The world’s weird self-organizing economy

Why is it so difficult to make accurate long-term economic forecasts for the world economy? There are many separate countries involved, each with a self-organizing economy made up of businesses, consumers, governments, and laws. These individual economies together create a single world economy, which again is self-organizing.

Self-organizing economies don’t work in a convenient linear pattern–in other words, in a way that makes it possible to make valid straight line predictions from the past. Instead, they work in ways that don’t match up well with standard projection techniques.

How do we forecast what lies ahead? Today, some economists believe that the economy of the United States is in danger of overheating. Others believe that Italy and the United Kingdom are facing dire problems, and that these problems could adversely affect the world economy. The world economy should be our highest concern because each country is dependent on a combination of imported and exported goods. The forecasting question becomes, “How will divergent economic results affect the world’s economy?”

I am not an economist; I am a retired actuary. I have spent years making forecasts within the insurance industry. These forecasts were financial in nature, so I have had hands-on experience with how various parts of the financial system work. I was one of the people who correctly forecast the Great Recession. I also wrote the frequently cited academic article, Oil Supply Limits and the Continuing Financial Crisis, which points out the connection between the Great Recession and oil limits.

Today’s indications seem to suggest that an even more major recession than the Great Recession may strike in the not too distant future. Why should this be the case? Am I imagining problems where none exist?

The next ten sections provide an introduction to how the world’s self-organizing economy seems to operate.

[1] The economy is one of many self-organized systems that grow. All are governed by the laws of physics. All use energy in their operation.

There are many other self-organizing systems that grow. One such system is the sun. Some forecasts indicate that it will keep expanding in size and brightness for about the next five billion years. Eventually, it is expected to collapse under its own weight.

Hurricanes are a type of self-organizing system that grows. Hurricanes grow over warm ocean waters. If they travel over land for a short time, they can sometimes shrink back a bit and grow again once they have an adequate source of heat-energy from warm water. Eventually, they collapse.

Plants and animals also represent self-organizing systems that grow. Some plants grow throughout their lifetimes; others stabilize in size after reaching maturity. Animals continue to require food (a form of energy) even after they stabilize at their mature size.

We can’t use the typical patterns of these other growing self-organized systems to conclude much about the future path of the world’s economic growth because individual patterns are quite different. However, we notice that cutting off the energy supply used by any of these systems (for example, moving a hurricane permanently over land or starving a human) will lead to the demise of that system.

We also know that lack of food is not the only reason why humans die. Based on this observation, it is a reasonable conclusion that having enough energy available is not a sufficient condition to guarantee that the world economy will continue to operate as in the past. For example, a blocked shipping channel, such as at the Strait of Hormuz, could pose a significant problem for the world economy. This would be analogous to a blocked artery in a human.

[2] The use of energy products is hidden deeply within the economy. As a result, many people overlook their significance. They are also difficult for researchers to measure. 

It is easy to see that gasoline provides the energy supply needed for our cars, and that electricity provides the power needed to clean our clothes. What is missing? The answer seems to be, “Everything that makes humans different from wild animals is something that was made possible by the use of supplemental energy in addition to the energy from food.”

All goods and services require the use of energy. While some of this energy use is easy to see, other portions are well hidden. Energy used in manufacturing and transport is most visible; energy used in services tends to be hidden.

Governments are major users of energy, both for their own programs and for directing energy use to others. Retirees get the benefit of goods and services made with energy products through pension checks issued by governments; researchers get the benefit of goods and services made with energy products through research grants they receive. Wars require energy.

Medical treatments are possible because of the availability of medicines and equipment made with energy products. Schools and books, as well as free time to study in schools (rather than working in the field), are possible because of energy consumption. Jobs of all kinds require the use of energy.

One thing we don’t often consider is that if energy supplies are growing sufficiently, they permit an expanding population. In fact, expanding population seems to be the single largest use of growth in energy consumption (Figure 1). Growing energy consumption also seems to be associated with prosperity.

Figure 1. World energy consumption growth for ten-year periods (ended at dates shown) divided between population growth (based on Angus Maddison estimates) and total energy consumption growth, based on the author’s review of BP Statistical Review of World Energy 2011 data and estimates from Energy Transitions: History, Requirements and Prospects by Vaclav Smil.

