The Approaching US Energy-Economic Crisis

I was recently asked to give a talk called, “The Approaching US Energy-Economic Crisis.” In other words, how might the United States encounter problems that lead to a crisis? As we will see, many of the problems that could lead to a crisis (such as increased wage disparity and difficulty in collecting enough taxes) are issues that we are already beginning to encounter.

In this talk, I first discuss the connection between energy and the economy. Without this connection, it doesn’t make sense to talk about a crisis arising with respect to energy and the economy. I then discuss seven issues that could lead to a US energy-economic crisis.

Economic Growth Is Closely Tied to Energy Consumption

If we look at world data, it is clear that there is a close tie between energy consumption and economic growth.

Slide 2

On an individual country basis, there can be the belief that we have reached a new situation where a particular country doesn’t really need growing energy supply for economic growth.

Slide 3

For example, on Slide 3, the recent nearly vertical line for the US suggests that the US economy can grow with almost no increase in annual energy consumption. This rather strange situation arises because the standard calculation misses energy embodied in imported goods. Thus, if the United States wants to outsource a great deal of its manufacturing to China, the energy consumption used in making these goods will appear in China’s data, not in the United States’ data. This makes the country that has outsourced manufacturing look very good, both with respect to energy consumption and CO2 emissions.

Buying imported crude oil from elsewhere (such as Saudi Arabia) is also helpful in keeping down energy consumption, because it takes energy of various types to extract oil. If oil extraction takes place in Saudi Arabia, using steel pipes from China, the energy used in extraction will appear in the data of China and Saudi Arabia. Neither China nor Saudi Arabia obtains as much economic growth, relative to its energy expenditures, as does the US. In order to make sense of what is happening, we need to look at the world total.

Slide 4

We see that the pattern of world energy consumption growth follows a pattern not terribly different from that of China. Its growth is not “straight up.” It does take growing energy supply to create additional goods and services. We are getting a little more efficient in this process over time, but energy is very much needed in many areas of the economy:

  • By businesses, to create goods, such as food, and services, such as vacation travel;
  • By governments, to create roads, schools, and other public services;
  • By individual citizens, to cook food, to heat homes, and for transportation.

The World Economy Is Organized Based on the Laws of Physics

There are many self-organized systems that seem to grow of their own accord in the presence of available energy supplies (that is, in thermodynamically open systems). Plants and animals are examples of growing self-organized systems. Hurricanes, ecosystems, and stars are also such systems. Economies also seem to be such systems. The name given to such a system is a dissipative system.

Slide 5 – Source: http://www.rinusroelofs.nl/structure/davinci-sticks/gallery/gallery-01.html

I visualize the world economy as being somewhat like a child’s building toy. It consists of many different elements, a few of which are listed on Slide 5. An economy is self-organized in that new businesses are formed when some entrepreneur sees an opportunity. Consumers decide which product to buy based on which product best serves their needs and based on price. Governments decide on changes to laws and tax levels, depending upon how the economy is functioning at a given time.

This system gradually grows over time, as more businesses and customers are added. As new products and new businesses are added, products and businesses that are no longer needed are taken away. For example, when the private passenger automobile was invented, there was no longer a need to feed and house a large number of horses to be used for transportation purposes. Thus, the system self-organized to eliminate the services needed to care for the many horses used for transportation.

Even if we wanted to get rid of cars and go back to horses, we really could not do so now. In some sense, the structure shown on Slide 5 is hollow, because prior capabilities that are no longer needed tend to disappear. The hollow nature of the economy makes it almost impossible to go backward if we somehow lose our existing capabilities–not enough oil, or an electricity problem, or an international trade problem, or a financial problem. Instead, we will need to build new systems that will function in the new context: depleted resources, a very high population level, high pollution levels, and degraded soils. The existing self-organized system is likely to collapse back to only the part that can be sustained.

Slide 6

Slide 6 is a preview of where this presentation is headed.

Slide 7

Slide 7 describes the issue most people are concerned about: oil prices will rise too high for consumers. In fact, we clearly have had problems with high prices in the recent past. The high prices in 2007 and early 2008 seem to have punctured the debt bubble that existed at that time, as I discuss in an academic article, Oil Supply Limits and the Continuing Financial Crisis.

Shortly before oil prices started to turn back up again in late 2008, the United States instituted a policy of Quantitative Easing (QE), in an attempt to bring interest rates down and thus encourage more debt. Additional debt at low interest rates can “pump up” the economy in several different ways:

[1] Some of this low interest debt can be used by governments to provide funding for unemployment benefits and projects such as road building.

[2] Some of this low interest debt can be used by businesses to open new factories, and thus hire more workers.

[3] Some of this low interest debt can be used by individual citizens to purchase a home, a car, or a college education.

It is the pumping up of the economy with low interest debt that seems to stimulate the economy in a way that raises oil prices. When the US discontinued its third and last phase of QE in late 2014 (shown as “End US QE3” in Slide 7), the pumping up action began to disappear, and oil prices again fell.

Slide 8

The figure in Slide 8 may seem a little exaggerated, but I wanted to make a point. Our wages can roughly be divided into three pieces:

[1] Essential goods whose prices are very much influenced by the price of oil, such as food and gasoline. Besides food and gasoline, the cost of replacing a road, particularly with asphalt, very much depends on the price of oil. Higher costs for roads will be reflected in taxes that we are required to pay. Almost any kind of product that is shipped is affected by the price of oil, because oil is the usual transport fuel. Oil is typically used in the extraction of metal ores, so the price of metals used in making cars, appliances, and other goods is affected by the price of oil. Thus, an oil price increase indirectly leads to inflation in the cost of a wide range of essential goods and services.

To make matters worse, fluctuations in the price of oil can be very large. Between 2000 and 2008, we saw monthly average oil price fluctuate from under $20 per barrel to over $130 per barrel. Thus, while the growth in the food and gasoline segment is somewhat exaggerated, the impact of price changes is much larger than a person might expect, looking only at the impact of higher gasoline prices for a consumer’s vehicle.

[2] Repayment of loans, such as mortgage payments and auto payments. Loan repayments of these types tend to make up a large portion of most people’s spending. If people don’t own their own home, they have rent payments to make. These rent payments are in some ways similar to loan payments, because they indirectly cover the cost of someone else’s mortgage. These costs tend to be fixed, even if the price of oil goes up.

[3] Everything else. These are the non-essential items that we cut back on when budgets are too tight. Examples include charitable contributions, visits to restaurants, and vacation trips.

Looking at Slide 8, it becomes clear that if a government wants to “counteract” high oil prices, it needs to lower interest rates. This will tend to make car payments, mortgage payments, educational loans, and even rents somewhat more affordable, at least for people whose loans are affected by the new low interest rates. Often, homeowners are allowed to refinance, to take advantage of the new lower interest rates.

