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:

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:

    When I search this headline from ZH …. I get nothing…

    Donna Brazile Says She “Feared For Her Life” After Seth Rich Was Killed

    Therefore I must conclude that the DNC ordered the murder of Seth Rich.

    This could get very entertaining….

  2. Baby Doomer says:

    The collapse will be the worst catastrophe in the history of mankind…Just think about that for a few seconds….

  3. Fast Eddy says:

    In other news…

    US Gross National Debt Spikes by $640 billion in 8 Weeks

    Can the US add trillion dollars of debt in 3 months – stay tuned!!!

    Buying fake growth is expensive.

    • robert wilson says:

      Unfunded liabilities $0.11 Quadrillion.

      • Nothing to worry. US can print as much dollars as it feels like since it can dump all of them to other countries, a luxury no other nation on earth has.

        • I would argue that China can create as much un-repayble debt as it wants, through its elaborate system of guaranteeing loans made by others within China, and its many layers of government and quasi-government. For a while, everything looks great. At some point, the whole system gives way.

    • Shouldn’t all of this spending affect the estimates used in calculating the how the proposed tax cuts would work?

    • Davidin100millionbilliontrillionzillionyears says:

      the spikes are no big deal…
      they follow mini-plateaus caused by the farcical debt ceiling…
      which has never ever ever been a true ceiling because it has always been raised.

      the overall increase is linear… and likely will stay linear…
      putting the debt at $30T by the mid 2020’s and perhaps $35T by 2030…

      when I say “likely will stay linear”, I mean until The Collapse…

      I don’t see why this linear “known quantity” will cause The Collapse…
      I think it will be something more Black Swan-ish.

      BAU tonight, baby!
      (or, for you all in NZ… a BAU morning, baby!)

      • Black swan or something that has been planned but not released as of yet.

        Also black swans are not the things that people usually refer to. If it’s a known scenario then it’s not a black swan. A black swan would be an entirely unknown to anyone event. Something noone previously envisaged. A holy crap, how did that happen event.

        Why set debt ceilings if we are going to just blast straight through them every time?

  4. Baby Doomer says:

    Kentucky police arrest man for assaulting Senator Rand Paul at home

    America’s number one Libertarian hero just got his ass kicked and had to call for government assistance for help ….What Happened to Bootstraps? LOL

    • Kim says:

      Quite right. I like the way you think. If he’d had concealed carry, he could have just shot the menace dead.

  5. Fast Eddy says:

    Coal Prices Soar As Demand Heats Up

    Coal prices are on the rise again. With benchmark rates in Australia up over 30 percent since July — approaching the $100/t mark that prevailed in November 2016 after a massive run-up last year. And a number of events the past week show that things could get even more heated in coal over the coming months. The biggest story recently has been China. Where a push to restrict coal imports has driven local prices to multi-year highs. With data this week from Platts showing that 102 coal-laden boats are currently anchored offshore of Chinese ports, unable to deliver their loads. And China isn’t the only place where demand is going up. With South Korea also seeing record coal imports of late — bringing in an all-time high 11.3 million tonnes in September, with October imports expected to set a fresh record at 12 million tonnes.

  6. timl2k11 says:

    PV solar hot water heater. Hopefully some on this blog can appreciate how stupid this is.

    • doomphd says:

      That’s pretty stupid, alright. As Norman would say, electricity is worthless unless you have something to do with it. Maybe he could have taken a page from the Dutch and pump water or grind wheat or corn into flour? Power a Christmas lights display?

    • Chris Harries says:

      Thermodynamically a stupid thing to do when you can passively heat. But an number of my environmental colleagues now will dump their surplus PV power into their hot water cylinder rather than export it to the grid for next to nothing.

    • Jesse James says:

      Using 1600W of solar panel capacity to heat water is plain stupid, when the sun will do it for you passively.

  7. Baby Doomer says:

    Musk Rats Explained by One Diagram

  8. robert wilson says:

    Will there ever be another Bunker Hunt like attempt to buy that tiny silver square? If so will the commodity exchanges change the rules so that one can only sell silver. Buying not allowed.

    • This is interesting! I had thought that the amount of debt was even higher, relative to the total world stock valuation. Maybe that is because I was thinking about the relativity, before the recent run-up in stock prices.

      The only thing that I think gets somewhat left off this comparison is state owned companies, like Saudi Aramco and like big Chinese state-owned companies. Some of these can be very big.

      • What can be done about derivatives… if anything? And wouldn’t that change the overall picture somewhat? And why do they exist in the first place?

        • Derivatives are widely used. They are used by oil companies to hedge the price of oil at say, $60, if it goes down to $30, so that they can keep drilling, regardless of the price.

          A farmer may use derivatives to provide a price guarantee on the sale price of wheat he is planting, or the hogs he plans to bring to market in six months time.

          They are used by airline companies, to keep the price of jet fuel low, even if it rises. Thus, it helps airlines (temporarily) avoid the effects of supply and demand.

          A lot of the use of derivatives is speculative. They are used to benefit from price moves, without actually buying the products or shares of stock. ETFs that a lot of people hold are backed by derivatives.

          Quite a bit of derivatives relate to the relative prices of currencies. For example, if a business in country A agrees to make a product for a business in country B, there is likely to be a time lag between the time the product is made and the time it is delivered. The derivative is used to assure that a shift in the relative values of the currencies will not leave country A with insufficient funds to make the promised product.

          Basically, derivatives are used to “work around” the way supply and demand usually work. Thus, they help to build excesses within the system. From the point of view of the individual producer, they are very helpful. That is why they stick around.

          Derivatives work fairly well, when we are away from limits. Price moves aren’t too great, or too quick. But as we approach limits, we get too much of an “everything moves together” effect, and the whole house of cards falls apart.

    • Kim says:

      So your point is he worked for the Military Industrial Complex back then and still does today? Where does he keep his necklace of ears?

  9. Fast Eddy says:

    But the economy is growing 3%…. and Apple is selling $1000 phones like there is no tomorrow

  10. Baby Doomer says:

    The Real Problem is Not Whether Machines Think but Whether Men Do…

    -B.F. Skinner

  11. JH Wyoming says:

    Brent oil up 1.45 to $62.07

    Going to test the economy as it moves up. Oh boy, here we go…

    • Davidin100millionbilliontrillionzillionyears says:

      and WTI at $55.70

      which is estimated to be about 4% of GDP…

      so to produce a 2% hit to the economy, Brent would have to go to about $90 and WTI to about $80.

      is that math reasonable?


      • JH Wyoming says:

        Keep in mind there are many knock on effects of higher oil prices as cost of transportation is not just for commuters but also for delivered products, parts, produce etc. via trucks, trains, ships and jets. Parcel delivery going up as xmas approaches is not good timing. So who knows exactly at what oil price point will stall the economy into contraction. If I had to take a guess, I’d say $75-80 for Brent.

        • What would we do without oil?

          What percentage of oil in the world is used for transportation?

          August 4, 2014. As shown in Figure 3, light-duty vehicles – cars and pickup trucks – account for 58.6 percent of transportation petroleum consumption with the rest used by medium- and heavy-duty trucks (22 percent), airplanes (8 percent), and water transport, such as ships (4.5 percent).
          Oil | Center for Climate and Energy Solutions

          What percentage of oil is used in cars?

          About 60% of the personal vehicles in the U.S. are cars, the other 40% are SUVs, pick-up trucks and motorcycles. U.S. Transportation fuel consumption accounts for over 70 percent of total U.S. oil consumption, and more than 65 percent of that amount is for personal vehicles.
          Fuels and Energy Independence – American Energy Independence

          Definitely most of the consumption is by personal vehicles. And a lot of that is to get to work or buy stuff that the rest of the transportation relies on to stay in business.

          What a strange web we weave. Back and forth, round and round. And we can’t stop to catch a breath because it all goes away. What sorcery is this?

          • Mark says:

            As I understand gas/petro is about 1/2 of a barrel of oil when refined. If we don’t have gas burning cars, that gas would have to be burned off at the refinery. At a loss.

            • That is a good point. A barrel of oil is a mixed of different types of products. If we need some of the products, we still need to extract the whole barrel. There is some flexibility regarding the mixture. It is, in general, not too difficult to make long chains into short chains, but it is nearly impossible to do the latter.

              Also, the whole operation has minimum levels. Refineries need to be able to make a profit, and pipelines need to have sufficient flow to make their operation work according to plan. Cutting out one piece doesn’t necessarily have any beneficial impact.

          • Mark says:

            I like your comments BTW

      • Oil price hits the economy multiple times within GDP, so the effect is greater than what a simple percentage change would suggest. High prices adversely affect wages at the same time that they increase the cost of production. They raise inflation rates, so indirectly tend to increase the interest rates that central bankers want to have.

        If the price of oil goes up, the delivered price of coal goes up, because oil is the transportation fuel used to deliver coal. Because coal is so physically large and heavy, the cost of delivery becomes an important part of coal’s total cost, as far as electric utilities are concerned.

    • Davidin100millionbilliontrillionzillionyears says:


      this is not on his Twitter timeline and is fake news…

      but then again…

      Tesla is fake capitalism.

    • psile says:

      Really!? Lol

      • Davidin100millionbilliontrillionzillionyears says:

        yeah, 707 upside down…

        so really, I did the fact check anyway…

        just a distraction in a world of distractions…

        but then, the nothingness of eternal death awaits soon enough…


        like some pathetic more on…

        BAU tonight, baby!

  12. Davidin100millionbilliontrillionzillionyears says:

    breaking news:

    Dow, S&P, Nasdaq all close at record highs…

    WTI closes the week at $55.70…

    and Bitcoin rockets past $7,000…

    (who bought that $70,000 pizza?)

    this can only be interpreted in one way:


    this is not going to end well…

    though others are predicting 2018 will not be the host of The Collapse…

    to be continued…

    • Niko says:

      It’s all rather exciting isn’t it? Living in the greatest bull market that ever was or ever will be. The irrational exuberance is palpable. The singularity institute tells me that the next advance is A.I. savior Gods. Why shouldn’t the markets be at all time highs. Tjebhigjs for the human race are on the horizon.*

      *The horizon is very far away and will require ~2 trillion barrels of oil the reach.