[3] Prices of energy services need to be low relative to overall costs of the economy. Falling energy costs relative to overall GDP tend to encourage economic growth.

Most economists expect energy prices to represent a large share of GDP costs, if energy is truly important. The statement above says the opposite. There are at least two reasons why low energy prices, and energy prices that are truly falling when inflation and productivity changes are considered, are helpful.

First, tools (broadly defined) used to leverage the labor of human workers often require considerable energy to manufacture and operate. Examples of such tools include computers, machines used in manufacturing, vehicles, and roads for these vehicles to drive on. The lower the cost to purchase and operate these tools, relative to the benefit of the tools, the more likely employers are to purchase them. If energy costs tend to fall over time, it becomes progressively easier to add more tools to leverage the labor of employees. Thus, employees become increasingly productive over time, raising the economy’s output of goods and services. For a similar reason, rising energy costs, if not offset by efficiency gains, present a barrier to economic growth.

Second, if the cost of energy production is low, it is easy to tax energy producers and thereby capture some of the benefit of their energy for the rest of the economy. If there is truly a “net energy” benefit to the economy, this is one way it gets transferred to the rest of the economy.

[4] There is indeed an energy problem, but it is not quite the same one that Peak Oilers have been concerned about.

The energy problem that Peak Oilers write about is the possibility that as easy-to-extract oil supplies deplete, oil production will reach a peak in production and begin to decline. Once decline sets in, they expect that oil prices will rise, partly because of the higher cost of production and partly because of scarcity. With these higher prices, they expect that producers will be able to extract at least a portion of the remaining oil resources. They also expect that higher prices will allow portions of the remaining natural gas and coal resources to be extracted. With higher prices, expanded use of renewable energy is expected to become feasible. All of these energy sources are expected to keep the economy operating at some level.

There are several problems with this story. First, it tends to encourage people to look for high oil prices as a sign of an oil shortage. This is not the correct indication to look for. Prior to 1970, oil prices averaged less than $20 per barrel. Comparing pre-1970 prices to today’s oil prices, current prices are already very high, at $75 per barrel. The idea that oil prices can keep rising indefinitely assumes that there is no affordability limit. Furthermore, a loss of energy consumption can be expected to reduce demand (because of its impact on jobs, productivity, and wages) at the same time that it reduces supply. If both supply and demand are affected, we don’t know which way prices will move.

Second, my analysis suggests that part of the story is that total energy consumption is very important, including oil, coal, natural gas, nuclear, and various forms of electricity. All of the attention given to oil has drawn attention away from the economy’s need for a range of energy types to keep devices of all types operating. Deciding to reduce coal usage because of pollution issues, or deciding to shut down nuclear because it is aging, has an equally adverse impact on the economy as reducing oil supply, unless the shortfall can be made up with other energy products of precisely the type needed by current devices.

Third, my analysis suggests that energy consumption per capita needs to rise for the economy to function in the way that we expect it to function. If world energy consumption per capita is too flat, we can expect to see many of the symptoms that the world has been experiencing recently: more radical leaders, less cooperation among leaders, slowing economic growth and increasing debt problems. In fact, wars are possible, as are collapses of governments (as with the Soviet Union central government in 1991). The current situation seems to be more parallel to the 1920 to 1940 flat period than it does to the 1980 to 2000 flat period.

Finally, with low energy prices rather than high quite possibly being much of the problem, there is a significant chance that oil and other production will decline because producers do not make enough profit for reinvestment and because oil exporting countries cannot collect enough taxes to fund the many subsidies that citizens expect. This makes for a steeper energy decline than forecast by Peak Oilers; it also reduces the possibility that high-priced renewables will be helpful.

[5] Part of the world’s energy problem is a distribution problem; the world becomes divided into haves and have-nots in many ways. It is this distribution problem that tends to push the world economy toward collapse. 

