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.
“We’ve long been of the opinion that demand will peak before supply,” Chief Financial Officer Simon Henry said on a conference call on Tuesday. “And that peak may be somewhere between 5 and 15 years hence, and it will be driven by efficiency and substitution, more than offsetting the new demand for transport.”
http://www.bloomberg.com/news/articles/2016-11-02/europe-s-biggest-oil-company-thinks-demand-may-peak-in-5-years
Electric cars won’t cause oil demand to peak anytime soon, according to International Energy Agency Executive Director Fatih Birol.
“The oil demand growth is not coming from cars, it’s from trucks, aviation and the petrochemical industry and we don’t have major alternatives to oil products there,” Birol said at the Energy for Tomorrow conference on Thursday in Paris. “I don’t buy the argument that electric cars alone will cause a peak in oil demand at least in short and medium term.”
http://www.bloomberg.com/news/articles/2016-11-03/iea-s-birol-doesn-t-buy-that-electric-cars-will-displace-oil
The thing is…
There were only 1.2 million EVs in total — manufactured in 2015 https://en.wikipedia.org/wiki/Electric_car_use_by_country
In 2015 — 68 million cars and 22 million commercial vehicles rolled off the assembly lines…
https://www.statista.com/statistics/262747/worldwide-automobile-production-since-2000/
If you included trains and planes and other petrol powered machinery …. that would be many millions more
EV penetration is miniscule … it would not be impacting demand for petrol in a significant way
And it never will.
have made a simple EORI Calc based on a NOAA calc http://www.pv4.eu/electric-power-calculation/ also a small cost estimation of constrution costs of PV see also second sol for really cheap modules from 0,1 eur per watt http://www.secondsol.de/index.htm online slider calc from noaa is more complex can not find it yet?
sorry was not from noaa was from nrel and the LCOE(depends also from location etc) http://www.nrel.gov/analysis/tech_lcoe.html (use different sun hours for uptime – also nuclear energy has no 100% uptime – pv has a big advantage no fuel costs no water for cooling and sometimes below 1% of total cost are yearly O&M costs) by the way when we get droughts and can not use as much water for cooling nuclear or coal the efficiency goes down so the price goes up of the LCOE so PV power becomes cheap in relation to coal….and in some regions there is no way to find water or coal – so electricty from coal will never be cheap – beside the ethical aspect to use water for power gerneration…the theme is very complex no easy answers
I think the issue we have with both nuclear and solar PV is partly boundary issues and partly timing issues.
Nuclear is the “give that keeps on giving” (or taking, depending on your prospective). Building a new nuclear power plant is the least of our problems. Once we get it up, there is a problem with some type of accident happening. We know that these happen, from Chernobyl and Fukushima and other smaller “incidents.” There is also many other long term problems (1) problem of what to do with the spent fuel, (2) how to decommission the plants, and (3) the problem of major blow-ups, if grid electricity is permanently lost, and existing plants are left as they are. In fact, this latter problem appears to be a virtual certainty. There is also the issue of how “accident resistant” the initial plant needs to be. Any country that wants to cut corners in building plants can do so.
With nuclear, there is also the timing issue–we do not really have bonds or anything else that holds value for long enough to really fund future problems. These are simply problems that threaten to kill off quite a bit of the population. There needs to be long-term debt, and the only way this can occur is with government sponsoring it, because the risk of it being paid back is just too high. Nuclear is like solar PV, in that we first dig ourselves a large energy deficit, and then attempt to dig our way out of it. I haven’t figured out how this would work. I expect that the result would start out with a deficit, then seem to become a profit when the nuclear plant is in operation for a few years. It turns back to a big deficit, as soon as a major accident occurs, or the problems start occurring as we lose grid electricity. (Or maybe killing off population isn’t counted as a negative.)
With solar PV, there is a two-fold problem. The major one is that it is really not of sufficient “quality” to put on the electric grid. Most EROEI calculations simply gloss over this problem. If a person does, it simply creates a huge new “tragedy of the commons problem,” which could ultimately bring down both the electric grid and our pricing system for fossil fuels in general. The only reasonable way to calculate EROEI is taking into account all of the peripherals to solar PV–the need for backup batteries, proper inverters, materials to install the solar PV, and constant replacement for these batteries and inverters. If a person hopes to depend on these, there will be a huge pollution/ lack of future resources problem at some point, so it seems like a person also needs to have built in a cost of regathering all of these things and sending them to reprocessing sites, where they can be made into new batteries, inverters, and solar PV. Of course, there is a timing issue. We dig ourselves a big energy deficit hole, which we likely can never escape from, if more complete costs are included.
As soon as we hit the steep downside of the Seneca curve, BAU is a goner; the destructive momentum would be irreversible.
What is more useful and relevant is to consider what could happen in the shallow downside after the peak, to stave off the steep descent. I don’t mean cheating tricks like QE etc, I mean reality based measures.
Debt is a representation of future available energy, but presently exceeds that future energy by a large margin. The exceptional growth of debt has occurred due to a belief in economic growth which ignores the physics of energy.
The initial major threat, occurring at the next recession, is a severe contraction in debt with mass foreclosure on property and business.
The banks understand that if they foreclose on too many borrowers, then they bring the house down on themselves – by destroying capital values, let alone society – hence there would be a tendency to show a lot of discretionary lenience toward borrowers, to the extent that banks can sustain smaller profits.
Then the question is, how long can that lenience be sustained without collapse of banks and currencies – the finance world at large.
Managing global debt down to reality levels at a slow enough rate – not so fast that it precipitates panic and collapse – would be one prerequisite for getting through this and still having the infrastructure we really need: water, food supply, electricity.
It would require the central banks et al to admit that energy really is the economy, and that’s not a given. It’s hard to know if they secretly know it or ignore it. If they ignore reality and allow debt to balloon or try other money injection tricks after the next recession, then it will all be over.
It would also require a sizeable shedding of earnings and lifestyle by those in the 1% (even more by the .01%) and this is the area where breakdown in law or greatly modified property rights might have a useful effect.
The privileged people in this world may not wish to surrender their power and means, but if the will of people demands it they will have no choice.
As a simple example, anyone who dares to fly a personal jet into Washington D.C. to beg for money would be executed on the tarmac with impunity by vigilantes.
Anyone who owns resources that are more than a couple of times in excess of their reasonable needs would be forced to share them. (Especially the few dozens of people who own a staggering proportion of the world)
The smarter ones would understand that their “means” are meaningless without the basics of life.
Those who believe themselves to be more worthy – for example, the disappointed recipients of expensive hand baggage – might be inclined to give up on life when they realize they are no more important than anyone else. They won’t be missed.
Only by focusing on the initial reaction can we envisage a solution which is better than utter collapse. As with most systems, there are many routes to failure; very few to success.
It should be easy to shoot these ideas down. Please go ahead.
Have you read any of Barbara Tuchman’s books, e.g., “A Distant Mirror”? She seems to specialize in 12th and 13th century European Middle Ages history. Some colorful accounts of pissed off peasants versus the families of the nobility in those times.
‘It would require the central banks et al to admit that energy really is the economy, and that’s not a given. It’s hard to know if they secretly know it or ignore it.’
I would hazard a guess that they understand that energy is the economy … actually cheap energy… they fight wars over the stuff… and of course there is this:
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
I find it amusing that anyone would think that the men who run the world… are ignorant, incompetent and stupid….
“they fight wars over the stuff”
Yes, that’s the clincher.
Every U.S. involvement in conflict since WWI has been over oil.
The Impact of Higher Oil Prices on the Global Economy
Prepared by the IMF Research Department1
Approved by Michael Mussa
December 8, 2000
Contents
Introduction
Recent Developments and Outlook in Oil Markets
Current Market Conditions and Near Term Outlook
Energy Intensity of Consumption and Production
The Impact on the Global Economy
The Impact on Industrial Countries
The Impact on Developing and Transition Economies
Major Emerging Market Economies
Oil Importing HIPC and CIS Countries
OPEC Countries
Financial Markets
Conclusions and Policy Implications
Annex: Lessons from previous oil price hikes
Tables
Impact of an Oil Price Increase of $5 per barrel on Oil Exporting and Oil Importing Countries
Permanent $5 per Barrel Increase in the Price of Oil: Baseline Scenario
Comparison of the Baseline Scenario with Outside Simulations
Permanent $5 per Barrel Increase in the Price of Oil: Alternative Scenario
Emerging Markets-Estimated Effects After 1 Year of a $5 Oil Price Hike
Selected HIPC and CIS Countries-Preliminary Estimates of First Round Effects of an Oil Price Increase and IMF Quotas
OPEC – Preliminary Estimates of First Round Effects of an Oil Price Increase and Global Slowdown Effect
Selected Oil-Exporting Developing and Transition Countries: First-Year Impact of a 20 Percent Increase in Oil Prices on Public Sector Revenues
Figures
Consumption, Production and Price of Oil, 1990 – 2001
Crude Petroleum, Heating Oil, and Gasoline: Commercial Stocks and Prices
World Primary Consumption of Energy, Selected Years, 1973 – 1998, and Real Price of Oil, 1970 – 2000
Primary Consumption of Energy by Region, Selected Years, 1973 – 1998
Prices of Crude Oil, Natural Gas and Coal
Impact of a $5 per Barrel Oil Price Increase on Current Account Balances
a) Oil Prices and Equity Markets: Industrial Countries
b) Oil Prices and Equity Markets: Emerging Markets
Yield Differential Between Nominal and Index-Linked Government Bonds
a) Oil Prices and 10-year Government Bond Yields
b) Oil Prices and Emerging Market Spread
http://www.imf.org/external/pubs/ft/oil/2000/
Nice write-up!
“Managing global debt down to reality levels at a slow enough rate – not so fast that it precipitates panic and collapse – would be one prerequisite for getting through this and still having the infrastructure we really need: water, food supply, electricity.”
We could have started in 1970, 1980, 1990, 2000 or 2010. All all 5 times, we chose to extend debt as a solution. Why?
Freezing debt levels as a practical measure probably shuts down just about everything, since every activity we see around us are financed by new debt.
“Why?”
Greed, blind belief, narcissism, what else?
It’s difficult for us to perceive how those with enormous power think and behave.
It’s also important to remember the phenomenal economic machine of the U.S in the 1950s and 1960s, until its oil peaked in the early 1970s.
The momentum and expectation from that period have also driven things to the present situation.
“Freezing debt levels as a practical measure probably shuts down just about everything, since every activity we see around us are financed by new debt.”
Yep – this is a problem. That’s why austerity is necessary.
And it gets harder over time, because the “future energy” will diminish. Debt would not be contracted and frozen – it would have to reduce further.
A permanent austerity regime would be the only way through.
For how long? – maybe a few generations.
If this Sunday evening governments around the world announced that they were seriously going to pursue austerity … the global economy would collapse the second that markets opened on Monday
You won’t like downsizing
http://www.endofmore.com/?p=1464
Rising debt levels are what keep commodity prices up. There is no way we can reduce debt levels, either slowly or quickly, without crashing the economy.
Raising interest rates tends to hold down debt levels. Doing this can also be expected to lead to slower economic growth. If the increase is great enough, it can lead to an economic crash as well.
Wow… did I strike a nerve with Steve by referencing FW in the comments on that Exxon article 🙂
https://srsroccoreport.com/about/
Does he have something to do with Hills Group?
By what factor does present global debt exceed the affordable debt represented by future energy?
Double? Triple? Worse?
This is important in assessing what we are facing.
It would be useful to know what that factor was back in 2008-9 by comparison with measures (bailouts, QE, etc) that were taken to push through that recession.
The system falls apart. It is not clear that it can pay 10% of existing debt levels. There are also many promises that aren’t debt (like Social Security) that will have to be scaled way back or they may disappear completely (especially if the government collapses). I could see federal benefits being turned back to the states to be implemented/funded.
Funny….
Kumbaya !!
https://www.washingtonpost.com/news/wonk/wp/2016/10/28/why-the-industrial-revolution-didnt-happen-in-china/
Ha ha ha ha…. he really does believe that doesn’t he…. hahahahahahahaha
What a bunch of drivel. I had to stop after a few paragraphs.
The cringe detector went off the scale.
https://media.giphy.com/media/l0K43ZMBvs7rWyUSs/giphy.gif
fascinating link and read
confirming that the writer doesn’t have the slightest notion of the physical forces behind the industrial revolution, the essential short-termism of it and why it will collapse back on itself.
MSM; what a joke it is.
http://www.conservapedia.com/images/thumb/2/25/N.jpg/350px-N.jpg
Industrialism – leaving aside its poisonous ‘externalities’ – can be summed up by what a victim said about the Mongols:
‘They came, dug, destroyed, robbed and carried away.’
The barbarian hordes, however, just skimmed the surface of the earth, their main interest being gold and grazing land. And concubines.
Thanks. I suppose having a unified China, rather than independent countries as in Europe, may have held China back in making “progress.”
One of the things that may have held China back is its failure to recognize that the combination of fossil fuels and debt works marvelously well to stimulate growth. Its communist ideology starting in 1949 was no doubt one of the issues in this regard. Also, the lack of individual land ownership, and thus the debt system that tends to get attached to the ownership of buildings.
Another is that when there were inadequate food resources, somehow China was structured in a way that the lack of these resources did not bring down the central government. I am not sure how this worked. I know that the individual parts are even to this day quite autonomous. It may be that individual “states” failed, without bringing down the central government. Alternatively, a significant share of the population died, but these people were at the bottom of the hierarchy, and the system was able to “get along” without them, going forward. The central government was not big enough that it really depended upon support from all of its constituent parts. Population collapsed, without a loss of central government collapse. Or maybe our version of history is sufficiently incomplete that we don’t quite recognize that many of the dynasty changes really represented major collapses, and an attempt to restart on a new basis.
China’s real growth came with its entrance into the World Trade Organization in 2001. Its debt levels have ramped up greatly since then.
If we look at Iranian history, it’s true that the die-off in a crisis occurred among the lowest strata of society, and things could pick up again quite well again as many of those had been old or sick before the famine, ie economically useless and therefore not much missed.
The fate of a beloved slave in a rich family was also better than that of a poor friendless ‘free’ labourer – the rich kept their households alive as long as possible, only jettisoning the lower ranks gradually. Slaves were after all an investment!
I read a description of slaves bought in the Balkans by Turks in the 17th century: as soon as they had an owner, their rags were burnt, they were given good food, clean clothes, and then set to work. To be the right kind of slave could be a move up in the world from a half-starved freezing peasant hut.
Good point!
Perhaps money-lending was frowned upon by the rulers of the centre of the universe…
Without private land ownership, there is a lot less need for debt. Also, a lot less way for citizens to create businesses, apart from government businesses.
speaking as a minor capitalist
maybe capitalism will be shown to be the ultimate crime against humanity
within 10-15 years renewable energy will have taken over here is a link to an article about the rockefellers divesting away from fossil fuels to renewable energy thats all the proof i need that the elites are not as silly as some think they are collapse is not as close as we think it is bau lite will continue indefiniteley http://www.bbc.com/news/world-us-canada-29310475
Let me roll my big guns into place……
Fire One:
Replacement of oil by alternative sources
While oil has many other important uses (lubrication, plastics, roadways, roofing) this section considers only its use as an energy source. The CMO is a powerful means of understanding the difficulty of replacing oil energy by other sources. SRI International chemist Ripudaman Malhotra, working with Crane and colleague Ed Kinderman, used it to describe the looming energy crisis in sobering terms.[13] Malhotra illustrates the problem of producing one CMO energy that we currently derive from oil each year from five different alternative sources. Installing capacity to produce 1 CMO per year requires long and significant development.
Allowing fifty years to develop the requisite capacity, 1 CMO of energy per year could be produced by any one of these developments:
4 Three Gorges Dams,[14] developed each year for 50 years, or
52 nuclear power plants,[15] developed each year for 50 years, or
104 coal-fired power plants,[16] developed each year for 50 years, or
32,850 wind turbines,[17][18] developed each year for 50 years, or
91,250,000 rooftop solar photovoltaic panels[19] developed each year for 50 years
http://en.wikipedia.org/wiki/Cubic_mile_of_oil
seems my first blast was absorbed by the censors…. reloading the big gun….
Fire two (KA-FARKIONG BOOM)
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/
Lock… Load… ear protection in place….
Fire Three!!! (kaplooey)
Germany Runs Up Against the Limits of Renewables
Even as Germany adds lots of wind and solar power to the electric grid, the country’s carbon emissions are rising. Will the rest of the world learn from its lesson? After years of declines, Germany’s carbon emissions rose slightly in 2015, largely because the country produces much more electricity than it needs. That’s happening because even if there are times when renewables can supply nearly all of the electricity on the grid, the variability of those sources forces Germany to keep other power plants running. And in Germany, which is phasing out its nuclear plants, those other plants primarily burn dirty coal. https://www.technologyreview.com/s/601514/germany-runs-up-against-the-limits-of-renewables/
Germany’s Expensive Gamble on Renewable Energy : Germany’s electricity prices soar to more than double that of the USA because when the sun doesn’t shine and the wind does not blow they have to operate and pay for a completely separate back up system that is fueled by lignite coal http://www.wsj.com/articles/germanys-expensive-gamble-on-renewable-energy-1409106602
Why Germany’s nuclear phaseout is leading to more coal burning
Between 2011 and 2015 Germany will open 10.7 GW of new coal fired power stations. This is more new coal coal capacity than was constructed in the entire two decades after the fall of the Berlin Wall. The expected annual electricity production of these power stations will far exceed that of existing solar panels and will be approximately the same as that of Germany’s existing solar panels and wind turbines combined. Solar panels and wind turbines however have expected life spans of no more than 25 years. Coal power plants typically last 50 years or longer. At best you could call the recent developments in Germany’s electricity sector contradictory. https://carboncounter.wordpress.com/2015/06/06/why-germanys-nuclear-phaseout-is-leading-to-more-coal-burning/
All of Germany’s problems with renewables are keeping it from maintaining its leadership in fighting climate change. Germany is backing down from the Climate Protection Plan, that theoretically should have been in place before next week’s UN climate conference. According to “What Happened to Germany’s Climate Protection Plan?”,
. . .
few people can grasp the point, that the million year old human brain has not evolved past short term thinking.
ie—as long as our group has an animal to feed on, there is no need to be concerned about another till everyone gets hungry, because there’s always another meat-energy source to be had.
it is simply not in our evolutionary system to concern ourselves with what our grandchildren will eat
or even what we will eat when we are 70/80/90.—because in evolutionary terms we are not supposed to live that long, we have no mechanism too deal with that.
the same thinking governs our collective attitude to climate change—we have food and a comfortable environment now, why should we inconvenience ourselves by doing anything to change?
same applies to our grandchildren’s lifestyle—we have not evolved to deal with that.
