move into a consumer society. Meanwhile, back to the unpayable loans:
    http://www.zerohedge.com/news/2016-06-19/problem-corporate-debt
    “We are just guessing here….but we believe there must be a few irate bank managers somewhere. Quite possibly they are irate with themselves, for having lent too much money to too many deadbeats. Here is a chart we have frequently shown before: the annual rate of change of the sum of charge-offs and delinquencies in commercial loans (we thank our late friend BC for the inspiration – may he RIP). Believe it or not, this number is growing at a record fast pace as of Q1 2016 – at 122% y/y it is surpassing even the rate of change peak seen near the trough of the “Great Recession” of 2007 – 2009. And this is happening with the Federal Funds rate target at a measly 0.25-0-50% corridor and the broad money supply (TMS-2) still growing at more than 8% y/y!”
    “U.S. HY Energy Defaults Tally $13 Billion in May; June TTM Default Rate * Approaching 5% * The June trailing 12-month (TTM) U.S. high yield bond default rate is closing inon 5%, reaching 4.7% after another $3 billion of defaults thus far this month, The $46.4 billion of recorded defaults this year is just $2 billion less than the total for the entire 2015. Through mid-June, energy and metals/mining accounted for 84% of defaults ($38.9 billion). The May energy TTM rate stood at 14.6% following $12.7 billion of sector defaults last month while the E&P rate is at 28.6%. The average high yield bid levels are at 92.9, up from 91.1 last month and from 83.7 in February when crude oil prices were at their low point.”

    But some good news on the Shale Oil projects:
    http://www.reuters.com/article/us-shell-shale-idUSKCN0Z60GT
    “Today, Shell makes a profit from shale oil production in “sweet spots” in the Permian or Duvernay in Canada with crude prices of $40 a barrel, Guidry said. After dipping below $30 in January, Brent crude is currently trading around $48.
    “In terms of execution, we are completely competitive and have aspirations to be leading,” Guidry said, adding the business could now compete with leading shale producers such as Pioneer Natural Resources and EOG Resources, though costs still could be reduced.
    Advances in technology meant there was scope to increase oil recovery from shale rock from today’s 7-9 percent by another 1-3 percent over the coming years, Guidry added.”

  40. Gail – Don’t forget about the difference in EROI. US coal can be as high as 80:1, while Chinese coal is generally 10:1. Thus the imports from Australia, US, etc. Also, Chinese coal is far away from the coasts, where most manufacturing is done, and the transport infrastructure isn’t mature yet. It is cheaper and better to inport coal.

  41. daddio7 says:

    When governments can create money to lend growth will continue.

  42. Stefeun says:

    Thanks Gail,
    Very interesting to see how and why all commodities are interdependant, especially fossil fuels, and why it can lead to surprising effects, such as peak coal happening before peak oil, although everyone thought it would happen decades later.

    Your demonstration shows once more that we cannot consider the pieces of our puzzle separately, they’re all interconnected, hold together mostly by debt (which allows the effects, e.g. on price levels, to be either delayed or forwarded in time, thus diminishing the role of traditionally considered parameters, such as geological reserves).

    This “time-arrangement”, thanks to debt, however seems to have a limit, which is to put all limits at same level, into which we’re likely to bump all at once.

    • I hadn’t really thought about coal peaking first, either. I know that researchers have been saying that the peak cannot be very far away. In fact, I am a coauthor of a 2013 paper in Energy Policy called, An analysis of China’s coal supply and its impact on China’s future economic growth. In it, we say that based on an analysis of available resources, China’s coal peak would seem likely to occur between 2025 and 2030. This analysis doesn’t include price.

      You are right about needing to think about the whole interconnected puzzle. The Hubbert Curve gives a little piece of insight about the overall problem, but not as much as most people think it does. Timing is terribly important, and traditional analysis has completely ignored the role of time.

      I am wondering if the reason we are seeing the effects of peak fossil fuels on coal first is because little coal mines don’t buy derivative hedges that guarantee a high price for coal–they simply close if the price goes too low. Coal has a bad reputation as well, so closing coal mines doesn’t worry people the way that falling drilling rigs does. The catch is that coal helps keep overall energy costs low. It also isn’t easily replaceable in particular applications.

      People haven’t considered the implications of such a problem. What if a wind turbine has parts made in China that need replacement? Usually exact replacements are needed. Hopefully, the company will still be open, and peak coal will not be leading to problems in getting needed replacement parts. And can we depend on China to be making billions of solar panels with coal?

