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$ (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$.
Figure 3. World GDP growth compared to world energy consumption growth for selected time periods since 1820. World real GDP trends for 1975 to present are based on USDA real GDP data in 2010$ 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.
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.
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.
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.
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. These choices lead to recession.
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.
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.
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 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.
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/
Only ‘pretty sure’….
I won’t even read it and I yet I am willing to bet my life that this is BS.
IPhone = about €600
Electricity bill = about €2000 per year
So by delaying purchase of iPhone by a few months I could save €2000 each year?
If you take up residency in DelusiTAN then …. yes… that would be correct.
I saw a home for sale somewhere – if anyone is interested just google : 356 Hopium Way, Province of Koombaya, Delusistan.
Does this place have GPS coordinates?
Classified… one of the DelusiSTANIS on FW will need to introduce you
http://i66.tinypic.com/2gtz1pk.jpg
I know DelusiStan is an alternative reality situated outside Florida, Massachusetts.
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..
“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?
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.
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…
LOL!
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 ?.”
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….
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 …
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.
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.”
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
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.
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….
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.
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…
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).”
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
If the masses were given the real story — instead of the hope stories powered by solar panels and Elon Musk….
Global despair would kick in — and collapse would begin immediately
It is good that top level management continue to buy into the green shoots expectations… because when they stop believing … watch out below….
Well, it’s all in the delivery. It’s a tough job, but somebody’s gotta do it.
Somebody’s gotta do it.. ok.. I vote Norman
i just outvoted me
Dang! With your orgy explanation.. that would have been some mighty delivery indeed
where’s winston when you need to break bad news?
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
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..
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
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”.
Isnt this the exception? I looked up about ten cathedrals and all except Prague was built in a century or two.
Yes, many were finished, but some, also smaller ones, were finished only in the 19th century.
Prague was one of the places that was not bombed during WW2.
“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. It is 144.5 meters (474 ft) long, 86.5 m (284 ft) wide and its towers are approximately 157 m (515 ft) tall. The cathedral is the largest Gothic church in Northern Europe.”
http://3.bp.blogspot.com/-OHvkeMqDyk8/U5pYjjJXe1I/AAAAAAAAJXI/OF1ld96ykXk/s1600/The+Cologne+Cathedral+stands+tall+amidst+the+ruins+of+the+city+after+allied+bombings,+1944+(2).jpg
Source: http://rarehistoricalphotos.com/cologne-cathedra-allied-bombings-1944/
The largest gothic cathedral is in Seville, Spain:
“After its completion in the early 16th century, the Seville Cathedral supplanted Hagia Sophia as the largest cathedral in the world, a title the Byzantine church had held for nearly a thousand years. The cathedral is also the burial site of Christopher Columbus.[3] ”
Source: https://en.wikipedia.org/wiki/Seville_Cathedral
“The crane on the southern tower was throughout centuries the symbol for Cologne.”
Source: http://www.koelner-dom.de/index.php?id=domkran&L=1
http://3.bp.blogspot.com/-c0gTytB68WA/UbsABLoPEDI/AAAAAAAAF3I/8_u0wZqCsZw/s1600/777px-Hasak_-_Der_Dom_zu_K%C3%B6ln_-_Bild_17_1824.jpg
Source: http://www.nevworldwonders.com/2013/08/preview-cologne-cathedral.html
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.
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.
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!
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.
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.
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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.
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.
This diagram is spot on …. Elite Bankers + El-DERS….
http://i0.wp.com/fmshooter.com/wp-content/uploads/2016/10/march-of-tyranny.jpg
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.
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
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..
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….
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.
Energy Orgy…. ++++++++++++++++++++++++++
Brutal hangover ahead….
my favourite kind of orgy
but my eroys never last the night
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.
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.”
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.
When you see your neighbour squatting in his backyard defecating ….. take that as a sign that collapse is on.