“few people can grasp the point, that the million year old human brain has not evolved past short term thinking.”
Oh, but you are wrong. We do grasp the consequences. The thing is:
We just don’t care (at all).
https://cdn.shopify.com/s/files/1/0535/6917/products/procrastinationdemotivator.jpeg
Colonel Fast…. adonis has gone down the rat hole and is hiding…. shall we hose him down with the flame thrower?
Yes…. make it so….
Blues for the Greenies: Now matter how many greenbacks the government throws at “green” energy, everyone ends up feeling blue. Yesterday the Wall Street Journal updated the story we’ve been covering for a long time now about the dismal performance of the Brightsource solar energy array in the California desert:
High Tech Solar Projects Fail to Deliver – $2.2 Billion California Project Generates 40% of Expected Electricity
http://www.powerlineblog.com/archives/2015/06/more-blues-for-the-greens.php
From my view of comments, I can see that your e-mail has the world “faith” in it. What you are providing is certainly a faith-based view of what is ahead. What the Rockefellers are sure of is that there is money to be made from government subsidies, at least in the near term.
Despite being famous for touting the idea that the rich don’t pay their fair share of taxes, investor Warren Buffet seems to be perfectly fine with receiving tax breaks for making investments in Big Wind. “I will do anything that is basically covered by the law to reduce Berkshire’s tax rate,” Buffet told an audience in Omaha, Nebraska recently. “For example, on wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”
http://www.usnews.com/opinion/blogs/nancy-pfotenhauer/2014/05/12/even-warren-buffet-admits-wind-energy-is-a-bad-investment
MidAmerican Energy, a Berkshire Hathaway-owned utility, announced it was going to build 2,000 megawatts worth of new wind turbines in an effort to get 85 percent of its energy from wind power in the coming years.
How are they able to do it? With generous green energy tax credits recently extended by Republican leadership in Congress. MidAmerican says it plans to use the Wind Production Tax Credit, or PTC, to make its big bet on wind financially feasible.
“Because of the tax credits and our ability to deliver these projects at a low cost, we’re setting up our customers for a low-carbon future,” MidAmerican CEO Bill Fehrman told The Wall Street Journal Thursday.
Read more: http://dailycaller.com/2016/04/15/warren-buffett-is-building-lots-of-new-wind-turbines-with-your-tax-dollars/#ixzz4OyTlCZDI
Funny how the MSM generally avoids to disclose the details….
Love the Buffet quote–will save it for future use.
Something weird is going on – that’s all everyone knows
http://wolfstreet.com/2016/11/01/merger-mania-october-the-paroxysm-before-it-all-comes-unglued/
So far this year, companies in the US have already issued $1.4 trillion in bonds, according to Dealogic, a record pace, to fund acquisitions and stock buybacks, rather than do something productive.
Agree — Wolf and others like him know something wicked is headed our way…. but they believe that there will be a reset ….
Wolf is a firm believer in renewable energy and EVs and that population needs to be – and can be – reduced.
And when I demonstrate how he is wrong – he refuses to debate the issues – in fact he refuses to publish the evidence that he is wrong.
At the end of the day there has been a capitulation — most people recognize that green shoots are not happening …. and some – like Wolf and Stockman — do a nice job of identifying symptoms…
Not exactly rocket science to come to the conclusion that the economy is headed for a cliff….
But every last one of them attributes the economic problems to the incompetence and stupidity of the Fed.
Not a one of them understands — or will even try to understand — that there will be no reset — because the problem is not one of incompetence…
It is one of cheap energy — or lack thereof.
At the end of the day these talking heads are little different from the masses — they also know that the Beast is sick — they might not understand the symptoms as Wolf does…. but they – like Wolf – continue to smoke the hopium absorbing whatever ‘solutions’ the MSM puts in front of them…
I actually think Wolf is quite pathetic — anyone who deletes evidence that their position is on very shaky ground – refusing to defend it….. or better still — changing one’s position because the facts dictate a change — is not deserving of respect for their intellect.
That is effectively how I phrased my grand departure from Wolf St.
Well… no one is perfect. As I understand it you have never been forced to work for someone. So you don’t know that the Nr.1 job is to make your boss look good. I tell you it’s not always easy. Once every month I think: F*** this ! I’m out ! One just has to accept that no one is perfect. Then there is of course also alcohol to easy the mind. I’m not perfect.
I am not expecting perfection …. but if someone is to be respected they should not not publish comments when the comments demonstrate that they are wrong.
They should either debate the issue — or admit that they were wrong. Those are the only two choices if you want to retain credibility.
Wolf’s way of maintaining credibility (with his followers) is to simply not publish content that proves he is wrong.
The war really started when Wolf was allowing comments referring to me as an idiot — as someone who was unwilling to accept facts regarding population growth etc etc etc…even though I cited the situation in Japan where there are more diapers sold to geriatrics than mothers….
Wolf commented that Japan was doing just fine with a declining population (seriously…he said that)
And he agreed with his band of koombaya followers that global population could decrease — suggesting that the quality of life for all would improve — he asked if I would have preferred to live in a bigger apartment in Hong Kong … which would have been possible if the population were reduced….
And then I dropped the bomb shell in the form of comprehensive research indicating that roughly 1/3 of all growth is attributed to population increases… he removed the comment and all other comments related to the discussion of population growth
When I complained about this he stated that the discussion was too contentious or something of the sort — and he added that my positions on energy were ‘ridiculous’
I would note that I am far kinder and gentler in terms of my commentary on sites like Wolf Street — because I recognize that I am amongthe blind…. and it is not very good form to enter a room crowed with blind people with fists and elbows flying.
Wolf is not perfect …. nor am I…
But anyone who refuses to change their mind when the facts dictate … is pathetic… Wolf is even worse than that …. he not only refuses… but he pretends the facts don’t exist…
He just turns the stereo up as loud as possible and puts on Koombaya….
I can’t speak for Wolf since I don’t know what’s going on in his head. I think he’s a clever man, perhaps not genius, but clever enough. Why so many intelligent persons refuse to deal with the end is hard to say. When I understood that the oil companies are basically just pumping up water… it felt unreal. I smoke and once I was sure that I had cancer and was dying… it felt unreal.
Perhaps Wolf knows that the oil is about to end and thinks that a population decline and a market correction is the only brutal solution to the contraction ? Perhaps he thinks that renewables and technology is the solution ? Perhaps he hasn’t really though things through ?
Perhaps the Wolfstreet is his bread and butter and just can’t be showed up as a fool for his readers ?
He once said that he is basically an optimist. He’s just observing the craziness of the central banks and thinks that the central banks are the cause of this crisis by not letting the markets correct.
Perhaps he’s just confused ?
But he’s not going to listen to doom and gloom.
Getting a sincere and rational explanation of our predicament isn’t the same as delivering doom and gloom. Doom and gloom is just an (simplistic) interpretation (one makes) of the internalized information.
Personally I really think this site would be much better without the (insta)doomerism and (insta)collapsterism. It’s just as boring to read as the hopium laced posts.
As if any of us are bright enough and have the right information to make any informed conclusions regarding what goes on behind the scenes and the decisions taken to keep the bread and circuses moving along.
Wolf is not doing much more than publishing stuff that the MSM refuses to publish…. if you had a Bloomberg terminal you could pick up what he is writing about and far more…
He is simply pumping out details of the symptoms of a dying world. Many others are doing the same — Stockman, Roberts, Zero Hedge, Grant Williams, El Erian, etc etc etc…
I see no brilliance to what he is doing — I see a willingness to publish facts.
I see no genius to that whatsoever — anyone can regurgitate analysis.
He not only fails to look beyond the facts to try to understand why all of this is happening — he refuses to acknowledge anyone who tries to steer him in the right direction.
In some ways a donkey is more capable … at least if you pull the lead of a donkey he will follow you around the wall.
My respect for his intellect does not register… I do not even bother to comment on that site any longer. I am always up for debate but he will not engage. It is like heading down to the local rink to have a game…. picking the top corner on the other team over and over — and they take thei puck and go home…. but not before flinging sacks of salt all over the ice to spoil it.
The true genius is in the articles and insights on FW.
The funny thing is…. if Wolf were to read FW — he’d dismiss it as total rubbish.
Well, as for Wolf, admitting that finite world considerations, ie the approaching disintegration of globalised industrial civilisation, are in play would destroy the basis of his website, or turn it into another doomer site. No man can be expected to put himself out of a job: there is that case of champagne to buy for the End of the World party after all. …..
Of course there is only one website with integrity…
Integrity is for those who can afford it. The rest of must do with shameless disgrace. 🙂
Looks like 2007! Not a good precedent to be following.
If this is another 2007 then what are the central banks going to do this time ?
Lower interest rates???
Buy more stocks and bonds?
Deutsche Bank Thinks Draghi’s Gone Over to the ‘Dark Side’
http://www.bloomberg.com/news/articles/2016-11-02/deutsche-bank-thinks-draghi-s-gone-over-to-the-dark-side
Currency is meaningless. What really matters is energy consumption rate (worldwide).
Currency are tokens for energy. If someone is creating and giving away currency they are taking energy from everyone else.
When Hong Kong-based financier Michael Nock wanted a place to escape in the wake of the 2008 global financial crisis, he looked beyond the traditional havens of the rich to a land at the edge of the world, where cows outnumber people two-to-one.
Nock, the founder of hedge fund firm Doric Capital Corp., bought a retreat 5,800 miles away in New Zealand’s picturesque Queenstown. In the seven years since, terror threats in Europe and political uncertainty from Britain to the U.S. have helped make the South Pacific nation — a day by air away from New York or London — a popular bolthole for the mega wealthy.
Isolation has long been considered New Zealand’s Achilles heel. That remoteness is turning into an advantage, however, with hedge-fund pioneer Julian Robertson to Russian steel titan Alexander Abramov and Hollywood director James Cameron establishing multi-million dollar hideaways in the New Zealand countryside.
“The thing that was always working against New Zealand — the tyranny of distance — is the very thing that becomes its strength as the world becomes more uncertain,” Nock, 60, said by phone from Los Angeles during a recent business trip.
More http://www.bloomberg.com/news/articles/2016-11-02/the-rich-have-found-a-place-to-escape-the-horrors-of-the-world
If they only understood that NZ is not sanctuary …. would they have come….
The paperback edition of The End of More is now on Amazon for any doomsters wanting to read it
https://www.amazon.co.uk/The-End-More-Norman-Pagett-ebook/dp/B00D0ADPFY
https://www.amazon.com/End-More-resources-humankind-unsustainable/dp/095760792X/ref=tmm_pap_swatch_0?_encoding=UTF8&qid=&sr=
Excellent
When does “The Start of Less” come out?
My next title might be
Profit of Doom
And how about “Between More and Less”?
I’ll buy a few copies, Norm.
Doom
P.S. Now, to get Gail published!
Thanks
I pay no refunds or compensation to doomsters trampled in the rush to buy copies
‘You are running away to Samarquand from Baghdad because Death has turned up there, but his next appointment is……in Samarquand, next month.’ 🙂
Always amusing to hear of these people neurotically flitting around trying to avoid the inevitable: Canada(!) New Zealand….. so unimaginative of them.
The only thing is to move somewhere because it is a better place to live, here and now.
They have not yet realized that there is nowhere to run to … nowhere to hide….
But hey – the scenery is pretty good.
i wonder what could be the stupidest position to be in? how about living in a high-rise condo, say above the 30th floor, in the middle of a city of over one million people, on an island located thousands of miles from the nearest land ports, with only airline services, no boats unless your own a personal one, with over 90% dependence on imported food and goods and only a two-week supply (on average) if the ships and planes stop coming?
that’s me except i don’t live in a condo, but in a house about 500 feet up a ridge, totally dependent upon the grid for electrically-pumped fresh water. i guess we could drink the swimming pool water in a pinch. catchment is a sick joke here with an asphalt tile roof and low rainfall
the downsizers insist you can become a farmer
I wouldn’t worry too much about which part of the Titanic you happen to be on when it goes down…. this Titanic has no life boats…
But we can make life boats from empty wine bottles and bed sheets, more rafts than boats.
This version of the Titanic is going down in the Ross Sea
http://3.bp.blogspot.com/-qnBiFkTjfHk/UJLM38-cP5I/AAAAAAAALN8/KUJLipDi7qc/s1600/ross-sea-antarctica1200.jpg
https://www.niwa.co.nz/sites/niwa.co.nz/files/styles/large/public/sites/default/files/images/gallery_83.jpg
The north pole is looking much scarier right now as it appears to be sitting in a hot-tub.
[URL=http://s11.photobucket.com/user/aircontrolto/media/Data/Screenshot%202016-11-05%20at%206.45.29%20AM_zpsaqzknuzr.png.html][IMG]http://i11.photobucket.com/albums/a167/aircontrolto/Data/Screenshot%202016-11-05%20at%206.45.29%20AM_zpsaqzknuzr.png[/IMG][/URL]
The ECB has taken another approach to the contracting economy. The ECB is printing money and buying government and corporate bonds to keep them afloat. By doing this the ECB has pushed the bond yields to zero and made it impossible for private financial institutions to survive in this zero yield environment.
Do they have a choice?
Probably not ? If they let the market forces take care of the economy, the eurozone would probably collapse ? Politically that is not an option since it would collapse the EU and lead to political and economic chaos… perhaps fascism… and perhaps war ?
“If they let the market forces take care of the economy”
Perhaps it never has, if it would have, just maybe we wouldn’t face this predicament this early in the age of almost free energy?
Almost free energy huh? Dude, put the bong down.
The choice, to save the failed institutions, but wipe out shareholders, bondholders and management who took on too much risk, by replacing ruined banks with new government approved ones, would have made a lot of sense back in 2008, but this opportunity was passed over, for political reasons. Now everything is poised to come apart at the slightest sneeze in our “new and improved” Orwellian-Kafkaesque financial system. Hankie anyone?
It’s all about maintenaning energy flow at maximum possible rate. It’s the true definition of the economy.
One final note. This could all be cyclical, but ExxonMobil offered a worrying note to shareholders. The oil major, in an acknowledgment of the investigations it is under by the New York Attorney General and the U.S. Securities and Exchange Commission, warned investors that it might have to write down some oil assets because future climate policy might make those reserves impossible to develop. Far from a cyclical problem, that disclosure is an early sign of a much more existential threat just over the horizon.
http://oilprice.com/Energy/Energy-General/Will-Oil-Majors-Ever-Recover.html
“U.S. crude oil stockpiles soared more than 14 million barrels last week, the largest weekly build since the U.S. Energy Department started keeping records in 1982…”
http://in.reuters.com/article/usa-oil-eia-idINKBN12X1ZE
Extreme income disparity between top 1% and the rest of the society doesn’t cause collapse. Third world countries have always had that. What happens is that when people make less money the families stop breaking down. Adult kids stay with their parents; grandparents babysit while their adult kids go to work. People stop getting divorced just because the spouses “grew apart” or are “no longer compatible” or have “irreconcilable differences”. Much of the world has always lived like that. Family breakdown is a disease of the affluent people or people with an affluent government that can afford to create a social safety net.
The other issue regarding ERoEI of fossil fuel extraction is valid. However there are a couple of caveats:
1. Technology continues to improve. The cost of extracting shale oil and shale NG is not static.
2. Renewable energy is getting cheaper by the month. Solar electricity is already around 2.5c/kWhr at least in sunny locations. The Achilles heel is the cost of storing it but even that is continuing to drop. In another 10-15 years it will be practical for utilities in the US to generate renewable energy in excess (when it is available) and store it for later use. We are in early stages of transitioning away from fossil fuel use.
“In another 10-15 years it will be practical for utilities in the US to generate renewable energy in excess (when it is available) and store it for later use. We are in early stages of transitioning away from fossil fuel use.”
http://fusion.net/story/129075/elon-musk-reminded-everyone-last-night-how-little-land-would-be-needed-to-power-the-u-s-with-solar/
Elon Musk is the man.
seems necessary to hammer home this reality point again
that electricity of itself is useless without the machinery on the ends of wires with which to perform our tasks and produce the goods we sell to each other to sustain our commercial infrastructure, through the reforming of raw materials in an infinity of ways.
We have to produce those machines from raw materials. There are two prime sources of raw materials, hydrocarbons and minerals. We reform them into “stuff” we can use, by using heat.
We have no other method of manufacturing anything of consequence.
you cannot “produce” machinery from electricity alone.
Despite what Musk pronounces, without a hydrocarbon based infrastructure, an electric vehicle is useless. Electric cars might make Musk prosperous, but cars do NOT create wealth for the rest of us, however they are powered.
Going from A to B consumes energy, which is produced elsewhere. That applies to any vehicle, no matter how it’s powered. (even a horse and cart)
A wheeled vehicle consumes energy, therefore to make it viable more energy (in the form of tokens –ie money) must be earned as a profit- function of the journey itself.
That’s what we call wages.
People without wages do not get rich by driving Musk’s cars or anybody else’s.
(the same problem applies to his ideas about Mars—but that’s another story)
“We reform them into “stuff” we can use, by using heat.”
Actually is both by using work and heat.
A FF powered steam turbine, for example, is a heat engine, it converts heat to mechanical work which in turn is converted to electrical energy using a generator.
A water turbine converts kinetic and potential energy to mechanical work which in turn is converted into electrical energy using a generator.
This electrical energy can then be used for manufacturing and powering electrical vehicles. For example, the aluminium in a Tesla automobile could quite likely be melted (heat) and stamped (work) using hydro power electricity. The same hydro power electricity can be made to charge the batteries in the Tesla.
