Why energy prices are ultimately headed lower; what the IMF missed

We have been hearing a great deal about IMF concerns recently, after the release of its October 2016 World Economic Outlook and its Annual Meeting October 7-9. The concerns mentioned include the following:

  • Too much growth in debt, with China particularly mentioned as a problem
  • World economic growth seems to have slowed on a long-term basis
  • Central bank intervention required to produce artificially low interest rates, to produce even this low growth
  • Global international trade is no longer growing rapidly
  • Economic stagnation could lead to protectionist calls

These issues are very much related to issues that I have been writing about:

  • It takes energy to make goods and services.
  • It takes an increasing amount of energy consumption to create a growing amount of goods and services–in other words, growing GDP.
  • This energy must be inexpensive, if it is to operate in the historical way: the economy produces good productivity growth; this productivity growth translates to wage growth; and debt levels can stay within reasonable bounds as growth occurs.
  • We can’t keep producing cheap energy because what “runs out” is cheap-to-extract energy. We extract this cheap-to-extract energy first, forcing us to move on to expensive-to-extract energy.
  • Eventually, we run into the problem of energy prices falling below the cost of production because of affordability issues. The wages of non-elite workers don’t keep up with the rising cost of extraction.
  • Governments can try to cover up the problem with more debt at ever-lower interest rates, but eventually this doesn’t work either.
  • Instead of producing higher commodity prices, the system tends to produce asset bubbles.
  • Eventually, the system must collapse due to growing inefficiencies of the system. The result is likely to look much like a “Minsky Moment,” with a collapse in asset prices.
  • The collapse in assets prices will lead to debt defaults, bank failures, and a lack of new loans. With fewer new loans, there will be a further decrease in demand. As a result, energy and other commodity prices can be expected to fall to new lows.

Let me explain a few of these issues.

The Need For Energy to Operate the Economy

On a worldwide basis, it takes energy to make the economy grow. This is evident, regardless of what time period we look at.

Figure 1. World GDP in 2010$ compared (from USDA) compared to World Consumption of Energy (from BP Statistical Review of World Energy 2014).

Figure 1. World GDP in 2010$ (from USDA) compared to World Consumption of Energy (from BP Statistical Review of World Energy 2014).

Figure 2. Three year average growth rate in world energy consumption and in GDP. World energy consumption based on BP Review of World Energy, 2015 data; real GDP from USDA in 2010$.

Figure 2. Three year average growth rate in world energy consumption and in GDP. World energy consumption based on BP Review of World Energy, 2015 data; real GDP from USDA in 2010$.

Figure 3. World GDP growth compared to world energy consumption growth for selected time periods since 1820. World real GDP trends for 1975 to present are based on USDA real GDP data in 2010$ for 1975 and subsequent. (Estimated by author for 2015.) GDP estimates for prior to 1975 are based on Maddison project updates as of 2013. Growth in the use of energy products is based on a combination of data from Appendix A data from Vaclav Smil's Energy Transitions: History, Requirements and Prospects together with BP Statistical Review of World Energy 2015 for 1965 and subsequent.

Figure 3. World GDP growth compared to world energy consumption growth for selected time periods since 1820. World real GDP trends for 1975 to present are based on USDA real GDP data in 2010$ for 1975 and subsequent. (Estimated by author for 2015.) GDP estimates for prior to 1975 are based on Maddison project updates as of 2013. Growth in the use of energy products is based on a combination of data from Appendix A, data from Vaclav Smil’s Energy Transitions: History, Requirements and Prospects, together with BP Statistical Review of World Energy 2015 for 1965 and subsequent.

There is a small gain, over and above that added by energy growth. This gain reflects the impact of efficiency gains and technology changes. Generally, this additional gain is less than 1% per year.

In recent years, a large share of the world’s manufacturing has been moved to developing countries. This shift gives the illusion that the developed countries can get along with less energy to produce their GDP. This is not really the case. The developed countries find themselves with a need for a large amount of imported goods. Their heavily services-oriented economies tend to grow slowly. This is because, with little energy use, it is difficult for these economies to make productivity gains. I have written about this issue in What really causes falling productivity growth — an energy-based explanation.

Figure 4. Total amount of energy used by Commercial and Industrial Sector (excluding transportation) based on EIA Energy Consumption by Sector, divided by Bureau of Labor Statistics Total Non-Farm Employees by Year.

Figure 4. Total amount of energy used by Commercial and Industrial Sector (excluding transportation) based on EIA Energy Consumption by Sector, divided by Bureau of Labor Statistics Total Non-Farm Employees by Year.

We Run Out of Cheap-to-Extract Energy Products 

The amount of a given energy product (whether oil, coal, natural gas, or uranium) depends to a significant extent on the price available. The wide base on the triangle in Figure 5 indicates that if the price is high enough, we can extract a very large amount of any given energy resource. For example, if oil is $300 per barrel, we can extract the huge amounts of oil that would seem to make it possible for the economy to grow for the next 25 years.

Figure 5. We extract the easiest to extract energy first.

Figure 5. We extract the easiest to extract energy first.

In fact, the IEA has even made projections assuming $300 per barrel oil.

Figure 6. IEA Figure 1.4 from its World Energy Outlook 2015, showing how much oil can be produced at various price levels.

Figure 6. IEA Figure 1.4 from its World Energy Outlook 2015, showing how much oil can be produced at various price levels.

The reason why there is a problem if oil prices rise to very high levels is because wages don’t rise at the same time.

Figure 7. Reason why wages don't grow.

Figure 7. Reason why wages don’t grow.

This situation of lower and lower efficiency at extracting energy, as described above, is sometimes referred to as diminishing returns.

We can look at the problem from the point of view of the worker. He must make choices regarding which things to cut back on if energy prices rise, but his wages don’t rise. The result tends to be recession.

Figure 8. A worker must make choices, if prices of goods made using energy products rise, but his wages don't.

Figure 8. A worker must make choices, if prices of goods made using energy products rise, but his wages don’t. These choices lead to recession.

Figure 9. Examples of discretionary goods include vacations using airline travel, new homes, and new cars.

Figure 9. Examples of discretionary goods include vacations using airline travel, new homes, and new cars. Other examples might include restaurant meals and charitable contributions.

Central Banks Can Fix the Problem Temporarily

If wages are too low to buy “big-ticket” items, lower interest rates and more debt can “sort of” solve the problem. The combination makes expensive goods more affordable on a monthly payment basis.

Figure 10. Comparison of world oil supply and price, as changes are made to interest rates using QE and other changes.

Figure 10. Comparison of world oil supply and price, as changes are made to interest rates using QE and other changes.

Quantitative Easing (QE) allows interest rates to be very much lower than normal. The United States first started using QE in 2008 when commodity prices dropped very low. The combination of the US’s use of QE, and significantly greater borrowing by China to stimulate its economy, helped bring Brent oil prices back over $120 per barrel by 2011 (Figure 10).

Figure 10 shows that, over time, QE has become less and less able to hold up oil prices. The price suddenly started to fall in 2014 when the US discontinued its QE program and China cut back on its growth in debt. Oil is priced in US dollars; the US dollar rose relative to other currencies when the US eliminated its QE program, making oil relatively more expensive for these countries. As a result, citizens of these countries were forced to cut back on discretionary purchases. This is what led to falling commodity prices of many kinds (not just oil) in mid-2014.

Since 2014, other countries besides the US have maintained their QE programs. In fact, Japan and the EU have expanded their programs. Even with very low interest rates, commodity prices remain far too low for most commodity producers to be profitable. This situation could lead to catastrophe because metals, agriculture, and energy are all essential to the economy.

Figure 11. IMF Commodity Price Indices, from September Commodity Market Monthly.

Figure 11. IMF Commodity Price Indices, from September Commodity Market Monthly.

Throughout the ages, there has been a problem with diminishing returns in producing food and other energy products. The standard workaround seems to be greater “complexity.” When complexity is used, specialization and more concentrations of energy are used to try to work around problems. For example, one solution is to make more tools and other capital goods that can be used to leverage the labor of workers. Another approach is to use larger companies with more hierarchical organizations to bring together more resources. For example, if the problem is inadequate food production, perhaps an organized group can build a dam, so that irrigation can be used to produce a greater amount of food on the same quantity of arable land. A third approach is more specialized training for some of the workers.

An unfortunate impact of greater complexity is an increasingly hierarchical society. While some workers benefit, a large number of non-elite workers accrue little benefit. Instead, lagging wages increasingly make the new, better products made possible by a complex economy less affordable.

What Goes Wrong?

There are several things that go wrong:

1. Non-elite workers find it increasingly difficult to buy the output of the economy. Their wages lag behind as more of the wages go to the workers with more advanced training and management responsibility. Because there are so many of these non-elite workers, their “demand” is needed if the prices of commodities are to stay high enough to ensure greater production of these commodities. With only low pay, non-elite workers find it difficult to afford houses, cars, and vacations. All of these use commodities, both when capital goods such as houses, cars, and airplanes are made, and later when these capital goods are operated. Low interest rates may not help these non-elite workers very much, because they lack money for down payments. Without as much demand, prices for commodities tend to fall.

2. Central banks lower interest rates, but not much of the benefit of these lower interest rates actually gets back to the buying power of non-elite workers. Instead, low interest rates tend to lead to higher prices of assets, such as land, existing houses, and shares of stock in companies. Unfortunately, these higher prices of assets do nothing for commodity prices. In order to raise demand for commodities, the buying power of non-elite workers needs to rise, so that they can buy the expensive goods that are no longer affordable.

3. The rate of return on investments tends to fall too low, because diminishing returns lead to ever more energy use (including human labor use) to produce energy products. Since capital goods are made and operated using energy products, the cost of their creation and operation is also raised. Each unit of debt required to finance new capital goods and new energy extraction tends to get lower returns over time. This results in the economy becoming increasingly less efficient, and productivity growth tending to fall.

4. Debt levels tend to rise for multiple reasons. One reason debt levels rise relates to diminishing returns with respect to energy extraction. What is needed when it comes to producing the kind of changes that underlie economic growth (for example, extraction of ores, heating of ores, and transportation of finished products to their destinations) is a particular quantity of energy, as measured in some unit of energy, such as British Thermal Units. If the cost of energy extraction is now five times as high as it was fifteen years ago, the quantity of debt needed to extract that energy may need to be five times as high. If the development process takes 10 years instead of 5, that may further increase the amount of debt required.

It is not only energy products that are affected by the need for a greater amount of debt. Products made using energy products, such as cars and homes, tend to become more expensive as well. If the prices of these products rise, more debt is needed to buy them, as well.

5. Another reason debt levels tend to rise relates to falling interest rates, and the impact that these lower interest rates have on asset prices. With lower interest rates, the purchase of existing buildings becomes more affordable, as does the purchase of shares of stock, so prices tend to rise. Customers buy these items, in the hope that capital gains will give them greater returns than the measly returns available from fixed income investments, and likewise, from new investment in new “productive” assets such as oil wells and factories. Most of this asset-based debt is not productive debt; it is simply obtained in the hope of obtaining capital gains on existing assets as a result of ever-lower interest rates.

6. Relativities among currencies become more important. If the US dollar rises, either because the United States is charging higher interest rates, or because it is not using QE while other countries are, then goods become relatively more expensive outside the US. In this situation, investment tends to fall in countries with perceived lower future prospects–in other words, in countries outside of the US. It becomes harder to keep debt levels up, and thus the buying power of the world economy. Downward pressure on the price of commodities becomes greater because of the loss of debt-fueled buying power.

7. Growth in energy supplies can be expected to slow and eventually begin to shrink, as low energy prices lead to lower new investments. Needless to say, these lower energy supplies adversely impact GDP growth, because of the connection between energy consumption and GDP growth. The countries likely to be affected first by low oil prices are oil exporters such as Venezuela and Nigeria. Many people will not make this connection, because they consider only the apparently beneficial impact of low fuel prices for oil importing countries.

Essentially, the problem being encountered is a physics problem. The economy is a dissipative structure. As it grows, it needs an increasing amount of energy to operate. If the energy is not available, it becomes increasingly subject to collapse. See my post, The Physics of Energy and the Economy.

At some point, we can expect to reach a Minsky Moment. Such a moment involves a major drop in asset prices. We have already reached the corresponding drop in commodity prices that comes with diminishing returns, because fewer non-elite workers are able to buy goods made with commodities, and because of the higher US dollar.

Figure 12. Stylized Minisky Cycle from Wikipedia.

Figure 12. Stylized Minsky Cycle from Wikipedia.

