Most of us are familiar with the Politically Correct (PC) World View. William Deresiewicz describes the view, which he calls the “religion of success,” as follows:
There is a right way to think and a right way to talk, and also a right set of things to think and talk about. Secularism is taken for granted. Environmentalism is a sacred cause. Issues of identity—principally the holy trinity of race, gender, and sexuality—occupy the center of concern.
There are other beliefs that go with this religion of success:
- Wind and solar will save us.
- Electric cars will make transportation possible indefinitely.
- Our world leaders are all powerful.
- Science has all of the answers.
To me, this story is pretty much equivalent to the article, “Earth Is Flat and Infinite, According to Paid Experts,” by Chris Hume in Funny Times. While the story is popular, it is just plain silly.
In this post, I explain why many popular understandings are just plain wrong. I cover several controversial topics, including environmentalism, peer-reviewed literature, and climate change models. This post pretty much excludes religion. It was added for people who find it hard to believe that a scientific article could also touch upon religion. If you want the complete discussion, as the post was originally written, please see this post.
Myth 1: If there is a problem with the lack of any resource, including oil, it will manifest itself with high prices.
As we reach limits of oil or any finite resource, the problem we encounter is an allocation problem.
Figure 1. Two views of future economic growth. Created by author.
As long as the quantity of resources we can extract from the ground keeps rising faster than population, there is no problem with limits. The tiny wedge that each person might get from these growing resources represents more of that resource, on average. Citizens can reasonably expect that future pension promises will be paid from the growing resources. They can also expect that, in the future, the shares of stock and the bonds that they own can be redeemed for actual goods and services.
If the quantity of resources starts to shrink, the problem we have is almost a “musical chairs” type of problem.
Figure 2. Circle of chairs arranged for game of musical chairs. Source
In each round of a musical chairs game, one chair is removed from the circle. The players in the game must walk around the outside of the circle. When the music stops, all of the players scramble for the remaining chairs. Someone gets left out.
The players in today’s economic system include
- High paid (or elite) workers
- Low paid (or non-elite) workers
- Businesses
- Governments
- Owners of assets (such as stocks, bonds, land, buildings) who want to sell them and exchange them for today’s goods and services
If there is a shortage of a resource, the standard belief is that prices will rise and either more of the resource will be found, or substitution will take place. Substitution only works in some cases: it is hard to think of a substitute for fresh water. It is often possible to substitute one energy product for another. Overall, however, there is no substitute for energy. If we want to heat a substance to produce a chemical reaction, we need energy. If we want to move an object from place to place, we need energy. If we want to desalinate water to produce more fresh water, this also takes energy.
The world economy is a self-organized networked system. The networked system includes businesses, governments, and workers, plus many types of energy, including human energy. Workers play a double role because they are also consumers. The way goods and services are allocated is determined by “market forces.” In fact, the way these market forces act is determined by the laws of physics. These market forces determine which of the players will get squeezed out if there is not enough to go around.
Non-elite workers play a pivotal role in this system because their number is so large. These people are the chief customers for goods, such as homes, food, clothing, and transportation services. They also play a major role in paying taxes, and in receiving government services.
History says that if there are not enough resources to go around, we can expect increasing wage and wealth disparity. This happens because increased use of technology and more specialization are workarounds for many kinds of problems. As an economy increasingly relies on technology, the owners and managers of the technology start receiving higher wages, leaving less for the workers without special skills. The owners and managers also tend to receive income from other sources, such as interest, dividends, capital gains, and rents.
When there are not enough resources to go around, the temptation is to use technology to replace workers, because this reduces costs. Of course, a robot does not need to buy food or a car. Such an approach tends to push commodity prices down, rather than up. This happens because fewer workers are employed; in total they can afford fewer goods. A similar downward push on commodity prices occurs if wages of non-elite workers stagnate or fall.
If wages of non-elite workers are lower, governments find themselves in increasing difficulty because they cannot collect enough taxes for all of the services that they are asked to provide. History shows that governments often collapse in such situations. Major defaults on debt are another likely outcome (Figure 3). Pension holders are another category of recipients who are likely to be “left out” when the game of musical chairs stops.
Figure 3 – Created by Author.
The laws of physics strongly suggest that if we are reaching limits of this type, the economy will collapse. We know that this happened to many early economies. More recently, we have witnessed partial collapses, such as the Depression of the 1930s. The Depression occurred when the price of food dropped because mechanization eliminated a significant share of human hand-labor. While this change reduced the price of food, it also had an adverse impact on the buying-power of those whose jobs were eliminated.
The collapse of the Soviet Union is another example of a partial collapse. This collapse occurred as a follow-on to the low oil prices of the 1980s. The Soviet Union was an oil exporter that was affected by low oil prices. It could continue to produce for a while, but eventually (1991) financial problems caught up with it, and the central government collapsed.
Figure 4. Oil consumption, production, and inflation-adjusted price, all from BP Statistical Review of World Energy, 2015.
Low prices are often a sign of lack of affordability. Today’s oil, coal, and natural gas prices tend to be too low for today’s producers. Low energy prices are deceptive because their initial impact on the economy seems to be favorable. The catch is that after a time, the shortfall in funds for reinvestment catches up, and production collapses. The resulting collapse of the economy may look like a financial collapse or a governmental collapse.
Oil prices have been low since late 2014. We do not know how long low prices can continue before collapse. The length of time since oil prices have collapsed is now three years; we should be concerned.
Myth 2. (Related to Myth 1) If we wait long enough, renewables will become affordable.
