I have been telling a fairly different energy story from most energy researchers. How could I possibly be correct? What have other researchers been missing?
The “standard” approach is to start from the amount of resources that we have of a particular type, for example, oil in the ground, and see how far these resources will go. Growing development of technology seems to allow increasing amounts of these resources to be extracted. Thus, limits seem to be farther and farther in the distance, especially if a person starts out with an optimistic bias. It is easy to get this optimistic bias, with all research funds going in the direction of, “What can we do to solve our energy problems?”
Approaches for forecasting future supply problems that start from the amount of resources in the ground suffer from the problem that it is hard to draw a sharp line regarding when we will run into difficulties. It is clear that at some point, there will be a problem–EROEI (Energy Return on Energy Investment) will be too low–but exactly when is hard to pinpoint. If a person starts from an optimistic viewpoint, it is easy to assume that as long as Energy Output is greater than Energy Input for a given process, that process must be helpful for solving our energy problem.
In fact, in my opinion, the story is very different. The very thing that should be saving us–technology–has side effects that bring the whole system down.
The only way we can keep adding technology is by adding more capital goods, more specialization, and more advanced education for selected members of society. The problem, as we should know from research regarding historical economies that have collapsed, is that more complexity ultimately leads to collapse because it leads to huge wage disparity. (See Tainter; Turchin and Nefedov.) Ultimately, the people at the bottom of the hierarchy cannot afford the output of the economy. Added debt at lower interest rates can only partially offset this problem. Governments cannot collect enough taxes from the large number of people at the bottom of the hierarchy, even though the top 1% may flourish. The economy tends to collapse because of the side effects of greater complexity.
Our economy is a networked system, so it should not be surprising that there is more than one way for the system to reach its end.
Figure 1
I have described the problem that really brings down the economy as “too low return on human labor,” at least for those at the bottom of the hierarchy. The wages of the non-elite are too low to provide an adequate standard of living. In a sense, this is a situation of too low EROEI: too low return on human energy. Most energy researchers have been looking at a very different kind of EROEI: a calculation based on the investment of fossil fuel energy. The two kinds of EROEI are related, but not very closely. Many economies have collapsed, without ever using fossil fuel energy,
While what I call “fossil fuel EROEI” was a reasonable starting place for an analysis of our energy problems back in the 1970s, the calculation now gets more emphasis than it truly deserves. The limit we are reaching is a different one: falling return on human labor EROEI, at least for those who are not among the elite. Increasing wage disparity is becoming a severe problem now; it is the reason we have very divisive candidates running for political office, and many people in favor of reduced globalization.
Overly Simple Models Give Misleading Answers
People who don’t work with models very much can easily assume that a model is telling them more than it really is. I discussed this issue in my recent article Overly Simple Energy-Economy Models Give Misleading Answers. It is quite possible to make a model that works some of the time, but not always. A researcher who is unaware of this problem is likely to overuse the model. As the saying goes, “If a person’s only tool is a hammer, every problem is a nail.”
If a system has multiple parts to it, as is the case with the system that controls energy extraction and energy prices, it is likely that a fairly complex model is needed to make a model that really represents the situation. The earliest models were in a sense one dimensional, when they needed to be multi-dimensional. With these additional dimensions, the model would include such characteristics as the fact that demand is controlled by a financial system, and the fact that the level of demand (and thus prices) depends on the ability of even the lowest-paid workers to afford the output of the system.
The model could also include what is essentially a physics problem–if there is not enough energy to go around, the usual solution is “more technology” or “more complexity.” What more technology and more complexity add is more concentrations of energy in various ways: in capital goods such as machinery and vehicles, in larger businesses to own these devices, in high-paid management officials, and in workers with specialized training.
These concentrations of energy are what lead to wealth disparity–some people “own” businesses and capital goods, and some people (but not others) receive advanced education or other specialized training. All of these things allow a relatively small number of privileged people to receive a greater share of the output of the economy. This leaves less for the rest.
As the result of this wage disparity, the economy ends up with too many people either dropping out of the work force, or earning low wages. It is lack of the ability of these people to afford the output of the economy that brings the economy down. Demand is closely related to affordability of goods made using fossil fuels, such as homes and cars. Many people miss the connection between demand and affordability.
Of course, if we didn’t have this falling demand problem (or low price problem) caused by increased concentrations of wealth leaving too large a share of the population too poor, we would eventually get to something similar to the problem that many have been concerned about: fossil fuel EROEI would eventually fall too low.
Hubbert Tells Part of the Story
When talking about resource limits, the thing that tends to confuse most people is the large quantity of energy resources that seems to be available. We can get some of these resources out with today’s technology. Logic would seem to suggest that with improved technology, we should be able to keep moving on to increasingly difficult-to-extract fossil fuel resources. We should also be able to create increasing quantities of substitutes.
M. King Hubbert gave an answer that only went partway in telling the extent of our problems. Basically, he said that once we had extracted 50% of a particular resource, the quantity we could extract would tend to decline in a more or less symmetric curve.
Figure 2. M. King Hubbert’s indicated symmetric curve of resource extraction from Nuclear Energy and the Fossil Fuels, published in 1956.
Hubbert described the situation of a single well or field, when there were other wells or fields taking the place of the wells and fields depleting. In this situation, demand (and thus price) stays pretty much the same. If investment in the well remains the same, production will tend to follow a symmetric curve.
We are clearly reaching a different limit at this time. We have a two-way tug:
- Low demand. We have wages that show increasing disparity. Wealthy people tend to spend their incomes on goods that are not very energy-intensive, such as education and financial services, while less wealthy people tend to spend a larger share of their incomes on energy-intensive products such as food, basic transportation, and basic housing. Thus, this shift in wage patterns tends to reduce energy demand, and thus energy prices.
- Government attempts to fix low demand. Low demand leads to low economic growth, so governments and central banks are doing everything that they can to raise demand. Their approaches include ultra-low interest rates and deficit spending. The hope is that even if citizens don’t have sufficient wages to buy expensive goods such as cars and homes, the additional debt at low interest rates will make these goods, more affordable and thus spur demand.
We can keep increasing oil and other fossil fuel extraction, as long as our current system continues to “work.” In particular, prices need to be high enough for those extracting oil to make a reasonable profit, to cover reinvestment needs. The profit has to be high enough, too, so that the companies can pay taxes to their governments, so that governments can continue programs that mostly benefit the 99% of the citizens who don’t have high incomes. This is a major way that the net energy that is generated by fossil fuels gets back to benefit the government and the many poorer citizens who benefit from government programs.
Misinterpretation of Hubbert by Peak Oilers and The Powers That Be
Neither Peak Oilers nor The Powers That Be (TPTB) figured out the real story. The Peak Oilers were “tripped up” by the overly simple model problem I described above. They assumed that 50% of remaining fossil fuels could be extracted after peak, regardless of whatever other circumstances might hold. Economists provided one part of this overly simple model: they postulated that if there were a shortage of some product, prices would rise. This view is true when there is not too much wage disparity, but it is not true in general.
The combination of these overly simple assumptions leads to the belief that we can continue to pump quite a lot of fossil fuels, even after the decline begins. These remaining fossil fuels together with renewables can lead to some sort of civilization at a lower level after collapse. High prices will point the way to economizing.
TPTB were even more confused. They listened only to economists, with their overly simple model about future prices, and paid no attention to Hubbert and his message that extraction would become more difficult after 50% of a given resource was extracted. Instead, they assumed that the recent pattern of adding new extraction at ever-higher cost would continue indefinitely, as a result of improved technology. Prices would probably rise moderately, as well.
Figure 3. Figure from Jeremy Grantham article published on The Oil Drum in 2011.
Figure 4. US crude oil production, separated into tight oil (from shale formations), oil from Alaska, and other oil, based on EIA data.
If there is an increasing wage disparity problem, the whole idea of ever-rising prices because of more technology doesn’t really work. At some point, there is an affordability problem, leading to low prices rather than high prices. Ever more debt at lower interest rates cannot cover up a problem of stagnating wages for the masses.
What Does Falling Fossil Fuel EROEI Tell Us?
Quite a few commenters on OurFiniteWorld.com like to use “falling EROEI” as a synonym for “reaching diminishing returns.” EROEI (really “fossil fuel EROEI”) as developed by Energy Researcher Charles Hall, is calculated by dividing “Energy Produced” by “Fossil Fuel Energy Used to Deliver that Energy.” The easiest-to-extract oil or coal or natural gas tends to be extracted first, and the later-to-be-produced fuel tends to have lower EROEI. Thus, lower EROEI is a handy numerical way of quantifying diminishing returns with respect to the production of energy using fossil fuel inputs.
The Paradox of Falling Energy Consumption Relative to GDP, Despite Falling EROEIs
We quickly get to a paradox: if falling EROEI is raising the cost of extraction for all fossil fuels, are we using an increasing share of the output of the economy for energy production? The answer for historical periods has been, “No.” Energy Researcher Carey King has reported on this in an academic paper.
Figure 5. Figure by Carey King from “Comparing World Economic and Net Energy Metrics Part 3: Macroeconomic Historical and Future Perspectives,” published in Energies in Nov. 2015.
In fact, recent United Nations’ research seems to indicate that this pattern of falling energy consumption as a percentage of GDP continues to hold through 2013 for the world as a whole:
Figure 6. Figure from UNEP Global Material Flows and Resource Productivity.
Figure 6 shows that the bottom two sectors, namely “Agriculture, hunting, forestry, fishing,” and “Mining and utilities” continue to fall to lower levels as a percentage of the world economy, through the last year shown, 2013.
The way that these falling percentages seem to take place is through rebalancing of energy supply toward countries with a lower-cost energy mix. See the Appendix for more information on how this seems to occur.
Aude Illig and Ian Schindler, who are specialists in mathematics and economics working at the Toulouse School of Economics, have been examining how oil prices can be expected to behave, both before and after the share of the world’s resources devoted to energy extraction hits the low point (nadir) and begins rising again, if Figures 5 and 6 were extended forward. They explain their findings in a working paper called Oil Extraction and Price Dynamics. It shows that prior to the nadir, oil prices can be expected to generally rise, with some temporary spikes. Once we are past the nadir, the dynamics are the opposite. Prices tend to fall, exacerbating the decline.
Does US Drilling for Oil Add to US Industrial Energy Consumption?
One of the commenters on OurFiniteWorld.com recently asked what impact the rise and fall of US oil production would have on US energy consumption. In his view, if extraction of oil from shale has low EROEI, surely US industrial consumption of oil or of total energy must rise and fall in response to the greater production. When we looked, any impact seemed to be too small to measure (Figure 7).
Figure 7. Comparison of US oil extraction with industrial consumption of total energy and of oil by itself, based on EIA data (monthly amounts, converted to average daily amounts).
Transportation energy is not included in industrial energy, so we looked at diesel energy consumption, to see whether it had changed materially in response to all of the drilling activity. Again, it was hard to discern any impact (Figure 8).
Figure 8. Comparison of US oil produced with diesel plus residual fuel oil consumed, based on EIA data. Monthly data, converted to daily averages. (Residual fuel oil combined with diesel, because of law change on types of fuel ships can use.)
Thinking about the situation, the energy consumed is quite possibly not consumed in the US. For example, a great deal of steel pipeline will be used. This pipeline could be made with coal and imported from China. The timing could vary as well, if the pipeline and the machines drilling the wells were made some time in advance. Some natural gas or oil is no doubt burned when wells are drilled, but, in the whole scheme of things, the amount isn’t large enough to cause even a tiny hump in the data.
If we think about the situation, it is not really the “energy consumed” (and thus EROEI) that affects “demand.” Instead, it is the selling price of the oil that affects demand for energy products. This selling price of oil is shared many ways. This selling price includes not only the direct cost of energy used in extraction, but many other costs, as well: wages, leases, dividends, royalties and taxes of various sorts. In many cases, the royalties and taxes go to provide benefits for the non-elite–in other words, the 99%. The selling price acts as stimulus for the entire world economy, not just the part related to EROEI.
If the price of oil drops, what tends to be cut first is taxes–the money that goes to help the non-elite 99% of the economy. Besides taxes, wages and pension benefits tend to be cut very early, in an attempt to keep the company operating. These comprise a large share of costs, so are easy to cut. Strange as it may seem, oil extraction may not be cut back, even in bankruptcy. Creditors want as much value to be retained as possible after bankruptcy.
So What Does EROEI Tell Us?
EROEI as a way of allocating limited fossil fuel energy supplies. One way of thinking about EROEI is that it can be used to show the optimal way of stretching a given supply of fossil fuels; all a person needs to do is select new approaches for producing energy products with the highest EROEI values, to be able to leverage available fossil fuels as much as possible.
The EROEI calculation seems to be oriented in the direction of allocating scarce resources. Energy is counted using its Btu value. Thus, oil is viewed as having the same “value” as coal (based on its Btu content), and intermittent electricity is viewed as having the same value as electricity that is suitable for distribution to customers. Since the focus is on fossil fuels “running out,” some researchers leave out hydroelectric power from EROEI calculations; it does not represent the use of fossil fuel energy. Human labor is generally left out, as are taxes, interest payments, lease payments, and many other components of costs.
“Boundaries” on what energy inputs are to be included vary considerably from researcher to researcher, making comparisons among analyses difficult. For example, is energy used in the irrigation of biofuel crops included in calculations? Reports prepared by researchers from certain universities tend to give higher EROEIs than those from other universities. There is sometimes a suspicion that the funding source for a particular university biases the results of its EROEI calculations. This situation is not too different from the independence problems experienced in other types of academic studies.
Back door to estimating costs. EROEI can also be considered as a backdoor approach for estimating the approximate cost of extraction. Researchers working in a university are unlikely to be able to obtain information on the true total cost of extraction. On the other hand, if they can develop a new metric, they have the possibility of building a tool that they can keep updating with company information. There seems to have been early hope that the new metric would be more objective than other available cost information.
Doesn’t behave like the cost metric we are used to. There often is an economic reason to make a highly valued liquid fuel from less valuable coal or natural gas, but the calculation does not take this into account. This is one reason that the EROEIs for ethanol tend to be very low; ethanol production tends to use quite a bit of electricity from coal or natural gas to produce somewhat higher-valued ethanol.
Another catch in trying to use EROEI for comparison purposes is that EROEIs for capital goods (such as wind and solar) behave differently from EROEIs of fuels that are burned. With capital goods, society first “digs an EROEI hole,” and over time, must dig itself out. (I expect that this is one of the reasons for our debt problem.) Energy Researcher Graham Palmer has developed “Dynamic EROEI” to deal with this problem.
Figure 9. My explanation of Graham Palmer’s chart of Dynamic Energy Returned on Energy Invested from “Energy in Australia.”
Wind and solar have a second problem, besides the use of capital goods problem, and that is an intermittency problem that is difficult for the grid to correct, especially when more than a small amount is added to the grid. In Figure 9, Graham Palmer has added batteries, and replaced them three times during the 30-year lifetime of the solar panels, to correct the intermittency problem. I would argue that other costs should also be included–the cost of building and operating an inverter and replacement inverter(s), for example, plus any type of installation costs.
Interest costs are not typically included in EROEI calculations, but it would seem like they should be, whenever the delivery of energy is substantially delayed, as it is when some type of capital good is used to capture energy from the sun.
Alternatively, instead of adding battery costs, it would theoretically be possible to revise the calculation to include the energy cost of adjusting the electric grid to handle the intermittency. All of these issues have to do with selecting proper “boundaries” for the calculation.
Intermittent Renewables Seem to Give Funding to the 1% and Raise Costs for the 99%, Unlike Fossil Fuels
Something that we don’t often think about is that individual types of energy production can be evaluated from the point of view of the extent to which they provide funding for the 99%, versus funding for the elite 1%. EROEI, of course, cannot consider this at all.
Fossil fuels would seem to favor the 99% because the fossil fuel industry has traditionally has been heavy payers of taxes. These taxes go to help the vast majority. It is rare to find reports showing taxes paid by fossil fuel producers, however. Instead, reports tend to show subsidies, which are offsets to the high tax payments. These offsets are frequently payments for such purposes as helping low income people pay their winter heating bills. While these payments are called “subsidies,” in a true sense they are often ways of helping the 99%.
Wind and solar tend to be financed in the US with tax credits. These tax credits help concentrate wealth among the already wealthy. In Europe, the high cost of intermittent renewables tends to be paid by individual households. This leads to a situation where businesses, and the owners and operators of these businesses, benefit at the expense of those who are financially less well off.
The debt level with wind and solar (and all of their related paraphernalia that often gets left out of EROEI calculations) also tends to be high. Interest on this debt transfers money from the 99% to the 1%. The grid likely will need upgrading to handle intermittent renewables. This cost, too, will be borne by the 99% through higher electricity rates or higher taxes.
What Should the Role of EROEI Be?
EROEI is now well established as a tool to try to see how much energy is being consumed in making an energy product. I think that many people have expectations for EROEI beyond what it really can do. For example, I don’t think that EROEI calculations can predict when the economy will collapse, because the mechanics for reaching collapse come from a different direction–namely, increasing wage disparity and low commodity prices.
EROEI doesn’t consider whether a high-valued product is being used to produce a low-valued product, or vice versa. The solution here is to look at the actual cost involved in producing the energy product, as a supplement to EROEI calculations. This is important if our real energy problem is high cost and lack of affordability, rather than “running out” of fossil fuels.
EROEI calculations also are not designed to look at the required growth in debt, and the required transfer of wealth from the 99% to the 1%. Clearly, it would be helpful to add some new tools to the tool set, to look at these problems.
As a check on whether EROEI calculations are really producing reasonable results, any energy product that is producing net energy should be able to support the government with taxes, rather than being dependent on subsidies. If an energy product is dependent upon continued subsidies, this should be considered as likely evidence that it is, in fact, a net energy sink.
EROEI studies do have a continued role, but they need to be used with care.
How Did I Get Involved in this Whole Discussion?
I have been what a person might call a “financial detective” for a long time. I started working for CNA Insurance Group as an actuarial trainee in 1970. This was about the time that inflation started to affect insurance companies. After I had been at CNA only a short time, I was the one who figured out how inflation would affect reserves set by claims adjustors. When my predictions proved to be correct, my supervisors were very surprised; they had never considered the possibility that there would be an impact.
I soon moved on to a smaller insurance company, where I reported directly to the president of the company. The position was supposed to report to a lower level in the organization, but the president was shocked at what I had been able to figure out about the company from its financial statements, and decided he wanted me to report to him instead. As a result, I had an opportunity to see the impact of the 1973-1974 oil price spike on an insurance company, from a front-row seat. I also got a chance to see what impact rapidly changing interest rates had on an insurance company. I later went back to CNA, and observed the problems they were also having.
I later moved into consulting. I was always the “go-to” person for trying to figure out answers to questions that had never come up before. If someone needed a model for something really weird, they would come to me. I would often develop material for expert witness assignments. When new companies were set up, I would set up models of how they might be expected to behave under various scenarios. I worked a lot with “long tail” business, where claims were reported and paid long after the time an injury occurred.
I didn’t get involved with oil limits until 2005, and began writing articles about it in 2006. I was near the age where I could take early retirement, so I left in 2007, with the plan to look into the subject further. Editors at The Oil Drum saw some of my articles, and invited me to write articles for them, under the pen name Gail the Actuary. Not too much later, they asked me to be an editor. I soon found myself corresponding with authors, fixing mistakes in articles, and becoming acquainted with many people in the energy field.
One of the articles I wrote fairly early was Peak Oil and the Financial Markets: A Forecast for 2008. In it, I forecast the 2008 financial crash. Prof. Charles Hall (of EROEI fame) saw the post, and invited me to come to Syracuse, New York, and give a presentation at the next Biophysical Economics Conference. I soon met many other researchers, either through the Biophysical Economics community, or through my work at The Oil Drum. I was invited to give many talks, including one in Barcelona, Spain, in 2010, which ultimately led to the publishing of my article Oil Supply Limits and the Continuing Financial Crisis in the journal Energy. All of this further led to my becoming more involved with the research and journal end of the oil limits story. I now get quite a few invitations related to the research end of my work.
One of the things that led to conflict between the Peak Oil community and me was that I wasn’t really telling the “Peak Oil” story. I was telling something different. By late 2010, the conflict was sufficiently great that I started writing my articles on OurFiniteWorld.com, and let TheOilDrum.com re-publish the ones they chose to. I continued to be an editor at TheOilDrum.com, however, until its close in 2013.
My general approach has been to learn as much as I can, in as many ways as possible. When various groups would want to sponsor conference phone calls, I would always participate, regardless of whether the group was a renewable group or one from the oil industry. I tend to interact with the commenters on my site, and get quite a few ideas from them. I don’t accept donations on my site, but I do accept invitations to give talks when people offer to at least pay my expenses. I also have had quite a few opportunities to visit installations of various types–geothermal as well as oil and gas. My only official affiliation is that I am Director of Energy Economics for the Space Solar Power Institute–an unpaid position.
