An Updated Version of the “Peak Oil” Story

The Peak Oil story got some things right. Back in 1998, Colin Campbell and Jean Laherrère wrote an article published in Scientific American called, “The End of Cheap Oil.” In it they said:

Our analysis of the discovery and production of oil fields around the world suggests that within the next decade, the supply of conventional oil will be unable to keep up with demand.

There is no single definition for conventional oil. According to one view, conventional oil is oil that can be extracted by conventional methods. Another holds it to be oil that can be extracted inexpensively. Other authors list specific types of oil that require specialized techniques, such as very heavy oil and oil from shale formations, that are considered unconventional.

Figure 1 shows the growth in unconventional oil supply for three parts of the world:

  1. Oil from shale formations in the US.
  2. Oil from the Oil Sands in Canada.
  3. Oil characterized as unconventional in China, in a recent academic paper of which I was a co-author. (Temporarily available for free here.)

Figure 1. Approximate unconventional oil production in the United States, Canada, and China. US amounts estimated from EIA data; Canadian amounts from CAPP. Oil prices are yearly average Brent oil prices in $2015, from BP 2016 Statistical Review of World Energy.

Oil prices in 1998, which is when the above quote was written, were very low, averaging $12.72 per barrel in money of the day–equivalent to $18.49 per barrel in 2015 dollars. From the view of the authors, even today’s oil prices in the low $40s per barrel would be quite high. Since the above chart shows only yearly average prices, it doesn’t really show how high prices rose in 2008, or how low they fell that same year. But even when oil prices fell very low in December 2008, they remained well above $18.49 per barrel.

Clearly, if oil prices briefly exceeded six times 1998 prices in 2008, and remained in the range of six times 1998 prices in the 2011 to 2013 period, companies had an incentive to use techniques that were much higher-cost than those used in the 1998 time-period. If we subtract from total crude oil production only the production of the three types of unconventional oil shown in Figure 1, we find that a bumpy plateau of conventional oil started in 2005. In fact, conventional oil production in 2005 is slightly higher than the later values.

Figure 2. World conventional crude oil production, if our definition of unconventional is defined as in Figure 1.

I would argue that far more crude oil production was enabled by high oil prices than I subtracted out in Figure 2. For example, Daqing Oil Field in China is a conventional oil field, but greater extraction has been enabled in recent years by polymer flooding and other advanced (and thus, high-cost) techniques. In the academic paper referenced earlier, we found that the amount of unconventional oil extracted in China in 2014 would be increased by about 55%, if we broadened the definition of unconventional oil to include oil made available by polymer flooding in Daqing, plus some other types of Chinese oil extraction that became more feasible because of higher prices.

Clearly, this same kind of shift to more expensive extraction methods has occurred around the world. For example, Brazil has been attempting to extract oil from below the salt layer of the ocean using advanced techniques. According to this article, Brazil’s “pre-salt” oil production was expected to exceed 600,000 barrels per day by the end of 2014. This oil should count, in some sense, as unconventional oil.

Massive investments in the Kashagan Oil Field in Kazakhstan were enabled by high oil prices. Some initial production began, but was discontinued, in September 2013. Production is expected to resume in October 2016.

There are clearly many smaller fields where higher extraction was made possible by high oil prices that allowed oil companies to utilize more advanced techniques. Deepwater drilling also became more feasible because of higher prices. Another example is Russia, which is reported to have heavy oil extraction that would not be commercially feasible if oil prices were below $40 to $45 per barrel. If we were to add up all of the extra oil production in many areas of the world that was enabled by higher prices, the total amount would no doubt be substantial. Subtracting this higher estimate of unconventional oil in Figure 2 (instead of the three-country total) would likely result in more of a “peak” in conventional oil production, starting about 2005.

Thus, if we think of conventional oil production as that which is possible at low oil prices, the forecast by Colin Campbell and Jean Laherrère was pretty much correct. Production of conventional oil did seem to peak about 2005 or shortly thereafter. We simply don’t have the data to estimate how much we could have extracted, if oil prices had remained low. Furthermore, oil prices did rise substantially, relative to 1998 prices, making Campbell’s and Laherrère’s forecast of higher prices correct.

I suppose that we could even say that if conventional oil were all that we had in 2005 and subsequent years, supply would have fallen far short of demand, based on Figure 2. This last statement is somewhat debatable, however, because there would have been other feedbacks, as well. It is possible that if total supply were very short, oil prices would have spiked to an even higher level than they really did. The resulting recession would likely have brought prices down, and temporarily brought demand back in line with supply. If prices had stayed low, there might have been a second round of shortages, with an even greater supply problem. This, too, might have been resolved by another price spike, quickly followed by another recession that brought world demand back down to the level of supply.

Of course, conventional crude oil isn’t the only type of liquid fuel that we use. When we add all of the pieces together, including substitutes, what we find is that since 1998, broadly defined oil production (“liquids”) has been rising quite rapidly.

Figure 3. World Liquids by Type. Unconventional oil is from Exhibit 1. Conventional oil is total crude oil from EIA, and other amounts are estimated from EIA International Petroleum Monthly amounts through October 2015. (EIA’s category “Other Liquids” is referred to as Biofuels in Figure 3, since this is its primary component. Other liquids also include coal and gas to liquids and other small categories.)

In fact, since 2005, Figure 4 shows that the single highest year of growth in oil production (broadly defined) was 2014, with 2.47 million barrels per day. (This is based on crude oil data from EIA Beta Report Table 11.b, plus values for other liquids from EIA’s International Energy Statistics. Annual amounts for 2015 were estimated based on data through October.)

Figure 4. Increase over prior year in total oil liquids production, based on EIA data. 2015 other liquids amounts estimated based on data through October 2015.

Figure 4 shows that the increase in oil supply in 2015 is almost as high as in 2014. The 2005 to 2015 period shown indicates a lot of “ups and downs.” The only two high years in a row are 2014 and 2015. This would seem to be at least part of our “oil glut” problem.

Exactly by how much oil production needs to increase to stay even with demand depends upon price–the higher the price, the smaller the quantity that buyers can afford. At a price of $100 per barrel, a reasonable guess might be that about 1 million barrels per day in consumption might be added. If categories other than crude oil are increasing by an average of 440,000 barrels per day, per year (based on data underlying Figure 4), then crude oil production only needs to increase by 560,000 barrels per day to provide an adequate supply of fuel on a total liquids basis.

If production of crude oil is actually increasing by more than 2.0 million barrels per day  when only 560,000 barrels per day are needed at a price level of $100 per barrel, clearly something is badly out of balance. According to EIA data, the countries with the five largest increases in crude oil production in 2015 were (1) US  723,000 bpd, (2) Iraq 686,000 bpd, (3) Saudi Arabia 310,000 bpd, (4) Russia 146,000 bpd, and (5) UK 106,000 bpd. Thus, US and Iraq were the biggest contributors to the global glut in 2015.

What Is Going Wrong?

Not only did a lot of people hear the Peak Oil story, a great many responded at once. Governments added requirements for more efficient vehicles. This tended to lower the quantity of additional oil supply needed. At the same time, governments added mandates for the use of biofuels, also reducing the need for crude oil. Arguably, the US-led Iraq war, which began in 2003, was also about getting more crude oil.

Oil companies also rushed in and developed oil resources that might be profitable at a higher price. These new developments often take more than ten years to produce oil. Once companies have started the long path to development, they are unlikely to stop, no matter how low oil prices drop.

It is becoming apparent that if oil prices can be raised to a high enough level, a lot more oil is available. Figure 5 shows how I see this as happening. We start at the top of the triangle, where there is a relatively small quantity of inexpensive oil, and we gradually work toward the expensive oil at the bottom.

Figure 5. Resource triangle, with dotted line indicating uncertain financial cut-off.

The amount of oil (or for that matter, any other resource) isn’t a fixed amount. If the price can be made to rise to a very high level, the quantity that can be extracted will also tend to rise–in fact, by a rather large amount. The “catch” is that wages for the vast majority of workers don’t rise at the same time. As a result, goods made with high-priced oil soon become too expensive for workers to afford, and the economy falls into recession. The result is prices that fall below the cost of production. Thus, the limit on oil supply is not the amount of oil in the ground; instead, it is how high oil prices can rise, without causing serious recession.

While wages don’t rise with spiking oil prices, increasing debt can be used to hide the problem, at least temporarily. For example, cars and homes become less affordable with higher oil prices, since oil is used in making them. If governments can lower interest rates, monthly payments for new homes and cars can be lowered sufficiently that new car and home sales don’t fall too far. Eventually, this cover-up reaches limits. This happens when interest rates start turning negative, as they now are in some parts of the world.

Thus, by ramping up buying power with low interest rates and more debt, governments were able to get oil prices to stay above $100 per barrel for long enough for producers to start adding production that might be profitable at that price. Unfortunately, the amount of additional oil demand isn’t really very high at that price. So, instead of running out of oil, we ran into the reverse problem–too much oil relative to the amount that the world economy can afford when oil prices are $100+ per barrel.

The attempt by governments to fix the oil shortage problem didn’t really work. Instead, it led to the opposite mismatch from the one we were expecting. We got an oversupply problem–a problem of finding enough space for all our extra supply (Figure 6). Unless we have infinite storage, this pattern clearly cannot continue forever.

Figure 6. Weekly ending stocks of crude oil and petroleum products through July 29. Chart by EIA.

Eventually, this oversupply problem is likely to result in “mother nature” cutting off oil production in whatever way it sees fit–oil prices dropping to close to zero, bankruptcies of oil companies, or collapses of oil exporters. With lower oil supply, we can expect recession.

Misunderstanding the Real Problem

In the early 2000s, the story that Peak Oilers came up with (or perhaps the way it was interpreted in the press) was that the world was “running out” of conventional oil, and that this would lead to all kinds of problems. Oil prices would rise very high, and oil depletion would take place over a long period, as shown in a symmetric Hubbert Curve. As a result, at least small quantities of additional energy products with high “Energy Returned on Energy Invested” (EROI) were needed to supplement the energy products that would be produced based on the slowly depleting Hubbert Curve. Our oil supply problems were viewed as a unique situation, calling for new and unique solutions.

In my view, this story came about through over-reliance on models that likely were accurate for some purposes, but not for the purpose that they later were being used. One of these over-extended models was the supply and demand curve of economists.

Figure 7. From Wikipedia: The price P of a product is determined by a balance between production at each price (supply S) and the desires of those with purchasing power at each price (demand D). The diagram shows a positive shift in demand from D1 to D2, resulting in an increase in price (P) and quantity sold (Q) of the product.

This model “works” when the goods being modeled are widgets, or some other type of goods that does not have a material impact on the economy as a whole. Substituting high-priced oil for low-priced oil tends to make the economies of oil importing countries contract. This effect indirectly reduces demand (and thus prices) for many products (not just oil), an impact not considered in the simplified Supply and Demand model shown in Figure 7. Also, the very long lead times of the oil industry are not reflected in Figure 7.