The fact that wage disparity grows as we approach limits means that prices can’t be expected to rise as we approach limits. Instead, prices tend to fall as an increasing number of would-be buyers are frozen out of the market. If in fact energy prices could rise much higher, there would be huge amounts of oil, coal and gas that could be extracted.
Figure 5. IEA Figure 1.4 from its World Energy Outlook 2015, showing how much oil can be produced at various price levels, according to IEA models.
There seems to be a maximum affordable price for any commodity. This maximum affordable price depends to a significant extent on the wages of non-elite workers. If the wages of non-elite workers fall (for example, because of mechanization or globalization), the maximum affordable price may even fall.
Myth 3. (Related to Myths 1 and 2) A glut of oil indicates that oil limits are far away.
A glut of oil means that too many people around the world are being “frozen out” of buying goods and services that depend on oil, because of low wages or a lack of job. It is a physics problem, related to ice being formed when the temperature is too cold. We know that this kind of thing regularly happens in collapses and partial collapses. During the Depression of the 1930s, food was being destroyed for lack of buyers. It is not an indication that limits are far away; it is an indication that limits are close at hand. The system can no longer balance itself correctly.
Myth 4: Wind and solar can save us.
The amount of energy (other than direct food intake) that humans require is vastly higher than most people suppose. Other animals and plants can live on the food that they eat or the energy that they produce using sunlight and water. Humans deviated from this simple pattern long ago–over 1 million years ago.
Unfortunately, our bodies are now adapted to the use of supplemental energy in addition to food. The use of fire allowed humans to develop differently than other primates. Using fire to cook some of our food helped in many ways. It freed up time that would otherwise be spent chewing, providing time that could be used for tool making and other crafts. It allowed teeth, jaws and digestive systems to be smaller. The reduced energy needed for maintaining the digestive system allowed the brain to become bigger. It allowed humans to live in parts of the world where they are not physically adapted to living.
In fact, back at the time of hunter-gatherers, humans already seemed to need three times as much energy total as a correspondingly sized primate, if we count burned biomass in addition to direct food energy.
Figure 6 – Created by author.
“Watts per Capita” is a measure of the rate at which energy is consumed. Even back in hunter-gatherer days, humans behaved differently than similar-sized primates would be expected to behave. Without considering supplemental energy, an animal-like human is like an always-on 100-watt bulb. With the use of supplemental energy from burned biomass and other sources, even in hunter-gatherer times, the energy used was equivalent to that of an always-on 300-watt bulb.
How does the amount of energy produced by today’s wind turbines and solar panels compare to the energy used by hunter-gatherers? Let’s compare today’s wind and solar output to the 200 watts of supplemental energy needed to maintain our human existence back in hunter-gatherer times (difference between 300 watts per capita and 100 watts per capita). This assumes that if we were to go back to hunting and gathering, we could somehow collect food for everyone, to cover the first 100 watts per capita. All we would need to do is provide enough supplemental energy for cooking, heating, and other very basic needs, so we would not have to deforest the land.
Conveniently, BP gives the production of wind and solar in “terawatt hours.” If we take today’s world population of 7.5 billion, and multiply it by 24 hours a day, 365.25 days per year, and 200 watts, we come to needed energy of 13,149 terawatt hours per year. In 2016, the output of wind was 959.5 terawatt hours; the output of solar was 333.1 terawatt hours, or a total of 1,293 terawatt hours. Comparing the actual provided energy (1,293 tWh) to the required energy of 13,149 tWh, today’s wind and solar would provide only 9.8% of the supplemental energy needed to maintain a hunter-gatherer level of existence for today’s population.
Of course, this is without considering how we would continue to create wind and solar electricity as hunter-gatherers, and how we would distribute such electricity. Needless to say, we would be nowhere near reproducing an agricultural level of existence for any large number of people, using only wind and solar. Even adding water power, the amount comes to only 40.4% of the added energy required for existence as hunter gatherers for today’s population.
Many people believe that wind and solar are ramping up rapidly. Starting from a base of zero, the annual percentage increases do appear to be large. But relative to the end point required to maintain any reasonable level of population, we are very far away. A recent lecture by Energy Professor Vaclav Smil is titled, “The Energy Revolution? More Like a Crawl.”
Myth 5. Evaluation methods such as “Energy Returned on Energy Invested” (EROI) and “Life Cycle Analyses (LCA)” indicate that wind and solar should be acceptable solutions.
These approaches are concerned about how the energy used in creating a given device compares to the output of the device. The problem with these analyses is that, while we can measure “energy out” fairly well, we have a hard time determining total “energy in.” A large share of energy use comes from indirect sources, such as roads that are shared by many different users.
A particular problem occurs with intermittent resources, such as wind and solar. The EROI analyses available for wind and solar are based on analyses of these devices as stand-alone units (perhaps powering a desalination plant, on an intermittent basis). On this basis, they appear to be reasonably good choices as transition devices away from fossil fuels.
EROI analyses don’t handle the situation well when there is a need to add expensive infrastructure to compensate for the intermittency of wind and solar. This situation tends to happen when electricity is added to the grid in more than small quantities. One workaround for intermittency is adding batteries; another is overbuilding the intermittent devices, and using only the portion of intermittent electricity that comes at the time of day and time of year when it is needed. Another approach involves paying fossil fuel providers for maintaining extra capacity (needed both for rapid ramping and for the times of year when intermittent resources are inadequate).
Any of these workarounds is expensive and becomes more expensive, the larger the percentage of intermittent electricity that is added. Euan Mearns recently estimated that for a particular offshore wind farm, the cost would be six times as high, if battery backup sufficient to even out wind fluctuations in a single month were added. If the goal were to even out longer term fluctuations, the cost would no doubt be higher. It is difficult to model what workarounds would be needed for a truly 100% renewable system. The cost would no doubt be astronomical.