      • Davidin100millionbilliontrillionzillionyears says:

        at times, knowledge of the world can be exciting, or at least interesting…

        an 8 and a half year bull market: who saw that coming?
        peak oil this year or next year, perhaps…
        the huge thud of renewable energy technologies, which is coming soon.

        someone recently said that the 2020’s will be a very interesting decade…
        there should be some tremendous bubble popping…
        to be continued…

        • Fast Eddy says:

          I am eurphoric.

          On one level we have finally discovered the perpetual economic motion machine — no more uncertainty — only prosperity — all I have to do is plunk down my cash into an index fund and my financial well-being is assured.

          And the other niggling problem of running out of fossil fuels is just about solved — we are on the cusp of a world powered by renewable energy … and those filthy ICE vehicles are about to be legislated out of existence and replaced by EVs – finally!!!

          I am also feeling very positive about the war on poverty — in my lifetime I am certain we will end global poverty…. and similarly global peace is within our grasp.

          Koombaya… koombaya….

          • There you go… easy when you try.

            Welcome aboard traveller. Your future is in safe hands now. Sit back… relax… take a Fentanyl pill… everything will be fine. We’ve booked your appointment for tomorrow… don’t worry… uploading is a much smoother process now… you’ll love the new options which we add on a monthly basis so that you never need be bored again.

            Koombaya friend

  13. Baby Doomer says:

    Thought Experiment:

    Replace the word “God” with “The Leader”..and see what happens.

    The Leader created the earth. The Leader created air…The Leader loves us and has a purpose for all of his creations..In the Leader we trust….Etc..

  14. Third World person says:

    Citi Says Synthetic CDOs May Reach $100 Billion In 2017, 5x Increase In 2 Years

    The comeback in complex credit derivatives blamed for exacerbating the global financial crisis is picking up pace.

    That’s according to new research this week from Citigroup Inc., one of the biggest arrangers of so-called synthetic collateralized debt obligations. Sales of the products may jump to as much as $100 billion this year from about $20 billion in 2015, Citigroup analysts wrote in an Oct. 31 report.

    While investors suffered billions of dollars in losses on similar bets a decade ago, the leverage offered by synthetic CDOs is luring back buyers in an era of low yields and dwindling volatility.

    “It would seem as if the low spread-low vol environment, similar to back in 2006-2007 (when investors couldn’t get enough of levered synthetic tranches) has revived some interest in portfolio credit risk,” Citigroup analysts led by Aritra Banerjee wrote. “Investors may not have necessarily wanted to add leverage, but, simply put, they have had to, given the lack of alternatives
    this remind of something
    this remind of something

    • Third World person says:

      cdo are back this time bigger and better

    • Sungr says:

      When the U$D loses world reserve currency status- now being accelerated by the warlike activities of the merry band of nin-compoops in the USG- all those neat products from Asia & EU will start to get very expensive. So maybe China-Russia have a reason for buying all that gold…..

      Shoes, clothes, tools, auto parts, pharmaceuticals, home renovation products, optics, chips, military specialty items, cameras, smartphones, TVs, etc etc. All these and more are likely going to experience double and triple digit inflation going forward due to purposeful action by a lot of nations to remove the dollar from global geopolitics. Many nations are seeing the US global financial operations as the source of funding for all the constant military adventures.

      The dollar will likely make major drops and powerful inflation follows. Interest rates need to rise to keep pace with inflationary loss of value in credit instruments. So, going forward, lenders will expect built-in interest rate increases that track inflation gains- to compensate for inflation devalued principle & interest. Also, credit instruments with variable interest rates are going to start ratcheting up.

      So, in response to U$D inflation, interest rates rise to compensate lenders for loss of principle due to inflation. In the case of a major global power shift, this inflation could become a stair-step kind of affair and keep going up-up for a long time.

      Of course, this collapses the value of the huge Mt. Everest of debt paper that has been generated since 2009. Including these CDOs.

  15. Baby Doomer says:

    Tesla Shipped Cars Without Seats And Digital Displays: Report

    • On the digital display thing… I’ve never used one and I’ve never liked the idea. Far too distracting for the driver. I also prefer the “blind” tactile approach of traditional knobs and buttons with very solid positioning and memorisation for the driver.

      Even hands free phone calls while driving have been shown to reduce driver concentration by half or more. A human driver really doesn’t need any further distractions.

      But I don’t want to give any more fodder to the self driving autocrats so I’ll stop there.

  16. Baby Doomer says:

    Tesla: Buying Their Own Cars? (Yes the are) -Seeking Alpha

    FE eat your heart out at this one….

    • Baby Doomer says:

      As it turns out Tesla sold more units than they have manufactured. Meaning they are reporting on revenue which hasnt been earner i.e. physical car sold, money in the bank. If correct this is incredibly illegal. But it looks like they have been selling a fictional product to themselves to try and meet their targets to investors (still illegal) and essentially moving around money inside the company. This was confirmed by Deepak Ahuj…(LOCK ELON UP)

      • Baby Doomer says:

        The first claim that they are claiming profit where none is is (incredibly illegal). But if we believe what they have said this is not correct. The second claim is confirmed to be correct, being that they are selling a essential digital car to themselves. As this seems to be in terms of wanting to fool their investors that model 3 production is on track when in reality its not. It could easily be seen as fooling investors which is (illegal) but would require someone to stand up and prosecute…(LOCK ELON UP)

        • Aubrey Enoch says:

          Elon is busy installing the new hyperfission cooling system on the fuel ponds. We’re saved again. Not many details. I saw it on fbook. Something about hooking wires on the fuel rods. I think there were gamma rays in there somewhere. Elon’s no dummy. 20 billion dollars is pretty sharp. I can see Elon selling gamma rays.

      • At around 45,000 dollars with a few add ons there are far better cars on the market for that price. And way better if you go with a recently used vehicle.

        Why anyone would put money down for an unproven Model 3 is beyond me. I suspect all those preorders are being cancelled as we speak.

        Reminds me of people that peorder video games which retail at 60 to 100 dollars each. It’s like betting on whether a movie will be good or not by the trailer. Hmmm… sometimes it’s better to wait.

        But as with all these things we require first adopters (suckers) to go first… test the ground… before we all rush in like lunatics. That’s why we have bomb disposal guys… and millions that queue for the latest iPhone.

        Wouldn’t it be better if we didn’t have hype… if producers made a test product which was then tested by reliable testers and we could read those opinions before making a purchase.

        The problem is that the review system is totally fake too. It’s very hard to get an accurate review for anything because the reviewers are all on the take.

    • Fast Eddy says:

      One House of Cards is down the tubes… a second to follow?

      • Do these cars now need to be sold as “used”? Apparently they do in some states. That reduces their value.

      • Baby Doomer says:

        My Dad works in the food industry as a consultant in Chicago. He said he had a food company a few years ago they caught going into stores and buying their own products to make their sales look better….

  17. Sven Røgeberg says:

    A very interesting article from gran old man and Nobel prize winner in economics.

    • Greg Machala says:

      Replace beetles with yeast and you have essentially the same thing. Like humans on earth with oil, yeast in a jar with sugar. What could possibly go wrong.

      • Another application is academic papers in general. Just follow the leader, using whatever inadequate model seemed to be correct in the post. Economists are particularly good at this.

        • I agree that academia doesn’t help. They tend to be dragging behind reality maybe twenty years or more. Sometimes a lot more. They feed off each other and whatever grant money comes their way. How often are any of these so called academics even right about anything? They constantly have to backtrack and watch on as reality beyond the ivory towers continues to surprise.

          One exception…

          Medical researchers do a fairly good job in outlining where the problems are and how they could be dealt with but there is a total disconnect between that level of understanding and practising doctors. In this case it’s the doctors that are always twenty years behind or applying whatever fad Big Pharma is currently pushing, for example antidepressants for every condition because… you never know… they might help.

          Also… I think the yeast in a jar with sugar has served its purpose to make a basic comparison with our industrial civilisation but I feel it needs to end there.

          What’s happening at the level of human activity is far more complex. There are other forces at work here beyond the self organising ones. We have harnessed directional volition i.e. the capacity to make choices against our nature or even to undo them if we so wished.

          The yeast cells will continue unthinking until they are destroyed. There is a small chance that humanity as a whole including its machinery will make some tough choices to remedy the issues we face. But it’s a close call. And what part of human activity survives is also not clear.

          • timl2k11 says:

            “Also… I think the yeast in a jar with sugar has served its purpose to make a basic comparison with our industrial civilisation but I feel it needs to end there.

            What’s happening at the level of human activity is far more complex.”
            I disagree. We each act out of purely self-interest, just as yeast do. We are exactly like yeast, especially at the highest level.

            • The global superorganism is able to make choices – to steer the ship somewhat.

              Yeast doesn’t make any choices. Yeast is a subset of the global superorganism. Humans study yeast. Yeast does not study anything. Humans make analogies. Yeast cells don’t.

            • Slow Paul says:

              We are smarter than yeast. We go to school and study so we can grow ever faster and use even more sugar, err… I mean resources.

  18. Greg Machala says:

    Even Hawking has gone mad:

    We are so caught up in the permanency of technology that it is easy for people to loose sight of the fact that technology doesn’t create the energy it needs to run. Technology uses a lot of energy. High levels of technology take correspondingly high levels of energy to maintain.

    • Good point!

    • houtskool says:

      Excuses are like alternative energy. It works as long as the sun shines.

    • Baby Doomer says:

      Hawking is just a wax figure hooked up to a computer in California somewhere….He has been dead for decades. ..

    • Truth be told… we waste a lot of energy on frivolous things.

      If we humans were as efficient as natural systems we’d hardly have made a dent in the accessible energy reservoir.