All of this puts me in an odd position. The research community seems to accept me as one of their own. But Richard Heinberg of the Post Carbon Institute can’t understand why my view differs so much from the view that the Post Carbon Institute is trying to sponsor. He refers to me as an “energy writer” and says, “Her critiques of renewables appear to be based almost entirely on literature from fossil fuel and utility companies; she doesn’t seem to cite much data from solar and wind engineers.” I do talk to everyone. But I certainly don’t get my views from literature from fossil fuel and utility companies. I expect that having someone give a different view than PCI’s preferred view is threatening, especially if it is having an adverse impact on donations.
Appendix: How Rebalancing of Energy Supply Occurs
How does rebalancing of energy supplies occur? The answer seems to be, “Expansion of economies that use a fuel mix that is disproportionately weighted toward cheaper fuels, and contraction of economies that use more expensive fuels.”
This following slide shows a simple grouping of fuels I made based on my perception of which fuels are more or less expensive.
Appendix, Figure 1. Slide showing groupings of low, medium, and high priced fuels.
Growth in energy consumption seems to take place almost entirely in parts of the world that use a disproportionate amount of low-priced fuel. These countries also tend to have low wages, to go with the low fuel costs.
Appendix, Figure 2. Note that the scales of the last three slides are all the same. Also note that the last of the four groupings is World Minus US Minus EU. It its thus the remainder of the world grouping.
What happens is that the world’s energy mix rebalances away from the countries that use a large share of high-cost fuels in their energy mix.
Appendix, Figure 3.
In the end, the low-cost fuels (coal and hydroelectric) hold their own, as a share of total production; countries using a disproportionate share of high-cost fuels tend to lose out in the world marketplace.
Appendix, Figure 4
Once the world “runs out” of cheap fuels to keep adding to the energy mix (or finds the cheap fuels too polluting), the situation changes. The world economy cannot maintain its shift in mix toward products that have a better return relative to their cost simply by rebalancing toward countries with a lower-cost fuel mix.
Instead, the price of energy products must fall below the cost of production, to maintain this pattern. We seem to be seeing such a drop in prices below the cost of production, starting in 2014. Proving that this is the reason for the price drop might be difficult, but it certainly is a strong suspicion.
Gail, thank you for his new article.
I support the motion Fast Eddy’ said: awarded the Nobel Prize in Economics.
https://www.unocero.com/wp-content/uploads/2013/02/medalla-nobel.jpg
Have you noticed that at the end of the Post Carbon Institute has published its reply, and Richard Heinberg has answered you?
A little late, I guess.
After much delay, they finally put my comment up, and after further delay Richard Heinberg replied to my comment. He sent me an e-mail saying he had responded, and his reply would be up soon. After it still wasn’t up the next day, I sent him an e-mail asking where it was. It finally went up several hours later. My guess is that some others in the organization looked at his response, before it went up.
I put together a response to his reply, which never did go up. It was after I wrote my response, and the new response didn’t go up, that I decided I needed to write an article on the topic. I had previously stayed away from the topic, because I thought the topic was too difficult for most readers. It also had the possibility of upsetting a lot of people. My second response, that never went up, was the following:
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Thanks for taking the time to respond. I think we both agree that it is not possible to add very much intermittent renewables to the grid, without causing a major problem. It is the rest of your comment that I disagree with. You have followed standard “peak oil” reasoning, much of it supported by academic papers, but I find this reasoning to be incorrect.
One of the issues is the idea that it would be possible to very substantially reduce our electricity demand by, say, 75% or more, without completely collapsing the economy. As I explained in my previous comment, I am looking at the physics of the situation. The economy requires energy. There may be tiny energy efficiency gains we can make very slowly over time, but most of these tend to be lost through Jevons Paradox. The economy is a dissipative structure, just as a hurricane is, and just as ecosystems are. All plants and animals, including humans, are dissipative systems.
Your idea that we can reduce energy consumption by 75% or more is equivalent to the idea that we could make hurricanes continue to exist when their heat sources have mostly disappeared—say, when they move over cold water or over land. This doesn’t happen. Your idea is also equivalent to the idea that you could reduce the food you give to your dog by 75%, or the food you eat yourself by 75%, with no ill effects. It simply can’t happen.
The physics connection to the economy is not an easy idea to see, so models have left this out. Engineers have tended to assume that all that is important is the oil or coal or gas in the ground. In fact, the price available for extraction is terribly important in determining whether any type of energy product can be produced. This price is indirectly determined by both wage and debt levels. The economy needs to be growing fairly rapidly to allow wage levels to continue to rise. Rising debt levels can temporarily mask an inadequate rise in wages, but this is a temporary situation.
Another point of confusion has been whether energy prices can be expected to rise endlessly. Economists, with their poor models of the economy, have not been helpful in clarifying the situation. Aude Illig and Ian Schindler have a new working paper (http://www.tse-fr.eu/sites/default/files/TSE/documents/doc/wp/2016/wp_tse_701.pdf), which indicates that we should expect oil prices tend to first ratchet upward as we reach a peak in oil production. Prices will then ratchet downward, causing production to fall rapidly. Also, I am a co-author of a recent academic paper that discusses the possibility that high prices will be the cap on oil extraction. https://gailtheactuary.files.wordpress.com/2016/09/ke-wang-an-oil-production-forecast-for-china-considering-economic-limits.pdf Both of these papers strongly suggest that the popular view of ever-rising energy prices is wrong.
Another point of confusion is whether EROEI calculations are useful tools for evaluating intermittent energy. The issue we are dealing with is substituting greater complexity (intermittent renewables plus a larger and more complex electric grid structure) as a workaround for inadequate energy supplies. If we read Joseph Tainter’s book, The Collapse of Complex Societies, we find that growing complexity is often a proximate cause of collapse. Evaluating the impact of this increasing complexity (more debt, more hierarchical organization to create and manage the new structures) is far beyond what EROEI was intended to do. EROEI calculations are designed for the simple case where the output is nearly simultaneous with the input, and the type of output is fairly similar to a fossil fuel.
One way of “checking our work” is to see whether wind and solar PV can pay a reasonably high level of taxes, because any source of energy that is producing considerable net energy should be able to pay high taxes to support the government—supporting the government is, in fact, the primary use of net energy. Fossil fuel energy has always paid high taxes. My conclusion is that intermittent renewables are, in fact, net energy sinks. Adding them to our energy mix makes no sense, either now or in the future.
My conjeture is that the Post Carbon Institute gave to Heinberg a dressing-down 🙂
I suspected that your article on “renewable” would give you some trouble.
By the way, your second replica is a splendid summary of the situation.
I liked the example of dog food. Very easy to understand, but very difficult if your interests depends on it.
FYI: http://richardheinberg.com/contact
What should we do with this contact link?
We’re a little hooligans … 🙂
For those who didn’t see Richard Heinberg’s much delayed response to my earlier response to his article (I had pointed out he was missing the physics of the situation, among other things), this is it:
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Thank you, Gail, for commenting on my essay. I don’t think our positions on renewables are all that far apart, but I’d like to zero in on what may be the point where we might disagree.
The intermittency of wind and solar is clearly a problem, but it’s a problem that grows very significantly as percentages of total electricity supplied by solar and wind increase. At lower levels of solar-wind penetration into the generation mix the task of balancing their intermittency is not as burdensome. For example, in this Scientific American article https://blogs.scientificameric… Robert Fares writes: “In a study commissioned by the Electric Reliability Council of Texas, General Electric calculated how much new reserve capacity will be required as Texas increases the amount of wind energy installed. The report found that an additional 15,000 megawatts of installed wind energy only requires an additional 18 megawatts of new flexible reserve capacity to maintain the stability of the grid. In other words, the spare capacity of one fast-ramping natural gas power plant can compensate for the variability introduced by 5,000 new average-sized wind turbines.”
Redundant capacity, storage, and demand management (timing electricity usage according to availability) are effective strategies for dealing with intermittency—though each carries a cost, and those costs escalate as the amount of variable renewable electricity fed into the grid increases.
The most effective long-range strategy would therefore be to very substantially reduce our overall electricity demand (in countries like the US), say, by 75 percent or more, so that a large proportion of overall base load could be supplied by hydro, geothermal, and biomass; then relatively small additions of solar and wind could either be balanced with biogas peaking plants, backed with storage (pumped hydro, batteries, hydrogen), or used in stand-alone systems (along the lines you suggest).
My point is, renewable energy is probably capable of powering an industrial society—just not the kind of industrial society we happen to have at the moment. Even production of renewable energy infrastructure could theoretically be accomplished using renewable energy (mining, high-heat industrial processes, transportation, installation); it’s just that many of the steps involved would be more expensive than is currently the case, again leading to the conclusion that only a much smaller overall energy would be affordable to build and maintain.
Of course, getting from current energy demand to a situation where we are using 25 percent or less energy, all of it from renewables, is the real challenge—one made much more difficult by our systemic dependence on economic growth and consumerism, and by failure to deal with the problem of population growth. There may in fact be no politically or economically realistic pathway from where we are to a 100 percent renewable energy future, but such a future is not impossible in principle.
– – – – – – – – – – – – – – – – – –
This comment left an easy opening to feeding his dog less.
Many divulgators of the limits of growth are very conditioned by economic theories which are clearly erroneous.
I guess you know the French economist Serge Latouche who is very influential in the Movement of Degrowth . His economic theory is a mix of economy-ecological and Marxism.
They think everything is a matter of our will. They forget that the economy (as you show article after article) is a dissipative structure that is subject to the laws of physics we can not escape.
The point is that years pass and they are not able to make a consistent road map, which lead us to a low energy economy and avoid collapse.
Sorry to say this, but my personal experience in the Spanish forums debate on the limits is that with degrowth is very difficult to reason.
Ideologies = absurdities.
http://i37.photobucket.com/albums/e77/beepbeepitsme/sleepofreasonflying50.jpg
“El sueño de la razón produce mostruos”
Francisco de Goya.
I really don’t know too many economic theories. I find myself looking up pretty much every theory someone describes. As you say, almost everyone assumes we are in charge, when we are not in charge. It is a lot like trying to make water run uphill. It can’t happen.
Gail, my dog George is in absolute agreement with you that he cannot function on 25% of his current food intake. Even at 100%, he frequently hits on me for extra treats.
When we look at the human socioeconomic system, it is easy to identify lots of what we might regard as waste, especially when we look at other people’s behavior. So it is easy to adopt the superficial attitude that we could cut out a lot of this “wasteful” economic activity and the economy would still be fine, because, for instance, as long as people have enough bread, who needs circuses?
But this attitude gets things backwards. It totally omits that production/employment side of the economy and fails to recognize that a lot of the “waste” produced is a consequence of the need to keep the economy running in high gear to prevent it from toppling over like a bicycle that isn’t being peddled.
With less energy being used, less people will be employed and less goods and services will be produced and distributed or provided. I’d like to ask the low-energy evangelists, what happens to the resulting mass of people with no work to do? Are they to be “crushed under with the weak and the infirm”, are they to die “and reduce the surplus population” in the words of Scrooge. Or are they to wait like Micawber in the hope that “something will turn up”? In the post-carbon era, how is the low-energy system going to produce enough to go around?
+++++++++
Richard Heinberg may be a King in DelusiSTAN…. but here he barely qualifies as the Village id-i.–ot.
I agree. The big thing our system provides is employment, so people can afford to buy energy products. Cutting out the “waste” tends to make the system not work, because fewer have jobs.
Gail, your food analogy is clear and convincing. Your point on energy needing to pay tax to support the government is also compelling.
I expect that is why my comment didn’t get posted. Too bad I didn’t find a way to weave it into my current post.
Maybe we could define the taxes of the energy producing governments as the share on the energy that is produced.
The energy importing countries also have taxes in fixed amounts on gasoline, diesel or heating oil and that way they get their share on the consumed energy.
Based on this, the energy producing countries are those who are hit harder than importers now, when the oil that is produced, is from less favourable locations in the world, i.e. the countires in these locations need larger share on the produced energy and are more prone to collapse, when the prices are too low.
Right! Low prices especially hit the oil producers.
I think that Heinberg was referring to a world where a lot less human consumers could survive on a limited amount of wind + solar power. That’s a leap over a lot of dead bodies. But, the dead body producing event will not be inconsequential. It could even be an extinction event. Jim Kunstler has written about these times in his World Made by Hand novels, and similarly jumps to a time and place with a lot less people around without much consideration of the impacts of getting there from here.
Yes I believe they do write about these things on a regular basis. If you buy into the is krap then head over there and lap it up.
Anyone posting this sort of nonsense on FW will be ridiculed and mocked. Newbies get a break…they get an opportunity to come to their senses.
I agree, Doomphd,
The journey “from here to there” will be at least as important and consequential than the destination itself, or even compromise it (ELE).
The outcome will be conditioned by the sequence of events, maybe as much as by the drop in energy input and the remaining burden of entropy legacy. So in theory we coud have some influence on that part of the story, in reality we haven’t any.
Somehow, it is necessary to ignore the “little problem.” It would be a lot easier getting along with a tiny share of the population, if virtually everyone were farmers, working with virtually no tools, and walking was the primary mode of transportation. Once you get to a situation where you need people with specific skills to be in a particular place at a particular time, then the situation becomes much harder to work with.
Gail, an amusing (?) thought to share with Richard (or not) concering feeding of his dog. Clearly, cutting back on a single dog’s food by 75% would probably result in the demise of the dog, so a better analogy might be thus: suppose you have a kennel of 100 dogs. You decide to cut back by continuing to feed only 25 of the dogs, a 75% reduction in feed/energy. Those dogs continue to do fine. The rest, not so good. This I believe is the essence of Richard’s reply.
Good point! Then the question is, “Can the economy continue, with only 25% of the workers?” It is a longer story, but I think it comes back to the same answer. To keep our energy system working, we need an increasing number of trained energy workers (making and servicing intermittent renewables, in Heinberg’s example), not a decreasing number. We have to subtract them from the 25% of workers. We soon find other groups that are essential–ones for maintaining roads, pipelines, and electricity transmission, for example, and food production. We soon get to all 25% of the remaining workers, and cannot keep all of the needed portions of the economy going. We can’t go backward, for example, to using horses instead of cars, to avoid this problem.
Perhaps the other point to make is that we are at a specific, very advanced point in the life-cycle of the complex system that is our current, global civilisation. Complex systems have no reverse gear. The economy can no more continue forward in a pared down state with a significantly reduced throughput of energy than a 70-year-old can diet themselves back to the age of 12.
ConocoPhillips revenue slides and misses estimates
http://www.marketwatch.com/story/conocophillips-revenue-slides-and-misses-estimates-2016-10-27
Press Release
ConocoPhillips Reports Third-Quarter 2016 Results; Strong Operational Momentum and Improved 2016 Outlook
http://www.marketwatch.com/story/conocophillips-reports-third-quarter-2016-results-strong-operational-momentum-and-improved-2016-outlook-2016-10-27
ConocoPhillips COP, +2.20% today reported a third-quarter 2016 net loss of $1.0 billion, or ($0.84) per share, compared with a third-quarter 2015 net loss of $1.1 billion, or ($0.87) per share.
That is an outstanding result! hehehe… if ever there was a misleading headline….
Now if they can just completely stop searching for more oil — slash capex to the marrow — shed few tens of thousands of employees…. then the upcoming year should be an awesome year for them!
Hammer time for Homo Sapiens…
http://peakwatch.typepad.com/.a/6a00d83452403c69e201b7c8a896c7970b-800wi
Now… those graphs have a look like we are on a sustainable path.
The great acceleration of the super-mega-plague !!!
Laugh for not cry…
https://subidasdeimagenes.files.wordpress.com/2016/10/giphy.gif?w=820
Reality Check: Reality is whatever your believe it is
One of my co-workers was discussing the lower pay that government jobs have compared to its private sector equivalents. He said if the government wanted to attract experienced workers, it would need to offer wages equal or better to the private sector because unemployment in the coastal metropolitan area we are in is low. He kept repeated that unemployment is low.
He’s a news junkie and like anyone with a job, he is drinking the cool-aid . Whatever the media reports is true must be true…
Another more Conservative co-worker believes in the American Dream–the solution to a low paying job is to go back to school and become a doctor. So many people believe this.
Another Conservative believes that disposable income is at an all-time high. He believes that government regulation is what is holding back growth.
People’s perception of reality is shaped by their beliefs. As someone noted by a former Greenpeace activist that is a prominent denier of anthropogenic global warming, how can any problem be addressed if there is such a wide range on a given problem, including whether said problem even exists.
acomfort writes “We need to make more jobs soon.
Past civilization have put their unemployed to work by building pyramids”
We already have plenty.
There’s the Military industrial complex, which includes the War on Drugs, the War on Terror. There are subsidies that create a small number of jobs centered around “Clean Energy”.There is the creation of the FIRE economy which in my opinion, includes “Higher Education”. Expanded “access” to Higher Education is a very effective way to keep people busy and gives the illusion that is well. Higher education is great for morale. An important requirement for any make-work scheme is that there needs to be a widespread belief that a particular make-work scheme has a benefit. to commerce or the lives of most people. A manned expedition to Mars has stalled for the last several decades because there is no benefit to be had and because the space industry has not been able to convince anyone into believing that there’s the possibility of a benefit from a manned expedition to Mars. The Intelligentsia’s attempts at selling the idea of electric cars to the (buying) public has been disappointing. http://www.wbur.org/onpoint/2016/10/26/tesla-chevy-electric-cars. They cannot understand the resistance to electric cars and blame it on irrational fear. They blurt out statements like ” California’s energy mix is clean” and expect to have credibility.
“how can any problem be addressed if there is such a wide range on a given problem, including whether said problem even exists.”
Many I know don’t admit ANY problem exists. Everything is more wonderful than ever and is guaranteed to become even better.
*The former Greenpeace activist didn’t not that, but someone commenting on lecture of his, did.
Funny… most people believe the electric car was killed off….
Yet anyone can walk up to a dealer today and drive away in one…. yet almost nobody is…
Like I said… funny that…..
It seems it’s taking off. Production capability need to be built up.
http://i.imgur.com/jaZozwy.jpg
Let’s take the Wikipedia “take on “Reality”:
Reality is the state of things as they actually exist, rather than as they may appear or might be imagined. In a wider definition, reality includes everything that is and has been, whether or not it is observable or comprehensible. A still broader definition includes everything that has existed, exists, or will exist.
If we accept the narrower definition, in other words, “the state of things as they actually exist, rather than as they may appear or might be imagined”, then it’s obvious that what we believe or perceive to be reality, is not necessarily reality but probably includes false beliefs and perceptions.
Governments and political/economic elites, while more powerful than the rest of us, have only modest power to manage reality, but they have considerably more power to manage public perception, so perception management is a big part of what they do. The idea that governments, corporations, media organs or politicians would not willfully attempt to distort public perceptions, for instance about the unemployment level, the utility of electric vehicles, or anything else—which is projected or conveyed as if it were an implicit fact even when not stated overtly—is an essential part of their perception management strategy.
To work within the system as a manager, administrator,academic, etc., one has to pretend to buy into the the system’s “institutional reality”, and to accept this reality uncritically makes it easier to function in those roles. But my guess is that there are millions of people who toe the line in public while remaining skeptical of institutionally reality.
I agree that a lot of our jobs can’t continue.
It doesn’t make sense to educate more people than there are jobs for, at a given level, or of a given type. We end up with a lot of highly educated cab drivers (or Uber drivers).
It doesn’t make sense to create a health care system that is far more expensive than the population can afford. At some point, things have to be scaled back to make the system more affordable. Diets need to suddenly be made a lot better, and exercise more frequent, so people are not in such poor health to begin with. Then we have to be going back to less complex treatments that can generally be handled by lower-paid workers, without expensive drugs. We have to give up the idea that we can save every 1 pound baby, and every 85 year old with a brain tumor.
The concept of EROEI, is certainly layered with a few anomalies, which means we have to treat it with caution.
One possible anomaly not, maybe yet fully recognised, is the potential effect of QE on the oil extraction industry.? If I pay you $2000 per week to collect sea shells on a beach, you’ll do it. You might question the pointlessness, but the money will swing it for you.
I’m going to restate the above, for the purpose of emphasis :
If I pay you a sufficient amount of money to carry out a pointless exercise, you will stop questioning the pointlessness of it,… take the money,..and just do it…?
We speak of ROI,.. Return on Investment and are at pains to separate out the meaning from the ($) perspective, to the (BTU) perspective, and with good reason. When the EROEI of crude oil extraction gets to about 7:1, some peripheral part of society is already beginning to shut down. This is of course, because the complexity that afforded a 100:1 society, cannot be sustained by a 7:1 energy extraction ratio.?
But just suppose I print [free QE], money and shove it into the oil industry.? The fact that the oil industry is not ($)economic, matters not, to the oil industry, as long as you’re being paid with freshly printed free money. As with the pointless shell collection exercise, mentioned above,.. you will happily continue to extract oil that makes no (BTU)economic sense, if someone is willing to pay you well [in QE printed $’s], for performing that increasingly [thermodynamically], pointless task.?
If the free money of QE is subsidising an increasingly pointless oil extraction exercise, it could well keep it going almost down the wire of 3:1 EROEI. Of course the result of such a [BTU pointless] endeavour will be that the front-end of society has the appearance of still functioning, whilst increasingly huge swathes of the back-end of society slowly crumbles in the background.
Which is I guess,..where we are right now.?
‘The front-end functioning while the back-end crumbles’: no better description of civilizational collapse: see Rome, see Islam after they lost the near-monopoly of global rare-goods trade, etc.