There are many parts to this distribution problem. One is the distribution of goods and services (created using energy) by country. Over time, this tends to change, especially as commodity prices change. Oil exporters are favored when oil prices are high; oil importers are favored when oil prices are low. The relative values of currencies can change quickly, as commodity prices change.

Another part of this distribution problem is growing wage and wealth disparity, as more technology is added. If there is too much wage disparity, low-paid workers often cannot afford adequate food, homes, and transportation for their families. Their lack of demand for goods made with energy products (because of their low wages) tends to work through the system as low commodity prices. This happens because (a) there are so many of these workers and (b) these workers tend to purchase a disproportionate share of goods and services that are highly energy-dependent.

[6] Debt-like promises play a major role in making the economy operate.

Taking out a loan allows an individual or business to purchase goods without saving for the purchase in advance. To some extent, taking out a loan moves up the timing of purchases. At times, it even permits purchases that otherwise would not be possible. For example, if a young person tries to decide between (a) working at a low wage until he has saved up enough to afford to go to college and (b) taking out a loan and going to school now, so his wages would be higher in future years, his optimal choice will often be scenario (b). The time would likely never come when the low-paid individual could save up enough wages to afford to go to college. If the young person strongly desires high wages, his optimal strategy would be to take the loan and hope that his future wages will be high enough to repay it.

If the goal of the economy is to produce an ever-increasing amount of goods and services, growing debt can very much help this growth. This happens because with more debt, more individuals and businesses can afford* to buy the goods and services that they want now. In a sense, debt acts like a promise of the future energy needed to make future goods and services with which the loan can be repaid. Thus, adding debt acts a somewhat like adding energy to the economy.

Because of the way debt works, the economy behaves much like a bicycle, with growing debt pulling the system forward. If the economy is growing too slowly, the tendency is to add more debt. This solution works if a rapidly growing supply of cheap-to-produce energy is available; the additional debt can be used to create a growing supply of affordable goods and services. If energy costs are high, the goods and services produced tend to be unaffordable.

Figure 2. The author’s view of the analogy of a speeding upright bicycle and a speeding economy.

A bicycle needs to operate at a fast enough speed (about 7.5 feet per second), or it will fall over. Similarly, the world economy needs to grow fast enough, or it will not be able to meet its obligations, including repayment of debt with interest. If the economy grows too slowly, debt defaults are likely to grow, pulling the economy down.

[7] It looks like it should be possible to work around energy problems with improved technology, but experience suggests that this approach represents only a temporary “fix.”

There are two issues that make improved technology less of a solution than it appears to be. The first is diminishing returns. For example, if a business faces a choice between (a) paying a worker to perform a process and (b) adding a machine to that can perform the same process, the business will tend to make the changes that seem to provide the largest cost savings first. At some point, as more technology is added, capital costs can be expected to become excessive relative to the human labor that might be saved. The issue of the diminishing returns to added complexity (which includes growing technology) was pointed out by Joseph Tainter in The Collapse of Complex Societies.

The second reason why added technology tends to be only a temporary solution is because it tends to lead to wage disparity. Wage disparity has a tendency to grow because of the greater specialization and larger organizations needed to coordinate the ever-larger projects. The reduced purchasing power of those at the bottom of the hierarchy can eventually bring an economy down because it can lead to commodity prices that are below the level needed to maintain the extraction of fossil fuels. Fossil fuels are required to maintain today’s economy.

[8] Renewable energy has been vastly oversold as a solution. What is needed is an ever-increasing quantity of inexpensive energy in forms that match the energy needs of current devices. 

The wind and solar story is far different from the story presented in the press. Essentially, wind and solar are extensions of today’s fossil fuel system. The evidence that they are truly beneficial to the economy is shaky at best. We know that if energy sources are truly transferring significant “net energy” to the system, they generally can afford to pay high taxes. The fact that wind and solar require subsidies raises questions regarding whether standard calculations are providing accurate guidance. The press rarely mentions the high tax revenue that high oil prices make possible, worldwide. Tax revenues largely support many oil exporting countries.

Furthermore, the share of the world’s energy supply that wind and solar provide is very low: 1.9% and 0.7%, respectively. They are shown in the almost invisible blue and orange lines at the very top of Figure 3. Fossil fuels contributed 85% of total energy supply in 2017.