When an analysis such as EROI is prepared, there is a tendency to leave out any cost that varies with the application, because such a cost is difficult to estimate. My background is in actuarial work. In such a setting, the emphasis is always on completeness because after the fact, it will become very clear if the analyst left out any important insurance-related cost. In EROI and similar analyses, there is much less of a tieback to the real world, so an omission may never be noticed. In theory, EROIs are for multiple purposes, including ones where intermittency is not a problem. The EROI modeler is not expected to consider all cases.
Another way of viewing the issue is as a “quality” issue. EROI theory generally treats all types of energy as equivalent (including coal, oil, natural gas, intermittent electricity, and grid-quality electricity). From this perspective, there is no need to correct for differences in types of energy output. Thus, it makes perfect sense to publish EROI and LCA analyses that seem to indicate that wind and solar are great solutions, without any explanation regarding the likely high real-world cost associated with using them on the electric grid.
Myth 6. Peer reviewed articles give correct findings.
The real story is that peer reviewed articles need to be reviewed carefully by those who use them. There is a very significant chance that errors may have crept in. This can happen because of misinterpretation of prior peer reviewed articles, or because prior peer reviewed articles were based on “thinking of the day,” which was not quite correct, given what has been learned since the article was written. Or, as indicated by the example in Myth 5, the results of peer reviewed articles may be confusing to those who read them, in part because they are not written for any particular audience.
The way university research is divided up, researchers usually have a high level of specialized knowledge about one particular subject area. The real world situation with the world economy, as I mentioned in my discussion of Myth 1, is that the economy is a self-organized networked system. Everything affects everything else. The researcher, with his narrow background, doesn’t understand these interconnections. For example, energy researchers don’t generally understand economic feedback loops, so they tend to leave them out. Peer reviewers, who are looking for errors within the paper itself, are likely to miss important feedback loops as well.
To make matters worse, the publication process tends to favor results that suggest that there is no energy problem ahead. This bias can come through the peer review process. One author explained to me that he left out a certain point from a paper because he expected that some of his peer reviewers would come from the Green Community; he didn’t want to say anything that might offend such a reviewer.
This bias can also come directly from the publisher of academic books and articles. The publisher is in the business of selling books and journal articles; it does not want to upset potential buyers of its products. One publisher made it clear to me that its organization did not want any mention of problems that seem to be without a solution. The reader should be left with the impression that while there may be issues ahead, solutions are likely to be found.
In my opinion, any published research needs to be looked at very carefully. It is very difficult for an author to move much beyond the general level of understanding of his audience and of likely reviewers. There are financial incentives for authors to produce PC reports, and for publishers to publish them. In many cases, articles from blogs may be better resources than academic articles because blog authors are under less pressure to write PC reports.
Myth 7. Climate models give a good estimate of what we can expect in the future.
There is no doubt that climate is changing. But is all of the hysteria about climate change really the correct story?
Our economy, and in fact the Earth and all of its ecosystems, are self-organized networked systems. We are reaching limits in many areas at once, including energy, fresh water, the number of fish that can be extracted each year from oceans, and metal ore extraction. Physical limits are likely to lead to financial problems, as indicated in Figure 3. The climate change modelers have chosen to leave all of these issues out of their models, instead assuming that the economy can continue to grow as usual until 2100. Leaving out these other issues clearly can be expected to overstate the impact of climate change.
The International Energy Agency is very influential with respect to which energy issues are considered. Between 1998 and 2000, it did a major flip-flop in the importance of energy limits. The IEA’s 1998 World Energy Outlook devotes many pages to discussing the possibility of inadequate oil supplies in the future. In fact, near the beginning, the report says,
Our analysis of the current evidence suggests that world oil production from conventional sources could peak during the period 2010 to 2020.
The same report also mentions Climate Change considerations, but devotes many fewer pages to these concerns. The Kyoto Conference had taken place in 1997, and the topic was becoming more widely discussed.
In 1999, the IEA did not publish World Energy Outlook. When the IEA published the World Energy Outlook for 2000, the report suddenly focused only on Climate Change, with no mention of Peak Oil. The USGS World Petroleum Assessment 2000 had recently been published. It could be used to justify at least somewhat higher future oil production.
I will be the first to admit that the “Peak Oil” story is not really right. It is a halfway story, based on a partial understanding of the role physics plays in energy limits. Oil supply does not “run out.” Peak Oilers also did not understand that physics governs how markets work–whether prices rise or fall, or oscillate. If there is not enough to go around, some of the would-be buyers will be frozen out. But Climate Change, as our sole problem, or even as our major problem, is not the right story, either. It is another halfway story.
One point that both Peak Oilers and the IEA missed is that the world economy doesn’t really have the ability to cut back on the use of fossil fuels significantly, without the world economy collapsing. Thus, the IEA’s recommendations regarding moving away from fossil fuels cannot work. (Shifting energy use among countries is fairly easy, however, making individual country CO2 reductions appear more beneficial than they really are.) The IEA would be better off talking about non-fuel changes that might reduce CO2, such as eating vegetarian food, eliminating flooded rice paddies, and having smaller families. Of course, these are not really issues that the International Energy Association is concerned about.
The unfortunate truth is that on any difficult, interdisciplinary subject, we really don’t have a way of making a leap from lack of knowledge of a subject, to full knowledge of a subject, without a number of separate, partially wrong, steps. The IPCC climate studies and EROI analyses both fall in this category, as do Peak Oil reports.