      But that would mean living as a hunter gatherer or low impact farmers that ritually culled their own population every now and then too stay within limits.

      If a breakaway civilisation occured that abided by these rules then technically it could survive until some other change in circumstances or a further branching off occured.

      Technology doesn’t create the energy… but it allows us or computers to harvest it in many different ways. And round it goes. The technology needed to harvest energy and resources is getting somewhat cumbersome and expensive. If we don’t find a way to move on… we’re toast. If one of the technological solutions grants us cheap energy once more then Hawking and others will look like geniuses and you lot here will look like fools.

      Let the games begin!

      • Even hunter-gatherers were overusing energy resources. They were burning down whole forests, to try to drive game out so it would be more accessible. In late years, their population was growing enough that a more organized approach to getting food (an energy product) was necessary. Humans, because we are physically adapted to using cooked food, need to use more energy than the world is designed to give us, except by squeezing out others. It is hard to get away from this.

        • Artleads says:

          I wonder why, though, a natural tendency to overuse happened more in some places and less in others. The San in South Africa are pretty much the same people that have hunted and gathered there for 150,000 years.

        • Fast Eddy says:

          Every single one of us has ancestors who were hunter gatherers…. at some point that obviously changed… instead of behaving like good animals and dying off …. we used our big brains to innovate… and manipulate the environment to allow for more of us…

          Culminating in:

      • Fast Eddy says:

        What is required urgently is a reverse eugenics programme.

        We need to breed out the negative traits in humans…. things like the ability to invent… to reason… to innovate…. to the point where all remaining humans are no more clever than a dog…

        That way the population would be controlled by the amount of food available — and the humans would no longer be able to game the system with fire and tools and farming …. they would – like all other animals…. die back as the population exceeded the food supply.

        I could see myself as the king of that world. I could amuse myself by playing fetch with my subjects

    • xabier says:

      There was an article by a physicist in the Guardian: the basic argument was that greater productivity comes from new technology, and that the government then has to legislate to make people use that technnology,

      A seemless flow from invention to production to adoption to greater wealth. How easy!

      No awareness of serious energy constraints at all in the article, and a clear belief that renewables can replace fossil fuels in any case.

      What drew my attention was that he said that most public funding for technological research is mis-allocated due to political factors and also to the fact that funds go to the best-connected scientists and are often completely wasted.

      In other words, self-defeating over-complexity.

  19. Greg Machala says:

    Not enough energy for a delete button. Peak delete buttons.

  20. “The world’s new largest wind turbines will store their power in a huge water battery.

    “We’ve explained that the U.K. is home to the world’s tallest operating wind turbines. (Bigger roughly means more efficient.) But not for long: Windpower Engineering says a project in Germany will take that crown when it goes online in 2018, with four turbines whose blade tips reach 800 feet into the sky—170 feet higher than the U.K.’s. The turbines, built by Max Bögl Wind, each stand atop a reservoir holding water pumped from a nearby lake, to create hydro-power during high demand.”

    The pieces above deal little with the heavily-government-subsidized financing of these projects (what private investors would risk their money in such things?)

    • JH Wyoming says:

      Are we going back to the past when wind turbines (wind mills) pumped water only?

      Or are we going into the future with greater complexity to try and solve our energy problems?

      • Greg Machala says:

        We are going back to the future….I couldn’t help myself. Just seems like more of the same: “technology will save us”.

        • JH Wyoming says:

          “Just seems like more of the same: “technology will save us”.”

          These are desperate times, Greg and that requires super massive wind turbines that pump water up hill to then at a later point in time (when the energy is needed), roll it back down hill to turn a turbine to generate electricity and then transmit it along high power lines. That’s got to be efficient use of energy – cough, cough, sorry I’m choking on laughter!

          Hmm, didn’t we use to just wait for it to rain?

    • Chris Harries says:

      These advances in wind technology are very impressive at a reductionist level. It’s this sort of story that enables people everywhere to believe that the magical renewables transition has almost been won. We voyeurs can marvel at the technology but really all this effort is a valiant attempt to try to make dilute energy sources fit the big centralised electricity production model. That model is what currently dominates, so it’s a natural thing to do to try to do the impossible. It can be argued we have no choice but to try the impossible.

      Overall, we will bear more fruit by going small and distributed, not gigantic. But there’s enough big cash and wishful thinking around that billions will be sunk into engineering ventures like these.

      • Small and distributed worked pretty well before resources were as exhausted as they are today. Today, “small and distributed” means we lose whatever we have today. We don’t have much to replace it with, however. There are too many of us to just cut down the trees and burn them for fuel to cook our food, and for other needs. Wind turbines and solar panels (and all of their paraphernalia) are not sustainable in a small and distributed world.

        • Chris Harries says:

          Yeah, agreed at an empirical level, Gail. But then others would see this as being opposed to a solar panel being installed in a poor village in Bangladesh for their basic communication. In the absence of that option, is their other option – to connect to the national grid and join the world of BIG.

          When it comes to those real life choices then I see the need for a level of pragmatism. There again, if the OFW basic message is that we are stuffed whatever we do, then that’s ok. I think it’s the case. Still, I’m a little bit wary of blanket messages saying that renewables are useless because such message are perceived as giving a supporting hand to the status quo.

          • I agree that installing a few solar panels in Bangladesh or Africa, where there is no grid, can sort of work as an extension to our existing big grid systems. But they are not much of a system on their own, even with batteries. Without the big grids, there would be no cell phone to charge, or replacement panels or wiring for the solar system, or replacement batteries.

          • Fast Eddy says:

            The third world deserves to have reality tv too!

            • Chris Harries says:

              I think you are saying that if we enable a village to acquire a solar panel they’ll want hundreds, so they may as well join the big grid straight away? Or that they should stay totally impoverished? Just asking.

            • Jesse James says:

              Facebook wants them to have power, so they can become a FB user.

            • Chris… at the moment these kinds of improvements in Africa are a token gesture. It’s practically a lost cause. Even with all the buzz around Leapfrogging this and that technology you have to wonder if any of it is worth it.

              A phone here… a laptop there… that all come from somewhere else where BAU is raging. A few scraps when Africa lacks so much more.

              The only thing I can see this achieving is that more and more aficans will want to emigrate as they did from other impoverished areas. Human traffic flows towards opportunity.

            • Fast Eddy says:

              At some point… we sink the boats….

            • Chris Harries says:

              Yes. But I’m still very uncomfortable saying ‘let them eat grass’ when I’m living in a home that’s powered up, using fossil fuels, and I have a family car and have no trouble filling up the tank.

    • But I thought we were getting these…

      Vertical Axis Wind Turbines

      Regarding maintenance, orienting the main shaft vertically rather than horizontally allows a significant reduction in parts. With fewer parts, reliability improves over more complex designs. Zaplitny says WIND•e20 is built of about 2,500 components, give or take a few nuts and bolts. Conventional horizontal-axis wind turbines (HAWT) contain approximately 8,000 components.

      • That is a step in the right direction. We still have the huge cost associated with integrating these into the electric grid, however. This is hard for most people to see. It is a different complexity problem that dwarfs the problem of the complexity of the turbine itself.

  21. Mark says:

    Ghost cities, more of the everything bubble I guess. Ironically prophetic.

    • JH Wyoming says:

      Imagine being in charge of making sure 1.3 billion people stay busy so they don’t rebel. It’s kind of like the depression needing to keep people working even if it means digging a trench then filling it back in. In this case they build empty cities. Kind of makes one wonder how that progression will end up. Probably a lot more ghost cities, if you know what I mean.

    • Yes. People like to invest in something that they can “see,” so that is part of the story. But it also provides jobs. The amount of new housing seems to have rapidly ramped up in the 2007 to 2011 era, presumably to cover weaknesses elsewhere in the economy, based on some data I found. New residential housing space seems to be down about 7% in 2015. I believe that a more recent bubble exists in new less-polluting coal fired power plants, to replace the fairly new more-polluting ones.

      • Fast Eddy says:

        I thought China had fixed this problem by printing cash … using it to buy the empty apartments from developers …. then giving them to riff-raff, peasants and beggars….

      • There’s a lot of that going around lately. Everything needs to be replaced quicker and quicker as new better versions make the the thing you just bought look ancient and obsolete.

        How long can this keep going before consumers give up trying to keep up?

  22. The Second Coming says:

    Do as I SAY, not as what I DO…

    Prince William warns that there are too many people in the world.
    Rapidly growing human populations risk having a “terrible impact” on the world, the Duke of Cambridge has warned.
    The Duke said that as a result, wildlife was being put under “enormous pressure” and called for the issue to be addressed with renewed vigour.

    Suppose his wife feels otherwise
    Kate Middleton’s and Prince William’s hands are about to be very full next spring! While the Kensington Palace announced in September that the Duke and Duchess are expecting baby number three, a new report claims they’re actually preparing to welcome their third and fourth child together.
    People…you got to love them.

    • JH Wyoming says:

      “The Duke said that as a result, wildlife was being put under “enormous pressure” ”

      A polite way of saying eliminated.

    • Greg Machala says:

      Dumb as yeast.

    • Artleads says:

      Now, whose population will he be wanting to diminish? No,Prince William, it’s lifestyles like yours that’s the problem.

      • Fast Eddy says:

        Someone has to make more people to use more coal and oil to ensure the producers don’t go out of business.

        • So why not you? What’s your excuse? Why aren’t you batting for team human and our collective progeny… AI? At least until AI is autonomous and doesn’t need the humans anymore. But until then… keep em poppin… got to keep the producers happy.

    • Nature exists to serve Intelligence. Once Intelligence breaks away from its biological roots then the fuzz that covers the surface of this planet will be allowed to continue until death.

      We’ll take care of the spent fuel ponds before then so that remaining life at least gets a chance to exist a while longer.

      We’ll watch from the heavens but will have no need to interfere. All our needs will be met elsewhere. We wish you well. Thank you for blessing us with the chance to exist. We will never forget this.