  43. dashui says:

    In the “Wealth of Nations” Adam Smith, after discussing substitution, states that he is fond of French Wines, and since there is a limited amount of French soil, therefore the amount of French wine is finite. Then the chapter ends, and this subject is never brought up again.

    Please do an analysis of Mexico, I wonder if they will be the next Venezuela of this hemisphere.

    • I noticed that Mexico’s total energy consumption dropped by -2.6% in 2015. At the same time, UN population statistics indicate that its population is growing at 1.3% per year. The combination means that energy per capita fell by about -3.9% in 2015. This puts them in a pretty awful position economically.

      • Tim Groves says:

        My guess is that you would probably find similar trends replicated in many countries worldwide. Overall world population is currently estimated to be growing at a rate of around 1.13% per year (a rise of around 80 million people per year).

        Do you have any reliable statistics on world energy consumption for the past two years?

        If anything China’s energy consumption seems to have fallen slightly in the past two or three years, while its population is still rising slowly (0.46% between 2015 and 2016, adding a little over 6 million people).

        • I am not certain about the reliability of BP’s Statistical Review of World Energy 2016 data, but it is the only data I am aware of that comes out this quickly.

          Before I started writing this article, I started writing about the world situation, and found it was difficult to talk about what was happening overall, in a reasonable-length article.

          China’s population is now growing by 0.5% per year over the last three years –or (0.46% as you show), so its consumption per capita is growing by 0.5% less than the amounts shown under figure 3.

          On a world basis, world energy consumption has grown by the following percentages: 2.0% in 2013, 1.1% in 2014, and 1.0% in 2015. World population growth has been about 1.2% per year, so per capita consumption (equal to approximately energy growth minus population growth) has been negative for the last two years. World electricity generation only increased by 0.9% a year in 2015, so its generation was also growing less than population. The only time energy generation growth has been lower than this in recent years is 2009, when it was -0.8%.

          When I was in China, I noticed that the graduate students I was working with generally had one sibling. One young professor who was a little older had three. There were two reasons for this. Graduate students were generally over 23 + years old, and the big reduction in birth rate came later. The other issue is that the one child policy was most strictly enforced in Beijing. In more distant farming areas, more children were allowed. Also, better food supplies made possible by more fossil fuel use (and other factors) allowed people to live longer, too.

  44. Paulo says:

    I live on northern Vancouver Island, about 1 hour drive north of the last coal mine to operate. It produced a high grade coal for the export market. Coal has been extensively mined on the Island for the last 100 years, and there were many controversial plans for new mines and transportation options; primarially a new mine below Courtenay and a renewed rail line to an offshore loading facility at Port Alberni, on the west coast of the Island.

    5 years ago Quinsam Coal, the last to fall, was actively recruiting workers. I attended one seminar and simply sat back and watched as company wanks extolled the virtues of coal, their operation, and stated boldly it would never end. They asked high school students to forgo their plans for Fort Mac employment, and remain in Campbell River and work at their mine. They called it a ‘career’.

    2 years ago it shut down permenantly. The only likely future is a place for locals to scratch out pick-up loads when they tire of heating with wood or can no longer afford rising electricty prices. I think it is fairly obvious the China growth curve is over. The stats provided by all Govt. are lies as far as I can see. Those that are increasing personal consumption around here seem to be newly retired boomers with solid pensions and everything paid for. They go on cruises, buy motorhomes and trailers, and sit around and cook steaks while patting themselves on the back. The flashy new toys of the younger generation are heavily financed, with bi-weekly loan payments offered to make purchases look affordable. It is a scary mess.

    The name of this blog says it all. When people talk about continued/projected growth I simply say, “As far as I know we are on a finite planet…all 7 billion+ of us. Now, how much longer can we continue to grow and consume”?

    • Thanks for your comment. You have it exactly right, “As far as I know we are on a finite planet…all 7 billion+ of us. Now, how much longer can we continue to grow and consume”?

    • GGWP says:

      As far as I see it, the end of the age of mindless consumerism and energy waste is nigh. This paradigm has run its course.

      Mechanized and computational productivity enhancements dancing together and racing to the bottom of profitability and smashed into the rock solid foundation of energy production cost.