Hm, sadly the very exact scenes you envisioned are just “right now!” going on many public places/streets across Europe, but only if you allow for little expansion of the concept of neighbor into a refugee.. I guess it was in France, recently a whole little boulevard turned into a public defecation arena and living on the street circus..
which is why I’m glad I’m not living next door to Eddy
A whiff … of what’s to come….
When there is defecation, there is still something to eat.
No doubt this will be short-lived phenomenon… that will persist while the neighbours clean out the crisps and doritos from the pantry…. and heat the soggy thawed frozen pizzas over fires fueled by burning sofa cushions…
Or that you are visiting India.
+++++++++++++ 🙂
https://assets.bwbx.io/images/users/iqjWHBFdfxIU/ivDmW5VLoj_k/v2/-1x-1.png
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..
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
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.
I agree.
That is the “peak oil”.
But many have not heard. And continue studying graphs and oil reserves in search of peak ¿Foolish?
I agree. Peak oilers have had their eyes on only peripherally related dynamics.
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?
There are paragraphs about the pick up phase, but the article is about the middle class shrinking.
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.
The young don’t have good paying jobs. That is ultimately what is behind them “not wanting ‘carz.'”
I got a relatively good paying job and savings. I want a 2017 Ford Mustang.
Will I buy one? Nopes; it isn’t worth the money.
http://www.sportcardesign.xyz/wp-content/uploads/2016/07/2017-ford-mustang-gt500-price-2017-ford-mustang-gt500.jpg
Fast in a straight line… don’t corner so well… if you do decide to piss away what is soon to be toilet paper (and rather bad toilet paper at that)… I’d recommend supporting the German economy.
Everyone wants a ‘Ferrari’ or even a Toyota — demand is very high…. but….
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.
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.
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
“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
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.
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.
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
Without cheap forms of concentrated amounts of energy, machines of any sort won’t last very long.
I’m not sure how you’ve come to the conclusion that machines are going to take over.
Maybe working with state of the art technology doesn’t actually give you any insight as to where they will go in the future. Too many things that people who think like you have said have never come to pass.
As technological evolution proceeds, companies are looking for competitive advantages. There is no reason for a technological cell or lineage to maintain an inefficient organic RNA when a more efficient and resilient robotic one can be employed. Those companies with the robotic RNA win, and even better, those companies with a robotic CEO can interface at electronic speed with super-computers to play a game of chess with the other companies. You’re not a doomer if you anticipate collapse for lack of energy, but rather an optimist.
Blame it on Hollywood… and Elon Musk.
http://aceofgeeks.net/wp/wp-content/uploads/2015/06/Terminator-3-1.jpg
Said the guy probably posting from a relatively new computer, most likely communicating over some advanced 4G cellular network using Internet protocols floating on top of ethernet based cross continental fiber optic backbones.
Geez, I wonder where this show is heading.. Mmmm, yeah..
https://s-media-cache-ak0.pinimg.com/736x/9e/e1/f4/9ee1f4862410742cbc8c38f72d59cc24.jpg
You should print out that image and have someone tack into your gravestone post BAU
“You’re not a doomer if you anticipate collapse for lack of energy, but rather an optimist.”
Brilliantly put. I agree 100%
http://4.bp.blogspot.com/–BYUek-cGA8/VeyNLF9eP6I/AAAAAAAABKg/K1kXT8QeQY0/s1600/11935088_502327576592013_508127552554708324_n.jpg
“You should print out that image and have someone tack into your gravestone post BAU”
Oh, you are so mean. I feel sad now… Actually, No….
Wait… There is something else.. I feel… I feel the lulz…
http://vignette2.wikia.nocookie.net/villains/images/d/d6/DSattack.jpg
The pessimist says things couldn’t possibly get worse.
The optimist is sure they can.
A Russian proverb.
LOL!