We are waiting now for asset prices to fall to a level corresponding to what these assets can really produce. When this happens, the big drop in commodity prices will transfer back to the corresponding asset prices. For example, the price of land used to extract oil and gas should at some point drop to reflect the lower prices available for these commodities in the marketplace. The price of agricultural land should drop to reflect the lower prices of commodities that can be grown on them, such as wheat, cattle, and hogs. The price of land used to extract metals should drop to reflect the low value of metals. This drop in asset prices doesn’t happen immediately, because everyone assumes that prices are going to bounce back up, and that the system will perform as it always has.

When prices of commodity-related assets drop to a level that reflects their true economic value, we can expect a huge number of debt defaults. This, of course, happens because these assets have been used as the basis for a large amount of debt. It will be difficult to save the financial system, because there will be huge defaults both on bank loans and on outstanding bonds. Banks, insurance companies, and pension plans will all be affected.

Can the Price of Oil Rise above $50 per Barrel?

I am doubtful that the price of oil can rise very high, for very long. Our oil price problem is part of a much larger problem–a slowing economy with low prices for a large number of commodities, including oil. The price of oil can perhaps briefly rise as high as $75 per barrel, but such a high price cannot hold for very long. Rising oil prices tend to lead to recession for oil importing countries, and recessions tend to bring commodity prices back down. The world clearly could not support a price of $100 per barrel before the crash in prices in mid-2014. Once we understand the reason for our low-price problem–diminishing returns and the economy’s tie to the use of energy–it is clear that there is no way out of the problem over the longer term.

In the not-too-distant future, our low commodity price problem is likely to become a low asset price problem. Once this happens, we will have a huge debt default problem. It will also become harder to obtain new loans, because defaults on existing loans will have an adverse impact on the ability of banks to make new loans. Interest rates required by bond markets are likely to spike as well.

The lack of new loans will tend to depress demand further, because without new loans it is difficult to buy high-priced goods such as cars, homes, and factories. As a result, in the long run, we can expect lower commodity prices, not higher commodity prices. Oil prices may ultimately fall below $20 per barrel.

 

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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1,582 Responses to Why energy prices are ultimately headed lower; what the IMF missed

  1. Artleads says:

    I’m pretty sure this is BS, and that it leaves out a million interconnections. The trouble is that average people have no way to see through what’s left out. Somebody has to figure out a simple calculus to steer them in a more realistic direction.

    http://educateinspirechange.org/nature/environment/cost-iphone-can-now-buy-wind-turbine-can-power-entire-house-lifetime/

  2. ps direct reply didn’t work on the thread few pages back..

    Gail, I appreciate your reply, basically condensed version of your thesis.
    However, that’s were we part ways, mainly on two basic lines.

    Firstly, the world even under severe FW issue pressures (worsening trend) continues as primarily a cross regional conglomerate of competing interests, dissimilar resource endowments, varied social-political cohesion, jockeying war-defense capabilities etc. So in essence “a relative performance” guaranteed among and across the players/actors. This is not 100% nullified by globalization, int finance flows, trade and JIT codependencies.

    Secondly, now for both the legacy infrastructure and remaining resource depletion thresholds (including human work-expertise), we are simply not there yet, especially with a mix of energy sources (oils, coal, natgas, hydro). It’s decades before choppers or advanced mobile lift crews can no longer services HV power lines, ANYWHERE on the globe. Again, lets stress this point with previous paragraph on regional relative performance in mind. Simply, some regions will fall from the complexity ladder pedestal faster and/or deeper, while some keep soldier on in their respective (in)capacities and COG like regimes of control over given area/capacities.

    I’m not discounting validity of yours proposed outcome as some grand finale point, but this is several steps into the future.

    • sorry for the typos, this posting board system is a mess..

    • Artleads says:

      “Firstly, the world even under severe FW issue pressures (worsening trend) continues as primarily a cross regional conglomerate of competing interests, dissimilar resource endowments, varied social-political cohesion, jockeying war-defense capabilities etc. So in essence “a relative performance” guaranteed among and across the players/actors. This is not 100% nullified by globalization, int finance flows, trade and JIT codependencies.”

      I love this kind of bird’s eye view of things. I wouldn’t know, but I thought the money system was more networked (interdependent) than you seem to be saying. Like it’s the money system and the rest (which can easily be dispensed with…contained by increasing militarism, etc.). If so, competition between blocks within the money system would mean that those who couldn’t compete have to drop out?

    • Fast Eddy says:

      On one hand Gail has presented her arguments using facts and evidence and logic and all those good things.

      Then we have what you have just stated.

      It’s such a difficult to decision trying to determine who is right…. I am torn…. but if you really want to force me into taking a position …

      I’d have to go with Gail… I hope you are not offended.

  3. Fast Eddy says:

    Some of the more common types of governments are:

    Democracy

    Republic

    Monarchy

    Aristocracy. …

    Dictatorship. …

    Democratic Republic

    Recently a new type of governing system has emerged…. it is starting in America and no doubt will spread around the world soon enough….

    This new system is called – Idiocracy:

    Here are some short clips explaining this new system:

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

    https://www.youtube.com/watch?v=UilzDRQXES4

    https://www.youtube.com/watch?v=7pSqu3PLovk

    As we can see by the ratings for the ‘debates’ — and the massive coverage in the MSM…. this form of government is EXTREMELY popular….

    The people love it. even more than they love American Idol and Dancing with Stars…

    • Artleads says:

      LOL!

    • Crates says:

      This image I’ve found out there.
      It seems significant.

      https://subidasdeimagenes.files.wordpress.com/2016/10/hillary_trump_monsters.jpg

      “How Democrats see him ?.
      How Republicans see him ?.
      How we see him ?.”

      • Fast Eddy says:

        Is it not a brilliant system though?

        You pretend that the elected leaders run the show — you let them carry out all the jobs of operating civilization so you do not have to micromanage them…

        You keep the big decisions – those related to power and control in house….

        You control the media … the money supply…

        You make sure everyone stays in line by making sure the key people get paid well…. and if anyone steps out of line you smash their heads in…

        Whenever something goes wrong the next election allows steam to be let off … and you wind up the toy for another round.

        The thing is…

        In the good old days kings ran the show … then those with land and money began to take over… then eventually democratic revolutions too over…

        Does anyone think that the elites would just sit back and let this sort of person offset their vote?

        https://s-media-cache-ak0.pinimg.com/originals/ac/46/ee/ac46eeaab6b5cc17e084da3262c53fef.jpg

        Of course not!

        The E’lders saw their opportunity – and they took it…. they gamed the system…

        And thank god they did…. can you imagine what would have happened if the really important decisions were made by the hoi polloi?

        Civilization would have been run into the ground decades ago….

        • Crates says:

          Certainly have under control more than 7,000 million people is something approaching a “masterpiece”.

          http://1.bp.blogspot.com/-LtfOyAOSVJ4/TaDjFswIKBI/AAAAAAAAA5k/3356dYQQI0Y/s1600/escuela%2Bde%2Batenas.jpg

          In my youth I had the belief that people could live without governments. I was an anarchist spirit. Now I’m getting older …

          • DJ says:

            Anarchism is a genetic mutation. Humans have a gene that surrends power to authority which gives the power to kill of smaller groups.

            A loosly organised group of anarchists can’t defend against an gigantic army willing to die for their king, god or the american dream.

            • Crates says:

              You’re right.
              Let me tell you this. My grandfather was an anarchist (an Andalusian mining) and when he lost the Spanish civil war against fascism, he went to the Maginot Line in France to fight Hitler. There he was made a prisoner and sent to the concentration camp of Mauthausen.
              Finally he saved the life.
              My grandfather was a genetic anarchist and always remember who told me: “Be a good person.”

  4. Fast Eddy says:

    The Grand Strategy, successful for hundreds of years, relied heavily on persuading “barbarian” tribes to join the Roman system for the commercial and security benefits. This process of integration worked because it was backed by the threat of destruction by military force.

    Once the military threats proliferated and the benefits of Imperial membership eroded, the Grand Strategy was unable to maintain the integrity of the Imperial borders.

    As trade diminished along with secure trade routes, self-reliance became the order of the day outside the borders of the Byzantine and Persian empires.

    http://charleshughsmith.blogspot.co.nz/2016/10/dont-diss-dark-ages.html

    Fast forward to the end of the American empire — happening right before our eyes….

    The dying days of the last Empire on the planet…. marking the extinction of our species

    • doomphd says:

      it’s interesting in this regard how the USA is allowing the Phillipines bases to slip away. i think we will miss Subic Bay naval base and the large airforce bases there. not too far from the South China Sea area of interest, too.

  5. Fast Eddy says:

    http://www.zerohedge.com/news/2016-10-26/trump-says-hed-love-fight-mr-tough-guy-after-joe-bidens-behind-gym-threats

    Contrary to what was screamed in Network…. life is a TV show now….

  6. Fast Eddy says:

    Perhaps Venezuela is like Lehman Brothers…. an experiment in seeing what happens when the central banks decide not to act….

    The main difference is that failing to act in Venezuela does not bring the world down….

    Perhaps the CBs use Venezuela as demo to roll in the next stage of the plan to keep BAU alive — you either take this medicine or you end up like Venezuela…

    Probably not though…. Venezuela will be allowed to disintegrate because it does not matter — and because Chavez offended the eL.ders.

    • Not intervening in Venezuela may bring oil supply down. It may also be a problem if Venezuela defaults on its loans, and lenders attempt to seize shipments of oil headed for the US, as repayment for loans. Of course, if they really want to get any value from the shipments, they will need to sell the oil to refineries, so I can’t see this play working very well.

  7. Lyn says:

    Imagine Jailing the Central Bankers Who Saved the World

    “The U.K. may be on the verge of an unprecedented experiment in public accountability. The courts may soon be invited to consider the following question: Should government officials face prosecution if the actions they took to support the financial system during the credit crisis stink in hindsight?”

    https://www.bloomberg.com/view/articles/2016-10-26/should-central-bankers-face-jail-for-saving-the-world

    Yeah, I do not think that it would have been a good idea to tell people the world was about to end…

    • Lyn says:

      It is a joy to read comments such as the following:

      “The ‘Save the World’ assumption is pure nonsense; the $1.6 trillion toxic asset purchase and government guarantees, etc. were there to save the day for the major investor.

      The ‘too big to fail’ is a myth and letting go either criminal actions or gross incompetence unpunished remain unprecedented actions (or rather lack of that).”

      • Van Kent says:

        I spend my weekdays in a big business talking to other big businesses. Its all a “surprise”.. the recession, or downturn lasting longer then expected.. the economy and exports not picking up as expected.. having to lay off even more people -yet again.. do another organizational strategy because demand simply doesn’t pick up.. rearrange the company -yet again, because falling demand.. etc. etc.

        There are a lot of smart, or even genius level, people who simply don’t have a clue.. say “the world is about to end”.. and they can’t fathom how on earth that could possibly be true.

        Now if the CEOs and CFOs are oblivious and obtuse of whats really going on, imagine the PM to tell the general population “hkhhrmm.. ok, here’s the deal, industrial civilization is about to collapse and each and everyone of you have less then five years to live, including your children and grandchildren. Have a good day.” I bet that announcement would be well met

  8. Fast Eddy says:

    LONDON—In June, oil giant BP PLC announced what it deemed an “important” new discovery in Egypt.

    It turned out to be a modest natural-gas find that didn’t even rank in the top 50 discoveries since 2012. The fact that BP and its partner Eni SpA hailed it as a major success is a sign of the times for the oil industry.

    For years, big oil and gas companies poured ballooning sums into seeking mammoth reserves in difficult locations. But their recent record was spotty, and a dearth of major finds was followed by the oil-price slump that began in 2014. It prompted companies to cut costs and shift away from expensive, high-risk exploration.

    Some in the industry say the decline in exploration spending will eventually contribute to an oil drought—and spiking crude prices. Saudi Arabia’s energy minister Khalid al-Falih told an oil conference in London this month that the underinvestment caused by weak oil prices over the past two years will result in “a period of shortage of supply.”

    Today’s frugal period comes after oil companies boosted exploration spending in the 2000s amid high prices and rising Asian demand.

    Drilling tested fresh ocean depths and under Arctic ice in a search for new barrels, as output from easy-to-reach fields declined.

    But as spending increased, success didn’t. Leaving aside unconventional resources, annual volumes of oil and gas discovered have declined successively since 2010, according to data from Wood Mackenzie.