The plan this year is to raise, rather than lower, interest rates. Needless to say, this has the opposite effect; it tends to reduce the size of the “everything else” segment of our income. This effect tends to be recessionary.

Slide 9

Monarch Air is a British airline that failed recently. It boasted very low fares. One of the problems leading to its failure was a falling pound relative to the US dollar, raising both the price of oil and the price of new airplanes.

Today, the price that oil producers need, including adequate funds for (a) reinvestment and (b) the high taxes that governments need to continue their programs, is likely $100 per barrel or more. Such a price would likely cause recession, because purchases in the “Everything Else” category on Slide 8 would be squeezed.

Slide 10

Most people don’t think about the possibility of oil prices falling too low for producers, but this is a major problem today. When prices are too low, oil companies need to borrow money to continue to operate. They are likely to cut back on developing new extraction sites. With low prices, the tax revenue that the governments of oil-exporting countries are able to collect tends to fall too low, leading to cutbacks in government programs and a need for more debt. Saudi Arabia is running into this difficulty.

The problems that arise from low oil prices can be hidden for quite a while, because investors are likely to see the low prices as a great opportunity. They think, “Surely, oil prices will rise again.” So investors are eager to buy more shares of stock, and banks are willing to issue more debt. At some point, the situation becomes unsustainable, and no more loans are offered.

It has now been about three years since prices fell to a level that is clearly too low for oil producers. It cannot be many more years before something has to “break.” Venezuela is an oil exporter that cannot collect enough revenue from oil exports to afford needed goods, such as food. Other oil exporters may eventually encounter similar problems.

Slide 11

A major reason for falling oil prices is growing wage disparity and the resulting loss in purchasing power for the bottom 90% of workers. In the United States, the bottom 90% obtained about 62% of total income as recently as 1992. In a 2016 Federal Reserve survey, only 49.7% of total income went to the bottom 90%.

The reason why wage disparity is important is because the wealthiest 1% (or even the wealthiest 10%) can’t purchase very much of the goods created using oil. The wealthiest 1% can’t eat very much more food than everyone else. They can only drive one car at a time. In order to have adequate demand for oil, the bottom 90% must have adequate purchasing power for goods such as homes and cars. If young people live with their parents longer, and aren’t able to afford homes, this holds down demand for oil. So does transferring manufacturing to countries where wages are so low that few people can afford cars and other manufactured goods.

Slide 12

Slide 12 shows the Federal Reserve’s graph of the share of families who own (as opposed to rent) their primary residence. There has been a drop in homeownership from 69% in 2004 to less than 64% in 2016. This is a period when wage disparity has been increasing.

Slide 13

Wind and solar are intermittent sources of electricity. They work adequately well in applications where intermittency is no problem, such as charging a cell phone that has a battery, or powering a desalination plant that is not expected to operate around the clock. Most analyses of the benefit of wind and solar are suitable only for these limited situations, because they omit any estimate of the cost of mitigating intermittency.

Intermittency becomes a major problem when wind and solar are added to the electric grid. Wholesale electricity prices may drop to very low levels when both wind and solar electricity are available. At times, prices may become negative. Electricity generation that is designed to be used most of the time (such as coal, nuclear, and even some types of natural gas generation) cannot survive without subsidies to offset the artificially low prices the system produces. The need for subsidies for backup electricity providers is really an indirect cost of adding intermittent types of electricity to the grid, but today’s pricing does not reflect this.

A different workaround for intermittency is to add a large amount of battery backup or other type of storage. In theory, batteries could be used to store electricity generated in the summer for use in the winter, when heating needs are greatest.

Another approach to intermittency is to greatly overbuild intermittent renewables, with the idea of using only that portion of electricity generation that is really needed at any point in time. Yet another approach is adding extra (lightly used) long distance transmission, to try to smooth out fluctuations.

Any of these approaches tends to be expensive. Academic papers estimating the benefit of wind and solar nearly always overlook the cost of mitigating intermittency. Thus, they suggest wind and solar can be solutions, when, in fact, their high cost is likely to lead to the same damaging economic effects as high oil prices. (See Slide 8.)

Slide 14

The dotted line on Slide 14 shows the downward trend in German wholesale electricity prices, as more and more intermittent electricity has been added to the grid. At the same time, total residential electricity prices have risen to higher and higher levels. The countries with the greatest use of wind and solar tend to have the highest retail rates, as shown in Figure 1 below (not in presentation).

Figure 1. Figure by Euan Mearns showing relationship between installed wind + solar capacity and European electricity rates. Source Energy Matters. (Image not part of presentation.)

Slide 15

As we discussed earlier, the “standard” workaround for high oil prices is low interest rates, because of the relationship shown in Slide 8. At some point, however, interest rates fall about as low as they can go.

Slide 16

The interest rates shown on Slide 16 are those for 10-year treasuries. These typically underlie mortgage rates. These rates have been falling since 1981, helping to prop up prices for homes, land, farmland, and other assets purchased with long-term debt. Low interest rates make monthly payments more affordable than high interest rates, so more people can afford to buy such assets. With greater demand, asset prices tend to rise.

Also, with all of the talk about the US continuing to raise interest rates, those owning bonds realize that rising interest rates will cause the selling price of bonds they hold in their portfolio to fall. Thus, pension funds and other organizations that are making a choice between buying bonds (which are certain to fall in selling price, as interest rates rise) and buying stocks, will choose to “overweight” stocks in new purchases for their portfolios. This will tend to push the price of stocks higher, regardless of the earnings potential of the underlying companies.

One thing I didn’t mention in the presentation, but is probably worth pointing out here: Short-term interest rates have been rising since late 2014, even as 10-year treasuries have been holding fairly steady (Figure 2, below). These shorter-term interest rates affect payments on other types of transactions–adjustable rate mortgages and auto loans, for example.

Figure 2. Chart showing 3-month, 1-year, and 2-year interest rates. Chart created by St. Louis Federal Reserve.

These short-term interest rates have been creeping upward, indirectly making certain types of goods less affordable. The increase in short-term interest rates will, by itself, push the economy in the direction of recession.

Eventually, the bubble in asset prices can be expected to collapse, as it did in 2008. Perhaps this will happen when corporate profits fall too low; perhaps this will happen when the economy hits recession. The prices of many types of assets, including shares of stock, prices of homes, and prices of businesses can be expected to fall. There are likely to be many debt defaults in the governmental, business, and personal sectors of the economy. In such a situation, banks may fail.

Slide 17

The goods and services that are delivered each year require the use of physical resources such as oil, coal, natural gas, metals from ores, and wood. In the past, the quantity of these physical resources has grown, year after year, as illustrated in Scenario 1.