I probably mean to demean your views (as I usually do) with the following question but…
Opposition to technology and the march towards a dehumanised industrialism have been central to the motivations behind many violent ‘revolutionary’ periods over the past 200 or so years. Given that propensity for ‘Luddite protest’ have you considered that societal upheaval along those lines may complicate the eventual victory of the ‘technosphere’ ? (to borrow Orlov’s terminology)
“have you considered that societal upheaval along those lines may complicate the eventual victory of the ‘technosphere’ ? (to borrow Orlov’s terminology)”
Have you considered the implications of advanced weaponry?
Social upheaval.. Bwahahahaha.. Go ahead, try it…. I dare you….
http://stream1.gifsoup.com/view4/2966826/a10-thunderbolt-o.gif
I always assumed accounting would be one of the last to go. Of course, there are routine processes that can be automated or even outsourced.
I had heard that some routine actuarial functions have been transferred to India, because labor costs are so low. Financial services is no longer the growing area it once was.
Some actuaries (planning for the future) have called me, and asked ask whether “oil limits” might be a money-making avenue for employment of actuaries in the future. I have told them, “No.”
‘Some actuaries (planning for the future) have called me, and asked ask whether “oil limits” might be a money-making avenue for employment of actuaries in the future’
http://cliparts.co/cliparts/8c6/oeL/8c6oeLzoi.png
LOL! They obviously don’t quite understand the problem.
http://mackenzieinstitute.com/the-new-dark-ages-2/
Many possible comments, I have not the required time right now
Leading to this:
https://www.scribd.com/doc/15974664/Huntington-The-Clash-of-Civilizations-1996-Synopsis
If you’re not crazy or despairing already, this staggering wealth of knowledge could take you there.
Wow. What a nut. There will not be a nuclear war. MAD still holds. http://www.ploughshares.org/world-nuclear-stockpile-report
Don’t know what MAD stands for. You’re right there will not be flying nukes. emptaskforce suggested Obama two reasons for emp protection, an attack and a solar flare. Trump mentioned the attack in his campaign, so Obama totally dismissed it and only took space weather as a valid reason; nobody does anything without aiming to some benefit…
MAD = Mutual Assured Destruction.
Ok. Not what we’d usually call a benefit
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 🙂
“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.
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…
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.
I think the comment was that we needed a new source of cheap energy — that has nothing to do with coming to our senses.
I think FE has never projected to try soylent’s taste… or running on the hunger games
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.
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
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.
And you base this prediction on what exactly?
Maybe with billions of people dying of starvation from 2020-2030. But, I wouldn’t consider that “making it”.
What strains of marijuana are you using?
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/
Sad story continues!
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/)
If 20% of wages goes to food, couldn’t it be said 20% are involved with food production? Maybe not driving the tractor, but maybe cleaning the floor in the supermarket.
It was just the example of bread, as the product from flour: the energy in making it, transporting it, all that ovens and lines, workforce etc. When the wheat was grown locally, the costs were easily calculated.
Today, we have complicated production and logistics chains, as the production of bread was delocalized.
The over processed food products are also less good for our bodies. One book I read said the processing partially “pre-digests” the food, in some sense. This makes the food harder for our body to handle without spikes in blood sugar and other problems. I am sure the processing also strips out some nutrients, and adds things that are not really good for us in the long run.
Yes, the processing breaks down (or even removes) the fiber – removes the outer shell of grains (e.g. brown vs. white rice) and the like. Therefore B-Vitamins are missing (in the outer layers of the rice or grains) or the starch (complex carbohydrates) and/or natural sugars (simple carbohydrates in fruit) will be processed faster by our digestive system – causing blood sugar spikes (not so good).
So it is best to eat/cook unprocessed (wholesome) food (vegetables, fruits, grains) with no added simple (refined) sugars, oil and additives.
I use to soup up my fruit and veggie smoothies with some refined fructose and sucrose before I hit the pedals. Works wonders. Sugar for the athlete is like kerosene for a jet engine.