    Big companies responded with big cuts. BP, Eni and their peers cut exploration spending by 35% in 2015 compared with 2013, Wood Mackenzie’s data show. Many projects now focus on lower-risk, lower-reward prospects as companies hope for incremental gains near existing infrastructure that they can bring online quickly and cheaply.

    http://www.wsj.com/articles/oil-companies-shift-exploration-tactics-curb-spending-1477474206

    https://si.wsj.net/public/resources/images/OJ-AQ625_EXPLOR_9U_20161025175106.jpg

    I suppose that the sheeple read that … and think… it’s a good thing that solar and EVs are arriving just in time to save the day….

    • to sum up

      we are using 10 barrels of oil for every one we find

      but not to worry—Heathrow is getting a 3rd runway—to be open in 10 years time….time to use your wall again eddy

      • Fast Eddy says:

        Granny is spending $10 per day but earning only $1.

        Granny is obtaining the difference by withdrawing $9 per day from her bank savings.

        How much money does Granny have in the bank and how long can this continue before her bank account balance is $0?

      • Boeing and Airbus are producing north of ~700x per year (each), crazy..

        • Jeremy says:

          Yes, but they are more fuel efficient (sarcasm)

          Report on Airplanes’ Lags in Fuel Efficiency Highlights Need for EPA to Set Ambitious Climate Rules

          SAN FRANCISCO— A new report showing that new airplanes are dramatically less fuel efficient than emerging technology makes possible highlights the need for the U.S. Environmental Protection Agency to curb planet-warming pollution from the nation’s aircraft fleet.

          Today’s report from the International Council on Clean Transportation found that new airplanes could cut fuel consumption by 25 percent over the next decade through better engine efficiency and other cost-effective measures — dwarfing the fuel efficiency of aircraft designs actually being brought to market by manufacturers today.

          “This new study shows that airlines care disturbingly little about either fuel efficiency or their skyrocketing emissions of planet-warming pollution,” said Kassie Siegel, director of the Center for Biological Diversity’s Climate Law Institute. “The Obama administration has to stop hoping for this shortsighted industry to regulate itself. It’s time for strong federal climate rules that actually cut airplanes’ rapidly escalating emissions.”

          Oops, I mean…

          “Together, we are changing sustainable aviation because of our continued focus on reducing emissions, noise and fuel consumption,” said Rick Deurloo, a Pratt & Whitney senior vice president, in a statement.

          “It provides less fuel burn for us, which saves us money, so we can pass that savings on to our customers,” Berry said. “It’s environmentally friendly because we’re burning less fuel, and then it’s also much quieter, so we’re being community-friendly when we’re flying in and out of different airports around the country

          Spirit Airlines on Friday unveiled its new Airbus A320neo aircraft, describing it as an eco-friendly plane designed to enhance the flying experience for passengers. The Miramar-based carrier is the first U.S. airline to take delivery of this type of aircraft, spokesman Paul Berry said during a tour of the plane at Spirit’s warehouse facility at Fort Lauderdale-Hollywood International Airport.

          Just depends how you spin it all

  9. MG says:

    What is interesting about the gothic cathedrals? That the construction of many of them started in the High Middle Ages, but they were finished in the 19th century.

    E.g. Cologne Cathedral

    “Construction of Cologne Cathedral commenced in 1248 and was halted in 1473, leaving it unfinished. Work restarted in the 19th century and was completed, to the original plan, in 1880.[6]”

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

    What else than the lack of energy could prevent finishing them in the “High Wood Ages”? We needed to start using coal to be able to get the additional energy for finishing them shortly before the start of the WWI, in the “High Coal Ages”.

  10. Yoshua says:

    Peak Dynamics

    Energy is the Economy.

    At global peak energy the global economy peaks. At the peak… economic growth is no longer possible. In a zero growth environment, inflation falls to zero. Interest rates fall to zero. Government and corporate bond yields fall to zero.

    • Van Kent says:

      If there had been even one Economist who had proved, predicted and peer review published:

      “In a zero growth environment, inflation falls to zero. Interest rates fall to zero. Government and corporate bond yields fall to zero”

      Then, maybe, doing my masters in economics wouldn’t now feel like a complete waste of my time.

      • The problem you seem to be describing sort of an eternal freeze, while this is only a final stage of a dying system, ending cycle-period inside larger-longer cycles. At some point the tug of war will unleash ~stagflation, actually we are probably in it already, as the officialdom statistics inflation measurements are mega bogus, the inflation is simply not counted. As it does evidently lurk in areas like taxes/fees, tradesman/craftsmanship work, baseload capable energy (coal spike after the German failed renewables experiment) etc.

      • In such a case, diminishing returns sets in because you are continuing to use non-renewable resources (minerals extracted from the ground, for example). Also, you are likely using soil in ways in which erosion and salivation are factors, making it decline in quality. At the same time, we have not found a way of making population growth stop, so resources per capita falls. The whole situation comes out worse than your zero scenario, I am afraid.

  11. Stefeun says:

    Old paper, still valid:

    Technology Assessment: The Case of the Direct Use of Solar Energy
    By NICHOLAS GEORGESCU-ROEGEN (1979)

    Matter matters too, or Feasibility doesn’t mean Viability

    One short excerpt from those 7 pages worth reading entirely (the quote is from Part IV, but don’t miss Parts I,II & III):
    The truth is that any present recipe for the direct use of solar energy is a “parasite,” as it were, of the current technology, based mainly on fossil fuels. All the necessary equipment (including the collectors) are produced by recipes based on sources of energy other than the sun’s [Georgescu-Roegen, 1979a, 1978]. And it goes without saying that, like all parasites, any solar technology based on the present feasible recipes would subsist only as long as its “host” survives.
    That is not all. As I propose to argue now, from all we can say, any presently feasible recipe for the direct use of solar energy causes a deficit in the general balance of energy; that is, any such recipe indirectly consumes more of some other form(s) of energy than it produces directly.

    http://www.peakoilindia.org/wp-content/uploads/2013/10/Georgescu-Roegen-The-Case-of-the-Direct-Use-of-Solar-Energy.pdf

    • Great quote!

    • meliorismnow says:

      As for deficit, that may have been true of “presently feasible recipes” in 1979 (making reasonable assumptions for the life of the cells and inverter and degradation of the cells). It’s not true today for lower latitudes (where it could be 5-20:1 based on insolation and “recipe”). And some mining today (as in ’79) is done completely with electricity which could be renewably sourced.

    • The problem with this line of thinking is that it’s sort of true, most of the time at most places of our current civilization. In practice though, solar does work fabulously, namely passive/thermal. But this performance is locked usually at place with very little pop density, like high deserts and various elevated plateaus, plus there must be the component of the high yearly insolation hours count per year for the spot.

      So, it’s verifiable fantastic resource, but for a niche, not universally applicable everywhere, especially not for our given path dependency, most of dwellings at “wrong” places.

      • Artleads says:

        So the vast majority will have limited means to maximize the sun’s energy. Cheap and easy ways to insulate average residences would need to be found. I don’t know how much heat gain vs heat loss sun roofs provide, and retrofitting for them wouldn’t be easy or cheap…as I believe insulation could be.

  12. Pingback: Stock Investors News » Schlumberger Is a Stock to Avoid in the Current Uncertain Economic Environment – TheStreet.com

  13. Fast Eddy says:

    If you are more pessimistic, your core scenario might run like this: Most Chinese have not yet lived through a true economic crash, and policy makers seem to have an increasing focus on the short term and maintaining political power. Given that dynamic, each time China postpones a major recession it encourages more debt and a greater overextension of investment. That requires stronger underlying positive forces to come to the rescue each time, whereas productivity improvements and urbanization probably are slowing down, although Chinese data as usual do not yield definitive answers.

    China’s Debt Bomb

    In any case, there is a race on, and much of the global economy depends on the outcome. It’s a question of ticking debt and bad investment decisions against the forces favoring Chinese economic catch-up. For all the talent of Chinese economic policy makers, it seems that the race keeps getting harder. I don’t expect the forces of catch-up to win every time.

    I am optimistic about the longer-run prospects of the Chinese economy, given the extraordinary talent and ambition in that country. In the shorter run, I would not be surprised if China’s 1929 moment still awaits. I’m not sure if the passage of another year without major incident, as 2016 seems likely to be, should make me feel better about that.

    https://www.bloomberg.com/view/articles/2016-10-25/china-can-resist-a-crash-but-can-t-prevent-one

    • The housing bubble must crash. “Regular people” can’t afford housing at current prices, without fraud involved, or without part of the goal being continued capital appreciation. In fact, that is a problem in many cities around the world. China has a real “tradition” of graft and fraud, so I think that is involved to a greater extent than we would expect here. (For example, distorted valuation so it is possible to borrow the downpayment from a shady source.) I understand that insurance companies and other commercial interests think home values are too high, and have already been pulling their money out of the Chinese market, and moving it overseas to the extent they can. That gives less support for the market.

      • Artleads says:

        I’ll have to read this over a few times. It seems to explain from a business perspective what I only perceive intuitively. To me, the unaffordability of housing for anyone is totally unnecessary.

  14. Fast Eddy says:

    This diagram is spot on …. Elite Bankers + El-DERS….

    http://i0.wp.com/fmshooter.com/wp-content/uploads/2016/10/march-of-tyranny.jpg

    • Fast Eddy says:

      Also – I would not call it tyranny…. the El-ders have been very good to us…. they have shared the wealth….

      • I can’t help agreeing with that sentiment.

        150 years ago my ancestors led lives dominated by superstition, potato scrounging, class-domination and an ignorance I’d spit at today. Their less complicated lives may have been more ‘wholesome’, but for the sake of the material excess I enjoy and the range of ideas a ‘sick’ society has allowed me access to, I can’t help but feel the greedy bastards at the top have done something that benefited this particular peon.

        • smile says:

        • xabier says:

          Likewise, I enjoy a richer life than even the richest of my ancestors, with an extensive library with the literature of many cultures, freedom of movement and the money to travel pretty much anyway, great domestic comfort and a life saved and extended by antibiotics – some three times so far.

          All at the expense of a living planet and the enslavement of my fellow human beings.

          Some of my ancestors had slaves of course, in Spain, won in battle, but I have all the poor buggers of Asia working for me with no personal risk….

          Not something I am inclined to be complacent about.

          It is in fact, a Nightmare.

          • we’ll all move in with you then

          • Van Kent says:

            My grandfather was a farmer.. he could do most wondrous things; art, furniture, build houses and buildings for the animals, that easily last a century.

            The planning which farming requires is interesting.. The things you do today, affect the things you do in three months time. Everything affects everything else. Its a short term plan combined with a long term plan constantly in your head. Puzzled out in safe efficient bits of work to be done next.

            As a stamina exercise farming is also interesting. Most need a brake after 1 or 2 or 3 hours. But experienced farmers who know how to plan their day, can go on for 12 or 14 hours and be in constant motion.

            In many ways I see life WAS hard back then. But in some ways it was also much better..

          • Fast Eddy says:

            Few realize that our wonderful lifestyles have as their foundation epic deprivation and misery…

            In fact most people wonder why the terrorists hate us for our way of life…. actually they don’t hate us for our way of life — they envy us — they want our way of life…. very badly….

            As for the planet…. earth passively tolerates us… like we tolerate Paris and Kim…. we are passing phase…. a minor skin rash….

      • Greg Machala says:

        What underlies this “wealth” really is an excess of net energy. So much so (historically speaking) that it could almost be phrased an orgy of energy.

  15. dolph says:

    Baudrillard: “Prophesying catastrophe is incredibly banal. The more original move is to assume that it has already happened.”

    Fast Eddy here is the prophet of doom. Any day now, and we will be dead. If one accepts the quote above, the more original position is that things have collapsed already (say, in 2008, though you can come up with different dates of your own), and that we are all zombies being kept alive.

    That’s why I make the predictions I do. Our system is on life support. So the question is not when some sort of collapse happens, the question is when does the life support fail. Pay attention and you will see it’s not going to fail yet.

    • Fast Eddy says:

      I define collapse as:

      – no electricity
      – no petrol
      – no food
      – no government
      – no police protection
      – no medical care
      – no medicines
      – no financial system

      As of this moment there has been no collapse anywhere in the world.

      When you find yourself without the above — you will be experiencing collapse.

      And yes – it could happen any day — it is impossible to predict when this will happen – but it will happen.

      • We would all like to think that it won’t happen to us. I might add, “no tap water” or at least “no potable tap water.”

        • xabier says:

          Collapse has many phases.

          One has to accept that one is living in one of them now, and observe the runes in order to see what might be foreshadowed, and act accordingly.

          Often there will be nothing at all to be done, sometimes a little.