Two other models that were used beyond the limits for which they were originally designed were the Hubbert Curve and the 1972 Limits to Growth model. Both of these models are suitable for determining approximately when limits might be hit. Even though Peak Oilers have believed that these models can accurately determine the shape of the decline in oil supply and in other variables after reaching limits, there is no reason why this should be the case. I talk about this problem in my recent post, Overly Simple Energy-Economy Models Give Misleading Answers. Thus, for example, there is no reason to believe that 50% of oil will be extracted post-peak. This is only an artifact of an overly simple model. The actual down slope may be much steeper.

The Real Story of Resource Limits that We Are Reaching

Instead of the scenario envisioned by Peak Oilers, I think that it is likely that we will in the very near future hit a limit similar to the collapse scenarios that many early civilizations encountered when they hit resource limits. We don’t think about our situation as being similar to early economies, but we too are reaching a situation of decreasing resources per capita (especially energy resources). The resource we are most concerned about is oil, but there are other resources in short supply, including fresh water and some minerals.

Research by Joseph Tainter and by Peter Turchin indicates that some of the issues involved in previous resource-based collapses are the following:

Growing Complexity. Citizens who discovered they were reaching resource limits typically tried to work around this problem. For example, hunter-gatherers turned to agriculture when their population grew too large. Later, civilizations facing limits added irrigation to raise food output, or raised large armies so that they could attack neighboring countries. Making these changes required greater job specialization and more of a hierarchical system–two aspects of growing complexity.

This increased complexity used part of the resources that were in short supply, since people at the top of the hierarchy were paid more, and since building new capital goods (today’s example might be wind turbines and solar panels) takes resources that might be used elsewhere in the economy. Eventually, growing complexity reaches limits because costs rise faster than the benefits of growing complexity.

Growing Wage Disparity. With growing complexity, wage disparity became more of a problem.

Figure 8. People at the bottom of a hierarchy are most vulnerable.

I have described this problem as “Falling Return on Human Labor Invested.” Ultimately, this seems to be a major cause of collapse. Workers use machines and other tools, so this return on human labor has been leveraged by fossil fuels and other energy resources used by the system.

Spiking Resource Prices. Initially, when there is a shortage of food or fuel, prices are likely to spike. A major impediment to long-term high prices is the large number of people at the bottom of the hierarchy (Figure 8) who cannot afford high-priced goods. Thus, the belief that prices can permanently rise to high levels is probably false. Also, Revelation 18: 11-13 indicates that when ancient Babylon collapsed, the problem was a lack of demand and low prices. Merchants found no one to sell their cargos to; no one would even buy human slaves–an energy product.

Rising Debt. Debt was used to enable complexity and to hide the problems that people at the bottom of the resource triangle were having in purchasing goods. Ultimately, increased debt was not successful in solving the many problems the economies faced.

Ultimately, Failing Governments. Governments need resources for their purposes, whether hiring armies or making transfer payments to the elderly. The way governments get their share of resources is through the use of tax revenue. When people at the bottom of the hierarchy were cut out of receiving adequate resources (through low wages), the amounts they could afford to pay in taxes fell. Governments would sometimes collapse directly from lack of tax revenue; other times collapses occurred because governments could no longer afford large enough armies to defend their borders.

Ultimately, Falling Population. With low wages and governments requiring higher tax levels to fund their programs, people at the bottom of the hierarchy found it difficult to afford adequate nutrition. They became more susceptible to plagues. Loss of battles to neighboring countries could at times play a role as well.

Lessons We Should Be Learning

Even if we made it past peak conventional oil, there is likely a different, very real collapse ahead. This collapse will occur because the economy cannot really afford high-priced energy products. There are too many adverse feedbacks, including increasing wealth disparity and the likelihood of not enough revenue for governments.

We can’t count on long-term high prices. The idea that fossil-fuel prices will gradually rise, and because of this, we will be able to substitute high-priced renewables, seems very unlikely. In the United States, our infrastructure was mostly built on oil that cost less than $20 per barrel (in  2015 dollars). We know that with added debt and greater complexity, we were temporarily able to get oil to a high-price level, but now we are having a hard time getting the price level back up again. We really don’t know how high a price the economy can afford for oil for the long term. The top price may not be more than $50 per barrel; in fact, it may not be more than $20 per barrel.

We need to look for inexpensive replacements for both oil and electricity. Many substitutes are being made to produce electricity, since indirectly, electricity might act to replace some oil usage. There is considerable confusion as to how low these prices need to be. In my opinion, we can’t really raise electricity prices without pushing economies toward recession. Thus, we need to be comparing the cost of proposed replacements, including long distance transport costs and the cost of adjustments needed to match electric grid requirements, to wholesale electricity prices. In both the US and Europe (Figure 9), this is typically less than 5 cents per kWh. (In Figure 9, “Germany spot” is the wholesale electricity price in Germany–the single largest market.) At this price level, producers need to be profitable and to pay taxes to help support governments.

Figure 9. Residential Electricity Prices in Europe, together with Germany spot wholesale price, from http://pfbach.dk/firma_pfb/references/pfb_towards_50_pct_wind_in_denmark_2016_03_30.pdf

Replacements for oil need to be profitable and be able to pay taxes, at currently available price levels–low $40s per barrel, or less.

We need to be careful in aiming for high-tech solutions, because of the complexity they add to the system. High-tech solutions look wonderful, but they are very difficult to evaluate. How much do they really add in costs, when everything is included? How much do they add in debt? How much do they add (or subtract) in tax revenue? What are their indirect effects, such as the need for more education for workers?

We need to be alert to the possibility that solar PV and most wind energy may be energy sinks, rather than true energy sources. The two hallmarks of providing true net energy to society are (1) being able to provide energy cheaply, and (2) being able to provide tax revenue to support the government. When actually integrated into the electric grid, electricity generated by wind or by solar generally requires subsidies–the opposite of providing tax revenue. Total costs tend to be high because of many unforeseen issues, including improper siting, long-distance transport costs, and costs associated with mitigating intermittency.

Unless EROI studies are specially tailored (such as this one and this one), they are likely to overstate the benefit of intermittent renewables to the system. This problem is related to the issues discussed in my recent post, Overly Simple Energy-Economy Models Give Misleading Answers. My experience is that researchers tend to overlook the special studies that point out problems. Instead, they rely on the results of meta-analyses of estimates using very narrow boundaries, thus perpetuating the myth that solar PV and wind can somehow save our current economy.

Too much debt, and too low a return on debt, are likely to be part of the limit we will be reaching. Investment in complexity requires debt, because complexity requires capital goods such as wind turbines, solar panels, computers and the internet. The return on this additional debt is likely to drop lower and lower, as complex solutions are added that have less and less true value to society.

We need to remember that as far as the economy is concerned, it is total consumption of energy resources that is important, not just oil. Wages reflect the leveraging impact of all energy sources, not just oil. If energy consumption per capita is rising, more and better machines can help raise output per capita, making workers more productive. If energy consumption per capita is falling, the world economy is likely moving in the direction of contraction. In fact, we may be headed in the direction of early economies that eventually collapsed.

When we look at the data, we see that world energy consumption per capita appears to have peaked about 2013. In fact, the big drop in oil and other commodity prices began in 2014, not long after energy consumption per capita hit a peak.

Figure 10. World energy consumption per capita, based on BP Statistical Review of World Energy 2105 data. Year 2015 estimate and notes by G. Tverberg.

The world seems to have hit peak coal, because of low coal prices. In fact, falling coal consumption seems to be the cause of falling world energy consumption per capita. Whether or not most people regard coal highly, coal is pretty much essential to the world economy. A recent decrease in coal consumption is what is pulling world energy consumption per capita down. We do not have any other cheap fuel to make up the shortfall, suggesting that our current downturn in energy consumption (shown in Figure 10) may be permanent.

Figure 11. World and China appear to be reaching peak coal.

We should not be surprised if the financial problems that the world is now encountering will eventually resolve badly. This seems to be how the Peak Oil story will finally play out. Without rising energy per capita, the world economy tends to shrink. Without economic growth, it becomes very difficult to repay debt with interest. Wealth disparity becomes more and more of a problem, and it becomes increasingly difficult for governments to collect enough revenue to support their needs. Our problems begin to look more and more like those of earlier economies that hit resource limits, and eventually collapsed.

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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1,968 Responses to An Updated Version of the “Peak Oil” Story

  1. Pingback: Gail Tverberg: How Peak Oil was misunderstood – Ecologise

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

    Yoshua, I too wonder why the economy is not “burning”, growing at a fast rate, expanding, providing jobs for young people. I offer two factors.
    1) Everything else is getting expensive. Food, housing, medical, education
    2) The owner are looking forward and do see what we see and conclude there is no good reason to expand.

    • smite says:

      Indeed,

      1) Human productivity on average is going down as even highly-educated and well paid humans now are facing strong competition from sophisticated computers and algorithms.

      2) No more wealth can be obtained by a larger population and work force. With the current technological sophistication, people are increasingly becoming a liability. A burden on the system. Humanoid entropy generator automatons for the owners.

    • Fast Eddy says:

      The growth numbers we are being fed are lies…. whatever growth is happening is simply shifting the pieces around …

      Evidence: Global GDP is increasing — but corporate earnings are decreasing for the second year now…

      The jobs reports are of course total fabrications.

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

      I am sorry I have not yet finished up a new post. I hope to be able to finish it up today, and put it up tomorrow. We are beyond the 20 day limit for comments on my previous post. That is why new comments won’t work any more.

      I will need to go to an out-of-state funeral this week, but I don’t know the date yet. My husband’s 43 year old nephew died–the funeral cannot be held until after an autopsy to try to figure out the cause of death.

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

    Tim Groves, I am enjoying your posts.
    I agree it is too late there will be no human solution to global warming.
    The time scales are long so let’s all just remain calm.

  4. Some news from a friend in Ittervoort, in the Netherlands.

    “We had some very rough weather last night. 2 houses in the neighborhood burned down because of lightning. A large tree ended up on a car injuring 3 and a roof was blown off a building. The lightning struck in our house too which caused short circuit in a part of the house, at that time all equipment had already been unplugged so no real damage was done. The chance that our house is being struck by lightning is higher because of the solar panels on our roof which cause static electricity (which attracts lightning). Both houses that burned down also had solar panels.”

    Solar panels – Catch 22. 🙁

  5. Yoshua says:

    World oil exports seems to have reached a plateau in 2005 at about 50 mbpd or half of world production (no imports from other worlds so far).

    http://i574.photobucket.com/albums/ss189/Darwinian1/World%20Oil%20Exports_zpsghm7ufud.jpg

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

      “No imports from other worlds so far” –LOL!

  6. adonis says:

    take your time gail it must be hard work churning out one article after another

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

      It is on intermittent electricity–wind and solar PV. There are a whole lot of pieces to pull together.