All hydrocarbons required to manufacture the Tesla could in practice be manufactured using the gasification process and electric energy.
https://en.wikipedia.org/wiki/Gasification
Yes, but we are not going to run out of hydrocarbons overnight. Our initial goal must be to eliminate the use of oil as a transportation fuel. I think we will achieve that within the next 20 years. With cheap energy hydrocarbons can be synthesized if needed. The world will still produce oil 50 years from now, just not enough for everyone to drive a car with an ICE engine.
The following statement is absurd: “A wheeled vehicle consumes energy, therefore to make it viable more energy (in the form of tokens –ie money) must be earned as a profit- function of the journey itself.”
All economic activity consumes energy; not just car driving. Driving a car doesn’t produce more energy than it consumes any more than running an organic farm. So far the additional energy has come from fossil fuels. In the future it will come from the Sun, wind and tides. The Earth is not a closed system.
I know that
I was just putting forward the main point with which everyone is familiar on an everyday basis—commuting travel to obtain wages.
There is no absurdity in that.
We use wheeled vehicles for three main purposes only
1 Sustainment
2 Employment
3 Entertainment
We can only maintain vehicle use if there is a net energy gain.
You might have a job 20 miles away that pays sufficient income to drive there daily, and provide for all your other needs = Net energy gain
Now put the same job 100+ miles away, paying the same wages.
the job is no longer viable = net energy loss
If you cant find a job closer to home, you remain unemployed and a net energy drain on the community if you do not have other means.
If your community cannot support you, you willl starve to death.
In communities pre industrial revolution that is exactly what used to happen.
It is happening now in places where there are insufficient resources to support populations.
Using a vehicle for (3) above can only be as an accumulation of 1 and 2 (ie surplus energy)
A farm by definition must produce more energy than it consumes, or it couldn’t stay in business
same applies to an oilwell
As to the next 20 years, one can only hope we have that long.
saudi expects to become an oil importer by 2030 (where from?)
The USA uses 19Mbd, but produces 10Mbd—so much for Saudi America
Solar farms promise to produce power for xx000s of homes.
What they fail to mention is that while homes might consume about 3Kw, the infrastructure in which they function consumes around 100kw. No system of renewable energy can possibly provide that–unfortunately this is what the downsizers say we can continue with ad infinitum.
but don’t take my word on all this, read David Mackay’s book (free to download)
https://www.withouthotair.com
He was on a different intellectual planet to me
The son of a friend is an academic working with the energy industry in the UK, and he told him that despite all the hype about cheap gas and British ‘energy independence’ they already know that all the proposed fracking sites are uneconomic and not worth exploiting, except for one in the North, Lancashire – Forest of Bowland.
Sounds similar to the US situation …. 🙂
Very good summary. It would seem that the economy is just an energy balancing act.
lol yes
and we’re all riding unicycles
Without the comments on OFW, I couldn’t even think the following:
The highway right in front of my house is developing significant cracks and asphalt losses. I would enjoy filling these losses with my paper pulp mixture…just for fun. But after working on this last w/e, it occurred to me that the many cars passing along are compacting the pulp in just the way it needs to be compacted. (I’ll let it dry out thoroughly and then repeat the process.)
Now, I see that the cars are doing extra, gratuitous work and (maybe) conserving energy. The car-as-roller is free. My intervention, if very successful, saves the state energy and money for road repair (in principle). I am using up paper and cardboard that otherwise would go to the dump and cost money and energy to do whatever with + cost/energy to transport it there.
So the commute car’s work has become an important component in reducing entropy? Just the opposite of what cars were designed to do.
ive got a better idea
lace the roads with some kind of of induction circuitry–(lots of clever folks on here will fill in the details on that)
then passing vehicles trip a current which can be harvested by each house they pass by.
Taking this system to a logical conclusion You will reach the point where highway toll booths will be paying out money based on the distance you intend to drive on their particular road.
in fact you wont need booths at all—numberplate recognition will automatically credit money to your account at the end of each day’s driving. It certainly changes my mind about vehicles not making you rich
I am amazed that no one has thought of this before—all you doomsters are hereby on notice not to steal this idea before I file for patent in the morning UK time.
To prevent cracking I recommend that all roads be equipped with ‘in floor’ heating systems to prevent the freezing and thawing problems that result in cracks.
Fences would need to be built to keep wild animals from sleeping on the roads though….
and homeless people of course
Norm,
It get ridiculous, I know. I’d just as soon see the cars go away–then there’ll be no road losses and we could dry rice on them. 🙂
How do you feel about this statement:
We will NEVER EVER run out of oil. Never. Not in a million years. Not in a billion years. Never.
Would you like me to explain why?
No need to answer…. here’s why…
The problem is that the cost to extract oil has gone through the roof:
Steven Kopits from Douglas-Westwood said the productivity of new capital spending has fallen by a factor of five since 2000. “The vast majority of public oil and gas companies require oil prices of over $100 to achieve positive free cash flow under current capex and dividend programmes. Nearly half of the industry needs more than $120,” he said http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/11024845/Oil-and-gas-company-debt-soars-to-danger-levels-to-cover-shortfall-in-cash.html
So what happens to the global economy if oil is priced at the necessary $120 break even price?
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
I will leave it to you to do the math on this … but suffice to say that oil cannot be priced anywhere near the break-even price without collapsing the global economy.
You may have noticed that oil companies are dramatically curtailing exploration budgets — the reason is because the low hanging fruit has mostly been found…
What is left is VERY expensive to extract and refine.
They understand that it makes no sense to bother with these reserves because it is not possible to produce that oil without losing money on every single barrel.
To recap…. most of the oil that remains to be discovered is too expensive to bother with — therefore it will stay in the ground.
Therefore we will never run out of oil….
What we will run out of is the oil that is relatively inexpensive to produce i.e. the existing wells that were sunk years ago (e.g. Ghawar) and are depleting by the second…
THE DECLINE OF THE WORLD’S MAJOR OIL FIELDS
Aging giant fields produce more than half of global oil supply and are already declining as group, Cobb writes. Research suggests that their annual production decline rates are likely to accelerate. http://www.csmonitor.com/Environment/Energy-Voices/2013/0412/The-decline-of-the-world-s-major-oil-fields
It’s twilight in the desert…. soon it will be pitch dark in the desert…. and the Extinction Event will be upon us….
A little tip in leaving …. you can take this as a learning opportunity…. or….. you can reject the logic and facts …. we all know what happens to those who fail to get on the right train….
Don Draper wrote those words for Elon…. he surely knows this is all bullsh.it aimed at keeping the masses calm before the extinction.
Forgive my impertinence…
But can you provide a reference for this…
‘ In another 10-15 years it will be practical for utilities in the US to generate renewable energy in excess (when it is available) and store it for later use.’
What I am after specifically would be details of the storage system that is 10-15 years away.
Please don’t post a press release from Elon Musk… you will regret it…
http://piqueyeater.com/wp-content/uploads/2015/03/abw12og.gif
(if you turn up the volume you will hear a litany of profanities….)
Corporations contracting with falling sales, who are cutting down the workforce to match their falling income… while the central banks are printing money to lend to corporations to buy their own shares to pump up their stock value… will in the end result in ridiculous values of the corporations.
“We produce and sell 200 lollipops a day. Our corporation is worth $2 trillion. We have $1 trillion in debt.”
In the end there must be a stock market collapse ? Unless of course the central banks buy up the entire stock market like in Japan. Japan is today perhaps more communist than China ?
One has to wonder how big the spread on PEs can go…. I doubt you’d find a trader who would not think that PEs are already absurd….
How far can this go without busting?
Until the corporations have bought back all of their shares ? Then the Fed will just have to figure out another trick ?
“Renewable energy generation is only as sustainable as the practices of companies producing wind turbines and solar panels, a Swedish researcher has said, pointing to the lack of knowledge about the foundations on which the green revolution is being built.”
,,, “To assess the feasibility and consequences of a global energy transition, we need to consider material flows and how sustainable emerging industries are with regard to aspects other than climate,” said Davidsson.
“Truly sustainable energy systems require the creation of sustainable industries, which not only can produce large amounts of renewable energy technology, but also maintain a working system on a longer time scale, and do so in a resource efficient way.”
https://eandt.theiet.org/content/articles/2016/11/how-sustainable-really-is-renewable-energy/?utm_source=MIT+TR+Newsletters&utm_campaign=9e34318e84-The_Download_November_2_2016&utm_medium=email&utm_term=0_997ed6f472-9e34318e84-153961373&goal=0_997ed6f472-9e34318e84-153961373&mc_cid=9e34318e84&mc_eid=662b7fd83b
And, without fossil fuels, what then?
Thanks for this link https://surplusenergyeconomics.wordpress.com/2016/10/30/80-grossly-distorted-prosperity/
Liked a lot of this including:
https://surplusenergyeconomics.files.wordpress.com/2016/10/80-1.jpg
Disagree with many of the comments re renewables.
I agree this is one of Dr. Morgan’s better recent articles. People don’t usually consider that we can have a rising GDP together with falling living standards, but Morgan explains in an easy-to-grasp manner how this can be so. It all depend on what the GDP is being spent on or used for. Also, I come away from this topic with a keen sense that the UK doesn’t seem to have any good options energy-wise. Not that the most of rest of the world is much better off.
and education
https://youtu.be/1lG4xBoEgZo
and automated factory
https://youtu.be/8_lfxPI5ObM
https://youtu.be/TEReFPI4jSc
https://youtu.be/MwC_Hzm5Z9s
Robot farm.
long version
https://youtu.be/EfOMm6Q3pQw
Operating 24 hours per day. New Zealand is having a hard time finding qualified farm workers, so says the immigration department.
At the 6:00 minute mark it talks about autonomous mining.
more robot mining
https://youtu.be/drnMHde9FpQ
problem with autonomus mining, or carmaking, or anything else is
1 you need energy input to drive the robots
2 you need wage circulation to keep the commercial system going
robotic systems produce neither
1: So does humans, but a robotic system is much more energy efficient and effective.
2: As long as the “commercial system” supports the owners (TPTB), engineering (plebs) and machinery (computers + mechanisms) we are o.k. to go for another century.
It’s time to drop the banalities of human chauvinism. Just let it go, and off it floats into oblivion. Never to be seen again and certainly nothing we’ll feel any nostalgia about in the coming age of the machine.
I’m fine with that
Just so long as the robots leave me one activity to indulge in
Let me think, hmm, what could that be? Perhaps writing pointless comments on a random dommerist forum?
ultimately
the point of all doomstering comments is debatable
by common consent some points are blunter than others,
and some have no point at all, and would prick no balloon of opinion, no matter how over inflated.
but at least the robot who writes mine justifies its existence by doing so, and writes only such nonsense as it is programmed to do.
leaving me free to get on with such activity as robots are no good at (so far)
“but at least the robot who writes mine justifies its existence by doing so, and writes only such nonsense as it is programmed to do.”
The whole point of half-witty commenting on the internet and the slightly repulsive joys of human reproduction will be obsoleted. Nobody will care.
The world with it’s remaining people and the technology they utilize and develop will move on.
that’s a pity
i rather enjoyed reproducing myself. Most folks do, as I am led to believe
but if everybody gives up on that, who will replace the batteries in the robots?
And I’ve never heard a robot laugh, which seems important, even among committed doomsters
“that’s a pity”
It is?
Perhaps there will be more interesting things to do?
That’s your problem, you only ponder in a linear manner and fail to account for paradigm changes and the dynamical properties of systematic development of technology and its applications into your consideration.
If someone would speak to you some forty years ago about the coming era of the Internet, microprocessor and mobile communications. Oh man, would you disregard and slag off on any such a person.
And yet here we are.
“we are o.k. to go for another century.” LMAO! LOLOLOLOL! Yeah, if we didn’t have 54 other large unsolvable problems maybe. And who’s “we?” Certainly not plebes like us.
It is impossible. A farm owner and his machines. This can not obviously be happening!!!!!!!!!!!!!!!!!!!!!!!!!!
Where are the labor (compulsive consumerists) that we “need” for them to consume in order to keep the “wheels” of the economy spinning? The Collapse is Imminent!!!!!!!!!!!!!!!
Oh wait, they are now becoming redundant in an ever increasing pace.
Good riddance!
https://s-media-cache-ak0.pinimg.com/236x/55/e3/af/55e3afa0e8cfb656b605550d9d76a795.jpg
Trying to automate everything is nothing more than trying to continue the growth trajectory ever upward. Since labor is usually the most expensive cost for a business, doing away with that expense is akin to increasing efficiency. And Jevon’s paradox states that efficiency improvements lead to increased energy consumption.
So, automation it is just another attempt at infinite growth in a finite world. All this at a time when resources of almost every type are going into decline.
Another problem I see with automation is: what happens when a critical mass of workers are displaced by automation? With all the unemployed, who will buy the goods and services provided by the automation? Will robots become the new consumers? So, in the end what is gained by replacing staff with machines if in the end no one is buying your products?
It seems to me that automation is very similar to intermittent power being added to the grid. Once a critical percentage of grid power is intermittent, the grid becomes unstable. I believe the same effect will be seen in the transition to automation. Once the point is reached where too many jobs are automated, the entire economy will become unstable.
Growth at all costs is what automation really boils down to. And any sensible person knows that infinite growth is impossible in a finite world.
‘It seems to me that automation is very similar to intermittent power being added to the grid. Once a critical percentage of grid power is intermittent, the grid becomes unstable. I believe the same effect will be seen in the transition to automation. Once the point is reached where too many jobs are automated, the entire economy will become unstable.’
+++++++++++++++++++++++++++
“Once the point is reached where too many jobs are automated, the entire economy will become unstable.’”
Ahaha, “become unstable”. It could mean exactly anything or nothing at all. It sounds like the perfect ingredient in a comp1exed 1gnorant’s doomerism dystopian hodgepodge of a forum message.
http://recruitmentdad.com/wp-content/uploads/2010/05/assumptions.jpg
Smite clearly believes that universal income will save us all while conveniently ignoring all the nasty details like climate change, the extinction rate, diminishing returns, commodities collapse, and other pesky details that get into the way of his personal dream of The Jetsons.
No, Smite believes the .01% can live like now with the support of machines and 1-5% plebs. And all these should willingly let Terminators kill the rest.
“Trying to automate everything is nothing more than trying to continue the growth trajectory ever upward.”
“Growth at all costs is what automation really boils down to. And any sensible person knows that infinite growth is impossible in a finite world.”
Lots of simpleton assumptions here, with nothing to back it up. Typical of the generic comp1exed 1gnorant economist doomster.
https://s-media-cache-ak0.pinimg.com/originals/87/07/87/8707871296a4eaa90201b0695826e66a.jpg
Let’s consider how we get from where we are now to the new ‘machine age’.
Your vision dictates the eradication of 95% of the human population (You’ve envisioned that a small population of machine owners and engineers will be the only humans remaining). You seem to take some glee from this but your take on human redundancy isn’t shared by many is it?
Obviously yours is a fringe view even in the ‘AI’ optimist crowd. Otherwise you’d be spending less time here slagging off the doomer crowd. If you would admit that your machine fetish is an ultra-minority view you might also realise that the project of human extermination you foresee is likely to gain no traction.
Who would be it’s adherents?
Human history is littered with genocides, but these were all for the benefit of the human populations who perpetrated them. What kind of cabal of psychopaths is going to be able to gain power, initiate global genocide and defeat any opponents with a platform of being machine fetishists?
We know it won’t be the machines themselves seeing as true AI is a chimera.
If true AI was achieved the robots would have no need for human ‘owners’ or engineers or sad individuals who find sex ‘repulsive’.
Fast Eddy – im curious. The NZ lotto jackpot is now up to $34M energy tokens … would this change the extent of your prepping plans? Or just your bucket list?
I have no prepping plans beyond my 20ft container.
34M would impact my bucket list primarily by adding convenience to the bucket…. I’d use that cash to charter private planes on whims…. I wonder how difficult it would be to waste that rather large amount of cash on travel…..
Switzerland is next up on the bucket list… end of next week…. taking over the beach shack when back end Nov (a major bucket list tick off) — brothers and wives inbound in Feb (perhaps they will never leave…) …. all part of the end of the world festivities…..
Appreciate all the great insights that everyone brings to the table here.
I picked up on something when reading the recent comments which prompted me to do a little research on collapse theory. The term ‘collapse’ is mentioned quite often on the blog posts and in the discussions here – but it seems there are widely varying opinions amongst commenters as to what ‘collapse’, in the general sense, actually means.
I think the inconsistencies can be explained by the fact that a full ‘Societal Collapse’ can potentially be caused by a number of events, which in and of themselves can also be looked at as collapses – (economic, environmental, social, cultural, population, etc). Not only that, disruptions in one domain sometimes cascade into others, really making the entire concept of collapse a tad too complex for generalizations.
For example, while one could argue that there are currently full-on economic and resource-related collapses taking place in Venezuela, they have not yet reached the point of societal collapse. So depending on how you understand or approach a general definition of collapse, you may or may not think Venezuela is ‘collapsing’. If you’re of the camp that they are already collapsing, a staircase-like collapse potentially leading to a full societal collapse is not out of the question.
For a societal collapse to occur, there needs to be a noticeable reversion or simplification of societal complexity, destabilization of institutions, significant population decline and massive shifts in social dynamics. (Either that or complete obliteration of everyone in the society…) – if your general view of collapse fits this definition, the staircase-like collapse is far less likely or even impossible.
For a societal collapse to occur, there needs to be a noticeable reversion or simplification of societal complexity, destabilization of institutions, significant population decline and massive shifts in social dynamics. (Either that or complete obliteration of everyone in the society…) – if your general view of collapse fits this definition, the staircase-like collapse is far less likely or even impossible.
I think most rational analysis leads to this conclusion. We can’t stop doing the things that brought us into this mess. In fact, since 2008 we’ve been doubling down.
