Energy limits: Why we see rising wealth disparity and low prices

Last week, I gave a fairly wide-ranging presentation at the 2016 Biophysical Economics Conference called Complexity: The Connection Between Fossil Fuel EROI, Human Energy EROI, and Debt (pdf). In this post, I discuss the portion of the talk that explains several key issues:

  1. Why we are right now seeing so many problems with respect to wealth disparity and low commodity prices (Answer: World per capita energy consumption is already falling, and the energy/economy system needs to reflect this problem somehow.)
  2. Why the quest for growing technology leads to growing wealth disparity (Answer: The economy must be configured in more of a hierarchical pattern to support growing “complexity.” Growing complexity is the precursor to growing technology.)
  3. Why rising debt is an integral part of the energy/economy system (Answer: We could not pay workers for making long-lasting goods and services without using debt to “pull forward” the hoped-for benefit of these goods and services to the present, using debt and other equivalent approaches.)
  4. Why commodity prices can suddenly fall below the cost of production for a wide range of products (Answer: Prices of commodities depend to a significant extent on debt levels. A major problem is that when commodity prices rise, wages do not rise in a corresponding manner. Rising debt levels can mask the growing lack of affordability for a while, but eventually, debt levels cannot be raised sufficiently, and commodity prices fall too low.)
  5. The Brexit vote may be related to falling energy per capita in the UK. Given that this problem occurs in many countries, it may be increasingly difficult to keep the Eurozone and other similar international organizations together.
  6. My talk also touches on the topic of why a steady state economy is not possible, unless we can live like chimpanzees.

My analysis has as its premise that the economy behaves like other physical systems. It needs energy–and, in fact, growing energy–to operate. If the system does not get the energy it needs, it “rebalances” in a way that may not be to our liking. See my article, “The Physics of Energy and the Economy.”

An outline of my talk is shown as Slide 2, below. I will omit the EROI and Hubbert model portions of the presentation.  

Slide 2

Slide 2

Peak World Coal Seems To Be Happening, Right Now

In the view of most of the researchers I was talking to at this conference, oil is likely to be the first problem, not coal. And the issue is likely to be high prices, not low. So peak coal now, as shown in Slide 3, doesn’t seem to make sense. Yet, my analysis of recent data strongly suggests that peak coal is exactly what is happening, right now.

Slide 3. World and China appear to be reaching peak coal.

Slide 3. World and China appear to be reaching peak coal.

I will show later in this presentation why peaking coal production does seem to make sense–price levels of all fossil fuels seem to vary together. The extent to which debt levels are growing seems to be a major factor in price levels. When the debt level is not growing rapidly enough, “demand” is not high enough, and prices for all fossil fuels tend to fall simultaneously. A related issue is the extent to which the world economy is growing; if world economic growth is too slow, this will also tend to hold down demand, and thus energy prices.

China’s rate of growth in coal production started falling back in 2012, which is when coal prices started falling. This is before China’s new leadership took over in March 2013. We know that coal production in China is likely to continue falling, because China’s energy bureau is reporting that China plans to close over 1000 coal mines in 2016, because of a “price-sapping supply glut.” See my article, “China: Is peak coal part of its problem?” for additional information.

World Per Capita Energy Consumption Seems To Have Already Started Falling

Slide 4. World per capita energy consumption may have reached a peak

Slide 4. World per capita energy consumption may have reached a peak

The reason why I say that world per capita energy consumption may have reached a peak in 2013 is partly because coal consumption appears to have peaked. If coal has peaked, it will be hard to make up the shortfall using other fuels, such as renewables, or even natural gas. Furthermore, recent world figures (shown above) already show a small drop in per capita energy consumption. If world coal production continues to drop, we can expect world per capita energy consumption to continue to drop.

Energy Consumption Trends for a Few Countries

The figure below is not actually in the presentation–I thought I would add it now, to show energy consumption varies for a few economies. The upper chart in the Supplemental Slide shows the trend in per capita energy consumption in UK, Japan, Spain, and Greece. We know that Japan, Spain, and Greece have been experiencing economic problems for several years, something that perhaps should not be too surprising, given their falling energy consumption per capita. The UK shows a similar pattern to these three countries. Such a pattern is likely to lead to rising wage disparities, for reasons we will discuss later in this presentation, when we talk about “complexity.”

Supplemental information showing how trend in per capita energy consumption seems to reflect health of economies

Supplemental slide. Per capita energy consumption trends for four advanced economies and for China, based on BP 2016 Statistical Review of World Energy and 2015 UN population data.

China’s energy consumption shows a contrasting pattern. China experienced rapid growth in energy consumption after it joined the World Trade Organization in 2001. Recently, China’s growth in energy consumption has been slowing, suggesting slowing growth in the economy–perhaps even more than reported in official GDP reports.

Why Peak Per Capita Energy Matters

In Slide 5, I give an overview of why peak energy per capita matters. My view is the second one shown on this slide. It is not that every segment of the economy will necessarily have problems. Instead, un-favored segments are likely to be first to have problems. Most conference attendees came with the first view.

Slide 5. Two views of peak energy per capita.

Slide 5. Two views of peak energy per capita.

How the Economy Is Affected by Growing Complexity

Joseph Tainter in the Collapse of Complex Societies tells us that the way economies that are in danger of reaching limits can sometimes solve their problems is through increased complexity.

Slide 6. Complexity introduction

Slide 6. Complexity introduction

Economists today seem to believe that technology will solve our problems. I see complexity and technology as being related, with complexity being a precursor to technology. Economies that hope to adopt higher levels of technology need to take steps in the direction of growing complexity, to achieve this goal.

When I thought about what makes up complexity, this is the list of elements I came up with:

Slide 7. Basic Elements of Complexity

Slide 7. Basic Elements of Complexity

Regarding concentration of energy, the use of concentrated energy seems to be what sets humans apart from other animals.