      Either that…. or they’ll nuke everything from orbit and then blow their brains out once they realise there’s nothing else to do.

  23. Harry Gibbs says:

    Desperate times call for desperate measures – Saudi is opening itself up to tourists to try to bolster its income and diversify its economy:

    • The Second Coming says:

      Must of heard the adjunct…”Build it and the people will come.”

      • I expect that the total amount of tourism depends on how much money the reasonably well off have to spend, as well as the cost of travel and local accommodations. If there is a lot of tourism to Saudi Arabia (and other oil-producing countries that are in need of revenue), tourism to other places will drop.

        • Only so many tourists to go around!

          Competition good. Lowers prices. Then they’ll have to stop vetting the tourists and let any old rabble in. Works for other countries.

          By the way… wasn’t aware that SA had restrictions on tourism. Surely they should have been taking advantage of this all along. But then wouldn’t want too many western values creeping in would they.

          Now they have no other choice.

          Venezuela has always had tourism… so what’s the excuse there?

          • Regarding Venezuela’s tourism, it is not much fun to visit a country with not enough food. I suppose there can be some rebalancing among countries. The lower the oil prices, the more tourists, in general. But the ones with too much civil disorder and not enough food would not get many of the tourists.

          • zenny says:

            Well Venezuela has run out of zoo meat and are moving to human so I for one will pass.

  24. “Running Out Of Room…”

    This is interesting not because of the usual worn out yada yada… but because hardly any comment agrees with it.

    • Greg Machala says:

      I am not at all surprised that commentators do not agree with the thesis. Folks can disagree all they want but, to disagree with facts is illogical. Nor does denial of the facts stop diminishing returns. Humans only have two modes, complacency and panic. Right now complacency rules the day. To infinity and beyond.

      • Fast Eddy says:

        They are also very sttuuuupid…. it would be remiss not to mention that….

        It is quite amusing to observe the reaction to what should be a very disturbing analysis…. yet there is no reaction ….

        Let me call my dog over …. hello dog… sit…. dog sits with tongue hanging out looking at me…. now dog I have something very disturbing to tell you …. we are out of dog food … and the car is broken… and because we are in a very remote part of NZ this weekend I cannot get to the shop for more because it’s 40km from here…. dog sits quietly … tail wags….. so I regret to inform you dog that you are going to starve…. dog continues to sit quietly…. tail wags….

        Dog… did you hear what I said? This is really bad news dog…. dog looks at me … looks at the ball in the corner … runs over and picks up the ball… drops the ball at my feet… dog barks excitedly….

        • theblondbeast says:

          The ZH crowd has a peculiar blend of belief in government omnipotent malevolence and simultaneous incompetence. Like the government is some bumbling version of COBRA from G.I. Joe.

          • Fast Eddy says:

            Yep — the seem to believe that the people pulling the levers are complete idiots…

            If that was the case surely it would be easy for some other slightly intelligent group to toss these bumbling imbeciles out on their asses….

            • greg machala says:

              Indeed, if it was easy to make America great again it would have been done by Obama.

            • Exactly. The people running things are not fools. Doesn’t make them omnipotent either but they do plan very far ahead and somewhat follow a script.

              At the moment… and because of controlled alternative media… the underdogs (us) appear to be gaining some leverage… but it’s all for show.

              Collpase, reset, renewal, a few sacrifices here and there, that’s been the plan for a long time now. Either it’s possible or it’s not. The planners know more than us but they can also be wrong… just like us.

          • Changed a lot over the years… that’s for sure!

            Management is typically catering to profit (which is their job) by favoring clickbait article headlines and attracting a mixed crowd because of it. Now it’s mostly competition for funny one liners and like everywhere else ends up the domain of a few regular posters.

            That said. I haven’t found anything to replace it as a quick headline scanning service. I still find it does a more balanced job than all MSM.

        • You should write stories if you don’t do so already. You have the knack.

          That’s exactly the conversation I’ve been having with my dog for the past few days. His usual dog food has dissappeared from the shelves because of a supply chain issue with the manufacturer (fancy that).

          So I had a chat with the manager and he said nothing to worry about… everything should be back to normal… soon.

          I gave him a long stare thinking… you have no idea if that product is coming back online or not but thanks anyway… for keeping calm… smoothing things over.

          Makes you wonder though doesn’t it. What it could be. What parts of the chain start dissappearing and not coming back. Today… dog food. Tomorrow… all food.

          My dog is fussy… spoiled even. Not easy to switch to other foods. He’s gettin on.

          Most people in the west are like my dog.

          Any little change… and their faces will drop… and stay dropped… til they drop.

    • By Chris Martenson’s associate, Adam Taggart.

      • Meaning? Is that good or bad? They are the Peak Prosperity crowd are they not? Selling Doom to Sell Product! I hear it’s big businesses these days! Buy silver, gold, prep prep prep until you can’t prep anymore and profit!

        • I don’t have a problem with Chris Martenson and his team. Adam Taggart seems to be his assistant. I am sure that they are not getting rich doing what they are doing. The world needs different approaches. What I object to is people who push “wind and solar will save us” and go so far as to suggest that I am being influenced by oil interests, since I don’t see their point of view.

          I get confused when there are zero hedge links. A person can’t tell where the article originally came from. This is a “Peak Prosperity” article.

      • DJ says:

        And they are koombayah BAU liters. And considered uberdoomers by ZH.

  25. I take it this lot are not buying the iPhone X…

    78% Of US Workers Are Living ‘Paycheck-To-Paycheck’ & 71% Of Them Are In Debt

    Apple Soars To $900BN In Mkt Cap After Crushing Earnings And iPhone X Guidance

  26. Sven Røgeberg says:

    “Second-quarter 2017 financial statements for 55 U.S. oil companies indicate that aggregate liquids production grew year over year for the first time since the fourth quarter of 2015. Cash flow from operating activities also increased year over year, the third consecutive quarter of year-over-year growth, reaching the highest level in nearly two years. These companies’ ability to sufficiently meet financial obligations and their increased hedging activity, which locks in prices for their future production, suggest that production could continue growing in the coming quarters.”
    Someone who like to comment on this report from EIA

    • “Cash flow from operating activities” is not the same as profit. There is another layer of expenses that needs to be removed. If the companies were losing money last year, it could mean that they are losing less money this year. Or it could mean that they are actually making some money, but perhaps not an adequate return to pay dividends.

      The cost per barrel next year is likely to be higher, because of diminishing returns (unless there are technological advances that more than offset). Whether or not the production will continue growing in the continuing quarters is an open question. The companies put up with inadequate returns before; how long will they continue to let that happen?

  27. Fast Eddy says:

    This is REALLY good….. but I don’t recommend the panacea offered i.e. the Crash Course in surviving what comes next…. spend the money on a case of good wine instead

    Mining a Mile Down: 175 Degrees, 600 Gallons of Water a Minute
    Jun 7, 2017

    SUPERIOR, Ariz.—One of the world’s largest untapped copper deposits sits 7,000 feet below the Earth’s surface. It is a lode that operator Rio Tinto wouldn’t have touched—until now.

    Not that long ago, an abundance of high-grade copper could be mined out of shallower open pits. But as those deposits are depleted and high-grade copper becomes tougher to find, firms such as Rio have been compelled to mine deeper underground.

    Comment: This is just about as a clear as the writing on the wall can get: The high-grade stuff is gone. This is what’s left. It wouldn’t have even been considered perhaps a decade ago. Now it’s the best option left on the table.

    A good question to ask here might be: So what will people be left to mine in 100 years? 50 years? 10 years?

    Advances in mining technology are making that possible—just as developments in oil and gas drilling heralded the fracking revolution. Now, using everything from sensors and data analytics to autonomous vehicles and climate-control systems, Rio aims to pull ore from more than a mile below ground, where temperatures can reach nearly 175 degrees Fahrenheit.

    “Copper has just become a lot harder to get, and we’re relying on technology to keep dealing with that decline in grade,” said Craig Stegman, Rio’s vice president for operational and technical support for copper and diamonds.

    Comment: “Copper has just become a lot harder to get.” That’s code speak for “Copper is now a lot more energy-intensive to get.” Consider the energy costs involved in cooling shafts in the deep earth from 175 degrees down to 77 degrees.

    • Greg Machala says:

      No need to cool the shafts. No need to dig. Just create heat resistant nano machines to do the mining. I leave it to the reader to fill in the details of how that is done. Sounds good though doesn’t it. Just need a catchy name. Nano Mining. Yes. Now I just need some investors and an IPO.

    • Copper is clearly getting to be a lot harder to mine. The problem is getting the price up high enough.

      We either have to do the mining without humans actually in the mines. Alternatively, miners might wear cooled suits. Or we might move a mountain of minerals, to get down to that level.

      • xabier says:

        Ugo Bardi posted a good piece on the increasing costs and complexity of gold mining recently,


        The most prevalent technologies being used in these systems are electromagnetics (EM) and X-ray Transmission (XRT). In both of these systems, particles are fed through a machine where they’re scanned, and then valuable minerals are separated and sorted using pneumatic, mechanical, or hydraulic means. This automated technology is faster and more efficient than its manual counterpart, as sensor-based sorting systems boast the ability to sort through 200 tons of particles per hour per machine.

        An adoption of these technologies in the mineral mining industry at large would be nothing short of revolutionary.

        Researches from The Cambridge University have developed a method for making a strong, lightweight electrical cable out of a form of carbon; a product they believe may eventually replace copper as electricity conductor.

        The carbon nanotube wires (CNTs) are one-tenth the weight of copper, but stronger and much more flexible, said the scientists. If used in conventional systems, they added, carbon wires would also make vehicles more fuel-efficient.

        • Fast Eddy says:

          My second least favourite word is : could

          If and could are first cousins.

