Intermittent Renewables Can’t Favorably Transform Grid Electricity

Many people are hoping for wind and solar PV to transform grid electricity in a favorable way. Is this really possible? Is it really feasible for intermittent renewables to generate a large share of grid electricity? The answer increasingly looks as if it is, “No, the costs are too great, and the return on investment would be way too low.” We are already encountering major grid problems, even with low penetrations of intermittent renewable electricity: US, 5.4% of 2015 electricity consumption; China, 3.9%; Germany, 19.5%; Australia, 6.6%.

In fact, I have come to the rather astounding conclusion that even if wind turbines and solar PV could be built at zero cost, it would not make sense to continue to add them to the electric grid in the absence of very much better and cheaper electricity storage than we have today. There are too many costs outside building the devices themselves. It is these secondary costs that are problematic. Also, the presence of intermittent electricity disrupts competitive prices, leading to electricity prices that are far too low for other electricity providers, including those providing electricity using nuclear or natural gas. The tiny contribution of wind and solar to grid electricity cannot make up for the loss of more traditional electricity sources due to low prices.

Leaders around the world have demanded that their countries switch to renewable energy, without ever taking a very close look at what the costs and benefits were likely to be. A few simple calculations were made, such as “Life Cycle Assessment” and “Energy Returned on Energy Invested.” These calculations miss the fact that the intermittent energy being returned is of very much lower quality than is needed to operate the electric grid. They also miss the point that timing and the cost of capital are very important, as is the impact on the pricing of other energy products. This is basically another example of a problem I wrote about earlier, Overly Simple Energy-Economy Models Give Misleading Answers.

Let’s look at some of the issues that we are encountering, as we attempt to add intermittent renewable energy to the electric grid.

Issue 1. Grid issues become a problem at low levels of intermittent electricity penetration.

In 2015, wind and solar PV amounted to only 12.2% of total electricity consumed in Hawaii, based on EIA data. Even at this low level, Hawaii is encountering sufficiently serious grid problems that it has needed to stop net metering (giving homeowners credit for the retail cost of electricity, when electricity is sold to the grid) and phase out subsidies.

Figure 1. Hawaii Electricity Production, based on EIA data. Other Disp. electricity is the sum of various other non-intermittent electricity sources, including geothermal and biomass burned as fuel.

Figure 1. Hawaii Electricity Production, based on EIA data. Other Disp. electricity is the sum of various other non-intermittent electricity sources, including geothermal and biomass burned as fuel.

Hawaii consists of a chain of islands, so it cannot import electricity from elsewhere. This is what I mean by “Generation = Consumption.” There is, of course, some transmission line loss with all electrical generation, so generation and consumption are, in fact, slightly different.

The situation is not too different in California. The main difference is that California can import non-intermittent (also called “dispatchable”) electricity from elsewhere. It is really the ratio of intermittent electricity to total electricity that is important, when it comes to balancing. California is running into grid issues at a similar level of intermittent electricity penetration (wind + solar PV) as Hawaii–about 12.3% of electricity consumed in 2015, compared to 12.2% for Hawaii.

Figure 2. California electricity consumption, based on EIA data. Other Disp. is the sum of other non-intermittent sources, including geothermal and biomass burned for electricity generation.

Figure 2. California electricity consumption, based on EIA data. Other Disp. is the sum of other non-intermittent sources, including geothermal and biomass burned for electricity generation.

Even with growing wind and solar production, California is increasingly dependent on non-intermittent electricity imported from other states.

Issue 2. The apparent “lid” on intermittent electricity at 10% to 15% of total electricity consumption is caused by limits on operating reserves.

Electric grids are set up with “operating reserves” that allow the electric grid to maintain stability, even if a large unit, such as a nuclear power plant, goes offline. These operating reserves typically handle fluctuations of 10% to 15% in the electricity supply.

If additional adjustment is needed, it is possible to take some commercial facilities offline, based on agreements offering lower rates for interruptible supply. It is also possible for certain kinds of power plants, particularly hydroelectric and natural gas “peaker plants,” to ramp production up or down quickly. Combined cycle natural gas plants also provide reasonably fast response.

In theory, changes can be made to the system to allow the system to be more flexible. One such change is adding more long distance transmission, so that the variable electricity can be distributed over a wider area. This way the 10% to 15% operational reserve “cap” applies more broadly. Another approach is adding energy storage, so that excess electricity can be stored until needed later. A third approach is using a “smart grid” to make changes, such as turning off all air conditioners and hot water heaters when electricity supply is inadequate. All of these changes tend to be slow to implement and high in cost, relative to the amount of intermittent electricity that can be added because of their implementation.

Issue 3. When there is no other workaround for excess intermittent electricity, it must be curtailed–that is, dumped rather than added to the grid.

Overproduction without grid capacity was a significant problem in Texas in 2009, causing about 17% of wind energy to be curtailed in 2009. At that time, wind energy amounted to about 5.0% of Texas’s total electricity consumption. The problem has mostly been fixed, thanks to a series of grid upgrades allowing wind energy to flow better from western Texas to eastern Texas.

Figure 3. Texas electricity net generation based on EIA data. The Texas grid is separate, so there is no imported or exported electricity.

Figure 3. Texas electricity net generation based on EIA data. The Texas grid is separate, so there is no imported or exported electricity.

In 2015, total intermittent electricity from wind and solar amounted to only 10.1% of Texas electricity. Solar has never been large enough to be visible on the chart–only 0.1% of consumption in 2015. The total amount of intermittent electricity consumed in Texas is only now beginning to reach the likely 10% to 15% limit of operational reserves. Thus, it is “behind” Hawaii and California in reaching intermittent electricity limits.

Based on the modeling of the company that oversees the California electric grid, electricity curtailment in California is expected to be significant by 2024, if the 40% California Renewable Portfolio Standard (RPS) is followed, and changes are not made to fix the problem.

Figure 4. <a href=

Issue 4. When all costs are included, including grid costs and indirect costs, such as the need for additional storage, the cost of intermittent renewables tends to be very high.

In Europe, there is at least a reasonable attempt to charge electricity costs back to consumers. In the United States, renewable energy costs are mostly hidden, rather than charged back to consumers. This is easy to do, because their usage is still low.

Euan Mearns finds that in Europe, the greater the proportion of wind and solar electricity included in total generation, the higher electricity prices are for consumers.

Figure 5. Figure by Euan Mearns showing relationship between installed wind + solar capacity and European electricity rates. Source Energy Matters.

Figure 5. Figure by Euan Mearns showing relationship between installed wind + solar capacity and European electricity rates. Source Energy Matters.

The five countries shown in red have all had financial difficulties. High electricity prices may have contributed to their problems.

The United States is not shown on this chart, since it is not part of Europe. If it were, it would be a bit below, and to the right of, Czech Republic and Romania.

Issue 5. The amount that electrical utilities are willing to pay for intermittent electricity is very low. 

The big question is, “How much value does adding intermittent electricity add to the electrical grid?” Clearly, adding intermittent electricity allows a utility to reduce the amount of fossil fuel energy that it might otherwise purchase. In some cases, the addition of solar electricity slightly reduces the amount of new generation needed. This reduction occurs because of the tendency of solar to offer supply when the usage of air conditioners is high on summer afternoons. Of course, in advanced countries, the general tendency of electricity usage is down, thanks to more efficient light bulbs and less usage by computer screens and TV monitors.

At the same time, the addition of intermittent electricity adds a series of other costs:

  • Many more hook-ups to generation devices are needed. Homes now need two-way connections, instead of one-way connections. Someone needs to service these connections and check for problems.
  • Besides intermittency problems, the mix of active and reactive power may be wrong. The generation sources may cause frequency deviations larger than permitted by regulations.
  • More long-distance electricity transmission lines are needed, so that the new electricity can be distributed over a wide enough area that it doesn’t cause oversupply problems when little electricity is needed (such as weekends in the spring and fall).
  • As electricity is transported over longer distances, there is more loss in transport.
  • To mitigate some of these problems, there is a need for electricity storage. This adds two kinds of costs: (1) Cost for the storage device, and (2) Loss of electricity in the process.
  • As I will discuss later, intermittent energy tends to lead to very low wholesale electricity prices. Other electricity providers need to be compensated for the effects these low prices cause; otherwise they will leave the market.

To sum up, when intermittent electricity is added to the electric grid, the primary savings are fuel savings. At the same time, significant costs of many different types are added, acting to offset these savings. In fact, it is not even clear that when a comparison is made, the benefits of adding intermittent electricity are greater than the costs involved.

According to the EIA’s 2015 Wind Technologies Market Report, the major way intermittent electricity is sold to electric utilities is as part of long term Power Purchase Agreements (PPAs), typically lasting for 20 years. Utilities buy PPAs as a way of hedging against the possibility that natural gas prices will rise in the future. The report indicates that the recent selling price for PPAs is about $25 to $28 per MWh (Figure 6). This is equivalent to 2.5  to 2.8 cents per kWh, which is very inexpensive.

Figure 6. EIA exhibit showing the median and mean cost of wind PPAs compared to EIA's forecast price of natural gas, from 2015 Wind Technologies Market Report.

Figure 6. EIA exhibit showing the median and mean cost of wind PPAs compared to EIA’s forecast price of natural gas, from 2015 Wind Technologies Market Report.

In effect, what utilities are trying to do is hedge against rising fuel prices of whatever kind they choose to purchase. They may even be able to afford to make other costly changes, such as more transmission lines and energy storage, so that more intermittent electricity can be accommodated.

Issue 6. When intermittent electricity is sold in competitive electricity markets (as it is in California, Texas, and Europe), it frequently leads to negative wholesale electricity prices. It also shaves the peaks off high prices at times of high demand.

In states and countries that use competitive pricing (rather than utility pricing, used in some states), the wholesale price of electricity price varies from minute to minute, depending on the balance between supply and demand. When there is an excess of intermittent electricity, wholesale prices often become negative. Figure 7 shows a chart by a representative of the company that oversees the California electric grid.

Figure 7. Exhibit showing problem of negative electricity prices in California, from EIA Convention Presentation.

Figure 7. Exhibit showing problem of negative electricity prices in California, from a presentation at the 2016 EIA Annual Conference.

Clearly, the number of negative price spikes increases, as the proportion of intermittent electricity increases. A similar problem with negative prices has been reported in Texas and in Europe.

When solar energy is included in the mix of intermittent fuels, it also tends to reduce peak afternoon prices. Of course, these minute-by-minute prices don’t really flow back to the ultimate consumers, so it doesn’t affect their demand. Instead, these low prices simply lead to lower funds available to other electricity producers, most of whom cannot quickly modify electricity generation.

To illustrate the problem that arises, Figure 8, prepared by consultant Paul-Frederik Bach, shows a comparison of Germany’s average wholesale electricity prices (dotted line) with residential electricity prices for a number of European countries. Clearly, wholesale electricity prices have been trending downward, while residential electricity prices have been rising. In fact, if prices for nuclear, natural gas, and coal-fired electricity had been fair prices for these other providers, residential electricity prices would have trended upward even more quickly than shown in the graph!

Figure 8. Residential Electricity Prices in Europe, together with Germany spot wholesale price, from

Figure 8. Residential Electricity Prices in Europe, together with Germany spot wholesale price, from

Note that the recent average wholesale electricity price is about 30 euros per MWh, which is equivalent to 3.0 cents per kWh. In US dollars this would equate to $36 per MWh, or 3.6 cents per kWh. These prices are higher than prices paid by PPAs for intermittent electricity ($25 to $28 per MWh), but not a whole lot higher.

The problem we encounter is that prices in the $36 MWh range are too low for almost every kind of energy generation. Figure 9 from Bloomberg is from 2013, so is not entirely up to date, but gives an idea of the basic problem.

Figure 9. Global leveled cost of energy production by Bloomberg.

Figure 9. Global leveled cost of energy production by Bloomberg.

A price of $36 per MWh is way down at the bottom of the chart, between 0 and 50. Pretty much no energy source can be profitable at such a level. Too much investment is required, relative to the amount of energy produced. We reach a situation where nearly every kind of electricity provider needs subsidies. If they cannot receive subsidies, many of them will close, leaving the market with only a small amount of unreliable intermittent electricity, and little back-up capability.

This same problem with falling wholesale prices, and a need for subsidies for other energy producers, has been noted in California and Texas. The Wall Street Journal ran an article earlier this week about low electricity prices in Texas, without realizing that this was a problem caused by wind energy, not a desirable result!

Issue 7. Other parts of the world are also having problems with intermittent electricity.

Germany is known as a world leader in intermittent electricity generation. Its intermittent generation hit 12.2% of total generation in 2012. As you will recall, this is the level where California and Hawaii started to reach grid problems. By 2015, its intermittent electricity amounted to 19.5% of total electricity generated.

Figure 10. German electricity generated, based on BP Statistical Review of World Energy 2016.

Figure 10. German electricity generated, based on BP Statistical Review of World Energy 2016.

Needless to say, such high intermittent electricity generation leads to frequent spikes in generation. Germany chose to solve this problem by dumping its excess electricity supply on the European Union electric grid. Poland, Czech Republic, and Netherlands complained to the European Union. As a result, the European Union mandated that from 2017 onward, all European Union countries (not just Germany) can no longer use feed-in tariffs. Doing so provides too much of an advantage to intermittent electricity providers. Instead, EU members must use market-responsive auctioning, known as “feed-in premiums.” Germany legislated changes that went even beyond the minimum changes required by the European Union. Dörte Fouquet, Director of the European Renewable Energy Federation, says that the German adjustments will “decimate the industry.”

In Australia, one recent headline was Australia Considers Banning Wind Power Because It’s Causing Blackouts. The problem seems to be in South Australia, where the last coal-fired power plants are closing because subsidized wind is leading to low wholesale electricity prices. Australia, as a whole, does not have a high intermittent electricity penetration ratio (6.6% of 2015 electricity consumption), but grid limitations mean that South Australia is disproportionately affected.

China has halted the approval of new wind turbine installations in North China because it does not have grid capacity to transport intermittent electricity to more populated areas. Also, most of China’s electricity production is from coal, and it is difficult to use coal to balance with wind and solar because coal-fired plants can only be ramped up slowly. China’s total use of wind and solar is not very high (3.9% of consumption in 2015), but it is already encountering major difficulties in grid integration.

Issue 8. The amount of subsidies provided to intermittent electricity is very high.

The renewable energy program in the United States consists of overlapping local, state, and federal programs. It includes mandates, feed-in tariffs, exemption from taxes, production tax credits, and other devices. This combination of approaches makes it virtually impossible to figure out the amount of the subsidy by adding up the pieces. We are pretty certain, however, that the amount is high. According to the National Wind Watch Organization,

At the federal level, the production or investment tax credit and double-declining accelerated depreciation can pay for two-thirds of a wind power project. Additional state incentives, such as guaranteed markets and exemption from property taxes, can pay for another 10%.

If we believe this statement, the developer only pays about 23% of the cost of a wind energy project.