Slide 8. Early use of concentration of energy

Slide 8. Early use of concentration of energy

If we want a steady-state economy, “all” we need to do is set aside our use of concentrated energy, and live like chimpanzees. I am not sure how we keep our bigger brains adequately nourished. A couple of slides related to this are Slides 9 and 10.

Another type of concentration of energy is capital goods. Capital goods are all of the goods that we expect to last for a fairly long time–things like homes, vehicles, and factories. The big issue is how to pay for capital goods.

Slide 11. Capital goods-- more recent examples of concentrations of energy

Slide 11. Capital goods– more recent examples of concentrations of energy

The problem is that we need to pay workers now, but the benefit of these capital goods is spread over many years in the future. Somehow, the future benefit of these capital goods must be “pulled back” to today. The obvious answer to this predicament is the use of debt (or debt-like instruments) to fund capital goods. We will get back to the issue of debt later.

The next few slides (12 to 14) show other ways that concentrations of energy can be developed. One way is through the creation of businesses. Even larger concentrations of energy can be formed by creating bigger businesses, including international businesses. Governments can also be used to concentrate the use of energy resources, because of government’s ability to build roads, schools, and many other projects. International organizations can also act to concentrate wealth, by easing trade among members (Eurozone and World Trade Organization) and by lending money to member countries (International Monetary Fund and World Bank). All of these organizations can benefit from the use of debt to fund their growing organizations.

We said that concentration of energy was the first element of complexity (see outline at top). The second element of complexity is pure elements and compounds. In many ways, this requirement is similar to concentrations of energy, in the way it allows technology to work.

Slide 15. Why pure elements and compounds are needed for complexity

Slide 15. Why pure elements and compounds are needed for complexity

The third element of complexity (see outline at top) is leveraging of human energy through hierarchical organization. In many ways, this is the idea of concentrated energy, as applied to humans.

16. Leveraging of human energy through hierarchical organization.

16. Leveraging of human energy through hierarchical organization.

Historically, the big problem has been populations that grew too large for their resource bases. In a way, we are reaching a similar predicament. Not too surprisingly, when this happens, it is the people at the bottom of the hierarchy who tend not to receive enough.

Slide 17. People at the bottom of a hierarchy are most vulnerable.

Slide 17. People at the bottom of a hierarchy are most vulnerable.

Why Debt Is Required

Slide 18 - Why add debt?

Slide 18 – Why add debt?

One of the fundamental benefits of debt is time shifting.

Slide 19. How debt allows time shifting.

Slide 19. How debt allows time shifting.

Of course, the value of these capital goods is speculative, when debt is used to price them in advance. As long as capital goods, and other uses of debt, provide sufficient benefits to the economy so that debt can be repaid with interest, the system tends to work as planned.

Slide 20. Debt makes the economic system work more smoothly.

Slide 20. Debt makes the economic system work more smoothly.

One key aspect of debt is its ability to determine demand, and thus prices, of commodities such as oil and natural gas. The reason why debt has almost magical power is because if a potential buyer is given a loan for any kind of capital good, say a house, or car, or factory, the potential buyer can purchase the capital good far sooner than if he or she needed to save up for it. Each of these capital goods requires commodities of various kinds, such as steel, copper, oil, coal, and natural gas. Thus, we would expect rising debt levels to raise the prices of a broad range of commodity prices, simultaneously.

21. Debt helps determine prices of commodities

21. Debt helps determine prices of commodities

We can think of the situation as follows: An economy that keeps growing is (in energy terms) an out-of-balance system. Rising debt levels help maintain this out-of-balance condition by providing ever-higher commodity prices. These higher prices encourage greater extraction of energy products, even when the cost of extraction is rising because of diminishing returns. Even if extraction costs keep rising, the situation of ever-rising commodity prices cannot go on endlessly. At some point, prices become too high for workers to afford. Demand tends to fall at some point because workers at the bottom of the hierarchy find themselves “priced out” of buying goods such as houses and cars that would help maintain commodity demand.

What causes debt levels to stop rising? One reason why debt levels stop rising is that debt reaches absurd levels, making it difficult to repay debt with interest. Several examples of absurd debt levels are given in Slide 21. An additional example is excessive use of student loans. If incomes after student loans are not high enough, student debt may create a huge burden, preventing former students from buying homes and cars and starting families. The problem is that incomes after the educational experience are not sufficiently high to both pay back debt with interest and leave adequate funds for other needs.

Growing wage disparity can also lead directly to falling energy prices:

Slide 22. Growing wage disparity tends to lead to falling energy prices.

Slide 22. Growing wage disparity tends to lead to falling energy prices.

Both growing wage disparity and lack of growth in debt are signs that an economy is not growing very fast–in some sense, that the economy is not hot enough. Some of the would-be workers tend to drop out of the system, because wages are not high enough to cover commuting and childcare expenses. In some sense, they “condense out,” similar to the way that water turns to ice when there is not enough heat in the system.

The situation with prices of fossil fuels is similar; low prices are a sign that the economy is not growing fast enough. The system is forcing a reduction in the production of many kinds of commodities, including fossil fuels, by reducing prices below the cost of production for quite a few producers. This situation can be thought of as some of the production “condensing out,” because the energy products consumed are not causing the world economy to grow fast enough to maintain a “hot” demand level.

More Thoughts on Energy Prices and Debt Levels

Slide 24. Use of debt permits two different valuations of worth of commodities.

Slide 24. Use of debt permits two different valuations of worth of commodities.

The thing that is confusing is that for many years, energy and commodity costs were very similar to energy and other commodity prices. It has been only very recently–when prices rose too high for consumers to afford–that the difference has appeared.

Slide 25. Possibility of different price compared to production cost appears very late.

Slide 25. Possibility of different price compared to production cost appears very late.

Looking at historical data in Slide 26, we can see two recent sharp drops in oil prices. Both occurred when debt levels were no longer rising.

Slide 26. Connection of debt with oil prices is shown by two sharp declines.

Slide 26. Connection of debt with oil prices is shown by two sharp declines.

In fact, prices of oil, coal, and natural gas tend to rise and fall together–just as we would expect, if they are all responding to the same changes in debt levels, and indirectly, the same changes in world economic growth rates.