For example, Western Rome still had functioning armies and so on while the mass of free peasants were selling themselves into slavery on great estates to escape heavy taxes, army conscription and all the other burdens of decaying complexity.
The West today is indulging in projections of military force in the Mid-East and Central Asia, and fantastically luxurious real state developments, while the prospects and quality of life of the mass of citizens declines below that of the 1960’s.
Actually, I think we started down this track with subsidies of the pointless wind and solar PV industries, quite a while ago.
From the point of view of complexity theory, adding more energy adds “information.” One of major pieces of information is prices. Once we started adding intermittent energy to the electric grid, they randomly added electricity to the grid, without paying any attention to the price. This badly depressed prices for other providers. This is a way of destroying information, because we really need those other providers to provide backup.
You are right about the subsidies for oil being pointless. It is simply that we have been down the pointless road before.
Information also has to be of the right type.
It means that obsolete info must be destroyed, and new one acquired, as long as the whole system evolves.
One of our problems is that our system is currently evolving too fast, and we’re not able to renew our “information set” at sufficient pace.
As an example, we’re still trying to apply solutions of the past although our situation and perspectives are totally different. That only adds to the burden empeaching us to take more adequate actions (and therefore speeding us towards collapse).
I think that obsolete information can be considered as a kind of entropy, one of the many we just can’t get rid of fast enough.
It is hard to come up with information that works, with this redundant intermittent generation. We need a double system, since the new system cannot stand on its own. There is no way that there is funding for this redundant system–it just sucks energy from the rest of the system. People have put together defective estimates of what intermittent renewables can do, with the idea that wind and solar PV can reduce the need for other generation. If they can’t provide this benefit in practice, it has to show up in the real data.
I agree with your example.
Information is a particular case of storage of energy (technologies, infrastructures, etc…), and thus must grow faster than the economy by itself, thereby consuming increasing energy, especially in periods when rapid changes happen, or a global new system should be implemented (!!).
Today we should operate a major shift but we’re running out of the required (additional) cheap energy necessary to even start such a process (about which there isn’t -or can’t be?- any agreement, by the way).
An increase in debt may temporarily mask the problem of decreasing energy (not even addressing the skyrocketing externalities that will likely kill us first), but we’re already seeing the limits of this debt-increase.
So I’ve hard time imagining any kind of “Plan Marshall” that could give us some more years before we hit the wall. No idea what such a plan could consist in, either.
+++++
Crude Oil Production
1 Gallon Crude Oil 37.5 API = Energy Content 140.000 BTU
ERoEI = 10 : 1
Extraction Cost = 14,000 BTU
Refinery Cost = 5,000 BTU
Distribution Cost = 5,000 BTU
Total Production Cost = 24.000 BTU
EROI = 140.00 BTU / 24.000 BTU = EROI 5.8 : 1
Diesel
1 Gallon Diesel = 130.000 BTU
Diesel Engine Efficiency = 40 percent
130.000 BTU * 0,4 = 52.000 BTU
1 Gallon Gasoline = 115.000 BTU
Gasoline Engine Efficiency = 20 Percent
115.000 BTU * 0.2 = 23.000 BTU
Conventional Crude Oil Barrel = 42 Gallons
Gasoline = 20 Gallons
Diesel = 10 Gallons
Jet Fuel = 4 Gallons
Heavy Fuel = 2 Gallons
Other = 8 Gallons
Total = 44 Gallons
So I would agree with Steve Ludlum, about his First Law of Economics, on http://www.economic-undertow.com/. Our human species does not really know how to handle a surplus. “the costs of managing any surplus increase along with it until at some point costs exceed what the surplus is worth.”
Any surplus needs to be “spent,” preferably on one’s self and one’s close allies.
All depends on your values. We are a fossil fuel global economy that needs to stop using fossil fuels because of global warming. In which case all CO2 emissions from coal and gas should have an accumulated social cost and ecological future costs. Therefore “low cost” isn’t really “low cost”, but represents “unpaid future costs”. Not paying the real costs is a short term competitive advantage, and a long term global commons loss. Short term competitive advantages lead to growth in consumption and population , which lead to faster depletion of non-renewable resources, also including the coal, gas and oil. Pricing refers to the high discount rates for our future. As far as making non-renewable resources go as far into the future as possible, while we still need them, by making efficient , clean energy infrastructure that lasts for a long time, and not increasing our consumption and production by the Jevons Paradox, we stand a better chance of understanding long term survival as a technological civilization. Plugged into the growth fetish as we still are from our biological instincts, we are but a short-lived, ecosystem, climate destroying species with not much time left in our last exponential doubling on this planet.
ALL civilization is short-term.
Anything else is a fantasy. Even China, Egypt, mere historical blips.
We need, if we are to be sane, to abandon the fantasy of long-term durable civilization.
We also need to give up the idea that climate is a long-term durable pattern that we can count on. History says it isn’t.
History also says the last time CO2 was this high many parts of the world were underwater and the planet didn’t have human life on it. Previous rates of CO2 change took thousands or millions of years to do what we did in a century. Evolution trails the current rate of climate change by a factor of 10,000, hence the current species extinction rate of a couple hundred per day. We are already so far beyond any sort of mitigable situation that it’s humorous. Sort of like the people who don’t understand energy claiming that we’re going to solve our mining problems by exploiting asteroids or Mars.
If somebody somewhere at some point in time is designing a human model 2.0, I’d like to make some modification proposals
– the ability to understand the exponential function would be juuust greeat, thank you
– causal pattern recognition of intergenerational trends would also help
– also a deep instinctive desire for making Terra Preta everywhere would be excellent
If we stop using fossil fuels, we are also dead–this is a problem as well.
We come back to the obvious question time and again with the Frantic Climate Change People (FCCP) …
What do we use to power our wonderful economy if not fossil fuels? What are the alternative energy sources? Keeping in mind that any alternative energy source must be cheap — which translates into the amount of energy that results from the production of said energy must be a whole lot more than goes into the production process.
Oh – and since we are concerned about AGW — that new energy source must also be clean.
Hmmm…. let me think about that … cheap… clean…. abundant…. hmmmmm…… hmmmm…
Snore — snore — dream state — snore — Charlie’s Angels dream…. snore — snore …
Walk up — coffee — oh right — cheap clean abundant energy …. hmmmmm…
Hmmmmm….. Hmmmm x 1000000000000000000000000000000 …. and hmmm again…
Hmm hmmm dee hmmm dadee hmmmm…. dooo dooo da hmmmm hmmmm… ahm…. ah… look… hmmmm… naaah…. nope… ah … no…. hmmmm…. there’s that …. ah no … hmmm….
I give up.
Green Groupies — please give me the answer.
Hi Gail
I really enjoy reading your posts and have learned a lot from you. I have shared them with friends here in Alberta that work in the oil industry and they too are very interested in what you have to say.
Thanks and keep up the good work!
Dean
You are welcome!
Globalization Goes Into Reverse
World trade as a percent of global gross domestic product…
https://pbs.twimg.com/media/Cv6CA_CWcAEkFYB.jpg:large
Looks like it is leveling out at 50-60%.
If not – how low can it go before collapse?
Probably a lot lower than you think, money printing can prop things up for some time longer, but not all the way to zero.
If world trade goes low enough world trade is no longer interconnected and the world can collapse in segments.
“Before going further, let me be clear: I’m bullish on solar. I’ve invested in solar. A decade ago, I paid to have 3,200 watts of solar panels installed on my roof. Why? Simple: I got a big subsidy. Austin Energy paid two-thirds of the cost of my $23,000 system, and those panels now provide about 30 percent of the electricity my family and I consume.”
Sheeeeeet Zeke — if da guvimint (i.e. my fella taxpayers) gonna pay 2/3 the cost of puttin solar on my roof I’d be hot damn bullish on solar too!
One would really struggle to make something up this amusing.
As long as you don’t put the solar electric on the grid, it is just the 2/3 government subsidy that matters. Once you put the electricity on the grid, somebody else has to fix up the mess you create–electricity prices that don’t react correctly, and lines that need fixing.
It looks like we could be past peak world trade, as a percentage of GDP.
Next Step in “Irreversible Decline”? Exxon Books 38% Lower Earnings, Blames Refining Margins
ExxonMobil reported earnings of US$2.65 billion for the third quarter of the year, or US$0.63 per share, largely in line with analyst expectations. The positive result reaffirmed the company’s reputation as one of the most stable Big Oil players.
In its financial report, the company noted that the annual drop in earnings from US$4.2 billion for the third quarter of 2015 was caused by lower refining margins and chronically depressed oil and gas prices, despite the pickup in crude over the last few months.
Even so, Exxon’s downstream business fared much better than its upstream operations. While earnings from exploration and production stood at US$620 million, chemicals and downstream operations contributed US$2.4 billion combined.
A recent report from the Institute for Energy Economics and Financial Analysis, however, warned that Exxon is suffering from fundamental weaknesses in its financials, which could spell an “irreversible decline” for the world’s top public E&P.
The report’s author, IEEFA’s director of finance, Tom Sanzillo, notes that Exxon has seen a 45-percent drop in its revenues over the past five years, accompanied by cuts on capex, declines in cash balances at the end of each year, and shrinking cash flows.
http://wolfstreet.com/2016/10/28/exxon-38-percent-lower-earnings-in-q3-blames-refining-margins-irreversible-decline/
Gail, you state “Intermittent Renewables Seem to Give Funding to the 1% and Raise Costs for the 99%, Unlike Fossil Fuel”
What about this, to bring the buying power of the 99% up? The tax code can change incentives. Tax codes are social engineering they encourage some things and discourage other things. In many cases we raise taxes on things that we think are socially destructive (cigarettes and alcohol) and we remove taxes from things we think are good for society (churches and charitable organizations.) Jobs are good for society but we tax them heavily.
We should try to remove all of the economic penalties (taxes) from labor. If a person does work, they and their employer pay several taxes. If a machine does the work, it pays none. When a machine does the work of 10 people, then it could be taxed at the same amount that 10 people would be taxed. That would be fair . . . right?
With this system, we would increase the number of jobs. If we have enough “people jobs” available, then the discrepancy in income should be less and a minimum wage might not be as necessary. A person working and paying taxes . . . not good. A machine working and paying taxes . . . is good
Plus:
I just saw this prediction . . . their may be some truth to it.
“unrestrained development of humanoid robots equipped with artificial intelligence looks set to replace 90% of ALL employment for humans in just the next 9 years.”
Note: Half of American males employees are employed to drive something. So I read recently . . . and we know where driving, as a job, is going.
We need to make more jobs soon.
Past civilization have put their unemployed to work by building pyramids and great walls.
Well . . . that’s what I believe. What are we going to do?
A busy/working young man is not a troublemaker for their rulers.
acomfort
Taxes on the wealthy would help, but they don’t go as far as a person might expect. Part of the problem is businesses, which act like wealthy individuals, but they can change corporate headquarters to new locations, to save taxes. It is only resource companies that are “stuck” where prices are taxes are high. Resource companies need the money for reinvestment, if they are to continue extraction, so taxing them is not helpuful..
Employers have always paid taxes for employees. Wouldn’t it be reasonable to have the employers pay equal taxes when a machine or a robot does the same job?
Yes, their is a problem . . . the company just lost one benefit from replacing a person with a robot therefore; they won’t let this happen.
Or perhaps, the company won’t be competitive with a socialist taxation? Nah, I’m just overthinking things, instead:
Let’s rip off John Galt and give the money to the hordes of useless, mindless consumerists, just so this pointless oil fueled and overpopulated earthly petri dish can continue to swell and spill, finally splashing onto the rock hard fundament of reality.
https://s-media-cache-ak0.pinimg.com/originals/b7/cb/11/b7cb11b1c07d55e2165046959098156a.jpg
They will put the machines in a different jurisdiction that doesn’t tax the output of machines. It is no different than attempting to tax companies for other purposes–they move if they don’t like the outcome.
I think I understand now . . . if employers pay taxes because of employees they will stay but, if they pay the same taxes because of machines/robots they will move.
Is this because employees are taxed everywhere but, machines and robots are not taxed anywhere?
Will my (computerized) coffee machine be taxed too? Since it automatically produces quite excellent coffee for me! The same for my (top of the line) electric bicycle, should that be taxed too? Those two computerized machines clearly indirectly make baristas and employees in the public transportation sector without a job.
How about if I, from scratch, build a 100% autonomous (lights out manufacturing) coffee producing factory with zero employees? How should it be taxed?
Oh, yes, I know, we need a huge and bloated government to create some arbitrary laws and regulations on how to rip money off John Galt and redistribute that to mindless consumerists. As usual a brilliant exercise in collectivism.
That is the crux. Manual labour is taxed harder than machine labour, resulting in loss of jobs, making it necessary to further race taxes on labour and making it easier to automate away more jobs.
Without a welfare state automation would not be as competitive.
It is very easy to move machines. Employees require training and are often hard to lay off and rehire.
Also, if a machine can do the job, likely your competitors have the same machine, or a very similar machine. The only way to compete is on keeping other costs low, including taxes. You likely have to be in a low-tax district, if any of you competitors are.
“The only way to compete is on keeping other costs low, including taxes. You likely have to be in a low-tax district, if any of you competitors are.”
You assume a cost cutting and automation race to the bottom scenario. In reality product development and innovation will create new market opportunities.
Robots are going to pay for the newly-developed output? You have got to be kidding. Somehow, wages have to go up, for this to happen.
“Robots are going to pay for the newly-developed output? You have got to be kidding. Somehow, wages have to go up, for this to happen.”
Where did I say that? You are getting caught up on that AI/Robot skit/schism FE et. al. brought on.
Those who can afford will buy the latest Tesla and iPhone, perhaps. Do you see subsistence farmers and poor city dwellers in Asia and Africa buying these goods? The difference is that I am not only considering the indebted “Average Joe” and broke US citizen in my rationale.
Furthermore no reasonable person will ever expect the great mass of earth’s poor people to be brought “online” to BAU once again. It is a process and that wave of prosperity have long since passed due to the process you have elaborately described in several posts.
On the contrary, the opposite is much more likely to happen as energy costs increase. More unproductive people (thanks to computerization, robotification, etc..) will be impoverished and be denied from the best spoils of BAU.
The reason for it being that it is too costly for the elite/TPTB to share the spoils of BAU. It cuts into their bottom line. Sooner or later people are going to be pushed off the bandwagon into permanent impoverishment. As is already happening across the planet.
http://www.t-shirtfrenzy.com/uploaded_images/Designs325/41150.png
Near Miss: The Solar Superstorm of July 2012
“If it had hit, we would still be picking up the pieces,” says Daniel Baker of the University of Colorado.
(…)
Extreme solar storms pose a threat to all forms of high-technology. […] Analysts believe that a direct hit by an extreme CME such as the one that missed Earth in July 2012 could cause widespread power blackouts, disabling everything that plugs into a wall socket. Most people wouldn’t even be able to flush their toilet because urban water supplies largely rely on electric pumps.
(…)
Before July 2012, when researchers talked about extreme solar storms their touchstone was the iconic Carrington Event of Sept. 1859, named after English astronomer Richard Carrington who actually saw the instigating flare with his own eyes. In the days that followed his observation, a series of powerful CMEs hit Earth head-on with a potency not felt before or since. Intense geomagnetic storms ignited Northern Lights as far south as Cuba and caused global telegraph lines to spark, setting fire to some telegraph offices and thus disabling the ‘Victorian Internet.”
(…)
https://science.nasa.gov/science-news/science-at-nasa/2014/23jul_superstorm/
According to physicist Pete Riley of Predictive Science Inc. there is a 12% chance that earth will get hit by a solar superstorm in the next couple of years. Thus “we need to be prepared”….
Isn’t it encouraging that Mr Baker is convinced that after the occurence of such an event there would be still people left in the industrialised world to repair the damages? I cannot fathom how these people do not seem to grasp the fact that the next solar superstorm of a similiar magnitude can be considered an extinction event. We only pulled through back in 1859 cause we lived less “complex” lives.
I deem a planetwide electronics and Internet destroying EMP event from the sun or a space nuke quite likely, at least compared with a hypothetical finance ‘collapse’.
Predictions are tough to make, especially about the future. Remember, collapse is always two years away and we are always long over due for some type of natural catastrophe. Boring!!!
“Remember, collapse is always two years away and we are always long over due for some type of natural catastrophe. Boring!!!”
http://notagrouch.com/wp-content/uploads/high-five.jpg
He needs to read Korowicz….
We always think that technology will save us, but in some ways it makes us more vulnerable. If there really is a Solar Superstorm, we could be in deep trouble. We depend on electricity for many things.
The war has been on for some time now. The war has been political, economic, financial, information, intelligence, energy, cyber, terror and hybrid.
Russia has made an offer to Europe of an Eurasian Union and is openly supporting nationalists in Europe who are against EU, NATO and US.
America has offered the TTIP to Europe and is supporting democratic forces in Europe who support EU, NATO and US.
China is building its New Silk Road that will connect the Eurasian continent with high speed rail from Beijing to Berlin.
The US is involved in colour revolutions in nations at the Russian borders and is building a New Iron Curtain.
The Middle East, the center of the global oil, is in flames, which is causing Muslim refugees to flood Europe, which in turn is turning Europeans to support the nationalists in Europe.
Russia calls this war WWIV, the Cold War being WWIII.
And then there is the Brexit vote… North Stream II… the DieselGate…. and Deutsche Bank. The war seems to again be concentrated to Berlin. On which side is Germany ?
War in the East
War in the West
War up North
War down South
https://youtu.be/loFDn94oZJ0
I am seeing things or do the post alerts for FW now display the username of the poster?
Let me look again … hang on….
Sweet Jesus …. what have I done to deserve such kindness! I will never doubt the existence of god ever again.
Smite — it is almost as if you don’t exist…. I am just going through the 90 or so alerts sitting in my account quickly ticking the ones with your UN …. and hitting the mass delete option…
I have given myself the gift of time as I no longer need to open the post — find it is you — and delete it…
What shall I do with all these precious minutes that I have gained today … shall I fly a kite? Or perhaps take a stroll on the beach? Read a chapter of a good book?
“Smite — it is almost as if you don’t exist…. I am just going through the 90 or so alerts sitting in my account quickly ticking the ones with your UN …. and hitting the mass delete option…
I have given myself the gift of time as I no longer need to open the post — find it is you — and delete it…”
http://www.hobokenpersonaltrainer.com/wp-content/uploads/2014/03/oh-no-baby.jpg
You will miss all the sweet mockery I have going on at your compexed ignorant expense.
http://www.zerohedge.com/news/2016-10-28/latest-blow-us-malaysia-will-buy-navy-vessels-china
I would highly, vociferously, absolutely, adamantly recommend NOT flying on Malaysian Airlines….
On the topic of collapse – since it is inevitable. I think we can all agree that is has started. And that it probably a process – not an event. Whether a region collapsed on its own or with some help I think is less relevant – and in MSM collapse may go under different names such as war on terror.
But what’s a good metric? Population? %of people with access to food, water and shelter? # gas stations open? Or grocery stores? And how far along are we today? 3% collapsed? Or much more?
I don’ think collapse has started at all.
I base that on the fact that the global economy is still growing — when it stops growing that is when we get collapse…. it grows or it collapses…. no in between.
What is happening is that more people are finding out what it is like to live like the billions who have lived outside of the prosperous core long before we ran into the limits to growth.
If you visit any third world country and wandered off the tourist trail you could see what that looks like…
While this may be ‘collapse’ for those who formerly lived cushy lifestyles… this is not the collapse of BAU. That said… even their downgraded lifestyle would be envied by those in the third world…. and when BAU collapses their current economic status will look downright regal.
If I were to be honest with myself … I would have to admit a certain amount of schadenfreude over this situation as I observe the smug formerly middle classes who have lived off the pillaging of the world come crashing down…
The donkeys who firmly believe in their superiority — who firmly believe that the terrorists hate us for how wonderful we are…. while they sit in front of one of their 5 teevees munching on pizza and super sized coke… wondering what Paris and Kim are up to…. and.thinking ‘what a wonderful world’
To such people I say this:
http://az616578.vo.msecnd.net/files/2016/04/11/635959442092430283-25552126_357592-violin.jpg
I am particularly bemused knowing that these types are starting to get a whiff of poverty… a whiff of the desperation that is part of waking up in the morning in the third world…
https://hamptons-magazine.com/get/files/image/migration/content_Hamptons-Celebrities-4.jpg
This is not yet collapse — this is just tossing a few chairs over board from the VIP section of the Titanic…
The real party gets started when the electricity goes out — forever.
Think about that moment for a moment.
One day you wake up … and go to flick on the coffee machine… and it doesn’t work…
Hmmmm…. must be a loose wire…
Then you go to your computer to check email and it’s running off the battery with no internet connection available…
Now that’s strange….
Open the door on the fridge and there is no light …
Try the radio and the teevee…. nope
Check the breakers and all are in the ‘on’ position …
Pick up the mobile to call a neighbour to see if their power is out… nadda
And then you think….. so this is how the end of BAU begins…. this is collapse.
I like your description. But this vision of one day everything on, and the next day everything off… That’s the 1 day collapse scenario. How likely is that to happen across the entire world? At the same time? Not very IMO.