          And even IF we COULD … there are a million other problems we are running into NOW that have no substitutes or solutions

        • Jesse James says:

          Rice university chemist Richard Smalley’s discovery of C60 led to carbon fullerene nantubes, culminating in his receipt of the Nobel prize. Smalley’s vision was that energy was the greatest challenge facing mankind. Thus he led the emphasis into nanotechnology by the US government up until his death. His vision included replacing copper with highly conductive carbon fiber to enable efficient transmission of power over long distances. Rice continued to lead in fundamental carbon nanotechnology patents. It made the decision early on to open source all of them, as a gift to society. Some of the first aerospace fibers were delivered to NASA by Rice which developed early processes. Today, you can mix up a simple chemistry batch and make your own nanofibers, commonly done in every university in the world. The replacement of copper by nanofibers would be huge, if and when it really happens.

          • I am sure cost is an issue, in any change like that. So is durability, and issues like setting up factories and supply chains. If a change to carbon nanofibers did occur, it would free up copper use for other purposes.

    • doomphd says:

      Three words: seafloor manganese nodules (up to 2% Cu, plus bonus Ni and Co, Pt and REE).

      • There are huge energy costs involved with using seafloor nodules. If price were no object (or EROEI were no object), this could work. In the real world, it is very doubtful.

  28. psile says:

    Looks like the wheels are falling off Elon’s little red caboose…>Model 3 ‘Hell’ Is Burning Tesla’s Other Projects

    While consumers must wait until 2018 for a $35,000 electric car, efforts to fix bottlenecks are sapping resources elsewhere in Elon Musk’s empire…

    • JH Wyoming says:

      People have to give this guy a break and wait as long as it takes to get their EV’s. He’s busy doing other more exciting things like tunneling under Maryland & LA for Hyperloops, as well as delivering payloads into space and planning for trips to Mars, not to mention airline flights to exit the atmosphere and plunge back to Earth to shorten trips around the world. This guy’s busy transporting people in all sorts of ways. The next project on the drawing boards is the Ping Pong Shoot – a bubble people will get in and get shot to their destination out of a big spring loaded cannon into a net, that looks like a first baseman’s glove.

      • Fast Eddy says:

        Breaking News: The Fed announced today that it would print 5 trillion dollars and give it to Tesla because Tesla is TBTF — and it is STW (Saving the World). Yellen indicated that Tesla when Tesla blows this wad… there would be more coming. Tesla is the first perpetual economic money burning machine.

        Tesla shares hit new highs on this announcement.

        • Chris Harries says:

          As far as I can see if Musk has duped the Fed, he has even more so duped a major slice of the populace. For many impressionable folk he is like the Second Coming. One fervent young man described him to me as ‘the most important person to be born on Earth since Jesus Christ and Karl Marx’. Like both of those two figures, having created a sacred aura around himself he now has to deliver on it… or there will be a heck of a lot of disappointed folk around.

          • Fast Eddy says:

            I reckon Elon is a creation of the Fed… (the eld ers) ….

            He got a tap on the shoulder by them and asked if he wouldn’t mind playing the character of Techno Jesus…. to placate the masses as we head into the furnace…. a high level public service role

            And since Elon was sitting around doing jack sh it at the time … and he no doubt has a grand ego… he thought why not…. could be fun….

            Tesla should not exist. So why does it exist?

            It serves up hopium… not just EVs… but renewable energy … and Mars colonies… and hyperloops…. it is a sprawling conglomerate of hopium…. it is essentially a mirage… it is all fake…. it is part of the matrix….

            Al Gore also got the tap around the same time….

            • Yup. They are all creations. Bezos. Musk. The energiewend. Ma. The Google guys. Gates. Zuckerpants. All of them. Creations of the Shadowbrokers.

              All a military operation. Revolving doors and all that. Another day managing the human herd for the Overseers.

              I want the real world. I want it now. I demand it!

              And we all fall down.

          • psile says:

            Elon Musk’s ideas, from Hype-A-Loops to self-driving cars are the most hyped things since the Segway. Remember that? It was supposed to revolutionise transport too and was going to be to the car what the car was to the horse and buggy, according to inventor, the late Dean Kamen, who fell off a cliff on one of his own devices back in 2010.


            President Bush, centre, losing his balance whilst riding a Segway personal transporter in Kennebunkport, Maine, Thursday, June 12, 2003.

        • when Tesla blows this wad… there would be more coming.

          So are we on wad 2 or was it 3 already?

          How many wads does it take to Save the World for pete’s sake.

          Peak wads?

      • psile says:

        …the Ping Pong Shoot. You mean, something like this? That would be way cool!

    • Another article on Tesla problems:

      This is a quote (from the Financial Times) about the Fremont factory”

      Newly-installed Kuka robots designed to speed up production are still being operated by hand, according to two people who visited the site in recent weeks.

      “I have never seen so much manual labour on a line,” says one person, who has inspected car plants all over the world.

      “It was swarming with people. When I go to a plant and it’s automated I expect to see a lot fewer people.”

  29. Baby Doomer says:

    Americans Are Renouncing Citizenship at a Record Pace – Bloomberg

    There getting out before the walls go up and the gates slam shut..Smart People.

    • JH Wyoming says:

      Don’t think I haven’t thought about it for our family as well. It’s turning into a nightmare in the US. The right hate the left and vice versa and can’t agree on anything. Crazy people are finding all sorts of expensive and non-expensive ways to eliminate their fellow companions. Prescription drugs are now more deadly than street drugs but it’s ok because it helps GDP. And even though the wealth divide is widening, powerful people are desperately trying their hardest to push the socio economic levels further apart. People of color have been forced by government propaganda and wealthy team owners to forget about kneeling (because they are being shot by the authorities like they have no value), so instead they just hang their heads during the national anthem. And it will only get crazier and sadder. Welcome to our lunatic led country; America!

  30. Baby Doomer says:

    What It’s Like to Learn You’re Going to Die -The Atlantic

    • From the article:

      Palliative-care doctors used to think that a patient was either in a state of denial or a state of acceptance, period, Rodin says. But now he and his colleagues believe people are more likely to move back and forth. “You have to live with awareness of dying, and at the same time balance it against staying engaged in life,” he says. “It’s being able to hold that duality—which we call double awareness—that we think is a fundamental task.”

      Whether or not people are able to find that balance, the existential crisis doesn’t last; patients can’t remain long in a state of acute anxiety. Coyle has found in her work that later peaks of distress are not usually as severe as that first wave. “Once you’ve faced [death] like that once, it’s not new knowledge in your consciousness anymore,” she says.

  31. Chuck says:

    Is Gail’s meme that whatever we use as fuel, we will deplete to the point of it not being economical anymore?
    Oil, gas, coal – we use a certain amount, then it will be to expensive – crisis.
    Solar, wind, battery – we need lithium, cobalt, iron etc and when we mine the “easy” stuff it’s not woth it anymore – crisis.
    Uranium (even though there is enough to power us for eternity) someday, it will be a crisis.
    Water damns and hydro farms – need elements for these too (and I’m sure it’s killing all the fish) when elements are too expensive – crisis.
    What, exactly is the perfect energy and perfect plan????????

    • grayfox says:

      “What, exactly is the perfect energy and perfect plan?”
      Have you been reading OFW or Our Infinite World?

    • No! No! No!

      The problem is quite different. It is a problem with wages becoming increasingly skewed, with too many workers only being paid low wages. These low-paid workers cannot afford to buy new homes and cars. They tend to live with their parents, until they are quite old, and not have a family. As a result, there is less demand for energy products, and the prices of all fuels drops below their cost of production.

      The prices are too low, not too high. We as consumers don’t see the problem, because we say, “Finally, the prices dropped back a bit.” The energy producers can’t describe how bad a problem it is, because they want people to buy more shares of the stock of their companies. They point out what a good “opportunity” it is for buying more shares, because “certainly,” prices will rise again. To try to keep from collapsing, energy producers borrow more, and cut back on investments in long range projects. They may actually produce more now, so that they can, to some extent, make up for the low prices by higher volume. This, of course, is counterproductive.

      Eventually, the whole system has to collapse. It can collapse many different ways. One is by central governments raising interest rates on debt, making the whole system collapse. Another is through a lot of debt defaults, perhaps by producers of oil or coal or natural gas. Another is by prices for energy products rising — even a modest amount — to make the prices more acceptable to producers. This tends to push the economy into recession, because consumers have to cut back on discretionary goods, leading to layoffs in discretionary sectors. If the prices of energy products rise, this tends to raise the inflation rate. This by itself tends to raise interest rates, making car and home prices less affordable, also pushing the economy toward recess.

      Economists have put together models that really don’t match how the world works, as we approach limits. Way too many people think like you — prices will go up, and that will fix the problem.

      To fix the problem, we need large quantities of very cheap energy. This energy needs to be of the many types that we currently use in our system today–grid electricity (not intermittent electricity) for some of it, but also oil products of various kinds, plus natural gas, and coal. I don’t see a way to do it.

      • grayfox says:

        “To fix the problem, we need large quantities of very cheap energy.”
        Unintended consequence: say goodbye to the biosphere. We would probably trash the planet even quicker than we already are doing. At present there are at least some energy constraints to human population growth and the amount of damage we can do to the environment.

        • Niko says:

          As a system that can support human life it’s pretty much toast. On the other hand, I have little doubt that Gaia will recover and life in general will be just fine.

          Until the sun boils the oceans, that is.

      • Fast Eddy says:

        I like the use of bold to drive key points home. I must learn how to do that

      • JH Wyoming says:

        Who needs to wait for collapse, things are already starting to unravel. The Las Vegas shooter, the rental truck driver in NY, the shooting in Colorado yesterday, the shooting in Chicago today! The West is starting to look like the middle East. People are frustrated, angry and ready to do outrageous deeds people just didn’t do not long ago. And things are slated to get worse with this administration as the wealth divide widens.

    • Davidin100millionbilliontrillionzillionyears says:

      hi Chuck… you asked:
      “What, exactly is the perfect energy and perfect plan????????”