The US Energy Information Administration prepared an estimate of certain types of subsidies (those provided by the federal government and targeted particularly at energy) for the year 2013. These amounted to a total of $11.3 billion for wind and solar combined. About 183.3 terawatts of wind and solar energy was sold during 2013, at a wholesale price of about 2.8 cents per kWh, leading to a total selling price of $5.1 billion dollars. If we add the wholesale price of $5.1 billion to the subsidy of $11.3 billion, we get a total of $16.4 billion paid to developers or used in special grid expansion programs. This subsidy amounts to 69% of the estimated total cost. Any subsidy from states, or from other government programs, would be in addition to the amount from this calculation.

Paul-Frederik Bach shows a calculation of wind energy subsidies in Denmark, comparing the prices paid under the Public Service Obligation (PSO) system to the market price for wind. His calculations show that both the percentage and dollar amount of subsidies have been rising. In 2015, subsidies amounted to 66% of the total PSO cost.

Figure 11. Amount of subsidy for wind energy in Netherlands, as calculated by comparing paid for wind under PSO with market value of wind energy. Exhibit from

Figure 11. Amount of subsidy for wind energy in Netherlands, as calculated by comparing paid for wind under PSO with market value of wind energy. Exhibit from

In a sense, these calculations do not show the full amount of subsidy. If renewables are to replace fossil fuels, they must pay taxes to governments, just as fossil fuel providers do now. Energy providers are supposed to provide “net energy” to the system. The way that they share this net energy with governments is by paying taxes of various kinds–income taxes, property taxes, and special taxes associated with extraction. If intermittent renewables are to replace fossil fuels, they need to provide tax revenue as well. Current subsidy calculations don’t consider the high taxes paid by fossil fuel providers, and the need to replace these taxes, if governments are to have adequate revenue.

Also, the amount and percentage of required subsidy for intermittent renewables can be expected to rise over time, as more areas exceed the limits of their operating reserves, and need to build long distance transmission to spread intermittent electricity over a larger area. This seems to be happening in Europe now. In 2015, the revenue generated by the wholesale price of intermittent electricity amounted to about 13.1 billion euros, according to my calculations. In order to expand further, policy advisor Daniel Genz with Vattenfall indicates that grids across Europe will need to be upgraded, at a cost of between 100 and 400 billion euros. In other words, grid expenditures will be needed that amount to between 7.6 and 30.5 times wholesale revenues received from intermittent electricity in 2015. Most of this will likely need to come from additional subsidies, because there is no possibility that the return on this investment can be very high.

There is also the problem of the low profit levels for all of the other electricity providers, when intermittent renewables are allowed to sell their electricity whenever it becomes available. One potential solution is huge subsidies for other providers. Another is buying a lot of energy storage, so that energy from peaks can be saved and used when supply is low. A third solution is requiring that renewable energy providers curtail their production when it is not needed. Any of these solutions is likely to require subsidies.


We already seem to be reaching limits with respect to intermittent electricity supply. The US Energy Information Administration may be reaching the same conclusion. It chose Steve Kean from Kinder Morgan (a pipeline company) as its keynote speaker at its July 2016 Annual Conference. He made the following statements about renewable energy.

Figure 1. Excerpt from Keynote Address slide at US Energy Administration Conference by Steve Kean of Kinder-Morgan.

Figure 12. Excerpt from Keynote Address slide at US Energy Administration Conference by Steve Kean of Kinder Morgan.

This view is very similar to mine. Few people have stopped to realize that intermittent electricity isn’t worth very much. It may even have negative value, when the cost of all of the adjustments needed to make it useful are considered.

Energy products are very different in “quality.” Intermittent electricity is of exceptionally low quality. The costs that intermittent electricity impose on the system need to be paid by someone else. This is a huge problem, especially as penetration levels start exceeding the 10% to 15% level that can be handled by operating reserves, and much more costly adjustments must be made to accommodate this energy. Even if wind turbines and solar panels could be produced for $0, it seems likely that the costs of working around the problems caused by intermittent electricity would be greater than the compensation that can be obtained to fix those problems.

The situation is a little like adding a large number of drunk drivers, or of self-driving cars that don’t really work as planned, to a highway system. In theory, other drivers can learn to accommodate them, if enough extra lanes are added, and the concentration of the poorly operating vehicles is kept low enough. But a person needs to understand exactly what the situation is, and understand the cost of all of the adjustments that need to be made, before agreeing to allow the highway system to add more poorly behaving vehicles.

In An Updated Version of the Peak Oil Story, I talked about the fact that instead of oil “running out,” it is becoming too expensive for our economy to accommodate. The economy does not perform well when the cost of energy products is very high. The situation with new electricity generation is similar. We need electricity products to be well-behaved (not act like drunk drivers) and low in cost, if they are to be successful in growing the economy. If we continue to add large amounts of intermittent electricity to the electric grid without paying attention to these problems, we run the risk of bringing the whole system down.

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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1,882 Responses to Intermittent Renewables Can’t Favorably Transform Grid Electricity

  1. dolph - if you can't beat them, join them says:

    There is nothing sustainable. There never was, never will be.
    Those who understand this (even if only subconsciously) chose to get rich over the past 20, 30 years, and in the process consume billions of years of accumulated carbon, creating debts that no human civilization will ever repay.

    You’ll be dead. I’ll be dead. Your children will be dead. This it folks, it’s all or nothing. Whatever your station in life, enjoy what you can because there will be little to nothing left in 50, 100 years. Do not waste a single second of your time preparing or being responsible. Make as much money as you possibly can, consume as much as you possibly can. Earn and spend, earn and spend, every day, month, and year.
    We are totally, completely out of control, and better for it, because at least we are not utopian. At least it is now out in the open…all of us will grab whatever we can before we die.

    Interesting to live at the end, isn’t it? Knowing that this is the end, I wonder why any of you are pretending this is the beginning or middle. There is no future, you really need to understand that.

    • Fast Eddy says:


      dolph – you are now on Team Doom!

    • Sungr says:

      “At least it is now out in the open…all of us will grab whatever we can before we die. This it folks, it’s all or nothing. Whatever your station in life, enjoy what you can because there will be little to nothing left in 50, 100 years.”

      Don’t forget that Earth has millions of species that will be coming under extinction pressures due to this human party. Maybe we shouldn’t go out of our way to make things more difficult for them.

    • Volvo740 says:

      Downsizing and living within your means has very positive effects too for some at least. Debt free == happiness. At least for me.

    • Tim Groves says:

      Dolph, I’m really not a hopeful man, but it is my fond wish that we will survive at lest until Norman’s book comes out in paperback.

  2. Fast Eddy says:


    Some folks believe the reason for the decline in oil production at the Bakken was due to low oil prices. While this was part of the reason, the Bakken was going to peak and decline in 2016-2017 regardless of the price. This was forecasted by peak oil analyst Jean Laherrere. I wrote about this in my article below (click on image to read article)– Published, APRIL 2015.

    As we can see in the chart above, the rise and fall of Bakken oil production is very close to what Jean Laherrere forecasted several years ago (shown by the red arrow). According to Laherrere’s chart, the Bakken will be producing a lot less oil by 2020 and very little by 2025. This would also be true for the Eagle Ford Field in Texas.

    According to the most recent EIA Drilling Productivity Report, the Eagle Ford Shale Oil Field in Texas will be producing an estimated 1,026,000 barrels of oil per day in September, down from a peak of 1,708,000 barrels per day in May 2015. Thus, Eagle Ford oil production is slated to be down a stunning 40% since its peak last year.

    Do you folks see the writing on the wall here? The Bakken down 25% and the Eagle Ford down 40%. These are not subtle declines. This is much quicker than the U.S. Oil Industry or the Mainstream Media realize.

    And… it’s much worse than that:

    It seems these projections are way off…..

    • Curt Kurschus says:

      As mentioned in the article, it had already been noted prior to the collapse in the price of oil that the tight oil production in the USA was looking likely to start a steep decline in 2016. Some were more generously suggesting by 2020. That was based on the geology and physics of tight oil. The price declines merely brought that forward. The important take home point, of course, is that all the hype about the return to increase in extraction / production being just around the corner as soon as OPEC and Russia freeze production can never be more than hype.

      Not that anybody seems to care about such insignificant details as geology and physics.

      My mother is a highly intelligent woman, but even she believes there will be flying cars one day. Why? The reason is simple: everybody needs to believe in perpetual progress. Take your pick as to the reason for that one. For some it is a natural part of being human. For others it is to excuse the debts accrued and the investments made. Another big reason is that positive thinking is more friendly and comforting than facing reality – and more likely to see that bill on the table being paid on time.

    • I have to believe that cutting back on the number of drilling rigs had something to do with the decline as well.

      There are some parts of the Bakken which are considered “sweet spots,” and others that are economic if the price is high enough. If the price had been $200 per barrel, I still think that more would have been extracted.

    • Yoshua says:

      I’m wondering how heavy oil and tar sands will be transported if they are not diluted with LTO in the future if the shale oil production collapses ?

      • richard says:

        You heat the pipeline, via steam, trace heating or induced electrical current.
        I hope Iunderstood the question correctly.

        • Veggie says:

          “You heat the pipeline, via steam, trace heating or induced electrical current.
          I hope understood the question correctly.”

          The cost of making enough steam or electricity to heat a pipeline would be far greater than the value of the goods being transported. Dilution is the only method that works for tar sand bitumen. The whole Tar Sand infrastructure is built around diluted liquid transport.

          • I know that in California, there is (or was) a heated pipeline that takes heavy oil from the Bakersfield area up to a refinery in San Francisco. The oil is not as heavy as the bitumen in Canada, however. The distance is shorter too. A heated pipeline was discussed for the Alaskan pipelines that is having problems with depletion, back when oil prices were much higher. That oil is also not very viscous, if heated a little.

  3. Simon Edmonds says:

    Good article Gail, you mentioned subsidies for renewables but not for fossil fuels, which they say amounts to about 500 billion dollars approximately, would this not effect tax income.

    • Fossil fuels are taxed very heavily–in quite a few places, as much as 90% of what oil companies have left, after they pay their regular expenses. This chart shows the “government take” in 2013, as a percentage of the amount that oil companies have left. This is why, with low oil prices, oil exporters are in terrible financial shape– they are losing their major source of tax revenue. Even in the US, taxes are relatively high on oil.

      Government take percentages

      What are called “Subsidies” for fossil fuels relate to forgiveness of essentially the high tax dollars for certain individuals. Typically, oil exporters “subsidize” the price of fuel for the people living in their country by not charging the full world price (which would allow the local governments to collect a high tax on the oil). Instead, they charge people in their country a price closer to the actual cost of extraction.

      Another type of subsidy occurs in oil importing countries, when there are programs to help low income people pay their fuel bills. These are subsidies, or a sort, but don’t change the picture materially. The amount of subsidies is tiny next to the taxes collected.

      Renewables pay very little or no taxes at all. In fact, they often get special treatment so that they don’t pay state or local taxes. Subsidies are over and above this, so that they are essentially paying negative taxes. This is very different from the fossil fuel situation.

      We need to be shown what each of these groups is actually paying in taxes net of subsidies, not the subsidies by themselves.

      Solar panels made in China seem to be subsidized by the government. The US and EU have both imposed tariffs under anti-dumping laws.

  4. Yoshua says:

    ConocoPhillips is a pure-play exploration & production company.This company could perhaps be used as model for how the global average oil extraction part of oil production is doing with oil prices at $50 per barrel.

    I have been looking at their Cash Flow Statement.

    The Operating Cash Flow has been falling with the falling oil price. But they still had a positive Operating Cash Flow at $7.5 billion in 2015.

    The Investing Cash Flow after Capex was negative at $8.5 billion in 2015.

    The Financing Cash Flow after paying out dividends and taking on debt was negative at $1.5 billion in 2015.

    The Free Cash Flow was then negative at $2.5 billion in 2015.

    So it looks like it’s not possible for ConocoPhillips to continue to produce oil with oil prices at $50 dollars per barrel. But I guess they could go on producing oil as long as they have a positive Operating Cash Flow and can take on more debt to pay dividends and pay for the capex.

    But what happens when the Operating Cash Flow turns negative as well ?

    • Ert says:


      Your statement / analysis goes in the direction of my comment above to FE’s post.

      “But I guess they could go on producing oil as long as they have a positive Operating Cash Flow and can take on more debt to pay dividends and pay for the capex.”


      You ask then: “But what happens when the Operating Cash Flow turns negative as well ?”

      I would assume / guess, that they then eat into their core capital base. Reduce investments, exploration, repairs, administration and the like… starvation to death with intermediate “refuelings” of debt when oil prices bounce up for a short times.

      • Yoshua says:

        Yes, I think you are right. I think that is just what they must do.

        I guess also that we will see a new round of QE from the Fed to pump in new money into the oil companies to keep them alive when they can’t make it anymore. The oil must continue to flow…

        The question is: Who will keep foreign state owned oil companies financed with new debt when they can’t make it anymore ?

      • Sungr says:

        “You ask then: “But what happens when the Operating Cash Flow turns negative as well ?”

        You just call up your captured Texas congressman and ask him if he is planning to run for re-election next year. Then you explain to him that this type of industry problem is the reason he was elected to Congress to solve and that if he can’t fix it, he will be selling used cars come next election cycle.

    • MM says:

      I do not see a financial problem as we have negative corporate bonds already. When you borrow, you earn money! We will never have a financial problem, Only physics is applicable and the net energy from oil or to say the net GDP value is still positive. The numbers in balance sheets are of no more interest at all.

      • Yoshua says:

        Negative corporate bonds becomes the new profit engine for corporations ?

      • Sungr says:

        “When you borrow, you earn money! ”

        Only for high-status financial criminals……!

      • I am afraid that financial numbers are important, because that is the way we “keep score” in the real world. That is what determines where investment is made, and how many workers will be hired. We are dealing with a networked system, and the financial system is an important part of the total. It is often hard for people coming from an engineering perspective to see this.

    • Good points!

      This same thing is happening around the world. When oil exporters encounter this situation, it is government tax revenue, as much as anything, that is suffering from the low oil prices. The oil companies can cover there operating expenses, and so continue to drill, as long as they can cover their major spending needs with more debt and or with funds put away for a “rainy day.” But at some point, this approach begins to fail. Often, it will be the governments that fail first, because they depend on this tax revenue.

      • Yoshua says:

        The U.S government can “always” take on more debt in dollars ( in its own currency) to cover for the loss in taxes ?
        But foreign nations dependent on oil exports to obtain dollars and tax revenue from oil sales are perhaps in more difficult situation ?

        • The USA has the unique position of being the reserve currency. The rules that normally apply, do not apply to them. Likewise, Japan, with its huge personal savings plus the carry-trade, is able to keep borrowing when by all rights it should not be able to do so without creating hyperinflation.

          Oil exporters do not have the scale, influence, etc to be able to thwart the standard rules. Except perhaps Saudi Arabia.

          • not that ”normal rules do not apply to them”

            instead ”normal rules take longer to apply to them”

            that is part of the denial factor that will steepen the slope of the ultimate downfall

            A few remote tribes in S America or the Kalahari or australia might flout the rules—the rest of us can’t

  5. Fast Eddy says:

    Kashagan economically viable with prices for oil at $100 per barrel

    Kashagan oil project in the Caspian offshore will be economically viable with oil rices standing at $100 per barrel, a journalist reports, citing Sauat Mynbayev, KazMunaiGas Chairman of the Board.