          Transience is the most important concept to grasp and internalise, quite hard if one has lived with the ‘promises’ of industrial societies.

        • Fast Eddy says:

          When you see your neighbour squatting in his backyard defecating ….. take that as a sign that collapse is on.

    • Some “expert” said recently this is highly correlated with the situation on respective real estate markets, namely locations and countries with very few smaller space flat/houses category to rent/own are pushing this effect, also unemployment rate inside the particular demographic bracket plays a role, but the latter one is not the driver as we can see from the graph and employment ratios for many of those top countries there..

      • Van Kent says:

        In Finland the housing prices are almost as impossible as in Sweden. There might be a few common things why the young gals of Finland move out so quickly
        A. They go get an education. And live in commune student apartments during the University education. 33% end up getting at least a Masters in something..
        B. They have their first child, and an apartment is provided for them..
        C. Their parents or grandparents own one or several apartments, and one is given for their use
        D. The municipalities have low rent apartments for the young unemployed. And the state gives unemployment benefits and apartment money, if someone is without an apartment at 18

  16. Yoshua says:

    Peak dynamics ?

    The oil price is too high = The oil price is too low.
    Wages are too high = Wages are too low.
    Interest rates are too high = Interest rates are too low.
    Bond yields are too high = Bond yields are too low.

    The economy must grow = The economy must decline.

  17. MG says:

    The New Poor: How The Ongoing Crisis Has Devoured Russia’s Small Middle Class

    https://themoscowtimes.com/articles/russias-new-poor-55836

    “Russian families are stretched almost to their limit now in paying for the absolute essentials of food, water, electricity, and heating, according to the Russian Presidential Academy of National Economy and Public Administration headed by Tatiana Maleva.”

    “As of Spring 2015, the severe economic crisis had turned into sluggish stagnation. Unlike previous crises, this stagnation has hit the middle class and residents of Russia’s largest cities even harder than the poorest members of society. There is no sign the situation will improve.”

    “Those who make their living selling high-end goods are especially pessimistic. Auto sales have almost halved in the past four years, and continue to fall.”

    • Politics of that media aside, interestingly, you have omitted the paragraphs dealing with the pick up phase ongoing since the slump few years ago, lolz. Russia is a troubled state and nation, the problem is lot of their adversaries still opulently gorging on credit are neither self governed states nor nations at the moment anymore. This discrepancy will scream louder year after year, decade after decade as we go through the next FW issues bottleneck.. Then what, too late to relocate?

      • MG says:

        There are paragraphs about the pick up phase, but the article is about the middle class shrinking.

      • xabier says:

        The great thing to understand about Russians is that after years of nasty experiences after the collapse of the Union, and with the great myth of the War of Patriotic Resistance, they are not so easily panicked as soft and indulged Westerners.

        Fundamentally, they see life as rather grim with if lucky – some bright patches, which one has to make the most of, usually with the aid of a table-full of bottles!

    • This kind of change is one of the things that makes oil consumption drop. Also, it makes the consumption of many other things drop.

      • Yep, while the electricity productions goes on record each year in Russia, as they build/renew NPPs like crazy. Because they are in the ELM/depletion race as anybody else, it’s openly admitted-stated policy it’s better to free those resources for exports and cash, and possibly in longer term for more like barter deals.

        Btw. I don’t dispute the oil consumption drop, but it has also other things behind it, decrease of purchasing power (for both domestic and imported stuff) after the recent RUB slump and demographics (+young don’t want own carz anyway), improving public transport (on electricity), ..

        Summary, it’s not as clear cut image as portrait from the “western reality” viewpoint.

      • throughout history, those conditions have invariably driven leaders to war in order to give focus to the ”masses” and take their minds off domestic problems

        • I think you are probably right. Especially if there is any change of gaining at least a little advantage by war. If nothing else, war gives an excuse to borrow more money and give people jobs by working in the military. Better than just “printing money” for this purpose.

  18. smite says:

    Complexity in manufacturing is continuously shifted from the realm of the physical (tooling, CNC, etc..) into the one of computation (software and 3D printing).

    “Czinger told us that a factory of 16 3D printers—at about $1 million each—would be sufficient to produce about 10,000 vehicles a year. And design changes are much easier to make, because the tooling is either the 3D printer or parts made by the 3D printer, which can be easily reconfigured once the revised part is designed in silico.”

    http://arstechnica.com/cars/2016/10/cheaper-faster-lighter-3d-printed-car-parts-are-now-a-thing/

    • one teensy problem with using 3d printers to produce cars—or anything else for that matter—just supposing anything as complex as a powered moving vehicle could be produced that way.

      3d printers don’t buy stuff, they just produce stuff.
      3d printers can only produce from what is put into their reservoirs.

      each of us (working adults that is) produces ”something” that contributes to a global ”whole” which is part of the complete world economy.
      Our buying and selling to each other is only possible if there is a constant input of fresh raw material, primarily hydrocarbons and metals. We are currently ripping the earth apart in an effort to keep that system going.
      Without constantly increasing supplies of hydrocarbons and metals, the system stops dead, and so do we. (literally)

      3d printers cannot be fed by an infinity of materials

      Humankind cannot survive by watching 3d printers produce stuff, and being given it as some kind of infinity freebie.
      If that were the case, it would make just as much sense to print money on rolls and hang it in public lavatories.

      the global economy doesn’t work like that.

      • smite says:

        Oh come on, give me a break, the article was clearly not related to economy, but towards how software advances and complexity are changing manufacturing.

        I am not advocating some new manufacturing technique as a fix for our intractable problems.

        These types of “cut ‘n paste” generic comments just diverts from the discussion regarding how new paradigms changes, adds and removes complexity and transforms the economy.

        • my point was, that as software and related automation speed up production and output, and thus makes workers redundant, if those workers remain unemployed then they cannot buy goods produced.

          if on the other hand they find alternative employment, then that employment must of itself consume energy to provide their job function.

          As population grows and automation grows with it we must reach a point where the majority are unemployed.
          That majority cannot be supported by an ”employed” minority

          no technology, no matter how sophisticated, can get around that problem

          • smite says:

            “no technology, no matter how sophisticated, can get around that problem”

            You have the wrong perspective. The workers have become redundant. Whatever their contributions are, there are no productivity or economic gain from them.

            This could be exemplified with an old hit and miss engine which becomes replaced with a much more reliable and efficient electric motor.

            The hit and miss engine require plenty of energy, lots of maintenance and constantly breaks down. Of course it will use more resources, more time and effort to keep running, compared to an electric motor.

            Now, replace ‘hit and miss engine’ with ‘human’ and ‘electric motor’ with ‘computer’. Now where are we at?

            Then assume the perspective of the owners. Do you really care about the part of the economy who pertains to hit and miss engines when clearly the future is in electric engines and the economy surrounding them?

            It is a total obsolescence. All of it will be gone. Left will be owners, their capital, machines and competent and capable people servicing that machine/computer based economy.

            This is the paradigm shift we currently are witnessing and living.

            http://www.feng-shui-flow.com/media/k2/items/cache/be28adfff47893c4519c1307dc6b8866_XL.jpg

            • MG says:

              What owners? Ownership is something that is dependent on energy. This talk about “owners” sounds like conspiracy. I would say that better term is “consumers” and “producers”. The real owners are populations. The populations produce and consume, not individuals. An individual or a small group needs trade and cooperation with others to survive. There is nothing like “isolated owner”. In that way Saudi Arabia could retain all its oil. But they can not: they need the products and services from others to sustain their populations.

            • i see where you’re coming from

              but the collective prosperity of our commercial system depends on the majority of us contributing to that system through work, and that it should continue ad infinitum.

              robots, automation or whatever require the input of energy and metals in various combinations to make them work.

              their output also requires people to purchase that output as part of an ongoing trading environment/function
              if robots just churn out ”stuff” and nobody is in a position to buy it, then they, and their owners, have a pointless existence and will quickly grind to a halt and go bankrupt.

              if on the other hand robots churn out stuff ”for free”, then the energy input in whatever ”stuff” it is will rapidly run out, because it will have been ”consumed” by the idle masses.

              Since the industrial revolution we have been combining heat and metals to produce stuff. Our continued existence depends on us doing the same—forever.
              The majority of people are convinced we can do just that.

            • smite says:

              All I read is lots of self referential rambling and human chauvinism.
              As an owner of any capital you are interested in optimizing your return on investment.

              The economy is decoupling from human consumption.
              We are going the way of the horse and hit and miss engine.

              But it is okay, you can still be huffin’ and puffin’ consuming oil and pretend as you matter.
              When in reality things are about to change. The oiled up human party in the petri dish is about over….

              http://thecripplegate.com/wp-content/uploads/2015/10/squashed-bug.jpg

      • Software tools helped greatly with team focused rapid product development across the board (design, workflow, logistics, procurement, ..) One example, for latest nuclear power plants that shaves off 40months, so total construction time of one additional power block ~ 1.2GW on existing “pre wired” power plant location site is under 5yrs (6-7 for greenfield), and that’s with all the added latest best extra protection crap like giant concrete bubble double containment, passive systems inside etc.

        • smite says:

          Yeah, it is crazy it is truly a paradigm shift we are witnessing with more and more capabilities going into engineering software.

          Working with state of the art technologies it is possible to sense the exponential curve. It is always a worry and amazement among me and my peers to be left in the dust as it accelerates, propels and feeds itself into the self referential loop.

          From relevant today to irrelevant the tomorrow.

          Just like our accountant got fired the other day, replaced with web based solution. I guess the same must be happening across the board for less creative/difficult occupations.

          http://bestdemotivationalposters.com/wp-content/uploads/2013/02/Humans-Best-Demotivational-Posters.jpg

  19. Christian says:

    http://mackenzieinstitute.com/the-new-dark-ages-2/

    Many possible comments, I have not the required time right now

  20. Fast Eddy says:

    What the world needs to do, but we very much doubt it will voluntarily, is not to look for other forms of energy to replace oil and gas, but to look for ways to use much less energy (90% or so) while still maintaining societies that function as best they can. We doubt this because man is no more made to volunteer for downsizing than any other species.

    The interview below with Louis Arnoux by the SRSrocco Report, combined with an article Louis wrote in July on the site of our old friend Ugo Bardi (is Florence really 6 years ago already?), is an excellent opportunity to catch up on energy issues.

    First, here’s the SRSrocco Report interview, below it you’ll find the article. Note: this is part 1, links to parts 2 and 3 are provided.

    http://www.nakedcapitalism.com/2016/10/ilargi-why-the-energy-crisis-is-coming-sooner-than-most-experts-forecast.html

    Wow – Louis shows up everywhere it seems … promoting his magic energy box no doubt 🙂

    • Artleads says:

      “What the world needs to do, but we very much doubt it will voluntarily, is not to look for other forms of energy to replace oil and gas, but to look for ways to use much less energy (90% or so) while still maintaining societies that function as best they can. ”

      We agree for once.

      • Fast Eddy says:

        It’s like saying … all I need to do to make starting centre on the LA Lakers is add over a foot of height … and knock 20 years off my age…

        • Artleads says:

          But you don’t have to do a thing. Just wait and see whether we come to our senses or not. It’s not up to you or me.

          • Fast Eddy says:

            I think the comment was that we needed a new source of cheap energy — that has nothing to do with coming to our senses.

          • Christian says:

            I think FE has never projected to try soylent’s taste… or running on the hunger games

        • DJ says:

          You also need to add speed, hand-eye coordination and peripheral vision and practice for ten years. But except for that ..:

    • When downsizing combines with cleverizing, the result is less energy needed for society maintenance. For the foreseeable future, maintaining the tech know-how (universities/research/manuf base) we need to continue some mix of urban and country. And this to work on the cities side it’s necessary to tweak some of the most atrocious energy wastage like personal carz/light trucks (heavy trucks for regional), heating/insulation of dwellings, health care in general sense (avoiding civilization induces stresses – pollutants etc). In this fashion it’s possible to cut down at least dozens of % energy wasted, we already know how to do it, but the path dependencies of previous sunk investments into the old infrastructure and overall ongoing social decay prevent that at many places. However, it will be likely attempted somewhere, actually it is as we speak. Another big issue is the demographic tsunami, young to elderly ratio ~10:1, will be soon ~1:1, I’ve no easy answer for that, other than that out of it some new equilibrium will be forming eventually and I don’t put a value judgement there.

      For me the biggest problem though is that there is bunch of sore moronic loosers in the developed world, which already demonstrate the signs of thing to come, i.e. if we are going to fall from the hedonistic pedestal we are going to drag you down into inferno with us as well, especially certain factions inside the US apparatus make the probability of full scale nuclear war very high for the key few next decades.