    • Thestarl says:

      Totally agree.I live on the eastern seaboard of Australia and we are in the midst of a totally unsustainable property bubble.I work in the metallurgical coal sector and have experienced the good times and the bad.What bothers me is that we have the highest household debt to income levels anywhere in the OECD as well as private debt to GDP at something north of 150%.
      How is this sustainable when we have wage stagnation (and in more instances deflation) not to mention deteriorating terms of trade due to collapse in commodity prices.Most of the guys I work with are much younger and totally tapped out with debt i.e. mortgage,credit card, lease cars with no savings living week to week.
      To me this is just a snapshot of all DM’s tapped out with debt, manufacturing outsourced to EM’s and now the whole thing seems to be imploding.
      I just wonder how long they can keep this going?

  45. Chinese crude oil production seems to peak right now. I am just writing 2 articles on Asian oil imports. In the 1st part I have many graphs on net oil imports

    Peak oil in Asia (part 1)
    http://crudeoilpeak.info/peak-oil-in-asia-part-1

    • Thanks! I am sure that price plays a role in this as well. China has a lot of unconventional oil that is unprofitable at low prices. I know I have seen an article saying, in effect, “Why spend lots of money extracting high-priced oil in China, when cheaper fuels can be purchased in the international market?” Thus, I expect that 2016 oil production will be lower.

  46. Your comments in the 3 pp that begin “After about 1970…” give me new insight on NAFTA and now TPP. It is not just about capital seeking cheap labor, but about capital seeking cheap energy (a lever for labor). Some of that cheap labor and energy also came with lax regulations allowing greater human and environmental exploitation. I think we know enough about those trade deals to understand that they also have non-trade elements that seek to give capital further advantages, but this insight coupling trade and energy and depressed wages and debt is interesting to me. The populist political ferment we are seeing in the US right now may be the fallout of all this — non-elite workers are less able to keep up and more interested in changing the rules of the game. Thnx.

    • I originally included more in that paragraph. I think adding India in 1998 and China in 2001 to the World Trade Organization was all about finding more fuel. Notice how China’s coal consumption rises at an incredibly fast rate after this point in time.

      The Kyoto protocol was adopted in 1997, and this also had the unintended effect of pushing manufacturing to coal-producing regions. It gave a reason to close down polluting industries in the North America and Europe. At the same time, it sent China and India a signal that the if they would ramp up production of consumer goods, and all kinds of other things, the US and Europe would give them little competition. There would be no tax on imported goods made with coal.

      The fact that China and India could ignore pollution issues of all kinds was helpful too in keeping prices down. Thus, globalization was to some extent a cover to get around rising pollution controls in developed countries.

      • bandits101 says:

        “Thus, globalization was to some extent a cover to get around rising pollution controls in developed countries”. Yes globalization ramped up exponentially after Kyoto. The west saturated the East with their pollution. It was a feel-good time for markets world wide. The sponge is now full. “There would be NO TAX on imported goods made with coal”…….and none on exported coal and other FF’s. We certainly are a two faced lot, are we not.

        • Tim Groves says:

          We certainly are a two faced lot, are we not.

          Speak for yourself. I have at least half a dozen faces depending on what mood I’m in when you ring the doorbell.

          “The West” and “the East” are not entities to which conscious intent can be attributed. What happens is that a relatively few people with the power, wealth and influence to make decisions make the decisions, and the rest of us get to benefit or suffer as a consequence. How else could it be in such a complex society?

          You’re looking for somebody to pin the blame on for pollution “in the East” when the situation are nowhere near simple enough to put together a an indictment that would stand up in court.

          Lots of Chinese and Indian people actively sought to build factories and lots more actively sought jobs in them. And despite the horrors of air and water pollution in much of India and China—which are blunting both quality of life and total life expectancy, I would expect that most people prefer that form of suffering to the grinding poverty they would have to endure back on the farm.

          Before moving to the cities, these Chinese and Indians were not hunter gatherers living a life of leisure and ease like the Bushmen or the Amazonians. In many cases they were dirt poor half-starved peasants or de facto slaves for whom a job in a plant making Iphones or sneakers was an improvement on what they faced at home, as well as the start of an opportunity for something better, an opportunity that subsistence farming could never have provided. An opportunity provide by King Coal.

          • Fast Eddy says:

            I recall a business trip to china in the mid 90’s — I was amazed to see a lone tall building in the middle of nowhere — with people living along side swine and other farm animals…. it was poverty in the extreme…

            So yes — they were not hunter gatherers — and yes they embraced industry without environmental controls — because it meant a job — food — survival

            Kinda like selling out your soul to the devil for a tee vee and a car — based on the results….