Slide 27. Prices of oil, call and natural gas tend to rise and fall together.

Slide 27. Prices of oil, call and natural gas tend to rise and fall together.

If energy prices are based on debt levels, our concern should be that all fossil fuels will peak within a few years of each other. The cause of the peak will be low prices, not “running out” of energy products.

Slide 28. Concerns if energy prices are based on debt levels

Slide 28. Concerns if energy prices are based on debt levels

In fact, the problems of the economy may be quite different from “running out.”

Slide 31. Candidates for what really brings the system down.

Slide 31. Candidates for what really brings the system down.

Supplemental Information on Income Disparity

A few slides giving additional information on income disparity are shown as slides 38-40. Please check the end of my presentation for these.

Conclusion

One topic I did not specifically discuss in this presentation is the possibility of slowing world economic growth. If we are seeing falling world energy consumption per capita, it should not be surprising if world GDP growth per capita is falling as well. I have talked about the link between energy consumption and GDP growth many times, including in my paper, Oil Supply Limits and the Continuing Financial Crisis.

It was not until I sat down to write up this presentation that I realized how closely the timing of the recent sharp drop of world oil prices corresponds with the decrease in world per capita energy consumption shown on Slide 4. World per capita energy consumption hit a peak in 2013, and dropped slightly in 2014, with a greater change in 2015. Mid-2014 is when oil prices began their major slide, so the timing of the two events matches up almost precisely. Thus, the drop in coal consumption may be resulting in low world economic growth, which in turn is holding down both oil and natural gas prices.

The apparent coincidence in timing may simply reflect the fact that the same forces that cause falling commodity prices are also causing low economic growth. Growing wage disparity and lack of growth in debt seem to be factors in causing both. If workers at the bottom of the hierarchy could better afford the output of the world economy, with or without additional debt, the world economy would have a better chance of growing.

I don’t see much hope for fixing a world whose economy is moving in the direction of shrinkage. Instead, the situation is likely to get worse, until the financial system collapses, or one of the issues shown on Slide 31 starts to become too great a problem.

I see the big push for renewables to be mostly a waste of time and resources. The major exception is perhaps hydroelectric, in parts of the world with good locations for new installations. EROI analyses are often used to justify renewables, but in my view (shown in the part of the presentation not discussed), EROI is too “blunt” a tool to properly evaluate resources that differ greatly in quality of output and in debt requirements. A major goal needs to be to maintain the functionality of the electric grid; evaluations of intermittent renewables should consider real-life experiences of other countries. For example, current pricing approaches seem to exacerbate the problem of falling wholesale electricity prices, and thus falling fossil fuel prices. (See this or this article.)

A major impediment to getting a rational discussion of the issues is the inability of a large share of the population to deal with what appears to be a potentially dire outcome. Textbook and journal editors recognize this issue, and gear their editorial guidelines accordingly. I was reminded of this again, when the question came up (again) of whether I would consider writing a book for a particular academic book publisher. The main thing I would need to do to make the book acceptable would be find a way of sidestepping any unpleasant outcome–or, better yet, I should come up with a “happily ever after” ending.

 

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 inadequate supply.
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1,725 Responses to Energy limits: Why we see rising wealth disparity and low prices

  1. Nihilism, Misanthropy & Misery Metasticize

     now UP on the Doomstead Diner!

     

    Dedicated to Fast Eddy here on OFW and the entire commentarial of Nature Bats Last.

     

    RE

    Nihilism, Misanthropy & Misery Metasticize

    • Ert says:

      Somehow I really don’t get the picture… I can understand RE in regard of FE, because many of FE’s comments add nothing to the discussion (where I would sometimes even not exclude me, too). But in contrast to name ones blog the Doomstead Dinner and focusing very much time of ones life to the doom oriented sphere… and ranting about lots of things and posting lots of ‘bad’ news… somehow I don’t get the difference from my point of view…. its a different way to cope with the degrading global situation…

      There are many individual ways to progress and cope/deal with the information and implications of the articles presented at OFW and elsewhere. Depending on the individual circumstances (and the progress along the Kübler-Ross model) everyone here and elsewhere has their own mechanisms to deal with things (at a given time).

      I would sometimes also like to have some more on-topic discussion, but I for my part… after approx. 8 years intensive dealing with “those issues” see that the discussion in the “peak”-related forums (i know) converge – as the picture of the future gets clearer (and closer). From my view there is no big difference of opinions – if viewed from an “mainstream” outsider, which had no prior exposure to the “LtG/Peak”-topics.

      Therefore I see RE article at his blog as a coping mechanism, too. From RE’s article I take that it is sometimes better to limit ones exposure to all of these topics… If it is not clear what for decisions we may make/derive from them for our “real” life.

      • “From RE’s article I take that it is sometimes better to limit ones exposure to all of these topics”- Ert

        If that is your take-away from the article, then you subscribe to the philosophy that “Ignorance is Bliss”.

        Certainly there are many “coping mechanisms” floating around here, from people who hang their hopes on renewables to those who hope for Giant Meteor to be elected POTUS and put us out of our collective misery quickly, painlessly and efficiently.

        My particular coping mechanism is to analyze these problems rationally and try to figure out a way to stay above ground another day or two. IMHO, this is a better coping mechanism than constantly writing about DEATH. I’d rather spend my time left walking the Earth discussing how to LIVE.

        RE

        • Ert says:

          Hi RE,

          You wrote: ” I’d rather spend my time left walking the Earth discussing how to LIVE.”

          Instead of discussing and thinking about how to live it is sometimes better to actually do it. Then as you write: “figure out a way to stay above ground another day or two” – that may be the difference in the end… but so many days lost by thinking and discussing about a probable end.

          Also I don’t recall discussing death here – that topic is not on my list. For me it is about in which direction to put or devote my time and my efforts and what to stop / discontinue and what to pursue. The journey is different for everyone and depends on circumstances (e.g. single, family, location, resources, etc. pp)

          I think our possible predicament as a species can be a personal wake-up signal to fundamentally changes ones goals and directions in life. But this is all a process – and as i wrote – a very personal one, on a very personal / individual path.