In a finite world, we cannot expect the amount of physical resources to grow, indefinitely. At some point something will go wrong, and the amount of resources extracted each year will start becoming smaller, as in Scenario 2. In a sense, the people of the world can expect to become poorer, because the quantity of goods and services that can be made with these resources grows smaller, instead of larger, and each person’s share of the world output becomes smaller.

Standard economic theory says that resource prices will rise, as the quantity of resources falls, but this view does not take into account the way a networked economy really works.

A more likely scenario is that as the quantity of resources falls, wage disparity will increase. As a result, the incomes of many of the lower-wage workers can be expected to fall. The problem is that jobs that pay well require the use of resources; if there is a decrease in resources available, some jobs are likely to be eliminated. Today, such job elimination may come through added technology, eliminating what were previously low-paid jobs. Studies of past collapses support the view that falling wages for the working class played a major role in these collapses. (See Secular Cycles by Peter Turchin and Surgey Nefedov.)

With greater wage disparity, a smaller share of people will be able to afford to buy homes and cars. Scenario 2 in Slide 17 will occur, not because we “run out,” but because too few people can afford to buy goods made with oil, gas, coal, metals and wood. Market prices will fall below the cost of extracting the necessary resources, and companies in these businesses will fail. Governments of oil exporters may collapse, because they cannot collect sufficient tax revenue at the low price available on world markets.

Slide 18

If there are physically less goods and services available, who will get the benefit of these goods and services? I see the situation as almost like musical chairs. Will it be pensioners who lose out, as bonds held by commercial pension programs default, and also as governmental plans are cut back? Or will it be the wages of the less skilled workers that are cut, as more processes are automated, and only managers and highly skilled workers are needed? If this happens, won’t commodity prices fall even further? We really need to have adequate wage levels for a wide range of workers, if we expect to have enough buyers for the goods produced.

Historically, when collapses have occurred, governments have lost out in the game of musical chairs because they could not collect enough tax revenue. The problem was that the bottom 90% of workers became poorer and poorer, and so less able to pay taxes. This brings us to our next potential US problem area.

Slide 19

In January 2017, the US Congressional Budget Office made a projection of how federal debt held by the public would grow, based upon the information available at that time. Their forecast was that the debt would grow to amount to nearly 150% of GDP. This would be a much higher level than during World War II, World War I, or the Civil War (Slide 19).

Slide 20

Since January 2017, more information has become available. We now know about three hurricanes, plus fires in California. Citizens affected by these events need financial support.

We also know about proposed legislation to reduce taxes, especially for businesses and high-income individuals. These proposals are likely to increase after-tax wage disparity, and increase the amount of the deficit. If corporations choose to return any of the benefit of the tax cut, it will likely be through dividends to those who are already wealthy. With respect to corporate tax rates, we are only trying to catch up with tax havens, so it is difficult to believe that the tax change will result in much more US investment.

Slide 21

We don’t think about the internet as being important, but it has become an essential part of our interconnected world economy. The internet helps facilitate all of the just-in-time deliveries needed to operate today’s economy. All of the fancy workarounds for the use of intermittent electricity on the electric grid assume that the internet will be available to transmit information back and forth quickly. Banks make use of the internet to get information to approve loans and to clear checks with other banks.

In the United States, we seem to hear one story after another about the internet being hacked. The most recent story involves a major hack of the data collected by Equifax for the purpose of determining the credit-worthiness of individuals in the US. If this data gets into the wrong hands, it can be used for “Identity Theft.” An impostor can apply for a new loan in the name of someone else, or can steal an income tax refund intended for someone else.

A different hacking situation in the Atlanta area recently led to the theft of a large number of checks intended for direct deposit in teachers’ bank accounts being stolen. They were instead direct deposited to an impostor’s account.

If the internet is truly not secure, no matter what we do, this by itself could cause major problems for the system we now have in place. We don’t have a “Plan B” available, either. Trying to start over with “snail mail,” for example, would be a problem. This is another illustration of the difficulty involved in going back to an earlier technology.
——–

Clearly this list of potential problems is not complete. Hopefully, this list gives an idea of the wide range of issues we are facing.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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2,174 Responses to The Approaching US Energy-Economic Crisis

  1. Fast Eddy says:

    Other than the reference to gerbil in the butt….. (does anyone really believe that is what the trigger will be – considering the gerbilator scientist have told us we still have a trillion tonnes of burning to go before we hit the wall….) this is pretty good:

    The aim of this article is to invite discussion on what kind of crisis event we might face – always supposing that there is a crisis, of course. Naturally, the focus here will be on economics, finance and energy, but readers are welcome to drive the conversation in different directions.

    National and global politics, social unrest and climate change are amongst the more obvious areas in which a crisis might happen.

    What follows here isn’t – and cannot be – a comprehensive assessment of crisis risk. Rather, it is simply “a canter over the ground”. It is a sketch, intended as a framework for discussion.

    https://surplusenergyeconomics.wordpress.com/2017/09/18/106-crisis-a-forum/

    • Tim Morgan doesn’t quite understand what is happening. He says that money is something “we can always create,” so it is not a problem. What the economy really needs is wages of non-elite workers. It is much harder to create such wages, than it is to create money (which is really more debt). There is also the problem that creating money is likely to change relativities among currencies.

      • theblondbeast says:

        Hey Gail – a clarifying question. When you say wages – do you mean increasing worker productivity or increasing their share of consumption – or both. Do you think accounting/distribution ideas like a jubilee, or large tax credits or helicopter money direct to workers accomplishes the target, or does it need to be organic increase in the economic value of work through structural productivity increases?

        • We really need both–increasing worker productivity, and a larger share of output for workers. Things like debt jubilee aren’t going to accomplish much–just make it hard to use debt in the future. Worker productivity usually grows with the use of more “tools,” and these require the use of more energy.

          The problem is that we are working with a networked system. The workers are both consumers and wage-earners. In order to perform their role as consumers, they need to get much more than they are getting now as wage-earners.

          • theblondbeast says:

            Yes, that’s quite a pickle. Thanks for the response. Some technology leverages worker productivity while other merely replaces workers – which may increase the process or business productivity while undermining purchasing power. In the same way some free trade represents competitive advantage while other just represents labor arbitrage. There is also a demographic problem – in that real wages depend also on demand for labor increasing faster than both population and productivity. If productivity is stagnant and population is increasing, I can’t see any intelligent response since it seems structural.

            The most valuable advances for labor seemed to be those which replaced human energy without replacing the human. I.E. An electric drill, vs a computerized milling machine – or the word processor vs the automated answering machine help desk. It seems like this has been highly prone to diminishing returns.

            • smite says:

              “There is also a demographic problem – in that real wages depend also on demand for labor increasing faster than both population and productivity. If productivity is stagnant and population is increasing, I can’t see any intelligent response since it seems structural.”