  7. subidasdeimagenes
    Crates says:

    ” The raw reality ” (La cruda realidad) is a new Spanish documentary on the depletion and limits. Though it is of scanty interest for the habitual readers of FW, it gives us the opportunity to listen to Gail in three short but interesting interventions, where she is very elegant.
    The interventions are in:
    1:09:30
    1:13:57
    1:19:25
    In the third intervention, the sum of his words, the background music, the gesticulation with his hands, gives a result of distress but also beauty … in my opinion.
    Most of the persons is not in disposition to understand the relevancy and significance of his words. This is something that to me causes a great affliction.

    • Artleads says:

      Very nice to hear Gail. Reading between the lines, there is this enormous behemoth of an economy, with millions (or billions or trillions) of interdependent parts. For some reason, nobody figured out that these millions of parts could be calibrated so that they didn’t all flake out at once. I guess it was every man for himself, and the devil take the hindermost, and that has not turned out well.

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

      I think that my sections were probably recorded when I spoke in Barbastro, Spain back in 2014.

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

    1888 posts! Looks like wordpress fixed the large number of posts bug. Wonder what happens when we get to 2000?

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

      I think it goes to 2001. I am trying to write a new post–takes time to research and write.

      • See, Fast Eddie, step up to the plate and post a short article here. After all it should be cake for you after all the teaching Gail gave you!. Believe you wanted to explore the BAU Lite topic and how its a non starter. Come on now, time for you to grow…..
        Sure Gail wouldn’t mind looking it over first and edit.

        https://m.youtube.com/watch?v=2cjRGee5ipM

        No, you’re not one of those people,

        • Fast Eddy says:

          We’ve already got the makings of a book from CTG on this … and still you cannot get it.

          Would you like me to rewrite what he’s posted — making it compatible with the comprehension level of a 6 yr old?

          • Sure Fast Eddie, that would be OK with all of us because we realize the IQ level you display here.
            You were the one, BTW, to suggest to Gail to write such an article for us all. What you need to do is divert some of that nonsensical comment space/time you devote here and channel it to some meaningful contribution. Having poor Gail shoulder all the hard work because of your addictive compulsive behavior to get attention is childlike. Come on, be a grown up and take a stab at some meaningful intelligent activity. My take is you are only able to play romper room fun and games tag. LOL

            • Kurt says:

              No turkey for you Vince! Besides, FE is kind of funny in a relentless sort of way.

            • Ert says:

              @Sungr

              FE lives in “Hobbit-Land”… and we don’t know how he looks like or what he really is… Hobbit? Elf? Ork? Human? Wizard? You never know….. he may even be a kind of Sauron or another evil force which wants to suc*k the spirit of live out of sheeple 😉

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

            Unfortunately, the American Public probably has the comprehension level of not much more than a six year old. It is hard to rewrite all of these things down to the level required.

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

    FE, you seem to have a strong understanding of the financial world. That world seems to me to be super strange now. Can you give us your take? Thanks.

  10. Tim Groves – Japan
    Tim Groves says:

    Gail, getting back to the subject matter of your post, I think it is interesting that since around 2005, world conventional crude oil production has basically been flat, hovering just above 70 million bpd. Some producing nations are experiencing production declines these days, but Iraq has the potential to expand production and Iran has just been allowed back into the game. So I wonder what are the prospects for being able to maintain this 70 Mbpd+ conventional oil production volume over the medium-term?

    Oil production volume depends on price as well as on demand. I’m not sure precisely how these three things relate to each other, although higher prices tend to suppress demand and producers attempt to match production to demand, obviously. Also, as you state, if the price rises, a lot more oil becomes available. Conventional oil tends to be cheaper to produce than unconventional oil, and so all other things being equal, the the current lower oil prices should favor more conventional and and less unconventional oil production. If rising demand drives prices higher slowly over a period of years, unconventional oil production becomes more affordable and so can be ramped up to meet demand. Put price crashes can wreck the best laid plans and send producers hurling toward bankruptcy.

    Oil prices rose steeply from the time of the 2003 Iraq invasion until 2011, with a short downturn in 2008, while world liquids production rose almost continuously until 2015 despite mostly rising prices—thanks in no small part to mushrooming debt. The oil industry loved that. Exon Mobil’s profitability in the first decade of this century made it the envy of the corporate world.

    But the party is now over. We have reached a point where the demand for oil is faltering and even steep price reductions have not done much to lift it. Could it be that too many years of high oil prices have damaged the rest of the economy so much that individuals and companies are no longer capable economically or psychologically of taking advantage of the benefits brought by today’s lower prices? Can we expect a modest economic recovery over the coming year or two as a result of lower oil prices, or should we expect things to get worse? Of course, reading the conclusion of your post, I know the answer to that.

    • dolph says:

      Here is my answer. You aren’t going to like it.

      Modern civilization has passed the point of the truth or reality principle. We have entered into media driven obfuscation and fantasy. Now, anything can just be made up or pulled out of a hat and presented to people. Nobody cares anymore, honest journalism and accounting has long ago disappeared.

      This is when reality will become important again…when the top people are close to starvation. If you are paying attention, you will realize we are nowhere near that point.

      The rest of us have only one role: accept the lies, work, and die. That’s it. That’s your purpose.

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

        dolph, agree with minor change. When the top people can not feed the army then reality matters again.

      • Sungr says:

        ” Now, anything can just be made up or pulled out of a hat and presented to people”

        Humans have always preferred adventure stories or religion over the sometimes laborious process of separating facts from fantasy. On Sunday, how many folks are sitting in church pews vs how many are digging into Economist articles or evaluating climate studies?

        However, this also creates job opportunities for priests, politicians, and many other categories of human predator. It also creates job opportunities for economic speculators who are wily enough to separate the REAL story from the illusions of the mass of true believers.

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

      It depends a whole lot on how we define conventional oil, whether it has been flat since 2005. In fact, I expect that high prices and a fear of shortages were even a consideration in the Iraq war, and getting the Iraq oil into production. After all, George Bush (and also his Vice President, Dick Cheney) is known for saying, “The American way of life is not up for negotiation.”

      Lower prices seem to be cutting out some American unconventional oil and some Chinese unconventional oil. Big projects which had been ongoing for several years are still going on, however, so some new oil will be coming online, to help offset decline in conventional oil. Thus, we are seeing enough new production right now that our oversupply problem continues to get worse, rather than better.

      I am expecting now that companies will do as much as their creditors let them do, in terms of new drilling and new projects. There has to be a crack in the financial system, for a major cutback in production. Of course, this crack may not be far away, with all of the problems we have with European banks, Japanese debt, Chinese debt, etc.

      Current prices are still high, relative to $20 per barrel oil that the infrastructure of the country was built on. Prices are low, but not low enough to encourage greater consumption. Of course, if prices get this low, no oil company can really make money on the situation, and production will drop quickly.

      I don’t think we can expect a modest economic recovery at this point. I continue to be surprised at how long the economy can hold on. I won’t complain, of course. Exactly what goes wrong where, when, is not something I know. It could be derivatives, or something else. It is sort of like walking on thin ice, wondering if we are not going to sink in at some point.

  11. hawkeye says:

    From The Economist:
    ‘Grim employment prospects for young people around the world”

    http://www.economist.com/blogs/graphicdetail/2016/08/daily-chart-23

    “Unemployment among 15-24 year olds has risen to 13.1% in 2016 and is close to its historic peak of 2013. The rate is highest in Arab countries, at 30.6%…”

    “In 2015, 25% of young workers in OECD countries were in temporary jobs and 26% were employed part-time…”

    And from MarketWatch:
    “Net investment at slowest pace since Great Depression.”

    http://www.marketwatch.com/story/americas-investment-in-its-own-future-is-in-a-depression-2016-08-26

    “… the median family’s annual inflation-adjusted income is still down more than $3,000.”

    “Most troubling, there’s still very little investment in the buildings and equipment… that we ought to be putting into place today as the foundation for our prosperity tomorrow.”

    “Since the recession, investments have fallen sharply, and they haven’t gotten back up again. It seems as if everyone is still scarred… by the collapse of asset bubbles in 2000 and 2006.”

    “Net investment by government has also collapsed since the Great Recession…”

    Well, except for government bailout, er, “investment” in the banking sector…

    Seems like “prosperity” and “tomorrow” should be mutually exclusive words, given our present situation.

    Anyone see a trend, and find a common thread in the financial/economic news these days?

    Cheers

    • dolph says:

      Here is the only trend that I see in anything:
      -our world is corrupt and irredeemable top to bottom; everybody is lying about everything, all the time

      As such, I find most analysis to be a waste of time. We are all Romans now.

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

        You are making my morning. “our world is corrupt and irredeemable top to bottom; everybody is lying about everything, all the time” Yup.

      • xabier says:

        The cheery philosopher, Kant:

        ‘Out of the crooked timber of Humanity, you will never make anything straight!’

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

      Thanks for the links. Both of these issues are concerning. When not enough jobs are being added, it is young people who get left out.

      Regarding net investment, I have not seen numbers on this basis–just on the gross investment basis, where they don’t look so terrible. Adding intermittent renewables puts us on a treadmill of investment being about equal to depreciation, but we still need to pay interest on what we have borrowed. We end up in an increasing amount of debt. We certainly have not been adding new road, or new schools. Just turning existing roads into gravel, to save money.

  12. hawkeye says:

    From yet another MSM source, this time Bloomberg:

    http://www.bloomberg.com/news/articles/2016-08-26/gross-says-yellen-s-economy-may-never-walk-normally-again?

    “[Yellen] is opening the door to creating even greater asset bubbles…This is not capitalism. This is providing…a wheelchair for an ailing economy. It may never walk normally again if monetary policy continues in this direction.”

    – Bill Gross, Janus Capital Group

    “Rivelle warned that central bank intervention to keep rates low and prop up asset prices may worsen the impact of an inevitable end to the current credit cycle…

    “Every cycle in human history has ultimately come to an end…Credit-enhanced cycles come to worse ends than the normal kind.”

    – Tad Rivelle, TCW Group

    Also from Bloomberg:

    “World’s Biggest Pension Fund Loses $52 Billion in Stock Rout”

    http://www.bloomberg.com/news/articles/2016-08-26/world-s-biggest-pension-fund-loses-52-
    billion-as-stocks-slump

    Cheers.

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

      Of course, it is energy consumption that has allowed the credit bubbles to form. Once energy gets expense to extract, we end up with all kinds of problems. We shouldn’t b surprised if a bubble breaks.

      Japan and its pension fund are another problem. I believe that the government has been using the pension fund for its own purposes, trying to keep everything from collapsing. Can’t really work long-term.

    • Yoshua says:

      Not much have actually changed in OPEC in two decades if one only looks at crude oil production and exports.

      http://www.theoildrum.com/files/09_OPEC_NET_EXPORTS_2009.PNG

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

      With all of the ups and downs, total OPEC production continues higher. Inventories are more of a mystery, but it is clear to me that US inventories keep rising.