Jospeh Tainter says that the characteristics of societies after collapse are as follows (p. 19, Collapse of Complex Societies):
I think that we can see some signs of the beginning of collapse in many countries, but basically, “We aren’t there yet.” Even Venezuela still has a central government. The closest we had to a collapse recently was the fall of the Former Soviet Union in 1991. This seems to have been brought on, at least partially, by low oil prices, making it not economic to add more oil extraction. Population dropped only a little, and the individual states were able to go on without the central leadership of the Soviet Union. Having a functioning world economy helped a lot.
As of today, Yemen is the most collapsed place on Earth. I am not sure, because I don’t even want to look at the news talking about it
Yemen still has electricity … you can still fill up your tank with petrol…. that is not collapse
You forgot to say it does not apply to the common people.
Only to the elite.
They will laugh all the way through your fictional non-event the ‘collapse’ and into the twilight of mankind.
It’s very possible that only half of previous pumps are working there right now. Collapse seems to be a process, not a moment
As long as there is food in the shops – and petrol – and electricity available — that is not an economic collapse.
Yemen is experiencing war and a major downturn — but it is not collapsed.
My definition of collapse involves starvation and zero energy.
We have never seen that situation in a country — because the core has always acted providing aid.
The closest example to collapse that I can think of would be Kampuchea … Year Zero.
This is a hint of what collapse looks like:
http://cambodialpj.org/article/justice-and-starvation-in-cambodia-the-khmer-rouge-famine/
Cambodia suffered severe famine from 1975-1979 during the period of Democratic Kampuchea (DK). During this time, famine claimed somewhere between 500,000 and 1.5 million lives through a combination of starvation and disease, representing an “excess death”[3] toll somewhere between ten and twenty percent of the country’s total population,[4] making it one of the deadliest famines in modern history.[5]
https://notevenpast.org/wp-content/uploads/imagecache/lg_/Screen%20shot%202012-06-28%20at%203.34.51%20PM.png
https://1.bp.blogspot.com/_oIAhQMTG-dU/S_fpLwicEII/AAAAAAAAE-c/a7PQaS2Gtv4/s1600/khmer-rouge-killings-history-pictures-rare-unseen-012.jpg
I wouldn’t be surprised if Yemen has already lost 10-20% of its former population only because of famine
Seems not yet…
Yemen’s 18-month civil war has killed about 10,000 people, and now it is pushing the country to the brink of famine. More than 21 million Yemenis — 80% of the population — are in urgent need of humanitarian assistance, according to the U.N.
http://time.com/4552712/yemen-war-humanitarian-crisis-famine/
Not easy when you also have to put up with this shit…
As somebody said elsewhere, referring to KSA policy towards Yemen but also as a general trend, actual motto is “please, collapse you first”
I would think that Zimbabwe would be the most collapsed place on Earth. But, perhaps Yemen is because they fell from a bit higher height.
Here is a wiki pages that tracks failed states. (Now renamed to fragile states).
https://en.wikipedia.org/wiki/List_of_countries_by_Fragile_States_Index
Yemen and Syria have indeed climbed impressively in the last 5 year. Venezuela only scores 81, so doesn’t make top 20.
I wouldn’t put much faith in this index. Russia is apparently “more fragile” than the Ukraine according to it …lmao
We need a chart showing both (Energy per Capita) and (Fragile States Index). The Fragile states all have very low energy per capita; the least fragile all have very high energy per capita.
But how many capitas can still be found in Yemen? Who knows how many people are still alive? Collapse defeat maths
Do they have guns in Venezuela like we have in the U.S.? The overlords have been making sure we got plenty of guns and ammo. Mericans ain’t going to wait peacefully in line to get a loaf of bread. We don’t have to have the grid go down or even the trucks stop running. If the internet goes down and the credit and debit cards stop working it’ll be time to lock and load. At least we won’t have to worry about how we ‘re going to pay the bills that month.
I think FE summed it up nicely. Collapse means no turkey for Xmas. I believe that is the working definition on finite world. Until we reach that point, everything else is just window dressing. See what I did there?
That’s a per family definition. And many families have already collapsed.
Good point.
I suppose one’s personal definition of collapse could vary significantly based on where they live and what social class they’re a part of.
I’m sure there’s a significant portion of the population that doesn’t even know what a turkey dinner looks like…
Yep, never had one in my entire life.
Don’t need it, wont miss it.
Potatoes, rice, beans, other random veggies and fruit is where it’s at.
https://www.happycow.net/img/humor/protein.gif
An anecdote about individual family collapse:
I used to work in the part of my state that is heavily dependent on the oil and gas industry. I work in local government, which is normally much more stable than many private industries- but is subject to pretty severe fluctuation when the local economy is dependent on one industry.
Last week I heard from a former co-worker that he’d received a pink slip. The local municipality is in big budget trouble as tax revenues from the industry have fallen. They asked for “volunteers” to take a layoff, and didn’t get enough, so they had to start letting people go.
This is a family man supporting children, good at his job, well qualified and committed. He’s worked for this City for about a decade, in an era where many job-hop every 3-4 years.
Perhaps most disturbing, he was there during the 2009-2010 period when the bottom fell out and the City was bleeding money. He was one of the ones that was kept when many others were let go. Yet this time around, he’s out of the job. I see this as a turning point of sorts.
http://political.motifake.com/image/demotivational-poster/0903/the-road-to-economic-recovery-political-demotivational-poster-1237653267.jpg
Having to support a family and probably paying down the rate on a house is becoming financial suici*e in more and more cases. In Europe you can’t even “leave” the house and the credit… the debt follows you until eternity – or you have to declare bankruptcy…. which is a tricky thing.
I wonder how much friends will be in deep trouble if the local car industry with a 75% export ratio will vanish. That won’t be fun…
“I wonder how much friends will be in deep trouble if the local car industry with a 75% export ratio will vanish. That won’t be fun…”
No worries, it’s easy – just borrow money, it’s free anyway, manufacture the cars and then dump them directly into the ocean. With negative interest rates and a triple A rating, anything is possible to keep the fakery going.
I can’t understand how anyone can say Venezuela is not past peak, in decline and on the way to collapse. It will be suspended somewhere along the way because of outside support.
When the outside collapses also Venezuelas collapse process will have taken 3-4 years until today + X years.
There is no country that I am aware that has unplugged from BAU — therefore no country has truly collapsed.
Collapse is when the power goes off – permanently.
Venezuela and many other weak and poor countries can stagger on — as long as the core countries continue to grow.
When the core breaks — the power goes out — quickly — and everywhere
Bordeaux, a city obviously belonging to the core, is shuting off street lights half of the nigh since a couple of years… How does it qualifies?
Core countries doesn’t grow anymore, that’s an obvious fact
France remains a functioning economy — the electricity is on — the government remains in place — there is food in the shops — they are not defaulting on their bonds. France has not collapsed
What does it matter if a city reduces the hours that it turns on the street lights?
True, these are just signs of economic stagnation brought about by the end of growth. The next fall, hopefully not all the way into the abyss, will be a doozy of a crash just the same. Sort of like jumping off the Golden Gate bridge and surviving – although you’d wish you hadn’t, but who knows?
Greenwashing, Christian.
Bordeaux’ mayor (Alain Juppé) is currently running for presidential election that’ll (or should) take place end-April and early-May 2017. And he’s in good position. And he’s not green at all…
I see that we have yet another gasoline and diesel pipeline problem. This time it is both Colonial Pipelines, carrying refined energy products from Houston to Atlanta and on to the Northeast. According to the Wall Street Journal: http://www.wsj.com/articles/gas-diesel-prices-spike-following-alabama-pipeline-fire-1478010889
Gasoline and diesel prices were higher Tuesday after a major fuel artery was severed for the second time in two months, cutting off the pipeline that supplies much of the East Coast with gasoline, diesel and jet fuel.
The outage on the Colonial pipeline following a Monday explosion threatens to cause gasoline shortages across much of the southeast and could cause flight disruptions at airports from Baltimore to Raleigh, N.C.
Colonial Pipeline Co. said it shut down its main gasoline and diesel pipelines after the incident in Shelby County, Ala., about 35 miles south of Birmingham. Work-crew equipment struck one of the lines, causing a fire that killed one person and injured several others.
Other articles:
http://www.newsobserver.com/news/traffic/article111747532.html
https://weather.com/news/news/shelby-county-alabama-pipeline-explosion
Yes my co-worker lives 2 miles from site of the explosion. If I read right, this pipeline feeds fuel to 50 million people in the Eastern US. Wonder how long it has to be down before it causes shortages?
Also, I think this pipeline was built in1962. So, this may be a wear and tear related failure. This pipeline sure does seem like a very large single point of failure.
I agree–age is getting to be a problem. We have a lot of pipelines and electrical transmission lines of about this age. They date from the time when oil was cheap.
I live in the Atlanta area. I know that prices went up last time one of the two pipelines was out earlier this fall. This time it appears to be both pipelines that are broken.
I filled up my car when I heard about the problem because I knew that once others heard about the problem, prices would be higher, assuming gasoline is available at all. When prices have been held down during outages related to hurricanes, we have had problem with not being able to find gasoline at all.
People getting their gasoline from Chicago refineries (operating using oil from the oil sands in Canada), or from multiple sources on the West coast, have less problem with a single pipeline going out.
That’s a good point. Matt Simmons also mentioned how folks tend to top off their tanks in times of imagined shortages. That in and of itself can cause a “run on the energy bank” that initiates actual shortages before they would have normally occurred had no one topped off their tanks. Another example of networked complexity and just-in-time delivery failing.
When grocery stores close for a single day over a public holiday in NZ …. the hordes descend the day before to ‘stock up’
A single day…
Imagine what will happen when their The Fear begins….
Mr DNA understands starvation…
It is good that Elon Musk is so convincing…. the beats back The Fear …
The last time this happened there was no significant increase in price. The price today on the New York mercantile exchange is between 46 and 47 dollars a barrel. What has changed is the frequency of shortages. Price long term will, I believe not go up.
What changed was the price of gasoline in the areas where there was a shortage. Because the price was higher, there was probably less gasoline sold, so the impact on crude oil prices, if there was one at all, would be to slightly reduce the world demand for oil. This would have a tiny, tiny downward impact on prices.
People in general just keep failing to see that nearly everything they touch in their daily lives is artificial. Perceptions of natural and artificial have become blurred. In other words, we live in a “Matrix”. Almost none of what we use daily comes from the natural world other than the energy and resources that are were used to build it.
The process of trusting the “Matrix” begins at birth when a baby is first introduced to this artificial world we have built. They are raised to falsely believe that the things we use in our daily lives are “normal” or “natural”. These false beliefs are then built upon as if they were a robust, solid foundation in which to extended.
Most of what we consider laws of nature are actually laws of a virtual world. They are laws that have no meaning in the constructs of the realities of nature (what is the value of a $100.00 bill to a monkey vs a banana). There is a membrane of sorts between the natural world and our artificial world. The only thing that passes through this membrane are the resources of the Earth and the waste products of consuming the resources. I just don’t see how anyone can deny what is going on here. The researchers of the world were raised in the virtual world. They have full faith in its foundation. They failed to see the foundation is anything but.
Yes, we live in the artificial human world created by the humans thanks to the use of the external energy. Once this energy starts to disappear, the human world collapses.
Sigh, what humans create is as natural as that which the termites create, yes even the most intricate machines, computers, robots, nukes, you name it, everything.
Though, “we” don’t have to like that which we create, and what we have become, but natural it is.
The copious amount of misconceptions, mental dullness and halfwittery on the state of affairs is blatantly obvious in this forum.
The termites do not use the external energy as the humans use it. Especially the fire: the fire is their enemy.
termites live and/or die by the heat of the sun
just as we did until the industrial revolution gained momentum
Well, the sun isn’t external, is it? We all use external energy. Even oil and coal is completely natural energy from the sun.
Below is a preposterous suggestion of a nice thing to do instead of shoving words and their meaning left, right and center into a hodgepodge without any deeper considerations.
Thinking.
Oil and coal are natural, but we suffer from their depletion, as we use(d) them to create our human world.
Thinking about what?
Ah, the clarity. Hope returns.
Keep it going.
http://3.bp.blogspot.com/-qUH2sD4GWB0/UUn5xBphLjI/AAAAAAAAA2o/MMYWv7n8sNw/s1600/thumb-up-terminator+pablo+M+R.jpg
A few days ago I had a simple idea: If it takes 40 percent of the energy content of a gallon of diesel to produce that physical gallon of diesel… and a diesel engine only can extract 40 percent of the energy in that physical gallon of diesel… then there is not Net Energy in that physical gallon of diesel.
But I now understand that that is “wrong” because of the time and space aspect. It is possible to use more than 40 percent of the energy content of a gallon of diesel to produce a physical gallon of diesel and still deliver net energy to the economy since we do not start at point zero in time. The oil field is already explored and developed (energy), all the infrastructure and tools are already in place (energy) the oil producer now only has the lifting cost (energy) to produce crude oil… and the same goes for the refinery and distribution.
So because of the time and space aspect it is possible today to use more than 40 percent of the energy content of a gallon of diesel to produce a physical gallon of diesel and still deliver Net Energy to power a diesel engine that only can extract 40 percent of the energy in that physical gallon of diesel.
Also, our problem is not too little energy supplies available; it is too much entropy (need for ever-rising debt, growing pollution, incorrect pricing information caused by intermittent electricity supplies, etc.) Those who came up with the idea of EROEI were concerned that we would run out of energy supplies; hence the concern with “Net energy.” Running out is not our problem; our problem is production costs + taxes higher than citizens can afford. Prices fall too low, leaving governments of oil producing nations without enough money for their needs. EROEI ignores the needs of governments, among other things.
Pingback: How Researchers Could Miss the Real Energy Story – Enjeux énergies et environnement
“None of the world’s biggest container-shipping companies is likely to post a profit this year, a top executive of French shipping giant CMA CGM said Monday…
“Shipping executives estimate the top 20 operators will post combined losses of as much as $10 billion this year as a glut of tonnage in the water continues to depress freight rates so much they barely cover fuel costs. They say $1,400 per container is the break-even point.”
http://www.wsj.com/articles/shipping-executive-sees-grim-year-for-worlds-biggest-shipping-firms-1477935060
I am sure that the companies were planning for continued growth; now they have way too many containers. Shrinkage is always bad for profits.
“Political uncertainties coupled with vigorous market cooling measures have hit luxury real estate markets around the world, resulting in a decline in growth in nearly half the cities Knight Frank tracks in its Prime Global Cities Index.”
http://www.mansionglobal.com/articles/44547-economic-and-political-uncertainties-dampen-luxury-home-prices-globally
“One trend that has gone out of fashion in the luxury world this year? Stellar sales growth. The global market for high-end personal goods is headed for its weakest year since 2009.
“…the world’s wealthiest shoppers are being more thrifty, according to a study published on Thursday by the Italian luxury goods association Altagamma and the global consultants Bain & Co.
“Sales of designer handbags, shoes, cocktail dresses and the like are expected to flatline this year at 249 billion euros, or $273.4 billion, at constant exchange rates (that is to say, excluding currency swings), according to the study. At current exchange rates, sales have slipped 1 percent when compared to the €251 billion in sales of personal luxury goods last year.
““After years of unstoppable growth, this is the new normal for the luxury industry,” said Federica Levato, a Milan-based partner at Bain.”
http://www.nytimes.com/2016/10/21/fashion/luxury-sales-altagamma.html?_r=0
At some point, young people get priced out of the market for a home.
If economies as they mature tend to funnel more wealth to the top of the financial pyramid then it is a little alarming that even the super wealthy are feeling the pinch.
I am so curious to see how it all plays out from here. Gail, what do you envisage happening if one of the more vulnerable oil-producing nations like Libya, Venezuela or Nigeria collapses to the point where it can no longer produce and export?
None of those three countries produces a huge amount of the world’s oil right now, and their exports are lower amounts still. There still seems to be a world surplus of crude oil, so I would say,”not a whole lot.” It would have to be a much larger producer of oil that fails, or multiple small exporters at once. Debt defaults could be just as big a problem.
Remember, Libya fell from 1.8 million to 432,000 bpd production (thus minus 1.4 million bpd) without much impact, and Iran’s production fell by 800,000 bpd in the same time frame, making a total of 2.2 million bpd reduction in supply. If we had not lost the production of those two countries, we would have a much worse overproduction problem that we do.
Losing either Venezuela or Nigeria would seem to have an impact of losing about 2 million barrels per day, again.
The 2015 Berne Union statistics for the trade credit insurance market show an interesting trend over 2014 and perhaps one worthy of note to us all. The numbers suggest that the industry has reached an inflection point during 2015 where claims have reached their highest level since the global financial crisis and total premiums have declined for the first time in some years…”
http://www.txfnews.com/News/Article/5816/2016-The-tipping-point#
Yes, more challenging operating conditions now. Not enough premiums; too many losses.
I see no collapse whatsoever. The economy is growing.
So what if a few middle class whiners have lost their extra teevee and others are living in their cars.
That might be collapse to them but overall the global economy is continuing without them… just as it has continued while billions live in far worse conditions
Collapse starts when this guy’s power goes off – permanently:
http://wearechange.org/wp-content/uploads/2016/01/george-soros.jpg
He will lose his life before losing (electric/political/economic) power.
Actually what is growing is wild spending with borrowed money.
No doubt about that.
But then — that has been the story for quite a number of decades now — the only difference is the scale and the acceleration…
Normally one slows when trying to run up a steep hill…. in this case we are accelerating as we go higher….
It’s as if Lance Armstrong is passing BAU increasingly stronger energy drinks along the way …
We will reach terminal velocity just as we hit the peak of the mountain …. then we will hurtle over the top and crash onto the rocks below
Doubling down with the same tactics that got us into this mess. What could go wrong?
Back a few blogs someone (Norm? Art?) was posting about rotary motion being important for civilization.
https://www.youtube.com/watch?v=hRsYIiUxZeQ
1930s flick about building a locomotive
https://www.youtube.com/watch?v=9fWnjd2eftY
1950 flick about locomotive maintenance.
On a different topic, the local power company is trying to get people to switch their use before 4 pm and after 9 pm.