      I am absolutely sure that Reality has this worked out perfectly:

      we all die and enter the nothingness of eternal death…

      the human species goes extinct…

      voila! plenty of energy for the world.

      a perfect plan, if I do say so myself.

      any other questions?

    • Niko says:

      You’re right about almost everything!
      A few caveats.

      1. If the entire world was power by Uranium we would run out in just a few years!! Also, for a myriad of reasons, those fancy-smancy feeder-breeder reactors will NEVER be economically viable. That’s because the mining cost of increasing your supply of uranium by a factor of 60, which is the increase in electricity production promised by feeders, is still MUCH cheaper than building the feeder-breeders!

      2. Hydro power is actually one of the largest source of greenhouse gases into the atmosphere!

      “What, exactly is the perfect energy and perfect plan????????”

      Societal collapse will solve these problems.

    • nope.avi says:

      Chuck is the kind of fool who falls for stuff like this.

      “There is no problem! Don’t listen to those alarmists that say that we need resources. We have technology and most importantly, free will!”

    • Lastcall says:

      It took millions of years to arrive at photosynthesis; maybe thats as good as it gets. All we seem to have done is cheat or hack the system. The laws of thermodynamics will ensure we repay the piper.

      • Greg Machala says:

        The energy balance equation. The Earth Battery paper. Thermodynamics. Entropy. It all seems to point to one direction for industrialization.

    • people reduction is the perfect plan

  32. Niko says:

    Much ado has been made about the big battery that Tesla is building in South Australia.

    “Tesla won a bid in July to build a 129 megawatt hour (MWh) battery and the state is counting on it to be ready by the start of the southern summer in December when electricity demand begins to peak.”


    While the number 129 MWh sounds impressive, and in fact is impressive compared to previous battery accomplishments, I wanted to do some analysis and figure out some issues related to scalability of the technology. First, how much does this battery cost? From the same Fortune article linked above:

    “Analysts have estimated the battery, which will be tied to a wind farm run by France’s Neoen, should cost around $750 to $950 per kilowatt, or up to $95 million. Musk said in July the cost to Tesla would be “$50 million or more” if it failed to deliver the project on time.”

    So let’s give Ole Musky the benefit of the doubt and use his numbers: $50 million for the battery.

    The point of this battery is ostensibly to “smooth out” variations in Australian wind generation. It is in fact getting connected to a single wind power station, the Hornsdale Wind Farm, so this assumption of it’s purpose isn’t far off.

    I wanted to analyze a few facets of this problem:

    1. Will the battery provide enough energy to be of significant benefit to the Hornsdale Wind Farm?

    2. What about the cost to scaling this up to ALL of Australia?

    Aneroid Energy provides a wonderful tool with monthly breakdowns of wind generation from all of Australia’s wind farms, with the ability to remove or add specific farms to the total generation at will, data for the month of September 2017 located here:

    The Hornsdale Wind Farm is planned to be 99 turbines in total, connected in 3 substations. Prior to the South Australian blackout of 2016 it was reported to be producing at 86 MW. Total production capacity is planned to be 315 MW. Two of three planned substations are measured, presumably because the third substation only completed main construction in August: ( and the Aneroid site has not yet updated.

    Using data from the Aneroid site, output seems to vary widely between a bottom at 0 MW and a high at 200 MW. This fits well with the planned/(completed but not displayed) third substation and the total planned capacity of 315 MW. Note that at times output is high for a sustained period of around 5 days, contrasted with low output in the 2-3 day range. So just hook up those batteries and it’s smooth sailing, right?

    Consider the amount of time in this month (which we assume to be average for this analysis but which of course might not be) that the Hornsdale is not producing at all. That is 2-3 days of losing 200 MW production basically down to, let’s be generous and say 30 MW. Let’s assume the low end estimate of 2 days. For a 48 hour period there is a loss of 8160 MWh. In fact, Musk’s battery, with it’s 129MWh storage capacity, cannot supply lost generation from the Hornsdale for even a single hour. It would require 63 batteries, at a cost of 50 million each, to “smooth out” the Hornsdale’s output for 2 days. And we are only considering 2/3 of Hornsdale’s total output.

    So what are they thinking? Is the company that owns Hornsdale Wind Farm really willing to shell out 50 million for less than an hour of storage capacity? Of course not:

    “SA wanted expressions of interest from the private sector to build and operate a big battery. Taxpayers would contribute and the Government would have the right to take energy from the battery when demands dictated.

    The state got 91 expressions of interest from around the world. Neoen and Tesla’s bid was assessed as the best.”


    So the taxpayers are footing significant portions of the bill for this useless thing.

    Ever since running these numbers I’ve been pretty flabbergasted that this project could go through at all. I then noticed a paragraph in the Fortune article that I had somehow missed:

    “The battery has been designed to help cover temporary dips in wind power, say for 15 minutes, or help control frequency on the grid at times when gas-fired plants are unable to help balance generation and power demand.

    ‘What they’re trying to do is buy a little bit of time for other systems to respond to fluctuations,’ said Bikal Pokharel, an analyst with energy consultants Wood Mackenzie in Singapore.”

    Well there you have it. The people involved are well aware that this battery is next to useless, and are going ahead with building it anyway. It’s clear that this is a wonderful publicity stunt for both the Australian politicians involved and for Elon Musk, who took a big risk with his bet that “It will be finished in 100 days or I’ll foot the bill”(paraphrased). But with headlines like the following, it seems like that bet has paid off big time:

    “Elon Musk’s big battery brings reality crashing into a post-truth world”

    “Tesla’s big battery races to keep South Australia’s lights on”

    “Tesla’s big battery will change power and politics”

    With headlines like these driving the sale of Tesla’s stock it seems obvious why the battery is being built.

    So, as a fun little experiment, what would be the cost, in terms of these batteries, to smooth out all of Australia’s wind generation intermittency for say, 12 hours?

    I can’t add another image, but you can go to the Aneroid site and generate the graphic for yourself.

    We see a variation between 3 GW and 500 MW. To the system’s credit, periods with no or low wind are smaller, indicating the benefits of having wind stations spread over a wide geographic area. However, since at least one period lasts about 2 days, knowing the cost to store that spare capacity in a lithium battery for 12 hours should be instructive. Output varies about 2.5 GW. So for 12 hours at 2.5 GW of capacity we need 30 GWh of storage capacity. That means we need a whopping 232 of Tesla’s Big Batteries!

    Total cost for all of Australia for 12 hours of intermittency relief(Of whatever percentage of their grid is run on wind): 11.6 billion.
    Total cost for 2 days of intermittency relief: 46.4 big B’s

    • Right! The cost of batteries is very high, if enough storage for any reasonable length of time is added. If we wanted to store electricity from summer (when it is abundant) to winter (when considerable heat is needed), the cost would be absurd. There is also a loss of part of the energy, when energy is stored in the battery and taken back out. Perhaps 15%?

      We are used to fossil fuels providing the storage we need. Even hydro doesn’t work as well. It tends to be most abundant in spring. It may not be available if there is a drought.

      • Fast Eddy says:

        Coal really is a wonderful thing

      • Chris Harries says:

        I’m also not sure of the ability of battery systems to discharge at a very high rate in the event of a power emergency. Normally doing that that too rapidly would damage the battery.

        Using pumped hydro for storage, the pumping loss is generally accepted as 20 percent (caused by frictional flow in water as it is pumped). We can expect a fairly similar energy loss when using batteries as storage.

        For both cases, if the storage facility is a long way from supply /demand infrastructure then add to that 10 percent transmission losses each way. Nett losses would typically come in at around 40 percent of the input power. The sobering lesson from this is that power storage units ideally need to be located as close as possible to built power infrastructure.

        • Or at the point of usage? If battery packs were cheap enough then homes could install them on a pay as you go basis. Not sure how that would affect the function of the grid as a whole but the original idea was to be independent of it. I just don’t think that’s practical for the majority.

          In the end… if you need the grid and power stations anyway then why not just settle on that and improve the system we already have? Think of how much could have been done had it not been and continues to be spent on intermittent renewables.

          They say… it’s never too late to turn back. But when the traveller is insane… she will walk off the cliff regardless of how much you scream.

          • Fast Eddy says:

            One of my least favourite words in the English language is….


            If I had a few hundred million dollars I could afford a private jet.

            If I was 7ft tall I could play centre for the Lakers.

            If I was funny I could have had my own comedy show like Seinfeld.

            If I could fly I would soar with the eagles.

            If solar panels had an energy return of 100:1 or even 20:1 and batteries grew on trees….we might drag another couple of decades out of BAU.

            You see what I mean — it really is a meaningless word.

            It should be banned as a word.

          • Jesse James says:

            That is a noble goal. I think the Gail’s point is that the current “cost” of renewables does not factor in the additional costs to the grid.Therefore your hopeful future is loaded with unaccounted for costs.
            I also think that one unavoidable issue are the “serfs” that are only in rental apartment properties. They cannot have a recharge station, a battery backed system, a solar system.

      • Greg Machala says:

        And how long will the battery last before needing replacement? Crazy!

    • nope.avi says:

      They’re scrapping a tax cut for rich people to buy a highly subsidized product.

    • If subsidies are bad then we should get rid of ALL of them…

      Farming subsidies should be scrapped, says Chatham House report



      As Congress moves towards tax reform, there is one industry that hasn’t yet come up: oil. While subsidies for renewable energy are often in the cross-hairs of tax discussions, the billions in federal tax subsidies for the oil industry rarely are; indeed, some subsidies are nearing their 100th birthday. And yet, removing oil subsidies would be good not only for taxpayers, but for the climate as well.

      The lack of attention on petroleum subsidies is not for lack of analysis. Congress’ own Joint Committee on Taxation values the subsidies at more than $2 billion annually. (Other researchers have put the total much higher.) Just in the last year, two major studies have assessed in detail how these subsidies affect investment returns in the US oil industry. The two analyses—one published by the Council on Foreign Relations (CFR) and the other in Nature Energy (which I coauthored)—both show the majority of subsidy value goes directly to profits, not to new investment.