    “When it comes to economic viability of the Kashagan project, it is a complicated project calling for susbtantial investments. To the best of my knowlege, it can be economically viable with oil prices standing at $100 per barrel. In the long term the figures are acceptable for the subcontractors (…) the formal contract life is up to 2041; however, the actual production could be extended for another 50 years. Both Tengiz and Karachaganak oilfields are effective projects, with the break even point being much lower that of Kashagan. Both projects are profitable even with the current prices for oil in place”, he said.

    Oil market braces for Kashagan field’s October debut

    Kazakhstani project, designed in $100 crude era, to pour more crude into oversupplied market

    Originally scheduled to cost about $10bn to develop the projects costs have exploded over two decades to more than $50bn.

    It first began pumping in 2013 when it was already eight years over schedule, but quickly stopped due to a series of internal pipeline leaks.

    The oil is under high pressure and has high levels of corrosive toxic gas that have complicated its extraction.

    But if it is now gearing up for production, estimates for how much oil will flow still vary. Italy’s Eni, which is the consortium leader in a project that also includes Total, and China’s CNPC, estimates 360,000 barrels per day by the middle of next year.

    So….. the project needs $100 oil to break even… oil is below $50….

    Is this one of those scenarios where you make up the difference by pumping more volume????

    Me thinks that the central banks are doing whatever it takes — and not telling us what they are doing — to make up the difference with this and a range of other oil projects (shale…) that lose a bundle on every barrel they pull out of the ground.

    Not unexpected….

    • Ert says:


      The investment is already done… the money is spend. So now its only about keeping up the game and hope – then if they would stop then the “lost investment” had to be realized in the books – and that can not be allowed.

      It was the same with the housing market and the foreclosures in the US… extend, pretend and hope for the next wave.

      • Fast Eddy says:

        Understood… although it is not like the oil that comes out of there is now produced for free….

        Perhaps the central banks have extended NIRP terms to the producers…. so that the 50B sunk costs are now an asset not a liability….

        Anything is possible in a world where you get paid to run up debt 🙂

    • Sungr says:

      360,000bopd = 131M bbl/year.

      That’s enough oil to keep Equatorial Guinea humming along quite nicely.

    • Central banks will try to do whatever they can do–succeed is much more doubtful. There are a bunch of these projects that were started long ago, when it looked like oil prices would be high. With so much in sunk costs, companies can’t afford to walk away. Local governments have little alternative for future productive output, either. All they can do is cross their fingers and hope.

  6. Ert says:

    I found this critique on Naomi Klein & Co. in regard that she doesn’t see the picture of energy depletion and favors 100% green energy and green growth (e.g. leapfrog manifesto) quite interesting:

    Whatever the background – without understanding the causes, as Gail lays them out here in the blog, one can’t formulate “solution” (or “extensions” as I see it) to our predicament.

    And I see not even energy depletion as the core problem – but overpopulation in relation to (long-time) available resources.

    • CTG says:

      Intellectual idiots – I have met one banker, in 2012, who keeps on insisting that Greece is really doing very well. Check out their GDP forecast and the unemployment figures given out by the government. He was arguing with me that why I am so pessimistic and that we should trust all the data given by the government. The banks have been using data from the government for all their modeling… sigh… better to be a wall flower when you are at an event where you are the only one who took the red pill.

    • Sungr says:

      Ert- it seems that the difference between a predicament vs a problem is that the predicament does not have a solution?

      So a predicament might be a situation where human population is surging into 50% over-population while at the same time it is impossible to enact any population control measures due to religious and political opposition.

      • Ert says:

        “it seems that the difference between a predicament vs a problem is that the predicament does not have a solution?”

        Thats how I see it, too.

        Someone may be of the opinion that is a problem – I see the boundaries of the road / way ahead as predicament. Individual (groups) may change lanes, overtake others, brake, go faster or slower… but the direction is per-determined by the laws of physics.

    • “And I see not even energy depletion as the core problem – but overpopulation in relation to (long-time) available resources.”

      The ultimate problem, as I see it, as that all systems must grow (exponentially) or die.

      • without checks and balances all (biological) systems will grow exponentially

        and then they will die

        That works equally well for a cancerous cell or global population.

        • “without checks and balances all (biological) systems will grow exponentially
          and then they will die”

          It sounds like you are proposing that with the right regulation, a perpetual motion machine is possible. The universe, our galaxy, our solar system, will all burn out. Even a stable population stuck in a Darwinian, Malthusian plateau will consume their environment, gradually wearing it down, causing their population to eventually plummet. A better-regulated system might last longer but will still collapse compared to an unregulated one.

          • i was careful to say ”biological” systems

            nothing to do with perpetual motion ”machines” at all

            obviously geometric growth will lead to the same thing eventually but over a much longer time period—-bacteria for instance —-the dominant life form on earth, have been around for 2 bn years.

            humankind discovered the means to exponential growth, and thought it was a perpetual motion machine.


        • I am afraid you are right.

        • Yorchichan says:

          Does an individual animal not count as a biological system? An animal only grows until it reaches adulthood, after which there may be a long period of non-growth before death.

          • no animal exists in isolation

            we are all part of a group entity—our bodily function sustains the ongoing group-mass. Herd, hive, anthill, city—the function is exactly the same. I get born, reproduce myself—rant on FW–then die. The entire purpose of my existence.

            It is the group that can unbalance itself if left unchecked by outside forces
            That is so ridiculously obvious I didn’t think it needed saying.

            • Yorchichan says:

              You’d be amazed what isn’t obvious to me. The mathematician in me likes things to be properly defined to avoid confusion.

              Thanks for your rants. You and Fast Eddy make a great team and help make OFW the great site it is. If “The End Of More” was in paperback I’d buy it. I don’t know or want to know what exactly a “Kindle” is, but I do know I don’t want to own one.

            • thanks for the thumbs up

              am working on the paperback—honest

              i need to get the updates in it completed—it’s not as straightforward as kindle

            • JMS says:

              I would eagerly buy the paperback also, but I feel the same as Yorchichan, the kindle thing is not for me. So I hope to buy some copies of your book next Christmas!

            • thanks guys

              i confess i need a kick up the proverbial backside to get on with this

              your prods do help

      • Our whole system is based on future promises, and those future promises require some kind of compensation for the delay in obtaining the promise–interest, dividends, or capital gains. This is the way the “carrot” works, to make our system continue to move along.

      • smite says:

        “The ultimate problem, as I see it, as that all systems must grow (exponentially) or die.”

        Corruption only affects an exponentially growing capitalist economic system marginally.

        Once growth stops the fight for scraps and leftovers will end up becoming a exploitation-fest gouging out the guts of BAU and feeding it to the charlatans.

    • Sungr says:

      “And I see not even energy depletion as the core problem – but overpopulation in relation to (long-time) available resources.”

      So, if 30 years ago, humans were able to reduce population down to say 1.5B humans, then we would be in balance with energy & other critical resources today?

      But what if those remaining 1.5B humans in 1970 decided to accelerate total resource usage? Could those 1.5B humans eventually have ended up using more resources and generating more pollution than we do today with 8B population?

      • people exist by making “stuff” and buying/selling it to one another

        you cannot make stuff without heat

        nether can you make stuff without a profit motive.

        to make a profit you must have “more”—which effectively means more production.
        more production means
        1—more energy (heat input)
        and 2—more people to produce and consume stuff.

        The alternative is to reduce humankind to the level of a grazing cow or sheep taking from the land only what is essential to exist—no heat, light or shelter. That will come when we have exhausted every other option.

        Sorry—but there is no middle way, because the knowledge we have cannot now be taken away.

        • smite says:

          “you cannot make stuff without heat”
          Without work, you must mean?

          “nether can you make stuff without a profit motive.”
          Yes you can, it can be for fun (hobbyist projects) or by forced labour (slavery).

          • work at any level produces heat, however minutely

            if you manipulate any (hard) object from one shape to another, then heat must be used to do it.

            Thus if you have a piece of metal, to shape it into something else you must heat it.

            The profit motive is irrelevant.
            You either use the object yourself, or exchange it for another object which itself has been produced by heat application/maniplulation of some kind

      • Ert says:

        So, if 30 years ago, humans were able to reduce population down to say 1.5B humans, then we would be in balance with energy & other critical resources today?

        I think there is no balance to reach with 1,5 Billion people. But at least it would extend the game and give us more time to act to extend the game further.

        But what if those remaining 1.5B humans in 1970 decided to accelerate total resource usage? Could those 1.5B humans eventually have ended up using more resources and generating more pollution than we do today with 8B population?

        If all of those 1.5 Billion would life like the (better of) people in the G-7, then yes – it could be worse.

        • Sungr says:

          Humans may have spent more time in the honeymoon zone- ie the 1960s period of large oil discoveries may have lasted longer. Of course, humans usually adapt quickly to such conditions and regard them as normal.

          Maybe the Rodeo Drive lifestyle would have become the average human experience for a few decades? More air travel, faster cars, bigger houses, hyper-real video games, romantic robots, underwater resorts, vacations on the moons of Uranus, bigger wars, better recreational drugs, etc.

          And the result would be the same as now. Except with a bigger downside collapse.

        • Tim Groves says:

          Was this guy an exemplary Finite Worlder or not?

          “Famine seems to be the last, the most dreadful resource of nature. The power of population is so superior to the power in the earth to produce subsistence for man, that premature death must in some shape or other visit the human race. The vices of mankind are active and able ministers of depopulation. They are the precursors in the great army of destruction; and often finish the dreadful work themselves. But should they fail in this war of extermination, sickly seasons, epidemics, pestilence, and plague, advance in terrific array, and sweep off their thousands and ten thousands. Should success be still incomplete, gigantic inevitable famine stalks in the rear, and with one mighty blow, levels the population with the food of the world.”

          — Thomas Malthus

          • ol Malthus would be deputy head honcho in here.

            fact remains that nature intends us to eat and replicate our species

            everything else is window dressing

            • smite says:

              “fact remains that nature intends us to eat and replicate our species”

              Nature has no intentions; nature simply is.

    • Fast Eddy says:

      Naomi is the Minister of Hopium Production in DelusiSTAN.

    • The fact that humans have managed to remove limits to population growth plays an important role in our predicament as well.

    • Crates says:

      Good points. We must understand that the problems can be solved but the phenomena can only be observed (better with a beer in hand).
      This is what engineers and many others do not accept.
      And we happily understood this physical reality, they call us as doomsayers, losers, pessimistic, negative and defeatist.

      In the photo we see engineers, politicians and activists seeking “solutions”.

      • Tango Oscar says:

        If by problem solving you are referring to the rearrangement of the chairs on the Titanic deck you would be correct. There are way, way too many problems to solve now. Let me know when you figure out the overpopulation problem first as that’s the biggest problem.

        • Crates says:

          Tango, overpopulation is a natural phenomenon, not a problem. That is why they are not solvable, something like the question of gravity: it is observed, studied, measured and nothing else can do.
          Those who believe it is a problem, and therefore susceptible to be solved something, come to solutions as stupid as those proposed by the Club of Rome. It seems (there to confirm) that the solution is to give $ 80,000 to each woman without children. It seems that lately the “intellectuals” of the Club of Rome vie for being the biggest blunder saying.

          • Crates says:

            Highly recommended viewing video. I guess they have already seen.
            We observe the evolution of an epidemic that has been done with full control of the situation from the year 1800 approx. It’s really epic!
            And some propose solutions … lol.

    • psile says:

      I particularly like this comment from A.S. Christensen’s blog:

      “A lot of bright people are in denial and agree with Klein.
      Klein has no need for denial because she’s not very bright.”

      Sums it up pretty well, don’t you think?

  7. Fast Eddy says:

    I’ve been expecting you…

    Ratchet up the fear… ratchet up the terror…. prep the masses for the final act of BAU…. in the interest of holding the fort for a few more weeks… or months….

    Vote for Trump. We need walls. The terrorists are coming. We need our armed forces on the streets. The cop-killers are gonna get us. Do whatever it takes.

    Stay tuned as we shift to Europe … for the next episode of …. Martial Law Lite.

  8. interguru says:

    The 0.0000001% who understand this … are easily able to manipulate the human cattle…

    That’s one part in 10^9 (one in a billion (US) ). That means that 7 people in the world understand what is going on. Eddy, I assume you are one of them. Who are the other six?

    • Fast Eddy says:

      The ones making the matrix know … of course. I don’t include them in the 0.000001%

      There would be quite a few of them I would imagine…. Don Draper knows…. Kissinger… etc…

      The only others that I am aware of — are on this website on a regular basis….

      I have never actually met someone outside of FW who demonstrated that they were not blue-piller’s…. anyone who swallowed the red pill would eventually land on FW…. because they would be relentlessly curious…. and they’d have nowhere else to go….

      Then again … I’ve never won the lottery…. and the odds of finding a red-piller…. are far lower than winning a major lottery…. so I suspect I will live my entire life never having met a red-piller…

      ‘Knowing’ …. is a lonely pursuit….

      • doomphd says:

        Fast, we could organize a FW red pillar BBQ at Gail’s place in Atlanta. I hope she doesn’t mind if we all pop in for a sleep-over in her backyard. We would of course want her to give us an overview slide-show and presentation, with predictions. Can you imagine the Q&A afterward? Maybe us older folks would stay at a nearby hotel or survivalist camp.

        I know, a book signing event!

        • Jarvis says:

          Am I the only one who wonders how many people read FW? My guess is in the 10’s of thousands? I kinda agree with Fast eddy in that FW followers have the best understanding of our situation and I can’t help but wonder how many of us there are?

          • There are quite a few places that copy OFW articles, some with different titles. That makes it hard to tell. But the number is definitely in the 10s of thousands. It seems like on some popular articles, I have been able to count 100,000 from popular sites.

            • Tango Oscar says:

              This is probably pretty telling of human intelligence limitations as well as the popularity of the subject matter. Most intelligent people I know are either unable to understand the complexity of our problems or they simply refuse the underlying theme of near term human extinction.

            • Fast Eddy says:

              It doesn’t take a genius to grasp the nature of the situation we are facing…. but it does take something — I can’t quite put my finger on what it is….

            • Tango Oscar says:

              It’s not that it takes a genius to realize you cannot have infinite growth on a finite planet. That was never my intent, rather, it does take a certain level of intellect to comprehend the details of collapse. Like you say all the time, the average person is more likely to spend their time examining Kim Kardashian’s assets instead of understanding the electrical grid or how solar energy works.

            • Fast Eddy says:

              Yep — but why is it that most people with the intellectual ability to understand the problem — are unable to…. no matter how clearly you lay it out for them…

              If you were to give them far more complex logic problems or math equations they could work them out ….

              That is what I cannot put my finger on.

            • Stefeun says:

              I think you actually put your finger on it: they (all of us, in fact) have been raised up in the idea that every problem must have a solution.