      • Fast Eddy says:

        How many years have you been visiting FW?

        And still you have not the slightest clue.

        • What you apparently don’t understand about the compare contrast:

          – coal smoke infested city sky over China vs. nuclear/natgas much cleaner sky of Russia
          (simplification as obviously China produces more trinkets and it’s different climate zone/wind patterns, less landmass/people, also China will phase out the coal)

          – dozens of walking people with groceries in backpack driving a trolleybus/metro/train vs. single occupancy SUV driving miles to the big box store
          (Europe and Russia vs. NA)

          ..

          • – China’s exponential development on coal reached plateau, now they are cleaning up the grid via nuclear and natgas buildup, oldest/dirtiest coal plant phase out
            – meant to say people-shoppers riding on a bus

  21. dolph says:

    Not only will we make it to 2020, we will make it all the way to the late 2030s.
    That’s the time frame we have. Late 2030s, our system’s collapse will come into view.
    That’s not that long from now! We are the same distance from 2036 as we are from 1996.

    Oh, and we are all wasting our time here. I do so because it’s interesting and because I have nothing better to do (or at least, I don’t have millions of dollars to frivolously spend). History is never accurately written. Yes, you can get a glimpse here or there, but history is written by victorious powers, and that’s all. None of us will be victorious by definition, since we are doomer monks.

    For example, when it comes to the hebrews, whatever one thinks of them, we can predict that in the year 2050, the remaining hebrews will be screaming that they were persecuted this, persecuted that by America (even if all that happened to them was that they died in a decrepit healthcare system), and therefore they deserve victimhood status, etc. We know this to be true because hebrews always win, or at least, always align themselves with the victorious powers after the dust settles on revolutionary times.

  22. Fast Eddy says:

    Caterpillar Retail Sales Decline For 46 Consecutive Months; Worst Month For North America Since 2010

    Shares in world’s largest heavy machinery maker Caterpillar (NYSE:CAT), the best-performing industrial stock so far this year, suffered Monday morning after the firm logged a 18% drop in global retail sales of equipment for the three-month period ended in September.

    While the Peoria, Illinois-based company has had more discussions about potential sales in recent months than in the last two or three years, it looks like those talks have once again failed to materialize. Currently, only the Asia-Pacific region is growing, the company said on Monday.

    “Total retail sales to resource companies dropped 37% in the quarter when compared to the same period last year.”

    Total retail sales to resource companies dropped 37% in the quarter when compared to the same period last year. Yet the results are slightly better than a 39% decrease registered from April to June.

    More http://www.mining.com/caterpillar-rally-hindered-by-fresh-drop-in-sales/

  23. MG says:

    Growing wheat can still be cheap, but further processing escalates the price of the food: today only one fifth (i.e. 20 percent) of the bread price in Slovakia is the flour. So price fluctuation of wheat has already only minor effect on the consumer prices. It is the rising complexity that makes the economy products more and more costly, both in the extraction of minerals or energy and in the food production.

    (The source of this info is an article in Slovak: http://spravy.pravda.sk/ekonomika/clanok/408825-kto-rozdava-potravinove-karty-na-slovensku/)

  24. Rodster says:

    Gail, I much enjoyed your most recent podcast with Chris Martenson. It puts in perspective the predicament we all face going forward. Boxing ourselves in with oil and NOT having an alternative to provide cheap energy to power and grow our world eCONomies was not a god idea. It seems their is NO way out for future generations.

    • Kurt says:

      Jimmy Carter was correct. I give it 3.5 more years before things collapse in the developed countries. Everybody else is going down now.

      A slow motion train wreck is still a train wreck.

      • Fast Eddy says:

        Has anyone every actually seen a slow motion train wreck?

        Generally a train wreck involves the train traveling at very fast speed — then ramming into something…

        Sometimes that can be seen — like another train or a station is up ahead …. but you cannot stop… and sometimes something rolls onto the track and the last minute….

        Our trains is running full out right now — we know something is up ahead…. is it a wall? Is it a tractor trailer stalled on the tracks?

        • Kurt says:

          The speed of the motion is in the eye of the beholder. Sometimes, when under stress, things appear to slow way down.

          • Fast Eddy says:

            Kinda like your life flashing before your eyes in the instance before you slam into the oncoming train…

    • Thanks! This is a link to Chris Martenson’s podcast with me. https://www.peakprosperity.com/podcast/102796/gail-tverberg-why-theres-no-economically-sustainable-price-oil-anymore I think that there may be a transcript of at least part of it at some point.

      I thought Chris did a good job with the questions. He clearly has been reading my posts and thinking about them. There weren’t questions of the type,”How high do you think prices will rise this time?” Instead, he tried to get me to explain some of the ideas I have been writing about.

    • It was relatively good podcast, Gail performed better than the host.
      I’m glad Gail raised around ~20min mark the important fact about the strange yet necessary return to coal when oil/natgas spiked up in price last time, which was indeed a strange regression on the “one way street” of unlimited progress, supposedly culminating with hitech renewables bright future.. One could add, also the recent example where the staunch promoter of renewables Germany had to ponny up its coal usage (both domestic and imported via electricity) to compensate crazy nuclear phase out and intermittency problems with wind generation.

      Martenson had some good moments as well, but disappointed with uniformed comments like mega cities are choked of passenger car traffic everywhere. Not true, there are several examples of heavily invested public infrastructure and clever combination of different modes at one place (light trains, trams, subway/metro, trolleybuses, natgas buses, ..) This could be leveraged further into displacement of liquid fuels in short distance delivery (food/groceries, light commerce), e.g. night shifts on these modes and or currently tested on-off trolleys for trucks.. Obviously, this all have a meaning only in societies, which are not falling apart, which is likely a decreasing number, lolz..

  25. MG says:

    The rising number of people return from suburbs into the capital of Bratislava, Slovakia

    After the family houses boom after 1989 (the fall of the Soviet bloc) in the surrounding villages of the capital Bratislava, the people return to live in the city. Traffic jams to and from work and school, lack of services etc. force the people move back into the city.

    http://ekonomika.sme.sk/c/20352846/zo-satelitov-sa-ludia-vracaju-spat-do-mesta.html?ref=av-center

    My comment:

    No wonder: There is no reason to live in the depleted countriside, if your life is dependent on smoothly working energy pipes, wires, roads and services of others.

    • DJ says:

      How will that work when the countryside stops sending food to the city?

      • in the good old days that question would have got you a first class ticket in a cattle truck to siberia

        • MG says:

          What sending food to the city? Machines and artificial fertilizers and a few workers do the job. There is no countryside anymore, when we live in the depleted environment and the inputs like machines, fuel and fertilizers have to be provided by industry and imports.

          And it is even cheaper to import the food from other countries and parts of the world with better climate, soil etc. Better option for many agricultural companies here in Slovakia is to produce subsidized technical crops e.g. for biofuel.

          • no—doubting that food will be available

          • MG says:

            Now we have subsidized sectors of the economy: when certian sector of agriculture does not get enough subsidies, it is dying, e.g. food crops, pigs, milk production.

            • DJ says:

              Yes, but only because those foods are cheaper imported (transport is cheaper than higher wages) or because consumers substitute (2L of Pepsi for the same price as 1L milk, half price per calorie).

          • DJ says:

            I was thinking of on the other side of the peak, if you believe there is an other side.

            Look up just about any city and find out how many lived there 1900, and where the countryside started.

            • Artleads says:

              Thanks DJ, MG, Norm. In my area, nobody seems to know what rural is anymore. Getting a good definition of rural would be nice.

            • In the days before powered transport allowed the mixing of occupations and places of residence—rural and urban could be simply defined

              rural was where the food was produced (together with ancillary trades–blacksmithing, timber etc)

              Urban was where the business went on that traded the inherent ”values” in that food for other commodities—cloth, imported goods, books, higher education. legal services, specialised business, aristocracy, military and so on

              now it has all become blurred, but rural is still where our food is produced, urban is where its bought and sold

            • MG says:

              Today, it is really mixed: you have graphic design studio or CNC machines in the village where the blacksmith and the industrial farm pigsties were before. There are only remnants of the village life in many places. With the depleted soil, it is cheaper to buy imported and subsidized food in the local grocery.

              Morover, many, who do not understand the situation, still believe, there is a better life in the city or in another country. Or in another occupation.

            • Fast Eddy says:

              DJ — for those who think we can return to the 1800’s…. can you explain where the food would come from to allow this to happen.

              I need to be made to understand how we grow crops in ruined soil — and what we eat while we repair the soils.

              I will pretend the spent fuel ponds don’t exist

            • and of course apart from a few odds and ends the village was pretty much self sufficient.
              you might have to trade specialist metals and pottery from elsewhere.

              it couldn’t grow beyond its own resource base

              towns existed as a kind of a hub for villages in a 10 mile radius, beyond which it wasnt energy efficient to travel.
              London itself had a 10 mile radius for most of its basic foodstuffs (resource base) until the advent of the railway.
              now that radius has been built over

              as to ”modern” industries in village settings, they can only exist through efficient and cheap transport systems and available energy input

            • DJ says:

              … or with another leader.

            • Artleads says:

              Thanks Norm. Helpful definition re the present. It’s still unclear how, when, if the powered transportation goes away. (All this talk about EVs… ) So a lot of food is starting to be produced in cities at the present. And food tends to be produced in cities during emergencies. E.g., Victory gardens in wartime, huge food production in Havana, etc…

            • DJ says:

              Fast Eddy,
              If we are pretending the fuel ponds is no problem we could just as well pretend the soil can be restored, at least to a useful degree, and that collapse is slow enough to start “organic” farming.

              Then food could be grown where you live. Unless you live in a city with more than a couple of thousand in population.

              Stockholm had a population around 50k for hundreds of years, when Sweden had conquered most of the Baltic sea. Those 50k could live of what was produced around the Baltic sea. Now the city has a population of 1M.

              In short – if there will be a dieoff less than 100%, city folks will be overrepresented in the dieing, not only starvation, violence and sickness also.

            • Fast Eddy says:

              Yes… we can pretend that the soil can be repaired within a few days of BAU ending and the petro chemical fertilizers not being available…

              We can pretend that a magic crop can be grown by the time the shelves in the grocery stores are cleared….

              But why bother with all that… let’s just pretend that this nightmare is not happening…. let’s just put reality on hold…

              There is no way in hell there is going to be food available except in the most remotest of remote places where people already live primitively and are completely disconnected from BAU (e.g. Irian Jaya)

              People in these places will not even realize that the end of the world has happened… they’ll just wonder why they are all suddenly exhibiting these symptoms… before dying…

              Nausea and vomiting. …
              Spontaneous bleeding. …
              Bloody diarrhea. …
              Sloughing of skin. …
              Hair loss. …
              Severe fatigue. …
              Mouth ulcers.

              http://www.cbsnews.com/pictures/radiation-sickness-8-terrifying-symptoms/

            • Artleads says:

              So I’m seeing how nuanced the issue of urban farming is. The article doesn’t deal with feeling and aesthetics, but these can guide as to what to use urban spaces for. I wouldn’t say it’s entirely a matter for the intellect. It’s art as much as science.

              “And on the flip side, some studies have noted, if urban farms take up too much land and increase sprawl, they could actually end up making global warming worse by increasing overall driving. Cities only have finite space, and sometimes the greenest thing you can do with a vacant lot is build more housing rather than grow a bunch of plants.”

              http://www.vox.com/2016/5/15/11660304/urban-farming-benefits

  26. “Iceland Is Drilling a 3-Mile Hole to Tap Magma Power
    “The project could increase the output of geothermal wells by a factor of 10.
    ” … Iceland already generates all of its electricity from non-fossil-fuel sources, but three-fourths of that is hydroelectric power generated from dams. If the IDDP’s magma well is successful, it could add a new source of abundant green energy to the country, and the technique could be imitated near fault lines around the world.”
    http://www.popularmechanics.com/science/energy/news/a23490/iceland-3-mile-hole-magma/?utm_source=MIT+TR+Newsletters&utm_campaign=a1964ba394-The_Download_October_24_2016&utm_medium=email&utm_term=0_997ed6f472-a1964ba394-153961373&goal=0_997ed6f472-a1964ba394-153961373&mc_cid=a1964ba394&mc_eid=662b7fd83b

    How could any of this happen without the fossil-fuel-based infrastructure?

    • Greg Machala says:

      How could any of this happen without the fossil-fuel-based infrastructure? – It couldn’t! There just isn’t a drop in replacement that has the required energy density that fossil fuels have. Fossil fuels kick-start (and maintain) every other energy source (nuclear,geothermal) or energy capture device (solar, wind, hydro) there is.