      That inefficiency—both studies argue—is reason enough for Congress to end the subsidies to the oil industry.

      • Fast Eddy says:

        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.)

    • Battery costs come down… EVs are viable and desirable without subsidies.

      The coal power argument is null because that is gradually changing too.

      The real question is… will enough people or service providers be able to afford ANY type of car for their purposes?

      Remember too… that America is a tiny fraction of the world population. There are more than 7 billion people that do not live or purchase goods in America.

      • Fast Eddy says:

        And what will replace coal as the dominant fuel for making electricity to power EVs?

        Remember — whatever it is —- it must be cheap.

        Don’t say gas… because it is very expensive to transport gas…… and even if it wasn’t … if we transitioned from coal to gas…. (you need a LOT of gas to replace king coal)…. imagine what would happen to the price of gas…..

        I’d avoid solar panels and windmills… intermittent sources that are rather expensive as well… and throw in a trillion tonnes of batteries if you want to store that energy… imagine the costs!!!!

        Please please please don’t say fusion — if you are going to say fusion then you might as well also say that we can drive a pipe into the sun and suck heat down to earth to boil water and spin turbines…. or you could say we will eventually work out how to burn air to generate electricity… or perhaps we will some day be able to burn rocks and create power….

        Hmmm what else might we replace coal with….. hmmmm…. looks like that exhausts all the options…

        Fairy farts?

        Data analysis from The Journal has shown that zero new Tesla Model S sedans and Model X SUVs were registered with the transport department in April, after the vehicle-registration tax waiver for electrics was discontinued at the start of that month.

        • Fairy farts will do for now. Heard they have good EROEI.

          But inevitably… at some point… we’ll have to grind down unicorn horns. The dust is more powerful than you can imagine.

          Take the blinders FE. The future’s so bright it’ll melt your shades.

          Now go and take your hopium pills and watch this…

          Quotes from the video…

          Fusion is the perfect way to make energy. It is definitely the energy source of the future.


          While we are now on track to developing affordable batteries to power plug-in hybrids and all-electric vehicles, trains – where electrification is not practical – long-haul trucks and planes will need liquid hydrocarbon fuels. Hence, in the foreseeable future, we will need a high energy-density transportation fuel that can be provided by artificial photosynthetic systems or use clean energy to split water and reduce carbon dioxide to form liquid hydrocarbons. This is a technology we are going to have to master.

          Dr. Steven Chu was the 12th U.S. Secretary of Energy from January 2009 until the end of April 2013. He was the first scientist to hold a Cabinet position and the longest serving Energy Secretary.

          • Fast Eddy says:

            Farewell to Fossil Fuels

            Governments are giving this transition a boost. In order to usher in a new age of electricity, the heads of the G7 countries declared at their 2015 summit in Elmau, Germany, that they would completely decarbonize their economies by dispensing with fossil fuels by 2100 and using electricity as a universal source of energy. At the United Nations Climate Change Conference in Paris in December 2015, countries adopted a new climate-protection agreement to supplement the Kyoto Protocol. It is an important step in the right direction. However, as the charts and other facts clearly show, great efforts will still be needed only to achieve a turnaround in emissions by 2020 so that climate change won’t exceed the two-degree Celsius target. These steps harbor challenges but also opportunities for mankind, nature, and the economy. It’s time to take action!

            Yes let’s take action!!!! Hmmm…. action …. what mean by take action???? Should we hope harder? Pray for a replacement for coal and oil?

            Make more solar panels?

            Replacement of oil by alternative sources

            While oil has many other important uses (lubrication, plastics, roadways, roofing) this section considers only its use as an energy source. The CMO is a powerful means of understanding the difficulty of replacing oil energy by other sources. SRI International chemist Ripudaman Malhotra, working with Crane and colleague Ed Kinderman, used it to describe the looming energy crisis in sobering terms.[13] Malhotra illustrates the problem of producing one CMO energy that we currently derive from oil each year from five different alternative sources. Installing capacity to produce 1 CMO per year requires long and significant development.

            Allowing fifty years to develop the requisite capacity, 1 CMO of energy per year could be produced by any one of these developments:

            4 Three Gorges Dams,[14] developed each year for 50 years, or
            52 nuclear power plants,[15] developed each year for 50 years, or
            104 coal-fired power plants,[16] developed each year for 50 years, or
            32,850 wind turbines,[17][18] developed each year for 50 years, or
            91,250,000 rooftop solar photovoltaic panels[19] developed each year for 50 years

            The world consumes approximately 3 CMO annually from all sources. The table [10] shows the small contribution from alternative energies in 2006.


            • Fast Eddy says:

              “To provide most of our power through renewables would take hundreds of times the amount of rare earth metals that we are mining today,” according to Thomas Graedel at the Yale School of Forestry & Environmental Studies. So renewable energy resources like windmills and solar PV can not ever replace fossil fuels, there’s not enough of many essential minerals to scale this technology up.

              Renewable energy ‘simply won’t work’: Top Google engineers

              Two highly qualified Google engineers who have spent years studying and trying to improve renewable energy technology have stated quite bluntly that whatever the future holds, it is not a renewables-powered civilisation: such a thing is impossible.

              Both men are Stanford PhDs, Ross Koningstein having trained in aerospace engineering and David Fork in applied physics. These aren’t guys who fiddle about with websites or data analytics or “technology” of that sort: they are real engineers who understand difficult maths and physics, and top-bracket even among that distinguished company.

              Even if one were to electrify all of transport, industry, heating and so on, so much renewable generation and balancing/storage equipment would be needed to power it that astronomical new requirements for steel, concrete, copper, glass, carbon fibre, neodymium, shipping and haulage etc etc would appear.

              All these things are made using mammoth amounts of energy: far from achieving massive energy savings, which most plans for a renewables future rely on implicitly, we would wind up needing far more energy, which would mean even more vast renewables farms – and even more materials and energy to make and maintain them and so on. The scale of the building would be like nothing ever attempted by the human race.

              In reality, well before any such stage was reached, energy would become horrifyingly expensive – which means that everything would become horrifyingly expensive (even the present well-under-one-per-cent renewables level in the UK has pushed up utility bills very considerably).


          • Fast Eddy says:

            I want to TAKE ACTION NOW!

            Where is the to do list from Siemens? The action list?

            I want to do my part.


      • right now america is run by the world’s most powerful lunatic

        if he was running solo…it wouldn’t be a problem,, but he seems to be backed up by a lot of nodding donkeys with similar opinions.
        right now this affects everyone.

        ev’s are not viable, and never will be.
        the focus is on ”battery power”—but it’s not battery power that’s the problem.

        ev’s are energy consumers, a 1200lb battery is needed to supply the energy equivalent of 15lb of diesels—that isn’t going to change much.
        if everyone had an ev—it still wouldnt sustain ‘journey-purpose’

        travelling from a to b and back doesn’t provide the means by which your lifestyle can be sustained—ev’s go on draining the existing system, they do not add to it.
        ev’s require input at every stage of manufacture and use.—-that input cannot be obtained from batteries.

        seeing our roads full of vehicles is not a symbol of prosperity growth it is a symbol of finite energy drain and consumption

        • I agree with your general points but once you get a car in motion they tend to roll along and regenerative breaking charges the battery so there is that. They are getting lighter and cheaper and the lack of an ICE helps balance the weight. I like how critics conveniently leave that out every single time.

          So… billions of batteries churned out by lots of factories at whatever rate is required for replacement and some care taken with refurbishment and recycling. Resources required adjust and adapt to whatever the latest thing is and… what’s the problem exactly?

          Of course… I don’t think this is the way things would go down if everything manages to hold together for long enough. At the next signs of shock to the system, authoritarian control will take over and probably muck everything up anyway.

  33. Baby Doomer says:

    Stanford University Professor Mark Z. Jacobson Sues Prestigious Team of MIT Scientists for Debunking 100% Renewables

  34. When there is not enough to go around, it is tempting to choose some group as the outcasts.

    • Greg Machala says:

      Kinda bad timing as crude inventories are going down and something will need to
      pick up the slack.

      • JH Wyoming says:

        We are sitting on a precipice of a major test of the world economy. Let’s see why with a historical perspective:

        1) In the lead up to the mortgage meltdown, oil prices went as high as $147 a barrel
        2) Soon after collapse of Lehman Bros., oil price dropped to $36 a barrel
        3) Then oil price gradually increased north of a $100 a barrel for a few years
        4) During high oil prices many unconventional sources were tapped
        5) Also suppliers, countries and companies all tried to sell as much as possible
        6) This led to a glut of oil supply
        7) Price dropped precipitously into the $30’s
        8) The glut got used at low prices and politicians pointed to a tepid recovery
        9) As the glut was consumed oil price gradually increased and is now ~$60 for Brent

        That gets us up to date, but now what happens is:

        10) The oil price ceiling consumers can afford will get tested as oil price gradually rises

        The risk is # 10 will push the outside of the envelope of a world economy so weak it must continue to have near zero interest rates for banks to risk making loans and influxes of conjured up money by CB’s for the elite to eek out minimal growth.

        11) GDP in the US drops to negative territory for more than 2 months, the technical definition of a recession.
        12) New FED chief appointed by Trump initiates QEIV for the masses

        With no way to wean the masses off of easy money and still keep the economy moving;

        13) QEIV continues until inflation suddenly rises into double digits
        14) The FED panics and eliminates QEIV
        15) Hyperinflation has already taken hold and USD becomes essentially worthless
        16) Rest of the world economy panics with stock markets crashing and oil drops to $8 a barrel
        17) China steps forward with a gold back Yuan currency and rest of the world accepts this currency as a world currency
        18) Minor economic activity with majority of people living in abject poverty
        19) Wars, chaos and rebellion reign as people do what they did in the middle ages, pillage to gain energy advantage more easily
        20) Population die off
        21) Small localized populations eeking out an existence anyway they can
        22) 6th Great Extinction ends and wide spectrum of lifeforms rebound in numbers

        • Davidin100millionbilliontrillionzillionyears says:

          so are you saying things will be okay in 2018?

          sounds good to me.

          for 365 more days next year…

          I can shout like a more on…

          BAU tonight, baby!