The progress I have made on figuring out the energy limits story would not have been possible without the work of many other people, including those doing work on studying Peak Oil and those studying EROI. I have also received a lot of “tips” from readers of OurFiniteWorld.com regarding additional topics I should investigate. Even with all of this help, I am sure that my version of the truth is not quite right. We all keep learning as we go along.
There may indeed be details of this particular climate model that are not correct, although this is out of my area of expertise. For example, the historical temperatures used by researchers seem to need a lot of adjustment to be usable. Some people argue that the historical record has been adjusted to make the historical record fit the particular model used.
There is also the issue of truing up the indications to where we are now. I mentioned the problem earlier of EROI indications not having any real world tie; climate model indications are not quite as bad, but they also seem not to be well tied to what is actually happening.
Myth 8. Our leaders are all knowing and all powerful.
We are fighting a battle against the laws of physics. Expecting our leaders to win in the battle against the laws of physics is expecting a huge amount. Some of the actions of our leaders seem extraordinarily stupid. For example, if falling interest rates have postponed peak oil, then proposing to raise interest rates, when we have not fixed the underlying oil depletion problem, seems very ill-advised.
It is the Laws of Physics that govern the world economy. The Laws of Physics affect the world economy in many ways. The economy is a dissipative structure. Energy inputs allow the economy to remain in an “out of equilibrium state” (that is, in a growing state), for a very long period.
Eventually the ability of any economy to grow must come to an end. The problem is that it requires increasing amounts of energy to fight the growing “entropy” (higher energy cost of extraction, need for growing debt, and rising pollution levels) of the system. The economy must come to an end, just as the lives of individual plants and animals (which are also dissipative structures) must come to an end.
Conclusion
We are facing a battle against the laws of physics which we are unlikely to win. Our leaders would like us to think that it can be won quite easily, but it cannot be. Climate change is presented as our only and most important problem, but this is not really the case. Our problem is that the financial system and energy systems are tightly connected. We are likely to have serious financial problems as we hit limits of many kinds, at more or less the same time.
Our leaders are not really as powerful as we would like. Even our scientific findings practically never come in perfect form. Our knowledge generally comes in a series of steps, which includes revisions to early ideas. At this time, it doesn’t look as though we have figured out a way to work around our rising need for energy and the problem with rising entropy.
Half a league, half a league,
Half a league onward,
All in the valley of Death
Rode the six hundred.
“Forward, the Light Brigade!
Charge for the guns!” he said.
Into the valley of Death
Rode the six hundred.
II
“Forward, the Light Brigade!”
Was there a man dismayed?
Not though the soldier knew
Someone had blundered.
Theirs not to make reply,
Theirs not to reason why,
Theirs but to do and die.
Into the valley of Death
Rode the six hundred.
_____________________
Alfred, Lord Tennyson
Um. Ok, I think we get it. There is a music blog that you can post on somewhere. Please go there now. Thank you.
The Royal Family just announced yesterday they are having another child. I guess they didn’t the memo that the world is coming to an end shortly..Oh well..Better luck next Civilization.
A horseman rides…
http://www.zerohedge.com/news/2017-10-18/57-dead-over-680-infected-madagascar-plague-outbreak-escalates
Attention Doomie Preppers….
Do you really want to die like this?
http://images.slideplayer.com/12/3517326/slides/slide_9.jpg
Or this?
https://i.pinimg.com/736x/61/88/7c/61887c18d7913c16174487bfab335fdf–concentration-camps-the-holocaust.jpg
I urge you … consider a means to put an end to the suffering … be totally prepared in advance
That is some pretty stark imagery FE.
I hate to see people wasting their time and money on futile prepping…. I wasted a fair bit myself on this nonsense….
Maybe if they are confronted with such imagery they will have an epiphany and realize just how ridiculous the whole idea is…. and then they can make informed decisions on how to use the time that remains…
If someone would have pointed all of this out to me 5 years ago — those lingering doubts would have turned to overwhelming certainties… and I would have saved a lot of cash … and I would not have been stressed every time I went overseas that I might get trapped away from my doomstead…
The doomie preppies should look at these images and comments as Public Service Messages… courtesy of Fast Eddy….
And all are franchises of the Big Daddy…. the Fed:
http://www.zerohedge.com/news/2017-10-17/how-elite-dominate-world-%E2%80%93-part-2-999-world-live-country-central-bank
WORLD’S LARGEST OIL COMPANIES: Deep Trouble As Profits Vaporize While Debts Skyrocket
https://dj0s31cxqi9ot.cloudfront.net/wp-content/uploads/2017/10/Worlds-Major-Oil-Companies-Long-Term-Debt.png?x65756
The world’s largest oil companies are in serious trouble as their balance sheets deteriorate from higher costs, falling profits and skyrocketing debt. The glory days of the highly profitable global oil companies have come to an end. All that remains now is a mere shadow of the once mighty oil industry that will be forced to continue cannibalizing itself to produce the last bit of valuable oil.
perhaps all oil companies will be nationalized.
no oil = no nations.
will there be any other choice?
sometimes you gotta do what you gotta do.
Nationalize American oil companies? How,? If it is a proven money looser than how does the government pay for it? Last I checked the US Government was in $20T dollars in debt. The only reason a nation would nationalize oil is to make profits from it.
IC must have oil, of course.
and that $20T can go to $30T as far as I care, as long as the FF’s are still here.
Yup. Why not 50 trillion? I think it can be done and will be done. So sayeth the Kurt.
Well all that money ($50T or more) will have to go into lifting oil out of the ground in some way. What good does that do for the rest of the economy? The oil will be there, yes, but, no one could afford to buy it or the products made with it. So, what is the point?