          • Arrrrggghh. Yet ANOTHER lost response! This database is a MESS!

          • Stefeun says:

            Ert,
            I agree on all points, except that for me, thinking and realizing where we are and why, is not lost time.
            It helps me to take deeper root into the present time -which is all we have- and live it more intensely.

            You’re right to say this is a very personal process and each of us has to build up his/her own path. One thing I wouldn’t do is to judge others and tell them what they should do and how they should behave. A word to the wise is enough.

            • Ert says:

              @Stefeun

              Agreed & I surly think a lot about these issues – but sometimes I feel (know) it is to much which diminishes my capacity to feel joy or connectedness in real life…. its the opposite to the intensely part….

              “One thing I wouldn’t do is to judge others and tell them what they should do and how they should behave. A word to the wise is enough.”

              Well said and very true…

    • InAlaska says:

      Here is a post from our good friend RE, who used to be a welcome breath of fresh air on this blog. He feels, as do I, that this site used to be more welcoming to a broader view of future possibilities but has become mired in a narrow-minded echo chamber led by Fast Eddy and a few other of his groupies. I, for one, miss the old OFW. From RE, I quote:

      “I also cross post and regularly talk on the Collapse Cafe with Gail Tverberg who runs the Our Finite World blog. I don’t drop in the commentariat there too often, but after her last article I did so because I take issue with her cockamamie anthropological arguments that Homo Saps must have Fire because we have small jaws and need to cook our food. Mostly we had a fairly genial discussion about our conflicting opinions on this topic, but again OFW has a very prolific poster Fast Eddy, who is yet another nihilist/misanthrope. You can’t make a positive comment on OFW these days without FE dropping in to accuse you of holding a passport to DelusiSTAN. The commentariat of OFW USED to be fairly balanced with people proposing different ideas and possible solutions, but they seem to have mostly disappeared as the overwhelming meme now in that comentariat is that Homo Sap is doomed and no solution will work. Although she is more cagey about it than Dr. McStinksion, you can tell Gail herself holds out no hope. She is convinced Homo Saps must have fire to survive, convinced we will be unable to extract the expensive FFs left due to economic reasons and then will proceed to burn down all forests on earth in the insatiable Quest for Fire. So this attitude attracts the nihilists and misanthropes into the commentariat, and then they come to dominate because they depress the hell out of everyone else and then people holding opposing opinions stop reading and/or contributing.”

      • Fast Eddy says:

        As I said earlier … if only there had been a Fast Eddy character on FW when I discovered it…. well – there wasn’t — but now there is — and I am doing the world a public service by burning off the hopium so that others don’ waste their final days on futility.

        Nobody is stopping anyone from posting these delusional ideas — all I am doing is bringing facts to the discussion …

        A lot of people don’t do facts… they want to dream and imagine….

        Why not shift over the Peak Prosperity — or RE’s site — FW is the only bastion of sanity on the planet and as such it must be defended from the hordes at all costs.

        • Yorchichan says:

          Thanks for all your entertaining comments, Fast Eddy. I for one appreciate the way you try to stick to facts to refute what others are posting and, unlike those who attack you, never respond in a personal manner.

          You must, by now, be starting to suspect your “Last Christmas” prediction was off the mark, though😉

          • Fast Eddy says:

            I hope I am years off the mark. Let’s go for decades….

            My prediction was made when the commodity collapse was occurring … China pumped out massive stimulus in Q1 which reversed the crash… (over 1 trillion dollars)… that is wearing off (see declining oil prices)

            The other factor I am looking at is corporate profits… the stock market is meaningless… if corporate profits are falling that eventually means layoffs and a deflationary bust up… I posted a chart yesterday indicating 6 quarters of declining profits…. that is ominous…

            There will be no warning when this unravels … I cannot rule out something dramatic happening before the end of the year

            I see the violence in Europe and police vs blacks in America as deliberate provocations meant to usher in police states to pre-empt mass protests from the masses who have no work and who are becoming increasingly frustrated with their governments.

            Something is brewing… and it ain’t a low fat latte with organic milk…

      • It is too bad that we can’t have a “live and let live” policy. If RE wants to say different things than I do, than just keep his views at his website, and don’t say bad things about mine. I don’t talk badly about RE and his website.

        • Vince the Prince says:

          Pardon Gail, I can’t speak for RE, but he was making a helpful point as you are.

          “It is too bad that we can’t have a “live and let live” policy”

          Fast Eddy did not seem to get the message, unfortunately for your website.

          • Fast Eddy says:

            Live and let live?

            That sounds like a invitation to the hordes from DelusiSTAN to drop by our party and piss and shi-t in the corner — and not be tossed out on their as.s-es.

            I’d rather the guests arrive carrying baskets of logic and facts.

        • I don’t say “bad things” about your website. As you well know, I highly respect the analysis you do, that is why I cross post your articles religiously. I don’t think I missed cross posting a single one in the last 2 years.

          However, that does not mean I cannot drop in the commentariat here to say my piece about what I think is going wrong with it, It also certainly does not mean I cannot write whatever I feel is important to say on my own Blog of the Doomstead Diner. I can make links to that long as you don”t whack them. Readers can then see both perspectives if they like.

          • Artleads says:

            Can’t disagree with these points, RE. No one should agree with everything anyone else says. That would be abdication of responsibility. I, for one, also respect Gail, while thinking I should have the right to voice my own contrary opinions. Otherwise we get a cult leader with their faithful flock.

          • Fast Eddy says:

            ‘what I think is going wrong with it’

            On the contrary …. FW continues to be the pinnacle of truth for all issues related to the end of civilization …

            It is not a place of wonderful fairies who smoke organic hopium while prancing about the camp fire.