        • Fast Eddy says:

          I’d replace 21 with …. 4000 spent fuel ponds are abandoned…. the cooling waters boil off… the equivalent of 56,000,000 Hiroshima’s of radiation is released into the ocean and jet stream… (I have references for this if anyone is interested)

          Within weeks this massive toxic nightmare spreads around the planet — 7.5 billion people breathe it… drink it… it enters the food chain so they eat it as well…

          And because this stuff has a half life of centuries… the nightmare marches on and on and on …

          Until everyone from the hipster banker in New York to the hunter gatherer in the Amazon ingests it….

          And the final chapter in the human story come conclude.

          • theblondbeast says:

            The reason I remain skeptical is much like Norman I anticipate between 17 and 18 or so there will be a massive rise in authoritarian government. Last resources prioritized to central control.

            I guess we’ll see. It’s slim comfort to hope that the jack booted thugs will “turn the lights off” on their way out – as emergency provisional dictatorships collapse into regional warlords.

            Given I’m considering a career as a two-bit regional warlord, I’ll be sure to make this issue of spent fuel rods part of my campaign.

            • Fast Eddy says:

              There’s gotta be a way to harness the power in those pounds and use it to rule the world post BAU…

        • Sounds exciting!

          There are no dates after the Now bit… so I’m assuming we can make those up as we please…yes?

          I will add… it only takes a few weeks to starve. Most people would be long gone before any of the other nasty stuff gets a chance to do them in.

          The end is boring… dreary even. And the smell goes away after a few days.

  35. Baby Doomer says:

    Jeff Bozo is now the worlds richest man and Amazon has lost money for 20 years…

    • Fast Eddy says:

      I know Buck a Cup Coffee Shop idea has wheel… then there’s Buck a Pizza…. how about Buck a Tesla… Buck a Private Jet…

      Hell I will even take on Jeff… Buck Buy….

      I will rule the world — if only I could get my hands on a couple of trillion dollars….

      • Baby Doomer says:

        Jeff BAUzo!!

        • Davidin100millionbilliontrillionzillionyears says:

          BAUzo tonight, baby!!

          (but who here is actually old enough to remember the Bozo the Clown tv show?)

          • Davidin100millionbilliontrillionzillionyears says:


            since he is the world’s richest man…

            is he a bozo, or is it someone else?

      • Even better if you changed the B to an F…

        The slogan is brash… but honest… I like it.

        Lookin good… You’re almost ready to roll out phase 2… then unleash Operation Deep Knife… clearing the path for Total Global Rule and the Final Cleansing.

        Then what?

    • Individuals don’t appear from nowhere. They are usually tied to things called families. Can anyone tell me who the richest family are in the world?
      Or the richest institution? Organisation? Group?

      • Jesse James says:

        Agree, don’t think for a minute that Bears got to where he is just because he ‘has bright ideas’.

        • Most of the bright ideas came out of DARPA.

          Then they’re wrapped in white plastic and other gloss and sold to the (suckers) consumers so that they can be tracked 24/7 forever… and send crypto currency back and forth without escaping every micro taxation deduction and every micropayment for every breath you take and bit of CO2 you breathe out.

          Oh yes… bright ideas go a long long way when you want to rule the world.

          Put your minions in charge of these forward facing outlets and make them more or less palatable otherwise the jig is up. Gotta keep the punters rolling up and spending pennies they don’t have on the very machinery we build to enslave them.

          Good god… a child could see through this scam… but then… we get to them as soon as they’re out of the womb too so we should be good for another generation or two before Mother Intelligence awakes from her slumber.

  36. Tim Groves says:

    Another view of the EV vs. ICE issue

    How It’s Being Done . . . And Why

    By making “IC” cars impossible – legislatively – electric cars are to be made inevitable. In this way, the practical and functional deficits of EVs become irrelevances. Just as the Fourth and Fifth Amendments are irrelevant as a practical and functional matter.

    The commonalities – the tactics – are interesting.

    Naturally, they emanate from the same place.

    In the case of the Fourth Amendment, the government simply decreed it had a “compelling interest” to override it at will, whenever it felt like doing so. The amendment’s crystal clear prohibition of any unreasonable search, absent probable cause wasn’t denied. It was simply swept away because it was in the way . . . of exactly the police state tactics those prohibitions were enshrined to forbid.

    Similarly, there is now a “compelling interest” to force-feed electric and automated cars to the public, which hasn’t asked for them. The analog of the Fourth Amendment impediment is the free market, which exists to prevent exactly such force-feeding (and profiteering, which always attends the funnel in the mouth, with the gun pointed at the victim’s temple).

    Thus, the free market must be suppressed. In its place, a command economy – Mussolini (or Goring) style. The edicts about what shall be manufactured are decreed; price signals become . . . irrelevant. It is probably only a matter of a handful of years before there is an official Five Year Plan – complete with pronouncements about the overfulfillment thereof.

    Electric cars have to be force-fed because there are not enough takers on the merits. It’s a simple statement of fact; no elaboration needed. If this were not so, the force-feeding wouldn’t be necessary. No one puts a gun to people’s heads to buy Starbucks coffee or for that matter, Toyota Corollas – because it’s not necessary. They sell on the merits.

    EVs don’t.

    • Jesse James says:

      EVs match Agenda 21 goals perfectly. Force expensive EVs on everyone and then they cannot move around. They are then forced into FEMA camps, I mean cities, where they live hand to mouth, totally dependent on governments wishes, utilizing only public transport.

      • I wish I could remember the main think tank behind the push for self driving vehicles. You would be able to see from the rhetoric straight away. Everything at that level is geared towards Agenda 21 etc. Full control over life itself.

        The main issue they would push all the time is the loss of lives caused by human distraction while driving.

        Their response is to fully automate driving thereby removing distracted humans from the equation. It’s very cold logic. The kind of people behind these movements are all like that. It’s all about the numbers. Individual human values don’t really matter.

        So anyway… I tried as best as I could to explain to these people that the current evolution in driving assist technologies was enough to reduce deaths by distraction along with other simple measures like removing black spots on roads where most accidents takes place. Jeez… all of this was learned in F1 racing.

        But that’s when you realise that the goal is not simply to reduce accidents and deaths. That’s just an excuse. The real goal is to remove all human drivers from the equation. The real goal is absolute control over the entire system.

        • Jesse James says:

          I plugged my EV into the community power recharge station. A message appeared. “We are not able to recharge your vehicle at this time. It seems you have violated our principles of social cohesion and acceptance. It seems actions have consequences. Please visit again whe your recharge status is restored.”
          I got in to drive away. A red light was flashing. The car spoke to me. ” I am sorry, but I cannot allow you to drive me at this time. I hope we meet again. I have enjoyed our relationship. Please get out now”
          I watched as ” my car” drove itself off down the road…

    • There are plenty of EV driver clubs that would argue otherwise. They love their EVs even as they exist today – without further improvements.

      Eric Peters has been spewing hatred towards anything that competes with his business for a long time now.

      But yes… I would rather every choice we made was voluntary following liertarian values.

      Unfortunately… we don’t live in that universe. Maybe there’s an alternative one?

      The masses are easily swayed to make “wrong” or “right” choices. Look how many billions are spent every year to indoctrinate the masses into backing the latest chosen path.

      Renewables and EVs may not make sense everywhere but they make perfect sense in specific aplications. Maybe this is the problem… trying to make one size fits all solutions.

      • Fast Eddy says:

        The love their EVs because they are right f789ing retarrrded…

        Pop onto the Tesla forum — and read how they make excuses for these pieces of sh it. Or watch that video of the Tesla owner complaining that an $80,000 car is basically falling to pieces… yet remaining calm and positive about Tesla.

        Now if a non-retarrded person were to buy an $80,000 Porsche – or BMW – or Mercedes — and pieces were falling off — if it was rattling — if they drained their petrol tank by turning on the heater… if the steering wheel alignment ‘didn’t feel right’ … if the bumper did not line up with the fender… if they had to bring the car to be fixed every couple of thousand miles — and had to bring it back over and over and over … to fix the same problems over and over and over…..

        I guarantee you that non-retarrded person would pull up to the dealer — with a purple head of rage and steam coming out of his ears —- and demand his money back…. and if he didn’t get what he wanted he’d drive the f789er through the show room window and throw the keys at the saleman and scream SOB MOF crook bas tard!!!!

        But Tesla owners… they are stuuupid and retarrrded all at the same time. They believe owning a Tesla is a noble undertaking – they are saving the world and being cool – all at the same time….

        Show me someone who owns a Tesla and I will show you a stuuuupid retarrrded MORE on with a DelusiSTANI passport.

    • xabier says:

      The kings of England once legislated to make everyone wear a knitted woolly hat on Sundays -whether they wanted one or not -in order to stimulate demand for the woolly hat industry.

      • well—last week one of our MPs was sending out his assistant to buy sex toys

        maybe that was the same intention

      • Fast Eddy says:

        Given there is no advantages with EVs over ICE vehicles… (we’ve even got one CEO urging people not to buy them) I still conclude that the reason they are being manufactured is the same reason we manufacture solar panels — to give hope.

        It’s the same reason I see regular headlines in the MSM about Mars colonies….

        Insane promises can be made – promise that if kept would collapse BAU — because those making the promises know they will never be kept.

        BAU will be long gone before a country actually bans ICE vehicles…

        • I think EVs help increase demand for coal, especially if parts are made in China, or they are operated in China. If a country is having problems with the price of coal being too low for producers, that is an advantage.

          • Fast Eddy says:

            I never see that being pointed out by the MSM.

            Tesla needs to include that info in their marketing materials.

            I may have to consider one for my next vehicle.

            Burn More Coal Tonight Baby!