  13. hawkeye says:

    FE wrote:

    “What I am wondering is …. what impact does this have on tourism?
    Of course my website strifetravel.com is prospering …. we have never had such awesome offers for so many destinations…”

    “Strife Travel”?? Yawn, bor-ing, been there done that…

    You need to book a trip with “Extinction Tourism”, now that’s the ticket, a once in a lifetime experience!! But hurry, before it’s gone, cuz remember, supplies are limited…

    https://www.theguardian.com/world/2016/aug/20/inuit-arctic-ecosystem-extinction-tourism-crystal-serenity

    Cheers.

    • Tim Groves – Japan
      Tim Groves says:

      If you enjoyed that, you may also like Last Chance to See, an above-average 1992 potboiler by Douglas Adams and Mark Carwardine, went around the world in search of endangered species.

      From the Amazon reviews:

      Douglas Adams’ sense of humour is so strong, it could inject a bucketful of laughs into an obituary. Needless to say I wasn’t surprised when this book, his elegy for endangered species, turned out to have a welcome balance between laughter and melancholy.
      Adams is joined by zoologist Mark Carwardine, as they use their last chance to see a variety of animals on the brink of extinction, such as the Komodo Dragon, the White Rhinos of Zaire, New Zealand kakapos, and Yangtze river dolphins. Adams, amateur wildlife lover, is wise enough to know the purpose of his journey: to shine some of the glare from his celebrity as a “science-fiction comedy novelist” on the issue of global extinction. He does wisely not to downplay the plight of these animals in the favour of commerciality, but manages to produce an entertaining work nonetheless. Carwardine, and the other people we encounter, sometimes come off as little more than characters in a Douglas Adams novel. I am hesitant to believe that everyone he encounters has the same dry, deadpanned British sense of humour. Nonetheless, the characters’ eccentricities further shed light on the kinds of people who are willing to undertake the monumental task of saving these beautiful beasts. It is not work for the dispassionate.

      “The great thing about being the only species that makes a distinction between right and wrong,” he notes at one point, “is that we can make up the rules for ourselves as we go along.” Which brings up the second theme he hopes to illustrate here. Humans are dumb. No, that’s too simple. Humans are egotistical, selfish, wasteful, materialistic, impudent, and dumb. The single, overwhelming reason why most of these animals must fight for their survival is the sheer audacity humans have in moving into their natural habitat, and upsetting the balance of nature. Adams has no time for individual moments of human idiocy, best exemplified by his wonderful line skewering young Yemeni men who insist on wearing rhino tusk costume jewelry: “How do you persuade [them] that a rhino horn dagger is not a symbol of your manhood but a signal of the fact that you need such a symbol?” His exasperation is evident in this and other such pearls of prose.

      I admit that I read this book more for Adams himself than for the subject matter. It is a credit to the author that by the end, I felt some sense of emotional investment in the animals, without the bitter feelings that usually emanate whenever I am subject to an overt tug at my heartstrings. Adams walks that fine line quite well.

      • Tim Groves – Japan
        Tim Groves says:

        And yet peer-reviewed grown-up research indicates that climate sensitivity to atmospheric CO2 has been over-estimated.

        http://science.sciencemag.org/content/early/2011/11/22/science.1203513

        And they’ve overestimated Antarctic melting.

        http://climatechangedispatch.com/ipcc-author-antarctica-s-abrupt-glacial-melting-greatly-overestimated/

        Yawn!! Groves’s Law: “Just as with proverbs, you can usually find plenty on the Web that contradicts anything else on the Web.”

        The IPCC is a UN quango, not a scientific body, and certainly not an authority on anything. They have to take political considerations into account when making their projections, and they employ an army of cooks (called authors) that tend to spoil the broth, and as a result they repeatedly underestimate this, overestimate that, and make a total pig’s breakfast of the other.

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

          Groves’s Law: “Just as with proverbs, you can usually find plenty on the Web that contradicts anything else on the Web.”

          I agree. Hard to sort things out.

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

        I don’t place very high reliance in Scientific American articles, after they wrote a few years about how we could transition to 100% renewables in some short time frame. They want to sell magazines.

        • hawkeye says:

          Gail,

          If you… “don’t place high reliance on Scientific American articles…They want to sell magazines”…

          …then why did you quote from a Scientific American article in your first paragraph?:

          “The Peak Oil story got some things right. Back in 1998, Colin Campbell and Jean Laherrère wrote an article published in Scientific American called, “The End of Cheap Oil.” In it they said:

          Our analysis of the discovery and production of oil fields around the world suggests that within the next decade, the supply of conventional oil will be unable to keep up with demand.”

          Good grief.

          Cheers.

          • hawkeye says:

            Gail wrote:

            “…after they [Scientific American] wrote a few years about how we could transition…”

            Is this 2009 article the one you’re referring to?

            “A Plan to Power 100 Percent of the Planet with Renewables”

            http://www.scientificamerican.com/article/a-path-to-sustainable-energy-by-2030/

            If so, Scientific American did not “write” it.

            Mark Jacobson and Mark Delucchi “wrote” it.

            In fact, in a 2013 interview with Jacobson,

            http://www.scientificamerican.com/article/how-to-power-the-world/

            Mark Fischetti, senior editor at Scientific American, opens with this question:

            “At first glance, your proposals to convert society wholesale to renewable energy, and relatively soon, sound wild. What kinds of reactions do you get?”

            So Scientific American thinks the idea sounds “wild”.

            Fischetti then asks about “obstacles”, “criticisms”, “challenges”, and “other concerns”.

            He ends the interview with this:

            “Given the radical nature of your proposals…”

            And then questions the authors motivation:

            “If you’re not an advocate [of Renewable Energy] what is your motivation? You’ve done this exercise three times now.”

            So:

            Scientific American prints a controversial energy plan, that it did not write, and does not endorse, written by an author who is later interviewed by Scientific American’s senior editor who thinks the idea sounds “wild”, and the proposal “radical”, then challenges the author on obstacles, criticisms and other concerns, and ends by questioning the author’s motivation.

            It’s fair to say that Scientific American was highly skeptical about the whole plan, and by printing it, “sparked a debate” that completely, and deservedly, debunked it.

            And… Scientific American wanted to sell magazines 18 years ago when the article you quoted approvingly of was printed, and it wanted to sell magazines when the article you disapproved of was printed.

            We all have our preferences on the publications we “place high reliance on” and those we don’t. That’s our personal choice based on our personal reasons.

            But it’s important to represent the position of those publications, and the authorship of their articles, clearly and honestly.

            Scientific American did not write the 2009 article, as you claimed.

            This fact materially changes your post. And thus changes, indeed obviates, mine.

            If the 2009 article is not the one you referred to, then would appreciate a copy or an address for the correct one.

            Thanks.

            Cheers.

            • Tim Groves – Japan
              Tim Groves says:

              If so, Scientific American did not “write” it.

              Mark Jacobson and Mark Delucchi “wrote” it.

              The SA doesn’t “write” anything. Unless they have started to employ AI programs for the task, human beings ”write’ or ‘author’ everything that appears in SA. And I assume they gave up on employing clerks with quills to create the magazine pages quite a while ago.

              The SA “printed” it. The SA “published” it. That’s what’s important. And in so doing they publicized, announced, reported, posted, communicated, imparted, broadcasted, transmitted, issued, put out, distributed, spread, promulgated, propagandized, disseminated, circulated, aired, blazoned, heralded, proclaimed it to the public—in association with their brand name.

              Unless the SA printed and published it without an accompanying note stating that the decision to publish in no way amounted to an endorsement of the authors’ opinions or claims and that the magazine had reservations about such, then publication can be reasonably assumed to indicate the magazine’s approval of the article.

              Moreover, articles of which the SA’s owners disapprove of or have reservations about do not get published in that magazine without a note clarifying the situation. The magazine does not lend its prestige to articles of which it disapproves.

              Furthermore, the expression “ABC wrote X” is a perfectly acceptable equivalent way of saying “X was written in ABC”. The construction is commonly used to that end within the journalism industry. Arguably, anybody who wasn’t a pedantic troll out trying to cause trouble would interpret it as meaning precisely that.

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

            Back in 1998, the Scientific American didn’t seem so focused on selling magazines. The thing that really got me upset was the article I wrote about at The Oil Drum, http://www.theoildrum.com/node/5939 back in 2009. It was about Scientific American’s so-called “Path to Sustainability.” I understand that the Scientific American has changed over the years. https://en.wikipedia.org/wiki/Scientific_American

        • Tim Groves – Japan
          Tim Groves says:

          Young Hawkeye makes yet another elementary mistake in logic.

          Gail says she doesn’t place very high reliance on SA articles after they wrote a few years ago…. And the Hawk-eyed one asks in an accusing tone why she quoted from an article they published 18 years ago.

          Duh!

          SA was a great read up until about 1990. It was well worth buying for the Stephen Jay Gould columns alone. But like so many magazines it gradually declined in quality until it became irrelevant. As one former subscriber remarked, “They gave up being about science a long time ago. Thinner and thinner all the time, they have to fill the pages with CAGW crud and junk now. It’s been like seeing an old friend get dementia. Sad.”

  14. Christian says:

    In late november Laherrère wrote on the price, it’s in french but graphs are in english (pages 24 to 35, and 44):

    http://aspofrance.viabloga.com/files/JL_Nice2015long.pdf

    Some of his conclusions:

    Since 2003, oil price is highly inverse to dollar value

    Before 2003, M2 stock growth dragged dollar value; since 2003 dollar value drags M2 growth

    In 2003, US oil costs and total debt hiked

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

      The graphs are in English, so those are easy to read. Jean Laherrère is 85 years old, but he keeps working on this issue.

  15. dolph says:

    The mortality of all of us is 100%. If you didn’t think this was the case, you were fooled by the good times.
    Collapse just brings this into sharper focus.

    • Tim Groves – Japan
      Tim Groves says:

      Most people are focused on something much smaller than the global situation. The world they perceive as “real” is the world of their local community or region. If they watch the TV, this may extend to their nation. The larger world where a lot of the food, fuel and other products they consume comes from is well over the horizon and therefore out of sight out of mind. Doubtless, they assume, the powers that be have everything in hand.

      This is true of most people even if they are intellectually aware that the world they live on is a ball with a large but finite surface area and copious but finite amounts of natural resources. Emotionally, most of us are rooted in my home, my town, or my local province. My parents, for instance, were Londoners, and London was their world. Dad never travelled further than Brighton on the south coast and Mum only ever took two overseas trips in her latter years. I had an uncle who was a merchant seaman who sailed the world for many years. But even he remained a Londoner and what he experienced of the wider world consisted mainly of lots of ocean views, touristic scenes and sailors nights on the town. He didn’t look down on the whole thing and see the planet and our place on it in a holistic fashion like an engineer sees a factory or a systems analyst sees a computer operating system.