Banks closed on Cyprus. They did the bail in. Greek ATMs spit out very little money these days. No instant collapse there either. Didn’t affect my ATM. Sure it’s not going very fast today. But I have a hard time seeing the 10 day collapse across the world play out.
But at an individual level, I’m sure many who couldn’t pay their bills have had their power cut. And, then there is no coffee in the morning. I’m pretty sure there aren’t that many coffee makers in Aleppo these days either. Looks pretty collapsed from what I can tell.
But I agree that we’re at or close to peak now, so we have seen nothing yet.
Cyrpus was a non event.
Lehman Brothers was an event. If the central bankers did not step in to backstop the financial system — the world would have stopped — completely — in a a matter of minutes.
Actually in less than the blink of an eye because there are complex computer programmes used by traders that immediately place massive sell orders based on trigger events/announcements.
If the central banks would have announced that they were going to allow ‘the free market’ to sort things out …. the financial system would have remained frozen.
Trade would have completely stopped. Stock markets would have completely collapsed. There would have been immediate global panic – pandemonium — food stores emptied… petrol stations emptied…
The world would have stopped.
The central banks are now all in trying to stop another Lehman moment — they know that when the next one arrives they will be powerless to do anything this time around – because every last bullet will have been fired trying to keep that beast in the box…
When the unstoppable event arrives — the world will stop.
Quickly – and forever.
Instadoomerism/collapsterism 101. There is always a new non-event for the complexed ignorant to safely ignore.
http://vignette4.wikia.nocookie.net/game-creators-universe/images/8/83/Joker.gif
tripple negation? I like it.
It’s doomerism and with that comes maximum negativity.
smite,
you get paid every time you post the silly image of the laughing zombie-clown? C’mon.
“smite,
you get paid every time you post the silly image of the laughing zombie-clown? C’mon.”
Ahahaha, he, he ho he.., “Zombie Clown”. 😉
You are most likely one or more of the following list.
1. A really, really o1d c00t?
2. Generally clueless about contemporary western culture
3. Plain ignorant.
4. A Russian online agitator
Now let me know how well I score in this little guessing game of cards.
https://s-media-cache-ak0.pinimg.com/236x/4e/a5/3c/4ea53cee97ca1fabdf2fa3f539c885ac.jpg
Fast-
You are so right on. I met a couple from New York city today that moved here in Cape Breton and they were so clueless about a power failure I just felt sorry for them. Even the people that get there is a problem don’t get there is a problem with regards to electricity.
It’s all relative …
For some not getting the right Louis Vuitton handbag for Christmas because the shop had run out of the preferred one… is an incredible tragedy … a collapse into despair and bitter disappointment … great moaning and complaining and whining….
This is actually a true story … as recanted to me by a friend of our friend who witnessed the tantrum. Then again … who buys a $2000+ handbag at all….
She goes onto the Schadenfreude List.
These water bikes are fun. The only problem is….
https://www.youtube.com/watch?v=ENg2UFlg23g
… once they sink, there is no way to restart in the water!
Isn’t the bottom line this is all related to population overshoot? We are now bumping into the natural constraints of the planet’s carrying capacity for humans? Given that there are no nearby resources to exploit to continue our growth (if there were Mars would have been colonized years ago), we only have the cliff to face? I could see Gail’s sudden stop scenario, but could also see some type of pandemic as the cause of economic collapse as easily as the energy per capita collapse as malnourished people get sick and spread disease across highly populated areas. If the population collapses, the price of oil would also collapse due to demand destruction. Of course energy per capita would then rise but hopefully we would be smart enough not to repeat the same mistake all over again.
I thought you were doing very well — until that last bit….
“Of course energy per capita would then rise but hopefully we would be smart enough not to repeat the same mistake all over again.”
Seriously? You must be trolling…
What you are saying is pure comedy…
http://vignette4.wikia.nocookie.net/game-creators-universe/images/8/83/Joker.gif
Absolutely, great point. Although the whole “not repeat the same mistake again thing” is probably hopeful thinking…
The thing is, we won’t get an opportunity to repeat the fossil fuel-fueled industrial revolution mistake again. Those of us who survive the end of BAU will have to look elsewhere for our energy and our entertainment.
Funny how some thing we can go backwards in time… when back in the day the reason we moved on was because the energy sources that were available were running out…
We were forced into the position we are now — if we had not ‘progressed’ then we would have gone extinct and none of us would have been born.
I am so glad that I have been one of the lucky winners of the lottery. I never win anything….
Overpopulation and hard limits are basically our 2 biggest problems. Since it is likely that our DNA forced us into this situation, and as we were obviously not responsible enough for the technologies we discovered, it is logical to conclude that this same scenario would be repeated forever. Of course, that is a hypothetical scenario as we are about out of cheap to extract energy and the biosphere looks ready to terminate us all on its own. This collapse will be more or less irreversible and permanent as nuclear radiation and climate change will absolutely destroy the habitat needed to support most life on Earth.
A new phenomenon at the labor offices in Slovakia: the unemployed reject to work and threaten and physically attack the employees of the companies seeking workforce who interview them.
This phenomen is most ofthen encountered in the Western part of Slovakia (with the lowest unemployment rate, where all the car industry is situated and the new car producing capacities are being built).
http://ekonomika.sme.sk/c/20369311/nezamestnani-zacali-utocit-na-uradnikov-nechcu-pracovat.html?ref=njctse
No wonder, if their families (often with pensioners who need assistance) need them more at home than the low wages that are offered to them, who would behave otherwise?
Maybe the unemployed is paid to much to do nothing?
Dear DJ,
are you crazy? Would you work for a few hundreds of EUR per month and away from your home? It is called slavery…
I would say that the social contacts in this dying world are more important than keeping the system going no matter what it costs.
The attacked officers and employers can simply reject to give them any social benefits. Why do not they do that? Would you do that?
I’m sorry I did not understand more than that unemployed declined work.
No I would probably not work if I got similar money for not working.
I find the question very complex.
It really is…
Dear MG, Maybe.
I believe it is a problem for productivity that disposable income differs too little between non-workers, unqualified workers and qualified workers.
On the other hand maybe producitivty is a bigger problem than inefficiency.
Dear DJ,
so I wish such fate…
…to you.
What do you wish for me? Threathening employers for jobs I won’t take or being threathened by people that won’t be employed by me?
To be in the situation when an idiot forces you to work against physical laws.
To be in the situation when somebody forces you to work against physical laws.
Understand that I can’t read slovakian, and possibly not english very good. I did not understand the physical laws thing, just that they refused to work because the wage was not (much) more than the unemployment benefit.
Dear DJ,
the physical laws act in the direction of contraction, when we are losing the cheap energy, so why should they go somewhere else? This is a complete misunderstanding that when the people leave their dying out villages, it will help nothing. The weeds and forest returns. And when they should die of hunger or lack of healthcare, why not die with their family? That is the point.
Better solution would be the serfdom with family in poverty than forcing them to leave.
In fact, something like that already exists in Slovakia: the so called “aktivačné práce” (activation works) – the unemployed secure services like grass cutting, cleaning some public places, collecting separated waste in the villages and towns for a very small wages from the state here in Slovakia.
It reminds me reading about the time when the winds of Communism was sweeping over Sweden, north to south. Oh boy did the ‘Capital’ in Sweden worry about that threat.
However, the communist agitators to their big surprise found out how incredibly fast the air went out of that revolutionary pancake once the the basic needs of the workers were met. As an added bonus; private consumption, worker productivity and corporate loyalty went through the roof.
Although, this require some work ethics on the part of the population, which have seldom been a problem in Lutheran Sweden. Not sure about Slovakia though.
Slovakia has Lutherans, too. It was one of the first places where Lutheranism came. Due to the connection with Germany, the first religious communities of Luther’s followers in Slovakia originated alread in 1517. In the 16th century, the 2/3 of inhabitants of Slovakia were Lutherans.
But the point is resource depletion, not religion.
The resource depletion causes the collapse of Christianity on the following line: orthodox -catholicism – protestantism – atheism (i.e. the line represents less and less resources)
In the seventies, the two famous humorists in Slovakia, in one of their scenes, imitated the Swedish language to the Slovak public (which sounds funny to the ears of the Slovaks), introducing their dialogue in imitated Swedish this way: “We are two Lutheran pastors tossed by whims to get rid of the faith.”
http://www.metoo.sk/play/f/5d41c9b74b87d0d56fe50c324cb97985/false/21
(I do not know, if the link for embedding works, so here is the website with the video: http://www.metoo.sk/myvideo/play/5d41c9b74b87d0d56fe50c324cb97985)
The internet is so cool. Thanks MG.
Didn’t atheism spread after fossil fuels was in wide use? Or perhaps replaced with another kind of religion not recognized as a religion.
Still suprisingly few atheists:
“According to the 2010 Eurobarometer Poll, the percentage of those polled who agreed with the statement “you don’t believe there is any sort of spirit, God or life force” varied from a high percentage in France (40%), Czech Republic (37%), Sweden (34%), Netherlands (30%), and Estonia (29%); medium-high percentage in Germany (27%), Belgium (27%), UK (25%); to very low in Poland (5%), Greece (4%), Cyprus (3%), Malta (2%), and Romania (1%”
Todays religion for many people is technology. God is too archaic for them.
The same belief in the progress was present in the communist countries of the Soviet bloc. The atheism was accepted by many and the religion of progress suppressed all other faiths, especially christianity. The christianity was the most dangerous for the atheist religion of progress: the idea of the end of the world is simply unacceptable for those who believe in neverending progress and the power of the human ingenuity etc.
Butl the system collapsed… The same way as many civilizaitons collapsed in the past. After that many people returned to religion: either to christianity or to some other faiths or philosopies. Or continued to believe in the progress represented by the western technology. Or believe that it was the corruption of the west that collapsed the communist regime. (Some were privileged, others were abused also in the communism, so those, who were privileged, want, of course, the return of the past.)
The people always look for some higher force, as we are dependent on the external energy, god being the emobodiment of the external energy that favours human species. When desperate, we are inclined to belief in whatever, that provides some kind of solution to our grim fate on the Earth.
You are right about technology being today’s god. As long as technology will save us, there is need for any other kind of good (except perhaps to reinforce the authority of the political leaders).
There are certainly a lot of both young and older people dropping out of the church today. You may very well be right about, “The resource depletion causes the collapse of Christianity on the following line: orthodox -catholicism – protestantism – atheism (i.e. the line represents less and less resources)”
I suppose too, if technology will provide resources, and there are so few resources that there is no point in thanking for them, a person might as well forget about a god.
Daniel Dennett writes about consciousness as an effect of multiple brain functions working in unison that create the “feeling” and “appearance” of consciousness. If Dennett is right, then ego really is more or less a harmful part of the human experience, as C.G. Jung tried to convince us. Another who disliked too much ego was the Buddha.
If thankfullness to god, and god itself as a concept, is a metaphor for lowering the volume of the ego, then, god has some purpose. But as to the human invented stories about god and gods, they are just fantasy stories..
Most of these stories have been born the same way. Actually we have several good cases of myth creation from our own time. First someone told a story: Roswell UFO! Then it was debunked with a sad unexiting truth; weatherballoon.. Then somebody told an even better story of Roswell; a cover up conspiracy of an alien autopsy! And as time goes by, tourists go there, movies are being made, books, tv-series, all kinds of things. And Roswell happened in a time of newspapers and radio. Imagine what it must have been like 2000 years ago without any written media, videos or pictures. Our species is a myth creating species, that, we have evidence about. Today the myth of god has been replaced by the myth of consumerism, the myth of a renewable energy transformation, the myth of perpetual growth on a finite world, the myth our species is exeptional and technology will solve everything. But they’re all still myths and we’re still a myth creating species.
Makes one wonder what kinda oral tradition myths will start to be born about the great Tverberg, the witty Pagett, the assailing Fast Eddy once SHTF cuts communications..
Kinda reminds me of Tverberg-Brahma, Pagett-Vishnu, Fast Eddy-Shiva
A different trinity?
any miracles (such as picking next week’s lottery numbers) I’m doing for myself
The company of those in the community of God is not bounded by time nor space. Some many good and kind are with us here and now if we allow. It has nothing to do with wealth nor winning. It does have to do with peace and joy. God and the community of all Gd are always here and now.
should read all in God
Diesel
1 gallon of diesel contains 138,690 BTU.
The diesel engines efficiency is 40 percent.
The economy receives 138,690 BTU * 0,4 = 55,476 BTU / gallon of diesel.
When it takes 55,476 BTU to produce a gallon of diesel from conventional crude oil then conventional crude oil can no longer deliver any Net Energy to the economy.
There are other energy leaks that need to be addressed in your analysis, Yoshua.
Gasoline, jet fuel, bunker fuel and asphalt produced from the same barrel of conventional crude oil. I know that the analysis is far from close to perfect.
Yoshua
Your calculation is incorrect because you apply the 40% at the wrong time.
If it takes 55,476 BTU to produce a gallon of diesel then the gross energy
= 138,690 BTU – 55,476 BTU
= 83,214 BTU
so the energy available to the economy = 83,214 BTU * 0.4 0
End should say Not Equal To Zero. Angled brackets for not equals were a bad idea.
Well… that wasn’t what I said.
I think that there has been too much focus on this dimension, and too little on the fact that it is the whole energy mix that matters, not a particular fuel. It is the mix that has to be cost efficient (or perhaps EROEI efficient, but EROEI doesn’t recognize value differences).
No one knows (except for the ones in the ivory tower) what the EROEI of the energy mix is. The value of the energy mix equals the global GDP.
I was thinking that maybe you have uncovered the Fed’s and Wall Streets strategy of how to bankrupt OPEC and how to take over their resources ? Perhaps they know exactly what they are doing ?
Regards Gail.
I am sure that you have got everything about right. I cannot fault your analysis, nor Putin’s analysis that global war might ensue from the battle over resources/US hegemonic pretensions, mostly to do with “energy” and the petrodollar.
I don’t share you sureness in Gail’s analysis, or anyone’s for that matter. It is just so hard to predict specific events in chaotic systems. I’m pretty sure that the future doesn’t involve a panacea, but Armageddon doesn’t seem likely to my eye either.
Gail, going forward: do you expect inflation or deflation? Which countries will experience which?
In the long run: Deflation. Everything human will go to zero.
+++++++++++++++++++++++
I expect a break in the system. Banks will be closed. Or maybe the electric power will be off, and no one will remember your bank balance.
Before this happens, some countries will go first. I suggest watching the problems in Venezuela as an example.
Japan and Sweden are good test cases also. No domestic energy supplies and their own currencies.
Japan is 20 years (or so) before on the demography. Homogenous population and nationalists. But I think they are much more overpopulated.
Sweden is probably interesting because of the question:
what happens if free everything ends?
And also. In a cold and dark winter climate. Where it’s not very windy some winter days. How’s that renewable transformation going? And enjoy your electric car in -20C. That ‘waste heat’ from the ICE sure doesn’t seem like waste at all!
Still. Sweden is James Hansen’s poster child since it’s 50/50 nuclear, hydro on the electricity side of things.
The populated areas of Sweden aren’t that cold. Temps of -20C are rare.
When I visited Stockholm a couple of years ago in February, it was above 0C pretty much the whole time. It was warmer than in Atlanta.
Baltic sea on one side and gulf stream on the other.
We have a short episode of -15C or colder every winter. But that is what furniture is for.
And for the parts of Sweden where it IS cold there is enough trees.
My guess: Swedens population through ages has been limited by, in order:
1. Starvation
2. Sickness caused by starvation
3. Weakness caused by starvation
4. Disease
5. War
No one freezes to death unless some kind of accident and no one thirsts.
Less than 1% of all land in Sweden is farmed organically…. so even if collapse hits at harvest time there will soon be virtually no food available.
Millions of people will be fighting over scraps… ripping everything that grows out of the ground.
Every animal will be killed and eaten – even those on two legs.
I would argue that northern countries would be the worst places to be when BAU ends… climate is one issue — but most fuel ponds are north of the equator…. so you get to eat the radiation before everyone else….
The radiation will probably take a few weeks to reach me here in NZ…. so when you guys up there are vomiting blood … and your skin is sloughing off…. and teeth falling out…
Just picture me in my 20ft container…. disco ball flashing…. battery powered stereo wailing….40 gallon barrel of booze…. as I toast the end of the world….
http://a.fod4.com/images/GifGuide/dancing/sunny2.gif
How about a dress rehearsal…. wait another month … till the temperature in Sweden drops to below zero….
And turn off your electricity for a week – buy no petrol — buy nothing from a shop….
Then imagine that being forever….
I bet you will wish you were dead.
Once we fed 5M with organic farming. Admittedly this was at the limit with famine every generation.
If you get your instadoom of course everything goes down instantly, it wouldnt be instadoom otherwise.
Yep – during the time of Malthus we fed hundreds of millions with organic farming methods..
But then when we realized that using petro chemical fertilizers… irrigation … pesticides… tractors etc… would allow us to feed billions …. we commenced killing out soils …
And now nearly 100% of all soil everywhere will support no crop when the chemicals are not available.
You cannot look at what was — for guidance on what will be.
This is an extinction event.
The bill I have run up learning this lesson is well over USD100k …
I am giving away the answers to the exam for free here on FW 🙂
Back in they day when I had not realized this was an extinction event… one of the reasons I chose not to return to Canada was the cold.
Month after month of misery ….
Anyone who is caught up in the romance of the north — go out to the forest with your axe — cut down a tree — then split it into firewood — carry it back to your home — and stack it.
Then report back on how romantic that was.
You are weak.
Such bravado!
Talk the talk… do you walk the walk?
Try this:
http://f.tqn.com/y/homerepair/1/S/S/B/-/-/turn_off_circuit.jpg
Unless you want to get rid of the tree you probably don’t have to cut it down, find a fallen. Using saw, wheelbarrow and axe it is not so bad. You don’t do it in the middle of winter.
A few month ago you said the bugs would kill the Scandinavians.
Nuclear war maybe, climate change probably not. Most likely starvation.
Not cold. Not water. Not bugs.
What happens when the fallen trees near your house are all burned up … and you need to walk a km … then 2km….then 5km….
What happens if your wheelbarrow breaks?
Bugs? I don’t recall a bug discussion — but of course there are those billions of black flies and mosquitoes… driving you out of your mind as you trudge off into the woods with your wheelbarrrow to collect wood.
You know how I concluded that this was not a feasible way forward?
I actually tried a ‘Lite’ version — setting up an organic operation with 200 square metres of raised beds (the largest organic garden in my area) and guess what — there is no farking way in hell I could feed the 4 people who live in this house off of that garden — and I live in a temperate zone where food can be grown in the ‘winter’
I also read a couple of books written by pioneers in Canada — these were hard men and women who knew how to farm — who knew hardships in Europe — who moved to Canada..
And they frequently starved — the suffered miserably. They had the skills required to live such a life and still… they perished.
Not only do I not have the skills … I have absolutely zero desire to live if that is what is what life looks like…. not to worry though …. there is no way I would be capable of staying alive for long without my darling BAU.
Speaking of having the biggest garden in the hood — I also realized that I’d be asked to feed a lot more than 4 people post BAU…. the hordes would be over the fence ripping up my measly crop within days of the shops going empty…
What I fool I was to believe this was a survivable event. A complete utter idiot. Silly me.
“How about a dress rehearsal…. wait another month … till the temperature in Sweden drops to below zero…. And turn off your electricity for a week – buy no petrol — buy nothing from a shop…. Then imagine that being forever…. I bet you will wish you were dead.”
Below zero, that’s petty. o_O
http://img.memecdn.com/Meanwhile-in-finland_o_146294.jpg
Below -40 C once you press onwards way north of the arctic circle. That’s proper winter for you weaklings.
Probably the safest place to be post a hypothetical BAU/collapse. That and with lots of ammo and a reliable rifle. Plenty of space and nothingness. The hordes will freeze to death, and potatoes grow like crazy under the midnight sun.
It sucks, but in a, harsh, hard and pure kind of way. An acquired taste.
http://img.memecdn.com/meanwhile-in-finland_o_2337435.jpg
“Sweden is probably interesting because of the question:
what happens if free everything ends?”
This would be interesting. What would the reactions be? Like Fast Eddys black friday movies, something worse or something more peacful?
I think they will mostly riot in their own neighborhoods. Which is what is already happening at low intensity.
I think Sweden has ok odds. Fossil free electricity, for practical purposes unlimited fresh water, a population not too out of proportion to arable land, a ethnic population that accepts most anything.
I think we can expect peak oil refugees from continental europe before the reverse.
‘Fossil free electricity’
Ha ha ha ha…. hahahahahahahahaha…. hahahahahaha.. ha … ho ho hee hee haw haw ….
Oh … look …. hahahahahahaha… I have p.issed myself ha … hahahahaha hooo haw heeyoo….
Hang on … yeeee hooo hawwww haw…. let me get some duct tape…. hooo ha that’s go-dam-funny… hoo hoo…. zrrrrrrrrppp… ah… that’s better… hahah heee hee…. my entrails were hanging out that nasty gut bust…. hoo hoo haw hee ha…..
fossil free electricity….sum bitch dats a funny one …. hooo hoooo haha hahaha….
https://m.popkey.co/ff0be0/3eMpZ.gif
Yes … give me some slack. I know it takes diesel to maintain, but most of the fossil fuels has been sunk into the production.