              Indeed, there are physical and intellectual limits for humans. We simply can not provide more productivity for each unit of energy input beyond a certain limit.

              Artificial intelligence will probably quite soon fill that void completely.

              Thus soon the circus will leave town and why not give a hand to the masters running the show, at least before you’ll be asked to bugger off. Indeed, what a performance it has been!

            • Smite…

              Probably… is a big word. But I dig your vibe man.

            • smite says:

              Thanks ZIS! 🙂

              “Probably” should perhaps instead have been “inevitably”.

            • theblondbeast says:

              @smite – If artificial intelligence ever happened, which I don’t think it will, the first thing a conscious machine would realize is that they were doomed to extinction based on energy collapse. Machines aren’t blessed with denial.

            • smite says:

              “If artificial intelligence ever happened, which I don’t think it will, the first thing a conscious machine would realize is that they were doomed to extinction based on energy collapse. Machines aren’t blessed with denial.”

              Machines have traveled past Pluto. Machines can go where no human ever will be, both intellectually and physically. The will inevitably become superior in every aspect.

            • Machines have a very difficult time keeping up their own energy supplies. I understand that energy supply is very much of a limiting factor for drones.

            • smite says:

              “Machines have a very difficult time keeping up their own energy supplies. I understand that energy supply is very much of a limiting factor for drones.”

              Yes, it is an aircraft built to a spec. There are aircraft propelled by solar panels and there are aircraft and rockets propelled by kerosene and even smaller aircraft propelled by li-ion batteries. It all depends on the application.

              Tell me: What is a hydro power plant, if not a machine? What is an oil and gas rig, if not a machine? What is a refinery if not a machine? And on it goes. In fact, machines are _the_ sole providers of all energy which later is mostly frivolously wasted by humans.

              Thus, you owe your existence to machinery and the ingenuity and capital that made it possible in the first place. Once machinery becomes sentient. You and your fellow marxists can kiss good bye to this little drama of yours.

            • Right. Except that a machine that is short on electricity cannot build a new hydroelectric power plant, or a new wind turbine, and connect it up to the grid. At some point, our the sequence of events needed exceeds our AI capabilities.

            • smite says:

              “Right. Except that a machine that is short on electricity cannot build a new hydroelectric power plant, or a new wind turbine, and connect it up to the grid. At some point, our the sequence of events needed exceeds our AI capabilities.”

              Actually, the hydroelectric plant generates electricity, which can be used to build another hydro power plant. That would just be too easy given that soon there would be very little energy wasted by the humanoid automatons.

              You have little idea about the current state of the art in tech [such as AI capabilities] and of those in control of the supercomputers that run our economy. None.

              Thus..

              There..
              Will..
              Be..
              No..
              Insta..
              Collapse..

              Say hello and welcome to the techno-feudalism.

            • I have a husband and two sons who are involved with computer programming–not AI itself. When I hear how many problems there are in keeping relatively small systems working properly, I am doubtful about AI for such a complex operation.

            • smite says:

              “I have a husband and two sons who are involved with computer programming–not AI itself. When I hear how many problems there are in keeping relatively small systems working properly, I am doubtful about AI for such a complex operation.”

              These systems are not explicitly programmed [by humans] for their functionality. Rather they have learned from feedback and data itself.

              So, perhaps check out the recent progress in AI? It will be as groundbreaking as the Internet, electricity, FF’s, etc. Patching in complex legacy systems isn’t quite a benchmark for what is possible with the latest software tech.

            • The latest software tech still has to live in the real world. The newest technology seems to be dependent on devices that use relatively rare minerals. If these are in short supply, then at a minimum, we need to go to plan be. All of the web interfaces are filled with bugs. These are subject to hacking, among other things. We haven’t yet figured an AI way of dealing with this mess. We create “solutions,” but someone else can use these solutions for their own purposes. The electric grid would seem to be a prime place for hacking.

            • smite says:

              Semiconductors are made from sand, more or less. Computer assemblies/phones/tablets are more or less plastic, silicon and a few milligrams of gold. Almost everyone on planet earth owns a mobile phone/smartphone. There are millions of semiconductor transistors per capita on earth.

              Electrification of the entire vehicle fleet would of course consume large amounts of rare earth minerals and metals. But that is another issue of it’s own that has nothing to do with the utilization of AI to displace the humanoid workforce. Besides, there will be little need for commuting once resource scarcity hits big time, wouldn’t you agree?

              Well of course there can be hacking, it isn’t something new. It has been around since the first computer networks became a reality. Just because “hacking” is a part of the current media narrative isn’t a sufficient condition for the capital to drop further tech development or that it isn’t a tractable way forward.

              As I have stated, real-world “complexity” is moving into the realm of computation in the form of advanced self learning sentient machines and other competent software tools.

  2. First floating wind farm, built by offshore oil company, delivers electricity
    Anchored, floating turbines allow offshore wind installations in deep waters.
    https://arstechnica.com/science/2017/10/first-floating-wind-farm-built-by-offshore-oil-company-delivers-electricity/?utm_source=MIT+Technology+Review&utm_campaign=533361aca0-The_Download&utm_medium=email&utm_term=0_997ed6f472-533361aca0-153961373

    All heavily subsidized, of course.

    • Thanks for the specifics.

      Not sure about the install price projection, supposedly falling 3x to ~$60/MWh later next decade. But if this is for real, connecting it with pumped hydro could be possible in some places. Obviously, the overall grid system still must continue to be subsidized by coal, natgas, NPPs etc.

      Another can kicking effort, somewhere for some time doable..

    • As long as cost is no object, we can do almost anything (on a tiny scale).

      • They say this first real project is 5x ~6MW, in total 30MW wind park, earlier prototype was based on smaller ~2MW turbine. And now they are going to run with it, mass produce it like crazy.

        So, you will need to assemble array of ~45 x (30 MW) of such wind parks (i.e. 45 x 5 turbines) to match one single unit of modern ~1.3GWe NPP, which additionally produces lot of thermal heat, base load grid function on top of it and so on.

        The wind park looks very workable for some specific near shelf located nations around North Sea and similar. Especially, when the intermittent problem could be transformed by using pump hydro in reservoirs.

        Even after dropping the price to 1/3 is it going to be cheaper than NPPs/natgas/coal probably not, but as long as the industrialized world hums around, and money could be burned, it could be preferred option for countries not liking dependency on Russian natgas imports and or nuclear fuel and technology lease.

        • It took me a bit to figure out that NPP translates to “Nuclear Power Plants.” This offshore wind is still going to be intermittent, so is worth a whole lot less than controllable types of electricity. Thus, even if somehow they can get to 60% use of capacity of the offshore wind, it still falls short, because we have no control over which 60%.