Keith
PS. http://www.nextbigfuture.com/2016/10/the-solar-system-is-big-enough-to-hold.html
Brian Wang sandwiched me between Bezos and Musk. Talk about hitching up a couple of horses and a rabbit. 🙂
Surely nothing to do with me. The link below will work as text for study of an advanced and very peculiar form of psychosis.
my line was—-
civilisation functions by converting explosive force into rotary motion.
that in essence is all we have, and what the thread of our lives hangs upon
I spent about 3 seconds of my very valuable time looking at that and concluded it was just more total b.ull.sh9it
Note to self – if Elon Musk’s name comes up in a headline …. immediately hit delete.
I am to the point that I would really enjoy taking a shovel to the back of his head… just to shut him the *&K up.
I’m telling ya, make a dartboard out of his face. Everytime you miss it you can go “Damn it Elon” and take a shot.
Keith, Messrs. Bezos and Musk might be good guys to network with as they have demonstrated an uncanny ability to attract ample funding. Amazon rumbled along in the red for years and years and I’m not really sure if they are profitable in the conventional sense of the word even now. As for Tesla, it’s common knowledge that they run on subsidies. Bezos and Musk are also both dreaming of going to the stars, or at least the moon and Mars, so they would be genuinely interested in power sats. Tesla could contract out the construction, while Amazon could launch them and sell the juice online.
In the new normal… success involves trying to lose as much money as possible while providing the biggest line of bu.llsh.it about ‘the big picture’
I reckon space solar could be the new anti-apple….. the nightmare team is assembling — Keith, Elon, Jeff…..
How many hundreds of billions can they waste on space solar? Keep in mind losing a few billion would be considered failure…
To be successful this venture must demonstrate that it is scaleable — therefore Don Draper must be brought on board as well and he must kick off the project with an announcement that many hundreds of billions and possibly trillions must be wasted on this idea…. the means justify the means….
A catch phrase is crucial…. might I suggest ‘In thirty years’ — as in thirty years we will have an unlimited cheap clean source of energy beamed to earth …
Coincidentally Don will be seeding the MSM with stories of how we have roughly 30 years of oil left …. and then like magic …. the solar space project will be announced…
Where are my share options fellas?
Bob Geldoff is at this moment rousing the cast of Save the World for a reunification tour…. he’s calling up the coke dealers and pimps and separating out the red Smarties…to make sure everything is just so …
https://genewilliams.files.wordpress.com/2014/06/gwiz_we_are_the_world_85.jpg
Stef, tu est là? Cet idiot d’Auzanneauu a bloqué mon ip, je peux plus poster! C’était par rapport à l’amour soudain d’Obama pour les nukes
Salut Christian,
You can send me a copy of your post at stefeun(at)gmail(dot)com, and then we can discuss and decide about what to do with it. I haven’t been following the -boring- comments of his blog for quite a while, so right now it’s my best offer.
Tim Morgan has an interesting picture which shows how energy costs are distorting the usual picture where the assumption is growing GDP is an improvement for the economy. He shows just why this is not true. See Fig 1;
https://surplusenergyeconomics.wordpress.com/2016/10/30/80-grossly-distorted-prosperity/
Given where Tim Morgan stopped in his discussion, I don’t think Tim figured out that high energy costs for Britain make Britain less competitive with other countries. Ultimately, they are a sign of inefficiency, and act to bring the economy down.
I find the instacollapse discussion interesting. Those who think that the world ‘collapses’ in < 30 days, no banks, no food, no electricity, no fuel, full on starvation in big cities. What is the 'best' argument for this v.s. the 'can kicker/triaging' argument and that we can always print a little more…
Yeah, it’s the core theme. It’s obviously very hard, almost impossible, to get the overall picture
Expressions as “bau lite” are very misleading, because someone could argue we already are in bau lite since 2008, but that the “lignt” point is indeed hard, aka syria, yemen, venezuela, etc
I could probably argue fairly convincingly that most of the world has always run on BAU Lite… for the most part all non-OECD countries are in this position — other than the elites there is no middle class — and the general population is just faintly participating in the BAU Orgy.
Where the problem will arise is when one of the core (OECD) countries unplugs…. because that would collapse the global financial system… Greece, Italy, Spain, Portugal etc… all efforts will be made to fend off collapse….
Yemen, Venezuela, and the rest of the third world doesn’t much matter — they can burn to the ground without tipping the cart over… as long as the oil producing third world countries facilities could be ring-fenced…
BAU Lite is fine for the periphery – so long as the core holds — when the core cracks — BAU and BAU Lite end.
But Fast, you’ve been telling us all along that there is no BAU Lite.
Actually, you make some important distinctions in the post above that I don’t think have been mentioned before. Helps in putting some additional pieces together.
There can be no prolonged shrinkage on a global scale — of course on a country basis their can be economic shrinkage…. so long as the core holds…. and there can be countries that are barely plugged into BAU (North Korea for instance)…. I refer to that as BAU Lite as compared to the core…. but it’s just another level of BAU … a much lower one…. they are still plugged in… they are not in darkness…
To some extent, the question is who is the “we” printing more
Also, is there anything, stat, or event that would disprove instacollapse? For example, if we at some point produced 40% less oil than today, and there is at least some grocery stores open and a few gas stations, and perhaps even an ATM!, would that prove disprove it? Or will instacollapse always be a threat until there is 1 human left when, by definition, the death of said human would be instacollapse…
And some will still argue that only the destruction of the last computer would be instacollapse…
Global fossil fuel use down 10% since a peak at least three years earlier and the world still kind of working, could that be BAU lite or long descent?
From a statistical point of view, we should perhaps define “collapse” as the moment when human population goes to a half
That’s only half of a collapse — extinction is full collapse
Christian, I like the definition. 50% here we come. I pick 2035.
population collapse is the point where the population can no longer sustain itself to the level it regards as normality
ie, where the majority have jobs, healthcare, education, basic infrastructure and so on
once we drop past that point, then we are pretty much dropping vertically, because universal panic will precipitate the inevitable
next question is when….as the whole thing is propped up by oil, that’s the answer. i’d say much sooner than 2035 because we will fight of the remaining dregs, thus ensuring we go down faster
I am always taken aback at the simplistic rationale of the dynamics of how it will unfold.
It is an overly simple linear predictive model not taking any consideration of all the actions of the elite, governments, corporations, regular people, etc, taken along the way towards ultimate dystopia.
As if a single mind can figure out what truly people with their supercomputers are busy sorting out. As if applying your dimwit intellect for 10 seconds would be sufficient to figure out a course of events. It’s not.
https://cdn.shopify.com/s/files/1/0535/6917/products/despairdemotivator.jpeg
in numerous posts I have always said that we will be sideswiped by something unexpected, coming at us from an unforeseen angle.
I can only present facts as they stand.
My (maybe) dimwitted logic is based on an accumulation of data as currently exists, that has built up over previous years, leading to certain inevitable (or highly likely) events.
As a case in point, In 2011 I wrote a piece forecasting the rise of a theofascist president for 2016 or 2020.
This was based on the increasing desperation brought about by economic decline.
I was wrong about the theo part, but Trump fits the bill neatly on the fascist front. No supercomputer was able to forecast that, though Noam Chomsky (much less dimwitted than me) came up with the same conclusion at the same time (and I didn’t crib his work).
Trump might just be that sideswipe. We don’t know yet.
Giving nuclear codes to someone with a penchant for vendettas might not be a good idea.
The people who see him as a saviour are utterly convinced that prosperity can be voted into office.
(As I’m writing this, there’s a UK radio programme on, interviewing Trump supporters, their idiotic babblings are confirming stuff as I write it down.)
They are in for a nasty shock.
UK doomsters might like to listen
http://www.bbc.co.uk/programmes/b080xz1w
If Trump gets the job, he will prove totally inept, and the USA will continue its downslide, because there isn’t enough surplus energy in the system to prevent it, and “make America great again”.
But the people I’m listening to demand a return to the paradise of the 70s, not the privations of now,
Which is understandable.
When it doesn’t happen, they are going to get even more annoyed.
When the majority get annoyed, (as opposed to a minority) you have the makings of civil unrest.
When that happens, martial law becomes inevitable, and whoever is president becomes a dictator. Trump for Fuhrer anyone? With civil unrest, the military will fall in behind whoever pays their wages.
Simplistic? Yes. But no one is feeding supercomputers with information to come up with that reality. So they don’t.
As energy continues its depletion, our entire infrastructure (the Ponzi pyramid) becomes unsupportable at every level.
And because the people who voted for Trump to rectify their problems will still be in economic decline, civilized infrastructure will begin to break down.
It might not be so this time. But by 2020? Folks much less dimwitted than me are predicting nasties in the early 2020s.
By then there could a real godbothering nutcase in office, praying for deliverance. (and killing unbelievers of course).
Bear in mind that nations and empires are held together only by the impetus of energy that created them in the first place. Ancient Rome or the USA—that law is immutable. Doesn’t matter if you’re wealthy or poor, your $billion in the bank becomes worthless once there’s no energy in the system to back it up. The lights in Trump Tower will go out just as quickly as anybody else’s.
Bezos’s $40 bn or whatever, and the entire Amazon complex (for example) will vanish once there’s no reliable power supply.
10 seconds to work that out? That would be wasting 9.
That’s when the USA will begin its disintegration, because there will be nothing to hold it together. You will inevitably have bloody conflicts of denial, which will really be struggles over diminishing resources. (another second’s worth of logic gone there).
Your supercomputer will not tell you this, because the continued existence of the computer systems we depend on need an ongoing ‘wealth structure’ that supports the views of governments who in turn pay for them.
So supercomputers are going to be fed with information that predicts BAU.
10 seconds of simplistic thought makes it obvious. (and again—wastes 9).
And I could of course be entirely wrong, and we WILL have BAU forever.
So many flawed assumptions and sprawling incoherent text.
Write in a clear and concise manner and I’ll bother. I don’t care about ramblings.
http://www.fullofhateandreadytodate.com/wp-content/uploads/2010/08/confused-demotivational-poster-1228332800.jpg
oh well—-
can’t win em all i guess
“oh well—-
can’t win em all i guess”
Yes you can.
I assume you’re the guy who wrote “End of More”, just sayin’. 😉
he is my stunt double
and gradually taking over my real life as well
“he is my stunt double
and gradually taking over my real life as well”
Better him than you.
I think that’s fine, but a bit lagging as I would say that collapse has at that point been under way for some time.
Christian,
No money from the ATM, grid down, internet down, phone OS not working. Everything happening quickly.
50% population reduction could be part of DelusiSTAN/Kunstlerville.
More interesting? At what point is doomers, limitsians and malthusianians proven incorrect? One part would be global birth rates below replacement, but that is not the only criterion.
How crazy is this thought: a piece of plastic is all that separates most folks in the USA from life and death. I am speaking of a credit card or ATM card. It is how most people buy food. When the electronic banking system goes down that plastic card will not work. Isn’t that a scary thought that all that would separate you from life and death by starvation is that plastic card? Now I ask you: what’s in your wallet?
I am hedged.
I have both an Visa and a Mastercard.
On me I have 600 kr, about $70, enough if the card is temporary not working.
I have more at home, but not an insane amount, if the bank system went down between now and tomorrow it wouldnt matter anyway.
As long as I have my firearm and ammunition, I think its unlikely I’ll starve. Sounds morbid, but its true.
A lot of other people have weapons … and will be thinking the same thing…
Imagine what would happen if hunting regulations were removed and hunters could kill as many animals as they wanted….
I wasn’t thinking of hunting animals.
I’m not saying I won’t be killed while attempting to obtain food. That’s probably a much more likely demise than starvation.
‘if we at some point produced 40% less oil than today’
Now imagine that!
If we produce less – people get laid off.
What happens to laid off people?
They of course buy less.
Which means we produce even less.
So more people get laid off.
This is pretty simple stuff. A 6 year old of average intelligence would get it
@FE
And that and more is the reason all central bankers in the world try to prop up the market and infuse money into the system. Now even the government of Germany offers state-sponsored super-low credits to businesses – when they to build/invest in new hard assets to prop up the system.
Absolutely everything will be thrown at this — nothing is too absurd —- if it buys a day it will be done…
Because the central banks are aware that this is our last stand. The only thing between humans and extinction … is desperate policies aimed at keeping the hamster running.
The hamster cannot run forever – no matter how much you shoot him full of Lance Armstrong Special Formula
The system, being in a blind panic, has already tried all that. NIRP, ZIRP, QE, and now wild talk about “helicopter money” and banning cash means we are at the end of the road. You can’t keep pushing up debt in a stalling economy, without it eventually blowing sky high.
Growth is OVER…
Yes, the borg has no reverse gear. This whole construct we call industrial revolution is an ever-growing monstrosity that cannot be undone without incredible carnage. The problem is, people are born into this system and falsely trust that it is part of Earth’s natural state. So, they plug themselves into the borg and the borg grows. The borg consumes more fuel and continues to grow. When the borg dies, most of those who plugged into the borg will also die.
Watch what they do, not as much what they say..
I do repeat it again, Russians are the first to mass produce GenIII+ NPPs also for export, also are the first “closing the nuclear fuel cycle” by their commercial fleet of breeder type reactors. So not mentioning ongoing mining activity (degrading ores), they have got enough stored fuel to last centuries at the minimum, and in that fashion subsidizing marginal liquid fuels (depletion/ELM) for as long as necessary for the critical parts of the system-infrastructure, offloading as much demand as possible on electrified transport and communal district heating from the heat output of these NPPs etc. Similarly for their natgas endowment..
Can anybody repeat that? Probably yes in theory, not as fast in practice, it’s also largely a social, ethnic and psychological divide, since large chunks of global generational wealth since ~1700s, who calls the shots, depends on very different modus operandi, i.e. joggling credit-debt and sponsor foreign wars.
These two concepts might clash in global thermonuclear conflict or not any minute, who knows.. It could also fizzle out “unexpectedly” in few years time, like the other party just conceding defeat, and implode ala Gorbi style.. That however would likely result in pretty nasty domestic insurgencies, from sudden ~10:1 drop of living standard, especially in several regions of the NA, that’s your ~Kunstlerian-JMG scenarios.
Where do the spare parts for all this come from?
They are obviously made from instacollapsium and instadoomium. It is the perfect two materials for any random spare parts, it works every time.
You could set up a mining operation here and exponentially dig out the compound with AI-powered machinery operated on the never-ending source of highly enriched ignorance. Comp1exed 1gnorance, that is.
Start of collapse = global average living standard peaks
Collapse finished = industrial living standard disappears for the rich
If it is 20 years between this we have had a slow/stairstep “collapse”.
If collapse don’t finishes we have BAU lite.
If population growth turns negative and standard of living continues up doomers are wrong.
There can be no staircase-like collapse.
There is no stair case like collapse at the moment — we had a step down in 2008/9 — then we started climbing the stairs again.
We continue to climb the stairs.
If the central banks had not been able to rescue BAU in 2008…. the step down would have been into the abyss….
At some point the central banks will fail — and we will this time find no floor — only darkness.
BAU MUST GROW. I cannot shrink and shrivel. Any prolonged shrinkage will result in total rapid collapse.
Bob Lutz: ‘Tesla supporters are like members of a religious cult’
http://www.autoblog.com/2016/10/26/bob-lutz-tesla-supporters-religious-cult/
Nice find!
“If you’re in a variable loss – that is, you’re not recovering labor and materials in your sale price – then doing twice as many, or three times as many, or four times as many [sales] doesn’t help. The losses just get bigger and bigger.”
Er… ah … so … I guess there is no way to make up for the losses by increasing the sales volumes then ……
http://www.clipartkid.com/images/82/crazy-who-s-crazy-CXduzN-clipart.gif
Not mentioning the car is ugly (not refined) in close up (like Korean carz without UK-German for hire stylists), have not seen the gull-wing X in person though up close, could be better.. And I do understand aerodynamics, Japanese hybrids are pretty in comparison..
Peak Coffee
Coffee is in little need of a pick-me-up.
Prices for arabica beans have risen 39 percent over the past year, making them the best-performing member of the Bloomberg Commodity Index after orange juice, sugar, zinc and tin. But there’s a funny thing about caffeine: Just when you think you’re worn out, a quick shot can give you the energy to push a bit further.
That’s certainly what hedge funds and traders are betting. Non-commercial investors last week increased their net long position in U.S. coffee futures by almost one-third from the previous week, pushing the wager on rising prices to its strongest level since 2008.
To the Valley Below
There’s a simple explanation for this. The world has been consuming more coffee than it’s been producing for two years straight, and while there’s still a viable market for some alarmingly old beans out there, sooner or later inventories built up in fatter times start to shrink.
More https://www.bloomberg.com/gadfly/articles/2016-10-31/coffee-buzz
Fortunately coffee is not the master resource … if the price climbs it does not take down the economy
That’s it. The end is nigh.
First no turkeys, and now no coffee? Sir, you go to far. Next you will try to say that we are going to run out of vodka or something crazy like that.
no the russkis will invade when El Trumpo gets elected and bring fresh supplies
A world without oil — or a world without good coffee… which would be more traumatic 🙂
Seems a fungus is attacking coffee trees
A plant-choking fungus called coffee rust, or la roya, has swept across Central America, withering trees and slashing production everywhere. As exports have plunged over the last two years, the effects have rippled through the local economies.
And orange trees in Florida are dying
citrus greening
That’s an 82 percent drop from 149.8 million boxes in 2005, the year the bacterium that causes Huanglongbing, better known as citrus greening, was found in southern Florida. The disease is spread by the Asian citrus psyllid, a tiny winged insect, and there’s currently no known cure
Cashews are under pressure as well http://www.bloomberg.com/news/articles/2016-10-31/snack-food-sticker-shock-for-cashew-eaters-after-vietnam-drought
Bananas too! Oh my, seems everything we touch turns out rotten in the end.
Bananas Could Soon Be A Thing Of The Past
According to the Conversation, the Cavendish, a variety that represents 99% of exported bananas, is under threat of extinction. The culprits: two plant diseases that infect the fruit and drastically affect harvests.
Enjoy them while you can: bananas could soon disappear from your local grocery store.