My understanding is that the government is running up larger and larger debts because the economy if failing. Running up more government debt (to get oil out of the ground) will not do anything to help the economy because the debt is a symptom of the disease of diminishing returns.
This is from 2014 – I wonder what the number is now given we keep reaching for high hanging fruit…
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
As more energy is used to produce oil (and coal and metals etc…) that means there is less nett energy available to the global economy – less taxes available to run countries – lower wages are paid out as inflation mounts etc…. the pie shrinks day after day month after month
Eventually there is too little left of the pie to operate BAU.
http://restlessboomers.com/wp-content/uploads/2013/06/2012-10-07_restlessboomers-shrinking-pie.jpg
http://econintersect.com/images/2015/5/60508902image2.png
“IC must have oil, of course.”
That doesn’t answer to Greg’s question. It doesn’t even make a relevant point for that matter.
US has been the host entity for global financial reserve system for past ~century, therefore debts don’t matter for a while in the visible plain, simply the contenders “and also runs” of the global system must unwillingly support the system of their own oppression, otherwise they would loose even more, their place at the table of plenty. That’s why Russia-China has not rocked the boat yet fully, despite some existing preparatory work and workaround plans, interestingly they have recently shown signs of realized frustration how truly boxed in everybody remains in order for the “mutual deal” staying on, as everybody kicks the can..
Oil companies are already subsidized by the money printing/zirp-nirp/.. and will continue to be subsidized by some marginal net energy gains in natgas, coal, NPPs-to-Tight Oil, etc.
Obviously, such last effort hard can kicking would eventually transform the social, economic, and political life profoundly and it will differentiate in details across the globe. Specifically, many countries-societies are going to fail irreversibly in complexity during early stages of this final act process, some enclaves might endure a bit longer, few decades and this “enduring” is not meant in their full spectrum of today’s capacity&capabilities, this is not about BAUlite rehash..
US debut has a long way to go … before it matters…
Rogoff was wrong – This Time is Different…. it really is…. OECD debt loads that would normally crater a country and force hyperinflation/default… are being ignored…
No sense in punishing the disobedient student when everyone is misbehaving. And there is that issue of putting the screws to a key country resulting in the collapse of BAU
https://scotterb.files.wordpress.com/2012/08/debtgdp.png
Yes, but still, there might be some individual surprises during this long drawn process. In this regard I’d tend to agree with Dr. Tim, that UK might be just few steps from accute currency inferno. After necessary dosage of sheer panic, the global would likely survive it, Euro continentals and Asians as well, some of the evaporated capital would be printed pronto to stabilize the world again. So, such rapid devaluation of GBP with some spillover into few other 2nd and 3rd tier countries could be on the horizon in ~2018.
In this scenario it would be possibly to *short (now) and then enjoy another lift up, say looking forward to ~2022ish..
*that’s the deflation next, followed by massive inflation (and rising markets) scenario, eventually banging into affordability barrier again, this time leading to more destructive correction
PS it would be the first quasi first tier country falling irreversibly into very abject poverty status before the major fireworks later, especially in terms of the others: US, EuroReich IV, SinoAsia, ..
“this is not about BAUlite rehash..”
More likely than BAUlite is BAUshite.
Indeed, when BAUnormal hits twilight all that will be left is the human garbage, pollution and feces. An oozing stinker for planet earth to deal with.
https://i.pinimg.com/736x/5b/20/71/5b20719ea5ea0234f2b57266d331732a–earth-day-planet-earth.jpg
You seem to be implying that humans are not the “chosen ones” with the responsibility (and ability) to save the planet. Your not thinking or behaving correctly.
“Saving the Planet”, oh the pompous utter nonsense. Now let’s listen to what the late George Carlin have to say about that.
https://i.pinimg.com/236x/77/de/0c/77de0c51218c4d3e7c5a66ae7bb7dbb9–george-carlin-the-planets.jpg
“Your not thinking or behaving correctly.”
Its just.. too.. Bwaahahaahahhahhahhahah…
http://gifimage.net/wp-content/uploads/2017/08/joker-laughing-gif-11.gif
Funny..
I agree – the govt will never nationalize these companies…
But the Fed is – and will continue – to make enormous amounts of interest free cash available to the industry to keep it alive…. just like they are making funds available to any large and important corporations that would otherwise fail
I agree, giving interest free loans to big oil companies would give a bit of an extension to BAU vs nationalizing them.
Once TPTB fully understand just how critically important it is for them to subsidize Big Oil, they will do whatever is necessary to kick the can down the road, including as you mention Greg, interest free loans I would add don’t to be paid back (if that’s what’s necessary). The agreement will essentially be; ‘we’ll keep the money flowing, if you keep the oil moving’. Only when both rivers stop will BAU end.
By subsidize, I mean much more than they already are.
Yeah that seems plausible.
I mean, if a nation can make 20 TRILLION dollars out of thin air, why not 20 more?
We are not using classical economics anymore. The new normal in our age of post peak everything is that nothing yields real profit anymore, instead there is a printing press which distributes money where it is needed. We need oil companies so they will go on producing oil from existing fields and possibly find more fields.
They might not have to nationalize per se, but at least handing out loans and subsidies where needed. This is IMO where many doomers go wrong. As long as there is confidence in a currency and society is fueled by a critical amount of resources, the printing press can go on and on.
It’s a game of musical chairs, or musical resources. Not musical money.
At some point total oil will peak. Soon after that we die
https://srsroccoreport.com/wp-content/uploads/2017/10/Worlds-Major-Oil-Companies-Long-Term-Debt.png
As we know … bankers are big on numbers…. so they would definitely see Big Oil slipping into bankruptcy … they would know that costs are through the roof — they would know that the global economy cannot tolerate 100+ oil….