      There isn’t a drop-in replacement at any price, much less one that is affordable for fossil fuels. Then you have the scaling problem! The drop-in replacement has to scale to be as ubiquitous as fossil fuels. The fossil fuel infrastructure is simply taken for granted in all the calculations with regards to any of its supposed replacements. Life without fossil fuels is life without energy.

      • meliorismnow says:

        Petroleum industries were kickstarted by a system based on coal and whale oil (the latter of which was depleted). Coal and whale oil were kickstarted by a system based on wood (which was depleted). The wood based economy was kickstarted by an economy based on farming, irrigation, and pottery. The farming economy was kickstarted by an economy based on hunter-gatherers with social constructs (language, trade, customs, and specialization).

        No renewable resource can kickstart itself, just as a water-logged coal seam 500m below surface wouldn’t have been exploited pre-petroleum era. But if there is a transition, like before, more and more infrastructure will convert until it can be self-sustaining.

        • Greg Machala says:

          That is true however we have been climbing the energy density ladder. There is no where left to go now. There is no energy source available to transition to that is more energy dense than fossil fuels. Nuclear is the only one and it is not kick-starting very well. Energy density is the key. Then, it has to be abundant and cheap.

          • our commercial economy has always been based on making and selling stuff to each other, and that has always involved heat

            Thus—if i have pile of woodworking tools, they represent embodied energy–(in the metal)
            they are of no use unless i cut down a tree, make some furniture and sell it. (or whatever)

            Same with electricity. Electricity is of no use unless it is used to make stuff we can trade with one another. Doesnt matter how much power is generated, without “stuff” to rework into other “stuff”
            it has no use at all.Thus each rung on the economic ladder has been formed by gradually improving skills in creating “things” by which our wealth has gradually increased down the millenia.

            there are no definite borderlines, each overlaps into the next

            No matter how much power we generate, we have to keep finding raw materials to use it on.

          • Van Kent says:

            Hmm.. I just wonder.. all these sort of ideas are relatively new.. M King Hubbard made his predictions in -56. Limits to growth -72. Climate science and resource/energy depletion confirmed in the 80s and 90s. Bogus solar hype confirmed in the 00s. Derivatives, black swans, JIT intertwined global economy, global financial risk transferal, limits to technology as a solution to intertwined global risks, all these (kinda) understood only in the 10s.

            In many ways we have a lot of fresh knowledge and ideas we are commenting here, on FW.

            Just wondering what Adam Smith, Marx or Keynes would have thought about these ideas we are toying around with here.. somehow for me that energy density ladder made “free markets” as a concept obsolete.. Explanation; If everything is a derivative of the master resource energy, in the energy density ladder, then free markets, or market dynamics as thought of by the classical thinkers, do not exist. Therefore rational actors in the market, or asymmetric information in the markets, does not function like economists think. Actually.. economics is a failure to appreciate what economic activity really is. Energy and resource depletion. Or in Gails words, a dissipative structure.

            Economics as a science, seems to me now, as a very poor attempt to describe activities that were actually fully dependant on coal, oil and non renewable resources in a dissipative structure

            Just wondering.. if Smith, Marx or Keynes would have had the same information we in FW have.. would we have Economics at all.. I think not

            • Fast Eddy says:

              Knowing what I know now …. leaves me thinking that a lot of great ‘thinkers’ —- in many respects do not deserve the title….

              They completely missed the big picture — which really is not that difficult to see if you were to look…

              I see it similar to the hedge fund manager master of the universe diligently trying to work out how to squeeze money out of the system — yet failing to recognize that the system itself is about to implode.

              Is he a genius because he is able to generate a big return in a challenging situation?

              Or is he a fool because he wastes his time fiddling with numbers… while Rome is ablaze… and he refuses to see the flames?

              Perhaps a bit of both.

            • Van Kent says:

              To me the genious fiddling with numbers while the system is about to implode, also sets up another problem..

              Who’s in charge?

              Military men don’t understand economics or the financial system (a generalization). Though they might understand finite resources just fine.

              Bankers and policy makers have had economics and their classical thinkers education.. Therefore they believe in a market, or at least some kind of a market dynamics.. so, bankers and policy makers can’t see non renewable resources in a dissipative structure on a finite planet (a generalization).

              To fully develop ideas, language, ethics and a thought structure of new ideas, you need other likeminded people around to do that.

              So.. who’s in charge??

              Can’t be the military men. Can’t be the bankers. Can’t be a think thank, because a group is never in charge of anything.

              Just leaves me thinking that the bankers and policy makers themselves, and everybody around them, think they are still in charge, but they STILL believe in some kind of market dynamics. And though perhaps explained, perhaps many times, these (shadow)leaders really, really, really don’t understand non renewable resources in a dissipative structure on a finite planet..

              So.. who’s in charge? By all likelyhood people who don’t really-really understand the problem

            • Fast Eddy says:

              The El.ders… of course.

              The bankers are their minions… as are the govt officials who are tasked with carrying out the policies to keep BAU alive as long as possible…

            • Van Kent says:

              Yes Eddy, but your E!ders also have an ivy league education..

            • Pintada says:

              Dear Van Kent;

              You mention an issue and realization that I only recently came to fully understand. No-one is in “charge”. Rex Tillerson can influence congress, and the President very easily, but when Bill Gates makes his demands, people listen to him as well, whether his demands are counter or in sync with the demands of a big oil company or not.

              The overall result is profoundly schizoid behavior. For example, oil gets an easy ride with regulators and government in general while breeder reactors are outlawed. Or another example, there are plenty of subsidies for “renewables”, but windmills can’t be installed if there are rich people within seeing distance. The Fed influences monetary behavior world wide, but there are always rumors of China and Russia trying to supplant the dollar as reserve currency.

              To imagine that any one group or any one person actually controls anything is to be well down that slippery slope to thinking that all conspiracy theories are correct. The “Je&ws” are in “control”?

              Please,
              Pintada

            • Fast Eddy says:

              There are literally trillions of dollars of stimulus flowing through the global economy with more coming online every day.

              Do you recall anyone voting on this? Do you think it just happened on its own?

              Or do you think that perhaps there are a small group of people who are making these decisions?

              Interest rates are being manipulated to 0 and -0. How do you reckon that happens?

              Loans are being extended to insolvent entities around the world (see the article I posted re: coal producers in China yesterday for instance). Normally a bank would never do such a thing.

              Does this not indicate some group is issuing edicts?

              Follow the money – to the source.

          • meliorismnow says:

            While dense energy is more flexible and convenient, it is by no means necessary. A couple billion people currently go without it and so could another five if they wanted to transition. For most of them, it will mean a life of poverty (by first world standards) and physical labor. Others could transition to comparable lives albeit with greatly reduced waste (bicycles, telecommuting, autonomous carpooling EVs and e-bikes). As renewables continue to scale, more and more people could be pulled back out of poverty, particularly in favorable locations (where people will migrate). But in order for this to be kickstarted and eventually stand on its own we need more investment and less consumption (and therefore more time to transition).

        • Fast Eddy says:

          If you say so…. heheheheh……

      • Fast Eddy says:

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

    • Fast Eddy says:

      None of it could happen.

      The thing is…

      Even if geothermal could suddenly emerge as a significant source of cheap energy — it would not matter…. we are out of cheap oil….

      • Greg Machala says:

        I agree. We are much too deeply invested in one single-minded fixation on fossil fuels. And, most folks don’t even realize it. In the past we had lower populations and more diversity in supply chains for food, water, clothing and shelter. Now, all of that depends on one single point of failure – fossil fuels. We bet the farm on it. Burning fossil fuels really is like burning a Picasso for heat.

        Why is this statement wrong: “fossil fuels can be used to build solar and wind turbines we can transition to them.” Because it is an endless loop, a treadmill to nowhere. You cannot build them fast enough because they are such low energy density that by the time you came even close to replacing our current electricity consumption with solar and wind, you have to replace and repair the ones that are already breaking down. It is like building a house and the wood rots before you finish it and you can never complete the house. Add to that the intermittent nature of solar and wind, it makes the situation even more impossible. And there is even more, the resources required to build and maintain solar panels and wind turbines are finite and some of the resources like copper and rare earths are already at or near peak.

        Solar panels and wind turbine are energy sinks!

  27. Tim Groves says:

    I had a lot of trouble getting my rice crop to dry this year due to the extremely wet conditions in September. But my troubles are nothing compared with what they are having to deal with on the Canadian prairies.

    With more wet and cold weather over the past week, the harvest delay is continuing for some Saskatchewan farmers, according to the province’s weekly crop report.
    The report said that 81 per cent of crops are combined — the same percentage as last week — compared to the usual average of 97 per cent for this time of year.

    Sask. harvest barely advances thanks to rain, snow
    Record rain, snow over much of southwest Saskatchewan
    The delay is being caused by wet conditions throughout the province, with snow in the northeast and northwest.

    Moose Jaw reported 15 millimetres of rain and Yorkton reported 35 millimetres over the past week.
    Temperatures also aren’t getting cold enough to freeze the moist ground to allow for combines to get back in the field.
    Other issues include crops being knocked over by rain and snow, leading to bleaching and sprouting and a loss of grade.
    The report is predicting that some crops will be left out over the winter.

    http://www.cbc.ca/news/canada/saskatchewan/harvest-stall-continues-saskatchewan-oct2016-1.3813663

    Bad weather aside, Saskatchewan looks set to produce its second biggest harvest ever this year. However, nobody is celebrating.

    You’d think that we’d be celebrating a bumper crop, especially with oil and potash prices being in the tank and the economy seemingly stuck in neutral. But you’d be wrong.

    First of all, it’s a time-honoured tradition in farm country not to celebrate bumper crops before they’re in the bin. Many things can happen between now and harvest completion and most are bad.

    Frost, rain, hail and disease are the proverbial “four horsemen of the apocalypse” for farmers at harvest time. You don’t go bragging about a bumper crop for fear of inviting any of these four harbingers of doom to descend upon on your farm and punish you for the sin of hubris.

    And while a large crop is generally a good thing, a large, low-grade crop isn’t. Unfortunately, the quality of some cereal, oilseed and pulse crops has been reduced by excess moisture, strong winds, lodging and disease.

    But there are other, perhaps more important, reasons why producers are reluctant to break out the champagne, or even put any bottles on ice, at the news we could be in for a bumper crop this year.

    For starters, the price of agricultural commodities is down across the board due to bumper crops in other parts of the world. BMO Capital Markets agricultural commodity price index dropped 10 per cent in July as “signs of abundance spanned virtually every corner of the sector. Crop prices took the biggest hit, with wheat falling to a 10-year low as the USDA (U.S. Department of Agriculture) raised its expectations for this year’s harvest and carry-over stocks.”

    Wheat prices at US$4.16 per bushel in mid-August are the lowest since 2006 when they averaged US$4.02, while canola at US$355 per tonne is the lowest since 2006 when it averaged US$257 per tonne.

    That’s bad news for Saskatchewan grains and oilseeds farmers. The hopes for a big, fat cheque to go along with the bumper crop are slowly fading as the price of wheat and canola sink to the lowest in a decade.

    Even more bad news. Canadian canola shipments of close to four million tonnes to China — representing 40 per cent of total shipments and valued at $2 billion in 2015 — could be reduced to a trickle if the People’s Republic goes ahead with tighter standards on the amount of foreign material in canola shipped to China.

    Canada has until Sept. 1 to resolve the dispute when the new standards take effect, potentially closing off the Chinese market to Canadian canola producers, who are expecting to harvest 17 million tonnes — 8.9 million tonnes of that in Saskatchewan — the third-largest crop ever.

    But as one Winnipeg based commodity grain trader remarked: “If China’s gone, we don’t need a monster canola crop.”

    http://leaderpost.com/opinion/columnists/johnstone-bumper-crop-forecast-a-mixed-blessing-for-saskatchewan-farmers

  28. Fast Eddy says:

    China’s coal production restrictions are a “stealth” bailout for miners and their creditors that may last until the end of the decade as the policies help boost prices, according to Goldman Sachs Group Inc.

    Without government intervention, China’s coal industry wouldn’t be able to service the nearly 3 trillion yuan ($444 billion) in debt from investing in new mines before demand started to drop, the banks analysts including Christian Lelong wrote in an Oct. 20 note. The twin goals of the mining restrictions have been to develop a “safe, solvent and efficient” industry and protect the country’s financial system from the risk of large-scale defaults, they wrote.

    http://www.bloomberg.com/news/articles/2016-10-21/goldman-sees-china-s-stealth-coal-bailout-lasting-until-2020

    Game plan: drive prices up to encourage more investment in energy plays — then – when prices are forced to collapse before the economy collapses — keep the energy plays alive with financial assistance (which keeps the financial system from imploding)

    We must be into the final chapter of the book now….