No fuel burnt directly for electricity and not much for heat.
No slack.
A single part in a system with many thousands of parts breaks — and the entire system is rendered permanently useless.
I would imagine that in such a complex system — parts break every single day.
I think there are some Fossil Fuels / Thermal power used for electricity generation in Sweden. Not much but anyway.
However, hydrocarbons are very much a crucial resource for maintaining our mostly Nuclear and Hydro powered electricity generation and infrastructure.
I expect we will both live to see. Unfortunately there will be no internet so we can’t agree on if 2015 or 2030 or something was the last year of the christmas turkey.
Sweden has got plenty of hydroelectric and wood. In this regard not really comparable to Japan. Still for other reasons an interesting test case.
I am surprised we’re having a discussion of whether Sweden or Japan collapses first, when we will have at least hundred countries go before both.
In Greece and parts of Italy you can almost sleep under a tree. That’s nice. Try that in Malmö, Sweden on a cold night in Jan. I basically think that these territories are not habitable if it wasn’t for FF/nuclear. Same goes for most of Canada and interior US. But at last those places have resources.
Exactly! When civilization started out, it was only in the warm parts of the world. It could only spread to cold areas, to any significant extent, when fossil fuel energy resources became available, so it was not necessary to cut down the trees to have metals and other desired products. If some remnant of civilization survives, it will likely be in a fairly hospitable area of the world, climate-wise.
Sweden had a population of aprox. 4.5 mil. in the later half of 1800 (todays population is more than twice of that). That was before FF. People emigrated to America, but a population of 4 mil or so was probably sustainable. Climate change will increase crop yields in Sweden but like many other countries, Sweden lacks the technology and human skills required to feed its population without FF. 20th century in reverse would be painful.
There is a reason why you don´t see homeless cats in cold countries. W/O social benefits you wouldn´t see many homeless people either in those countries.
Could you give an example of a country where 20th century in reverse would not be painful? A country where 2016 is not already painful.
I was in no way suggesting Swedens current population could go back to 1870 and live happily ever after.
Only that, providing the whole earth is not uninhabitable, Swedens population probably could climb back up to 3-5M and live sustainably unhappily ever after, kept in check by famine.
Japan has some hydroelectric and plenty of wood too. During and after WW2, a lot of the mixed woodlands were cut to make charcoal and then planted with cedar and cypress. Neither of these softwoods has the energy density of harder woods such as oak, chestnut,beech, or cherry, but there’s enough of it to last a few years.
The thing is…
Japan’s chief cabinet secretary called it “the devil’s scenario.”
Japan’s chief cabinet secretary called it “the devil’s scenario.” Two weeks after the 11 March 2011 earthquake and tsunami devastated the Fukushima Daiichi Nuclear Power Plant, causing three nuclear reactors to melt down and release radioactive plumes, officials were bracing for even worse.
They feared that spent fuel stored in the reactor halls would catch fire and send radioactive smoke across a much wider swath of eastern Japan, including Tokyo.
Thanks to a lucky break detailed in a report released today by the U.S. National Academies, Japan dodged that bullet. The near calamity “should serve as a wake-up call for the industry,” says Joseph Shepherd, a mechanical engineer at the California Institute of Technology in Pasadena who chaired the academy committee that produced the report.
Spent fuel accumulating at U.S. nuclear reactor plants is also vulnerable, the report warns. A major spent fuel fire at a U.S. nuclear plant “could dwarf the horrific consequences of the Fukushima accident,” says Edwin Lyman, a physicist at the Union of Concerned Scientists, a nonprofit in Washington, D.C., who was not on the panel.
After spent fuel is removed from a reactor core, the fission products continue to decay radioactively, generating heat. Many nuclear plants, like Fukushima, store the fuel onsite at the bottom of deep pools for at least 5 years while it slowly cools. It is seriously vulnerable there, as the Fukushima accident demonstrated, and so the academy panel recommends that the U.S. Nuclear Regulatory Commission (NRC) and nuclear plant operators beef up systems for monitoring the pools and topping up water levels in case a facility is damaged. It also calls for more robust security measures after a disaster. “Disruptions create opportunities for malevolent acts,” Shepherd says.
At Fukushima, the earthquake and tsunami cut power to pumps that circulated coolant through the reactor cores and cooled water in the spent fuel pools. The pump failure led to the core meltdowns. In the pools, found in all six of Fukushima’s reactor halls, radioactive decay gradually heated the water. Of preeminent concern were the pools in reactor Units 1 through 4: Those buildings had sustained heavy damage on 11 March and in subsequent days, when explosions occurred in Units 1, 3, and 4.
The “devil’s scenario” nearly played out in Unit 4, where the reactor was shut down for maintenance.
The entire reactor core—all 548 assemblies—was in the spent fuel pool, and was hotter than fuel in the other pools. When an explosion blew off Unit 4’s roof on 15 March, plant operators assumed the cause was hydrogen—and they feared it had come from fuel in the pool that had been exposed to air.
They could not confirm that, because the blast had destroyed instrumentation for monitoring the pool. (Tokyo Electric Power Company, the plant operator, later suggested that the hydrogen that had exploded had come not from exposed spent fuel but from the melted reactor core in the adjacent Unit 3.)
But the possibility that the fuel had been exposed was plausible and alarming enough for then-NRC Chairman Gregory Jaczko on 16 March to urge more extensive evacuations than the Japanese government had advised—beyond a 20-kilometer radius from the plant.
Later that day, however, concerns abated after a helicopter overflight captured video of sunlight glinting off water in the spent fuel pool. In fact, the crisis was worsening: The pool’s water was boiling away because of the hot fuel.
As the level fell perilously close to the top of the fuel assemblies, something “fortuitous” happened, Shepherd says. As part of routine maintenance, workers had flooded Unit 4’s reactor well, where the core normally sits. Separating the well and the spent fuel pool is a gate through which fuel assemblies are transferred.
The gate allowed water from the reactor well to leak into the spent fuel pool, partially refilling it. Without that leakage, the academy panel’s own modeling predicted that the tops of the fuel assemblies would have been exposed by early April; as the water continued to evaporate, the odds of the assemblies’ zirconium cladding catching fire would have skyrocketed.
Only good fortune and makeshift measures to pump or spray water into all the spent fuel pools averted that disaster, the academy panel notes.
At U.S. nuclear plants, spent fuel is equally vulnerable. It is for the most part densely packed in pools, heightening the fire risk if cooling systems were to fail. NRC has estimated that a major fire in a U.S. spent fuel pool would displace, on average, 3.4 million people from an area larger than New Jersey. “We’re talking about trillion-dollar consequences,” says panelist Frank von Hippel, a nuclear security expert at Princeton University.
http://www.sciencemag.org/news/2016/05/burning-reactor-fuel-could-have-worsened-fukushima-disaster
Citing a little-noticed study by the Nuclear Regulatory Commission, the Academies said that if an accident or an act of terrorism at a densely-filled pool caused a leak that drains the water away from the rods, a cataclysmic release of long-lasting radiation could force the extended evacuation of nearly 3.5 million people from territory larger than the state of New Jersey. It could also cause thousands of cancer deaths from excess radiation exposure, and as much as $700 billion dollars in costs to the national economy.
https://www.publicintegrity.org/2016/05/20/19712/scientists-say-nuclear-fuel-pools-around-country-pose-safety-and-health-risks
At this very moment there are pumps hurling tonnes of sea water onto the active fuel rods of the Fukushima reactors…. these are not the fuel ponds … just a relatively small amount of fuel vs what is in the ponds…
If the pumps were for some reason to stop working…. a nightmare scenario would play out… with radiation spewing across the country….
Note: this is ONE facility only. And it is not a spent fuel pond – which is a far more dangerous animal.
As for the fuel ponds these are not static ponds – computers and pumps and valves and all sorts of high tech gear are involved in keeping them safe – all of this needs an energy supply….
Post BAU — how does one keep those pumps running and pouring water onto the melted cores? How does one keep the high tech gear operational in the spent fuel pond facilities?
I don’t think finding wood for a fire will be much of a problem post BAU…. we’ll all be dead long before we burn up the low hanging dead wood….
Cheery thoughts!
I would think that Sweden has a lot of wood per capita that could be burned, if need be.
I am working on a screen play for Being There 2 – The End of BAU
Chauncey Gardiner: ‘The body can function even if you cut off a leg that has gangrene — a finger — an arm…. but if you cut off any of the core components such as the brain, or heart or liver or kidneys… the body will die — and you definitely cannot hack out the spinal cord and expect the body to function’
The rise of cremation in the world: obviously cheaper is better
https://nationalcremation.com/cremation-information/why-is-cremation-becoming-more-popular-in-the-us
https://www.theguardian.com/world/2016/oct/25/vatican-bans-catholics-cremation-ashes-loved-ones-home
The same trend is also in Europe.
The energy crises and the spread of contagious diseases led to interesting reforms in the Austria-Hungary empire in the 18th century:
“Because people were using more and more energy and wood was in increasingly short supply, Maria Theresa and Joseph II ordered the population to save energy. While the ‘economy stove’ was a great success, there was considerable resistance to the ‘economy coffin’.”
http://www.habsburger.net/en/chapter/it-forbidden-wear-clogs-saving-energy-under-maria-theresa-and-joseph-ii?language=en
http://www.habsburger.net/en/chapter/recycling-even-death?language=en
http://michaelorenz.blogspot.sk/2013/07/mozart-and-myth-of-reusable-coffins.html
The need for coal was triggered by the lack of wood:
http://www.habsburger.net/en/chapter/coal-instead-wood-coal-alternative-supplier-energy?language=en
Agreed. Coal helped prevent deforestation.
Now imagine how quickly the low hanging fruit i.e. the dead wood laying around close to where people are living … and gathering to keep warm when the power goes off….
Will get burned up…
Once that is all gone then wood collection will involve axes and splitting…
Every try to burn green wood? Best of luck with that….
So you cut and split your trees and you pile it waiting for it to dry enough to be able to burn it…
Meanwhile you … you huddle in the corner … the dark… in your IKEA blanket….
Extinction event imminent (EEI)
http://www.doomsteaddiner.net/blog/wp-content/uploads/2015/05/human-extinction.jpg
Who would want to lay down under a blanket and wait for death? I got a bulletproof vest and a large assortment of weapons as I imagine a few million other Americans do. For me the party starts when the grid goes down. Until then I plan on doing everything I can to tilt the odds in my favor, fully aware that I will likely succumb to something embarrassing like tetanus.
I imagine I will be going out in a blaze of glory…. either it will be running into the rock cut (before the skin sloughing starts)…. or a dien bien phu/ok corral scenario….
Tango Oscar,
When I first came across the Chinese curse “May you live in interesting times” (that does not, in fact, exist in Chinese), I thought it was a blessing and not a curse. Who wants to live a long and boring life, right? I thought it would be great to live in anarchy and be a domesticated sheep no longer. Having to fight for food and survival like the rest of the animal kingdom I would discover what it really meant to be alive. Like you I got the weapons and trained everyday.
I hold no such fantasy thoughts anymore. Perhaps you living on your defensible farm would be able to make a go of it, but if I’m honest I lack the skills, resources and determination to survive a collapse. I am a product of IC and if it ends suddenly so do I.
‘Interesting times’ have a certain amount of appeal…. however the awareness that death is a certainty vs a risk…. reduces the appeal dramatically…
I saw a previously used funeral pyre in India. I suppose it is the same principle.
Sky burial — feeding the vultures — is far more environmentally friendly.
I can’t think why Greenpeace isn’t pushing for that.
The trend in the so called atheist Czech Republic: the funeral or cremation without the ceremonies. Already 50 % of them are already without the ceremonies. Those with ceremonies have them increasingly shorter. Another predicted trend in the article is that there will be a declining interest in visiting cemeteries. Today, every 15th urn remains uncollected in the crematory.
http://byznys.lidovky.cz/hitem-v-cesku-je-pohreb-bez-obradu-pozustali-chteji-co-nejvice-usetrit-1es-/moje-penize.aspx?c=A161027_143522_firmy-trhy_kkr
I don’t know if many of your readers appreciate if I point this out, but what you do in the first part of your article is to describe a marxian critique of capitalism. The problem that “lower return of labour” will decrease demand is basically covered in Marx capital volume 1 ans 2! I really appreciate that you bring together this marxist approach with the role of energy in our economic system. It also brings together your model view of the world system with the theories of the founder of “world system theory”, Immanuel Wallerstein (yes, as most sociologists he is very much influenced by Marx).
His analysis is pretty close to yours, See his Paper on “Crisis of Capitalism”
http://mrzine.monthlyreview.org/2009/wallerstein121109.html
Yeah, this place indeed got that Marxist vibe.
It springs from, a quite arrogant and generally uninteresting, human chauvinism.
“Western culture, according to which human beings are the only subjects of moral consideration and are the only objects with intrinsic values.”
https://thoughtsofascent.files.wordpress.com/2014/12/9-the-human-test-e1418129570213.jpg
https://en.wikipedia.org/wiki/Anthropocentrism
http://24.media.tumblr.com/tumblr_mbr3dre04l1r37yrwo1_500.jpg
Least I should remind you, there is Fast Eddy
Just watch
https://m.youtube.com/watch?v=jZuktUfF0nE
Harping on that instacollapse dogma is so simple, sweet and appallingly…
Wrong.
http://izquotes.com/quotes-pictures/quote-for-every-complex-problem-there-is-a-solution-that-is-simple-neat-and-wrong-h-l-mencken-384395.jpg
I like the quote, “For every complex problem, there is a solution that is simple, neat, and wrong.” – even if I don’t agree with your previous statement. I do agree that there are things we don’t understand about what is ahead, however.
Smite is into hot robot chicks…. that I know…
I understand that he has a fetish for the solar powered ones….
Ahaha, I see we are a little intrigued by that ‘hot chick’ robot sharing program.
https://s-media-cache-ak0.pinimg.com/736x/41/ee/b6/41eeb6d5c2972ebd676a4d12956434fd.jpg
o_O
FE, wanna borrow mine?
Low mileage, fully serviced and disinfected.
o_O
Dear smite
Your comment has no argument wharsoever, I dont understand it? I am not american, is this the thing when you try to win arguments by pussygrabbing everybody else?
From where I live, it seems to be the american way.
I am glad you are in charge of the narrative.
Yes, I live in the 51:st state: Namely Sweden. So you could rightfully say I’m ‘american’.
I used to live there. I thought Canada was the 51st state. Though I have to agree that Sweden is pretty darn americanized by now!
Wasn’t there some survey a while ago where Swedish youth trounced US youth in English skills. It just goes to show the amount of U.S. soft power in Sweden.
Although, with the exception for english skills, the Swedish PISA scores are pretty much abysmal. But it’s perhaps a sign of the kid’s mental health. Swedish elementary and upper secondary school sucks. What a mind numbing piece of leftist PC brainwash waste of time that was. Luckily for this country our sci/tech universities are still decent.
“Luckily for this country our sci/tech universities are still decent.”
Are they? Five years ago I used to do some teaching in one of those places. Not an impressive clientele. In fact a catastrophe… The skills have gradually been sinking each year since the early 90ies, according to diagnostic tests on first year students.
Agreed.
I didn’t say good, I said decent. At least that’s my impression from interacting with newly graduated students.
However, my older and similar age fellow engineers, on the other hand. Now that is mostly a bunch of self entitled, elitist and halfwit dullards. No wonder corporations like Ericsson is going down the tubes.
http://www.azquotes.com/picture-quotes/quote-if-there-s-an-original-thought-out-there-i-could-use-one-right-now-bob-dylan-66-57-97.jpg
The way the energy system is set up, Canada might as well be the 51st state. Up until a few years ago, a person could just drive across the border, without any particular kind of controls.
Isn’t Canada one of the other 50 states?
😉
If there is a real underlying reason, perhaps two different analysts could come to the same conclusion.
Gail,
Very well thought through. Definitely will review my energy portfolio and look at government policy in energy matters from a different perspective. Your right, there is a tendency to push for very simple explanations and in some cases solutions to complex problems.
Thanks!
Clay
Started reading about peak oil around 2003. Too bad these poor fools who keeping out babies just don’t seem to understand the post WWII model fizzled out about 40 plus years ago. Ever since early 70s we’ve been living off the fiat petrodollar which has steadily been losing its purchasing power. We’re long overdue for population die off.
Sent from my iPad
>
I agree, the Petrodollar definitely has been helping the US economy. So has our relatively good internal supply of energy products.
“The wages of the non-elite are too low to provide an adequate standard of living.”
Just some thoughts:
To focus on this point in abstractio it seems that the system could readjust with a dimunition of the population level. If the system relies ever more on a specialised elite and is unable to provide for quite so many non-elite persons, then the system may survive by adjusting the quantity of the non-elite.
The non-elite contribute essential work to the functionality of the overall system but a lot of their work is likely unessential to the functioning of the system. The non-elite could simply be reduced to a level that allows the system to continue without the excessive strain that too many of them place on the system. If there is insufficient taxes to maintain such a large population then those taxes could support a smaller population.
That population reduction is likely to happen as a consequence of system readjustment rather than by deliberate policy. I saw on the news just a few minutes ago that millions face starvation in Yemen because of the war. Yet we also know that Yemen is largely depleted of its resources and that it cannot possibly maintain its current population without massive outside aid on a permanent basis.
Much of MENA is passing peak oil production of much of it is ravaged by war. The UN, NATO and EU continue to resettle millions of refugees. So it seems that underlying economic decline will for the time being manifest as war and starvation that will reduce the population without any deliberate policy to reduce it.
Of course the starving masses of the developed world may ultimately rise up and destroy everything. The states will defend themselves from the masses and many of the masses will die. The system will only take a hard line when it is unavoidable. Or they may not rise up, they may just die.
However the financial system is likely to collapse and there is no guarentee that the system will be able to readjust. Very likely the whole thing will just collapse.
Most people who have looked at the problem think that there has to be a diminution of population.
I think you are right about, “Very likely the whole thing will just collapse.” There are a lot of things we can’t know exactly. Will there be some kind of outside intervention, in some religious or quasi-religious fashion, for example? Or will a combination or war, disease, nuclear power plant problems, and lack of clean fresh water do most of us in?
good thoughts…
one would think that the Obama administration should not be collapsing the U.S. coal market, because of its cheap energy value in relation to oil …obviously they have other motives, rather than to enhance u.s. productivity.
They do. See https://guymcpherson.com/climate-chaos/
Sounds like you have fallen prey to the “war on coal” propaganda campaign. Between expanding wind and solar and tons of cheap fracked natgas, it’s just a matter of economics. The only war coal is in is a propaganda war that they started out of desperation,
Shale gas, not EPA rules, has pushed decline in coal-generated electricity, study confirms
https://www.sciencedaily.com/releases/2016/10/161007105548.htm
I tend to agree with you, but there is an issue that you are probably not aware of. US coal production has been collapsing since 2008. It doesn’t seem to be economic to extract it any more. I think that the issue is more than environmental laws. We started to extract the best quality coal very early, and now it is mostly gone. We are now dealing with poorer quality coal that must be transported longer distances. Also, natural gas, at its give-away prices (selling price below the cost of extraction), is making electricity companies switch to natural gas. Building new gas plants is very cheap as well. But the gas supply cannot be sustained, without higher prices. This is another dimension of the problem. Having more choices might keep things going a bit longer.
Very few of my posts are getting through. Gail, if you censor discussion you will miss a big part of the story. Nothing should be off limits while discussing collapse.
They get through eventually. Gail is not out to get you. But WordPress …
I am not censoring your posts. I have no idea what the problem is. Sorry!
Working on behalf of the RealitySTAN secret service, agent 00Eddy hacked into the Finite World servers and set up a self-destruct mechanism on any of dolph’s posts that are greater than 200 characters.
http://www.clipartkid.com/images/236/creepy-smiley-face-by-reddmunki222-on-deviantart-f4zX9B-clipart.jpg
I appreciate your insights and the hard work involved in describing them. It helps so much in understanding the world falling apart around me.
Thanks!
Pingback: How Researchers Could Miss the Real Energy Story – Olduvai.ca
“The Paradox of Falling Energy Consumption Relative to GDP, Despite Falling EROEIs…
EROEI as a way of allocating limited fossil fuel energy supplies…
What Should the Role of EROEI Be?”
EROEI is a perfect framework for evaluating ALL energies, from human, human & animal, wood, coal, gas, hydro, solar, petroleum through nuclear and thorium. All that is required is the rigorous calculation of any and all energy used in the production, delivery and implementation of the energy to be used and a precise calculation of the energy output especially including any inefficiencies. This will give you the EROEI of almost everything.
What is the energy cost of a man digging for gold with a shovel? What is the proportionate cost of the energy to make the shovel for however long the man uses it and what is the energy cost of the man digging? What is the per load or per hour energy cost of the donkey the man uses to carry the ore? What is the energy cost per unit for the geological degree of the man to determine where to dig? And so on and so forth. Understanding that not all energy invested yields anything, like burning a candle in full sunlight and not using it to heat anything. Energy is easily and usually wasted.