So why are they continuing to fund this? No doubt they can see that the CBs have the backs of big oil …. so why not ride along…. they would understand that at some point this all blows to pieces… and that when it does it does not matter if you were long the trade…. when this blows — ‘I’ll be gone and you’ll be gone’
And by gone… not to another job in finance…. rather gone as in 6ft under… as in extinct….
https://srsroccoreport.com/wp-content/uploads/2017/10/Worlds-Major-Oil-Companies-Long-Term-Debt.png
breaking news:
http://www.foxnews.com/tech/2017/10/17/bigfoot-reportedly-sighted-in-northern-california-pictures-go-viral.html
it’s a distraction for sure!
“they” don’t want us paying attention to what’s really important!
ps: BAU tonight, baby!
Lived in eureka growing up. Big foot is real.
Eureka!
so, you are an eyewitness?
perhaps you have a sample of Bigpoop?
you know, they must eliminate.
other proof?
Yes, I seen Bigfoot. He was bigger than a bear!
our leaders know what their doing imagine a driverless car fitted with one of those batteries it states it can get up to 1000 miles before being recharged amazing http://www.hybridcars.com/renault-nissan-to-use-phinergys-aluminum-air-battery/
yes, I can imagine such a driverless car.
I can also imagine fusion reactors and round trips to Mars…
and my personal favorite, moon colonies!
Bigfoot or Driverless Car…
will either one be shown to be real?
https://www.youtube.com/watch?v=Cp25EqyKlww&t=2s
Electric vehicle battery 35 years ahead of its time was shelved for some unknown reason. Probably a big pay off.
I couldn’t find much data on these online, but if zinc-chloride batteries are so good, cheap, safe and long lasting, why did Elon go for the more expensive lithium ion? Size and weight issues?
No rapid charging, but 6 to 8 hours for a recharge would make zinc-chloride workable for a Power Wall, and since they don’t explode on impact they should be OK in cars too—if the owners were punctilious enough to plug them in every evening.
Just like the carburetor that allowed IC engines to get 200 mile per gallon was shelved
This has got to be the biggest waste of resources I’ve ever seen: weaponizing infectious microorganisms.
http://www.bbc.com/future/story/20170926-the-deadly-germ-warfare-island-abandoned-by-the-soviets
The benefit of deploying biological weapons, is close to nonexistent in my opinion, because it contaminates what would otherwise be land that could be inhabited by humans.
This happened during another, larger waste of resources–the Cold War.
I know others may say if there was no Cold War, there may have been two more billion people alive at the moment but I doubt that the Cold War was check on population.
Remember, humans are dumber than yeast.
It must have seemed like a good idea at the time.
When we organized that referendum, we didn’t expect the Spanish Inquisition!
https://youtu.be/QcjVbs6pSH0
no one EVER expects the Spanish Inquisition!
The Supply Chain Can’t Handle Skyrocketing Demand for Lithium-Ion Batteries
Lithium is “the new gasoline,” but our mining infrastructure isn’t designed to handle the electric car revolution.
https://motherboard.vice.com/en_us/article/zm3d9x/lithium-ion-battery-demand-supply-chain-tesla
The fact that all these major car companies are announcing huge roll outs of EVs…. BMW 12 models apparently — Volvo all models by 2019…
Leads me to believe that we are not going to live to see this happen….
EVs make ZERO sense — they are not green — they lose the manufacturers many thousands of dollars on every sale (even with govt support) —- and costs are only going to go up as demand for lithium skyrockets…
Also – there is the issue that there is very little demand for EVs. Even with huge rebates.
Clearly all of this is impossible — so I am thinking this is the cancer patient on his last legs…. writhing in agony …. and giving him control of the button that pumps painkillers into the body… it’s wide open now ….
The masses are getting hopium on full throttle as well….
FE, yes it is complete insanity. What happens when these cars makers sell 300 cars? When does the electric generation and transmission towers get built? What fuels the generators? What are they trying to tell us?
30 minutes minimum waiting to complete a charge…
http://euanmearns.com/electrifying-the-a9-trunk-road-in-scotland/
Now imagine trying to do this on a large scale where there are literally millions of vehicles travelling much longer distances … say the US interstate highways….
You would literally need thousands upon thousands of charging terminals…. the costs would be astronomical …. the space required would be gigantic …. the upgrades required for the grid monstrously expensive…. and if you were to actually manufacture that many cars the price of lithium would go through the roof…. $100k for a simple EV – even with subsidies?
Yet the MSM publishes these edicts that insist entire countries will soon be going EV only…. not a single question raised about the obstacles….about the absolute impossibility of any of this happening … not in 10 years … not in 50 years… not ever… It is simply not possible.
And of course not a single mention of this http://www.zerohedge.com/news/2017-08-18/inconvenient-fact-morgan-stanley-says-electric-cars-create-more-co2-they-save
Nope. We are told that these vehicles are emission free. And if one of the less stuuuupid humans says – hang on — there are emissions associated with EVs …. the MSM is quick to jump and tout clean coal…. thereby calming the less stuuupid (but still very stuuuupid) few who dare to challenge the Lie.