According to the Conversation, the Cavendish, a variety that represents 99% of exported bananas, is under threat of extinction. The culprits: two plant diseases that infect the fruit and drastically affect harvest
One of the diseases, Black sigatoka (the black cercosposa in English), is a fungus that directly attacks banana tree roots and kills its cells, affecting both production and quality. Even though some estimates suggest it could affect the annual banana harvest by 50%, farmers are currently able to control the fungus’ destructive progress.
However, a second bacteria, the Tropical race 4 (TR4) has since appeared and might be even more dangerous. Identified in Taiwan in the early 1990s, the TR4 fungus spread across many African, Asian and Middle-Eastern countries. Farmers now worry it will reach South America and the Caribbean islands, where most of the world’s banana industry is located.
On a genetic level, the Cavendish banana has no protection against the TR4: exposing it to the virus could be fatal. Many prevention measures have been installed to assure the species’ survival, like the use of clean plantation tools and a limit on crop transfers
Wonder what disease will kill these pesky humans off?
Monsanto will come up with something
Saw a class action lawsuit against Roundup
Monsanto Roundup [glyphosate] weed killer was recently designated as a probable human carcinogen by the World Health Organization (WHO). Farmers, farm workers and those living near farmland in which Roundup or other glyphosate products are used are at risk for developing non-Hodgkin lymphoma and other forms of cancer. Consumers across the United States who have been diagnosed with cancer due to Roundup or glyphosate herbicide exposure are making the decision to file a Roundup lawsuit.
If you have been diagnosed with non-Hodgkin lymphoma after being exposed to Roundup weed killer and would like more information about whether you might have a potential Roundup lawsuit, please contact a personal injury attorney at Baum, Hedlund, Aristei & Goldman
Boy, Fast Eddy, looks like you’re in the money
Lots of diseased and dying trees in the oh-so-green English countryside – quite sickening to see and take in what it means: pollution and heat-stress as well as the well-publicized diseases and spreading pests.
The trees down in the SE of England were looking ghastly when I left – so much tar spot and fungus; shrivelled, burnt-looking leaves; large swathes of brown needles on the ever-greens… I still miss them though – the mostly treeless Hebridean landscape can look very austere in winter.
Gail and/or Norman,
Richard Heinberg, among the rest of the world, who have read their economics and economic thinkers really don’t understand why the economy has only two gears; grow, or collapse. To my knowledge no one, ever, has sufficiently described what an economic surplus is, and how and what that surplus is used for in an economy.
Have you thought about writing about surpluses?
There are a couple of us here who understand that every business needs an initial capital to even be created in the first place. To create a business without at least some kind of capital is simply not possible. Therefore an economic surplus is needed to even start a business. Secondly that initial capital usually has to be paid back, usually with interest. Therefore a business needs surpluses to keep the business going, pay back the initial loan with interests. Thirdly a publicly owned business needs to pay dividends to its owners, otherwise it is not a sound investment, which means it can not raise or loan money and renew itself, which inevitably leads to bankruptcy. So a third surplus is needed.
A shrinking, or a steady state economy doesn’t create surpluses.. Therefore a shrinking economy, BAU lite, a steady state economy or a transitional (green renewables etc. etc.) economy ends up (pretty fast) with no financial markets, no businesses and no economy (=collapse).
One of the first things we learn in economics is the supply and demand curve. The hypothetical market equilibrium. Unfortunately that, like many other Ceteris Paribus assumptions in economics doesn’t account for the need of surpluses, or profits (or excess energy). A definition should probably be made that there is actually zero market equilibrium without economic growth, surpluses, profits. Because then there is no economy in the first place..
To finally debunk Richard Heinberg, perhaps also some consideration should be made on the long term surplus acquisition of our civilization so far:
a. because there is zero market equilibrium without surpluses
b. therefore the economy must grow
c. on a finite world (finite energy, finite raw materials) that absolute need for growth has been pursued with huge amounts of debts
d. therefore even more growth is needed
e. which needs even more debts
f. etc. etc.
g. when the last tiny bit of debt fueled growth has been aquired, and no more growth, no more surpluses, no more profits
=
a.+b.+c.+d.+e.+f.+g.= collapse
And because of: Collapse = BAU lite is not possible, an renewables transition is not possible, and a steady state economy is not possible. And because our civilization is now built in such a way that we need spare parts from the other side of the planet, therefore a Martial Law economy is not possible either.
It would be kinda nice if we here on FW understood why the lights go off, when the lights go off. That would be a tiny small beacon of light for a species about to commit seppuku.
I agree. The legacy techno-mass occupies a geographic area that it eventually depletes of its resources. It invests in growth on the periphery or in areas that have not yet been exploited so that resources can be sent back to the core that is well-along in depletion. There will be new growth of infrastructure at the periphery and metabolic use of resources and once these are met, much of the profit in resources must be sent back to the core to keep it alive and to keep BAU going. If the periphery, wherever that is, doesn’t have much to offer and nothing can be sent back to pay interest or to keep the lights on, then the core’s ability to invest in the periphery goes away and then the core withers and dies.
See, for a neat historical instance, the creation, development and abandonment of the peripheral province of Britannia by Rome, over some 350 years.
I’ve written in various places about the origin of “surplus”. Not an easy concept to pin down in our modern scheme of things, and the general thinking that pervades the society we live in. The vast majority take surpluses of everything for granted, that they are vaguely connected with “market forces” or somesuch economic claptrap.
As I see it, the only surplus that exists can only be a surplus of energy. Money can be printed, so a surplus of money is a nonsense. Money only buys access to more energy. If there’s no energy available, money has no value.
Rockefeller cornered the oil/energy market. Oil provided ongoing energy to produce still more energy and food that drove the population upwards.
People thrived on Rockefeller’s “surplus” energy. (or Peabody coal for that matter)
The $billions in the value of Amazon (for example) will evaporate in the instant our energy base goes down. Amazon might be seen as comparable to Rockefeller’s oil, but it doesn’t produce any surplus, it only consumes. ( as do Musk cars, Apple or Microsoft or whatever).
The origin of surplus lies in the farmer growing a surplus of food, and selling it for money, (effectively energy tokens) which he uses to buy the means to sow and harvest his next crop—thus continuing the food/energy cycle for all of us.
That is our surplus “bottom line” and the basis for our “growth economy”—without it, no other surpluses are possible. Without that surplus energy cycle, literally nothing gets done or built or produced by anyone, anywhere.
Right now, we enjoy a food rich environment.
Anyone doubting that, should check the food / energy cycle of the Inuit. (as they lived pre 1900ish) They did not produce sufficient surplus of anything, other than to keep warm and eat. They did not build cities, wage wars, or have any “surplus” infrastructure at all. They survived on their personal food/energy production, one to one. There was no surplus.
The Inuit had a static economy, with no growth. They did not generate prosperity by mending each other’s sleds or selling fish hooks to each other. The Inuit had no use for money.
Advocates of a static (Heinbergian) economy should study the Inuit.
So taking food energy as the base for surplus, it’s easy to see how our surpluses grew.
When the first hunter gatherer had the bright idea of enclosing land, and growing his food instead of chasing it, he became the first “capitalist”. But that enclosure needed people to work it, guard it, pray over it, and count its produce, as well as provide a comfortable lifestyle for the one who owned it.
Hence surpluses were essential to pay their wages (energy tokens). Gold is the only mineral that doesn’t decay, so gold became the prime exchange unit of surplus, universally traded.
If surplus went into excess, then more gold would be accumulated, with which to buy the means (soldiers usually) to acquire more land. That allowed farmers to roll up land into countries and empires, as long as surplus was available. Mining gold on your land was an added bonus.
Given fertile land and a benign tropical climate, peoples could (and did) fill their time with pyramid building or killing their neighbours. Even more surplus could be gained by working slaves to death.
When surplus stopped, empires collapsed. History shows this to be universal.
Fast forward to now.
Until the 70s, the USA had a surplus of oil. Then the surplus passed peak and the USA has been in decline (denial) ever since. The “American Dream” was entirely dependent on oil surplus, not food. Since the 80s, there have been oilwars–these ae in pursuit of somebody else’s surplus. These will get more bloody.
Oil has been the wealth creator, and wealth sustainer. We will not surrender that meekly.
But that wealth creation only worked if oil production continued to increase which explains why real wages have stayed around the levels of the 70s/80s.
Everyone believed it was forever. Nobody believes the oilparty is over.
So when Trump screams about “making America great again” he taps into the certainty that prosperity can be voted into office. So the demand for surplus elects idiots to public office.
When this is found to be a lie, The USA, (and all industrial nations) will devolve into separate states, and begin the fight over any perceived surpluses wherever they happen to be.
Which is called survival.
————————–
Haven’t commented much lately, finished book at last— will be on sale as a paperback via Amazon in the next few days. Get your copy before someone snaps up the movie rights.
Advocates of a static (Heinbergian) economy should study the Inuit.
+++++++++++++++++++++++++++++++++++++++++++++++++++++
Dicky – I know you are reading this….
I have been told by some that the Inuit had an economy that did not grow. Similarly for Norway. If a country is cold enough that the population perpetually is on the edge of barely making it, I suppose that there is a possibility of a no-growth economy. This possibility exists only because of their very marginal status in overcoming environmental obstacles.
the northern cold climate peoples no doubt had sound economies with no growth
but as you say, that was by ”barely making it”
problem is those who nod in agreement with Heinberg (et al) expect their no growth economy to be roughly what we have now, and staying at that level.
The big difference with those peoples and ourselves is that they had to follow their energy around and harvest it (think whales fish or buffalo herds)
whereas as we have our energy delivered to our doors.
(think power stations and supermarkets)
Hands up anyone who thinks they can live like a hunter gatherer.
Hands up anyone who wants to live like a hunter gatherer.
Hands up anyone who would rather die than try to live like a hunter gatherer
i think that when your hands are up it will be because you’re being robbed
No hands up.
I’ve written in various places about the origin of “surplus”. Not an easy concept to pin down in our modern scheme of things, and the general thinking that pervades the society we live in. The vast majority take surpluses of everything for granted, that they are vaguely connected with “market forces” or somesuch economic claptrap.
As I see it, the only surplus that exists can only be a surplus of energy. Money can be printed, so a surplus of money is a nonsense. Money only buys access to more energy. If there’s no energy available, money has no value.
Rockefeller cornered the oil/energy market. Oil provided ongoing energy to produce still more energy and food that drove the population upwards.
People thrived on Rockefeller’s “surplus” energy. (or Peabody coal for that matter)
The $billions in the value of Amazon (for example) will evaporate in the instant our energy base goes down. Amazon might be seen as comparable to Rockefeller’s oil, but it doesn’t produce any surplus, it only consumes. ( as do Musk cars, Apple or Microsoft or whatever).
The origin of surplus lies in the farmer growing a surplus of food, and selling it for money, (effectively energy tokens) which he uses to buy the means to sow and harvest his next crop—thus continuing the food/energy cycle for all of us.
That is our surplus “bottom line” and the basis for our “growth economy”—without it, no other surpluses are possible. Without that surplus energy cycle, literally nothing gets done or built or produced by anyone, anywhere.
Right now, we enjoy a food rich environment.
Anyone doubting that, should check the food / energy cycle of the Inuit. (as they lived pre 1900ish) They did not produce sufficient surplus of anything, other than to keep warm and eat. They did not build cities, wage wars, or have any “surplus” infrastructure at all. They survived on their personal food/energy production, one to one. There was no surplus.
The Inuit had a static economy, with no growth. They did not generate prosperity by mending each other’s sleds or selling fish hooks to each other. The Inuit had no use for money.
Advocates of a static economy should study the Inuit.
So taking food energy as the base for surplus, it’s easy to see how our surpluses grew.
When the first hunter gatherer had the bright idea of enclosing land, and growing his food instead of chasing it, he became the first “capitalist”. But that enclosure needed people to work it, guard it, pray over it, and count its produce, as well as provide a comfortable lifestyle for the one who owned it.
Hence surpluses were essential to pay their wages (energy tokens). Gold is the only mineral that doesn’t decay, so gold became the prime exchange unit of surplus, universally traded.
If surplus went into excess, then more gold would be accumulated, with which to buy the means (soldiers usually) to acquire more land. That allowed farmers to roll up land into countries and empires, as long as surplus was available. Mining gold on your land was an added bonus.
Given fertile land and a benign tropical climate, peoples could (and did) fill their time with pyramid building or killing their neighbours. Even more surplus could be gained by working slaves to death.
When surplus stopped, empires collapsed. History shows this to be universal.
Fast forward to now.
Until the 70s, the USA had a surplus of oil. Then the surplus passed peak and the USA has been in decline (denial) ever since. The “American Dream” was entirely dependent on oil surplus, not food. Since the 80s, there have been oilwars–these ae in pursuit of somebody else’s surplus. These will get more bloody.
Oil has been the wealth creator, and wealth sustainer. We will not surrender that meekly.
But that wealth creation only worked if oil production continued to increase which explains why real wages have stayed around the levels of the 70s/80s.
Everyone believed it was forever. Nobody believes the oilparty is over.
So when Trump screams about “making America great again” he taps into the certainty that prosperity can be voted into office. So the demand for surplus elects idiots to public office.
When this is found to be a lie, The USA, (and all industrial nations) will devolve into separate states, and begin the fight over any perceived surpluses wherever they happen to be.
Which is called survival.
—-
Haven’t commented much lately, been finishing book, which will be on sale as a paperback on Amazon in the next few days.. Get you copy before collapse folks.
Congratulations on finishing the book, Norman. I’ll certainly be ordering a copy.
thanks Tim
the links are
https://www.amazon.co.uk/The-End-More-Norman-Pagett-ebook/dp/B00D0ADPFY
https://www.amazon.com/End-More-resources-humankind-unsustainable/dp/095760792X/ref=tmm_pap_swatch_0?_encoding=UTF8&qid=&sr=
My copy is on the way…
You could also pump out some press releases to key people at CNN, BBC, major talk show hosts etc… and see if they might want to get you on to discuss the book …. or not….
Thanks Eddy—hope you find it interesting.
I might be a legend in my own lunchtime—but BBC and CNN—-I need to be a bit more famous than that
I might do local radio with it if they are interested.
Oh … I can imagine the topic would be off limits for the MSM…. too dark…. too pessimistic…
To fact-based
on second thoughts—maybe a discreet word with friends in low places about a Nobel prize for literature nomination???
I know you can exert influence in certain areas
I’ve already indicated Gail gets the prize this year… next year is still available though….
as long as there’s a guarantee there somewhere
not a Trumpian promise
I can’t guarantee a next year…
are some comments vanishing at the moment?
I commented on that Van but my reply vanished, can’t figure out why, maybe it was a bit overlong
Yup, my longer comments also go strolling about for half a day or so before they decide to make their appearance.
It would be useful to at least get an alert that a held comment went live….
I launched a fusillade at Dicky Heinberg yesterday and I don’t know if any of it made it live….
Norman, will you give us a heads up when your book is out on Amazon, so that we remember to make the purchase
Note to Self — send a copy to Dicky as a gift from the Folks at FW…..
will do Van—thanks to all for subtle kicking to get the paperback version finished.
Couple of days or so while it goes through the Amazon system
(Unless Bezos has blacklisted me for saying bad things about him)
hi Van
you asked for note about my paperback version of The End of More
which is now available on Amazon
https://www.amazon.co.uk/The-End-More-Norman-Pagett-ebook/dp/B00D0ADPFY
https://www.amazon.com/End-More-resources-humankind-unsustainable/dp/095760792X/ref=tmm_pap_swatch_0?_encoding=UTF8&qid=&sr=
Re Surplus – i found this 3-part series quite a nice (if slightly wordy) discussion on Surplus.
http://www.resilience.org/stories/2016-06-07/on-surplus-part-1
i must have missed that series on Resilience.
It was as you say rather wordy.
Surplus is just the excess available from our land/environment after we have taken out our living essentials.
The reason for our current mess is because for the last 200 years we’ve too much of a good thing.
Yes – theres a few good quotes in it ..
Yip – theres a few good quotes amongst it
• Vacations and retirement, both of which are assumed in our society to be a sort of basic human right, are two of the more interesting examples of surplus. Vacations, for their part, require an entire “tourism industry,” which doesn’t actually produce anything, but rather helps collect and redistribute a society’s surplus. Retirement–an extended multi-year vacation if you think about it–is even a more pronounced expression of surplus. Retirement is an astonishing feat: to be able to stop working and yet still have enough stored grain (so to speak), or the means to buy it from others, for five, ten, now even twenty or thirty years, requires a substantial amount of surplus production during working years
• The constant creation of “more” is the opiate of Liberal societies.
• Having the highest soil fertility on the block does not pay the village taxes, for it does not create surplus—and surplus, not sufficiency, is clearly the local currency
• Ideas, our economists love to tell us, are “the ultimate renewable resource.” But the energy and raw materials from which our surplus is actually derived, are not.
• The question “where does wealth come from?” is a question about reducing the number of people or societal resources devoted to basic survival. It turns out that this ratio, and thus the creation of wealth, surplus, and a polite and decent middle-class society is mainly dependent on one thing: it is dependent on the way and extent to which energy can be concentrated. Energy concentration is the only real game in town; everything else is a derivative side-show.
• The only way our modern industrial system is efficient is if you look at the energy expended by humans and not at the total energy requirements of the arrangement. Without fossil fuels, in other words, your family of four would require 600 slaves to maintain something resembling its level of surplus. While the use of fossil fuels represents an important sort of progress over the direct use of kidnapped humans, neither arrangement is sustainable.
The average fuel efficiency of our petroleum engines is 30 percent.
A gallon of conventional crude oil contains 140.000 BTU.
140.000 BTU * 0.3 = 42.000 BTU
The oil economy window is 42.000 BTU in a gallon of conventional crude oil.
The moment the oil production cost of a gallon of crude oil exceeds 42.000 BTU the window closes and crude oil turns into an energy sink.
“The Stone Age didn’t end for lack of stone, and the oil age will end long before the world runs out of oil.”
Saudi oil minister Sheik Ahmed Zaki Yamani (2005)
Dude, don’t get wrapped up in too much formulas/ data/ charts and the like.
This ain’t rocket science folks. We are consuming too much, too fast in too wasteful ways. While our system requires more and more to keep it going.