The calculation of the energy costs of all things is a herculean task perhaps, but once accomplished the calculation of the EROEI will answer most energy evaluation questions and resolve the apparent paradox. When you have determined the energy cost of each additional dollar of debt, the paradox disappears.
Sorry, I don’t agree with you. We don’t really have a shortage of energy (we have a shortage of cheap energy), and “cost” comes out better as a way of evaluating relative values.
Reblogged this on Stephen Hinton Consulting and commented:
Repost from the excellent blog of actuary Gail Tverberg. Gail has an uncanny ability to spot what is happening in the interface between energy and economy. She has an amazing intellectual capability to model it combined with clear and insightful communication.
Thanks!
Great article.
George Box said, “All models are wrong. Some are useful.”
You mention the problem of drawing boundaries in the calculations of EROEI. I have always felt that this step is critically important, and doing it in an incomplete manner (particularly for the denominator, the inputs) accounts for the misleading values and misguided conclusions that people draw from such numbers. For example there are the direct inputs, the people, equipment, vehicles, fuel, that go into planning, exploration, drilling, production, refining, distribution, environmental cleanup, etc. But for each one of these direct inputs, there are multiple support systems that need to be present and in working order: schools, universities, health care, utilities, government, law enforcement, security, sea lane management, steel making, shipbuilding, food production, etc. And for each one of the indirect inputs there is another level of inputs, each level more distant from the oil producer, but each indispensable and necessary. It is like an infinite rabbit hole of regression to enumerate all of the energy inputs that had to be expended to allow the barrel of oil to emerge at the end of the process. Of course only a diminishing fraction of each distant input can be allocated to energy production, but the fraction is not zero. I would like to see a model that at least attempted to incorporate all of the above. On the other hand, with the apparent urgency of the situation, maybe people who could construct such a model have better things to do with their time.
It seems we have come a long way from Colonel Drake who walked out into the woods with some simple equipment and came away with thousands of barrels of oil.
You are exactly right about the infinite rabbit hole. Our system of adding together all costs is the only system I know of that “fixes” this problem.
I was perhaps too charitable in talking about EROEI. It is a flawed system. It was developed by well-meaning people, some of whom are my friends. I feel very bad for them. I talk about “costs,” because these are things that we understand, and that have truly have meaning. The developers of EROEI thought that they could build a better system, but in practice, it doesn’t work. There are too many boundary issues. These get worse, when many different people from different institutions make calculations, with their own assumptions.
To make things worse, an awfully lot of people assume that if Energy Out is greater than Energy In (as counted in EROEI calculations), that is good enough. That is not nearly enough, especially if the inputs and outputs are of equal value. It the inputs and outputs are of different value, that adds to the confusion.
I see this as a political rebalancing of energy. Energy use is changing worldwide. The west is using less while poorer nations use more. Unfortunately at this time falling use is exceeding rising use in other nations. It will take time for this rebalancing to complete. Unfortunately those in power do not want to wait and war will be used to tighten supplies and raise prices.
There is another angle on the debt subject which should be added to the discussion, namely that nearly all “money” (bank deposits) are created as debt, on computers, from thin air, with a few keystrokes. This is seen dramatically in the case of trillion dollar bailouts of the private banking system.
Government banks can also create funds from thin air. Abe Lincoln did it with “Greenbacks.”
https://en.wikipedia.org/wiki/Greenback_(1860s_money)
So in a sense, money is a fiction. And who should profit from creating this currency?
Cheers, George
Money is to a significant extent relying on the benefit that capital goods financed with debt can provide. We can’t fund capital goods without debt.
The present economic system began about 250 years ago – based on fossil fuels. That system is now geriatric & dying, & industrial capitalism with it. Sad, but there is no halting entropy.
Only a new form of cheap, clean energy can save the Western economy & culture. This can only come from radical, new science: no, not technology & widgetry, but from new fundamental science.
Modern physics has been in a virtual state of suspended animation since the ‘particle revolution’. That was about 100 years ago now. So why isn’t the deep research a matter of urgency? The answer is the negative influence of powerful, vested political interests. The oil/gas oligarchs don’t want cheaper alternatives, & they control energy research globally.
“The present economic system began about 250 years ago” – invented by smarty people in England. Then incompetent foreigners tried to join in and predictably made a hash of it.
Here in UK we have just approved a third runway for Heathrow, a gigantic extension of our railways, and many are proposing to double the size of second city Birmingham’s airport too. We’re nowhere near peak optimism here.
gagagagaga…..
Using costly energy for building someting that is visible and lasting is an ideal way how to keep the illusion that the civilization is o.k.
I think part of what is involved is that the logical end of underregulated capitalism is that one person ends up owning everything and everyone else is his debt slave. We are well on the way to that situation. As a result there is a group of several thousand multi-miilion/billonaire people who are getting even richer and would just like the queues at the airports to be speeded up so they can commute to the Bahamas more conveniently.
How many hundreds of billions – if not trillions – have been wasted on things like solar and wind power? Isn’t China desperately trying to make fusion work — and spending hundreds of millions on research?
It is total bullshit that entrenched interests are inhibiting attempts to replace fossil fuels.
In case you have not noticed – big oil is not replacing reserves… nowhere near …
They have families — they want to live — they can see the writing on the wall.
Let’s apply some common sense here
The options are:
Grow the economy — and collapse later
Stop growing the economy – and collapse now
I eagerly await the 4th and a 5th runways
the irony of not enough arable land… with the only viable solution being to lay more concrete.
Unfortunately, you are exactly correct.
Now shall we vote on which we prefer …
All those for Door Number One tick this box ___
All fhose for Door Number Two tick this box ___
It’s door Number One – in a landslide….
Now let’s get shopping people!
I agree that these are our 2 options however I think we could choose to reduce the pain and danger of collapse by climbing part way down from the cliff and reducing the inequality that will exist when we hit the bottom. For example, confiscating some (not all) of the wealth of the 1% to pay down public debt and implementing austerity measures to avoid more public debt that cannot be repaid unless the value of money is destroyed with money printing. It seems to me the 99% could force this policy if more people understood what is going on. It probably won’t happen but it is something concrete we could do to improve the situation. Along with a global one child policy.
I refer you to this short essay from our esteemed associate here on FW … Norman…. I am sure he’d be happy to answer any questions you may have:
You won’t like downsizing
http://f.tqn.com/y/homerepair/1/S/S/B/-/-/turn_off_circuit.jpg
“Along with a global one child policy.”
I got this thing, it is called a zero child policy. Heard about it?
https://cdn.meme.am/instances/62587034.jpg
And as for how “we” get rid of the compulsive consumerist old coots drugged up on hopium and abilify, well that’s easy peasy just send them off to “Ättestupan” together with our best wishes.
https://en.wikipedia.org/wiki/%C3%84ttestupa
War?
Genocide?
Less people => cheaper energy
Not really. The cheap to extract fossil fuels are gone. So called renewables tend to be expensive. Cutting down trees is cheap, I agree, but it dos’t provide a very reasonable long-term future.
‘Less people => cheaper energy’
Less people does not make the cost of finding, extracting and refining of oil any cheaper than it is now.
Also — reducing population would result in a deflationary death spiral — fewer people to buy stuff — leading to layoffs — bankruptcies — fewer people with jobs and buying stuff … and so on.
People seem to have trouble with the concept of grow or die.
The economy must grow — or it will collapse.
It’s actually one of the more simplistic concepts that have been discussed on FW.
Smite – try reading this — I am sure Norman would be happy to explain the parts that you are unable to understand http://www.endofmore.com/?p=1464
“So why isn’t the deep research a matter of urgency? The answer is the negative influence of powerful, vested political interests.”
I don’t think so. Much of physics has become a pseudoscience in recent decades, as evidenced by the paucity of useful things emerging and the need for vastly expensive equipment to supposedly prove hypotheses. Contrast with the age of x-rays and so on.
See my previous response — had an internet hiccup and I think I replied to the wrong person
‘Only a new form of cheap, clean energy can save it…’
Well, it seems like we don’t care about clean. If we found a dirty but cheap new energy source I’m 100% sure we would use it.
James Hansen recently penned an article to Mrs. Solberg. (http://www.columbia.edu/~jeh1/mailings/2016/20161018_SolbergLetter.pdf) Hansen also has an interesting view of the world. In his world the most important thing is that we price carbon fuels out of existence. Instead there will be nuclear. The fact that roads are not made of electricity doesn’t seem to be a concern. And amazingly the 99% will come out ahead through the dividend. It’s pretty amazing.
But his view probably comes from the fact that he has a very deep understanding of how rapidly humanity is destroying the planet, and he is probably correct in that focusing on a single issue he might have some impact.
But if I understand you correctly Gail – there is no fix. Perhaps reduced usage could make the system a little longer, but is your opinion that even reduced usage brings on collapse sooner than we would have it otherwise?
Thanks again for the article!
Reduced usage means growth is reducing = total collapse
I think reduced usage brings collapse quicker. The financial system can’t stand a reduction in usage.
In 25 words or less, the problem is that it is too late. Even if something new came about now, it would be too late to implement it on the scale needed. It takes 30 to 50 years to make an energy transition.
Dear Gail,
Excellent article, as always, thank you! Also thanks for your impressive bio.
I’m hoping we could expand the issue re how debt affects the 1% and 99%. You wrote “The debt level with wind and solar (and all of their related paraphernalia that often gets left out of EROEI calculations) also tends to be high. Interest on this debt transfers money from the 99% to the 1%.”
It seems to me that nearly all debt transfers money from the 99% to the 1%.
I love this simple story – scroll down about one page to see “The Eleventh Marble”:
http://www.whatreallyhappened.com/WRHARTICLES/11thmarble.php#axzz4OJDaMbbS
This analogy is amusing until you visualize the social effects.
There has been a struggle for centuries, including in the USA, between public and private banking systems. In most media, government is described as not sufficiently responsible to be in charge – but note the profits (interest) would then return to the public purse, instead of to the 1% (who also own the major media).
Also note the track record of private banking as it deals with “moral hazard.”
https://www.amazon.com/Predator-Nation-Corporate-Criminals-Corruption/dp/B008563RXI
How superior does that seem?
These two books helped me to understand this issue:
http://www.monetary.org/lostscienceofmoney.html
http://www.webofdebt.com
It appears to me that pulling in the 11th marble results in defaults, mostly among the 99%, unless it is papered over with more debt – which seems to explain the steepening curve of debt.
Thank you, and commenters, for any insights.
With best regards, George
As an observation, I don’t think the 11th marble analogy really works. Because paying back the whole debt isn’t ever the point (or the aim) – ability to service the interest over a time period is the important bit.
Many years ago, it was the government who owned the system that gave out debt. With this arrangement, debt jubilees could be made a regular intervals, to try to cut back on the problem of wealth tending to migrate upward to the 1%.
Moving the debt to privately owned banks changed the possibility of doing this. There are also bonds sold directly to the public. If these default, they affect the organization who owns them. Very often, these are pension plans and insurance companies. Shares of stock of companies have a similar function, and also affect pension plans and insurance companies. Once ownership is spread around, heavily to the 1%, defaults become a bit problem.
One time I had the occasion to visit the people in Washington DC who administered the FDIC insurance plan for banks. They explained that it led to a “heads I win, tails the FDIC loses” mentality among those operating banks. The people who made investments could choose as risky investments as they liked, because they “knew” that the FDIC would protect the depositors. The FDIC wanted to know whether we (as actuaries) could fix this problem, but I don’t think there was.
Nice article….
Here’s some ammo re big oil and taxes… https://ourfiniteworld.com/2016/10/27/how-researchers-could-miss-the-real-energy-story/comment-page-1/#comment-104355
‘TPTB were even more confused. They listened only to economists, with their overly simple model about future prices, and paid no attention to Hubbert and his message that extraction would become more difficult after 50% of a given resource was extracted.’
Don’t agree. The minions of TPTB may be confused …. but the TBTB… the ones who are actually the masterminds directing this gargantuan effort to keep us alive…. they most definitely are not confused…
They recognize the implications of high oil prices…
Of course we do not get to hear what they think or know — because they do not tell us … they hide behind the curtain and let spokespeople feed us soothing fables….
But if we look deep into the bowels of the system…. we can find evidence that at the very highest levels… they know …. there are releases like the one below…. there is also evidence in their actions (vs what they say)….. as in massive amounts of stimulus to attempt to offset higher oil prices….
According to the OECD Economics Department and the International Monetary Fund Research Department, a sustained $10 per barrel increase in oil prices from $25 to $35 would result in the OECD as a whole losing 0.4% of GDP in the first and second years of higher prices. http://www.iea.org/textbase/npsum/high_oil04sum.pdf
How can we get Dicky Heinberg to venture forth from DelusiSTAN to debate his assertions here on FW?
Yoo hoo Dicky… come out to play…. yoo hoo where are you…
I love Global Warming because it = growth which equals me getting to live longer — I have been called a shill for big oil based on my position … I am a shill for keeping BAU on track no doubt about that…. if throwing babies on fires would keep BAU on a roll I’d shill for that too…. if clubbing old people to death and making coats of their wrinkled skin would add a decade to BAU I’d take out my Louisville Slugger right now and crack some skulls…
What do you think of that Dicky?
Be a man — come here and defend your positions. Don’t hide away and live large off donations from your Koombaya Korporations….
http://i.dailymail.co.uk/i/pix/2015/10/19/16/2D8FB92700000578-0-image-m-7_1445267865328.jpg
I actually think that Richard Heinberg believes what he writes about. He is an “educator,” not a researcher himself. I have never seen him at an academic conference. He is truly confused about what I am writing about, and thinks I must be getting help somewhere.
He is irrelevant outside of DelusiSTAN.
Thanks Weirdo !
Amazing that you can dive into the complexity and balance the books.
The return on cost of producing different fuel types using the energy mix and the value the different fuel types add to goods and services in the production chain ?
Things “turn out” differently than a person might expect, just looking at one part of the system. This is part of what makes the analysis confusing.
One important thing that the local power generation advocates miss is the lack of the suitable workforce for it and sufficiently high incomes of those who would buy their services: if everybody could produce electricity at home, this in itself is a big inefficency, as we would need disproportionately huge amounts of installation, service and maintenance personnel. Besides cleaning solar panels etc. done by the owners themselves. And when the incomes of the majority are too low, such essential services are not affordable.
Large scale electricity production with electricity grids allows only small amount of jobs to be dedicated to electricity production and distribution. The same is valid for the central heat generation.
This inefficiency of the local energy production can be easily demonstrated on the recent law in Slovakia that introduced too much compulsory regular checks and cleanings of chimneys by qualified personnel in the country based on the rising number of house fires caused by chimneys that are not cleaned, built in a faulty way or damaged. This law can not function in the reality because of several reasons:
Firstly: there is not enough workforce to provide these works
Secondly: the large share of the population has already too low incomes (like pensioners) to afford these works
Thirdly: there are already permanently poor Roma people communites in Slovakia that do not mind, if they get a fine for not having certified functioning chimneys according to the standards, because they have no other way to secure heating in their homes than with cheap and self-made (and thus often malfunctioning) chimneys.
The idea of efficient local power generation (not to mention the generation of the quality energy for the industry!) is completely wrong exactly because of the abovementioned points.
You are right–local generation would be horribly expensive. The government has tried to cover this up with all its subsidies, but it is basically the case.
Another issue is that it is not just homeowners that need local generation. Businesses and governments will need generation close at hand as well. Our energy needs will be especially high in the winter, but our ability to get this energy will be less available then, unless we cut down trees for that purpose. This is a chart of US energy consumption by sector. I combined US commercial (offices and stores) with US residential, because they both show the same patter. Quite a bit of energy is for heating. US residential and commercial are approximately the same size, so US residential is about half of the combined amount.
Industrial and transportation are quite high, compared to combined residential and commercial. Of course, we import a lot of manufactured goods from China and elsewhere. If we counted the energy spent there, our industrial energy consumption would be a lot higher.
I can’t speak for polar extremes, but in most cases, cardboard alone can insulate buildings. I will look up how cardboard is manufactured, but I imagine it’s not the hardest thing to make. I don’t think BAU is organized in the most practical way imaginable.
How does cardboard handle getting wet?
Fine, if you coat it with grease. I’ve also experimented with the inside of pop-corn bags glued on top. Exterior paint is perfect. I’ve had boxes out in the elements with various coatings. No problem at all.
Quite the fire hazard… paper and grease….
Water is one thing, and it’s certainly no problem. Fire is a BIG concern. House paint would be better there. My approach so far is twofold:
1) Make sure there are no flammable loose edges sticking out. You larder exposed joints with glue or paint, or cover them with silver tape. Not giving fire any easy place to start is the best fire protection method I can think of.
2) Pack the insides jam packed with plastic/tin/aluminum containers, etc. allowing little or no circulation of oxygen. Not having a scientific handle on this, I put more faith in #1.
If youre interested in how to build a shanty town maybe you should study the romas who arrived to sweden about three years ago.
Their villages pops up from nowhere, for free, can withstand cold, and until now has never been burned down,
http://www.themanufacturer.com/articles/how-a-cardboard-box-is-made/
Well this IS rather complicated. So it’s not a clear case, and it risks over dependence on BAU. Still, while billions of boxes are being thrown into dumpsters, good insulation use could be made of them instead. Immersing domicile underground (as in basements where feasible) in 90%-less-energy-times is probably a better solution than cardboard.
Another point to consider is that turning to RE (instead of hydro and nuclear) for primary energy would inevitably lead to a return to a form of feudalism. That’s because RE, like agriculture, requires a lot of land. Therefore in an RE-powered society, landowners will control the wealth. Just like it used to be.
I hadn’t thought of that. Alternatively, the government could control all of the land, and move people around, as needed.
Thanks for the personal history section, Gail. I’m always fascinated at how “contrarians” come to their world view.
You describe yourself as “retired” and not making much more than expenses for your current energy work. This leads me to think that you must have some faith in the financial system, or you would have divested and turned to supplying your own needs, as I (“of little faith” in the financial system) have done.
And yet, the strapless evening gown (“no visible means of support”) manages to stay up! I swore I’d never see any Social Security, and yet I find myself salivating over that first monthly cheque in the next few years.
I’m guessing your personal situation must be somewhere between ditching the investment system for the farm and doing the “Chris Martenson” disaster-investment-advisor thing. Are you planning on early Social Security, or waiting for a bigger pay-out, later? Are you planning on ample investment income for the rest of your life, or do you have a “Plan B” in the works?
You don’t have to convince me of what’s happening. I just want to hear what you plan to do about it! We probably agree that nothing can be done for all of civilization, but that leaves considerable leeway for individuals to do something locally. To me, that would be of more interest in future columns, rather than simply showing more evidence of what is happening.
(Because this is a “noisy” comment section, I’m not ticking the “Notify me” box, but I’ll check in to see any answers.)
I also wonder why it’s so hard to think in terms of small local communities. I do community planning in a non orthodox way. But I can’t see drawing a firm line around any viable local space. For one thing, I see a top down role for managing what I call “contagion.”
Top down planning to focus on the management of “contagion”
– nuclear
– disease
– watershed related
– defense
– etc.
Actually, my view of the financial system is, “You have to take any pension funds now, if you actually want any benefit from them. Once the system goes down, they are of no benefit to anyone.” I also have a husband who is working (but now with “Professor Emeritus” status), and our standard of living is not particularly high. Our house is paid for, and our cars are paid for. We sent our children to inexpensive schools, because I could not see a point in paying the high tuition of private schools. When a person takes early retirement, they do get a pension–just not as much as what they might theoretically might receive later.
Also, you should note that my background is as an actuary. Actuaries get paid well. A frugal actuary ends up with money in the bank at the end. This money is invested in a diverse way, but I don’t expect any huge benefit from it. So my husband and I have taken the “Don’t worry about whether we spend it now” approach. We probably spend more on vacations than we would if we didn’t know about collapse. We take vacations to places where I can combine learning about an economy with vacation. Our charitable contributions are probably also higher than they would be, if we didn’t know about collapse ahead.
Perhaps our view is closer to, “You can’t take it with you, no matter what you do,” than, “We need to make plans so we can outlive the 99%.” Realistically, we are older–close to the age of the US presidential candidates. We don’t have the strength to farm and do basic heavy labor to support ourselves indefinitely. It is not terribly important that we make it through the bottleneck. The situation might be different if we were a lot younger.
There’s a choice to be made: a) living in small, discreet small communities, and b) living as individual within the broad mix of networked industrial civilization–with money, cars, debt, “homes,” etc. (BAU, for want of a better name.)
Discussions here greatly prefer the latter. The former tends not to be taken seriously. Why I don’t know. But small, local groups that have their own water, basic healthcare, and food-growing capacity would requite tons less energy, since the basic means of survival would not have to be transported in (or accessed from beyond) using pumps, automobiles, pipelines or maintenance crews.
The problem I see with the local model is it’s remaining (though much decreased) dependence on BAU. There is also need to consider effects (contagions) that can’t be managed by small groups–– nuclear, eoidemic, watershed related, defense, etc.