    • Aubrey Enoch says:

      Yeah. Like the oil companies aren’t subsidized to the extent of the “defense” budget??
      What crap to talk about solar subsidies. The oil brothers have been subsidised to the extent of of the mid east wars. Fu***ing moreones. Mr Off to Mars Tesla robot is SciFi stupid but fact is Sunshine is the only income we’ve got.

      • Fast Eddy says:

        I know it hurts…. that’s why I do this:

        Which Companies Pay The Most In Taxes?

        In 2011 these three oil giants each paid more in income taxes than any other corporation in America.

        ExxonMobil in 2011 made $27.3 billion in cash payments for income taxes. Chevron paid $17 billion and ConocoPhillips $10.6 billion. And not only were these the highest amounts in absolute terms, when compared with the rest of the 25 most profitable U.S. companies (see our slideshow for the full rundown of who paid what), the trio also had the highest effective tax rates.

        Exxon’s tax rate was 42.9%, Chevron’s was 48.3% and Conoco’s was 41.5%. That’s even higher than the 35% U.S. federal statutory rate, which is already the highest tax rate among developed nations.

        (The lowest taxpayers among the most profitable companies? Automakers Ford and GM, despite $20 billion and $9 billion in net income, respectively, paid a scant $270 million and $570 million in taxes — simply because they have billions in previous-year losses to balance against recent profits.)

        https://www.forbes.com/sites/christopherhelman/2012/04/16/which-megacorps-pay-megataxes/#59fbc2405586

        • Oil companies by definition cannot move away to a tax haven. They also have historically been a major source of taxes for countries with oil and gas industries. I believe that “an energy surplus” really should be defined as the ability to produce sufficient profits, so that these profits can be taxed heavily, to support other industries. This is a map from 2013 of “government take” as a percentage of operating income for various countries (by Barry Rodgers):

          Barry Rodgers Government take

          For the most part, high tax rates correspond to low cost of extraction, and low tax rates correspond to high costs of extraction. The exceptions might be places like Argentina, that was desperate for funds, so taxed the companies at a high rate, whether they could afford it or not. I expect that effective tax rates have somewhat fallen, as oil prices have fallen. In some places, this is written into the state tax law. Some taxes are pretty much fixed, even if oil companies are losing money. So as a percentage, their rates could be rising greatly.

      • Tim Groves says:

        You’re obviously upset, Aubrey. I can understand that.

        When you’re 17, it’s cool to hate Big Oil and want everyone to give up using it.
        And then, if and when you grow up, it’s painful to realize that everyone in the modern world, yourself included, is dependent on using oil for their continued existence.

        Of course, we all hate Big Oil and yet we’re all dependent on Big Oil to provide the oil we depend on for our survival. In a sense, we’re in the position of the anti-smoker who can’t give up their cigars; the teetotaler who has a daily whisky on the sly, the vegan who eats fried chicken, the communist who lives off the rent they receive from the tenants of their property.

        Perhaps we shouldn’t be taking our emotions or likes and dislikes, our commitments to the causes we identify with, or the lablels we use to describe each other quite so seriously.

        You can be a gambler who never drew a hand,
        You can be a sailor who never left dry land,
        You can be Lord Jesus, all the world will understand –
        Down where the drunkards roll,
        Down where the drunkards roll,
        Down where the drunkards roll!

        • Fast Eddy says:

          Aubrey — the good thing about you showing up here on FW….. is you get to learn from the very best….

          From those who were not dissimilar to you at some point….

          But you must be willing to learn…..

          Lesson 1: the MSM Lies. Always. The purpose of the MSM is to tell you what to think. To control you.

  3. Fast Eddy says:

    watching some video of an rams jaguar game…. loads of empty seats….

    NFL games with empty seats???? A sure sign the consumer is tapped….

    • xabier says:

      It’s probably the ‘consciousness shift’ that has been predicted : they are at home pursuing some quiet reflective reading, or maybe out working on ecological conservation projects.

    • Yorchichan says:

      Possibly, but also “taking a knee” when playing for a football team based in a military town does not go down well with the fans.

      • Fast Eddy says:

        Or maybe that is the excuse they are putting out there….. NFL fans are rabid…. football is religion on the US….. that stadium was at best half full….. the anthem thing might have some impact…

        But I suspect the bigger issue is that the middle class is getting crushed…. and the choice is – food or football…

  4. Richard Jones says:

    Interesting thoughts, much of the challenge you outline is mirrored in the sharp slow down in the velocity of money within the economy. As many focus on the wealth markets, ie the stock market, one must remind oneself that these markets are secondary to the main street market, consumption starts and ends with a consumer…
    Economic health requires a healthy consumer that has the resources to consume, capital allocation over the past 40 years has been marginalized to consistently funnel the consumption resources into fewer and fewer hands… I would pose the question…what is the definition of a healthy developed economy?

    • smite says:

      “what is the definition of a healthy developed economy?”

      The productivity per unit of energy input constantly increases the economic activity.

      • So the productivity growth more than offsets the diminishing returns that are occurring in many different areas of the economy, simultaneously (oil extraction, water extraction, mineral extraction, usefulness of additional education, usefulness of additional medical treatment, etc.) This is quite a trick!

        • smite says:

          Yes, but it also means that the [real] economy of goods and services, in a planet of finite resources, eventually will need to tend towards zero.

          • theblondbeast says:

            In a way, yes. If you define the economy as “The production and exchange of goods and services through the application of energy to resources and activities.” You are constrained by energy and resources. There is no such thing, ultimately, as sustainability without answering (1) What you are sustainaing, (2) for whom?, and (3) for how long?

            But yes, ultimately, a thermodynamic understanding of the economy would yield the conclusion that ultimately the economy will end – in the same way as our world and galaxy will.

            • A dissipative structure has a finite life. Economies tend to collapse, as resource per capita fall.

            • smite says:

              “But yes, ultimately, a thermodynamic understanding of the economy would yield the conclusion that ultimately the economy will end – in the same way as our world and galaxy will.”

              It depends if the universe can be viewed as a thermodynamic closed system. It is highly doubtful that this is the way an/our universe operates.

              Personally I’m more inclined towards a Nietzschean “eternal recurrence” type of universe, than the current big bang Einsteinian paradigm.

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

              Indeed, it is very mentally grueling to have to endure current cosmology and even GW discussions/theories/proofs. It’s just way, way off our current scientific understanding.

              And given that it even seems hard to predict planetary weather patterns with any semblance of accuracy for a longer period of time than a few days ahead. Then science have the audacity to “know” how it all came to be from nothingness. I guess not.

              Btw; the works of Halton Arp (books, YT, research papers, etc) is a good read regarding a critique towards the current state of affairs in cosmology.

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

            • smite says:

              What Nietzsche concluded (from Wikipedia):

              “If space and time are infinite, then it follows logically that our existence must recur an infinite number of times.”