    • Tim Groves says:

      Same game plan. As with oil, so with coal. And as in the West, so in the East.
      Methinks the Elders have one ring to rule them all.

      Questions:
      1. How long can this be dragged out before we reach the point where the center cannot hold, etc., etc?
      2. Will the would come down the slope to collapse like going down a staircase, like going down a ski slope, like traveling in a runaway roller coaster, or like dropping off a cliff?

      • Crates says:

        Answer to question No. 1:

        It seems reasonable that China is the decisive factor (except previous event unexpected).
        Its economy should not grow at the pace they declare given its apparent slowdown in energy consumption.

        http://mazamascience.com/OilExport/output_es/Sources_BP_2016_consumption_mtoe_CN_MZM_NONE__.png

        The same can be observed in global consumption.

        http://mazamascience.com/OilExport/output_es/Sources_BP_2016_consumption_mtoe_MZM_WORLD_MZM_NONE__.png

        Somehow it seems as if there was a critical point (or loss of center of gravity)
        on a 2020 deadline.

        Answer to question No. 2:

        http://i.imgur.com/giGffzJ.mp4

        • Van Kent says:

          Crates,

          2020 is a bit optimistic for me. When I feed these into my calculator;
          a. The economy MUST grow
          b. Energy is the master resource, for growth, for everything, and no price works anymore.. http://www.zerohedge.com/news/2016-10-24/why-theres-no-economically-sustainable-price-oil-anymore
          c. Food and raw materials need more energy by the day. Without food and raw materials, no growth, no energy, no economy. And all the low hanging fruits have been picked already.. all foods and raw materials need more energy by production unit http://www.wri.org/blog/2013/12/global-food-challenge-explained-18-graphics

          2020 is reeeeally streching the string for me. Though every day now is a blessing, I would be comfortable with a timeframe of; Twilight Zone -Illusions and Magic tricks- Economics 2017. Dominoes chain reaction with every helicopter money trick in the book used 2018. Lights out, grid down SHTF everywhere early 2019.

          Going beyond 2020 just doesn’t add up for me. Food production needs more energy. Raw material productions needs more energy. Energy production needs more energy. And energy.. no price is working anymore..

          • xabier says:

            Having realised the gravity of our situation, I resolved to spend what might be a precious last summer contemplating- among other pleasures – Nature: delighting in its intricacy, the bees, butterflies, etc.

            In the whole summer, I saw about 4 bees, and hardly any more butterflies, despite having lots of lovely things to tempt them to my garden. Even the wasps were subdued and left fallen apples to rot uneaten, and I am left with a deeper than ever impression of the death of the natural world at our hands.

            If I’d been absorbed in the life of glowing screens I wouldn’t even have noticed.

            • Joebanana says:

              That is sad. I love nature and this summer I saw more bees than I ever have before in my garden. There must have been 50 of them one Sunday afternoon enjoying the buckwheat. I also found more snakes in my yard this year than ever before. 21 different snakes. Because of the lack of agriculture here I think our insects are doing much better.

            • Van Kent says:

              Honey production this year was about 25%, a quarter, of normal levels.. I lost half of the bees.. otherwise the harvests were about average

              For me the bleaching of the coral reefs, and subsequently reading about Ocean science, acidification and deoxygenation, those were the real bummers for me this summer

              I kinda knew my time was up. End of the industrial civilization and all that. But to realize human habitat is heading towards 0%. ELE. Not from McPherson, but from other scientists. That was kinda hard for me.

            • Tango Oscar says:

              Salmon catch was 10% of historical averages for Kodiak, Alaska this season. The community is devastated that with even some of the best wildlife conservation in the world, they have still been unable to keep the salmon at “sustainable” levels. The biosphere is in full-on collapse right now if you just take a closer look.

            • Tango Oscar says:

              That particular article claims pink salmon catch was 28% of normal for Kodiak, which is still catastrophic. I got the 10% number from my in-laws, a few of whom have fishing charter businesses in Kodiak. Maybe they were overestimating or it was for perhaps all species of salmon instead of just pink. Either way, very bad news from either an ecology or economy perspective. The biggest remaining carnivores on the planet won’t thrive for much longer if their food supply is shrinking.

          • Fast Eddy says:

            That’s the thing… no matter how big the number…. it is never enough…. Apple earns 18 billion dollars? Next year they need 20 billion ….

            China pours this much cement…

            http://blogs-images.forbes.com/niallmccarthy/files/2014/12/20141205_Concrete_FO.jpg

            Next year they need to pour even more — or some other nation needs to pour enough so that we break the record the following year…

            And the year after… and the year after …

            The flame’s intensity is about to reach it’s hottest point…. then there will be darkness… icy cold darkness…. nothing.

            If we make it to 2020 that would be an excellent result.

            • Crates says:

              FE:
              The comparative image of concrete consumption China-US is really amazing !!!
              However, I believe that in the US is much built with wood. I think it would have been better to compare Chinese consumption with consumption in Europe, where if massively built with concrete.

            • doomphd says:

              I wonder how much of that cement was poured for the Three Gorges Dam, completed in 2012? If a lot of it was for that project, a sorta one-off production, then the Chinese cement production quoted in 3 years is not quite as amazing, but still one heck of a lot.

            • This is a link to an article by Euan Mearns that calculates an EROEI of 147. http://euanmearns.com/the-energy-return-of-the-three-gorges-dam/

              It shows the following concrete amounts:

              Concrete = 27.2 million m^3 [1]
              Concrete = 65.2 million tonnes*

              I think that there was a huge amount of indirect concrete use as well. Millions of people were displaced, and moved to new concrete homes, complete with plumbing and electricity, all of which had to be built. Some of these condo towers are only partially occupied, because young people especially chose to move to the city, instead of staying in less urban areas with less chance of jobs. This is a photo I took of some of the walk-up high rise tower being built to house displaced people who had lived in the valley. The photo is not too clear, because it was misty in the valley. The broken sign is from small earthquakes that are a problem as a result of adding the dam.

              Buildings in Qutang China

            • Crates says:

              Certainly China’s growth in the last fifteen years has been really crazy. I wonder if a more moderate growth would have given us some more time?
              That’s hard to know because perhaps without the growth of China, the world economy would have already collapsed.
              This could be an interesting exercise in imagination: What would have happened if China had not entered the WTO?

            • Tango Oscar says:

              That source for the concrete ends at 2013 and I can’t find current statistical information for China’s concrete usage. With all the reports of ghost cities I find it hard to believe they’ve beaten that pace for concrete the last 3 years. I would love to get a good look at undoctored Chinese financial and economic data. U.S. energy data for example looks horrid!

          • Crates says:

            Van Kent, thanks for the links.

            My guess is that the pace of slowdown in energy consumption is a realization that the economy is clearly subject to diminishing returns (a terminal mode, this does not need to explain in OFW).
            Against diminishing returns, central banks can not do much.
            At current slowdown, more or less we can calculate that reach zero in 2020 approx. This very well might be the time of the inevitable global recession.
            Since the growth of the world economy needs growth of energy consumption, it seems that the curve is describing looks like the Minsky moment.

            https://upload.wikimedia.org/wikipedia/commons/thumb/c/cf/Stylized_Minsky_Cycle.PNG/300px-Stylized_Minsky_Cycle.PNG

            It’s a guess. Nothing more than that.

        • Kanghi says:

          That looks like a making of Ugo`s famous Seneca Cliff, in what a great roller coaster we are, just that we dont then have anymore energy for the new cliffs to rise..

    • A Real Black Person says:

      We must be into the final chapter of the book now…
      Rank-and-file Progressive Blogger Yves Smith re-posted a doomer article.
      This time there is lack of hopium from her about “Green energy”.
      http://www.nakedcapitalism.com/2016/10/ilargi-why-the-energy-crisis-is-coming-sooner-than-most-experts-forecast.html

      Her readers are another history. A lot of people there think efficiency can help the world deal with looming liquid fuel shortages.

      • Although the above is more or less overview and meandering article, some parts are more interesting than others, for instance the musings on “The energy cost of system replacement” ..

        Very true, for instance, take this one, at the moment the Russians are able to produce “only” (world’s record?) ~5 big nuclear reactor vessels (~1GWe scale ) per year, which from the viewpoint of their overall aging fleet (must be replaced/upgraded), and plans to reaching 2x nuclear capacity near term, plus some exports, makes it pretty tight fit. Not mentioning their world’s unique breeders program, currently at 0.8-1.2GWe scale, which is more capital and manuf demanding than classic pressurized water reactors. Potentially they can upgrade the whole manuf chain for even higher production numbers of reactors in new facilities, but those existing factories/foundries are quit giant too start with, but at least they have enough qualified staff to do it, should the resources be allocated for such purpose..

        On the other hand, the technology progresses, so .5GWe reactors of the past could be exchanged by 1.2GWe, life span for older reactor vessels of <40yrs is now ~60yrs, and their current top research indicates ~100yrs neutron bombardment stable hitech steel formulas availability.. In terms of other parts, steam generator vessels are good for ~40-50yrs, most of the smaller technical fluff ~25yrs.. I'm certainly not saying it's just plug and forget system for decades, but certainly better long term performance – serviceability than "renewables"..

        Uranium mines, now already most of the world's miners must dig deep thousands meters bellow surface for it, but there are some uranium strip mining sites remaining (mostly in Africa) as well. But for the Russian breeder reactors there is existing in situ fuel for hundreds/thousands years already, although even the most optimistic scenario can't count on having most of their nuclear fleet made of them before 2040-2050, only one new big operational now (second one approved), several more commenced before 2030 likely.

        As discussed elsewhere, there is a lot that can be run on electricity (and nuclear plant waste heat) in transportation local or regional replacing liquid fuels, also natgas can fill a void is some applications (river barges, cargo trains at non electrified routes, heavy machinery etc.).

        Question one, is it going to be attempted? A: Indeed some are already trying.
        Question two, is it going to be successful transition midterm/longterm? A: ??
        Question three, what are the practical effects from such transition attempted in progress? A: ???

        • I think electricity will go down at pretty much the same time as oil. Everything is tied together. Talking about electricity continuing on is just wishful thinking.

          • I hope you are not serious here, in fact it matters a great deal if a particular country has got solid base load electricity system in place or not. Empirical evidence plentiful in recent years (political-social and weather events), compare/contrast renewable crazies instability with “smart countries” with rock solid >20% nuclear penetration + natgas + coal ..

            • Fast Eddy says:

              ‘I hope you are not serious here’

              Wow. Hang that one from the rafters of DelusiSTAN!

              Have you not been reading the articles Gail posts?

            • Tango Oscar says:

              And how will repairs be conducted without gas to power the cherry pickers? What supply chain is going to bring you parts anyways? What about coal and natural gas powered burners, those would obviously be kaput right away, ditto with nuclear. So right off the bat most electricity is gone. Even if you had semi-usable forms of hydro, wind, solar or whatever else, the moment you can’t instantly replace a “clutch” part your system fails. We don’t even need to get into the fact that banks won’t be paying workers and that workers will likely be preoccupied playing the zombie apocalypse in the streets at roughly the same time.

          • Gail, I assumed your are well world traveled.

            But since you mostly don’t have it in NA, doesn’t mean the rest of the world is not into it.
            The effect of mass production of tech on affordability and electricity displacing liquid fuels potential is non disputable. For example, the ~350km/h fast trains tech has been scaled down in recent decade into decent inter city rail 230km/h tech, an affordable investment/upgrade of older stuff, which is taking over Europe and Asia.

            Specifically, one passenger consumes <5 kWh of electricity per 100km distance traveled. That's 10x less energy than similar air travel and also fraction of ICE vehicle operation.

            Sorry, that's why I said on other place here, the wake up into energy starved, infrastructure gutted and overall impoverished reality check won't be a pleasant event in the US/NA. It might increase chances of some faction of loonies taking over 2020-35 and nuking the world in revenge, since their false giga pride collapses on this realization of total full spectrum failure.

            • Sorry, electricity is part of our networked economy. Oil is very important in making repairs to the electric grid–for example, in powering helicopters needed to fix power lines that go down. The financial system is also terribly important, both for getting payments to the companies that sell electricity, and for paying employees. If we start getting breaks in either the financial system, or the electricity system, the whole thing goes down. It doesn’t matter how secure the electrical system appears to be, it is dependent on both the oil system and the financial system.