              It’s linear thinking that consists in defining a question as precisely, narrowly, as possible, in order to bring an answer to this narrow, isolated problem. Side effects and all kinds of externalities are almost never taken into account (btw, that’s what’s killing us today, entropy we can’t get rid of).

              Yet, we’re not living in a juxtaposition of isolated entities, instead our world is a complex network of interlinked nodes, and when you modify one of them, it has an impact on the whole.
              A complex system does not have solutions, instead it shifts constantly from one equilibrium to another, in perpetual search of an optimal configuration.

              Most people think there must be solutions and a meaning to all that, while it’s only energy aiming to dissipate as fast as possible.

            • Tango Oscar says:

              Easy. They resolve cognitive dissonance by choosing to accept the fairy tale rather than believe reality. Confirmation bias permits them to accept what they want as “real” while ignoring all the facts. They sift through life and just pick out the parts they agree with. Sort of like religious followers picking which parts of the bible they want to follow while ignoring the lies or obvious falsehoods.

            • JMS says:

              “It doesn’t take a genius to grasp the nature of the situation we are facing…. but it does take something — I can’t quite put my finger on what it is….”

              Maybe (Intellectual) courage? Or some kind of psychological strenght?

            • Christopher says:

              It requires a certain amount of cynicism. The conclusions of OFW are way too discouraging to the average citizen. I know many that realize that infinite growth on a finite planet is impossible. They admit we will have some problems but in the end everything will turn out rosy.

              Sometimes I think that OFW just gathers people from all around the world with a similar brain chemistry. Maybe we are all deceived by our own brain chemistry and all of the gloomy predictions will be wrong….

              On the other hand we could be the Cassandras of our time…

            • Tim Groves says:

              why is it that most people with the intellectual ability to understand the problem — are unable to…. no matter how clearly you lay it out for them…

              First, you have to ask the right questions, and if you can’t get good answers to them, you have to ask why that is. Most people, even those with the intellectual ability, are not necessarily interested in asking or answering the right questions.There are many subjects affecting our lives that don’t interest us enough for us to explore them in depth, and so we tend to assume someone else has done the requisite homework. And usually someone has, and so the system works, but not always by any means.

              Next, most people have a propensity for thinking in herds. They take comfort in being normal, in the majority, or about average. They don’t like to be an outlier along bell curve as they associate this subliminally with danger.

              This is where the mass media comes in. In today’s world, the media plays a crucial role in directing our attention towards things that the authorities have decided are problems we should know about and away from those they think we shouldn’t know about.

              The mass media is a hydra-headed beast, but how many of those heads are emphasizing the realities of finite world economics, the impossibility renewable energy being our savior, or the dangers of economic collapse? How many times have you seen in the mass media the concept of the Cubic Mile of Oil? How many mainstream media have explored the implications of “non-elite” workers no longer being able to afford oil at prices that can keep oil companies solvent? How many of them have looked into the consequences of current levels of debt and the scale of the derivatives market?

              The authorities clearly do not want the people thinking about the possibility of the end of BAU, and most of us conform.

          • Crates says:

            Tim, you said this:

            “The authorities clearly do not want the people thinking about the possibility of the end of BAU, and most of us conform.”

            If you think about it, it better be that way. Would not it be the worst imaginable black swans that the masses become aware of the reality of OFW? Imagine the consequences of the total loss of confidence in the future…

            In a way, without meaning to, OFW readers we have become the new punk working-class districts of London: “no future” 🙂


            In a way, in a marginalized, I’m afraid.

      • Sungr says:

        “Maybe us older folks would stay at a nearby hotel or survivalist camp.”

        Maybe Gail can forward a list of survivalist camps in the greater Atlanta area.

        • doomphd says:

          Sounds like it might be a pretty big backyard BBQ if Gail’s readership is in the 10,000 range. Even if only 1% actually show, up that’s 1E+04*1E-02 = E+02 guests. Well, maybe like the size of a wedding or big family reunion. Not too bad.

          We’d have to insist on FE being there, too, as a distinguished FW blogger.

  9. Fast Eddy says:

    At the of the day 99.99999% of humans are no different than this

    The 0.0000001% who understand this … are easily able to manipulate the human cattle…

    All you have to do is show them this

    and the effect is much the same bringing this near the sheep enclosure

    Oh and we all know how to train a dog —- rewards tend to work very well …

    Stands to reason that the same strategy will work with a human …. cash is the reward…

    And everyone is for sale…

    I’ve never seen a dog say no to a treat either….

    • Tango Oscar says:

      How much this impacts the economy will remain to be seen as I don’t think auto loans are that big of a portion of GDP. That being said, the “official” recession data is starting to look like we’re heading into the eye of the hurricane right now and this could be just one indicator of many. Here’s hoping we get a 4th quarter crash so I can have an easy peak holiday at work.

      • Fast Eddy says:

        Not so much the value of the auto loans… rather the drop off in auto purchases…

        If that continues to trend downwards that means layoffs…recession… and deflation….

        Auto purchases has been one of the main drivers of the economy since 2008….

        • Tango Oscar says:

          Perhaps that’s why they arranged the $850 Billion bailout package back in 2008 that included most auto companies (except Ford)? If auto purchases have collapsed that much it would tend to corroborate other recessionary data.

  10. Fast Eddy says:

    I understand why so many people are taking mind-numbing drugs in America…. I cannot imagine living there and being able to make it through a day without them….

    It would be either that or I’d have to head down to Guns R Us…. purchase an automatic rifle and a few hand guns… and plenty of ammo…

    And just blow off some steam at the local mall…..

    • psile says:

      I believe this is Morris Bermann’s prescription for America in general. Multiplied 1000 fold.

      • Fast Eddy says:

        Heh heh… that’s a name I have not thought of in years… is he still living in Mexico?

        • psile says:

          Yeah, and his writing’s wittier than ever. Pity he can’t see the whole picture, believes something better is coming after the crash of industrial society, but hey, nobody’s perfect! 😀

  11. Fast Eddy says:

    Why is it… that whenever I watch an interview with Taleb… I shut it down before it finishes…

    And I am left wondering who actually wrote The Black Swan…

    He is clueless

  12. Fast Eddy says:

    One more shot at this… skip down to Step 2

    • Ed says:

      Europeans (that whole genetic stock in general) will be extinct in 100 years. Then it will be a fight between African, Muslims, Indian, Chinese, and Central/South Americans. No point or need to educate the European goyim.

      • Fast Eddy says:

        That said… we Goyim have done quite well under our masters…. no complaints here…

        I understand that under the previous empire — the British — if you did not have a British surname it was very difficult to get ahead in a place like Canada…

        Our current masters work off of the merit system….

  13. Fast Eddy says:

    Let’s try shortening that last post…

    According to Forbes, the Federal Reserve in 2008 alone – under the oh! so responsible watch of the Ashkenazi Je.w Ben “Helicopter” Bernanke – single-handedly allocated “over $16 Trillion to corporations and banks internationally, purportedly for ‘financial assistance.’ ” Other sources put it at close to $30 Trillion, twice the size of America’s GDP. And none of that money has been accounted for. These transactions were only discovered after a “quick audit” that then Congressman Ron Paul miraculously managed to squeeze out of the Fed when he was beating the drums trying to get Americans to pay attention to the secretive bank.

    So who really got all that money? Was it only $16 – 30 Trillion? And how much money has actually been stolen since the founding of the Federal Reserve? No one knows. Not even Congress. And no politician would even utter a word about it. Plus notice how such brazen thievery did not get any play in the mainstream media.

    If you think that these Ashkenazim who took control over the US Central banking system did not turn on the money spigot for their fellow Jews in order to create a Je.wish stranglehold on the US economy and beyond, then you’re a bigger fool than Judas who sold his Lord for 30 pieces of silver.

    No wonder close to half of all billionaires (“half” is what we’re told) in the US are Ashkenazi And it’s no coincidence either that they dominate the US Media.

    “…the will have all the property of the whole world in their hands,” predicted Baruch Levi in his Letter to Karl Marx, La Revue de Paris, p574, June 1st. 1928.

    By controlling the money supply, they’re able to buy anything and anyone – anyone who serves the MONEY god that is. Said control abets the financiers to steer the US Government which in turn steers the world.

  14. Fast Eddy says:

    Seldom does ZH have any interesting comments…. however the Taleb article bucks the trend…

    I was particularly interested in this link:

    STEP 2

    “Give me control of a nation’s money and I care not who makes its laws” – Mayer Amschel Bauer Rothschild

    he Rothschilds and their fellow Ashkenazic partners began their international control of money in Europe and from there extended it throughout the world.

    Wikipedia and the Jewish Encyclopedia clarify it thus:

    “Mayer Rothschild’s strategy was to keep control of their banks in family hands, allowing them to maintain full secrecy about the size of their fortunes. In about 1906, the Jewish Encyclopedia noted: ‘The practice initiated by the Rothschilds of having several brothers of a firm establish branches in the different financial centres of the world was followed by other Jewish financiers, like the Bischoffsheims, Pereires, Seligmans, Lazards and others, and these financiers obtained credit not alone with their Jewish confrères, but with the banking fraternity in general. By this means Jewish financiers obtained an increasing share of international finance during the middle and last quarter of the 19th century. The head of the whole group was the Rothschild family…’ “

    Said share of international finance reached its apex in 1913 when they finally established a Central Bank in America. It would be known as the Federal Reserve System. They managed to bring it to life by bribing their way through the US Government and Congress. Such method was necessary because the Federal Reserve System is in fact a private enterprise that is pretending to be a US Government institution. It is a cover to secure the privilege of issuing money.

    “The financial system has been turned over to the Federal Reserve Board. That Board administers the finance system by authority of a purely profiteering group. The system is Private, conducted for the sole purpose of obtaining the greatest possible profits from the use of other people’s money,” explained Republican Congressman of Minnesota Charles A. Lindbergh Sr. in 1923.

    To conceal their scheme, the Rothschilds and their co-conspirators attached to said central bank the “FEDERAL” moniker, a clear misnomer intended to hoodwink gullible Americans. Quite the obvious pattern, isn’t it? As a result, money creation in the US went from the People’s Representatives to a group of wealthy men who all strangely happened to be Ashkenazi Jews (except for their token non-Jewish partners):

    1. Rothschild Banks of London and Berlin.
    2. Lazard Brothers Banks of Paris.
    3. Israel Moses Seif Banks of Italy.
    4. Warburg Bank of Hamburg and Amsterdam.
    5. Lehman Brothers of NY.
    6. Kuhn, Loeb Bank of NY (Now Shearson American Express).
    7. Goldman Sachs of NY
    8. National Bank of Commerce NY/Morgan Guaranty Trust (J. P. Morgan Bank – Equitable Life – Levi P. Morton are principal shareholders).
    9. Hanover Trust of NY (William and David Rockefeller & Chase National Bank NY are principal shareholders).

    Dean Henderson, in his article The Federal Reserve Cartel, clearly explained and confirmed the private ownership of the Federal Reserve:

    “J. W. McCallister, an oil industry insider with House of Saud connections, wrote in The Grim Reaper that information he acquired from Saudi bankers cited 80% ownership of the New York Federal Reserve Bank – by far the most powerful Fed branch – by just eight families, four of which reside in the US. They are,
    • the Goldman Sachs, Rockefellers, Lehmans and Kuhn Loebs of New York
    • the Rothschilds of Paris and London
    • the Warburgs of Hamburg
    • the Lazards of Paris
    • the Israel Moses Seifs of Rome

    “CPA Thomas D. Schauf corroborates McCallister’s claims, adding that ten banks control all twelve Federal Reserve Bank branches. He names,
    • N.M. Rothschild of London
    • Rothschild Bank of Berlin
    • Warburg Bank of Hamburg
    • Warburg Bank of Amsterdam
    • Lehman Brothers of New York
    • Lazard Brothers of Paris
    • Kuhn Loeb Bank of New York
    • Israel Moses Seif Bank of Italy
    • Goldman Sachs of New York
    • JP Morgan Chase Bank of New York

    “Most Americans have no real understanding of the operation of the international money lenders. The accounts of the Federal Reserve System have never been audited. It operates outside the control of Congress and manipulates the credit of the United States,” revealed Arizona Republican Senator Barry Goldwater in the 1950s.

    According to Forbes, the Federal Reserve in 2008 alone – under the oh! so responsible watch of the Ashkenazi Jew Ben “Helicopter” Bernanke – single-handedly allocated “over $16 Trillion to corporations and banks internationally, purportedly for ‘financial assistance.’ ” Other sources put it at close to $30 Trillion, twice the size of America’s GDP. And none of that money has been accounted for. These transactions were only discovered after a “quick audit” that then Congressman Ron Paul miraculously managed to squeeze out of the Fed when he was beating the drums trying to get Americans to pay attention to the secretive bank.

    So who really got all that money? Was it only $16 – 30 Trillion? And how much money has actually been stolen since the founding of the Federal Reserve? No one knows. Not even Congress. And no politician would even utter a word about it. Plus notice how such brazen thievery did not get any play in the mainstream media.

    If you think that these Ashkenazim who took control over the US Central banking system did not turn on the money spigot for their fellow Jews in order to create a Jewish stranglehold on the US economy and beyond, then you’re a bigger fool than Judas who sold his Lord for 30 pieces of silver.

    No wonder close to half of all billionaires (“half” is what we’re told) in the US are Ashkenazi Jews. And it’s no coincidence either that they dominate the US Media.

    “…the Jews will have all the property of the whole world in their hands,” predicted Baruch Levi in his Letter to Karl Marx, La Revue de Paris, p574, June 1st. 1928.

    By controlling the money supply, they’re able to buy anything and anyone – anyone who serves the MONEY god that is. Said control abets the Jewish financiers to steer the US Government which in turn steers the world.


  15. Ed says:

    How about a 10% solution? That is society uses all its resources to support the top 10% and lets the rest fen for it self. That would be the 5% rich and powerful and 5% that do what is needed to keep the lights on.

    • SAAB 99 says:

      It’s always been survival of the fittest, but with exponential growth it was easy to accommodate weaker individuals. Not so in the future, and it’s not going to be fair either…

  16. CTG says:

    Nassim Taleb Exposes The World’s “Intellectual-Yet-Idiot” Class

    Read the articles and comments section. A lot of interesting stuff on the comments section.

    A lot of our predicament are caused by these group of intellectual idiots.

    • I sometimes think that some of the writers of academic papers are in this class. They recirculate the misunderstandings of the past, leading to wrong views of solutions.

      • richard says:

        People with money invest in academic studies. Sometimes your employment depends on not understanding things, and when that happens, truth becomes expensive.

      • doomphd says:

        most of the ones i know are delusional, making 20-30 plans, to train the next generations to do highly complex work without the underlying resource base. they actually believe in infinite growth on a finite world. starry-eyed academics with blinders on.

        • Ert says:

          Even the people that have the intellectual capacity and lots of facts to acknowledge the problem or (predicament) choose to ignore it and go into BAU mode. I think that their can’t stand the alternative, because it is quite hard (or nagging) to do things differently than the (>>95%) majority.