Hey old dudes; time to spin the cranks instead of spouting instacollapsterism!
https://crankpunk.files.wordpress.com/2013/03/pb-120217-cyclist-jb-01-photoblog900.jpg
Train low compete high is nothing for you?
My gas tank is always full of sugars.
Burns with a clean blue flame.
https://s-media-cache-ak0.pinimg.com/564x/eb/d2/2a/ebd22ab2fed0013b1ff95337bdb602eb.jpg
If you work out immediatly after consumption and are NOT sugar-sensitive (https://www.goodreads.com/book/show/581895.Potatoes_Not_Prozac) than it can work for you – and me 😉
I doubt it is healthy five times a week.
Question is if practice is more effective during a suger high. If performance is only temporary elevated then it is better to save until competition, time trial or longer workouts.
After all you want good fat burning to keep you functioning between servings of soylent green.
My insulin sensitivity have improved by cycling and going mostly with a vegan diet. I rarely get any big sugar spikes or crashes/bonks anymore. I mostly notice it from the power (meter). I can sustain a higher power output for a longer time. It also feels more fun.
http://fitwerx.com/wp-content/uploads/2012/10/Stages-Cycling-Dura-Ace.jpg
@Smite
Sugar spikes go down when you reduce fat intake to <>30% fat (US and Europa average around 36-40% of total calories) then the fat basically speaking blocks the ATP from getting too the cells (“no power” in time) – blood sugar spikes (since the converted ATP can’t get to its destination) – insulin release, blood sugar goes yo-yo, etc. pp.
Yes, with fully sugared up muscle cells (by resting for a couple of days), then cycling and getting to max pulse feels so effortless it becomes a surprise.
And, it seems there are a lot of sweet and sugary (nordic) talent attracted to downhill skiing and mountainbiking. That, too, doesn’t hurt motivation either. 🙂
https://s-media-cache-ak0.pinimg.com/736x/37/03/3a/37033a43a5ac298ee8529148e2f7666c.jpg
Mmm, yeah, potatoes and sweet potatoes. Best carbs ever invented by nature. 🙂
Now that I think about it: Time for dinner.
http://media.mercola.com/assets/images/food-facts/sweet-potatoes-fb.jpg
Potatoes? I thought you were talking about pepsi.
Pepsi = sugar + chemicals + water; not much nutrients. But sometimes we all enjoy living in america and it is tasty.
https://www.colourbox.com/preview/16729791-young-cyclist-drinking-pepsi-before-start-of-cycling.jpg
@Smite
Had 750g (600 cal) Potatoes some minutes ago. And yeas… Women can dissipate more heat through increased skin surface area 😉
Two of us burning clean carbs, lovely, isn’t it? 🙂
https://upload.wikimedia.org/wikipedia/commons/0/01/Airstrikes_in_Syria_140923-F-UL677-654.jpg
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.
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.
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?
The speed of the motion is in the eye of the beholder. Sometimes, when under stress, things appear to slow way down.
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..
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.
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
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
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.
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).
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.
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
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.
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
… or with another leader.
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…
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.
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/
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
“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?
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.
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.
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.
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
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.
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
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…
Yes Eddy, but your E!ders also have an ivy league education..
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
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.
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).
“Others could transition to comparable lives albeit with greatly reduced waste (bicycles, telecommuting, autonomous carpooling EVs and e-bikes).”
Spoken like a true humanis…. Sorry, I ment, hypocrite. Let me know about how you will change before you propose anything for the rest of us.
In the mean time. Let there be rain.
https://pbs.twimg.com/media/BwY6RvTIUAE2k4k.jpg
http://i.imgur.com/yj7tgkv.gif
If you say so…. heheheheh……
https://m.youtube.com/watch?v=2hzRnwLTMfM
++++++++++++++
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….
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!
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
Sounds like it could be a bit of climate change mixed with deflating commodity prices. I read an article the other day that said food prices in America, and other places, have been declining for like 7 or 8 months in a row now. We’re in double trouble here if both food and energy producers cannot make a profit out of their traditional business model.