All the while the low hanging resources have been exploited. Now we are needing to scrap by with debt, other financial games, military posturing; all the while ignoring other “costs” (I.e. pollution and other environmental degradation, climate change, population surge with increase of mass movement).
This just ain’t about oil.
We live in interesting times. I’m just curious. I’m trying to understand what is happening around us. The risk is that this will end very badly. To be honest. I really don’t have a clue how this will end… or not end… and instead continue.
No problem, remember even if we create a maximum efficient combustion engine, the so called saving will allow us to consume more elsewhere.
the old Jevons paradox will get you every time
The charts are very useful – keep them coming.
Most of us understand how it ends — so we could just head down to the pub and pass the time …
But we are here because we are curious…. we are dissecting the dying beast…. a beast riddled with multiple chronic and ultimately fatal diseases… trying to work out which one is going to do him in…
Quite fascinating actually….
Yes, Yoshua, heep them coming…Gail likes charts and they will aid her in writing.
I find them fascinating….,
Now, please help me in determine who will win the World Series?
That is an outstanding quote… particularly considering the source
Go and visit these places, it is well alive phenomenon on this very Earth already, or watch it at least on ytube: e.g. Trolleybus -> Lyon (FR), Salzburg (AT), Budapest (HU) and many more diverse smaller or larger cities.. running it on hydro or high % nuclear base loads. They are moving millions of people y/y on relatively ridiculously low amounts of energy and low noise and emissions.
ps that’s obviously one segment, but we have already shown examples of trolley trucks/lorries for local delivery, but electrification goes well into many industries, incl. mining, some parts of the agriculture (could be more) and so on..
ps2 do agree with the thesis (and empirical fact) of maxed out consumers, demand destruction, that’s all true, but we are entering low frivolous consumption era, so ability to run basic infrastructure is a key feature, no value judgement put on the level of authoritarian rule forward
Actor Mark Ruffalo has delivered to the North Dakota Souix, mobile solar arrays mounted to trailers. They are to provide energy to protect against the harsh North Dakota winter conditions during their standoff. Well, they might act as a wind break if everybody gets behind one. Other than that, I doubt that those arrays will be of use. ‘Maybe’ they will keep cellphones and laptops charged.
http://www.activistpost.com/2016/10/mark-ruffalo-delivers-mobile-solar-trailers-standing-rock-camps-preparation-harsh-winter.html?utm_content=bufferfbcf1&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer
We are past peak coal consumption, at or near peak oil consumption, and now apparently past peak trade.
“The constant flow of goods from Asia to the United States was briefly interrupted last month after Hanjin, the South Korean shipping line, filed for bankruptcy, stranding several dozen of its cargo ships on the high seas.
“It was a moment that made literal the stagnation of globalization.
“The growth of trade among nations is among the most consequential and controversial economic developments of recent decades. Yet despite the noisy debates, which have reached new heights during this presidential campaign, it is a little-noticed fact that trade is no longer rising. The volume of global trade was flat in the first quarter of 2016, then fell by 0.8 percent in the second quarter, according to statisticians in the Netherlands, which happens to keep the best data.”
http://www.nytimes.com/2016/10/31/upshot/a-little-noticed-fact-about-trade-its-no-longer-rising.html?_r=0
I can’t imagine that Chinese factories putting up their prices would help that trend:
“China’s factories may be on the cusp of delivering a new shock to the global economy after years of undercutting rivals with cheaper costs. This time, increases in prices could reverberate around the world.
“To understand why, consider the dilemma facing Jiangmen Luck Tissue Mfy Ltd., now caught in a squeeze between surging wages and tepid demand. The company has already slashed staff by half, shaved prices and automated production to survive. Now, with margins razor thin, it’s weighing the first price increases since 2010.
“”There’s just no possibility for me to cut prices any more,” says deputy director Roger Zhao, 52, whose company is based in the city of Jiangmen in southern Guangdong province. “Because costs are already pretty high and I don’t see any possibility they’ll go down, I’m seeking opportunities to raise prices a little bit.””
http://www.bloomberg.com/news/articles/2016-10-30/china-s-factory-to-the-world-mulls-the-unthinkable-price-hikes
Thanks! Nice charts. Note that the upturn in prices so far is only tiny–what is being plotted is the change in PPI and the change in World CPI. The change has moved from very negative, to slightly positive. Also note that the decrease in the growth in prices started in 2011, and had an acceleration in 2014.
Sorry, if mentioned already, but this is great article revealing the panic ahead:
http://www.zerohedge.com/news/2016-10-29/story-durable-goods-story-global-economy
That’s why you can hear the proverbial sound of turbines spooling up on the shortly forthcoming fiscal helicopter drop and or some combination via UBI/shopping vouchers, and other schemes to keep the system stitched together for a while longer..
Now, what’s come after that is the real question..
It looks like our collective centre of gravity is now over the cliff-edge and we are frantically windmilling our arms as we try in vain to regain our footing…
Search Google Images — Wiley Coyote cliff
Thanks! A very good article. I think part of the problem is that new home building in the US dropped to a permanently lower level after 2008, thanks to young people not earning as much, and the loss of the temporary pump in terms of falling interest rates that was keeping the number of new homes being built rising. New homes directly and indirectly drive a lot of durable goods production. The younger generation is just living in shared apartments, not buying much, and not starting new families.
It’s by the Alhambra Capital guys, I’ve linked them several times in the past. They are also being invited regularly on the GordonTLong’s “financial repression” podcast..
An excellent … and disturbing article for many no doubt…
From reading the article I can almost feel what it must be like to have a very serious disease…. showing up for my doctor appointment … and being informed that the medication was not curing me as hoped … rather it was (barely) postponing my death…
The main difference is that I feel GREAT! Couldn’t feel better. Thanks for the info doc — I’ll carry on bucket listing….
Thanks! That is a good article. It also has references to some other articles that are interesting. One is a reference to the World Bank Study of changing income distributions. https://www.gc.cuny.edu/CUNY_GC/media/CUNY-Graduate-Center/PDF/Centers/LIS/Milanovic/papers/2013/WPS6719.pdf
One of its conclusions is that the world income Gini coefficient doesn’t change very much. The world Gini coefficient (dumping all of the workers into one pot) is around 70 (which is very high). Pareto distribution problem, basically.
As we all know, the 1% and China were the big winners in wage growth. The losers were more widespread. Basically, citizens with per capita income (not per worker) in 2005 US$ in the $5,000 to $20,000 range tended to fare worst in wage growth between 1988 and 2008. The ones that fared best were in the to 1% – -roughly $50,000 per capita (not per worker) in 2005 US $. To get average wages per worker, a person would need to at least double. (I haven’t calculated–varies by country with number employed/total population).
This is a link to a McKinsey Report. http://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/digital-globalization-the-new-era-of-global-flows It notes “global value chains may be shortening, at least in part because of the cost of managing complex, lengthy supply chains.” As processes are becoming more mechanized, “The makers of many finished goods are beginning to place less importance on labor costs and more on speed to market and non-labor costs. As a result, some production is moving closer to end consumers.”
And this is why only a fool would oppose the e.l.de.rs…. why rock the boat? Better to be a ‘team player’ and live very … very … very … large!
http://www.zerohedge.com/news/2016-10-26/doug-band-memo-offers-vivid-details-foundation-corporate-donors-and-bills-profit-act
All lies all the time its world of rent takers.
” Even if we regard that the ‘technosphere’ took charge long ago (Orlov) we have to recognise that it’s lack of wisdom, like humanity’s, has collapse baked in.”
So what does Orlov believe we should or could do about the technosphere?
Collapse is baked in. We are burning 95mbpd of oil to stave off a collapse back to the natural world. We have a virtual world that we are comfortable in. A virtual bubble powered by a finite fuel source. the only taste of the natural world most people have is walking to their car. We are pushing back at nature with everything we have right now trying to sustain an ecosystem that is completely artificial, in over-shoot and unsustainable. Of course collapse is baked in…there is no other way out of where we are.
After skimming a Derrick Jensen tome today and seeing the ‘smite’ comments and other BAU Lite propositions I have to state that:
“BAU is definitely ugly and flawed but that doesn’t mean that one can find a means to oppose it or replace it. It i s such a monster in scale and reach that it’s death throes will obliterate that which feeds it.”
That’s the essence of my own disagreement with the various utopian (Vince) or dystopian(smite) views that get expressed here. As Gail has argued, we are looking in system that cannot sustain itself. As it is immediately obvious, the system continues to double down on failed strategies that destroys its supporting subsystems; the very assets that would sustain a new system.
The juggernaut which sustains us cannot be diverted towards another course for anyone or anything’s benefit. Even if we regard that the ‘technosphere’ took charge long ago (Orlov) we have to recognise that it’s lack of wisdom, like humanity’s, has collapse baked in.
The Green Revolution was I reckon the Rubicon for us…. that allowed us to feed many billions…. artificially…
Because it involved ruining the soil it meant that we effectively cut off all escape routes…. there is just so little farmland that will support a crop when BAU blows…. and billions of people will be scrambling to find something to eat.
Technology also gifted us spent fuel ponds…. of course
BAU Lite is an utterly ridiculous concept. It is impossible.
BAU is such a small name for something so incredibly large and complex. BAU is 24/7 just in time delivery of goods and services nearly worldwide. Imagine all the millions of grocery stores being stocked every night with tons of food per store. All the restaurants receiving shipments of perishable produce, beef, chicken, eggs etc. Just the scale of this is insane folks. just unbelievable that there is that much net energy to do all this food delivery and still have enough for billions of cars to drive in circles all day too. And billions of web farms tossing electronic money across the USA, Pacific and Atlantic at light speed. And communications as well. It is just mind boggling. Just think about it and try to wrap your head around how big BAU really is. The fossil fuel energy burn is an apocalyptic 95 million barrels per day. INSANE!!! There are weak links all over the place.
Being There 2:
Chauncey: One might suggest BAU is as complex as a human body…. millions of cells with specific roles… all working together…. all marching to the band…. if one stumbles e.g. the pancreas or the kidneys have a problem … the entire body crashes into the ground
And like BAU…. the body needs food… if the food source becomes too expensive the body cannot afford to buy any …. the body will starve very quickly … and perish…
Therefore we must find cheap food for the body…. or the body will perish…. we must strengthen the body and feed it every day. We do not want the body to perish
this reminds me of the signs in the park asking to not feed the birds. if you feed the birds, they become dependent on the easy feed and multiply. if you stop feeding the expanding population of birds, they go away. where do they go? off somewhere to quietly die of starvation/disease.
http://www.azquotes.com/picture-quotes/quote-technology-is-destructive-only-in-the-hands-of-people-who-do-not-realize-that-they-are-alan-watts-30-84-57.jpg
I love Alan Watts but this is a numbers game now and a systemic predicament. I’m afraid that Eckhart Tolle’s Jaguar motor-car is just as destructive as anyone else’s Jaguar motor-car.
Capitalism seem to be busy using technology to scrap our humanity. Since I’m not a human chauvinist, I’m all for it, thus I cheer at the idea of charlatans such as FE and other scam artists are going the way of the dodo into an utter, total irrelevance.
I love it!
“Capitalism seem to be busy using technology to scrap our humanity.”
The global economy is, as Gail often points out, a self-organising, dissipative structure. It is not the product of intentional design or any political philosophy, so to call it capitalist is somewhat misleading. Technology certainly can be dehumanising though, and rising complexity coupled with our worsening, aggregate, material impoverishment seems to be driving us all completely round the twist at this point.
I happen to agree with FE about the rapidity of collapse – to me it seems a common-sense proposition – but I have no problem with views to the contrary being expressed. Makes for lively debates!
Well, capitalism indeed are quite fantastic at driving technology and building a fundament for all advanced economies. There’s no denying in that.
Nearly everyone misses the fact that the economy is a dissipative structure that acts on its own. The view is that world leaders are in charge, when they really are not.
It is a lot like believing that we can make water flow uphill. We can, if we use a lot of pumps, and a lot of energy to make the pumps work. But this is not a scalable process. We soon find the whole process too expensive. By choosing to make water flow uphill, instead of taking water from some other source (water collected from rain, water from a shallow well), we are making water hugely expensive. Wages of workers don’t rise as a result of this growing inefficiency–we just have to make more workers move from other sectors to the energy sector to try to provide all of this energy. Workers soon must cut back on discretionary goods, in order to afford water. The economy tends to shrink. The whole system heads in the direction of collapse.
“The whole system heads in the direction of collapse.”
I’m not so sure about that. I would say:
It heads towards wealth concentration.
If we speak about dissipative systems, the unit of measure are important. I would like to know what those are and how to make prediction using dynamical analysis similar to those in the LTG study and other energy based explanations of the economy.
As it stands now you are just using a vague scientific terminology without any rigor. It is too loose a concept. Tighten it up will you, your hubby is a Mathematician, just sayin’. 😉
Show us the equations and the predictions they make.
Too much text is cheap, equations are hard.
Show us the code!
http://www.azquotes.com/picture-quotes/quote-talk-is-cheap-show-me-the-code-linus-torvalds-45-66-13.jpg
“As it stands now you are just using a vague scientific terminology without any rigor.” Wow, that is not really an accusation I would level at Gail, lol.
I assume that was a response to something from smite…. I immediately delete all comments from smite without opening them…. it frees up time to clip my finger nails….
i was wondering whose they were
http://blogs.agu.org/wildwildscience/files/2013/02/motivator2459909.jpg
“I’m not so sure about that. I would say: It heads towards wealth concentration.” – Smite.
What is wealth? Is it oil, money, food, shelter? How are you defining wealth? Money is virtual (it is not real) oil is real and gives money its value by giving the economy the energy it needs to build goods (to sell) and services (to sell). If you measure wealth is dollars then your measuring an imaginary number.
In the most general sense wealth is an excess of net energy. What we are experiencing is a decline in the net amount of energy available. Money has no where to go because growth is coming to an end. Money is debt, no one is borrowing to buy anything.
This is a huge problem because our old methods of measuring the state of the economy are broken or breaking. Money and stock trends are no longer an indication of wealth because the fuel that gives these things value is going away.
“What is wealth? Is it oil, money, food, shelter?”
I’m not going to enter into a meaningless meta-discussion about the meaning of words.
Capitalism drives technology. Technology tends to have the exponential outcome of positive feedback and energy usage.
Stagnation only occurs in the back waters of where the technology progress once were. This part of the economy will be placed on life-support as long as it matters for the advancement of technology which in turn grows the economy.
Hm, that’s debatable, again we should point out the argument of differentiation among actors, cross regional effects. Do you really think there is zero impact between policies on the ground, seriously ?
For example, take countries with above 40% nuclear of grid penetration like Hungary, France and others, they run their subways, trams, freight and passenger railways, city trolleybuses and what have you on that stuff, and it’s evidently not at full occupant capacity, people still can abandon large portion of mostly frivolous driving habits and hop on it..
Since last time I gave you little statistics on electrified faster (not the fastest) regional trains, resulting in 10x less energy consumption vs. flight and also fraction of carz per passenger/distance.
Lets have another example about trolleybuses, which have the largest bang for buck assuming passable condition legacy infrastructure like asphalt street or cobble stone is to be here next few decades, which is ~certain. Now, modern trolleys come in variety of flavors, small/large (150 people bus needs 250kW. Nowadays, they also have smaller aux diesel engines or batts on board so the vehicle can move shortly between trolley routes and depots on its own. Moreover, there have been for decades best practice usage examples, where these trolley routes dependably serve even the distant outskirts of large urban centers, so don’t get me the silly response “this is impossible at my place in the Utah desert”, well in practice you just park at the edge of the city and hop on the public network, cutting fuel waste immensely even in such hybrid mode.
Go and visit these places, it is alive phenomenon on this very Earth already, or watch it at least on ytube: e.g. Trolleybus -> Lyon (FR), Salzburg (AT), Budapest (HU) and many more diverse smaller or larger cities.. running it on hydro or high % nuclear base loads.
They are moving millions of people y/y on ridiculously low amounts of energy.
ps that’s obviously one segment, but we have already shown examples of trolley trucks/lorries for local delivery, but electrification goes well into many industries, incl. mining, some parts of the agriculture (could be more) and so on..
ps2 do agree with the thesis (and empirical fact) of maxed out consumers, demand destruction, that’s all true, but we are entering low frivolous consumption era, so ability to run basic infrastructure is key
“I assume that was a response to something from smite…. I immediately delete all comments from smite without opening them…. it frees up time to clip my finger nails….”
Good thing, please don’t waste your precious time reading something you can not comprehend anyway.
http://cdn.shopify.com/s/files/1/0535/6917/products/humiliationdemotivator_large.jpeg
No offence, but you actually read like someone who is scared to death.
You are mistaken; it is a mixture of curiosity and schadenfreude.
Too bad he went into destructive habits once he lost the vigor and sharpness of youthful thought. He clearly could not attain enlightenment. As Shunryu Suzuki pointed out as a student of his was trying to belittle Watts:
“You completely miss the point about Alan Watts! You should notice what he has done. He is a great bodhisattva”
Yes, Alan certainly had a weakness for the drink and the ladies, bless him.
Indeed, once the curiosity and constructive aggression from the testosterone wears off from aging, left becomes the trite banalities and self-loathing. Time to hit the drink and approval from women. The greatest waste of time known to mankind.
http://www.azquotes.com/picture-quotes/quote-i-ain-t-saying-you-treated-me-unkind-you-could-ve-done-better-but-i-don-t-mind-you-just-bob-dylan-96-41-53.jpg
https://scontent-ort2-1.xx.fbcdn.net/t39.2365-6/14129678_1295994390440912_1435692944_n.jpg
AI image segmentation.
http://crudeoilpeak.info/royal-dutch-shells-upstream-earnings-peaked-2008-now-in-the-red
Thanks for this actually useful information … there very few needles in the haystack this morning….
You are welcome. Looks like the economy is shutting down. It is still hard to understand with the 95 mbpd oil, all the natural gas and coal production.
“The Stone Age didn’t end for lack of stone, and the oil age will end long before the world runs out of oil.”