          If you don’t believe in the 20-30 year BAU time-line then the motivation to keep ones BAU job or invest in BAU schemes diminishes or even completely vanishes. That doesn’t make life easier… believe me…. I’ve gone a lot of steps into that direction… the last one was quitting my job in one of the core “BAU” consumer industries.

          • Tango Oscar says:

            It’s awfully hard to sit there and not only be compliant but enthusiastic about the destruction of our world. I think many of us have taken to drugs as a way to cope. Being comfortably numb is a lot better than having constant anxiety.

    • dolph says:

      The fascinating thing about America is that the people who chant so loudly and patriotically (the white working and middle classes) are the ones who are losing out most by the actual policies of the country. Which are, of course, to replace them with migrants from around the world, load them up with debt, use them as cannon fodder for wars, and ship jobs overseas.

      It’s an interesting thing. The more they are abused and displaced, the more they chant that they love the country. Actually changing policy, or seceding, never enters their minds. Just chant “USA!” and repeat it over and over and surely things will get better.

      I’ve said again and again at this blog, this how things are going to play out. Strange behaviors, political and economic dysfunction, chaos and testing of allegiances. A break with reality and a descent into fantasy at all levels.

      • Tango Oscar says:

        Nationalism is pretty much equal to religion, where the believer is completely brainwashed to reality, facts, and logic. A book, a god, a flag, a sock or whatever is really just a symbol that reinforces imaginary lines in order to justify genocide.

  17. Fast Eddy says:

    Very ‘Forest Gump’….

    A very fitting for the end of civilization …. the latest generation is walking the streets faces buried in smart phones banging into people l… on their way to their parents’ basement rooms to watch the finale of Dancing with Stars…

    And we have the jester vs the mentally defective HRC for POTUS.

    The Roman Coliseum had jack-sh%t on the show we are witnessing!

    • And human extinction is a bad thing…………………………………?

      • Frankly, the planet before humans, even more so the domesticated/civilized variety, was such a lush and overflowing place of stunning biodiversity, that we must conclude the human’s are just the agents of the “6th extinction”, i.e. used just a tool to move/reset the planet Earth into different era of new biodiversity..

  18. Tim Groves says:

    Major pipeline trouble in Alabama with potentially massive knock-on effects on the East Coast supply chain. Could this be a big enough blow to take BAU over the edge of the cliff, or do they have the resources, technology and will to patch things up and keep the roller-coaster running?

    Gasoline prices are set to jump across the eastern U.S. after a spill from the country’s largest fuel pipeline choked off supplies.
    A leak in Alabama Sept. 9 shut the main gasoline pipeline delivering fuel from refineries along the Gulf Coast to 50 million Americans in states from Mississippi to New Jersey. Colonial Pipeline Co. said on Thursday it pushed back the estimate for a complete startup of its Line 1 to next week from this weekend, citing adverse weather conditions overnight that slowed the cleanup and repair.
    Suppliers are moving gasoline and diesel by sea and sending trucks to distant terminals to bring fuel to consumers, but it won’t come close to the 1.3 million barrels a day that the shuttered line normally carries.
    “The thing is that there is a time pressure. No one is exactly sure when the pipeline will be completely fixed,” Patricia Hemsworth, senior vice president at Paragon Global Markets in New York, said by message.

    There’s more:

    • greg machala says:

      So that is what happens when gas is intermittent.

    • I live in the Atalanta area. We have been through pipeline problems several times before–pretty much every major hurricane that affects the gulf.

      The usual response has been to declare, “There will be no price gouging.” We then have a problem with low supply, long lines, and some gas stations closing. People run to gas stations and top off their tanks, making the problem worse. Letting the prices temporarily run up would be a better solution. In the past, we had a few days when gasoline supplies were a problem. A few people ended up staying up from work, because they did not want to wait through lines to get gasoline. The problems tended to resolve pretty quickly, and outside of Atlanta and an area a little to the north, including Tennessee, the problems were not greatly noticed.

      This time is probably a little different, however, because some of the oil refineries in the Northeast have been closed because of low profitability. (Brent was too high relative to WTI; it didn’t make sense to import high-priced oil from Europe, when cheap US oil was available.) This likely means that more people are now dependent on pipeline gasoline provided by Colonial. In the past, the combination of gasoline from Europe, coming in through New York ports, plus gasoline provided from our Northeast refineries kept that area pretty well supplied. The problem of the outage could be more widespread, if it is not fixed quickly.

      The Atlanta Journal Constitution has an article in its paper edition that does not seem to be up on the Internet. (It has an earlier one up on the internet.) The article indicates that Colonial is trying two different approaches–a parallel pipeline and fixing the existing pipeline–in the one of them will work quickly. They reportedly have 680-person crews working 12-hour back to back shifts to fix the problem.

  19. Fast Eddy says:

    Unable to ‘see beyond her own lifespan:’ AfD’s Petry slams Merkel for not having children

    • Ert says:


      You really like this one video 😉

      But for Merkel as having no kids… that may be another story…. its bad enough as it is for having her as chancellor…. but I doubt in this late stage of the global game that her successor would be different in (their allowed or ordered) actions.

      Petry and AfD are another thing, as the official party line denies AGW. They basically take the old CDU positions (Merkels party) – also no solution….. or may be an extension to the game as it would allow nuclear again.

  20. Yoshua says:

    The Messiah will save us through these changes.

  21. Ert says:

    Ugo Bardi has a new post out:

    Its about a new paper (“The sower’s way: quantifying the narrowing net-energy pathways to a global energy transition”), where he an others argue, that near 100% EE is possible, archive-able, with a big part in 2040 and near full 100% EE in 2060.

    I’m more and more confused by Ugo and don’t know what may be his (changing?) premises. He even sees that the energy demand will further increase around 50% and states: “We just assumed current technologies and that the population curve would follow the UN projections. At the same time, we recognize that perpetual growth is a dream that only madmen or economists can think as possible. We assumed that humankind would gradually move toward a stabilization of the economy and of the population on a level of per capita energy sufficient to survive. “

    Haven’t read the paper (yet)… but I’m already flabbergasted by the result in light of the premises.

    • Crates says:

      Other one that has lost any notion of the reality. These graphs begin it is to look like suspiciously to the images of the psicodelia. Is disheartening that analysts and utterers like Ugo Bardi they start fantasize.

      I do not try to put in a commitment the Mrs. Tverberg. This one is my personal opinion.

      They bear in mind neither the thermodynamic one nor the economy nor the costs nor the overcrowding nor the debt nor the complexity. It is completely depressing.

      • DJ says:

        If sun & wind has EROEI of 20:1 and from year 2025 can be used to build new PV & turbines it is not harder than that.

        Why settle for a peak and decrease?

        • I do not think that EROEI calculations for capital goods used to generate intermittent electricity have any meaning whatsoever. There are at least three problems.
          (1) The quality of the output is very different (worse) than the quality of the input. This is not recognized in the calculation. Essentially what happens is that the devices which are supposed to produce electricity for the grid do a very partial job of what needs to be done. The whole cost of what else needs to be done is left out of the calculation.
          (2) EROEI is created for use where the return on energy invested is instantaneous. This is very definitely not the case when capital goods are used to create the energy. The cost of capital needs to be reflected in the calculation as well, because it will normally take a share of the energy produced and give it to investors/bondholders/banks.
          (3) Intermittent electricity creates huge problems for the grid, in terms of too low prices for competing producers. This type of problem is not something that EROEI can be expected to address.

          This is a chart the Graham Palmer made, showing what happens when a person uses a battery to adjust for intermittency. He does not add an inverter. I would expect with both batteries and inverters, the EROEI would permanently be below 1:1.

          Graham Palmer solar EROI image

          • DJ says:

            “The quality of the output is very different (worse) than the quality of the input”
            If I understand the post correctly they believe that by 2025 the output could be used to create the input.

            “EROEI is created for use where the return on energy invested is instantaneous.”
            PV and wind should not be too long investments.

            “Intermittent electricity creates huge problems for the grid, in terms of too low prices for competing producers.”
            Doesn’t Ugo propose electricity when it is available? Like internet shopping only when the sun is shining (everywhere).

          • DJ says:

            Graham Palmer was hard to Google, but the battery must be very expensive compared to the PV panels.

            • Yes, batteries are energy intensive, compared to the PV panels. You also have to keep replacing them. It is also necessary to replace to buy and replace inverters, if you are running things with electric motors.

        • a wind turbine cannot reproduce itself

          neither can a pv panel

          • DJ says:

            I believe you but the chart implies it can. Otherwise as least the top 5% (the input) should be fossil forever.

            • don’t quite understand the meaning of your reply

              a wind turbine is constructed of base minerals of various kinds—these have to be mined, refined processed and reformed to fine tolerances…..this requires high energy input.

              The turbine has to be built and installed…this requires high energy input—either at sea or on land.

              then the energy produced has to be delivered to the consumer—ditto above

            • DJ says:

              It I understand Ugos chart correctly, the energy above the dotted line is invested to return the renewable energy below the dotted line. From about 2025 renewable is used as input to output renewable

            • Fast Eddy says:

              I am sure his chart looks awesome … if one is in DelusiSTAN.

    • Fast Eddy says:

      Perhaps someone is telling him (and other doomsayers) that it would be better for everyone if they injected a puff of hopium into their work…

      I find it rather strange that so many hardcore doomers have suddenly found (solar) jesus…

      • Doorknob says:

        Private-Public “partnership”

        In Layman’s: Huckster-Simpleton Fleece Job

        That will always equal “renewables”.until the lights go off.

        These doomer turkey’s are all Chris Martenson wannabees

      • Ert says:


        I may try that – or at least try to ask him at the ASPO yearly meeting in Germany, Berlin at the 24.10.2016 ( where Ugo holds a Keynote titled “Conventional Oil Supply – The Impending Seneca Cliff”.

        I do not assume that I will get the chance to talk to him or even really care to ask him – but I’m there anyway.

    • Tim Groves says:

      Hope and fear are two sides of the same coin. They are the yin and yang of the human desire complex. Or, if you prefer, like matter and antimatter. If all the hope and all the fear in our individual psyches was piled up together in one place, it would disappear in an explosion of psychic energy that would leave us like Doris Day’s mother — placidly accepting of whatever will be.

    • Ugo is given to wishful thinking, I am afraid.

  22. Artleads says:

    What is the cost of the lawn? Extremely long, and rather off topic, but the first few paragraphs are funny and shed some light on where much of our cultural energy goes.

    “NOWHERE IN THE WORLD ARE LAWNS AS PRIZED AS IN America. In little more than a century, we’ve rolled a green mantle of grass across the continent, with scarcely a thought to the local conditions or expense. America has more than 50,000 square miles of lawn under cultivation, on which we spend an estimated $30 billion a year””this according to the Lawn Institute, a Pleasant Hill, Tenn., outfit devoted to publicizing the benefits of turf to Americans (surely a case of preaching to the converted).”

    • Ert says:

      Also in Germany…. the same craziness…. and total waste.. The same goes for big gardens with plants that are not native and where no one, not even the bees, find something to eat.

      But lots of people won’t have edible gardens… they are not “representative” and don’t look like the neighbors one… whatever…

    • The lawns create lots of jobs for people who care for lawns–disproportionately Mexican Americans, where I live.

      • Each municipality has under their wings large facility full of various landscaping/park/garden upkeep machinery + the maintenance and operational workforce. It’s relatively big operation just everywhere, we are accustomed to clean streets – cities, but from a certain moment this will be triaged away..

  23. Tim Groves says:

    Looking for a well-deserved putdown for that annoying cocktail party acquaintance who is gushing effervescently about how awesome their new home solar system is going to be once they add a storage battery?

    A Tesla Powerwall capable of powering a home costs $7,340 to buy.

    A conservative analysis estimates a Powerwall can save its owner a maximum of $1.06 a day. An Elon Musk Tesla Powerwall battery would take almost 40 years, or roughly four times its warranty period, to pay for itself, according to analysis performed by the Institute for Energy Research. Tesla only offers five to 10 year warranties on its Powerwalls, and predicts they will last for only 15 years.

    Read more:

    • Ert says:

      Which warranty?

      Tesla scrapped the warranty recently… now you don’t get any guaranteed capacity within a time frame but only warranty against total failure of the system. But what is a power-wall worth when its capacity rating may be down 40% after 5 years of usage?

      Read more here:

      Funny thing is, that “Petersen” analyst at InvestorIntel is not anymore.. and they scrapped all of his articles, which had a lot of Tesla related things in them… and Tesla didn’t look good… he unraveled many scary facts about their Lithium and Cobalt sourcing agreements, missing patents, people and processes required for and at the GigaFactory, the testing and introduction of new battery chemistry, etc. pp.

      • Kurt says:

        I think it would save you a whole lot more than one dollar a day. That just doesn’t make any sense.

        • Froggman says:

          That’s how much it would save me. My electricity provider charges me $30/month connection fee to feed into the grid, so that the grid acts as my battery. During the day, I put energy into the grid and the meter runs backwards. At night I pull from the grid and it runs forward.

          If I installed batteries the only savings I’d have would be the $30/month grid connect fee.

        • Tim Groves says:

          I pay about 100 dollars a month to the utility for electricity on the average. That’s 3.3 dollars a day. If I had a solar system, I could probably eliminate two thirds of the bill by using solar as a direct power source for expensive daytime electricity, so I’d be left with about a dollar a day’s worth of cheap night electricity to pay for. So regardless of how wonderful a battery storage system I installed, the most I could possibly save would be a dollar a day.

          • richard says:

            How would you price a night without electricity? I’d be interested in several variations: just one night per year; two nights in succession; I’m assuming that your grid supply defines your valuation of a year of no night-time electricity. Just curious.

            • I think we are talking about a few minutes around midnight both times. These are times of low demand, anyhow. Planning could be done, to make certain that there was backup for essential services that could not be taken off line for even a few minutes. Batteries might be sufficient for most applications.

          • The point of having batt storage appliance and some PVs plus inverters capable in offgrid setup is not that you are saving the civilization, but that you are simply selfishly buying some luxury-services into the volatile future. If you don’t abuse lithium and the other items, it’s good for next 15-20yrs. Obviously if nothing kolapsnikwise happens, meaning sort of “BAUlite” grid is to stay in your particular location for say 3-5decades in semi dependent 24/365 working order, then obviously these gadgets are enormous stupid waste of resources, and you should focus efforts elsewhere. You have to take your chances what are the probabilities of the future..

            Art Berman predicts from now low oil prices range-bound – deflation with short occasional megaspikes, followed always by a bust and increasingly by shortages as well, at some point resulting in collapse of the system and so on..

            Gail predicts relatively soonish insta-fin collapse and other systems crumbling out of that

            Tim Morgan sees muddling through at least till 2025-30 then perhaps expecting something more serious

            Others predict systemic global fin reset, regionalization, chaos in the West and some level of order maintained in the East, at least for the midterm


            => there are numerous wildly diverging “prophecies” in their scope, sequencing and timing, many “players” will loose, only few hold for a moment if nothing better

        • Perhaps they are looking at the wholesale value of electricity, or alternatively, the amount that electric companies would pay for the electricity.