      Thus, for most people, a form of secular providence reigns supreme in their subliminal belief systems. The idea that their society could collapse would never occur to them until, as in Venezuela, Ukraine, Syria and Yemen today, they are staring collapse in the face.

      I know this from talking to many kinds people and also because I too am like most people in most respects.

      • dolph says:

        Right, and in the face of collapse, people will hunker down which means their perception and world will get even smaller.

        Another thing I find interesting about people: they will lie, and they can understand if other people are lying to them in small matters…but they don’t believe politicians or business people lie! They actually do believe the government is honest, the corporations are honest, the accounting is real, they are protecting our interests, etc!

        It would never occur to an American, for example, that virtually every single person of big influence in America is lying to them. Rather, they will attack the person who tells them that. Witness how strongly you guys react against me, and you are fellow doomers.

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

          I see the same thing. I take a psychological view of the effect. People have an internal model of the world. For each of us that internal model IS the world. When you tell someone a significant part of their world is not true they take it as a personal attack. They need to defend “the world”, at least their model of the world. A person to person lie on a local fact does not pose that same level of threat. It is not that people think the president can not lie they believe “the office of the president” can not lie because that meme has been embedded in them by society, tv, and the government school system.

          Their are few people with the ability to do abstract thinking that challenges core emotional beliefs. At 58 I have learned I will not be changing peoples core beliefs. But I do enjoy the company of others who can see.

        • Tim Groves – Japan
          Tim Groves says:

          Dolph,

          Agreed!

          Witness how strongly you guys react against me, and you are fellow doomers.

          At least they don’t call you a “denier” when you disagree with their dogma!

          Ed,

          When you tell someone a significant part of their world is not true they take it as a personal attack.

          It’s a very common human trait. My mother got quite upset when as a teenager I told her that there was nothing truthful in the horoscope magazines she used to read. After a bit, she admitted astrology was probably bunk, but insisted it was a source of comfort to her and I shouldn’t try to take it away from her. I right little Rationalist Red Guard I used to be. 🙂

  16. hawkeye says:

    And this from yet another MSM source that is having a difficult time ignoring reality:

    “QE Infinity: Are we heading into the unknown?”

    http://www.cnbc.com/2016/08/26/qe-infinity-are-we-heading-into-the-unknown.html

    “….Markets are currently riding on the wave of uncertainty and speculation over whether the world’s central banks will continue to pump in more and more cash into the economy…”

    Well, markets are currently riding on a bubble in the bond market – a market which is three times larger -Trillions and Trillions larger – than all global stock markets combined.

    Given that scale, if the pop of a dot com bubble (2000), or the pop of a housing bubble (2008) can cause deep recession, then what would a pop in the global bond bubble look like?

    Maybe this is a scenario where the four horsemen awaken once again, perhaps for the last time, and begin to saddle up?

    “….The problem is rising debt and monetary easing comes with many collateral effects…”

    So beautifully understated. Oh, you mean like collapse of the global economy and the end of industrial civilization?

    We are, no doubt, living in one of the most riveting times in human history.

    Two quotes immediately come to mind:

    “If something can’t go on forever, it won’t.”

    – Herb Stein (CCE under Nixon and Ford)

    “You can avoid reality, but you can’t avoid the consequences of reality.”

    Ayn Rand (we all know who she is)

    There’s another saying, “A group of people are only as healthy as the things it talks about…”

    That’s good news for OFW readers: we might have a better measure of health than most, at least in awareness – and at least while the grid still works.

    Cheers

    • interguru
      interguru says:

      “If something can’t go on forever, it won’t.”

      – Herb Stein (CCE under Nixon and Ford)

      Two lemmas ( mine — Interguru’s Lemmas )
      1) They go on a lot longer than you think they can.
      2) They stop suddenly without warning. Even those who see it coming have no idea when.

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

        I am becoming ever more aware of the last part of your lemma, “Even those who see it coming have no idea when.”

      • smite says:

        2.1) They degrade with plenty of warning. Everybody will be suffering through the grueling process.

    • Fast Eddy says:

      good stuff!

      How’s this for a place to see off the end of the world… west coast of NZ…. spending a night in a nearby beach shack…. maybe I should haul my 20ft container and park it here 🙂

      http://www.planitnz.com/assets/Uploads/West-Coast-Beach.jpg

  17. hawkeye says:

    For anyone interested in the role of geopolitics in the collapse of BAU and the unraveling of empire:

    http://www.counterpunch.org/2016/08/25/the-broken-chessboard-brzezinski-gives-up-on-empire/

    Read this book review by Mike Whitney in Counter Punch – and, if you have time, read the book. Would be interested in any thoughts our OFW friends here might have.

    My take, in reading between the lines, is that it confirms the growing sense of impotence and desperation – and a whiff of fear when reality can no longer be easily ignored – in the imperial halls of power.

    Or is this just a warmed over, updated version of pragmatic realpolitik?

    Cheers.

    • Artleads says:

      Interesting article. From what I know, Iranian youth rather like America. More so, it seems, than any others in their region.

    • Artleads says:

      Military might and realpolitik aren’t always the best policy. The reset that Brzez envisages seems to require far more soft power and diplomacy than at any time. A very quick calibration to soft power and diplomacy might take traditional adversaries off guard. Speed is good. There’s still plenty of room to maneuver–working with religious organizations or non profits on the ground, etc.

      It costs little, and probably is most practical to gear American grants to planning departments (which can be paid not to get in the way, at least) as well as other organizations that can promote small-group community planning. Each group tries to acquire a measure of self-sufficiency through small upgrading of water conservation and food production–like roof water catchment and soil building workshops, etc.. Small, coherent, universally distributed expenditures. Since they are the most concerned with the nurture of their families, women might be most receptive to such a plan.

      But military might would be quietly reserved in the background. Walk softly but carry a big stick.

    • John Green says:

      Book review? It’s a review of a ~3K word article

  18. Tim Groves – Japan
    Tim Groves says:

    China is pushing the limits on urbanizatio:. Welcome to the “City Cluster”.

    By any measure, Shanghai is one of the world’s biggest cities. It’s home to more than 24 million people. Its subway system is the longest ever built, extending to its rural limits. Crowds are so thick that burly “shovers” get paid to help pack the trains. Now the local government is saying enough is enough: Documents released this week reveal that Shanghai intends to admit a mere 800,000 new residents over the next 24 years, on its way to becoming an “excellent global city.”

    A population cap on one of China’s most dynamic locales may seem impractical. But the government is actually thinking bigger: The plan envisions Shanghai as the high-end hub at the center of a massive “city cluster” comprising 30 urban areas — with a staggering total population of 50 million.

    That might sound preposterous. But the Yangtze Delta Cluster, as it’s known, is one of at least 19 such projects in the works. The idea is to use an extensive hub-and-spoke rail system, much of it high-speed, to better integrate China’s burgeoning urban areas. The big three clusters — located along the Pearl River, the Yangtze River and the Beijing-Tianjin corridor — will each have 50 million people or more.

    The effect could be transformative. For one thing, it will create the world’s biggest labor markets, and further urbanize a country that’s still more than 40 percent rural. It should boost economic growth and efficiency. And it could help solve a growing dilemma: Many of China’s biggest cities have simply reached their geographic and demographic limits.

    https://www.bloomberg.com/view/articles/2016-08-25/how-big-can-china-s-cities-get

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

      How much “stuff” would need to be imported into such a huge city cluster? How would road transport really work? This sounds like science fiction, but I suppose planners think this way.

    • psile
      psile says:

      All I see is concentrated dieoff…

  19. http://davecoop.net/senecagraph.gif
    http://davecoop.net/seneca.htm
    Above, are my latest guesses about the world oil-production situation.
    Here’s an acronym for what drives a lot of this: MROMI, for “money return on money invested” — my guess is, MROMI considerations (not EROEI, or some such thing) are largely what drive oil-extraction companies (including such as ARAMCO).
    With broad simplification, I think oil-extraction costs fall into two categories:
    (A) the costs of keeping the existing wells/oilfields producing, &
    (B) the costs of replacing those wells/oilfields, when they deplete
    Though economic collapse may occur in different places at different times (EG, compare this “Silicon Valley”, where I am, where the water is pumped around, & mostly pumped in from afar, with electricity, with much of the world, where young folks carry the day’s water home), as someone (I think it was FE) wrote on OFW, “when the oil goes, the food goes”.
    That’s part of why I think that the (A) costs will continue to get paid, if not the (B) costs.

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

      Thanks! I agree that MROMI is a whole lot more important than EROEI.

      One thing that confuses matters is that M includes growing debt, or lack of growing debt. Once banks cut off financing to oil companies, it seems like the game is over. Or worse yet, if banks fail, and it is not possible to pay employees of any kind of company, oil or otherwise.

    • Christian says:

      Dave, you don’t really use your mromi concept to draw your graphs, don’t you? Rather an extrapolation of past production?

  20. Fast Eddy says:

    The team of scientists also used historical aerial photo analysis, soil and methane sampling, to quantify the strength of the “permafrost carbon feedback.”

    Although the amount of gases being released from permafrost at the moment is “pretty small,” it’s thought that over the next 90 years, the levels of gas could be from 100 to 900 times greater than present measurements.

    https://www.rt.com/viral/357224-permafrost-carbon-climate-change/

    Pretty pretty … pretty … pretty … small

    Other sources would have us believe the frozen muck will be melted by the end of summer…

    Again — if AGW is the real deal — it ranks way down my list of concerns…. IBGYBG – I be gone you be gone in 90 years…….. actually everybody be gone….long before that

    • bandits101
      bandits101 says:

      You maybe need to google a few sources. Cherry picking just amplifies your bias. Any googler can make themselves look like they are informed, maybe even seem intelligent. I don’t expect this post will pass inspection though.

    • Tango Oscar
      Tango Oscar says:

      Keep in mind Eddie that the attitude of “I don’t care, it won’t be here while I’m still alive” is a big part of what got us into the middle of this climate change and extinction mess in the first place. What I don’t understand is the ones who have kids. Apparently they don’t care about them either.

      • Tim Groves – Japan
        Tim Groves says:

        Tango Oscar, I accept that you are genuinely concerned about catastrophic climate change. But the big question is, what do you suggest we can do to prevent it?

        As a denier, I feel no responsibility to do anything apart from to keep calm and carry on. But you, an alarmist, shouting “Fire” in our common global crowded cinema—a cinema apparently without exits—must feel some responsibility to do more than alerting other people to our impending doom. So what’s your plan for dousing the flames? What would you have the rest of us do?

        • “But the big question is, what do you suggest we can do to prevent it?”

          I’ll give it a shot. The Earth receives about 1200 watts per square meter from the Sun, and has a current surplus of about 0.6 watts per square meter. That’s about 0.02% more energy coming in then going out. So all we need is a bit of dust, gas, particles, whatever in high atmosphere, preferably some kind that reflects visible light but not infrared, to just block out 0.02% of the sunlight.