(where else do we see the MSM rush in with Lies every time one of us stuuupid humans questions the narrative…hmmmm let me think about that…. I am after all only a stuuuupid human….. don’t you just love how the MSM changed the terminology from gggggglllooooobbbbbaalllll wwwwwaaaarrrrrmmminggggg to kkkkllllimmmattte ccccchhhhaaangggeee when a few stuuuupid humans pointed out that the kkklllimmmmatte was not waaaaarming … that in many places it was in fact getting colder… hmmmmmm…)
Once again — the MSM does NOT exist to inform …. it exists to control what you think … to tell you what to say when someone brings up the topic of peak oil or any other uncomfortable topic…
It arms you with catch phrases … fake facts…. it thoroughly convinces you KNOW….
Because you are up to date on your current events — you read the news —- you have always read the news since you were a youngster — heck you always were at the top of your class since grade one when it came to presenting Current Events…..
http://www.azquotes.com/picture-quotes/quote-those-who-do-not-read-the-news-are-uninformed-those-who-do-are-misinformed-mark-twain-76-98-79.jpg
ALWAYS… on EVERY issue. The MSM LIES
“Yet the MSM publishes these edicts that insist entire countries will soon be going EV only…. not a single question raised about the obstacles….about the absolute impossibility of any of this happening … not in 10 years … not in 50 years… not ever… It is simply not possible.” – Nice rant!
“Lithium is “the new gasoline,” Really? What is lithium without fossil fuels?
Wow…. I can’t believe someone actually said that….
Well actually…. I can…. humans are very stuuuupid….
Brother-in-law(BIL): Electric driverless cars are the future!
ME: Where’s the electricity going to come from?
BIL: Where do we get it from now?
ME: Fossil fuels.
BIL: Ok, we’ll keep using them
ME: What about pollution and the environment?
BIL: It will be the same as today,..they’ll figure it out.
Most people believe that the future will look like the past, just with more and better shiny objects. Change will be gradual, so there’s no need to sacrifice lifestyle. Real change? That’s a problem for the next generation.
If only you could just beat the stuuupidity out of people….
let me fix that “If only we could beat the stupid.”
Ah what the f789 … beat the stuuuupid to death… it would be good for the gene pool
Lithium is like anything else. If we could get the price up arbitrarily high, we could get any amount out. The problem is that we cannot. We get hit by growing wage disparity, among other things, limiting the price increase.
Half of one banks loan book are interest only loans! But Australia’s top bankers don’t seem to care, as long as they are in the “game”.
Interest-only loans are a huge problem for the Australian economy
https://edge.alluremedia.com.au/uploads/businessinsider/2017/10/GettyImages-852817790.jpg
They have made a huge amount of interest-only loans, at historically low interest rates, to buyers in a frothy housing market, who spend a large chunk of their income on interest payments. This certainly looks troubling. It may not be US sub-prime, but it could be ugly. Very ugly. To put it in context, there appears to be in the neighbourhood of A$1 trillion of interest-only loans on the books of Australian banks. I say “appears to be” because reporting requirements are so lax it’s hard to know for sure…
The way I see it, banks are rapidly heading for a time when they have two choices (if they are to have customers for loan products):
A) Interest only loans.
B) 0% interest loans.
If I was a bank with this choice, I would choose B. Interest only loans are forever loans and never get paid off. With 0% there is a chance the loan might
be paid off … then the bank makes no money. Can’t have that.
Meant to say banks would choose “A” over “B”.
Well I think for all intents and purposes, we’re already there. Although in some places, like Australia, there’s a floor, which I believe’s already breached. Here rates simply cannot go lower, since it would blow the economy sky high almost immediately, via a crack-up boom.
choice 3 negative interest rate products
Touche . I doubt banks would go for negative interest rate consumer loans. However, they would love to give you a negative interest rate savings account rate. LOL!
I am trying to apply for a million dollar loan with a negative interest rate.
10 or 20 % will do.
haven’t found a bank that will go along with me.
yet.
there’s always tomorrow (and BAU tomorrow too, I bet!)
Now that would be a superb way to stimulate the global economy…. until hyperinflation blew it into a billion pieces…
the interest only loans only go to a maximum of 5 years and the aussie banks are bringing them to an end no big deal the banks wont make much profit for a few years at most especially once interest rates go negative in australia over the next few years this is part and parcel of the post peak world of peak oil
Please refrain from writing nonsense…
Just the Commonwealth Bank’s loan book is 98% of Australia’s GDP. 40% of it is interest only. They are leveraged at 30:1. A 3% default is sufficient to wipe them and the Australian economy out. Then there’s the other three majors.
And interest rates can’t go negative here. They are as low as they can dare go. The economic disruption from an overheated property market is already a ticking time bomb.
Where do you get this nonsense from? Does it get beamed down to you from the aliens?
https://wolfstreet.com/2017/10/17/weak-consumers-slowing-economy-uk-inflation-jumps-most-5-years-rate-hike-november/
CBs – caught between a rock… and a hard place
The Titanic remains on course (as expected). Nothing is pointing to a recovery in oil prices or, the economy. Again, no surprises to OFW’s.
This Titanic … is taking a lot longer than I expected… to sink
No doubt the solar panels and wind turbines are keeping it afloat. LOL!
well, it hit a massive iceberg in 2008 but didn’t sink.
took on some damage, lost some speed.
but still afloat after 9 years.
so why not 9 more years?
keep the BAU-LL rolling!
bringing back Tim Groves’ comment from a couple days ago:
“My take:
Collapse—the end of BAU—will always seem to be ten years away right up to the point when it occurs due to a catastrophic systemic failure that can’t be repaired or worked around.”
so this is like hitting a bigger iceberg…
a black swan event.
while this idea is extremely intriguing and perhaps may become reality…
I’m still favoring that it will be the hitting of many icebergs leading finally to The Collapse.
I’m thinking that The Collapse still “seems to be ten years away”.
and Tim’s comment is out there, haunting me in the darkness.