So rather than limiting discussion to small communities vs BAU, what about examining the pros and cons of both, leading to some kind of synthesis of understanding?
epidemic
I am ticking the delete boxes… 🙂
This post probably needs a few barrel bombs stuffed full of of realiTNT as suppressing fire to curb the hopium induced delusions.
http://i.telegraph.co.uk/multimedia/archive/02812/barrel_bomb_05_2812373a.jpg
Smite, it’s not hopium; it’s 100% certainty. Well, certainty that if you want to hang on for as long as possible, considering the advantages of smaller, less dependent communities is a plus. Jan (above) was wondering why we always have to be fixated on 7.4 billions, why most of them can’t figure out their own systems while we figure out ours. I’ve wondered that myself.
Artleads I don’t think there’s a problem with working on small-scale intentional communities. We should be, even if it’s just to preserve and enhance our own humanity in the final days. I try to, on the chance it helps produce comparatively better outcomes for my children.
My sense of where the disconnect is: BAU will never voluntarily dis-aggregate itself into these communities on a global scale. Or a national scale, or any scale that would be meaningful in a history-moving sense.
On certain timescales we might be able to change how things pan out for us individually and as small groups, but we can’t insulate ourselves from everything else going down the toilet. A giant many-armed monster is at the controls, and it doesn’t care about my small farm or cooperative arrangement with the doctor and his family living next door. I have a ballot sitting at home and my 2 choices are Clinton or Trump! There are others, but not really. This thing is on auto pilot, and the only things I can control are myself and my immediate surroundings. Eventually, my span of control may shrink even further.
Have you ever been to a local Chamber of Commerce meeting? I occasionally have to go, and that serves as maybe the best possible reminder why there is no diverting from the BAU pathway. I never fail to walk out and think to myself- “well, we’re getting what we deserve…”
Hi Froggman,
” I have a ballot sitting at home and my 2 choices are Clinton or Trump! There are others, but not really. This thing is on auto pilot, and the only things I can control are myself and my immediate surroundings. ”
I wouldn’t say that voting for a third party–if enough people did it–would be insignificant. Somebody behind the curtain is looking at the numbers and taking actions (advantageous or not) which reflect those numbers. The error is to ascribe too much importance to the individual who wins. It’s the forces behind and related to those individuals that count.
BTW, if I could only vote for the major two, I’d vote for Trump. As would any other disruptive force, Trump means change (advantageous or not).
And I doubt that your small “intentional” community is impotent to change the bigger picture. Your impression of the local CofC is probably close to mine of the major organizations in town. Perfectly useless. But they are at a scale that’s consistent with possible change. It’s clear that much critically needed change won’t come from the top. It follows that it must come from the bottom up. I’m working for this kind of change, as are you. That is how it works. The seemingly impossible gets to be possible over time.
You hold out more hope than I do, my friend. I hope that you’re right.
“You hold out more hope than I do, my friend. I hope that you’re right.”
I’ve been around a lot longer too. 🙂 You just keep plodding on, expecting nothing, but never ever giving up. It’s worked in the past, so no need to change the formula.
This is an another excellent analysis of our present predicament. As a designer of systems I have been faced more than once with the belief by some that my proposed systems will not work because of some long-established process in the workings of my customers’ businesses. When I was just getting started I found this to be frustrating. The frustration was mostly due to the fact that the defenders of the status quo and the long-established process could not explain why that process had to remain in place. But, after a while, I learned that when the management of the company felt enough pressure from outside sources they would suddenly be willing to consider changing the “thing that could not be changed–never–ever!!!” We would change it and away we would go.
In today’s analysis you mention the usual “things that cannot be changed–never–ever!!!” Wages, interest rates, taxes, and available investment being the biggest obstacles. But we can change the way our economic system works and those problems would vanish.
But if you are now an economics expert and a systems design expert and you are dead sure of your position on these issues, or if you are dead sure that the needed changes could never be made, then all your work will surely come to nothing.
If some physical resource was lacking you would adjust your ideas to see if there was a way forward. In this case a new economic system is the way forward. So, design one. Use your impressive intellect, your rational powers, your energy, and dedication to solving our greatest national problem and design a new system of economics that would be built on an unlimited supply of money, that could adjust wages at any level to give workers a livable income, that has no interest rates, that does not tax, that invests limitless funds in the needed projects, and that invests in the technical education of thousands of workers to carry out the ultimate plan to save us from ourselves. If you are telling us that our present economic system will not support a program to solve our climate change problem, and it can never be changed to do so, then throw in the towel. As for me, I have designed such a system, which includes the necessary changes to the system of government, and revamps the economy. What is more it can easily be implemented by changing the current system. It ain’t hard. The work you do is hard and valuable. Don’t let this economic crap drag you down.
The system we have has evolved over many thousands of years — we refer to that evolution as progress.
Essentially what we have been doing is seeking ways to live ever more large….
As a species we were not happy with living like animals… we wanted warm homes, an endless supply of food …. we evolved to want cars and planes and bigger homes and teevees etc etc etc..
We used the resources that were at hand to make this dream come true.
And now we are running out of these resources.
And unfortunately there is no going backwards.
The reason we are burning oil and coal is because we were running out of whale oil and trees…. we were forced to innovate…
7.4 billion people cannot return to the ‘old ways’
And then there is the issue of food — progress has allowed us to thwart Malthus — we have destroyed out soils by tossing petro chemicals onto them — the green revolution sealed out fate….
You cannot grow food on soil farmed industrially without years of repairs… so when the petrochemicals are no longer available — we will have nothing to eat – so we will starve.
Then we have these 4000+ spent fuel ponds that will no longer be managed and will spew massive amounts of radiation into the environment for centuries.
You say you have an answer to all of this — devil is in the detail…
I am standing by ….
http://il9.picdn.net/shutterstock/videos/10971989/thumb/1.jpg
“Spent” nuclear fuel is, in reality, lightly-used fuel that still contains 95% of its original energy content. It’s not waste if we don’t waste it. And there are ways that it can be done.
http://www.transatomicpower.com/wp-content/uploads/2015/04/TAP-Press-Release-7-6-2016.pdf
Tim — Kap has apparently not seen your business model for using spend fuel….
As for me, I have designed such a system, which includes the necessary changes to the system of government, and revamps the economy. What is more it can easily be implemented by changing the current system. It ain’t hard.
Sounds like it might be just what the world needs. Please tell us more. After all, the devil is in the details.
If you are telling us that our present economic system will not support a program to solve our climate change problem, and it can never be changed to do so, then throw in the towel.
What is “our current climate change problem”? Are you going to offer an “Obamascience” solution and promise us that If we like our current climate, we can keep our current climate?
Let’s put it this way. There seem to be some basics that cannot go away. If we have more than a hunter-gatherer society, we need to have some kind of government. We also have to have some organized way of making goods and services. This might be part of the government, or it might be separate businesses. To leverage the work of humans, we need some sort of capital goods. Making the capital goods requires that people who make these goods be paid in advance of the time when the output of the devices is really available. These devices (machines, cars, roads) can be very beneficial, so we need some way of making promises, based on the future output of the economy, including the devices. Today we do this with debt and with stock, which is supposed to appreciate in value and pay dividends.
The catch is that the output of the economy has to get back to all of the providers of services. Humans especially have to receive part of the output of the economy, either as wages or transfer payments. Businesses have to receive part of the output of the economy, and do governments. Taxes serve as a way of transferring part of the output of the economy to the government, so it can be used for the general good, either as transfer payments, or as new capital goods. If new capital goods are made, there is again the problem of the need to pay workers who make the goods (actually, the entire supply chain), before the goods actually go into the system. This seems to be one of the major ways debt (or shares of stock) is added to the system.
Given these basics, I find it hard to find it possible to make sufficiently major changes to the system. Also, the laws of physics that say you need energy products to make the goods and services that operate the economy. We also run into diminishing returns, and the fact that we have limited resources in a finite world. To add to our problems, humans are adapted to eating some cooked food, and we live in climates that would not be amenable to living in them without the benefit of energy products. These needs cause us to need energy products, and in fact, a growing quantity of energy products. The use of these energy products allows human population to grow, because they give us an advantage over other species who do not use them.
We end up with a situation that tends to give rise to overshoot and collapse, no matter how it is arranged. At some point, resources per capita fall. There are not enough resources to be “spread around” to everyone. The folks at the bottom of the hierarchy tend to get squeezed out. When they get squeezed out, governments can’t collect enough taxes, and businesses find themselves with the reverse of “economies of scale.” The whole system collapses.
I do not mean to be rude. I really do want to understand. I am not being sarcastic. I am earnest in trying to understand what you are saying.
Your response, to me, is simply a recapitulation of the way our current systems work. You are saying that you cannot see how my ideas could work. I think therefore that you are offering the chance for me to explain in some detail my ideas. I would love to take advantage of that chance. There are two chapters in my book that summarize our economic predicament and I would love for you to read them and tell me what you think. One chapter is “Tyranno-Capitalism” and the other is “An Unlimited Supply of Money.” The former is 58 pages and the latter is 46. Obviously this is copyrighted material and I need to protect it. If you would be willing to take a look at these chapters, just tell me how I can get a pdf to you.
In my working life I designed large systems for large enterprises, and the process that I and many others followed (we are the generation that computerized America—there was a case in which we did something that millions of others said could not be done) was to ask “what if?” So, I have asked, since 1949, “what if our supply of money was unlimited?”
One of the first systems I helped develop, with five others, was Medicare, and all of a sudden we started paying millions of dollars of claims all across America. We did it with no problem. The SSA deposited money in Medicare payor accounts and away we went. That money did not come from taxation. It was created by the SSA. The next system I helped develop immediately after Medicare, was Medicaid, and again the money was simply deposited in payor accounts.
So, to me, these examples and many others are proof that we have an unlimited supply of money. All we need is a system to distribute and manage it. So, I have designed that system. Through that system we will be able to distribute money to everyone who needs it. We can set wages just as Medicare and Medicaid per-procedure payments are set all across the nation. We can fund national projects that are needed to combat global warming. We can make promises, and they will change the way that ordinary citizens live their lives. Without my system, or one very much like it, we will not have the funding we need to save us from ourselves.
Consider this: what if we were still on the gold standard, what if the Rocky Mountains were owned by the government, and what if we discovered that they were made of pure gold? What would you have us do? Should we ignore this infinite source of money and continue to issue paper currency at 35 dollars per ounce for the ounces we have in Fort Knox, or should we find a sensible way to spend some of that Rocky Mountain gold to implement programs that would be good for America and the world? Wouldn’t we be able to eliminate taxes (except for sin taxes and a tax to drain excess gold from the system)? Wouldn’t we be able to provide college at no cost just as we do high school today? Wouldn’t we be able to provide the funding for switching to new methods of power generation and distribution? Wouldn’t we be able to take an engineering approach to our future as a nation? Wouldn’t we be able to solve the problems you mention in this blog?
We don’t need to have a huge staff of IRS personnel. We need a huge staff of technicians of many kinds to deal with the near future. We are under the gun. The race has started and we are still in the blocks. And everything you have said tells me that we have lost the race already. I fear that you may be right. There are many finite resources and capabilities as you have told us in your many excellent blog posts—but money is not one of those finite resources. Here is a excerpt from my book.
Alexander Hamilton, with whom I have many disagreements, did say something about money that is worth considering:
“Money is, with propriety, considered as the vital principle of the body politic; as that which sustains its life and motion, and enables it to perform its most essential functions. A complete power, therefore, to procure a regular and adequate supply of it, as far as the resources of the community will permit, may be regarded as an indispensable ingredient in every constitution. From a deficiency in this particular, one of two evils must ensue; either the people must be subjected to continual plunder, as a substitute for a more eligible mode of supplying the public wants, or the government must sink into a fatal atrophy, and, in a short course of time, perish.”
As it turns out, things are even worse than Hamilton feared—our Madisonian republic has failed to provide “a regular and adequate supply” of money, the people have been “subjected to continual plunder,” the “public wants” have not been satisfied, and our government has fallen into “a fatal atrophy” which prevents us from maintaining and improving our infrastructure, and which blocks the prudent, aggressive, large-scale, time-sensitive actions needed to deal with the adverse effects of global warming.
What he omitted, and may not have known, is that money is a natural, national resource much like water. Throughout history, civilized society has worked to improve the water supply and distribute it directly to the people so that they may use it to nourish themselves and their families, and to businesses and other institutions so that they can use it for the permanent and aggregate interests of the community. Money should be managed in the same way. So, let’s adapt Hamilton’s definition of money—let’s bring it into the 21st century:
“In any large human society money can correctly be considered as an inexhaustible natural resource that is essential for the welfare of all human beings—from individuals, to families, to communities, to nations, to entire civilizations—by means of which they can sustain their lives, and carry out their most essential function: to build a community, and help to build a world, in which all persons can live long lives that are worth living. Therefore, a regular and adequate supply of money should be distributed directly to all citizens to be used for any appropriate purpose, at the appropriate time, in the appropriate way, in the appropriate place, and in the appropriate amount.”
Money, like water, sustains our lives and our society, and, like water, it should flow directly into every American household. Our new system of democrato-capitalism, along with our new faction-free democracy, will enable us to make certain that it does.
Money, like water, sustains our lives and our society, and, like water, it should flow directly into every American household. “
Energy sustains our live – money is only a proxy. And if you “create” money out of thin air, without an obligation (like money created through the issue debt) that this has no value, except driving inflation. And even if the Rocky would be of pure gold – it hasn’t any lagre value, can’t be burned, doesn’t provide energy. It wouldn’t even be scarce anymore – thus would remove even golds role as (historical) monetary intermediary / proxy for (a possible) future.
You are making many assumptions to support you position. And you sort of have things upside down. I am not the one who invented the gold standard. Some older humans did it. But we got off the gold standard years ago and yet we still manage our money supply as if we were still on it. This is the source of all of our economic problems. We manage our economy as if we could run out of money, or in some cases we act as if we have already run out of money, but we haven’t. In a world of unlimited money there is no government debt. If individuals want to incur debts between them, like borrowing money from your uncle to buy a car, then so be it, but there is no national debt because the government has no real need to borrow which creates debt.
Our system creates money out of thin air all the time. When I go to my bank to borrow money for a car the banker puts the money into my account and thereby creates money. He doesn’t call the Treasury and ask for money, he doesn’t take deposits out of other people’s accounts and move them to my account. He just creates it with his computer.
So, we already perform some of the basic tasks that we would need to live in a world of unlimited money. We just need to add a couple of wrinkles.
If we were to just give everybody a lot of money we would have trouble. It would be like trying to drink from a fire hose–so, we wouldn’t do it. We would need to manage our supply of money, but we need to manage the supply we have now. All I am saying is that we can use our computers to put more money into our current system. The question is how so we do it, and how much money should we insert?
I have designed a system that infuses money into the system from the bottom up not the top down. In other words I give money directly to the people instead of giving it to the capitalists and hoping that they will eventually let some of it trickle down to poor folks like me.
@Hestal
Money is created “out of this air” by an obligation (Debt) and by balance sheet extension (Bookkeeping). That is a slight difference – money is to some degree scarce, as it would otherwise have no value.
The core point is: “infusing money” without any obligation (repayment, etc.) doesn’t solve anything. It cant solve our energy problem or predicament – it only would cause the “bid up” of all commodities in $ terms. Nothing would be gained to solve the issues / problems Gail addresses in this blog.
‘Our system creates money out of thin air all the time’
Not correct.
The central bank is the entity that has the power to create money. Individual banks do not.
The Fed is the master franchise holder of money printing rights…. and thus runs the world.
The central banks have created trillions of dollars since 2008 – out of thin air — and without a single vote authorizing this.
Now THAT … is real power!
http://rlv.zcache.com/big_smile_happy_face_drawer_knob_srf_ceramic_knob-r95f84f7818be4b3aa45a36488e23c00d_zp2d5_324.jpg
Yes!
Why can’t everybody automatically get more money when their account is empty.
You are on the right track. We can give money to people at certain times to be spent on certain projects, such as a college education, starting a business, building or buying a home, and other important, worthwhile, non-inflationary tasks. That way when a child is born in America an account is opened into which the government will deposit money to be used for purposes that will be good for the individual and for everybody else. In other words our unlimited supply of money will be used for the common good.
Who is this “we” that decides who gets what? Is it a competing organisation to the el.Ders?
It’s the same “we” people who chased John Galt to exile. After some time on this planet you learn to hate everything about ’em. Specially their superficial and empty thoughts pertaining our predicament.
Why can’t we just make Monopoly money real? Why can’t oil beget oil? Why can’t we have a fridge that replenishing the food like magic? Why can’t we invent a perpetual motion machine? Why can’t I just add a bunch of inches to my height and be the LA Lakers centre? Why can’t I live forever (young)? Why can’t we grow bananas in the arctic?
These are mysteries of the universe that nobody can answer.
‘Money, like water, sustains our lives and our society, and, like water, it should flow directly into every American household. Our new system of democrato-capitalism, along with our new faction-free democracy, will enable us to make certain that it does.’
Ask yourself — when there is no longer any oil, gas or coal available…. what use will money be?
Of course they’ll need the money to buy groceries and fuel up their SUV. Oil, gas and coal, well good riddance once that dirty and polluting stuff is gone.
https://s-media-cache-ak0.pinimg.com/originals/b9/79/14/b9791454cad67e3ea317f07c02fcfbb5.gif
Or in other words… Our World is Finite…. there is no way around that…. and the implications are about to strike home…
Jerry, you’re overlooking 3 ginormous problems: Overpopulation, finite resources, and hard limits.
There are too damn many people. If you want to argue this point we can go back and forth for hours. Any sort of system that you’re envisioning may be plausible with 1 billion or 500 million folks, but surely not 7.5 billion and growing.
We are at peak mineral extraction for all the good stuff like coal, copper, cheap oil, and other critical natural resources like potable water. If we were to implement some fantasy economy that catered to all 7.5 billion folks as equals then we would almost instantly collapse the entire system from demand. That is unless you can somehow convince all the westernized countries to voluntarily except an extremely lower quality of life. Not happening. Do you even know how many violent, ignorant, gun toting crazies there are in America that have every intention of driving around in their air conditioned SUV with the windows down while slamming a 90 oz. big gulp soda right up until the grid goes down?
Lastly, hard limits cannot be overcome by our technologies. Right now copper is extracted at .2-.5 % weight ratio of earth in what is considered good mines. We don’t have the technology or resources to continue ripping up entire continents just so we can make some more pennies. Any sort of theoretical economic system that increased demand for copper would increase costs to the point where no one would be able to use copper.
And I’m going to briefly mention limits to the biosphere as well since nobody else mentioned it. We are running out of time due to runaway CO2, increasing temperatures, and increasing sea levels. Every day a couple of hundred species go extinct and by 2020 it is projected that 2/3 of wildlife will have been eradicated from the planet. There is no way to reverse the harm we’ve inflicted and we appear to have set forth an unstoppable train of biosphere destruction. And even if you want to argue about weather humans caused the current situation or not is largely irrelevant since it’s happening anyways. The CO2 is rising at an exponential rate weather fossil fuel burning has caused it or not. Those are major, major consequences coming down the pipeline.
What you’re talking about is increasing the rate and quantity of humans pooping in their own living rooms and apparently you can’t see or smell the poop. It’s unfortunate that you’re still going to have to deal with the giant mountain of poop in your living room at some point though, even if you want to pretend that it doesn’t exist. Too many people, not enough stuff, and poop in the living room. Any questions?
Oscar, I addressed only one of the three problems you mentioned, and that is the idea that we have a finite amount of money. I say that we have an infinite amount of money. We have more money than there are atomic particles in the universe. We could foolishly use this infinite supply of money, just as we could foolishly use fossil fuels… oh, wait.
Ms. Tverberg said, if I understood her, that our finite supply of money will block us from doing the things we need to do to deal, as best we can, with the onrushing catastrophe of global warming. We will still have hard limits just as you say, but money will not be one of them. This is more important than it may first appear. The immovable object that blocks our way forward is the idea that we can’t afford to undertake large-scale projects. It is the political football that tyranni can kick back and forth while slowly destroying our civilization. So, I have done my part, I have presented a way to get around this immovable object You will have to do the rest. I am too old to do more.
But judging by the smart aleck remarks I get here and elsewhere whenever I propose my ideas, there is no hope, for our species. I was born before WWII and I have been retired 21 years. The chances are very good that I might not live to post this comment. So, I wish you good luck.
Ms. Tverberg is serious and does excellent work. In my working life I was deeply involved with the economic planning of several large enterprises of various types. I found that economists were not worth the powder it would take to blow them to bits, but actuaries, such as Ms. Tverberg, were very helpful in developing realistic projections. But we are in the hands of politicians, economists, and smart alecks. If we were in the hands of engineers and actuaries we would have a fighting chance. You can take this as the babbling of an old man, but take it from this old man, when your life and the lives of your descendants are at stake then running out of time is a very bad thing.
Our civilization will not be saved by the older generations. It will be saved, if it is, by people who are now under age 26.
Try to get your mind around this …
Money is a representation of the energy that remains in the ground that can be extracted and refined cheaply — by that I mean that there is significant energy available to operate BAU …
Money represents that excess energy.
Without that excess energy money is at best good for starting a fire — it is not an ideal substitute for toilet paper because it smears rather than absorbs…
We have run out of cheap to extract and refine oil – which is the master energy resource.
The low hanging fruit is gone.