            If fairies do knock on the door with their crazed ideas — what should happen is their unsound ideas should be exposed as unsound (they need to be educated)… if they are not unsound then the ideas can be embraced…and we add to the knowledge base…

            But if they continue to pummel FW with unsound ideas — ignoring logic — dismissing facts and common sense…

            Then this is what awaits:

            The thing is …. FW is the only place on this entire planet (outside of the very highest halls of power) where a very small number of individuals convene who truly ‘get it’ … the total number is less than 20… this group understands the horror of what we are facing … accepts it … and is interested in analyzing it…

            FW will be defended.

            • hkeithhenson says:

              “FW will be defended.”

              I am amazed that you think you are defending Gail’s blog. Gail’s essays are analytical and while they don’t paint an attractive future, they certainly do try to understand the problem space. If you think there are 20 people who know the future, you are just wrong. Nobody can know the future. It’s not likely will get hit with a comet, but it is certainly something that could happen. Likewise, we could have bird flu mutate into something like the 1918 flu and knock 10 or 20 percent off the population. Or Rossi’s cold fusion could turn out to solve the energy problem. Or the Russians could use their 20 tons of smallpox. Or the AI people could make a major break through and in a year we would all be working for The Machine. Or the Middle East heat waves could get to the point that governments would look hard for an energy solution that wasn’t fossil fuels.

              Your deriding potential solutions is far from Gail history. She edited and sponsored two early articles on power satellites and one on StratoSolar when the Oil Drum was up.

            • Fast Eddy says:

              I think it was Gail – it was definitely someone on this site – who explained that even if a solution were at hand it would take many years to roll it out.

              We do not have many years.

              We don’t even have a &^%$ solution!!!!

              I have put forward a solution — driving a pipe into the sun and sucking energy back to earth.

              It makes as much sense as beaming solar to earth from space.

              What do you reckon Keith – is my idea gonna save us?

              Gail concluded the space solar is too expensive – it is unworkable. Did you miss that part?

              For some reason she feels the need to coddle you ….. I am not the coddling type.

              In fact — let me run through the china shop with a sledge hammer to make my final point…

              Imagine if tomorrow we discovered a cheap source of energy that could replace oil…. that would result in ever increasing populations across the planet — it would result in more raping of the planet’s other dwindling resources…

              In short – it would solve jack sh-it.

              Eternal growth is not possible on a finite planet.

              There is no hope — there is no solution – the future does not require the wearing of shades….it looks like:

            • Timing is a big issue with space solar. The view of costs changes over time. We can’t just sit around, even if the outlook does look dim. It still makes sense to try to figure out something that might help.

    • Stilgar Wilcox says:

      RE, if it’s any comfort to you, on every message board (and I don’t care what the subject is) it always inevitably occurs that one overpowering personality takes it upon himself to police the message board to maintain his overall viewpoint. It happened on The Oil Drum when Ron Patterson (Darwinian) ruled the roost. Late in the game on that website his presumed power position clashed with the actual moderator, Leanan, and after some exchanges left to begin his own website, peak oil barrel dot com to rule the roost on his own message board.

      On peak oil dot com for a while it was shortonoil. I couldn’t write anything without him attempting to guide me into his viewpoint in condescending ways, often explaining things I hadn’t even touched on. So I left for this website.

      The same is probably true for every small community in which one dominant male personality sets the tone for the rest of the inhabitants. Remember the movie First Blood? The town Sherriff, Teasle, who dictated town ediquette. Early in the movie he tells one citizen to take a bath. Later of course he bumps heads with Rambo and it escalates into mayhem because neither top dog would acquiesce.

      One male pissing on the fences that border a town or a message board (or even on another poster) is just how it is with humans. It’s no different with other primate species. It’s why my relatives in the UK voted yes on Brexit, so they wouldn’t be under the rule of Brussels. Even if they end up in a worse economic situation, they don’t care because at least they get back their country’s sense of self rule.

  2. adonis says:

    i still believe our situation is like a ponzi scheme which nearly imploded in 2008 and will likely implode shortly taking down a subtantial part of the investors will we be reduced to savagery or violence once the dust settles no, we will be sheep easily herded into the direction the elites wish to herd us into slaughter or producer . the new world order

  3. InAlaska says:

    Here is a post from our good friend RE, who used to be a welcome breath of fresh air on this blog. He feels, as do I, that this site used to be more welcoming to a broader view of future possibilities but has become mired in a narrow-minded echo chamber led by Fast Eddy and a few other of his groupies. I, for one, miss the old OFW. From RE, I quote:

    “I also cross post and regularly talk on the Collapse Cafe with Gail Tverberg who runs the Our Finite World blog. I don’t drop in the commentariat there too often, but after her last article I did so because I take issue with her cockamamie anthropological arguments that Homo Saps must have Fire because we have small jaws and need to cook our food. Mostly we had a fairly genial discussion about our conflicting opinions on this topic, but again OFW has a very prolific poster Fast Eddy, who is yet another nihilist/misanthrope. You can’t make a positive comment on OFW these days without FE dropping in to accuse you of holding a passport to DelusiSTAN. The commentariat of OFW USED to be fairly balanced with people proposing different ideas and possible solutions, but they seem to have mostly disappeared as the overwhelming meme now in that comentariat is that Homo Sap is doomed and no solution will work. Although she is more cagey about it than Dr. McStinksion, you can tell Gail herself holds out no hope. She is convinced Homo Saps must have fire to survive, convinced we will be unable to extract the expensive FFs left due to economic reasons and then will proceed to burn down all forests on earth in the insatiable Quest for Fire. So this attitude attracts the nihilists and misanthropes into the commentariat, and then they come to dominate because they depress the hell out of everyone else and then people holding opposing opinions stop reading and/or contributing.”

    • MG says:

      Without the rising amounts of the cheap external energy, the human population simply collapses. Because the more we use the external energy, the faster and more genetic mutations we accumulate.