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

            Easy just place 400 satellites in orbit each 10 miles by 10 miles to block 0.02% of incoming sunlight. Aluminized Kevlar at 0.1mm thick (this is to get a back of the envelope number thicker than needed but accounting for other system components) weights 1.5g/cc or 0.015g/sqcm or 150g/sqm or 1.5E8g/sqkm or 1.5E5kg/sqkm. Gives 256*1.5E5 = 38E6 kg per satellite. At $4000/kg to medium earth orbit that is about 160 billion dollar per satellite or 64 trillion dollars for the whole constellation. Doable as a twenty year global project. Global warming problem solved.

            • Fast Eddy says:

              I think you forgot to include this (sarc) 🙂

            • Won’t aluminized mylar bounce infrared back to Earth equal to the amount of sunlight it deflects? Like, a space / survival blanket works by reflecting your own body heat back to you, so …

              I think just using balloons with variable displacement would work better, to lift loads up into the stratosphere and release the dust or whatever and then come back down to take the next load. Or partially deflate the balloons at max altitude and just let them fall back down slowly.

          • Fast Eddy says:

            Maybe tactical nuclear war —- Nuclear Winter Lite?

            Or perhaps we could spray 30 sunblock into the atmosphere on a daily basis?

  21. Fast Eddy says:

    https://www.rt.com/news/357230-belgium-chimay-sports-blast/

    And the hits keep coming! Relentless… fear fear FEAR!!!!

    What I am wondering is …. what impact does this have on tourism?

    Of course my website http://www.strifetravel.com is prospering …. we have never had such awesome offers for so many destinations…

    My other business of front-running the stock markets because I live in the future is also doing quite well… we make money every single day.

    • DJ says:

      “because I live in the future”
      Never mind the stock market. Tell us who wins the game of thrones. Then we can let this collapsing thing have its run.

      • Fast Eddy says:

        Keep in mind I am only a few hours ahead… so my power to predict is quite limited…

      • “Tell us who wins the game of thrones.”

        I think it is pretty obvious, winter wins and all the contenders die. Unless we get a cheesy ending where everyone unites to stop global cooling.

        • DJ says:

          Yes, I am hoping for the silver wig, the dwarf and the bastard wins the throne halfway through the last episode. Then the snow zombies comes south, kills everyone. Then eternal winter.

  22. MG says:

    Unusually normal summer in 2016 in Central Europe after the years of escalating temperatures: the climatologist Pavel Fasko says that we have returned 30 – 40 years back (article in Slovak)

    http://kosice.korzar.sme.sk/c/20253739/v-kosiciach-a-presove-uz-mesiac-nebolo-ani-len-30-stupnov.html?ref=trz

    Is it possible that the peaking coal consumption has its impact?

    https://gailtheactuary.files.wordpress.com/2015/06/world-energy-consumption-by-part-of-world-2014.png

    Well, we will see…

    • Fast Eddy says:

      Towards a new economic system for the 21st century

      The new economic system should be based on localised forms of industry, finance and participatory democracy.

      I didn’t get past the headline because I started to hear this song playing in my head… don’t you hate when that happens!!! It really can drive one around the bend…

    • psile
      psile says:

      “An article that starts out nicely, then peters out.”

      Why? Because it’s completely delusional, the writer ends up in a cul-de-sac of illogical thinking, and deep down knows it. Airy fairy talk about “consciousness shifts” and “young people taking up the vanguard of revolutionary struggle”, or “new ways to restart production and consumption by other means “new economy” are laughable, for all the reasons we’ve spoken about ad nauseum, on this blog.

      • Fast Eddy says:

        It must be difficult to maintain a line of thought as a journalist who is ordered to write something based on an edict issued from the Ministry of Truth … when you know what you are writing is total nonsense…..

        You of course spew something out — a series of disjointed thoughts — bordering on gibberish…. hoping the editor will accept it….. because you need to eat….

    • Tim Groves – Japan
      Tim Groves says:

      An article filled with the audacity of hope. It put me in mind of this catchy little ditty.

      https://youtu.be/FjtEYt6l2Cs

      • Fast Eddy says:

        Ha ha ha ha …. and what would a Hoper Party be without this classic (and organic granola…)

      • Tim Groves – Japan
        Tim Groves says:

        Imagine no possessions. The way things are going, quite soon we might not need to imagine that. But in the meantime, let’s calm ourselves with the mantra,” Nothing’s gonna change my world!”

        • Fast Eddy says:

          Imagine there are no people… they’ve mostly starved and died…. and the rest succumbed to radiation poisoning…. it’s easy if you try…..

    • Tim Groves – Japan
      Tim Groves says:

      If that version isn’t working:

      https://youtu.be/XcsflKHiKlo

    • Artleads says:

      He took on the Bernie New Deal approach, which was intriguing. But didn’t explain why it couldn’t work (which would have been helpful for millions of those “new young revolutionaries”). Then he abandoned the discussion entirely thereafter.

    • DJ says:

      That was four minutes of my life I will not get back.

  23. psile
    psile says:

    Hey, how come my comments are always awaiting moderation nowadays?

  24. psile
    psile says:

    The things you see when you haven’t got a gun…

    Climate Change Is Making This Portable Air Conditioner a Must-Have Summer Accessory

    https://i.kinja-img.com/gawker-media/image/upload/s–ag_ccKev–/c_fit,fl_progressive,q_80,w_470/scnspmha4kvdnpzcsolu.jpg

    Sunglasses, swimsuits, tank tops, and sandals are the usual accessories you think of when you’re getting ready for summer. But with climate change pushing summer temps higher and higher ever year, it’s probably not a bad idea to add the Zero Breeze portable battery-powered air conditioner to that list.

  25. Fast Eddy says:

    “Assuming by BAU you mean 3 – and this is where Laetititia’s observations come in – transition to a post-consumerist economy, based on the smaller energy surplus that renewables can provide, may be feasible.”

    https://surplusenergyeconomics.wordpress.com/2016/08/13/76-the-point-of-no-returns/?replytocom=2337#respond

    This is what happens when you write a book and want people to guy it….

    • ” The link between population and energy availability is incontrovertible, and is discussed in my book…
      Adjusting the economy downwards could be traumatic – adjusting population downwards would surely be brutal.” – drtimmorgan

      • Fast Eddy says:

        That should help book sales in DelusiSTAN.

        And it makes sense to focus on that population — because if the book were written to appeal to RealitySTAN residents …. it might sell a dozen copies.

        Norman – do you reckon that is accurate?

  26. Sungr says:

    (Jackson Hole Wy) Conferees at the Jackson Hole Economic Symposium were startled when a middle-aged man forced his way past security and barged into the main conference hall shouting “You’re doomed. All of you! BAU will end and you will be dead. Dead.”
    Symposium security guards quickly overcame the slightly built intruder and ejected him bodily out of the hall and into the street where he was taken into custody by Wyoming State Police. Calls to the FBI revealed the man to be a possibly deranged New Zealand citizen who has claimed to have a gift of prophecy in predicting the end of the world. State Police spokesmen said that FBI inquiries indicated that “Fast Eddy” apparently posed no security threat and is mainly interested in publicity. Troopers escorted the man to the town limits and warned him to stay out of town or else.
    The man was last seen weaving around outside a local cowboy bar and annoying passerby with shouts of “Hey I’m Fast Eddy. C’mere and let me tell you a story about the end of the world” but getting few takers.
    Fed Chief Janet Yellen was not present during the incident and presented her keynote address at 1:00pm as scheduled and without interruption.

    • Fast Eddy says:

      I’m typing this from a cell in Jackson Hole….

      Tiffany & Co revenue fell 5.9 percent to $931.6 million, missing analysts’ $933.9 million estimate. Comparable-store sales fell 9 percent, excluding the effects of currency fluctuations. Analysts projected a 7.1 percent drop, according to the average of estimates compiled by Consensus Metrix.

      The same-store sales disappointments were centered in the Americas and Japan.

      In the Americas, they dropped 9 percent. Analysts estimated a 7.8 percent decline.
      In Asia-Pacific, they slipped 9 percent. Analysts estimated a 11.4 percent drop.
      In Europe, they fell 13 percent. Analysts estimated a 13.6 percent decline.
      In Japan, they were down 3 percent. Analysts estimated a 1.8 percent gain.

      http://www.bloomberg.com/news/articles/2016-08-25/tiffany-sales-miss-estimates-as-global-uncertainty-hurts-demand

      The and other corps are cutting expenses to the bone …. how do we not have mega layoffs?

      • Kurt says:

        Update: police say that upon questioning, Fast Eddy would only repeat over and over, “there will be no Christmas turkey for you.”

      • Tim Groves – Japan
        Tim Groves says:

        The world has become a giant cargo cult. The people are gathered in the parks, praying for black helicopters (or any other color) fly over and drop money on them like mana from heaven or the rain that falls after a long drought. If we listen hard enough, we may hear the whining of the choppers in the distance as they approach us loaded with pallets of nice, fresh, crisp greenbacks, euros and yens. Once they’re dropped, all we have to do is go out and spend them and salvation is at hand.

    • Pintada says:

      On August 25, 2016 at 3:10 Fast Eddy was able to – from his cell – create and market $1 billion in negative interest bonds. Those bonds pay him 1% per year, and so with his first interest check he was able to bribe the judge, and get released.

      Knowing that the end is nigh and having a few bucks in his pocket is a well known sign that FE is going to PARTAAAIA, and he has not been seen since … though he still is posting on OFW.

  27. hawkeye says:

    And from Bloomberg:

    “Mobius says helicopter money will be Japan’s next big experiment”

    “They’re beginning to think what ammunition they have…”

    “Central bankers have flooded their economies with monetary stimulus in the eight years since the global financial crisis, driving up asset prices – including the stock markets…”

    “Helicopter money, a kind of last resort in unconventional monetary policy, comes in several forms. The most simple is printing money and giving it to the public… hoping they’ll spend it. Others include…putting it directly into the hands of corporations.

    “Mobius says there’s… questions about whether it would be effective in increasing tax revenue in a country where national debt is about 250% of GDP.”

    “…qualms about the side effects of helicopter money may condemn it to failure.”

    Well, it won’t be qualms that condemn it to failure, imho.

    It will be chaos, the breakdown of the economy, and social and political instability.

    It’s been suggested that Japan may be the first industrialized country to go “medieval”.

    And I think, as goes Japan, so eventually goes other advanced economies.

    Why?

    Take a look at this from Wolf Street:

    http://wolfstreet.com/2016/08/24/world-trade-falls-second-quarter-in-a-row/

    “World Trade Falls for Second Quarter in a Row”
    “Decade of Stagnation of Industrial Production in US, Japan, and EU”

    “…And here the trend is awful for advanced economies.”

    It seems we are entering the end game in the experiment of industrial civilization.

    Cheers.

  28. hawkeye says:

    From Reuters this morning:

    “Central bankers eye public spending to plug $1 Trillion investment gap”

    http://www.reuters.com/article/us-usa-fed-fiscal-idUSKCN1100BJ

    “…the US economy needs more public spending to shift into higher gear.”