  29. I did an interview with Chris Martenson last week. It is now up on Peak Prosperity. He calls it “Why there is no economically sustainable price for oil any more.” https://www.peakprosperity.com/podcast/102796/gail-tverberg-why-theres-no-economically-sustainable-price-oil-anymore

  30. Fast Eddy says:

    The thing is…

    He knows this is being filmed… and does not care

    https://www.rt.com/usa/363802-dashcam-cop-kicking-suspect/

    Prepper Tip: when the marauders come to your farm gate demanding food … no need to call the cops… cuz they are already there.

    Of course there will be no working phones anyway….

  31. Yoshua says:

    The Fed pumped up the oil price to $100 to bring on line unconventional oil since conventional oil discoveries are declining to zero ?

    https://damnthematrix.files.wordpress.com/2016/09/ec609-discoveries.png

    They brought the unconventional oil on line a little bit ahead of the curve since it would not have been possible to do this is in a chaotic situation with collapsing economies and a financial meltdown ?

  32. Yoshua says:

    One Last Attempt At The E.T.P Model

    http://www.eia.gov/petroleum/gasdiesel/images/dieselpump.gif

    If the ERoEI at the wellhead is 10 : 1 and a gallon of conventional crude oil contains 140.000 BTU.
    Extraction = 14.000 BTU
    Refinery = 5.000 BTU
    Distribution = 5.000 BTU

    Total = 24.000 BTU
    EROI = 140.000 BTU / 24.000 BTU = EROI 5.8 : 1

    • Most of those BTUs are not oil, and are not US expenditures. They may be coal used to make steel in China, for example.

      • Yoshua says:

        I understand. Your point is that we convert other energy types to crude oil ?
        We use a cheaper energy source like coal to produce a more expensive energy souce like crude oil.

        • Exactly! It is all about leveraging. It wouldn’t matter if biofuels used 1 unit in for one unit out, if the unit out was a burnable liquid, and the unit in was coal or natural gas. In fact, ethanol uses quite a bit of electricity, typically made with coal or natural gas (or even hydroelectric or nuclear).

          • Yoshua says:

            So if oil is 1/3 of our primary energy sources, then it takes 24.000 BTU / 3 = 8.000 “Oil BTU” to produce a gallon of a refined oil product.

            With the energy price spread the oil industry will try to convert as many coal and gas BTU as possible to “Oil BTU” to make a profit on the spread. Perhaps this can to some degree explain the oil glut ?

            The scarcity and the following high price of oil leads in a “strange” way to an oil glut ? At least as long as there is an abundance of other BTU to convert to “Oil BTU”.

            It is hard to look into the complexity and see what goes into the machine and what comes out… at what quantities… and at what prices… from the different tubes.

            The machine should find an equilibrium… if it’s not manipulated… or if something hasn’t broken down.

    • Tim Groves says:

      The current retail price of gasoline in my part of Japan is currently about 120 yen per litre.
      At 3.8 litres to the US gallon and 96 yen to the US dollar, that’s $4.75 a gallon. And that’s dirt cheap. Japanese consumers were paying 50% more than that in yen terms and the dollar price reached an all time high of $2/litre or $7.60 a gallon in December of 2012.

      Of course, the current relatively low prices are not doing much more than keeping the economy on life support. What Abenomics really needs is for people the world over to go shopping for lots of wonderful high-quality Japanese products. So, minasan yoroshiku onegai shimasu!

    • Rising interest rates for the US would be a huge problem. Among other things, they would raise the level of the US dollar relative to other currencies, and lead to lower commodity prices. Higher interest rates would also cut of investment directly.

  33. adonis says:

    ksa was playing a big showing off game for the world the last 2 years but deep down they knew they were all washed up their oil was nearly gone once the oil price adjusts to a much lower price we shall see the emperor without his clothes

  34. adonis says:

    ksa is selling up cos theyre 90% depleted the golden goose that layed its golden eggs is just about done

  35. Yoshua says:

    Ali Al Naimi’s memoir shines light on Saudi oil policy

    http://www.thenational.ae/business/energy/ali-al-naimis-memoir-shines-light-on-saudi-oil-policy

    High price

    Mr Al Naimi, who for several years defended oil prices at around $100 per barrel as fair to consumers and producers, admits that was a mistake.

    “It was very high,” he writes. “That price unleashed a wave of investment around the world into what had previously been uneconomic oilfields,” including US shale, the Arctic and ultra deep water.

    “We are in a temporary state during which the world’s most important commodity is being repriced for the future,” he writes. “New supplies will find new demand at the right price.”

    Mr Al Naimi draws some parallels from the current situation to that of the early 1980s, when Saudi Arabia first agreed to increase or decrease output to balance the market.

    In May 1983, at an Opec meeting, Riyadh accepted for the first time the role of “swing producer”, something Mr Al Naimi says “would prove to be a momentous and, in many ways, unfortunate decision”.

    Decades later, he still believes that Saudi Arabia should not play the role of swing producer, despite the financial pain of lower prices today. “I will let history be the judge as to the success of our market-based policy,” he writes in the epilogue of the book. “This commodity, like all commodities, is inevitably cyclical.”

    • Fast Eddy says:

      “That price unleashed a wave of investment around the world into what had previously been uneconomic oilfields,”

      I believe that was the point of boosting oil to $100…. now we get run BAU off of oil that by rights… should not have been pumped out of the ground….

      • Yoshua says:

        What ever they did, it seems to have worked. Now the Saudis are begging for money. It should be the other way around ? Who knows, the Saudis are perhaps still in the game ? The next part of this elaborate whatever is the magnificent Aramco IPO ?

  36. richardA says:

    A country without banks, circa 1970
    http://www.independent.ie/business/how-sixmonth-bank-strike-rocked-the-nation-26130249.html
    “To the surprise of many, imports were not severely hampered by the dispute. As Fogarty points out: “The services of the clearing banks proved by no means as indispensable as would have been expected before the dispute, and many of the difficulties experienced was due to being taken by surprise.””

    • Fast Eddy says:

      One small country… that would have turned into a banana republic if this had continued…

      Take down the global financial system and trade stops — that valve that is needed to keep hydro plant operating is not available because it is made in Germany….. so off goes the electricity — forever…

      This really is not a very difficult concept to understand.

      The financial system is the spinal cord of the global economy…. the operating system….

      Rip Windows out of your computer and see what happens.

      • smite says:

        It runs linux.

      • Joebanana says:

        Fast-
        I actually work in a coal fired power plant and last month we had had an induction fan bearing fail. It was a leak in the cooling water compartment on the bearing that passed water into the oil. We were going to be at half load for a few weeks due to the only place a new bearing could be had was Germany. A good millwright was able to fix it but I just wanted to point out how on the mark you are. This is just a small example but people have no idea of how dependent our electrical grid is on just in time delivery. There is no “Canadian” power system . The same week another unit was almost down for six months due to an operator not opening a drain valve on the reheater after a hydrostatic test.

        • This is the kind of problem that increased complexity leads to.

          Your problems could be worse. Imagine adding lots and lots of wind and solar to the grid, and trying to keep it balanced by ramping up and down plants that weren’t meant to be ramped up and down very often. China, for example, has lots of coal, which is terrible for balancing wind and solar.

          • Joebanana says:

            Hi Gail-
            Thank you for your work. We actually do have lots of wind here and it is challenging.
            Here is a link you might find interesting:
            http://www.nspower.ca/en/home/about-us/todayspower.aspx#

            • Thanks!

              Somehow I see some irony in the statement, “The Maritime Link will deliver clean, renewable and reliable electricity from Newfoundland and Labrador to Nova Scotia and reduce the use of fossil fuels and exposure to unpredictable oil and solid fuel prices.” Unpredictable, in fact, seems to mean low. Reliable varies a whole lot depending on the source of renewable power.

        • smite says:

          Talk about contradicting oneself?

          The system is extremely sensitive and yet a millwright can fix a bearing problem.
          It is surely impossible with some proper CNC machinery (there are probably 1000’s of them in your country) to mill out another holder and to fit another bearing in there?

          It just goes against the instacollapse/rupture dogma here, doesn’t it?

      • smite says:

        “The financial system is the spinal cord of the global economy…. the operating system….”

        https://66.media.tumblr.com/3832c060be9d2827cd9f4aa22ac4d2a6/tumblr_o0wgbltxnX1u77v55o1_500.gif

  37. DJ says:

    Smite
    “Technology is continuously becoming exponentially more capital and energy intensive. However, here’s the twist, it’s drastically less people intensive. ”

    How do you measure that?

    If you mean more and more become generally unemployble I agree.

    Other than that it feels like most everyone who is working it working in finance or IT.

    And would not technology becoming more energy intensive pose a problem when energy is becoming scarcer?

    • smite says:

      “And would not technology becoming more energy intensive pose a problem when energy is becoming scarcer?”

      Yes indeed. If energy would be for free the technology would advance even faster.

      “How do you measure that?”

      http://protecttheharvest.com/wp-content/uploads/2016/01/numberOfFarmers-1024×777.jpg

      • DJ says:

        Give me that on a logaritmic scale or I will claim progress has leveled off. (And still a decent part of every paycheck goes to food anyway)

        • smite says:

          You got the wrong perspective. Every person less is a drastic reduction in an already small work force. As fewer people work in a certain field, each headcount reduction will have a compounding effect.

          Besides, once it is automated and computerized close to 100% it will continue to be upgraded for greater efficiency of converting natgas fertilizer to food/energy.

          • DJ says:

            Because energy is priced at extraction cost and work is heavily taxed it has been rational to replace several workers with someone who creates the automation. Even though this someone has to pay the others living through taxes.

            I miss both how we will get even more cheap energy and how the last 1-25% will accept termination of democracy and the other 75+%.

            • smite says:

              Why miss it?
              Were you looking forward to an even more densely populated planet?

              Technology will eventually replace workers anyway.
              Taxed or not. It only speeds up the process.

            • DJ says:

              Strangely enough the cleaning function at my work is less automated than in the 80s.

              But maybe the cleaning lady, receptionist and coffee dude are the last to go? Before the plumber. And everyones daycare personell.

            • smite says:

              “Strangely enough the cleaning function at my work is less automated than in the 80s.”

              Government jobs programs. Tax incentives and other Utopian social democrat “full employment” dreams.

              I’ll bet it will end up much more costly for the middle class IT and other productive workers once all the health problems of mundane repetitive physical labor surfaces. Than to automate the sh1t out of it and decommission the halfwit doing the labor.

            • DJ says:

              “we” have made a democratic decision everyone should have a certain living standard. After that decision everything is only sublevel optimization deciding if less competitive workers should be automated away or kept in the workforce.

              Unless you find a way to end income redistribution the most logic way forward is that the gap between minimum cost of living and post-tax middle class IT productive worker wage shrinks as energy costs increases.

            • smite says:

              “Unless you find a way to end income redistribution the most logic way forward is that the gap between minimum cost of living and post-tax middle class IT productive worker wage shrinks as energy costs increases.”

              It will be a long and grueling march towards social democrat dystopia. Will you stick around and enjoy it to the fullest?

              My solution is to take of the silk gloves and recommission the old classic Swedish “Uppsala” (SIFR) rac1sm doctrine and perhaps augment it with this proven piece of 40’s technology:

              http://www.richardcyoung.com/wp-content/uploads/2015/10/auschwits-birkenau-300×225.gif

            • DJ says:

              Name one non-failed state where the bottom-spongers does not get food, housing, basic education and health care.

              When the producers share has shrunk to the same size as the bottom-spongers then it is over for both producers and top and bottom spongers.

            • DJ says:

              It seems like you are mostly dreaming.

              I agree a mild eugenics and population control program implemented globally 1950 would have put us in a whole other situation now. But that path was not taken.

            • DJ says:

              Slaves are not spongers.

              I suppose if you’re rational you would just kill your slaves if they didn’t produce in excess of requirements.

              I would not be a good plantation owner.

            • smite says:

              “I would not be a good plantation owner.”

              Oh yes you would.

          • It is in the US that we use natural gas for fertilizer. China uses coal to produce nitrogen fertilizer. It also could be made with using the waste electricity from wind turbines, when it is not needed for the grid.

      • Tim Groves says:

        Can we all agree that the % of farm jobs vs.total jobs will start heading upwards soon?

    • smite says:

      Since you apparently got some time to spare. Please watch “Humans Need Not Apply”.
      Then, I’ll look forward for your future comments and criticisms.