      • MG says:

        Maybe it was the fire itself that caused that we lost our hairy skin of apes and started to be dependent on it.

        https://peerj.com/preprints/1702.pdf

        • Ert says:

          The best presentation regarding that topic the usage of fire, and the evolution of Humanity as precursor to the agricultural revolution is: “Catching Fire: How Cooking Made Us Human”: https://www.youtube.com/watch?v=69ckWLrvVhg

          The video is great and summarizes the most important aspects of the Book by by Dr. Richard Wrangham, Professor at Harvard University and co-director of the Kibale Chimpanzee Project

        • Stefeun says:

          Thanks MG,
          Interesting to see the list of all the possible causes that have been evaluated (or imagined).

        • Artleads says:

          What about the need to sweat, given that humans are the premiere long distance runners among apes (and perhaps most other mammals)? Could there be a relationship, either part of the cause or part of the effect of hairlessness? (Not an opinion. Just a question.)

          • Read Marvin Harris’ “Our Kind: Who We Are, Where We Came From, Where We Are Going”. He explains sweating pretty well in that text as I recall.

            https://www.amazon.com/Our-Kind-Where-Came-Going/dp/0060919906

            RE

            • Artleads says:

              Thanks.

              “Our Kind (meaning the human species), another of anthropologist Harris’s popularizing works, is a compendium of short essays (or musings) on an incredibly wide range of topics from fossil humans to yuppies. The book, which begins, “IN THE BEGINNING was the foot,” is written in a chatty, urbane style. Harris fears that we too easily are learning to live with the threat of nuclear annihilation and that we will not survive even the near future ” . . . unless we transcend the state’s insatiable demands for sovereignty and hegemony.” He also warns that “we must rid ourselves of the notion that we are an innately aggressive species for whom war is inevitable.”

            • Fast Eddy says:

              “we must rid ourselves of the notion that we are an innately aggressive species for whom war is inevitable.”

              Seriously – he believes that?

              If I were a DJ I’d start with Koombaya my lord… koombaya…. melting into We are the World… then pumping it up with Imagine….

        • The loss of body hair came as a result walking upright and then running. The first hunters of big game often had to track them for days, and then run them down. There are many mammals faster in a sprint than Homo Sap, but no mammal has more endurance. A Homo Sap in good shape can run down any animal to exhaustion and then the kill is pretty EZ. Bison, Deer, Horses, anything really. This tactic is quite inefficient though in terms of EROEI. Homo Sap added Planning to this, and would stampede animals into surrounds or off cliffs. Much less energy expenditure this way and less dangerous for the Homo Sap.

          RE

          • MG says:

            Dear Reverse Engineer,

            I would say that the fire was the key, as the human beings first needed some kind of protection against other species, so they could move on the ground and hunt them. Living in the trees was safe, but what protected them from predators when they left the trees?

            So, my opinon is, the the fire had to be somewhere between leaving the life in the trees and hunting for other species.

            • MG says:

              I. e. the fire allowed our ape ancestors to create a safe base on the ground – THE HOME.

            • Stefeun says:

              MG,
              The French word for “Home” is “Foyer”, i.e. the fire-place.

            • Stefeun says:

              MG,
              One more point to the FIRE !

              Note that many of the described theories aren’t contradictory, and can even be cumulative, and mutually enhancing. I even think that most of the big changes aren’t due to one single cause, rather a coincidence of multiple conditions and opportunities, that made the emergent property more (energy) efficient than ancient configuration.

            • I need some dates attached, to see if this theory makes any sense. I thought man walked upright, long before man developed smaller jaw and molars (presumably because man no longer needed such big teeth and jaw, because of cooked food).

            • Stefeun says:

              Gail, MG,
              As for dates, pls have a look at the “Human Timeline” chart on right side of this wiki page (sorry I can’t copy/paste it here):
              https://en.m.wikipedia.org/wiki/Control_of_fire_by_early_humans
              Human timeline
              Earliest bipedal : 4 my
              Earliest stone tools : 2.8 my
              Earliest fire use : 1.5 my
              Earliest cooking : 0.3 my

              However, these dates seem questionable ; I remember another article saying that they found molars of homini, whose size and shape could be explained only by use of cooked food; those molars were 1.8 million years old.

            • Stefeun says:

              Not exactly the article I was thinking of, but nevertheless serious enough, I hope:

              “Molars say that Cooking is almost 2 Million years old”
              http://www.scientificamerican.com/podcast/episode/molars-say-cooking-is-almost-2-mill-11-08-22/

            • MG says:

              I would say that the image of the “flaming sword” in the Bible when being expelled from the Eden, describes the situation, when the man started to use the fire on the ground:

              “After he drove the man out, he placed on the east side of the Garden of Eden cherubim and a flaming sword flashing back and forth to guard the way to the tree of life.”

              “Tree of life” can be simply the tree that the man descended to ground from.

              We have a “tree” and a “fire” there together.

            • I hadn’t thought about that!

            • I would say you are wrong.

              Fire was certainly a contributor to the success of the species Homo Sap, but not the main one. The main one was Tool Making, specifically the ability to make tools which substitute for Large Jaws and Big Teeth. Homo Saps without those attributes became able to take down and carve up large mammals, with a large source of energy stored in fat. They did NOT need to cook said animals, and mostly they did not in early years. Even today with my tiny jaws I can eat most of a Moose without cooking it, no problemo there.

              This whole concept you need to cook food to live is utterly ridiculous.

              RE

            • MG says:

              Dear Reverse Engineer,

              well, but it seems that cooking food was an advantage that caused the rise of the modern human population while the Neanderthal population died out:

              http://www.livescience.com/50532-neanderthals-died-no-fire.html

            • Ert says:

              @MG & RE

              Watch the presentation “Catching Fire: How Cooking Made Us Human” – which I linked further up. Fire and Nutrition -> and then freeing up time, more available calories, etc. pp. plays an important role. The author presents the issues to consider very well.

            • MG says:

              Independent evolution of knuckle-walking in African apes shows that humans did not evolve from a knuckle-walking ancestor

              http://www.ncbi.nlm.nih.gov/pubmed/19667206

              “The presence of purported knuckle-walking features in the hominin wrist can thus be viewed as evidence of arboreality, not terrestriality, and provide evidence that human bipedalism evolved from a more arboreal ancestor occupying the ecological niche common to all living apes.”