          I also haven’t looked at the capacity of these batteries.(I know it is given, but I don’t have much intuition as to how it compares with usual household consumption, including air-conditioning, clothes drying and other loads.) It may be that they don’t really supply much capacity relative to what households actually use.

          • We discussed it just few weeks ago, these batt storage home appliance ala Tesla wall are usually <10kWh which for rough comparison equals 1/2 – 1/3 of capacity in smaller electric car or 1/5 – 1/10 of luxurious "long range" EV.

            If you ~daily use electric oven, big american fridge-freezer, pool filtration, mansion circus lights etc. just forget it for multi day trouble free operation, unless you can reliably secure 365day sunshine for very large PV array recharging..

            But as mentioned before, if you use it only for tiny fridge, few small led lights, accu tools etc. it's fine, but again at that price your rather go diy batt + generator, it would be way cheaper

            Conclusion, either compromise on consumption demands or look elsewhere..

  24. MG says:

    Is money debt?

    Zimbabwe to Introduce Bond Notes Worth $75 Million This Year

    When the promises become too distant (or blatantly false)… the collapse follows.

    Deflation = shortage of consumers (human energy is going down, the demand is being destructed)
    Hyperinflation = fight for the resources (external energy is going down, the demand can not be satisfied)

    The stimulation of the economy via QE brought new energy production. The end of QE brings less energy production.

    If there are resources and money can be put into energy production, the final outcome is that the energy production becomes a black hole and finally consumes the energy of the human beings in such a way, that the deflation can not be defeated. The human population falls.

    The direct transfer of money into the sectors that do not produce the energy, creates the opposite: the demand for energy rises, but the supply falls.

    The transfer of money (and thus of the natural resources, human resources and energy resources) into energy sectors is the way how to create the deflation and prevent hyperinflation that would be the unavoidable outcome of energy shortage.

    Do you agree?

    • How about

      Deflation = Not enough increase in debt, to keep prices up. Wages are not rising enough to keep up with rise in commodity costs.
      Hyperinflation = Too much increase in debt; no one really believes the ability to pay back debt

      Either way, the integrated system fails, and the quantity of goods and services produced drops precipitously. The financial system likely fails as well. There is a need for a whole new system, in ether event.

      • MG says:

        Hyperinflation as too much increase in debt? That is o.k.: The government increases the debt based on the wish of the population. And the population realizes that it solves the problem only partially, so the population wishes that even more money must be printed. And the government does it…

        It is easy to fulfill such wishes of the population, printing money costs less than real resources, the can is kicked further down the road for a while. When it stops working and the hyperinflation is too high (i.e. the money as debt turns first into promises and finally into false promises), the use a generally accepted foreign currency is adopted, as it is e.g. USD in case of Zimbabwe:

        “As in every fiscal emergency, hard currency, particularly the United States dollar, has long served as a parallel currency on the black market, and many prices in shops would be posted in US dollars, even during periods when it was illegal to possess foreign currency or to transact business in US dollars.”


        In such situations, it shows up that the best currency is problably the currency backed by the energy:

        “A unique form of circulating specie is the fuel ration coupon, which has been issued in 2005, 2006, 2007 and 2008. Known denominations include 1, 5, 10, 20, 25, & 50 litres of petrol (gasoline), kerosene and/or diesel, and translate roughly into the local petrol price (about 1 UK pound sterling per litre or US$1.50 in late 2008).[55][56] Businesses, including Western Union, have been reported paying employees with these coupons, and even auctions have been transacted in this currency.[57]”


        But what about giving the population bond notes instead of money? Oh, no! The population wants real money, not something that was printed by the central bank based on its order:

        “We know what happens when the central bank prints money,” Promise Mkwananzi, leader of the social media movement #Tajamuka, said. The name of her initiative is a slang term in the Shona language for “defiance.”

        “Our message to Mugabe […[ is that we don’t want those bond notes.”

        So, with the dwindling resources, I would say that money is more and more promises and false promises than debt, as it is more and more clear that the debt can never be repaid.

        Using bond notes denominated in USD as money when the resources are harder and harder to get is making money look again more like debt that can be repaid.

    • “Deflation = shortage of consumers (human energy is going down, the demand is being destructed)
      Hyperinflation = fight for the resources (external energy is going down, the demand can not be satisfied)”

      These terms normally refer to the money supply. Deflation is when debts are defaulted on, and the money supply shrinks. Hyperinflation is when people lose faith in the currency and its value rapidly vanishes.

      Of course, if you use different definitions, you get different meanings. More abundant energy and more technology reduce the price for goods and services. Workers become wealthier and can afford more – until the workers become under- or un-employed due to automation taking their jobs faster than new jobs can be created.

      The currency units are just a way of accounting. The supply side problem is when more and more energy must be invested to generate more energy. The demand side problem is when the population in aggregate cannot or will not consume increasing amounts of energy.

      • MG says:

        I was trying to find some reasons why transferring money into various uneconomical energy sectors like intermittent energy is better than allowing mortgages for everyone that brought collapse in 2008.

        If you concentrate your life on getting energy, not on getting things, you are rich. But when you concentrate your life on getting things, you become poor, as the ownership of things consumes a lot of energy.

        From this point of view, subsidizing energy production also from intermittent sources like the sun and the wind is better than loans and mortgages for the poor youth. Because when you are poor and you get a house on mortgage that you have to pay back, you are poorer than before. But when you are poor and you get energy, you can live a quite comfortable life, e.g. in your parents home or in a hired flat.

        The mortgage crisis in 2008 accumulated houses in the hands of those who were getting poor, i.e. they were loosing the external energy. And the ownership of the new houses sucked them further like vampires.

        Definitely, transferring money into sectors that do not produce energy when cheap energy is in short supply brings the collapse sooner.

        • “From this point of view, subsidizing energy production also from intermittent sources like the sun and the wind is better than loans and mortgages for the poor youth.”

          It seems the unintended effect of subsidies is that the thing being subsidized becomes more expensive, contrary to the stated goals. Subsidize post-secondary education, and it costs more. Subsidize housing and housing becomes unaffordable. Subsidize renewable energy, and electricity rates climb to deal with intermittency problems. I think government programs exacerbate the problems, but the ultimate cause is simply the system’s need to grow or die.

          • MG says:

            Surely, the reason is to keep the growth. It is the wish of the population. The fact that the populations finally face governments that are not able to fulfill their promises is the other side of the same coin: the populations are not able to fulfill their promises: when the system is collapsing, it is due to the fact that the populations are exhausted. They are not able to pay higher and higher taxes, work longer and longer, fulfill more and more demanding complex tasks etc.

            Who is responsible? The governments? No. The populations. The populations that are in big debt create the currencies that are not trusted. Not the banks. The members of the populations know that their neighbor either has nothing as they have nothing, too or was already robbed by others. Finally, all populations are poor, as the limits of the finite world are reached.

      • Consumers play a double role. They receive wages that indirectly reflect how well the economy is doing. Also, how hierarchical it is becoming. Problems in this regard reflect increasing inefficiencies in producing goods. This happens when it takes more human labor and more other resources to produce oil (fracking or deeper wells) or to produce water (desalination) or metals. Falling wages of those at the bottom of the hierarchy lead to lower demand.

        Debt can be used to keep up supply. The big question is when debt bubbles will break.

  25. Sungr says:

    Well we have fought the good war against “terrorism” for many decades now. Let us look at the accomplishments……

    “According to a report released by Dr. Neta Crawford, professor of political science at Brown University, spending by the United States Departments of Defense, State, Homeland Security, and Veteran Affairs since 9/11 is now close to $5 trillion USD. Before we have the chance to ask how a country that has racked up over $19.3 trillion USD in debt can spend $5 trillion USD on war, the focus of this article is to ask: What has all of this spending achieved?”

    Well, let’s see………

    *ME in flames practically everywhere

    *Collapsed civilian infrastructures in Iraq, Syria, Libya, Somalia, Lebanon……..where not?

    *Many millions of refugees so desperate that they will risk their children’s lives on rickety boats to escape. Maybe 20-30M more in the pipeline

    *More than a million dead civilians in Iraq alone & 2-4M displaced across the ME

    *A hybrid terror organisation, ISIS, that makes Al Qaeda look like a bunch of hobbyists. These Mad Max nihiilists have risen from the rubble of the ME. They are our children- the children of drone strikes and shock & awe operations. So far they are waging attacks with small arms. But for how long?

    *Still more warsare being planned in Washington.

    *The danger from truly mass terror attacks is now probably magnitudes higher than when the “war on terror” began.

    *Meanwhile, China operates by soft power- building roads, railways, hospitals, ports, schools, in many areas of the world- especially Africa.

    The only real accomplishment here is that Western forces have managed to hang on to critical strategic territory in the heart of Eurasia. Why is that a goal? Because the moment our military forces leave the area, the other Eurasian powers will shut the West out permanently from the region.

    • I suppose a person could say that we have created a lot of close to totally non-productive jobs for people–screeners in airports, soldiers around the world. Spending of all of this money has given the US cover for borrowing the money to give jobs to these people. This has helped to keep demand up, and commodity prices up. These jobs are part of the reason that productivity is down.

  26. Fast Eddy says:

    When I look at this:

    I think of this:

    And I imagine this:

    The central banks are in the mother of all battles…. they are giving whatever it takes… and barely holding that line steady….

  27. Fast Eddy says:

    NFL’s ‘Monday Night Football’ Takes A Sack In The Ratings

    If the NFL was hoping that Monday Night Football would put an end to their Week 1 ratings slump, they’re going to be quite disappointed.

    To be fair, the NFL was facing some opposition from the broadcast networks. ABC kicked off a new season of Dancing with the Stars last night (with Ryan Lochte, no less), while NBC’s American Ninja Warrior and FOX’s So You Think You Can Dance aired their season finales. WWE’s Raw also aired on cable.

    And many people think that extinction would not be a positive outcome…… go figure!

  28. Fast Eddy says:

    Deconstructing Median Income Bullshit

    When I learned yesterday, 55 days before the 2016 election, that the Census Bureau and the White House had announced an historic leap in real (inflation-adjusted) median household income, my bullshit detector went into the red, went right off the scale and then ceased functioning. I’ll have to get a new one

  29. Fast Eddy says:

    If Angela Merkel has been waiting for just the right moment when she can unleash the Bundeswehr to “pacify” the unruly public, she may have an opening. According to Deutsche Welle, in the small town of Bautzen in the state of Saxony, a second night of violent clashes broke out between residents and migrants.

    According to police reports, “20 refugees and 80 right-wing extremists” got involved in verbal and physical attacks when residents of the town located 50 kilometers northeast of Dresden, chanted on Wednesday evening that the town belonged to Germans. Opposite them, according to Reuters, stood a group of around 20 unaccompanied minors- meaning they are younger than 18 – who are seeking asylum in Germany.

    Totalitarianism Lite imminent….. (upgrading from Martial Law Lite…. upgrading from Bud Lite)

  30. interguru says:

    Gail — here is vindication of your base idea from the belly of the beast.

    Oil Glut Bomb: New Data Suggests Global Economy Too Weak To Hold Up Oil Prices

    EIA data indicates that maximum consumption growth as a percentage occurred when oil prices were falling into the low-$30 range and that it has weakened as prices increased into the mid- to upper-$40 range. This suggests the global economy is too weak to support oil prices in the current range.

    • Christian says:

      I can’t get it, how is it that both consumption and stockpiling are growing while production peaked a year ago?

    • MM says:

      I think we also see a trend that charles hugh smith is talking about “The commodification of goods”. It simply makes no more profit to produce anything. The factories are increasing automation and replace workers. That shrinks profits. It is a death spiral. Producing goods does no longer create high profits. In theory good ideas bring profits but a good idea also has to stand up against existing technologies and monopolies. Any investments in more productivity lower profits even more. We are already in a starting era of full automation without jobs.

  31. Fast Eddy says:

    So… Hillary has Parkinson’s …. see the video….

    Not that it matters… my dog could be elected POTUS…. and they could do just as good a job as she would do — because POTUS really does nothing except bark …

    • Video is disturbing. My mother-in-law had early stage Parkinson’s. Her symptoms were fairly different–much more confusion about simple things. I don’t know much about Parkinson’s, such as the range of symptoms.

      • Fast Eddy says:

        Or maybe all that LSD she downed in the 60’s is catching up with her….

        Or just maybe…. when she has those ‘episodes’ …. she is receiving a signal from the aliens…

        There is of course the distinct possibility that she is caught between two worlds… when she goes catatonic she enters DelusiSTAN… she is hearing Koombaya looping in her mind…. the voices are calling…. ‘come to us…. be with us…. dance around the camp fire… have some organic beer…’

        I have an idea for another post Apocalypse movie…. ISIS meets the Stinky Hippies. Maybe not a movie rather a 1 minute vignette….

    • Sungr says:

      This whole Presidential election is disturbing. We have a corrupt family dynasty versus an upstart facist strongman.

      Sounds rather 3rd World….. not good.

      • xabier says:

        Oligarchy moderated by elections: perhaps one could bring back Kings and aristocrats governing constitutionally?

        Oh, but you kicked them out some time ago as a failed model…….

        If you are concerned, just think how the rest of the world feels about this sorry tragedy and farce! Enough to make one go weak at the knees and fall over…….

      • Fast Eddy says:

        We have a corrupt family dynasty versus an upstart facist strongman…. vying to be the mascot of the e.Lders.

        I suppose the El.D.eRS wanted to be amused as they watch the world collapse… so they put these two buffoons on stage.

        I am most definitely amused. Shakespeare could not written a better ending to the world.

        • Sungr says:

          “I suppose the El.D.eRS wanted to be amused as they watch the world collapse…”

          Yes very amusing. Especially Hillary’s conviction that “we must make Russia pay”.

          After the Battle of Stalingrad, so many bodies (1.5M total dead) were rotting under the mountains of rubble, that train passengers through Stalingrad a year after the battle were still overwhelmed by the smell of death.

          I wonder what a hundred nuclear Stalingrads would smell like?

          • “I wonder what a hundred nuclear Stalingrads would smell like?”

            If radiation levels are high enough, there won’t be any microbes so decomposition will be stopped or occur differently, so maybe it won’t smell at all.

  32. Fast Eddy says:

    Germany Readies Internal War on Terror: More Large Scale Attacks “Conceivable, Even Probable”

    Martial Law Lite cometh….

    I’ve got cash with Ladbrokes that a major terrorist act will hit Europe by the end of the year…. at least that’s what my CIA contacts indicate the time frame to be…. 🙂

  33. Fast Eddy says:

    Venezuela’s “Death Spiral” – A Dozen Eggs Cost $150 As Hyperinflation Horrors Hit Socialist Utopia

    Socialism takes the blame…..

    Of course the blame lies with $40 oil vs a fiscal break even of $100+….

  34. Sungr says:

    “From being a China hawk in South-east Asia, the Philippines under new President Rodrigo Duterte is extending an olive branch to Beijing. But can this diplomatic gambit change anti-Chinese sentiments, or last?”