Number of smart phones sold is no longer growing either. Apple reported its first quarterly fall in revenue for a long time.
A saturated market. Everybody’s got a smartphone, with and without internet connectivity, these days.
http://sites.psu.edu/siowfa15/wp-content/uploads/sites/29639/2015/11/graph-mobile-phone-subscribers-world-un.jpg
Ditto with Apple watches although they are losing considerable market space to Garmin.
Garmin seem to be successfully going for that techie/sporty segment with purchasing power. The type of gals and guys who knows that the bragging rights is in your bank account and with your Strava KOM’s.
The Apple watch, geez, what an useless expensive piece of bling-bling gimmicky trinket it is. The proper accessory for any a self entitled little precious snowflake.
http://starecat.com/content/wp-content/uploads/10k-apple-watch-is-the-most-technologically-advanced-way-to-let-strangers-know-whos-bad-with-money.jpg
I’ve always hated Apple. It’s going to be fun to watch their earnings start to go down the crapper here in the next couple of quarters.
I’ve always hated Apple Groupies….
These are the people who have derided Microsoft for being a ruthless corporation …
Then they buy endless gadgets from another ruthless corporation selling over-priced gear to these suckers — in fact they will not touch anything that is not Apple…
They worshiped Steve Jobs as some sort of I dunno what…. saviour? When the only difference between him and Bill Gates is that he is dead.
The iPhone and Macs are a pretty decent piece of kit.
I believe I saw revs from China down 17%….
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….
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?
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
Sorry.
http://i.imgur.com/giGffzJ.mp4
Damn, go a mess I’m doing !!! 🙂
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..
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.
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.
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.
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.
http://www.thefishsite.com/fishnews/28236/alaska-fish-factor-pressure-for-government-to-declare-disaster-for-regions-hurt-by-low-salmon-catch/
Disaster….
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.
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.
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.
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.
http://www.china-embassy.org/eng/zt/sxgc/t36512.htm Mixing and pouring 27.15 million cubic meters of cement
https://www.wired.com/2014/06/how-much-cement-has-china-used/
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.
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?
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!
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.
I came to the same conclusion in my article https://ourfiniteworld.com/2016/10/11/why-energy-prices-are-ultimately-headed-lower-what-the-imf-missed/
Of course, I only speculates with a maximum specific date based on their analysis and observing the rate of decline of global energy consumption 🙂
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..
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 ..
‘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?
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.
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
Photo of the day
Fights over supplies in devastating aftermath of hurricane in Haiti
https://cdn.rt.com/files/2016.10/article/5809f2a2c36188b95e8b45ae.jpg
https://cdn.rt.com/files/2016.10/original/5809f2aec361885d278b45f2.jpg
https://cdn.rt.com/files/2016.10/original/5809f2aec361885d278b45f0.jpg
More photos: https://www.rt.com/in-vision/363661-scuffles-haiti-hurricane-matthew/
Bring them all to America!
That’s what you guys believe, right?
No.
No need…. we’ll be seeing scenes like in our backyards without having to import them….
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….
Yep, they have learned the tools of the trade, so to speak. 😉
“It’s not the first time that Venezuelan police have been caught in the act. In July, bystanders in the eastern city of Cumana captured this video of policemen whisking goods into their patrol car as people looted a warehouse.”
http://fusion.net/story/358308/cops-join-the-looting-in-venezuela-as-food-shortages-worsen/
Peak Oil took place in 1979. 🙂
http://static1.businessinsider.com/image/4df61aa64bd7c8512a700000-1200/why-is-the-paradigm-shifting-because-demand-is-now-growing-far-faster-than-supply-the-worlds-oil-production-has-barely-increased-since-the-1970s-while-oil-usage-has-exploded.jpg
Thanks, Yoshua, for the recap on what we all recognize here on FW. Suppose we can “debate” the details until the SHTF. Of course, our self proclaimed moderator, Fast Eddy, will ensure the integrity of the posts.