    “…for…efforts to counter weak growth, sagging productivity improvements, and lagging business investment.”

    “The Fed’s annual conference…is due to focus on how to improve central bank’s “toolkit”, but the unanimous message from the Fed’s top policymakers is that those tools are not enough.”

    Yes, indeed.

    But here’s the sentence I found interesting:

    “…companies seem to have stopped responding to low borrowing costs.”

    The MSM seems to be acknowledging that lowering interest rates no longer works.

    What will central banks do when they realize that QE and “helicopter money” no longer works either?

    What kind of “tools” will they use then?

    From a half century of Keynesianism to what? Authoritarianism? Militarism? War?

    Reading between the lines, one begins to see increasing frustration and desperation – and smell a whiff of fear – in the imperial halls of power.

    Cheers.

  29. ! ” £ $ % ^ & * ( ) _ – + = \ | , . / ? ; ‘ : @ # ~ [ ] { } ` ¬

  30. Yoshua says:

    Norman Pagett says:

    August 24, 2016 at 4:14 pm

    in previous times, no matter how stupidly we behaved, we could not exceed the energy output of the land we lived on.

    unfortunately we found the way to do that, and convinced ourselves it was forever.

    Right now, we are being shown that we lied to ourselves.

    • Yoshua says:

      I’m starting to get the notion that this collapse will be very different from previous collapses.

    • Tim Groves – Japan
      Tim Groves says:

      Ever since we started making flint tools, progress has been a process of employing new technology to solve the problems created by employing existing technology.

      This is an oldie but a goodie.

      https://youtu.be/Ulxe1ie-vEY

      • Fast Eddy says:

        I’d not seen that before…

        If there was any confusion about how the lower half of the US consumer class is doing these days, it was quickly lifted following today’s distressing earnings calls of dollar store titans, Dollar General and Dollar Tree.

        Discount retailer Dollar General said it was cutting prices on its most popular items such as bread, eggs and milk, intensifying a price war among already commoditized products with retail giant Wal-Mart Stores to win back falling market share. It shares fell the most on record, plunging by 18% after the company missed on revenue, blaming aggressive competition, lower food prices and reduction in SNAP, or food stamp, coverage in 20 key states.

        http://www.zerohedge.com/news/2016-08-25/things-are-worse-dollar-stores-startling-admission-half-us-consumers-are-dire-strait

        Soon they’ll be stocking expired cat food at 25 cents a can….

        • Tim Groves – Japan
          Tim Groves says:

          Soon they’ll be stocking expired cat food at 25 cents a can….

          And soon people will be eating it. Right after they run out of expired cats.

          Maybe it’s time for a return of the dime store?

      • Stefeun says:

        Exact, Tim,

        Problem solving is the best problem generator, by far.

      • Yoshua says:

        We solve a problem by creating a bigger one. We survive only by solving the next one. Life is a game. Is this Game Over or will we solve this one too… just to create a new mind boggling problem for the next generation ?

  31. Fast Eddy says:

    Offshore Wind Turbine Maintenance Cost Fiasco: “100 Times More Expensive Than A New Turbine Itself”!

    By P Gosselin on 2. February 2016

    A press release by Germany’s Fraunhofer-Gesellschaft reports how offshore North and Baltic Sea wind turbines need to be in operation for 25 years before they become profitable, but that they are prone to shortened lifespans due to rust from the harsh sea environment.

    As a result the wind turbine installations need extra and very costly maintenance to ensure that they survive long enough. It’s turning out to be an insurmountable challenge.

    Maintenance to turbines cannot be done at a dry dock, rather, because they are permanently fixed out to sea, repair work and maintenance have to be done offshore in raw and windy conditions. Not only is this expensive, but it also puts the lives and limbs of repair personnel at risk.

    This is the reason engineers and researchers are trying to find ways to better protect offshore wind power systems from the brutal elements. Protection of vulnerable metal surfaces is planned to be achieved by developing and applying new surface films, but this is still very much in development.

    100 times the cost of a new turbine

    The figure that is especially astonishing about offshore wind power turbines is that the “maintenance and repair costs of offshore wind turbines over the years add up to be a hundred times the cost of the new turbine itself,” says Peter Plagemann of the Fraunhofer Institute for Production Technology and Applied Material Science (IFAM) in Bremen.

    Plagemann adds (my emphasis):

    While a metal coating during the construction of a turbine on land can cost up to 20 to 30 euros per square meter, it can be several thousand euros for offshore turbines.”

    This is yet just another huge and costly technical obstacle faced by offshore windparks. It’s going to be an expensive mess come clean-up time.

    – See more at: http://notrickszone.com/2016/02/02/offshore-offshore-wind-turbine-maintenance-costs-100-times-more-expensive-than-new-turbine-itself/#sthash.JtA9Up6B.dpuf

    • “This is yet just another huge and costly technical obstacle faced by offshore windparks. It’s going to be an expensive mess come clean-up time.”

      On the contrary, I suspect the clean-up costs will be non-existent, as there will be no clean-up. It does seem quite amazing to me that this concerns did not come up in the planning stages, or at the very latest with the first test prototype of an off-shore windmill.

  32. Fast Eddy says:

    Oh look….. it’s an idiot! Where’s my shotgun…

    (I cheekily posted Tim’s reference on WS)

    While on the topic of energy …. here’s an interesting comment: Warren Buffet said: “I will do anything that is basically covered by the law to reduce Berkshire’s tax rate. For example, on wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. […]

    This is a ridiculous argument that ignores reality.

    Inform yourself about the real cost of wind energy, e.g. the new 3000 MW of wind farms that is being build near the Dutch coast, and that will be a lot cheaper than nuclear – despite the HUGE subsidies for nuclear power, and the fact that most of their cost like 100.000 year storage, extreme security measures and decommissioning are all paid by the taxpayers. Nuclear is one big scam and its only special ‘advantage’ is to enable nuclear warfare for some countries that are above international law.

    The new Dutch wind farms get a bit of subsidy, but because the cost was far lower than initially estimated it isn’t much. The total cost to the population of one nuclear power station will be a hundred times higher, at least – and that is assuming that nothing bad happens in 100.000 years which is a silly assumption given the experience with Chernobyl, Fukushima and many other near-disasters.

    http://wolfstreet.com/2016/08/24/whats-wrong-with-us-oil-glut-petroleum-products/?replytocom=51414#respond

    Take it away….

    • Tim Groves – Japan
      Tim Groves says:

      Nuclear is one big scam and its only special ‘advantage’ is that it produces electricity reliably 24/7/365 (apart from when refueling during the season of lowest demand) at a reasonably affordable cost to the consumer.

      Of course, it can be a real pain when nuclear goes wrong. But if you had X billion to invest in large-scale electricity generation spending your own money and with no subsidies and no environmental considerations, just looking at cost per kilowatt hour you’d probably go for coal or gas, followed by nuclear and hydro. With subsidies it’s another matter. You might be persuaded to put it all into wind power if the government made it worth your while. But subsidies are a means of robbing Peter to pay Paul; Peter in this case being the consumer of electricity and the taxpayer. The social costs of subsidies to society are another factor that need to be woven into the analysis of Finite World economics.

  33. Fast Eddy says:

    http://www.zerohedge.com/news/2016-08-24/france-deploy-3000-troops-schools-threat-real-education-minister-says

    Preparing the table for Martial Law Lite….. Germany is seated… France is seated….

    My guess suggesting we may not make the end of the year…. is looking less unlikely…

    Regardless… when the troops establish a street-presence — that signals a new more dangerous phase — because it indicates the economy is about to take a really wicked turn … or perhaps it means the high priests have some medicine for us — that we will not like the taste of…..

    It’s only a skip and a hop from Lite to Hard Martial Law.

  34. MG says:

    To stop them becoming terrorists, Italy is giving teens €500 to spend on high culture

    http://qz.com/765106/to-stop-them-becoming-terrorists-italy-is-giving-teens-e500-to-spend-on-high-culture/

    Giving people money and require from them to use them in the prescribed way instead of subsidizing the institutions directly. Well, there will be more and more “creative solutions” to cover the truth about the increasing energy poverty.

  35. Tim Groves – Japan
    Tim Groves says:

    First the classic sci-fi writers made it exciting. Then Carl Sagan came along and made it respectable to ponder. And now I hear Stephen Hawking says colonise other planets to protect the human race.

    “Sending humans to the moon changed the future of the human race in ways that we don’t yet understand,” he said.

    “It hasn’t solved any of our immediate problems on planet Earth, but it has given us new perspectives on them and caused us to look both outward and inward.

    “I believe that the long term future of the human race must be space and that it represents an important life insurance for our future survival, as it could prevent the disappearance of humanity by colonising other planets.”

    http://www.independent.co.uk/news/science/stephen-hawking-space-travel-will-save-mankind-and-we-should-colonise-other-planets-10058811.html

    I believe Steven Hawking died decades ago and was replaced by one or more impostors, and that his handlers can make him “say” anything they want via that laptop. Possibly the chap who plays C3PO could play Hawking in his spare time. It would be one long dramatic pause.

    I believe my belief is far more credible and involves far less suspension of disbelief than Hawking’s belief that living in space represents an important life insurance for our future survival. I admit that I may be mistaken, but the content of the above speech reads like it was written by a copywriter working in PR than by one of the greatest minds in physics since Einstein.

    • subidasdeimagenes
      Crate says:

      “I believe Steven Hawking died decades ago and was replaced by one or more impostors, and that his handlers can make him “say” anything they want via that laptop. Possibly the chap who plays C3PO could play Hawking in his spare time. It would be one long dramatic pause.”
      🙂 🙂 🙂
      Tim, interesting hypothesis, who knows …?
      The certain thing, it is that many intelligent persons believe in this possibility. A time ago I conversed with a clearly intelligent gentleman. He is sure that it is possible to do spatial mining industry to solve the problems of resources in the Earth. To refute his argument, I did not want to enter physical aspects or the unsoluble problems of engineering. I centred on the economy. I said to him: of that it would serve us a kilogram of copper which cost would be of hundreds of thousands of dollars. And he I answer: the offer and the demand, and the free competition, would lower the costs up to making them competitive!

      It does not matter if one is republican or democrat, right or left, believer or atheist … the faith in the progress is the principal religion in Delusistan.

        • Tim Groves – Japan
          Tim Groves says:

          Oh, you mean the traditional Crates?

          • subidasdeimagenes
            Crates says:

            Yes, Crates de Tebas, philosopher of the cynical school. But not the boxes, it is ridiculous. Crates and boxes it is synonymous in English … or I believe it.
            Definitively not to know Englishman is a problem. 🙂

            • “The word tuphos (Greek: τῦφος) in the first line, is one of the first known Cynic uses of a word which literally means mist or smoke. It was used by the Cynics to describe the mental confusion which most people are wrapped-up in. The Cynics sought to clear away this fog and to see the world as it really is.”