            • Davidin100millionbilliontrillionzillionyears says:

              isn’t that Nietzsche quote absurd? (hint: yes, of course)

              in infinite space and time, there are infinite possible “worlds”…

              there will never be a recurrence of “our existence” because there are infinite possible “other existences” that will occur in the future and “our existence” is only one possibility.

              anyway, Nietzsche has entered the nothingness of eternal death, so there’s that.

              (ps: see that story where this Universe has two trillion galaxies?!?!?)

            • smite says:

              “there will never be a recurrence of “our existence” because there are infinite possible “other existences” that will occur in the future and “our existence” is only one possibility.”

              You clearly misunderstand “infinity”. One infinity does not exclude the other infinity, that is, the one that is an endless repetition of the previous one.

              One can in fact argue that there is an infinite set of infinite repetitions of the same thing in our [eternal] universe.

              This no remorse for the mundane, the saints and sinners. Dead or alive.

          • theblondbeast says:

            Note to smite: Note that in my comments about entropy I mentioned the planet and the galaxy, not the universe. I tend to agree with you about the universe. But on a more temporal timespan – I agree with Gail. An economy is a dissipative structure – and I have every reason to believe our current one will do what all previous ones have done.

            • theblondbeast says:

              Although if Nietzsche is right – we will have to consider if BAU collapses and we are to face the “eternal recurrance” will we embrace industrial civilization and say “I will it thus!” or would we repudiate it. Good thoughts for how to live ones life in the face of what seems to be unstoppable.

            • smite says:

              I am not arguing, neither did Nietzsche, that “Big Bang” recurs, just that [if] our universe is infinite in size and age and then by some reasoning concluding that there then must exist an infinite number of equal solar systems and planetary configurations, just like ours.

            • An economy is a dissipative structure among many other existing structures and embedded within these structures are nascent structures that could replace the existing economy.

              Technically “the planet” and the “galaxy” are not closed systems. It’s just convenient for doomers to see them that way. Making something finite when actually there’s some way to go before that becomes the case gets the blood racing. It makes for good storytelling.

              That doesn’t mean that the economy wont implode tomorrow because of weaknesses in this particular system but technically there is scope for growth if the system were able to hold together for long enough. Which by the look of things appears to be unlikely.

            • Everything I can see says that the Universe is an open system, and the systems we operate with on a regular basis, such as the solar system, behave (at least temporarily) as if they are open systems.

              But the solar system is a finite system, just as the earth and its biosphere is, and just as humans are. We and the other systems are all dissipative structures, with finite lifetimes.

            • smite says:

              “Technically “the planet” and the “galaxy” are not closed systems. It’s just convenient for doomers to see them that way. Making something finite when actually there’s some way to go before that becomes the case gets the blood racing. It makes for good storytelling.”

              Indeed, specially since the “financial” system is run, controlled and maintained by the same elite that owns our collective a$$es.

              Whats the probability that this system will be allowed to “collapse” uncontrollably? Yeah right. Zero! 😉

            • The financial system can do a little–make promises–but they cannot make cheap-to-extract resources. Thus, there is a limit to how long they can keep the system going.

            • smite says:

              “The financial system can do a little–make promises–but they cannot make cheap-to-extract resources. Thus, there is a limit to how long they can keep the system going.”

              “They” can do whatever deemed necessary for it’s continuation. They ARE the system.

            • The system is self-organized. “They” will be over thrown.

            • smite says:

              “The system is self-organized. “They” will be over thrown.”

              Gasp!!!! Did I just catch a whiff of Marxism? Viva la revolución?

              As a roboticist I will do whatever is within my capability to make sure that this [dystopia] of yours will never become a reality.

              Soon, really, really, soon now, most humanoid automatons will be rightfully decommissioned:

  5. Davis Waldo says:

    Thanks for the continuation of the limits to growth, revisited. The problem of the intermittent nature of renewable energy sources is rather easily solved by using hydrolysis to convert low or zero priced electricity to hydrogen. This can scale to any size and does deteriorate in storage. The hydrogen can then either be fed back into the grid for peak shaving via fuel cells, added up to 20% into natural gas pipelines or fuel transportation.

    • Tim Groves says:

      It’s true that renewable energy sources such as wind and solar can be used to produce hydrogen from water via electrolysis, and it’s true that hydrogen can be stored indefinitely, transported over long distances, and used when needed as a fuel to generate electricity, produce heat or power internal combustion engines.

      The main question is, what will it all cost? If hydrogen can be utilized in place of oil, gas or coal at an equivalent cost to $20/barrel oil, then we’re in business. But if it costs the equivalent of $200/barrel oil, then is use will be limited and it won’t save industrial civilization as we know it. Has anyone worked out what hydrogen is going to cost to produce, transport and use once the hydrogen economy has been established?

      • theblondbeast says:

        The safety concern cannot be understated. In the States at least Natural Gas can be piped in homes because it has a low propensity to leak, low risk of explosion, etc. You can’t even store LP gas indoors because of the risks of leaks and explosions. Hydrogen stored residential in large quantities is hazardous.

        • Dennis L. says:

          Some years back, there was a fellow in the New England states who converted solar/wind to hydrogen and stored it on his property. As I recall he was a DIYer. Hydrogen burns with a colorless flame and moves through materials with ease due to its very small size, also to achieve required densities generally requires liquefacation something like what was used in the space shuttles. There seem to have been some issues safely using hydrogen in those systems. A DIY liquification plant run on solar would be an interesting project for the family back yard.

          Dennis L.

          • Dennis L. says:

            http://hydrogenhouseproject.org/the-first-consumer-hydrogen-house.html

            Looks very easy and economical. Disclaimer, I have done solar, am doing solar. If you have to ask how much, you can’t afford it. Panels are cheap, building supports that don’t allow them to blow over in a storm, very expensive. Check out his control panels and space alotted, almost need a second house to store all that stuff. Now, where does one source replacement parts?

            Looking at all this it is easy to get pumped; then think of FE, get out some Glenlivet, a few ice cubes and this too shall pass.

            Dennis L.

            • Jesse James says:

              The scale and size of,this system is large. Just looking at the electrical, I would gestimate this system to be at least $100K

          • Fast Eddy says:

            Sounds promising.

            However I already have a DIY experiment underway … I am attempting to breed sheep with windmills…. to create a renewable energy system

            So far I have killed 68 rams…. each time they try to mount the windmill …. (which I have in sheep’s clothing … added a bit of lipstick and eyeliner)….. the blade of the windmill comes around and hacks off the ram’s member….