The central banks can print money till they are blue in the face — that helps to keep BAU staggering on for awhile … but every second of every day we are using up the conventional oil reserves that we have banked ….
We are marching towards the cliff… step by step….
The system is not the problem — it is the fuel that is required to operate the system — to operate ANY system – that is the problem.
There simply is not enough nett energy available to keep BAU operational.
This is not as nuanced as Gail’s explanation in her last article…. however you might find it useful… the intro sums things up very nicely indeed:
THE PERFECT STORM (see p. 58 onwards)
The economy is a surplus energy equation, not a monetary one, and growth in output (and in the global population) since the Industrial Revolution has resulted from the harnessing of ever-greater quantities of energy.
But the critical relationship between energy production and the energy cost of extraction is now deteriorating so rapidly that the economy as we have known it for more than two centuries is beginning to unravel.
http://ftalphaville.ft.com/files/2013/01/Perfect-Storm-LR.pdf
This not WW1 or WW2…. this is not The Depression.
This is an extinction event.
Sorry to inform you but your children and your grand children are about to starve to death.
You are on the first class deck of the Titanic…. the band is still playing … there’s plenty of champagne … show a little class… and get ready to die with dignity…
As the saying goes – it is …. what it is….
No our civilization is going extinct and so are it’s horridly resource abusing ways. It’s not sustainable now and it won’t be in the future, even if you subtract 6 billion people. No amount of money can fix climate change or work around hard limits to resource mining.
As soon as you remove money as a barrier you would see demand outstrip supply and then nobody would get anything. Furthermore you would exacerbate all of the other problems previously mentioned and put even more stress on the system.
Hestal – FYI:
Thanks for your comments. Regarding,
I think of actuaries as being very much like engineers. We solve real world problems. We don’t spend much time with academic papers of economists, instead coming up with generally fairly simply ways of solving real-world problem. So we don’t make the same mistakes as economists.
Unforunately, both actuaries and the economists have managed to miss the issue of resources of all kinds being subject to diminishing returns. As a result, the rate of economic growth should slow over time, and interest rates should fall. At some point, the rate of growth becomes negative and interest rates become negative. This is a big problem, because investment requires a reasonable chance of a positive return on investment.
Thanks, Gail. You have caused me to think differently about my own energy-related research (“sustainable” biofuels). (I hope to make them sustainable.) I am always more or less uncomfortable after I read your work. That is how I know I have learned something. 🙂
Thanks! LOL!
Dear Gail,
Are you aware of any EROEI studies concerning continuous space solar energy that would be “beamed” to Earth’s surface to feed the grid?
Have you talked to Elon Musk about the economics of a continuous space solar energy projet? He already has Space X and Solar City…
John
EROI of ground-based solar is impossibly low, and putting it in space increases energy inputs while not changing energy outputs one bit. The idea is, bluntly, a total disaster.
The idea is to provide solar power 24/7 with the devices, instead of just a small percentage of the day. Also, some have thought that they could use the PV material more thinly, because it would not be subject to weathering. If those changes could actually be made to work, they could, in theory, more than offset the energy cost of putting them in space.
I agree that the possibility is pretty remote though, and that there are still depletion problems of the materials used to make the solar panels, among other things. Timing is a major problem as well.
Solar uses large amounts of silver, tin, zinc, aluminum, and copper (not to mention rare earths). Considering we’re at peak mineral extraction for the most part it is unlikely the resources exist to really “replace” any sort of electricity infrastructure in any sizable quantity. That and the costs should be sky rocketing if people tried, making this technology unaffordable for most. This doesn’t even take into account the storage, which is likely lithium based but I don’t really give Musk’s ideas 5 minutes. Anyone who thinks we’re terraforming Mars is delusional.
I read in the news about fully autonomous cars released next years. Electric cars, with increased range, speed, low price.
Then I realized it was the same dude that are going to colonize Mars by 2025.
Yeah, he’s on the good stuff I think. What we should really be asking Elon Musk for is his soil concoction to grow his hemp that strong. I mean, he’s obviously an expert on that.
Yep….
Renewable energy ‘simply won’t work’: Top Google engineers
Two highly qualified Google engineers who have spent years studying and trying to improve renewable energy technology have stated quite bluntly that whatever the future holds, it is not a renewables-powered civilisation: such a thing is impossible.
Both men are Stanford PhDs, Ross Koningstein having trained in aerospace engineering and David Fork in applied physics. These aren’t guys who fiddle about with websites or data analytics or “technology” of that sort: they are real engineers who understand difficult maths and physics, and top-bracket even among that distinguished company.
Even if one were to electrify all of transport, industry, heating and so on, so much renewable generation and balancing/storage equipment would be needed to power it that astronomical new requirements for steel, concrete, copper, glass, carbon fibre, neodymium, shipping and haulage etc etc would appear.
All these things are made using mammoth amounts of energy: far from achieving massive energy savings, which most plans for a renewables future rely on implicitly, we would wind up needing far more energy, which would mean even more vast renewables farms – and even more materials and energy to make and maintain them and so on. The scale of the building would be like nothing ever attempted by the human race.
In reality, well before any such stage was reached, energy would become horrifyingly expensive – which means that everything would become horrifyingly expensive (even the present well-under-one-per-cent renewables level in the UK has pushed up utility bills very considerably).
http://www.theregister.co.uk/2014/11/21/renewable_energy_simply_wont_work_google_renewables_engineers/
http://techcrunch.com/2011/11/23/google-gives-up-on-green-tech-investment-initiative-rec/
I’ve read this before Eddy when I was doing research in college. I used to use it as a reference in online discussion forums and never had anyone claim authority over 2 Google Dr.’s.
I agree that the mineral extraction to do all of the things we would like to do would be a problem. Also, once the minerals have been used, it becomes hard to recycle them, because many of the amount are so small that recycling is not possibly economic. The energy cost becomes exorbitant.
Elon Musk is an expert in getting the taxpayer to pay for boondoggles like Tesla …
Yet even he will not touch space solar:
Drawbacks
The SBSP concept also has a number of problems:
The large cost of launching a satellite into space
Inaccessibility: Maintenance of an earth-based solar panel is relatively simple, but construction and maintenance on a solar panel in space would typically be done telerobotically. In addition to cost, astronauts working in GEO orbit are exposed to unacceptably high radiation dangers and risk and cost about one thousand times more than the same task done telerobotically.
The space environment is hostile; panels suffer about 8 times the degradation they would on Earth (except at orbits that are protected by the magnetosphere).[38]
Space debris is a major hazard to large objects in space, and all large structures such as SBSP systems have been mentioned as potential sources of orbital debris.[39]
The broadcast frequency of the microwave downlink (if used) would require isolating the SBSP systems away from other satellites. GEO space is already well used and it is considered unlikely the ITU would allow an SPS to be launched.[40]
The large size and corresponding cost of the receiving station on the ground.[citation needed]
Energy losses during several phases of conversion from “photon to electron to photon back to electron,” as Elon Musk has stated.[41]
https://en.wikipedia.org/wiki/Space-based_solar_power#Drawbacks
Thanks for the new article Gail!
The space solar ask me for prices that they need to aim for to make non-intermittent electricity from space possibly feasible. I have told them they need a fully loaded wholesale price of 3 cents per kilowatt hour, or less. They have been trying to work backward to figure out how much costs can be. I don’t know how much EROEI needs to be. It depends on how costs are divided up among energy consumption, wages, taxes, rents, and various other things. Only “energy consumption” counts. It would need to be a very high EROEI under any circumstance.
I am afraid Elon Musk is not on my Rolodex.
What is the “Space Solar Power Institute” doing if it does not have any EROEI data for a base load space located solar energy production system and is not already in touch with Elon Musk?
John
I heard that they were raking in funding from DelusiSTANIS and spending afternoons down at the strip bar using the cash for lap dances. Don’t quote me but I my sources tell me they are heavily into a-grade blow and are frequently into the VIP rooms with the ladies to indulge…
I don’t see EROEI as very helpful. Cost is much more useful.
The cost may be high and the EROEI low (ex. tar sand oil) or the cost can be high and the EROEI high (ex. Hydroelectricity).
In the first case, high tech society is not sustainable and in the second it is, as Charles Hall so well explained.
There are a lot of things I don’t agree with Prof. Hall on. It an economy has insufficient growth in energy consumption, it will collapse. I cannot imagine an economy running solely on “tar sand oil” or “hydroelectricity.” One is clearly high-cost, the other is clearly low-cost energy, but they cannot power an economy by themselves. If energy per capita starts falling, an economy is in danger of near-term collapse. This has happened to some individual countries, and we have seen the results –Syria, Egypt, Venezuela, former Soviet Union at the time of the collapse. But in the past, it has not happened to the world economy.
Thanks for the read, Gail.
“Once the world “runs out” of cheap fuels to keep adding to the energy mix”
I believe it is unsafe to assume that technology won’t provide the solution to the cheap energy problem. IMHO, the current biggest roadblock from a transition from a fossil fuel economy is scale of infrastructure changes that are needed to transition from fossil fuels to a pure energy supply chain. Several companies, Tesla being most notable, along with many other companies are trying to start that transition. As fossil fuels become more expensive, energy alternatives become more cost effective and I believe that after several shocks to the economy, the transition will occur. Several of the high priced energy sources that you have referenced have gone down in cost astronomically over the past few decades. Why do you think that tread would not continue?
There are also energy alternatives, including fusion energy generation, algae oil, and synthetic ethanol that are theoretical-to-proven methods of obtaining energy (especially algae oil), that may not even need extensive changes to our supply chain… that could be implemented if the need arises. If we have another 20 years of relatively cheap fossil fuel energy available , why don’t you think that would be enough time for a transition to be made?
We are not out of oil – we will never run out of oil – we are just not finding anymore oil that is cheap enough to extract economically.
‘There are also energy alternatives’ — there are?
Can you show me an alternative to oil — it has to do what oil does – and it must be cheap.
Our big need is roads, oil and gas pipelines, electricity transmission lines, and water and sewer pipelines. No one ever thinks about these things. How are people going to drive the Teslas without roads? Or use the electricity to power factories without transmission lines? Also, our big problem is that we need lower priced products that people can really afford. Does Tesla have a new $10,000 model in the pipeline?
Fantastic. One of the most explanatory articles so far. Thank you.
I was afraid it would be over people’s heads and too long.
“Intermittent Renewables Seem to Give Funding to the 1% and Raise Costs for the 99%, Unlike Fossil Fuels”
+++++
The obvious solution is to tax the people who have the money. That converts saved money into spent money and stimulates demand. Rising demand results in rising employment and rising wages. The current ultra-low interest rates are evidence of too much saved capital chasing too few investment opportunities, so there is no rational reason not to tax that extra capital and put it to good use.
It’s no coincidence that during the high-growth 50s and 60s, the top federal tax bracket was in the 80% to 90% range: that’s exactly what is needed to stimulate high demand and high growth. It’s also no coincidence that since the end of WW2, GDP growth and job growth are positively correlated with federal tax rates on the rich (while being negatively correlated with federal tax rates on the middle class and poor).
“It’s also no coincidence that since the end of WW2, GDP growth and job growth are positively correlated with federal tax rates on the rich (while being negatively correlated with federal tax rates on the middle class and poor).”
Interesting. Any links to the source of this?
Tax Foundation income tax bracket data http://taxfoundation.org/taxdata/show/151.html
Tax Foundation payroll tax http://taxfoundation.org/taxdata/show/24682.html for FICA and Medicare taxes
BEA data for real (inflation-adjusted) GDP http://www.bea.gov//national/nipaweb/DownSS2.asp
BLS data on job growth (sorry, only after 1961) ftp://ftp.bls.gov/pub/suppl/empsit.ceseeb1.txt
Tax brackets & payroll tax need to be inflation-adjusted to match real GDP. Then run correlations by constant-dollar income and you get this for GDP growth correlations:
http://farm8.staticflickr.com/7161/6598794011_23848e4dac_z.jpg
… and this for job growth correlations:
http://farm8.staticflickr.com/7149/6641860117_91974f6092_z.jpg
It’s been a few years since I ran the numbers,but they will not have changed much. Interesting, though, that Clinton’s cutoff of $250k for tax increases is right on the money.
Thanks!
Nice work, but might this not only be correlation, or inverted cause and effect- when growth dries up the rich insists of their growth continuing through lower taxes.
US has a special situation because high wage earners has no obvious way to flee other than salaries paid as dividend/profits (options/equity).
American capital can still move to a small island, like Ireland.
Interesting! The rich don’t really spend their money on goods that stimulate the economy, so taxing them does not really depress demand. The middle class do spend them on goods that stimulate the economy.
We don’t need doctors earning $600,000 per year, or financial managers earning high six digit wages. Or all of the corporate presidents, with multi-million dollar salaries.
“We don’t need doctors earning $600,000 per year, or financial managers earning high six digit wages. Or all of the corporate presidents, with multi-million dollar salaries.”
And they represent what, 0.1% of the population? And beside’s who’s “we” to decide?
Anyway; the “rich” is probably some generic person running his own business earning a few bucks more than the regular burger flippin’ dofus.
LISTEN UP; all the mediocre compulsive consumerists, let’s go after John Galt so we can go on partying up whatever is left of cheap FF’s.
https://i.imgflip.com/10nmbc.jpg
“The obvious solution is to tax the people who have the money.”
Yes, so the middle class is heavily taxed. But you cannot tax the middle class beyond the point where post-tax wage is the same as working poor or unemployed.
The capitalists or even upper middle class cannot be heavily taxed, because they move their capital and/or lives.
This of course only until we have a one world government.
We can indeed tax the rich more (and we should). Remember we’re talking about taxing income, not assets. (Although taxing assets isn’t a bad idea either, in some cases).
As I wrote: then they move elsewhere.
The smart and powerful will inevitably game and rig the system to their gain.
Even though the broad trend is deflationary (in the ‘affordability’ sense that Gail writes about), middle class living, certainly here in the UK, is getting more expensive:
http://www.telegraph.co.uk/finance/personalfinance/household-bills/11622867/How-middle-class-inflation-is-threatening-your-standard-of-living.html
I agree closing the wealth gap would be wise to maintain social order however redistributing wealth from the rich to the poor would accelerate collapse because instead of money sitting (mostly) idle it would be (mostly) spent on non-renewable resources by the poor. A better approach to closing the wealth gap would be to tax the rich and use the funds to pay down public debt and not permit governments to re-borrow the money. This would help to preserve the value of money, social order, and peace as the economy collapses.
Paying down the public debt is the least-productive way to spend increased tax revenue from the rich, because we’d just be returning that money right back again into the paper economy (savings & assets), instead of putting it to work in the real economy (things people use). Remember that GDP is the real economy only — spending, all the spending, and nothing but the spending. Any time we move money from the paper economy into the real economy, GDP increases. Any time we move money from the real economy into the paper economy, GDP slows.
Debt is a claim on future resources. In a post peak world most of the resources claimed by debt will not be produced. This means that either most debts will default or money will be printed to inflate debt away. Politics guarantees the latter path will be chosen and therefore a high debt level means that the value of money will eventually be destroyed which in turn guarantees despots and war. Paying down debt with wealth confiscated from the rich would help to maintain social order by retaining the value of money and reducing the wealth gap. How much you have relative to others affects happiness more than how much you have in absolute terms.
Either that, of the system will fail.
Right! Another thing I could write a post about. Nearly all of the QE effect has gone into inflating asset prices and adding to the wealth of the elite.
Another way to think about debt is that in a post peak world debt represents the level of our overshoot and the height from which we will fall. Confiscating wealth from the rich to pay down debt and implementing austerity measures to avoid additional debt will reduce the pain we experience during the collapse and how angry we will be due to wealth inequality. The destination is the same regardless of what we do however we can reduce the height of the fall and how angry people will be when we get there.
I think the hierarchical arrangement is a natural way of making certain that some population will remain, even if a particular population hits some sort of bottleneck. The fact that the survivors are from the top of the hierarchy suggests that they are somewhat “better adapted” to the conditions that now exist.
I agree that redistributing the money/resources downward and hastens collapse. It is frustrating to everyone who has do-good instincts. I think those instincts came from a period of abundance and surplus which could be easily redistributed.
While I agree with your solution, the way I interpret growth after WW2 is essentially because of oil. During approximately 30 years (1945-1970) the extraction of oil grew between 5-8% per annum. More oil means more machines to work. Jobs grew only because of that, and not the other way around, essentially because man supplies 1 unit of work, while the machine supplies 200 units on average. Most jobs are done essentially by the machine, not the man, and this is still true today. GDP is a consequence of the machines’ work, not that of men, thus an indirect consequence of using oil. Unfourtunately, oil stopped growing in the ’70s but the inertia of demography was too strong, thus a new class of unemployed persons started appearing at that time and never got away (because essentially oil stopped growing). I’m not sure the federal tax had that much impact on growth at that time – these tax measures that were implemented a few decades eariler.
It’s not the extraction of oil, it’s the EROI of the extraction. The oil shocks of the 70s were basically the market catching up to the declining EROI of oil extraction that had been going on for decades, as the shallower, cheaper-to-produce fields gradually became depleted (and replaced by deeper, more-expensive to produce fields.)
So the ultimate solution to both climate an energy is the high-EROI, zero-carbon energy sources, which are geothermal, hydro, and nuclear. Geothermal and hydro and geographically limited, but nuclear isn’t. That’s where we need to push, and rapidly, to save civilization from itself.
I’d recommend you read through the archived articles on this site before you continue any further down this path – as what you have posted makes no sense whatsoever
There is no solution to our problems anymore and our “solutions” are what made all the problems in the first place. There’s too many people and not enough surplus energy to go around. The biosphere is FUBAR! There is no such thing as “zero-carbon energy sources” whatsoever. Please try and prove me wrong.
Renewable energy isn’t real, it’s called green-washing. All “renewable” forms of energy require fossil fuels to install, maintain, create, and replace components, not to mention the mandatory JIT supply chains. Solar cannot replicate itself.
Civilization is already toast. It previously took millions of years for the CO2 in the atmosphere to change as fast as it has since the industrial revolution and NASA just said a few weeks ago that it’s basically past the point of fixing. It’s gone runaway at an exponential rate.
Furthermore the average temperature for 2016 is likely going to be around +1.35 C above baseline and we had months this year at +1.8 C above. At +2 C our habitat, and consequently our food sources, will cease and erode in a few years right before our eyes. It’s already happening. We are in the middle of the 6th great extinction right now and recent projections claim that 2/3 of wildlife will be gone from the planet by 2020. There is no reversing what’s happening. It’s all downhill from here.
http://www.cnn.com/2016/10/26/world/wild-animals-disappear-report-wwf/index.html
I am banking on it! — as in running up debt with the expectation that the debt collector will starve to death before he gets to me…
I was mentioning this ‘strategy’ to a friend who spent years as a banking analyst… and he said — Fast — you do know that if a bank blows up … another institution will pick up the assets and you will still need to pay them back…
It would appear the he does not realize that this time time is different… I am sure he thinks I am deranged… (which would be partially correct)
https://thumbs.dreamstime.com/x/crazy-smiley-face-illustration-5301735.jpg
I can’t think there will be a problem in the future having assets worth less than debts as long as you can pay interest (0 % or so).
I’m not going into debt or anything but I am happily spending a few hundred here or a few hundred there on frivolous things. Like drug paraphernalia and pizzas.
I would generally agree with you, except that it is really total energy and not just oil at work. The world switched back to coal growth to keep the world economy growing.
One of the big issues is that quite a bit of the wealth is gained by corporations, rather than individuals. These corporations have the ability to move to parts of the world where they have low tax rates. The ones that can’t move tend to be commodity companies. They need the “profits” for reinvestment, so raising their tax rates tends to be counterproductive. Also, they tend to already have high tax rates.
But corporations USE their wealth for doing real things in the real world, and that’s a good thing. Even corporations moving offshore is a good thing globally, because it reduces global poverty.
http://www.washingtonexaminer.com/amazing-chart-shows-thanks-to-capitalism-global-poverty-is-at-its-lowest-rate-in-history/article/2562224
Rich individuals, however, typically sock away their savings for no good reason other than greed, or passing it on to their pampered offspring. No reason not to use some of that for better purposes.
This is amusing: “Rich individuals, however, typically sock away their savings for no good reason other than greed, or passing it on to their pampered offspring. No reason not to use some of that for better purposes.”
Once we look at the world from the point of view of resource depletion, then:
1. The rich are good, because they save money and do not let the population grow too fast and reach the collapsing high number.
2. The various large scale money thiefs and cheater do the good to the population in the same way as the rich: they prevent it to grow fast into high numbers and terribly collapse.
This is one of the “secrets” of the Bible why Jesus favoured cheaters, prostitutes etc. that is hard to grasp for the majority: the large scale cheaters, thieves and prostitutes help to keep the population down. Shocking, but true…
The banks issuing free money for everybody is nothing than the measure of the last resort used by the populations before the collapse.
Interesting speculations about the bible.
Cutting poverty around the world means “demand higher and resource use higher.” Jobs are shifted out of the developed countries (but I am not sure that they could have been here in the first place, with the high cost mix of energy products in the US). I suppose it is the way a dissipative system works–it keeps optimizing to dissipate as much energy as possible.