    “Given Mr Duterte’s “super-majority” support in the Philippine Congress, he might be able to amend strict restrictions in the Constitution on joint development agreements with other sovereign states in Philippine-claimed waters.”

    “In exchange for de-multilateralising the disputes and adopting a “keep it quiet” position on the Unclos ruling, the Philippines is likely to also ask China to shun any further coercive measures against Filipino troops, fishermen and personnel in the Spratly chain of islands.”

    “As a sweetener, China has also offered big-ticket projects to upgrade the Philippines’ decrepit infrastructure. Nevertheless, the warm rhetoric and initial signs of thaw in bilateral relations could end up as nothing but a temporary diplomatic mirage.”

    Another drop-out from the $US-centric world order?

    • It’s crumbling everywhere..

      Indeed, it seems as some sort of immunology reaction to these old tricks have finally developed recently. The most funny thing is that in the end the Chinese are going to prop up the US (EU) as long as their own most strategic core projects are not bold enough. But their shopping list is getting pretty short as the following is already in place: independent int. wire system to SWIFT, inclusion of yuan into global reserve status and lowering %share of $ (former done, latter takes still some more time to threshold area), global defensive alliance and biz partnerships in progress (with Russia and others in Asia/Pacific/C-S Americas), know-how transfer from the west (done for nuclear energy, most of all industrials/consumerables, few items like computer chips and segments of high end defense remains) .. In summary, there is still some incentive perhaps for a half to a full decade of lukewarm support, then they will turn tables.

      There is no sane defense against this outcome, only the old outgoing hegemonic power starting full scale WW3, mind you it could be in various forms and sequencing (EMP, bio-genetics, thermonuclear, ..). The faction willing to pull it at the highest echelons of power is there, so the probability is pretty high, not zero, however not 99% either as western elite has got enough of diversified loot stored in Asia to sort of slowly die out comfortably in few generations.

    • Just informed by friends within CEE, that French and German owned banks there dispatched letters to even! rudimentary retail clients about new account conditions specifically saying YOU MUST COMPLY, VERIFY AND MAKE SURE NOT BREACHING SANCTIONS issued by the following entities: US-EU-UN lolz

      Noteworthy?, perhaps nothing serious, or something more to come soon..

      • Sungr says:

        The French are going full bore ahead on the Big Brother stuff……… as are the Germans & Hungarians. Yikes.

        ” France needs to get tough on militants by creating special courts and detention facilities to boost security, the country’s former President Nicolas Sarkozy said in a interview published in Sunday newspaper Le Journal du Dimanche.”

        “Every Frenchman suspected of being linked to terrorism, because he regularly consults a jihadist website, or his behavior shows signs of radicalization or because is in close contact with radicalized people, must by preventively placed in a detention center,” Sarkozy said in the interview.”

        ” Sarkozy, who announced last month his candidacy for the April 2017 presidential election, has said there is no place for “legal niceties” in the fight against terrorism.

        • xabier says:

          Now what was one of things the French Revolution was supposedly about? (Yes, I know about the crop failures, etc)

          Ah yes, being imprisoned by the king on a mere whim without trial and indefinitely….

          When are they holding the funeral of the Republic?

        • Fast Eddy says:

          It is all going according to plan…. when the troops appear on the streets on a permanent basis… know that we are very very very close to the end…

          Historically the parallel moment would be the peasants starting to feel pangs of hunger and reaching for their torches and pitch forks…

          Our masters know history inside out…. they know you need to kill kill kill…. well before the torches are thrown into the manor….

          Can you feel the slight tremors starting?

          • yup—-agreed

            like ive said on numerous occasions—martial law becomes inevitable as civil society starts to break down

            governments have no other course of action available, and governments pay soldiers wages.

            when they can no longer pay those wages—soldiers go self employed.

            as el Trumpo said, he’ll fire all the generals—-and no doubt hire generals who will do what he wants—-truly classic dictator material there

        • Tim Groves says:

          I assume Sarkozy is looking to peel off some of the Le Pen vote. Scuppering her presidential election chances is a top priority item for the French and EU Establishment.

  35. Fast Eddy says:

    Duterte Turns Back On US, Orders Philippines To Buy Weapons From Russia And China

    Let’s see if the e’.lders turn the Philippines into another Syria…. stay tuned for some major acts of terrorism sponsored by your local office of the friendly CIA handled by their flunky fanatics….

    • Yoshua says:

      Duterte has been hard on drugs while CIA is trying to scrape a living on heroin. He’s obviously bad for someone’s business and must go.

  36. Fast Eddy says:

    Fast Eddy Enterprises (non-used car division) is launching a new venture….

    Our analysts have identified all organic farms in America.

    We are in discussions with Tesla to build a fleet of solar powered buses…. (powered by roof top solar panels… not charging stations) ….

    We are currently selling tickets on the solar powered organic farm buses that entitle you to a ride to the organic farm nearest you when BAU collapses and everyone is starving because the non-organic farms will support no crops.

    We have determined that less than 0.2% of all agricultural land in the United States is farmed organically…. and thus tickets are LIMITED!

    If you sign up within the next 15 minutes you also get a free AK47 and 5000 rounds of ammo which will be given to you as you board the bus for use in killing the farmer and his family so you can take the food he is growing…

    Act NOW!

  37. Yoshua says:

    International Oil Companies (The Seven Sisters)

    Exxon Mobil Corporation – Net Income – 2015 – Profit 16.15 billion
    Chevron Corporation – Net Income – 2015 – Profit 4.59 billion
    ConocoPhillips Company – Net Income – 2015 – Loss 4.4 billion
    BP PLC – Net Income – 2015 – Loss 4.24 billion
    Royal Dutch Shell PLC – Net Income – 2015 – Profit 1.27 billion
    Total SA – Net Income – 2015 – Profit 5.1 billion
    ENI S.p.A. – Net Income – 2015 – Loss 7.68 billion

    ExxonMobil is the largest of the world’s supermajors with daily production of 4 MBOED.
    Chevron is engaged in every aspect of the oil production and produced 3 MBOED.
    ConocoPhillips Co. is a pure-play E&P company and produced 1.5 MBOED.
    BP is a vertically integrated company and produced around 3.3 MBOED.
    Royal Dutch Shell is vertically integrated and produces around 3.1 MBOED.
    Total SA is vertically integrated and produced 2.3 million MBOED.
    ENI S.p.A. is a E&P company and produced 1.8 MBOED.

  38. Pieter says:

    And what about High Altitude Wind Power? See

    • I know that Ugo Bardi has been a fan of kites. As we add height to wind turbines, it makes them harder to repair. I expect more repair would need to be done with helicopters.

      Kites might actually work, if they could get to a high enough level that they could get over the intermittency problem. I don’t know whether that is a possibility. We haven’t seen big installations of kites, so my guess is that they have a ways to go. Also, I expect that they would get in the way of aircraft at some point.

    • Jarvis says:

      It would be interesting to see how they plan on dealing with the voltages necessary to send a current down the 20,000 or so foot long line from the kite generators to the ground. I considered installing my solar panels on my dock were they would get better sun exposure but the extra 150 feet reqires too high a voltage to work . My guess as a pilot is they need altitudes of at least 10,000 feet to get the steady winds and probably much higher!

      • Fast Eddy says:

        I have limited understanding of electricity … but I have been told that the further you have to send the electricity … if you want to maintain voltage… the larger the cable you require.


        • I don’t know if weight becomes an issue as well. Also, increased difficulty of getting the kites up and down, and problems if they accidentally come down and hit other things at the same time.

          • Fast Eddy says:

            I am not sure why we are discussing this idea… It’s right up there with the mad guy on the street corner urging passersby to repent now because the aliens are coming…..

        • Sungr says:

          Internal resistance of wire creates heat per unit distance.

          So….the longer the run, the higher the resistance and so the higher the electrical potential which is dispersed as heat. The only solution is shorter runs. Or higher gauge wire which has lower internal resistance.

          Or super-cooling.

      • All of these details matter a lot. When these kites get up to high altitudes, they start getting in the way of aircraft, I would expect.

        • Don says:

          High altitude aircraft will likely be military or commercial types who will avoid charted obstacles in their routing and are often flying under Instrument Flight Rules (IFR). IFR is mandatory for all aircraft flying above 18,000′. IFR traffic has the benefit of air traffic control (ATC) monitoring along assigned routing. It’s the weekend sport pilot, who is unmonitored and far too often has no idea where they are, who is of greatest concern. They fly almost exclusively below 10,000′.

      • “It would be interesting to see how they plan on dealing with the voltages necessary to send a current down the 20,000 or so foot long line from the kite generators to the ground.”

        For the KiteGen at least, the actual generator is inside the pole at the ground; the kite harnesses the energy and transmits it mechanically through its cables. Plus I think these are looking at more like 500 m, not 10,000 where the optimal winds are.

        • wratfink says:

          Hello Matthew.

          I’m confused as to how that works. Does the kite spin a cable that turns a generator at ground level? Maybe like an older automobile speedometer cable works?


        • Fast Eddy says:

          My Solar Energy Pipe to the sun is not such a crazy idea after all…. we are 0.1% of the way there with these kites….

        • If the kites are that low, then we are back to the intermittent electricity problem. Intermittent electricity isn’t worth much.

          • “If the kites are that low, then we are back to the intermittent electricity problem. Intermittent electricity isn’t worth much.”

            That’s true; I think the company there was estimating closer to 50% uptime instead of the 20% or so for conventional windmills, but still intermittent.

  39. michaelrynn says:

    These problems do weigh on minds. It is good to get it out and talk about it. Intermittent renewable energy can transform peoples minds, by helping us realize the difference between energy stocks, and energy flows, and energy budget. After the great acceleration from fossil fuels, the super-abundance of cheap energy created enormous optimism, such that anything is possible. Now our the running of our greatly enlarged infrastructure has become costly, and our global warming carbon budget threatens immediate curtailment. Just by normal economics, governments and corporations and cutting costs everywhere, and financial management is tramping all over more fundamental change. A period of decline brings about too much “conservatism”, most of which is the privately wealthy holding on to their status, investments, income and power. The social inertia plays as big a part as the technical inertia, in failing to consider the great “contraction” that is now “in progress”, and how far it has yet to go. Few people I know of are racing to get ahead of the contraction, and be pre-adapted to its closing strictures, either individually, or even less common, as societies or collaborative groups.
    A lot of people I know are still fighting the losing battle against coal and gas, and corporate-government approved destruction of nature.

    • xabier says:

      Very true: and of course many who can see the accumulating and menacing problems take refuge in the old reflex: ‘If it all lasts 20 years, I’ll be gone by then, or too old to care.’

      Above all, people who have made their pile from the status quo and are usually middle- aged.

    • As we built our economy, we added new ways of doing things and took away old ways of doing things, since maintaining both ways would be inefficient. The problem is that we cannot now really shrink back. We certainly cannot go back to horse and buggy. Banks cannot succeed if a substantial share of borrowers default on their loans. The problem is really a physics problem. Our economy is designed in a way that it dissipates increasing amounts of energy. Intermittent renewables add so much complexity to the system, that the economy itself does not dissipate much additional energy.

      • We certainly can go back to horse/mule and buggy at least in the sense of last mile operation (long distance rail still working), but obviously not overnight in one transition step, not in a decades. There are several in/voluntary acts preceding (some optional) such outcome, sequencing and timing unknown, mentioned in haphazard fashion: WW3, depopulation, triage of fluff (incl. most of the highly leveraged tech sectors), fracturing globalization into smaller interdependent blocs or even complete small scale regionalization, ..

        Some would call it BAUlite, I’d call for finer resolution, a temporary stabilization phase in ongoing larger cycle process of unknown duration and direction.

        • Sungr says:

          “We certainly can go back to horse/mule and buggy”

          I would suggest finding a good breed of workhorse and start breeding operations right away. The horses popular with americans today are more akin to big dogs and are not built for any kind of practical work.

          And remember that horses eat up a third of human agricultural output.

          • xabier says:

            A long and painful process, breeding for work not mere appearance, speed or meat: one has to breed from animals which have proved mentally adapted to the work in hand.

            So, breed, train, and ruthlessly weed out the failures with the wrong temperament, etc – it can’t be done over-night.

            When a hunting dog, for instance, has been well-bred, it practically ‘trains itself’, in that it remembers in some way the excellent performance and the training of its ancestors. All you have to do is nudge it along, taking account of its temperament.

            The British worked very hard from the 1750’s to the early 1800’s to get the very best stock -cattle, sheep, oxen, draught horses, for meat and work, and it required vast fortunes to be sunk into the effort by competing aristocrats who had oligarch-class levels of wealth.

          • I think the share of output that horses eat up varies with the climate. In cold climates, you need really small horses to keep horses from eating up a disproportionate share of profits.

    • Fast Eddy says:

      I’m fighting the winning battle to burn more coal, gas and oil.

      Every time I hear of a new coal-fired power plant coming on line I have to smile …. because it means BAU continues….

  40. Artleads says:

    “The greenest building is the one that’s already built. It takes energy to construct a new building—it saves energy to preserve an old one. It simply does not make sense to recycle cans and newspapers and not recycle buildings.”

    • DJ says:

      “It takes leds energy to preserve an old one”.

      Is it a usual thing in US to tear down perfectly functional houses and build a similar in the same place? (Not counting replacing a single-family house with 7+ stories high = increasing urban density)

      • xabier says:

        Green Party in the UK proposed demolition of old housing stock to build Green-friendly housing, designed to last a mere 20 years so that new housing could be built on an undoubtedly improved future design (and create work)!

        • Artleads says:

          They would certainly lose my vote for such proposals. “Man shall not live by bread alone.” Old buildings store culture and cultural behaviors that are lost with their demolition. Buildings predating the oil explosion (and the real estate explosion) were built more solidly and with better materials. They don’t need to be triple glazed to be more energy efficient; an added, removable glazing structure can be added instead. Pre-war buildings existed in a context of walkable cities. Current car-oriented building practices remove the old pedestrian orientation. The cost to landfills of demolition must be accounted for as well.

      • I think what happens is that there is job loss in one area–for example, farms become much larger, so not as many farmers needed. Or industry closes in an area. People move around, in search of jobs. New housing is built in the areas that people move to. A lot of unused buildings are left, where people moved away. Sometimes these are taken down–getting rid of extra houses in rural area gives more area for farming, for example. In cities, the extra homes may be boarded up for a time. Governments are often lacking for funds to take these buildings down. They may just sit vacant.

        • Artleads says:

          How about moving millennials, dreamers, immigrants, do-gooders into those empty houses? They have to repair it and grow food, or no go. They’d give government less trouble and maintain the housing stock that way.

          • I have a sister who bought older housing near downtown in a Midwestern city, under some program for people with low wages. This was several years ago. So there are cities with programs that do some of this kind of thing. She is in the do-gooder category, but not one to grow food.

          • DJ says:

            We have had plenty of empty multifamily houses here in small deindustrialised villages.

            Unfortunately immigrants and millenials don’t want to live there.

            • Artleads says:

              Since I like old abandoned buildings, and have some relevant knowledge around maintaining them, I could PROBABLY know how to sell some of those people on the idea. Where there is no vision, the people perish.