Yep, he is well qualified…just watch
https://m.youtube.com/watch?v=tcGQpjCztgA
Exactly! And any deviation into Koombaya territory will be met with a shovel blow:
That is the extent of you contribution,.
PS. If I were you, I wouldn’t boast about it.
Some might feel that the neighbourhood cop is a useful guy to have around.
PS – do you think I give a rat’s a.ss what you think?
The rat’s a.ss, which has long been much undervalued, looks set to become a much sought-after delicacy. Within a few months after the end of BAU, people will be sticking forks in them and turning them over.
I hear rat meat tastes like … rat meat….
Tim, +++++++++++++
Fortunately I was not aware of any of this at the time…. it would have been too early to start on a bucket list…. and I had not the means to do so anyway.
Imagine living the bulk of one’s life with the sword of Damocles over one’s neck…. yikes!
Thanks! This is a battle we have been fighting for a long, long time. And governments and publishers have been trying to cover up the problem since then.
Any idea where this chart originally came from (more specific than “business insider”?
Link to the image : https://www.bing.com/images/search?q=oil+discoveries+lowest+since&view=detailv2&&id=117C4350463DAA7A6CC741FED4271D6E6F966458&selectedIndex=60&ccid=qeHuVfxw&simid=608022698643361079&thid=OIP.Ma9e1ee55fc702fc6fd135acdc49d465eo0&ajaxhist=0
Thanks! I was able to use that to find the Business Insider Article.
http://www.businessinsider.com/were-headed-for-a-disaster-of-biblical-proportions-2012-11?op=1/#-the-past-200-years-the-world-population-has-exploded-just-as-malthus-predicted-what-malthus-did-not-foresee-was-the-discovery-of-oil-and-other-natural-resources-which-have-temporarily-supported-this-population-explosion-those-resources-are-now-getting-used-up-1
It is supposedly Jeremy Grantham’s graph.
It would seem your supposition is correct Gail – the graph appears as “Exhibit 5” here: http://www.theoildrum.com/node/7853
Many thanks for all your fine analysis of our predicament – and for hosting the comments.
Many thanks too to the “scourges of DelusiSTAN” for their contributions!
Thanks! I see that Nate Hagens put that post up, not me. If I had put it up, I likely would have remembered the graph. It is a good one!
I refer everyone to Exhibit A — Jeremy Grantham’s introduction to DelusiSTAN 101.
If I am right, we are now entering a period in which, like it or not, we must finally follow President Carter’s advice to develop a thoughtful energy policy and give up our carefree and careless ways with resources. The quicker we do this, the lower the cost will be. Any improvement at all in lifestyle for our grandchildren will take much more thoughtful behavior from political leaders and more restraint from everyone. Rapid growth is not ours by divine right; it is not even mathematically possible over a sustained period. Our goal should be to get everyone out of abject poverty, even if it necessitates some income redistribution. Because we have way overstepped sustainable levels, the greatest challenge will be in redesigning lifestyles to emphasize quality of life while quantitatively reducing our demand levels.
“The era of procrastination, of half-measures, of soothing and baffling expedients, of delays is coming to its close. In its place we are entering a period of consequences.”–Winston Churchill
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 ?
Great chart…. and I was concerned when I initially looked at it….
Fortunately we have enough shale oil to last another 100 years… and by then we will no longer need oil because we will have EVs in every garage and solar panels and wind mills providing 100% of our energy …
And within a few decades there will always be the option of moving to the colonies on Mars or any of the other planets that Elon Musk is readying for us.
The future is so bright…. I need to wear … welding goggles?
https://images-na.ssl-images-amazon.com/images/I/41zKBDDjG2L.jpg
https://www.youtube.com/watch?v=PRdcZSuCpNo
We all upload.