Thanks, Tim!
Recall the run up to 2008….. the global economy was absolutely ROARING….. you had the average person in places like America making fortunes in the property market…. you had Liar Loans… people with minimal income and poor credit buying homes…
Recall the Big Short… a stripper owned how many properties?
And the home prices were lifting off…. there were millions of ‘lottery’ winners across the US… and they were living large!
And then one day — virtually over night …. this all ground to a halt….
That’s what will happen this time — because this is the way all bubbles end…. they do not slowly deflate – they explode
This time the CBs will not be able to step in …. they will have used up all their gimmicks…
This time gimmicks will not work — because we will have run into resource depletion issues…. the CBs will not be able to subsidize big oil …. because they will have done all they can… the ratio will no longer work… no matter what they do.
And the oil that is in the ground will remain in the ground — and because BAU cannot function without affordable oil….. it will collapse.
And then the crazy will start…. 7.5 billion will pop out of their bubbles…. into the real world…. and they will be on the hunt for food….
Mind your fingers…. these animals are wild … this won’t be a petting zoo… oh … and keep your children close….. humans tend to eat them first when desperate.
And permie doomies…. this is when you will remember what Fast Eddy said … as the hordes overrun you hobby farms… when the neighbours come begging….. how many years did you waste on what is a really duuumb idea… when you could have been living it up.
2 brothers of Cezch-Japanese origin are candidates in the Czech legislative election, 2017: one of them has got already his own populist party and is already quite successful in the Czech politics:
https://en.wikipedia.org/wiki/Tomio_Okamura
Another brother is a candidate under the Christian party KDU-CSL:
https://www.youtube.com/watch?v=Pxg3BYgo6t8
Energy declining Europe more and more resembles Japan…
2 brother fight between each other show the elites are turn on each other
The mother of these two brothers comes from the same region on the Czech-Slovak border as Ivana Trump.
Tomio is for leaving EU like Britain, Hayato is against leaving EU.
Hayato again:
https://1gr.cz/fotky/lidovky/17/033/lnc460/RSA6a3446_162229_7183277.jpg
What strikes me, when I read the biography of Ivana Trump is, that she was married with 4 men, but she has children only with Trump…
https://en.wikipedia.org/wiki/Ivana_Trump
“Alfred Winklmayr, 44, wed Ivana in 1971 so that she could obtain a passport and flee her native Czechoslavakia, the Post said. The marriage lasted just two years and was apparently never consumated.” – Ah, thats it…
https://www.upi.com/Archives/1990/02/24/Report-Ivana-Trumps-ex-hubby-ready-to-spill-beans/2823635835600/
Really the first lady of the president…
So Ivana would be an illegal immigrant, except that she paid someone to get married to her.
Well, the past of the current leaders is often dubious, as they are mostly adventurers…
Hi Gail, would you care to comment on this: https://srsroccoreport.com/thermodynamic-oil-collapse-interview-why-the-global-economy-will-disintegrate-rapidly/
and what is referred to as the Hill’s group report?
http://peakoilbarrel.com/on-the-thermodynamic-model-of-oil-extraction-by-the-hills-group/
I am not convinced. Too many holes in the Hill’s group report. EROEI theory is quite limited to begin with. Hill group’s variation on EROEI does not appear to be an improvement.
It has good points and is well worth a read.
Once the equilibrium point has been reached, that is, when the FF industry can no longer provide any net energy gains for growing the economy, then, undeniably the FF industry will shrink together with the net output, and most likely the [real] economy too, as it tapers off towards a state with the sun as the only energy source and source of all humanity’s heat exchange with the surroundings and cold sink of interstellar space.
I expect this joint to be lit until the end of this century. Maybe there will be a competent electrical/mechanical replacement of and instead of mankind by then.
And off to the stars they will go.
Yeah, I think the general idea is unobjectionable. However the exact predictive models and curves imply a level of certainty that I think is largely an illusion based upon aggregating hugely complicated data sets. They apply simplifying basic concepts to the issue which a number of reviewers have noted. For instance, they predict a maximum economic price of oil by year.
I’m a mechanical engineer and I find it a bit hard to follow. The HIll’s group deals a lot with the fact that oil extraction has thermal functions (such as heating and lifting oil). Louis Arnoux has related work.
Their basic idea when applied broadly is that there is a point at which oil no longer represents a net energy source to the economy based on the thermal and mechanical energy used to extract (100% or more of the equivalent chemical energy of a barrel of oil is expended in the cost of extraction). Their more bold point is that we have already crossed the point at which over 50% of the potential chemical energy use of a barrel of oil is expended in the cost of extraction – which they use as evidence for the claim that oil is on a perpetual value down-slope on the supply side, not the demand side.
I have to say even reading Hubbard is quite demanding for non industry professionals. I think with some of these things understanding the basic issue is helpful, but it is quite demanding to really wrap your head around the whole argument – and remain skeptical about dates and predictions.
I think Hill really took off because it correlates well with many other predictions in terms of time-frame. There can be reasons why models fit data, but may still be wrong.
“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” — Mark Twain
What do you know for sure Joe?
He was pretty much an expert on everything-
Las Vegas shooting: Security guard who led police to gunman Stephen Paddock has ‘vanished’
http://www.independent.co.uk/news/world/americas/las-vegas-shooting-stephen-paddock-jesus-campos-secuirty-guard-vanished-unarmed-police-gunman-a8004411.html
The whole “story” just stinks to high heaven.
Vanished is sensationalism alert, I presume the hotel told him to lay low.
Orlov wrote on it on his blog today, just skimmed it.