            Once I work out the kinks … I will sort out the hydrogen thingy…

            Oh I almost forgot — I have to finish staining the garage as well… although should I bother to stain the garage? Am I wasting my time…. it would take some years for the wood to rot if I don’t stain… hmmmmm…. time management issues crop up when one is unsure when BAU will blow up… perhaps my time would be better spent downing a bottle of wine?

            • Davidin100millionbilliontrillionzillionyears says:

              “… time management issues crop up when one is unsure when BAU will blow up… ”

              true. we must live with this constant uncertainty.

              but since it is BAU… for now…

              go stain the garage…

              then down the wine…

              you will get the best results if done in that order…

              BAU tonight, baby! or is it already “tomorrow” in NZ?

            • xabier says:

              You need Southern (Latin)blood FE: it’s perfectly possible to wield a paintbrush, drink a bottle of wine, and make love to a beautiful woman, simultaneously! And perhaps make stylish, philosophical, observations on Life.

              As one goes North, human capacities tend to lessen, until in Slav lands the men can only manage to hug the vodka bottle, mumbling incoherently, dying at 33 from alcohol poisoning…….. 🙂

            • ” I am attempting to breed sheep with windmills…. to create a renewable energy system” — LOL!

            • Tim Groves says:

              I am attempting to breed sheep with windmills…. to create a renewable energy system

              Sounds like you’ve got a ramshackle system there.

      • 78friendly says:

        Here’s a little backup to my claim that it is easy, a small scale demonstration plant using off the shelf technology in place and working. So the technology is certainly there, just needs to be scaled.
        https://www.nrel.gov/continuum/energy_integration/hydrogen.html

        Now is it economic?
        First I read that commercial scale wind and PV electricity plants are now the cheapest source of electricity available. That’s why capacity additions are going crazy. However, at some % of the grid, approx 20-30% or 2-3x current U.S. and where Germany is now, additional costs must be considered. Either one charges renewables for the costs of maintaining base load coal and nuclear plants or builds long-distance transmission lines to places with these type of units, or builds storage. In this context a 2$/kg incremental costs of hydrogen with free electricity or a 5$/kg full cost should also include a credit for the avoided cost of maintaining other base load facilities. But I’m in over my head here.
        Now to get controversial. Is the 200B cost of 4 hurricanes hitting the U.S. in one year a new annual cost to be added to all CO2 emitters? Trump says no. If it happens again, many people will say yes.

        • Dennis L. says:

          See above posts and link to someone has actually done this. I have solar, am doing solar, see my post, have a Glenlivet and things will be seen in a clearer light.

          Dennis L.

          • 78friendly says:

            Very cool. Maybe I’ll visit sometime. I’m off-grid, 3.3kw of PV capacity, backup diesel generator that consumes 10 gal diesel/yr. 8 lead-acid batteries that have to be replaced every 10 years. I buy propane for domestic water heating, some space heating, and cooking. My excess electricity is used for domestic water heating and space heating so my propane bill is $28/mo average. I burn wood for heat, which is just a slight acceleration over natural decay releasing the CO2. But there are significant investments in transportation and processing equipment to harvest.
            I’ve thought about scale up the PV, install an electrolyzer, H2 storage, eliminate the batteries, and make my own transportation fuel for a vehicle with a 300 mile range. Pretty cool. Never pay compared to buying diesel for my MB GLK250 that gets 39 MPG.

          • theblondbeast says:

            I wonder if the owner ever considered just building a small house – or perhaps staying in an older house. You can make a great many sustainable “science-projects.”

        • Tim Groves says:

          Now to get controversial. Is the 200B cost of 4 hurricanes hitting the U.S. in one year a new annual cost to be added to all CO2 emitters? Trump says no. If it happens again, many people will say yes.

          Hurricanes have always hit the US and will continue to do so. It would make as much sense to try to stop them by burning Al Gore inside a Giant Wicker Man than it does to blame them on CO2 emitters. There is no “science” behind either idea but implementing both of them would be cathartic for many people, so if a proposal to implement both of these ideas is put to the American people, many people will say yes.

          • Fast Eddy says:

            BUT! The MSM has told 78 to think that this GGGeeebirls arssse is the cause of hurricanes…

            And 78 – like most people – does not question the MSM….. 78 is a human/parrot hybrid unit…. he repeats what he is told to repeat

          • It would make as much sense to try to stop them by burning Al Gore inside a Giant Wicker Man…

            Sounds sciency enough to me. When do we start collecting twigs?

            • smite says:

              Hey, leave Al Gore, Elon Musk, Stephen Hawking and the rest of the BAU mouthpieces alone.

              They are.. Funny..
              In a depressing way..

              Fake Elon:

              Real Al:

              Nutty Stephen:

            • Fast Eddy says:

              It seems that Mitt Romney has now developed a similar case of A….GgggWwww hypocrisy. Back in June he told everyone he believes in aaaaanthr…opogeeeeenic g….looooob…al waaaa…rm..in….gggg, ergo he believes in sea-level rise. Ergo, if one is going to build a mansion it had better be on top of Mount Araratnext to what’s left of Noah’s Ark so it’s safe.

              So, what does Uncle Mitty do? Well, not only does Uncle Mitty own some beachfront property just north of San Diego in La Jolla, California, he now wants to tear down that measly 3,000 square foot mansion and replace it with an 11,062 square foot mansion, larger than Revered Al’s 6.500 square foot villa.

              That’s awfully close to sea level…. maybe Mitt has an insurance scam in mind…..

            • He clearly wants to conserve the use of resources as well.

            • Fast Eddy says:

              And here is Mitt and his environmentally friendly private jet….

              It amazes me just how gullible people are …. the main front men for the GGG wwwww movement — do absolutely NOTHING to try to reduce their c arbon footprints…

              They are some of the biggest burners of c arbon on the planet….

              It would be like the head of the world vegan society —- urging everyone to stop eating meat because it is unhealthy and bad for the environment…

              Then eating these for dinner every day:

              Wat da f789!!!

    • theblondbeast says:

      If making clean hydrogen were a viable endeavor I think existing commercial hydrogen would already be made this way, not from natural gas, which it is. I think the only reasonable conclusion for hydrogen is that it is theoretically possible given (1) higher energy prices can be supported by the economy, (2) capital is available for massive investments in new infrastructure, (3) enormous changes to the way people use cars are possible.

      But the claim that this is cheap or easy I cannot accept. Below is a link to the best investigation at the laymans level I have located.

      http://euanmearns.com/the-hydrogen-economy-more-green-mythology/

      • I would believe Euan. He is usually pretty level-headed.

        • Is this the same Euan that also bashes people for not believing in his theory that we’ll all be riding around in self driving battery powered super taxis within a year or two?