The ones in the ivory tower have everything under control.
All commodity prices were low at the same time in 2008- 2009. The Fed needed to pump up everything at once. Low discoveries are a recent occurrence, related to low prices again.
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.
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).
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.
The equilibrium produces too low prices, because wages for the 99% are too low. The whole system collapses.
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!
http://www.telegraph.co.uk/business/2016/10/19/fed-risks-repeating-lehman-blunder-as-us-recession-storm-gathers/
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.
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
ksa is selling up cos theyre 90% depleted the golden goose that layed its golden eggs is just about done
Council on Foreign Relations: Saudi Arabia’s Break-Even on Oil is Approaching $120 per barrel
http://www.cfr.org/oil/fiscal-breakeven-oil-prices-uses-abuses-opportunities-improvement/p37275?cid=ex-cgs-oil_breakeven_discussion-levi_use-113015
http://i.cfr.org/content/Breakeven_figure_Saudi_Arabia.jpg
To get that down to the 80 bucks or so they are now reporting sounds hard to believe… unless they cut down the budget for these sorts of activities…
WikiLeaks cables: Saudi princes throw parties boasting drink, drugs and sex
Royals flout puritanical laws to throw parties for young elite while religious police are forced to turn a blind eye
https://www.theguardian.com/world/2010/dec/07/wikileaks-cables-saudi-princes-parties
Why do we use the price needed to fund extraction plus welfare for 30 million useless eaters as the price of oil from KSA? Forty dollars per barrel would be enough to make a profit on extraction with zero spent on welfare. I guess the true cost of the oil is extraction cost plus mercenaries to keep the people away from the oil infrastructure. Any conjecture of the cost of keeping the oil fields, pipelines, refineries, ship loading terminals free of pests?
Look, they got some fairly hot and competent European jets “just in case”:
http://media.defenceindustrydaily.com/images/AIR_Eurofighter_Saudi_Delivery_lg.jpg
And some U.S. heavy armor:
http://www.armyrecognition.com/images/stories/middle_east/saudi_arabia/heavy_armoured/m1a2s/pictures/M1A2S_Abrams_main_battle_tank_Saudi_Arabia_army_003.jpg
Could be some European heavy armor as well:
https://assets.bwbx.io/images/users/iqjWHBFdfxIU/i0ara4aGyBZY/v1/-1x-1.jpg
Plenty of quite expensive toys. It will be “fun” to watch the eaters revolt.
http://67.media.tumblr.com/fad5dea6521a4f6090daeb8d21314d63/tumblr_o6ni32KWDK1s2wio8o1_1280.gif
When things get real bad the internet will go down and we won’t get to watch much of anything after that.
Sad isn’t it. 🙁
https://c1.staticflickr.com/1/171/463480276_940476c723.jpg
Must know he’s going into the pot shortly.
That’s a real kick in the ass…. we’ve been waiting for the Big Show and when it arrives we’ll probably get a very short period of televised panic…. then it will all go black…
Our world view will then be what goes on outside our front door…
Honestly it looks like it’s going down right now if you’re paying close attention to the U.S. Presidential election. It’s honestly more drama than House of Cards on Netflix.
The truth is likely not far from what is portrayed in House of Cards…
I pulled down the historical fiction ‘Vikings’… at one point there is a war between factions within the kingdom … over land (mention is made of the minerals on that ‘special’ land) …
After decimating each other cooler heads prevail and it is agreed that they will stop fighting each other — and instead join together — and head off to pillage England….
There is a message there — when we run out of places to pillage – we will be at each others throats….
And I think part of that is occurring right now on the global stage. America has never had so many countries, especially with nuclear weapons, making threats and just doing whatever they want to do. Russia, China, Iran, North Korea, and likely several others would love for nothing more than to watch America fall on her face. Moreover, several of those countries already appear allied with one another in regards to confronting American aggression, or as we like to call it spreading freedom and democracy.