              Wow, that sounds awfully familiar.

      • Fast Eddy says:

        This is on a sign board at the main gate into DelusiSTAN:

        “Give me your illogical, your ignorant,
        Your huddled masses yearning to breathe hopium,
        The wretched fools and imbeciles of your teeming shore.
        Send these, the factless, tempest-tost to me,
        I lift my lamp beside the golden door!”

      • “And he I answer: the offer and the demand, and the free competition, would lower the costs up to making them competitive!”

        I wonder what the scale of economy is for bringing metal down from space to Earth, such that it only costs $1 per Kg. At that point, the risks if something goes wrong could be pretty massive.

        The “best” idea, the most theoretically efficient, is the idea of having a ring around the Earth that is spinning in constant free-fall, and then that ring suspends a stationary ring by magnetism, and that ring has elevators that go up and down from the surface. Even imagining that such a thing is possible, can you imagine the consequences if something goes wrong?

        • subidasdeimagenes
          Crates says:

          I agree with you because the human being is of “incompetent” nature.
          I think about Fukushima … a higher wall of protection of tsunamis had avoided the catastrophe. But it was not done in his day and now it is necessary to pay the consequences. I do not want to think about the dangers of living in a world full of spatial elevators.
          Something of DelusISTAN official propaganda:

  36. Fast Eddy says:

    Pravda NZ – otherwise known as Radio NZ….. was again running a story about an inhabitable planet that has been discovered….

    The MSM seems to feed the sheeple at least one of these stories per year….

    They make is sound as if another earth has been discovered and is waiting for us once we completely burn this earth to the ground….

    Of course this is total utter nonsense… there is no other inhabitable planet …. because there has been no other planet found with air and water on it …. let alone vegetation…

    Alas — the sheeple love this stuff — it’s like feeding them a sack of apples…. joy bliss….

    To understand where they are coming from think about what heaven represents … this is like Heaven Lite…. it’s not eternal life… but it does give the Hopers comfort knowing that they kids or grand kids have an Eden to move to when things go really badly….

    • bandits101
      bandits101 says:

      “Of course this is total utter nonsense”……….
      Yes absolutely, in a relative 24 hour day humans have inhabited Earth for about the last 75 seconds, life other than bacteria less than 4 hours. Ours is a very, very lucky planet from memory I think 12 rare occurrences have been identified, examples being a liquid spinning metalic core, a moon of the requisite proportion, a benign star, our position relative to said star, a Jovian planet close enough to sweep comets and asteroids, our position in the galaxy, plate tectonics………

      The chance of even bacterial life occurring is infinitesimal, we only assume it is abundant, and bacteria were essential to enabling this planet to be hospitable to “higher” lifeforms.

      ….and if we want to examine the distances involved and the perils of deep space, well I for one have no idea why that avenue of astronomy is entertained at all.

      • Rare Earth: Why Complex Life is Uncommon in the Universe / Peter D. Ward and Donald Brownlee
        Reviewed by Tal Cohen Monday, 26 November 2001
        It is said that one of the most important skills a physicist needs is the ability to quickly make “back-of-the-envelope” calculations. For example, Jan Wolitzky (in Jon Bently’s Programming Pearls) tells about Enrico Fermi, Robert Oppenheimer, and the other Manhattan Project brass who were behind a low blast wall awaiting the detonation of the first nuclear device from a few thousand yards away. Fermi was tearing up sheets of paper into little pieces, which he tossed into the air when he saw the flash. After the shock wave passed, he paced off the distance traveled by the paper shreds, performed a quick “back-of-the-envelope” calculation, and arrived at a figure for the explosive yield of the bomb, which was confirmed much later by expensive monitoring equipment.

        But expensive monitoring equipment which can confirm the calculation does not always exist, and hence in some fields, our entire knowledge is based on back-of-the-envelope calculations and rough estimates. Take, for example, the following question: “How many intelligent civilizations, capable of radio communications, currently exist in the Milky Way galaxy?”. The worthwhileness of search projects (such as SETI) is closely related to the answer to this question. The number of positively known civilizations is exactly one: the human civilization. And yet, many scientists believe, or at least believed until recently, that the actual number is far, far higher.

        This belief was based on various estimates, such as the calculation proposed by Frank Drake, now known as “The Drake Equation”. This equation was popularized in Carl Sagan’s remarkable TV series, Cosmos. Sagan himself believed the calculation’s result, and was one of the founders of SETI.

        Drake’s equation is easy to understand. Take the number of stars in the galaxy (about 200 to 300 billion, based on generally accepted estimates), and multiply it by: the percentage of stars that are similar to our Sun in the energy output and stability; the percentage of stars that have planets (since not every star has any); the percentage of planets orbiting their star in a proper distance (so they could hold liquid water, a necessity for maintaining life); the percentage of planets with liquid water on which life actually evolved; and finally, the percentage of life-bearing planets in which intelligent civilizations (i.e., those that can communicate by radio) eventually came to be. All in all, there are five or six factors in this product.

        (Note: In my own copy of the book (2nd impression), page 267 states that “a good estimate for the number of stars in our galaxy [is] between 200 and 300 million” — one letter mispelled, and wrong by three orders of magnitude. I do hope the authors’ actual calculations were based on the correct value.)

        But what values should be used for the various percentages? Drake (and Sagan) chose what they considered to be a conservative approach, and estimated that only about 1 in 10 stars has any planets; only 1 in 10 planets is in the proper orbit, and so forth. Despite the conservative approach, the results were encouraging, indicating that there are thousands of intelligent civilizations in the Milky Way, and probably millions of them in the whole universe. Thus they concluded that there is intelligent life out there, in all likelihood; now we only have to look for it.

        In their book Rare Earth, published by Copernicus Press in 2000, Peter Ward and Donald Brownlee point at Drake’s (and other physicists’) mistakes in a long and depressing discussion, a discussion that took the wind out of more than one SF author’s sail.

        The book presents what the authors call “the rare Earth hypothesis”: simple (bacterial) life is very common in the universe; complex life (multi-cellular life forms, or animals — let alone intelligent life) is very rare

        http://tal.forum2.org/rare

        These are the necessary features

        Proper distance from the star. If a planet orbits its sun too closely or too far away, liquid water would not exist. There isn’t much margin for error here: a change of 5 to 15 percent in Earth’s distance from the Sun would lead to the freezing, or boiling, of all water on Earth.
        Proper distance from the center of the galaxy. The density of stars near the center of the galaxy is so high, that the amount of cosmic radiation in that area would prevent the development of life.
        A star of a proper mass. A too-massive star would emit too much ultra-violet energy, preventing the development of life. A star that is too small would require the planet to be closer to it (in order to maintain liquid water). But such a close distance would result in tidal locking (where one face of the planet constantly faces the star, and the other always remains dark — as with the moon in its orbit around Earth). In this case one side becomes too hot, the other too cold, and the planet’s atmosphere escapes.
        A proper mass. A planet that is too small will not be able to maintain any atmosphere. A planet that is too massive would attract a larger number of asteroids, increasing the chances of life-destroying cataclysms.
        Oceans. The ability to maintain liquid water does not automatically imply that there will be any on the planet’s surface. It looks like Earth acquired its own water from asteroids made of ice that crashed here billions of years ago. On the other hand, too much water (i.e., a planet with little or no land) will lead to an unstable atmosphere, unfit for maintaining life.
        A constant energy output from the star. If the star’s energy output suddenly decreases, even for a relatively short while, all the water on the planet would freeze. This situation is irreversible, since when the star resumes its normal energy output, the planet’s now-white surface will reflect most of this energy, and the ice will never melt. Conversely, if the stars energy output increases for a short while, all the oceans will evaporate and the result would be an irreversible greenhouse-effect, preventing the oceans from reforming.
        Successful evolution. Even if all of these conditions hold, and simple life evolves (which probably happens even if some of these conditions aren’t met), this still does not imply that the result is animal (multi-cellular) life. The evolution of life on Earth included some surprising leaps; two worth mentioning are the move from simple, single-cellular life to cells which contain internal organs, and the appearance of calcium-based skeletons. It appears like the first of these leaps took more time than the evolution from complex single-celled life to full-blown humans.
        Avoiding disasters. Any number of disasters can lead to the complete extinction of all life on a planet. This include the supernova of a nearby star; a massive asteroid impact (like the one that probably caused the extinction of dinosaurs, and 70% of all other life-forms at the time); drastic changes of climate; and so on.

        Also more

        The existence of a Jupiter-like planet in the system. Apparently, Jupiter’s large mass attracted many of the asteroids that would have otherwise hit Earth. Could life evolve in a system with no Jovian planet? On the other hand, too many Jovian planets, or one that is too large, could lead to a non-stable solar system, sending the smaller planets into the central sun or ejecting them into the cold of space.
        The existence of a large, nearby moon. Apparently Luna, Earth’s moon, is atypically large and close. Both of Mars’s moons, for example, are minor rocks by comparison. What does this have to do with life? Well, it turns out that Luna kept (and still keeps) Earth’s tilt stable. Without Luna, the tilt would have changed drastically over time, and no stable climate could exist. If the tilt would have stabilized on a too-large or too-small value, the results could also be disastrous; Earth’s tilt is “just right”.
        Plate tectonics. Surprisingly enough, it seems like plate tectonics are required for maintaining a stable atmosphere. Plate tectonics play an important role in a complex feedback system (explained in detail in the book) that prevents too many greenhouse gases from existing in the atmosphere. No other planet (except maybe for Jupiter’s moon Europa) is known to have plate tectonics. Is this a rare phenomenon, but required for life?

      • Fast Eddy says:

        LOOK! It even looks like Earth – see the video

        Discovery of potentially Earth-like planet Proxima b raises hopes for life

        Thought to be at least 1.3 times mass of Earth, planet lies within ‘habitable’ zone of Proxima Centauri, raising hopes for life outside our solar system

        Eamonn Kerins, an astrophysicist at Jodrell Bank Centre for Astrophysics, was among those enthusiastic about the discovery. “Finding out that the nearest star to the sun hosts not just a planet, not just an Earth-sized planet, but one which is in the right location that it could support life – and there are a lot of caveats there – really underscores that not only are planets very common in our galaxy, but potentially habitable planets are common,” he said.

        https://www.theguardian.com/science/2016/aug/24/earth-like-planet-found-orbiting-our-suns-nearest-star-raises-hopes-for-life-proxima-b

        Heavenly father …. give us our daily puff of hopium….

        I would be keen to understand how this works…. I would expect that a PR company is involved tasked with getting the lie into the MSM…. I wonder who pays the bill though? PR is expensive….

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

          Ha! and how many light years away is Proxima Centauri? Might be a long trip, even with warp drive.

          • how many light years away is Proxima Centauri?

            The closest star to ours, at only 4.25 light years. So, a ship traveling at 10% of light speed average would only need 43 years to get there. You can see how easy the techno-lust Utopian futurism can take hold of the minds of the masses.

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