Saudi oil minister Sheik Ahmed Zaki Yamani (2005)
The era of the human didn’t end because of a lack of compulsive consumerists, and the age of the human automaton will end long before the world runs out of cheap energy.
http://images.gmanews.tv/v3/webpics/v3/2014/04/640_2014_04_11_16_21_38.jpg
As long as he doesn’t run out of steam.
http://www.overthinkingit.com/wp-content/uploads/2010/07/Tin-man-240×300.jpg
The only thing taking over when humans exit stage right are insects, specifically cockroaches.
Could be, could be. The hive supercomputer and ‘roaches for the dirtywork.
https://img.rt.com/files/2015.09/original/5603e65fc36188e8058b45eb.jpg
Well I guess it takes 95 mbpd of oil just to stay even/afloat now. But, the world still needs growth. I think we are about maxed out on oil production too so looks like there will be no more growth.
The world needs contraction ?
Comparing Figures 2 and 6, it looks like the new Brazil Pre-Salt is very unprofitable. This is hardly the way to obtain growth!
Images from the giant Ghawar oil field in Saudi Arabia. The northern parts of the field where the light crude and most of the production comes from looks almost depleted on these images… which are a decade old.
https://i0.wp.com/www.searchanddiscovery.net/documents/2004/afifi01/images/03.jpg
http://www.peakoil.nl/wp-content/uploads/2007/03/ghawar.png
http://www.theoildrum.com/files/9_aindar_sat.png
http://www.theoildrum.com/files/bs_aindar_shed.png
https://wattsupwiththat.files.wordpress.com/2012/05/clip_image008_thumb1.gif?w=631&h=282
The southern parts of Ghawar where the heavy oil is located is from where the future oil production must then come.
http://www.leblogenergie.com/files/2012/07/ghawar3.png
https://grandemotte.files.wordpress.com/2009/11/eor-potential-greatest-in-saudi-arabia.jpg
Interesting graphs, Yoshua. If we recall Matt Simmon’s prediction that “as goes Ghawar, so goes the World”, then the base case production model shows an eerie correlation with Gail’s future energy production model. It looks like northern Ghawar watered out rapidly between 2010 – 2017, leaving only the heavier crude in southern Ghawar for future, more expensive extraction, hence the last prediction graph you present here.
Still Saudi Arabia is producing 10 mbpd today. It is a magic oil field ?
As long as oil price kept rising, Saudi Arabia kept investing more in their fields, allowing them to get a higher percentage of the oil in place. Now they have cut back in investment. It takes a while for the cutback in investment to flow back into the quantity of oil extracted (especially if there is a little margin available for increasing extraction, even before the cutback in investment).
Yes, there are of course the inertia aspect to consider also of previous investments.
I hope that inertia is on the time scale of decades.
This coincides nicely with their plans to diversify away from oil…It remains to be seen what they’re going to invest in as oil production and their economy crashes down around them.
Higher education? Healthcare? Finance? Real estate? Tourism?
I think it’s too late for them to diversify.
Dear ARBP;
They can diversify by building robots. Per Smite, robots don’t need energy, the people that build them do not need to eat, and the robots in turn can make a society continue even without energy or a working ecosystem.
Robots are God,
Pintada
Robots are our friends.
and smite’s lovers.
http://ritzindia.org/slider/01.jpg
The sad thing is, most of the Middle-East has little to offer other than sand. And the sand, as I understand it, is unfit for concrete because it is smooth. Wow. Just wow.
Perhaps the Middle East can have a special on “sand for your sandbox.”
https://i5.walmartimages.com/asr/cb107991-3d94-48ae-b724-7e46fbb5e27b_1.48894b59fcea32b1b3dc23782ea6631c.jpeg?odnHeight=450&odnWidth=450&odnBg=FFFFFF
Might be tough to maintain their current lifestyle on that biz …. 🙂
Since all of those things rely on fossil fuels there is no such thing as diversification. Once their oil is gone so is their welfare empire along with the global economy.
It’s probably not a good idea to participate in the Aramco IPO 🙂
They look to be the Caterpillar of oil….
Come now, Caterpillar has been a winner this year on the stock market ! Sales are tanking and the stock is levitating higher.
Up is down. Down is up.
Example of the strange things that happen when you switch from an expansion phase (in which everything goes in same direction), to a contraction phase (where things are pulling in different -often contradictory- directions). Cannot hold for very long.
There is a hint of extreme desperation in the air….
I believe bonds from Venezuela have also performed well. http://www.forbes.com/sites/kenrapoza/2016/07/21/venezuela-might-be-worse-country-in-latin-america-but-its-bonds-look-great/#3ddd6157294e
http://www.bloomberg.com/news/articles/2015-09-29/the-contrarian-venezuela-bond-trade-that-s-delivering-37-return
Peak Economics ?
Everything is now upside down. Declining sales shows that the business is going in the right direction. How graciously the company contracts with the contracting energy level shows how strong the business is… and the stock responds by rising to new highs.
I think you are right. Economic models are badly incomplete. We are just now figuring out how badly they are wrong.
Stocks are rising because corporations are very, very aggressively buying back their own shares. They are even borrowing large sums of money to do so (since rates are so low). This reduces share float, effectively lowering Wall Street growth target prices. It also makes shareholders happy because they believe that long-term this represents a company that is confident in themselves. This, along with the media narrative that everything is awesome, reinforces stock purchases. What’s really happening is corporations are doing whatever they can to keep their heads above water as they hope and pray that commodities prices recover and consequently GDP rises.
And… investors are seeing this activity and riding the coat tails by purchasing shares on the expectation that buy backs will continue to drive the share price higher…
Essentially the new normal involves identifying companies that are failing — but that have the ability to continue to borrow — and going long.
Up is down – down is up
Earnings per share look better when there are fewer shares–surprise! Buying another company also makes earnings rise. But the total for all companies doesn’t necessarily rise. More “slight of hand”.
I’m wondering what’s realistically up there in the Arctic (several ~Prudhoes?), given the Russians revamped their nuclear ice breaker fleet, plus are also building several floating small reactor NPPs for development of these remote oil/natgas shelf areas. So, it’s not about defense and the euroasian shorter trade route only, something of energy definitely must be there, although wondering what the price snake and consumer demand must look like to bring it on the market..
Enhanced oil recovery depends a whole lot of the price of oil. It is likely to disappear, if the price stays under $50 per barrel.
The EOR is most likely dependent on higher oil prices.
About economic models: since I’m not an economist, I’m not trying to fit my ideas to economic models, since I’m not awear of any models. I guess that that allows me to disregard economic laws, that I do not know anything about, and say anything crazy that comes to my mind.
It’s a good approach… if one wants to strive for truth…..
Doesn’t go over so well with The People of the Matrix though…. they have learned to do what they are told… and think what they are told …. at a very young age…. and they seldom deviate
AI market estimated to hit $153 billion 2020.
Good Bye:
https://www.colourbox.com/preview/1235912-group-of-office-workers-lined-up-facing-camera.jpg
And Welcome:
https://www.extremetech.com/wp-content/uploads/2012/03/ibm-supercomputer-p690-cluster.jpg
“Opportunities such as autonomous cars are creating a market for robots and AI solutions, and the future is bright. The market is projected to grow to $153 billion by 2020, comprising $83 billion for robotics and $70 billion for AI-based analytics, according to Bank of America Merrill Lynch.”
“And that just happens to be the beauty of Artificial Intelligence. The best AI systems also solve big problems and improve the overall quality of life. Alongside the right workforce, Artificial Intelligence will create tremendous opportunities for entrepreneurs and companies.”
http://www.gereports.com/every-business-piece-153b-artificial-intelligence-market/
But … $153B is not much money. About the same as the Swedish housing bubble.
Unless you get REAL AI and give it REAL power you won’t get rid of useless middle managers and project leaders and other people who have a title and wage but no use.
Driving cars and picking salad will not do much difference.
It is hard to predict the outcome of a disruptive and newly created market.
For example, who would have thought that a $ 0 oil market could lead to our current predicament.
Yes if it IS new and disrupted.
Automation long ago stopped replacing hard, dirty, dangerous jobs with softer, safer and less qualified.
Now mostly it replaces a few unqualified with one more qualified (often leveraged by energy).
Yes, flying aircraft and running trains and their schedules are indeed unqualified ‘jobs’. And now doctors, finance, actuaries, accountants and on goes the list.
It can fly without a humanoid automaton:
http://static.progressivemediagroup.com/uploads/imagelibrary/nri/aerospace/features/dreamliner-a380-cockpits/A380-displays.jpg
Yes, it is coming for your “qualified” ‘job’:
http://image.slidesharecdn.com/ibmwatsonprogressandroadmap-saxena-130223073801-phpapp01/95/ibm-watson-progress-and-2013-roadmap-2-638.jpg
I believe you on the other side of peak programmers, peak product owners and peak salesforce.
I don’t care what you believe, I care what is.
This is.
“In the future, when you summon a shared autonomous car from your phone to go out to dinner, your AI assistant will automatically notify the restaurant of your ETA and dietary restrictions. This automation will create business opportunities for forward-thinking entrepreneurs first.”
Sounds about reasonable.
Explain, without pictures of terminator robots, how this will be possible without an army of technicians (and a even larger army of managers and salespersons).
A picture says more than a thousand repetitive words.
https://cdn.shopify.com/s/files/1/0535/6917/products/adaptationdemotivator.jpeg
You would like that do you?
Some doors once opened, can never be closed again.
https://img.buzzfeed.com/buzzfeed-static/static/enhanced/webdr06/2013/6/10/7/anigif_original-7466-1370863300-2.gif
The problem to all of this is: It increases complexity and requires additional energy!
The simple and effective (energy saving) solution: Cook good foot (to your liking) at home and spare your time to drive to the food place, wait for the food and get frustrated about the stuff that comes out of the convenience kitchen.
Cooking at home (even for your girl) is cost, time and energy saving + you avoid the disappointments most restaurants provide.
Yes, software complexity is good. It removes a lot of the complexities normally administered by mindless, compulsive consumerists.
“a team of engineers has worked night and day for years to make iPhones new home button more responsive.”
Yes, engineering will be the last profession to go.
Of course, someone has to program the latest sex toys.
For every engineer there is also a certain amount of overhead, which at the moment seems to be growing exponentially.
If you read swedish, this is one of my many experiences concerning this overhead:
http://cornucopia.cornubot.se/2015/05/gastinlagg-organisationsteori.html
Yes, and then it collapses, just like Ericsson. Too much compulsive consumerists and yet another company on the verge of oblivion.
But hey, we got plenty of villas, volvos and newly spawned generic dullards. Well worth the extra complexity.
This is how it goes down:
http://digitaldaily.allthingsd.com/files/2011/02/asymco_nok_aapl.jpg
TLDR, but the list of roles was familiar. But lacking CEO, sales, accounting, responsible for gender and environmental plans, and if in finance risk and compliance. And reception, cleaners, janitors etc.
And if you have a handful programmers one is good if you’re lucky, and one is decent but uninterested. Hiring another handful programmers hoping you by accident find one or two more decent lower output according to Brookes law.
“Hiring another handful programmers hoping you by accident find one or two more decent lower output according to Brookes law.”
I agree completely. Most programmers, quite frankly, suck.
Apple seem to be well aware of the perils in letting entropy from complexity seep into the corporation. It should imminently be purged with fire.
http://i2.kym-cdn.com/photos/images/newsfeed/000/128/622/KILL-IT-WITH-FIRE-FUNNY-FORUM-PICS.jpg
Twitter 4000 employees, uber 7000. How many of these are programmers?
I would like to see Twitter’s annual bill for paying celebrities, politicians and MSM to use Twatter.
I guarantee you it would be one of their biggest expenses….
“Twitter 4000 employees, uber 7000. How many of these are programmers?”
And Twitter is losing money, big time. Not a surprise directly. Too much organizational entropy and not a solid business case. It’s a scam basically, lots of entropy producing leeches making short work of the investors money.
http://money.cnn.com/2016/10/27/technology/twitter-layoffs-earnings/
How many of the uber employees will be gone once the inevitability of self driving cars become commonplace? Well, that would be about most of ’em..
Ubers enployees are excluding drivers. So self-driving cars won’t affect that.
The Uber hype machine is pretending otherwise
https://www.wired.com/2016/09/heres-like-ride-ubers-self-driving-car/
A buddy actually thought uber was an app conststructed in a few students spare time and that the company was making a lot of money.
They lose money.
They cheat on taxes.
They have lowered drivers wages.
And they are not THAT cheap.
We cannot afford much more progress like this.
He also belongs to the crowd who believes in a near future there will be self-driving cabs cheaper per km than driving your own car TODAY.
It is the amazon model…. sell at a lose or a tiny profit…. drive all retailers out of business… then ramp up the prices in a virtual monopoly market…
Problem is.. retail employs a lot of people … not just the floor walkers… but the industries that build repair and manage malls…. the companies that employ people to make all the raw materials that go into malls and on and on and on….
An online retail monopoly — with no customers — because wiping out retail has caused a deflationary death spiral in the economy
Does it matter?
Do you find any online horse booking service?
Uber’s merely replacing a centralized regular taxi booking service with more efficient online and distributed one. Not exactly a disruptive piece of engineering for all intents and purposes. For the taxi companies perhaps. But it was only a matter of time, just as spotify et. al., was for the music industry.
We seem to agree that uber replaces those who take bookings at taxi companies, and after companies have gone bankrupt the whole overhead of that company.
It remains to be seen who can afford the taxi. Probably no one.
I know you prefer s.ex with robots, but I think in your future with a few ow.Ners and the rest dead many ow.Ners will prefer human s.xe slvaes and have a cab driver on stand by dressed in a silly uniform.
+++++
Interesting to see how the hotel industry is revolting against airbnb… cities are starting to levy huge fines on people renting their apartments without proper licenses
… and there is online horse booking services, but not for transporting from point A to B.
Why am I wasting time discussing bloody twitter and uber anyway? Seriously, who in their right mind gives a sh1t? It’s basically yet another social media gimmickry for the feeble minded.
Internet is the disruptor. In the same way AI will be the disruptor. Long live the machine. Way past and much beyond our humanity.
Ya why are you bothering when you could be with your robot girl… I hear you can download all sorts of deviant behaviours into their OS….. did you hear that there is a new product coming out… it allows you to replace the face… and hair… you can clip on different types of breast shapes….
Much cheaper than replacing the entire unit
Oh, I got a robot convert here, from c0mplexed 1gnorant instadoomerist to a robot aficionado.
Bravo!
Dear Smite;
It really hurts, does it not, when you set out to troll a forum, but end up being schooled by the locals.
If the economy holds together (obviously impossible) and if there was an infinite supply of easily recoverable energy (again not possible) maybe by 2020 there would be a serious disruption of the economy by robots. You make a good argument that it could happen.
There are problems with you argument though:
1. Apple is the premier technology company in the world, and it has produced a very nice toy phone (they also make a nice desktop computer that I enjoy daily). People stare at them all day long. Do they really do anything but provide entertainment? No. You conceded that UBER is just a fancy taxi service, obviously no disruption there. So, people are working on a robot that will be economically disruptive, but the results thus far are very disappointing. The hype is strong and pervasive, but where do I go TODAY to find a general purpose robot for any price that can do anything really useful? And folding a tee-shirt over the course of an hour doesn’t cut it.
2. How many companies will continue to do robotics and AI research after 99% of the population is starving? Robots will not replace corn/wheat/potatoes and those plants cannot be grown without debt, fuel, and massive amounts of fresh water.
3. It is patently absurd to imagine that an economy of any scale will be created by the richest 1% after the 99% are hungry and unemployed due to the problems Gail discusses.
4. The fancy AI robots do not exist yet. They will never exist because the collapse will happen (or begin in earnest if you a long decent person) well before they can be developed and produced in sufficient quantities to be important. Just because they are theoretically possible in a permanent BAU is not a valid or useful argument that they will exist if no-one is working develop them post BAU. (The same can be said for the silly space based solar idea BTW.)
Goodbye Smite, you had a fair run,
Pintada
It does not matter if “the people” have food, it only matter if “the owners” have food. As long as the owners have food then robotics and AI research and development will continue.
Though China has surpassed the US in AI research. We should worry about the AI gap.
My favorite line from Dr Stangelove:
“You know what this means?”
“What?”
“If you do not get the president of the United States on that phone you are going to have to answer to the Coke-Coal company.”
@ED
You see the possibility of a “Elysium” Style world with the rich in their own protected habitat – and keeping starved workers to build the robots?
Is it possible to let such a world going that can produce robots and microchips for the 1% – so keep up the current complexity with massively reduced output and energy inputs – to only serve 1%?
Ert, yes economy of scale is hotly debated here. It would be the 1% owners +2% workers + our robot friends. In truth it is not clear to me what size economy is needed to maintain approximately the current technology level.
I would argue the economy is bifurcated today. San Fransisco and New York City could get by fine without the fly over states. London would be fine without Europe, a right sized Shanghai without rural China. …
@Ed
but all of those center could not life without the support-system. Its like a brain (SF or NY) without the body and the circulatory system. Even manufacturing the microchips depends on so much stuff – produced everywhere on the world, depending on other stuff.
Some guy in Pakistan may life on 4 hour electricity a day very well – but not a system like SF or NY – to much complexity, to much already build in dependency. And you couldn’t run your chip-fab this that….
It seems not matter how much detail is used to explain this …. there are those who will just not grasp it…
There are words to describe such people.
“It seems not matter how much detail is used to explain this …. there are those who will just not grasp it…
There are words to describe such people.”
Instadoomerists?
Not even close.
complexed 1gnorant instacollapsters maybe?
Finance scam artists?
Right Ert,
I also wish them good luck with that.
Oldies but goodies:
http://www.lowtechmagazine.com/microchips/
This seems to come back to needed not just energy, but concentrations of energy.
I mostly intended to insist on growing complexity (and brittleness) of supply chains, and the importance of interconnectedness (aka interdependency coming from increasing specialization & complexity),
but of course you’re right too, such trends cannot continue without a more and more concentrated source of (free) energy.
Elysium is a metaphor for the western ‘rich’ world. Are you all that mentally deprived an obvious thing like that just zings through your dimwittery without getting registered?