I guess it’s because those 5,000 princes want to keep partying, and their heads!
If there isn’t enough to go around, those at the top seem to get the same amount; it is those at the bottom of the hierarchy that get cut out.
twas ever thus
Yes but those at the bottom have never has so far to fall before. Going from grocery stores, medical care, cars and climate controlled homes to sticks and stones is a pretty big drop historically speaking.
i agree completely
my point was that while the scale is different now–the problem is the same as it always has been—-horrifically magnified
Exactly: descent down a ladder from which all the rungs have been chopped away.
Good analogy!
Agreed – nicely done!
Xabier:
I have a small agricultural production in the Sierra Norte de Guadalajara. A while ago I asked a countryman if there was any mule in the region. He answered a resounding no. I told him would happen if one day we could not make use of the tractors. And he told me that that could not happen. We have definitely broken the rungs of the ladder climb.
If you think about it, it seems that it was a prerequisite to climb.
“Exactly: descent down a ladder from which all the rungs have been chopped away.”
The rungchopper is speeding up.
And it is powered by a Fossil Fueled V8:
This is perhaps why it’s possible to look – in a crisis like the present – at packed-out restaurants and cafes and conclude that nothing much is amiss: only a fraction of the population have to be (solvent) patrons for them to be full.
they use those same V-8 engines to slice the really old hard salamis in NYC delis. kinda noisy inside.
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.”
“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….
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 ?
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.””
Shh! you are disrupting the instacollapse narrative.
https://s-media-cache-ak0.pinimg.com/236x/03/84/36/038436f70eb93dbc3f15978ecbb43d37.jpg
Someone who actually believes in instadoom will point out it is not 1970, no one has cash, JIT, etc
This constant finance stroking. Is it only bankers and other scam artists in here? I say, bring it down and trade will just pop back up in an instant. Freaking finance. What a joke. Just like economics is “science” for clowns.
Clown? Did someone say clown?
Did I just hear instacollapse drivel spouting buffoon?
Well done!
https://i.kinja-img.com/gawker-media/image/upload/s–Am0IrNtt–/c_fit,fl_progressive,q_80,w_636/194xm6a424yw2jpg.jpg
You’re welcome.
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.
It runs linux.
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.
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.
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-
No contradiction at all. The point being that the only place to source this bearing was in Germany. It was repairable only because of fast action in taking it out of service. You have no idea what you are talking about.
I’ve got plenty of idea from working as a repairman/millwright in the mining and steel industry before I hit the academia and got my M.Sc.
So Homer, you go on mashing those buttons as I’m busy engineering the next gen coal powerplant.
https://svpow.files.wordpress.com/2011/02/homer-3.jpeg
Smite-
If you actually think a Canadian province can keep its electric grid in service without the globalized supply chain you are simply wrong and terribly naïve.
+++++
“Ego sum ego et delusional existant” Smite
If you actually think there will be an instacollapse it’s perhaps time to hit reality for a moment.
It is typical of the generic complexed ignorant to focus on the minutia of detail and forget that new circumstances and opportunity arise from taking action.
What we need is more of this:
https://fossbytes.com/wp-content/uploads/2015/06/Titan-Supercomputer.jpg
And less of this:
http://educationcareerarticles.com/wp-content/uploads/2013/11/Banker2.jpg
Besides: It is about time to pop a cap into this instacollapse dogma perpetrated by the generic scam artists with an inflated ego of self importance.
“The financial system is the spinal cord of the global economy…. the operating system….”
https://66.media.tumblr.com/3832c060be9d2827cd9f4aa22ac4d2a6/tumblr_o0wgbltxnX1u77v55o1_500.gif
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?
“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
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)
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.
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+%.
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.
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.
“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.
“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.
“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
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.
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.
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.
“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.
Can we all agree that the % of farm jobs vs.total jobs will start heading upwards soon?
Gardeners rather than farm jobs.
Yes.
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.