              Arboreality, terrestriality and bipedalism

              http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2981953/

              “But we are not fast runners (see Bramble & Lieberman 2004), and in terms of energy storage have a very long way to go to catch up with dogs bred for hunting. Early human ancestors would clearly have been no match for a cursorial predator, so that it is perhaps fortunate that along with late retention of long forearms (Dunsworth et al. 2003), which would improve throwing distance if not accuracy, part of our arboreal inheritance was powerful leg muscles, which remain very helpful for climbing trees!”

            • Bipedalism came 4.4M years ago.

              “The earliest hominid with the most extensive evidence for bipedalism is the 4.4-million-year-old Ardipithecus ramidus. In 2009, researchers announced the results of more than 15 years of analysis of the species and introduced the world to a nearly complete skeleton called Ardi.”

              http://www.smithsonianmag.com/science-nature/becoming-human-the-evolution-of-walking-upright-13837658/#2KXpxfxIuQbEogUF.99

              On the other hand, the use of fire is only about 2M years old.

              “At the base of a brush-covered hill in South Africa’s Northern Cape province, a massive stone outcropping marks the entrance to one of humanity’s oldest known dwelling places. Humans and our apelike ancestors have lived in Wonderwerk Cave for 2 million years — most recently in the early 1900s, when a farm couple and their 14 children called it home. Wonderwerk holds another distinction as well: The cave contains the earliest solid evidence that our ancient human forebears (probably Homo erectus) were using fire.”

              http://discovermagazine.com/2013/may/09-archaeologists-find-earliest-evidence-of-humans-cooking-with-fire

              Therefore, we have spent more than half our existence time on Earth without the use of fire.

              Done once, it can be done again.

              RE

            • Stefeun says:

              RE,
              Your timeline more or less fits in with all I was able to find about that.

              The point is that “we”, before 2 million years ago, weren’t even Homo, but Australopithecus.

              The chart (hope it displays) is from this quite long but very interesting article:
              http://sci.waikato.ac.nz/evolution/HumanEvolution.shtml

              In its second half you’ll find many examples of little changes that provided an advantage to those benefitting of it (genetic mutation, mainly).
              For example, less efficient breathing, that produced less ATP (muscle fuel) and more waste heat, also allowed dwellîng in colder climates.

              Again, the whole story of Evolution is about -often tiny- advantages that allowed one group to grow faster (dissipate more energy) than the others.
              Which doesn’t mean that the “ancient” configuration can’t survive, but due to its lower efficiency it tends to be replaced by the new one when and where it’s possible. We can even imagine a temporary coexistence in many cases.
              I don’t think this is “utterly stupid”.

            • Stefeun says:

              RE,
              One more remark: I totally disagree with your assumption:
              “Done once, it can be done again”.

              Any change in a complex system impacts several other parts, which make it impossible to return exactly to the previous state, because a change implies that some information is lost in the process.

              In some cases I assume something similar can be acheived, but I also guess it’s generally not the better choice.

              The better choice is to adapt to the conditions that exist at a given time, not try to come back to an old configuration for which all elements won’t be available anymore, and which likely won’t be adapted to the new environment.

            • Fast Eddy says:

              Reverse evolution …. is like putting toothpaste back into the tube….

            • I wonder how similar we were to how we are now, 3 million years ago. Our big advantage, which led eventually to human’s population growth came after we started burning wood and biomass. We eventually added other forms of supplemental energy, including animals such as dogs for hunting, and eventually larger animals for labor.

            • MG says:

              As Stefeun have said, the point is that the various theories are not necessarily contradictory. The bipedal hominids could still live in the trees. As e.g Korowai people in West Papua today.

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

              http://www.atlasobscura.com/places/korowai-tree-houses

              “Fire is the biggest danger to tree-dwellers, so the fire pits are specially designed with cut-away floor sections in case things get out of control. Even without going up in flames, the houses only last about 5 years.”

              The key is that the fire brought a substantial advantage in protection against other species and intake of energy.

              We can read about the Australopithecus also this:

              “Though the intelligence of these early hominids was likely no more sophisticated than in modern apes, the bipedal stature is the key element that distinguishes the group from previous primates, which were quadrupeds. The morphology of Australopithecus upset what scientists previously believed — namely, that strongly increased brain size had preceded bipedalism.”

              “A recent study of primate evolution and morphology noted that all apes, both modern and fossil, show skeletal adaptations to erect posture of the trunk, and that fossils such as Orrorin tugenensis indicate bipedalism around six million years ago, around the time of the split between humans and chimpanzees indicated by genetic studies. This suggested that erect, straight-legged walking originated as an adaptation to tree-dwelling.”

              Source: https://en.wikipedia.org/wiki/Australopithecus

        • Fire selection against “hairiness” – people with hair would have more problem with catching fire. I hadn’t thought of that. I thought more about humans living in a warm climate, and needed to run fast to catch prey. Actually, they may have eaten a lot of vegetables and fish, so running fast may not have been a major concern.

          • Yoshua says:

            There is a theory that humans are water monkey’s. We are different and have actually some common things with dolphins. Children that turn over on their stomach start to “swim” before they start to crawl. I believe that children can even learn to swim before they learn to walk.

          • Yoshua says:

            A short video

            • common phenomenon says:

              What happens to human skin, when it’s been in water for any length of time? It becomes crinkled and wrinkled. That’s because it’s NOT adapted to life in a watery environment.

          • there is a line of thinking that puts our current line of evolution as that of a sea/sea edge creature—hence hairless.

            that would also fit with tool use, the need to access food sources that don’t run away—shellfish–, which is itself known to feed brain development

      • hkeithhenson says:

        Without “cheap external energy, the human population simply collapses.”

        Complete agreement on this point, but I don’t see a direct connection between external energy and genetic mutations. Could you expand on this?

        • DJ says:

          Cheap energy has put natural selection out of business.