      • Froggman says:

        I see this often in commercial buildings. For example, in our city, there is currently a proposal to tear down a large old big box store and build a slightly larger but differently shaped new big box store in its place. Complete with enormous parking lot out front for convenient access from your SUV.

        Also, there was a recent “redevelopment” of the mall that cost hundreds of millions of dollars including millions in tax subsidies from the city. It tore down old sections of the mall and built new ones in a different arrangement. The net effect was a small reduction in the total number of square feet. The thing people don’t think about is that “development impact fees” that go to the government to pay for new infrastructure (roads, sewer plants, water plants) are usually based on square footage. So this redevelopment generated no new impact fees for these things because they aren’t actually increasing the SF above what was built back in the 1970’s.

        The pathway to our demise has been institutionalized. The tracks are worn so deeply, we just repeat the same destructive behaviors over and over again.

        • My husband tells me that there is a different budget item for “redevelopment of old buildings” vs.”building from scratch,” for the university he works for. The reason for redevelopment is because a building is in a good location. When redevelopment is chosen, it seems like nearly the whole building is removed, leaving only a core support structure, before the rebuilding takes place. They could almost just as well start over.

      • Artleads says:

        Yes. The US is world capital for destroying old buildings. Onward, progress, more. All building must be oriented to the car. Roads curve at intersections, widening them greatly, to make it easy for cars to turn. Not so groovy for pedestrians. Malls everywhere are set back so cars can park in front of them. The front of houses display two-car garages. So the old things not oriented to cars have got to go.

    • Good point! I wonder about people who want new buildings, oriented differently toward the sun, with triple glazing. Certainly, this can be done, but not with existing buildings. If the number of households isn’t growing much, we don’t need many new buildings. Triple glazing is hardly sustainable either. If a rock is thrown trough it, it will be a major problem, if glazing of any type is no longer available.

  41. Fast Eddy says:

    Chinese Debt Soars Into Space

    Astronomical credit binge exceeds 2009 stimulus; ‘financial Star Trek’

    Astronomical credit binge exceeds 2009 stimulus; ‘financial Star Trek’

    SHANGHAI—Since China was the first country to use paper money it shouldn’t be a surprise that it was also guilty, earlier than most, of monetary recklessness.

    When Marco Polo visited China in the 13th century, notes the Cornell economist Eswar Prasad in his coming book “Gaining Currency: the Rise of the Renminbi,” the Venetian adventurer was so impressed by the use of notes, rather than hard cash, he wrote that the Mongol emperor “has a more extensive command of treasure than any other sovereign in the universe.”

    Alas, this control was fleeting: The Mongol dynasty printed too much money, succumbing eventually to a lack of financial discipline as well as internal rebellion.

    Latter-day Marco Polos regard Chinese financial practices with a deeper skepticism but a similar sense of head-shaking wonder. Today’s monetary boom in all its forms has few parallels. Over the past 12 months, China added more domestic credit than in 2009, when authorities engineered one of the greatest bouts of stimulus spending in history to rescue the economy as exports wilted during the global financial crisis.

    The multiyear boom surpasses even America’s excesses in the run-up to that crisis, and the biggest question hanging over the economy is how it will end. Because end it must.

    “I sometimes joke that we’re in financial Star Trek,” says Rodney Jones, the Beijing-based principal of Wigram Capital Advisors. “We’ve left the solar system behind.”

    This voyage into the unknown, says Mr. Jones, could reach further and last longer than many expect. He points out that Beijing has lately fired up a new thruster: bonds.

    Beijing has encouraged local governments—which do the bulk of China’s investing—to issue huge quantities of bonds, ostensibly to repay more expensive bank debt but in reality to accumulate new funds for roads, subways and other infrastructure for which the returns are far from clear.

    On top of that, the central bank is selling large volumes of bonds to commercial banks to shore up their balance sheets so they can keep pumping out loans. Bank credit is increasing at twice the pace of the overall economy.

    This financial jolt—monetary expansion has been larger than quantitative easing in the U.S., eurozone, U.K. and Japan combined—has considerably brightened the economic gloom.


    • I wish the article would have used more real numbers–not just comparisons to other things. It is clear though that China is using a lot of debt. This is no doubt part of what is keeping the world economy from collapsing.

  42. Yoshua says:

    Annual Financials for Exxon Mobil Corp.

  43. LimitsToGrowth says:

    “Deutsche Bank has studied the last 35 years and says the next 35 don’t look so good”

    Deutsche Bank is right, though they don’t understand the scale or severity of the problem. They are only thinking in terms of financial numbers: bond yields, stock market return, pensions, etc.

    The financial system is broken. I wonder – how long can we can keep the charade going? Western governments will grind their middle class into dust for “positive GDP growth”, it seems. But the recent populist murmurs (Trump, Bernie, Brexit, the elections in Austria, Alternative for Germany, etc., etc.) might lead into full blown uprisings.

    The truth is, we’re staring at a multi-decade long collapse of civilization. Some financial experts are getting it right, though – Tim Morgan is an example:

    “Perfect Storm: Energy, Finance, and the End of Growth”

    “…The economy as we know it is facing a lethal confluence of four critical factors – the fall-out from the biggest debt bubble in history; a disastrous experiment with globalisation; the massaging of data to the point where economic trends are obscured; and, most important of all, the approach of an energy-returns cliff-edge…”

    Sounds like a Finite World Post.

    Somehow I think Gail is familiar with Morgan’s work. I bet I found this article on this blog.

    • Fast Eddy says:

      Tim did get it right in that paper — but if you check his blog — he now believes in BAU Lite…

      Tim no longer exists for me…. most unfortunate because the paper you reference was one of they keys for me in first understanding the nature of our problem

      • I’m not pointing at you now here, but lets not be fundamentalist, we simply don’t now the sequencing order and timing, full stop. There could be BAU-lite attempt, followed by “final collapse” finishing most of the current global and technocratic settings. Moreover, at some point the 6th extinction might likely culminate in human wipe out. That’s all likely and possible, but it doesn’t have to be served for tomorrow’s dinner, the human’s lifespan of single person plays tricks on us, sometimes it’s deemed to short, sometimes it takes just too long.

        • Fast Eddy says:

          Did you notice what happened when growth turned negative in 2008? Remember the millions of jobs being lost very quickly?

          That is what an attempt at BAU Lite would look like….

          If that would have been allowed to continue without the central banks stepping in… if the central banks simply said ‘we are going to a BAU Lite economy…. we will not plant nor fertilize green shoots — we prefer to see what a world of less consumption looks like’

          I guarantee you — within seconds of an announcement of that nature — BAU Lite would turn into total collapse. Chaos would reign

          There will be no attempt at BAU Lite – it is anathema to BAU. It is impossible.

      • I am not a huge fan of Tim Morgan’s either. He uses a lot of the EROEI stuff in the Perfect Storm stuff. I don’t really agree with all of the EROEI things myself–it is easy to come to wrong conclusions (basically BAU lite) using that methodology.

    • Thanks! I had forgotten about the Buttonwood post about Tim Morgan’s work.

      DB is right that demography is working against us now, along with a lot of other things.

    • Tim Groves says:

      Tim Morgan does indeed believe in BAU Lite. The title of his book “Life After Growth” makes that self-evident. He doesn’t necessarily believe we are going to get to BAU Lite, but when we don’t make it, I expect he’ll blame incompetence and wrong decisions rather than the sheer physical impossibility of getting there from here. That’s what prevents him from giving up his citizenship of DelusiSTAN and applying for a residence permit in RealitSTAN.

    • A Real Black Person says:

      I read that “Perfect Storm: Energy, Finance, and the End of Growth” report earlier this year while search for various topics online .
      It is an excellent summary of what the topics discus here, although they look the topics through the lenses of economics.

      Its boldest conclusion is that globalization has been a disaster.
      This is a very non-mainstream idea.

    • why the constant certainty about ”government subsidies”?

      this may come as a shock, but governments don’t have any money

      governments take in your money and my money, then pass it out again in diverse and magnanimous (and idiotic) ways.

      If I get a haircut, or buy a new tyre, or even spend money on fast women and slow horses, it counts as “Gross Domestic Product” in government taxation terms.
      Unfortunately that is just an illusion. It is merely cashpassing. Nothing is ”produced” in real terms except taxation itself.
      But everyone demands “more” so to keep themselves in office, governments have to spend more (of your money)—-so the tax take must be constantly increased.

      And to do that you and I must spend more to make cash circulate faster and faster. (to increase GDP)
      At every exchange, tax is extracted.

      But your ready cash is limited……so….. you are encouraged to go into debt.
      This keeps the system rolling.

      Unfortunately debt is a mortgage on your future. Which is fine if your future keeps rolling in the cash.
      But then you smack into the wall of finite resources, because all money is a token of energy, and our future will have no hydrocarbon energy resources to turn into cash with which windfarms can be subsidised.
      At which point humankind is going to find out that energy isn’t fungible.

      • In the later stages of collapsing system it gets much worse, domesticated population is caged into no escape situation via financial repression tools (aka gov theft) of which there are plainly visible and less apparent forms, but everything gets progressively gloves off brutal as times goes on.. few remaining tools how to gauge it discussed here:

        ps summary: expect the unexpected even higher regression taxation coming your way

        • xabier says:

          Taxes: how governments can turn you into a debtor or felon over-night. Many historical precedents for this: novel, irrational, and retrospective taxes.

          One thinks of the late-Roman farmers or tradesmen crushed by taxation and giving it all up to become bandits or slaves on a big estate.

          There was a proposal in the UK to change the property/residence tax system to take account of the amenities surrounding a property: ie, nice view from the window? You pay more! Big garden you’ve made lovely: you pay more!

          We shall see much of this, I am sure, for as long as state structures persist. And when they decay, the next stage is the army, police (uniformed thieves) and mafias (plain-clothes thieves) putting the squeeze on you – think Pakistan/Italy for this pattern of society, or the more corrupt of the post-Soviet states.

          • Tim Groves says:

            The UK has an interesting precedent with regard to property taxes in the shape of the Window Tax.

            [The Window Tax] was first imposed in England in 1696. It was intended to be a progressive tax in that houses with a smaller number of windows, initially ten, were subject to a 2 shilling house tax but exempt from the window tax. Houses with more than ten windows were liable for additional taxes which increased in line with the number of windows. The poorest, who were more likely to live in houses with fewer windows, were therefore in theory taxed less. This principle generally worked when applied to the rural poor, but failed to alleviate the tax burden on the urban poor. In towns and cities it was unusual for the working classes to live in individual homes. They would usually live in large tenement buildings which, however they had been subdivided, where considered to be one dwelling house under the terms of the tax, and therefore subject to heavy window tax assessments.

            As it was the landlord, as the property owner, who was subject to the tax, windows in tenement buildings were often boarded up, and new buildings were constructed without sufficient window accommodation. The interpretation of the tax was also very strict. No definition of a window was included in the legislation, and it tended to be interpreted in such a way as to include the smallest of openings in any wall. In some cases even perforated grates in larders were charged as if they were a large window. Not only did tenants suffer as a result of inadequate ventilation in their living quarters, invariably the costs of the window tax that were imposed were passed on to the residents in heavier rents. The impact of the tax can be seen in the fact that, in 1766, when the tax was extended to include houses with seven or more windows, the number of houses in England and Wales with exactly seven windows reduced by nearly two-thirds.

            The negative impact of the tax on health was well known from the early eighteenth century and was written about in pamphlets and popular ballads. Those living in accommodation without sufficient light and ventilation were more subject to epidemics of typhus, smallpox and cholera. According to Dr D B Reid’s report on the sanitary report of Sunderland, published in 1845, the local Health Committee have ‘…witnessed the very evil effect and operation of the window tax; and they do not hesitate to declare that it is their unanimous opinion that the blocking up of the numerous windows caused by the anxiety of their owners to escape the payment of the tax, has, in very many instances, greatly aggravated, and has even…in some cases been the primary cause of much sickness and mortality.’

            Although deeply unpopular, the tax survived until the mid nineteenth century. The negative effects of the lack of adequate light and ventilation were becoming so well documented that a popular campaign against the tax began to gain strength. A motion to repeal of the tax failed by three votes in April 1850. A national campaign against the tax followed throughout 1850 and 1851, and it is against this background that Sunderland’s petition should be seen. The tax was repealed in 1851.,


      • Ert says:

        “And to do that you and I must spend more to make cash circulate faster and faster. (to increase GDP). At every exchange, tax is extracted.

        Which got me to the point to cut expenses, buy & sell used stuff, reduced my income – probably move in again with my parents… and medium/long term searching for some kind of shared and/or community living.

        A lot of people don’t get it. They earn crap, but still cling to the car and the own house. I Germany in the city and metro areas you don’t need a car at all. Good public transports starts at 200.000 people cities or even earlier. For smaller towns everything is bikeable, especially in the north where everything is flat.

        Once more people get it (and much of the younger do) the even more pressure is put onto the status-quo.

        • Yep, exactly, in the end this is the only “through times” repeatedly verified method, simply starve the beast, every token and small bit matters in the aggregate. From forced labor under Adolf making defective armaments to medieval peasants hiding “next tax ready” farm animals deep inside the deep caves and dark forest, think it through, work it..

      • Niels Colding says:

        “If I get a haircut, or buy a new tyre, or even spend money on fast women and slow horses, it counts as “Gross Domestic Product” in government taxation terms.
        Unfortunately that is just an illusion. It is merely cashpassing. Nothing is ”produced” in real terms except taxation itself.”

        I don’t agree:

        If you spend your money on fast women or haircuts that money will be a part of the fast women’s and the hairdressers’ income which they spend on buying things – and when you buy a thing – no matter what – you automatically trigger an energy consumption. You pay taxes? The government spend that money on paying things (schools, roads, weapons etc.) and thereby trigger an energy consumption. When money goes from one hand into another an energy consumption will always be triggered.

        Money is the symbolic value of energy. That’s why money is so important!

        • my comment related to government subsidies, which are in fact taxation paid by all of us.

          money of itself is a token of energy exchange, other than that it has no value

        • The question with deficit spending is whether it causes the currency of the country to drop so much relative to other currencies that the money is worth less in the world marketplace–actually buys less energy products.

      • Fast Eddy says:

        This gets me thinking more about helicopter money ….

        Already we are seeing real wages decrease for most people…. the pie is shrinking….because the nett energy that is available to the economy after you factor in higher extraction costs and all the other claims to the nett energy produced… is shrinking….

        I fail to see how simply putting say $5000 in the pockets of people is feasible.

        It doesn’t increase the size of the pie — just as establishing a minimum wage of say $25/hr would not increase the pie size.

    • I don’t have much hope for tidal energy. Between the salt water and tidal changes, the machines converting the energy to electricity can’t be very long lasting. Add to this the intermittency, and the cost/benefit must be very low.

  44. Yoshua says:

    IEA Changes View on Oil Glut, Sees Surplus Enduring in 2017

    The surplus in global oil markets will last for longer than previously thought, persisting into late 2017 as demand growth slumps and supply proves resilient, the International Energy Agency said.