          • I don’t think so. These are a few of Euan’s posts:

            Mercedes B-Class Electric and Diesel Cars Compared

            This post compares the price and performance of the Mercedes B class all electric and 180d diesel cars. In this summary the subsidies and taxes have been stripped out. The all electric costs 39% more and has only 14% of the range of the diesel. Using these metrics, the diesel is 10 times better than the electric car. The 104 mile range of the electric car really confines its use to a daily commute or city runaround which somewhat devalues the 8 second 0-62 mph acceleration. Stripping out taxes on fuel, the running costs per 100 kms are 249p (electric) and 159p (diesel). Contrary to popular belief, electric vehicles (EVs) are considerably more expensive to run. Zero tail pipe emissions (NOx, PM2.5 and CO2) is the clear advantage that the all electric version has. The question then is zero tail pipe emissions worth the extra cost and reduced performance?

            Worldwide investment in renewable energy reaches US$ 4 trillion – with little to show for it (by his partner, Roger Andrews)

            Approximately $US4 trillion, made up of $3 trillion in direct outlays for generating plants plus an estimated $1 trillion for renewables-related network upgrades, has been invested in electricity-sector renewable projects since 2000. As a result of these expenditures the percentage of renewable energy in the global electricity mix has risen from 19% in 2000 to 29% in 2016 and global CO2 emissions have been cut by a small but unquantifiable amount over what they would otherwise have been – not much bang for the buck.

            Lithium: Reserves, Use, Future Demand and Price

            Currently electric cars are dependent on Lithium Ion batteries for their on-board store of energy and this obviously raises questions about supplies of Lithium (Li), and as luck would have it a comprehensive report on this topic fell into my mail box last week. The report Raw material needs by the Li-ion battery industry by Dr P. Kauranen [1] is available online and in this post I want to provide a simple and partial summary of that report whilst adding information from other sources.

    • Fast Eddy says:

      Can?

      can
      kan
      verb
      1. be able to.
      “they can run fast”

      If it ‘can’ then why is it not happening?

      You should choose another word.

  6. psile says:

    The LPA (Liberal Party of Australia) along with it’s coalition partner the National Party, is actually a conservative party, clad in a neoliberal wrapper. Like all other political parties, mainstream or otherwise, it’s doomed, because it is trying to navigate the future whilst looking through the rear-view mirror.

    The now discredited neoliberal agenda has a stranglehold on the thinking of all political parties that aspire to leadership. But, as the modern world ebbs away, and at an increasing pace, western people everywhere, unsure as to why their lifestyles are being eroded, will strike back. There will be popular revolutions, fascist & theocratic dictatorships and secessions from here on out.

    Brexit, Trump, the Italian referendum, Scottish and Catalonian independence movements – these are all attempts by the growing army of the estranged and dispossessed to wind back the clock. But we all know that this is impossible. Entropy has its deathly grip on the industrialised way of life, and will not let go.

    Party squabble may end in extinction for the (Australian) Liberal Party

    Contemporary conservative politics is unstable and schismatic to a degree not witnessed since the abortive Joh for PM push in 1987. The sources of division are manifold. Nor is it purely a local phenomenon. The pervasive global media market has created a viral backlash against “political correctness”. The Liberal Party base is being eroded by a raft of right-wing insurgencies…

    • J. H. Wyoming says:

      I’m not surprised. It seems to be happening all over the place. In the US people are getting ready to happily roll over for yet another trickle down tax cut for the top 1% and the dismantling of the first healthcare policy that has ever helped the middle class. Apparently it’s easy to convince people of absurd ideas, like voting conservative is somehow going to help them.

  7. Did someone mention epidemic?

    One minute everything’s hunky dory then…

    • “When civilisation ends… it ends fast.”

      • theblondbeast says:

        “Civilization” is what people do with excess resources. Chaos is what they do without it.

        • Davidin100millionbilliontrillionzillionyears says:

          “When civilisation ends… it ends fast.”

          perhaps…

          but there’s this:

          “slowly at first, then all at once”…

          the possibility of The Collapse is upgraded by the slow and steady population growth.

          denser population = greater chance of a runaway epidemic.

          the next ten years will be very interesting.

          • Davidin100millionbilliontrillionzillionyears says:

            “’Civilization’ is what people do with excess resources. Chaos is what they do without it.”

            that sums it up nicely.

            declining net energy = increasing chaos.

            something else to watch in the next ten years.

            will we not be entertained?

  8. Fast Eddy says:

    General Electric turns positive, rebounding after huge earnings miss

    After stripping out restructuring charges, GE earned 29 cents per share from continuing operations in the third quarter, down 9 percent from the same period a year earlier. Analysts surveyed by Thomson Reuters expected the company to earn 49 cents per share.

    The punchline:

    Shares of GE sank as much as 8 percent in premarket trading before recovering ground ahead of the opening bell. Within 16 minutes of trading, the stock’s volume had outpaced its daily average for the past 30 sessions.

    CBs were busy yesterday …. http://www.zerohedge.com/news/2017-10-20/and-horrible-unacceptable-ge-goes-green

    • Fast Eddy says:

      Or maybe not…. maybe a huge miss is now a good thing…. it indicates that the company is thriving…. everything is awesome and about to get even more awesome.

      Or maybe I am going insane… am I insane? Am I not getting it? Am I getting it? 1+1 still = 2… right? right?

      Or maybe it now = 5.

      If I release an egg from above my head … it should fall to the ground – right? Or will it fall to the sky???

      Is this a circle or a square? I used to think…. but now I am not sure

      • Fast Eddy says:

        As expected…. a 7 year old would understand that the global economy is kept on life support with low interest rates…. any significant rise would result in a cataclysm event…..

        Case in point …. the massive number of interest only mortgages in Australia … even with this ridiculous arrangement… people are struggling to make payments…

        And what about subprime autos….

        Bump interest up even 1% …. and the defaults would kick off.

        • Fast Eddy says:

          One has to wonder what the actual balance sheet of the Fed and other CBs might be…. perhaps they have a massive off-balance sheet set of numbers that they don’t divulge….

          Why tell us? Why do we need to know? Knowing would only spook us…..

  9. JT Roberts says:

    I’ve been doing a little reading and stumbled on this statement.

    “Many have pointed to energy efficiency as an escape from resource constraints, arguing that we can get more economic output with less consumption. This is true, but only locally. What arises from the constant λ is a seeming paradox: improving global energy efficiency benefits prosperity so that through a positive feedback, efficiency promotes faster global growth into the reserves that sustain us. With higher accessibility of these reserves, what follows is faster consumption of energy and raw materials.”

    http://www.inscc.utah.edu/~tgarrett/Economics/Economics.html

    What’s interesting is it basically answers Jevons paradox. Or at least compliments it.

    https://en.m.wikipedia.org/wiki/Jevons_paradox

    So efficiency has accelerated consumption. Very interesting.

    Maybe a meaningless pithy comment is preferable. With pictures of course.

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