          In Sweden 25% of births are cesarian (half of them pre-planned), also a lot of couples have troubles concieving without assistance.

          Of course this could be mostly environmental causes, but anyhow they wouldnt procreate without cheap energy.

          • I agree. And we keep people living, with antibiotics and chemotherapy and many other techniques. A toothache or a broken leg could have killed a person years ago.

            • Stilgar Wilcox says:

              Yeah, I already would have died from a urinary tract infection at age 29 (but for the anti-biotics), or died at 52 from a deep lung infection that even eurithramycin couldn’t kill off so needed clarithromycin. Walking, talking, gobbling up food, energy and other resources, proof this stuff works!

      • When we overeat food with highly concentrated energy (sugar, meat, oils) our bodies don’t handle the situation well. This contributes to our poor health.

    • Fast Eddy says:

      Imagine the traffic pouring in to FW from RE’s site to check out this Fast Eddy dude!

      • Vince the Prince says:

        Thank you RE for laying it out straight to Fast Eddy and unfortunately his ego has blinded him to your message. Fast Eddy please take a moment to reconsider…

        • You can lead a horse to water, but you can’t make him drink.

        • Fast Eddy says:

          Do not confuse ego (nor condescension) with the pursuit of purity of thought.

          • Fast Eddy says:

            ‘Insults are the arguments employed by those who are in the wrong’ Jean-Jacques Rousseau

            ‘Mockery and condescension are the tactics employed by those who are in the right and seek not to continue to argue with those who are wasting the short time left while the lights remain on’ Fast Eddy

            Let us also borrow a line from Apocalypse Now …. ‘I love the smell of insults in the morning … it smells like….. victory’

            Keep ’em coming! The more base the better!!!

  4. Yoshua says:

    The U.S has the Patriot Act and Russia has the Counter Terror Law while Europe is ruled by European Court of Human Rights.

    The Americans and the Russians are destroying the Middle East and flooding Europe with Muslim refugees from war zones. European naïve leaders have again no clue of what is waiting Europe.

    • Yoshua says:

      The Turks, Kurds, Iranians, Afghans, Arabs and Africans in Europe hate one another. With a sectarian and ethnic war going on in the Islamic world, a civil war in Europe is most likely to be ignited among the Muslims.

      • xabier says:

        After an Ahmadi Muslim shopkeeper was murdered by a crazed orthodox Muslim in Scotland a few months ago, I thought I’d take a look at who the Ahmadis are.

        Perfectly pleasant people: brotherhood of man, kindness and charity and respect for other faiths, etc. No Jihad (except as defined as ‘struggle with oneself’ as among certain Sufis.) The murdered shopkeeper had in fact just sent out Christmas best wishes Facebook or Twitter or something…..

        What has this reasonable pacific stance brought them? Ceaseless, and often very violent, persecution by fellow Muslims, as they hold that Mohammed was not the last of the prophets, which makes them heretics to be exterminated. The orthodox even try to stop the building mosques.

    • Yoshua says:

      The war in German refugee camps.

      • Yoshua says:

        … and the video…

        • Artleads says:

          I couldn’t agree more. Brilliant man. Where are our American militarized, trigger-happy cops when we need them? Maybe the US could spare a few. Take them away from persecuting non violent drug “offenders” and send them over there to hep the Germans.

    • Yoshua says:

      Today in Germany

      A Syrian with a machete kills a Polish pregnant woman, a man called Mohammad gave an interview to a German journalist describing what he saw. A Turkish driver hit the Syrian with his BMW and put the “refugee” out of service preventing more damage. Multi-Kulti.

      By Mr. Currywurst

      • Plus yet another explosion/unfinished mass slaughter yesterday evening..
        “.. Amazing.. !” no pun intended, lolz.

        The situation as it stands should be crystal clear by now, that out of the UK-FR-IT only Germany contributed the least amount and or was exposed into foreign modern oil/gas wars. This has to change apparently, so the public has to be worked on and prepared for it.

        Also interesting is the focus of activity of these “lone wolf crazies” on the state/region of Bavaria, which is ~1/4 the size of all Germania and much more in economic share, historically before German unification it was independent and /strong actor of European politics forging various coalitions. And even recently their politicians mildly criticized the onslaught of madness from Berlin circles. Obviously for some reason and goals this has to change as well..

  5. Greg Machala says:

    Low oil prices are making a comeback it would seem. Current WTI price is poised to drop below $43.00 per barrel. That would be a nearly 15% drop from the May highs of $51.00 per barrel. That was a mighty brief “recovery” in oil prices.

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  7. Fast Eddy says:

    “Correction. OFW WAS a bastion of sanity until YOU surfed in with the Dr. McStinksion Nihilism meme. Are you aware Guy has now shut down his commentariat because it turned into Nihilists Gone Wild? You are on the road to doing the same thing here”

    Based on the volume of comments on FW articles… this site is becoming more popular…

    That said — the goal should be quality — not quantity… and the quality has also improved dramatically….

    Who is Guy?

    • Fast Eddy says:

      In terms of end of the world blogs… I read FW … I also have time for Tim Morgan’s Surplus Energy articles. Orlov rates well.

      I have dropped in on a few others — I think I have looked at yours at one point..

      I find that other blogs are breeding grounds for hopium addicts…

      I have zero time for blogs that offer solutions to a problem without a solution.

      Kunstler has nothing new to say — he is circling the drain howling racists commentary …

      Heinberg has sold out…

      Then there are all those ‘flee for the hills and live like a mad dog off the land’ post-BAU blogs (yours?) which is just pure nonsense.

      Who is Guy?

      Is he another Nicole Foss who thinks we all need to learn how to weave baskets and play a musical instrument in order to survive post BAU? I saw a video of her where she actually said such things….

      Like I said… I have zero time for blogs that offer solutions to a problem without a solution

      • Guy is Guy McPherson who runs the blog Nature Bats Last. He recently shut down comments on the blog because apparently it spiraled out of control. I believe he has kept the forum open. If so, you’ll love it there. The commentariat is loaded with Fast Eddy clones.

        RE

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