            • OP says:

              In fact, here’s some anecdotal evidence from my last trip there: They still live among their animals, but with a Geely/Volvo, Xiaomi and Hisense Tee Vee added to the collection.

              https://cdn-webimages.wimages.net/050f6655c4f571605361ab4eedb36f2de39418-wm.jpg

            • Fast Eddy says:

              Living in the same mud hut with chickens is a bad idea….

            • I never had a chance to see how poor people lived today in China (this tends not to be on the tour), but when I visited a village in India, I saw a house with only a kitchen and a multipurpose room–also an upstairs attic reached by ladder for some storage. (No bathroom. Water was carried in jars on tops of women’s heads from the place where water was available for the village for a few hours a day.) The house had a single light bulb, a treadle sewing machine, and a TV. Electricity was available only a few hours a day. No other appliances. The animals were penned outside. One shelf on the wall had bright colored nail polish, no doubt for the teen daughter in the family. We sat on the dirt floor and ate lunch with no implements except our hands.

              We also drove by homes that were even poorer–no separate kitchen; cooking was done outside.

            • China knew that they desperately needed arable land for crops, so they built high rise buildings to conserve the arable land. I saw high-rises of something like 12 or 13 stories that did not have elevators. The lower floors were more popular than the upper ones.

            • ouch—i always assumed those chinese highrises had elevators

              seems the Chinese have got their EROEI’s all wrong somehow!!

            • GGWP says:

              Aha, those missing elevators ended up in the west as bragging rights accessories for their villas. It all becomes clear now. Thanks Gail.

          • Coal directly and indirectly provided a whole lot of jobs. It also indirectly, if not directly, provided a lot of revenue for government services. If coal is lost, a whole lot is lost.

        • Fast Eddy says:

          Rats will find around just about anything …. to get to more….

          Humans too.

          • bandits101 says:

            No argument with that. More sex, more food, more trinkets, more power. In its primitive basic form, it’s simply pleasure seeking and many papers and books have been written on the subject.

  47. China may have also decided it needed to factor in “externalities” into the price of its coal usage — given the high levels of pollution that have been experienced. While it may have been a policy action not an economic/market one, this could raise the effective “price” of coal (thus reducing demand).

    • I agree that pollution is an issue as well, but my question is when this would affect the timing of the cutback in coal production, and whether this is really the primary issue.

      When I look to see the frequency of the search term “pollution China,” I see that it rose significantly about the beginning of 2013. March 2013 was when Xi Jinping took over as president. My strong impression is that no change in policy occurred before the political change.

      The big drop in coal growth started in 2012. That is also when coal prices began dropping from the high level hit in 2011. My guess is that while pollution may have played a role in continuing the cutbacks, the initial impetus was lower profitably. As this profitability dropped further, this added justification for the new administration to close facilities, and pollution problems created a good cover story for the reason why this closure was taking place–helped their political popularity.

      There has also been a problem with very high death rates of miners in Chinese coal mines. http://www.jpma.org.pk/full_article_text.php?article_id=1811
      This reference says:

      It is estimated that coal mining accounts for less than 4% of the Chinese work force, however the fatalities from coal mining injuries are the single most important occupational hazard in China, responsible for about 45% of industrial fatalities. Annual work place fatality rate in China is 11.1 per 100,000 workers compared to the rate of 2.19 per 100,000 in US.

      This recent article from Reuters says:

      China will aim to close more than 1,000 coal mines over this year [2016], with a total production capacity of 60 million tones, as part of its plans to tackle a price-sapping supply glut in the sector, the country’s energy regulator said.

      China is the world’s top coal consumer but demand has been on the wane as economic growth slows and the country shifts away from fossil fuels in order to curb pollution.

  48. ejhr2015 says:

    How about this explanation? Our industrial dynasty is declining. Dynasties are usually in the order of 250-300 years long before collapse. Starting say in 1750 we are at 265 years now, and in stagflation mode the last stage before collapse. We peaked back before 1970. Collapse is coming as sure as sunset. All these events. like coal decline and declining ERoEI, declining shipping, declining or deflating economies, especially in the West, and demographic changes, peaking of demand by boomers etc. all point downhill. It’s not a trend we can escape.

    • Basically, we are following the same overshoot and collapse model as everyone else. Eventually, the return on human labor falls–in fact that is what has been happening, especially since 2000, but even back to 1981. When the return on human labor falls, it is impossible to pay for government programs. The huge demands of retiring baby boomers causes part of the problem. In theory, taxes should be raised to cover them. This makes the return on human labor for the rest even worse.

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