Figure 3. World energy consumption divided between fossil fuels and non-fossil fuel energy sources, based on data from BP Statistical Review of World Energy 2018.

[9] The world economy becomes very fragile as energy limits approach.

Energy limits seem to be affordable energy limits. Oil prices need to be high enough for exporting countries to obtain adequate tax revenue. In addition, oil producers need prices that are high enough so that they can make the necessary reinvestment, as fields deplete. At the same time, energy prices need to be low enough for consumers to afford goods and services made with energy products.

Much of developed world’s infrastructure was built when oil prices were less than $20 per barrel, in inflation-adjusted terms. A rising price of oil will lead to a higher cost of replacing roads and pipelines. If these were built using $20 per barrel oil, even a current price of $40 per barrel would represent a significant cost increase. The world has experienced high oil prices for sufficiently long that we have collectively forgotten how low oil prices were between 1900 and 1970.

Most people know that the earth holds a huge quantity of energy resources. The problem is extracting these resources in a way that is both affordable to consumers and sufficiently high-priced for producers. Falling long-term interest rates between 1981 and 2002 allowed the world economy to tolerate somewhat higher oil and other energy prices than it otherwise could because these falling interest rates permitted ever-lower monthly payments for a given loan amount. For example, if interest rates on a $300,000 mortgage would fall from 5% to 4% on a 25-year mortgage, monthly payments would decrease from $1,753 to $1,584. The lower interest rates would allow more people to buy homes with a given size of mortgage. Indirectly, the lower mortgage rates would permit additional new homes to be built and would allow more inflation in home prices. These benefits would at least partially offset the adverse impact of high energy prices.

Since the natural decline in long term interest rates stopped in 2002, the world economy has become increasingly fragile; the Great Recession took place in 2007-2009, when oil prices spiked and long-term interest rates were already low by historical standards. It was only when United States’ program of quantitative easing (QE) was put in place that long-term interest rates could fall to even lower levels, helping the economy hide the problem of high energy prices a little longer.

The artificially low interest rates made possible by QE have problems of their own. They tend to inflate asset prices, including both real estate prices and stock market prices. Thus, they tend to create bubbles, which are prone to collapse if interest rates rise. Artificially low interest rates also tend to encourage investment in schemes with very low profit potential. Artificially low interest rates also encourage cross-border investments to try to take advantage of interest rate differences. If interest rate relativities change, the money that quickly would enter a county can almost as quickly leave the country, causing major fluctuations in currency relativities.

Regulators do not understand the role that physics plays in making the economy operate as it does. They assume that they, alone, have the power to make the economy behave as does. They do not understand how important falling interest rates are in creating growing demand for goods and services. The economy, since 1981, has spent most of its time with falling interest rates; the most recent part of this decline in long-term interest rates has been made possible by QE. These falling interest rates have played a major role in disguising the world’s long-term problem of rising energy costs. These rising energy costs are taking place primarily because the cheapest-to-extract resources were produced first; the resources that are left are have higher costs associated with them, for a variety of reasons, such as being farther away from the user, deeper, or needing more advanced extraction techniques. These issues have not been sufficiently offset by improved technology to keep extraction costs low.

US regulators now want to raise interest rates by raising short term interest rates and by selling QE securities. They don’t understand that they are playing with fire. They feel that they will have more power if they can raise interest rates now, they will have the flexibility to lower them later if the economy should later slow excessively. They don’t understand how much of the world’s economy may really be a bubble, created by the decline in interest rates since 1981.

[10] The adverse economic outcome we should be concerned about is collapse, as encountered by prior civilizations when their economies hit limits. 

The stories in the press have been so focused on oil “running out” and finding alternatives to oil that few have stopped to ask whether this is really the correct story. Instead of creating a new story, it might have been better to look more closely at history. Based on the historical record, collapse seems to have be associated with situations where populations have outgrown their resource bases. In other words, collapse can be considered an energy consumption per capita problem. The oil problem (and other fuel problem) we are facing today can be viewed as an energy consumption per capita problem, as well.

We know from research that has been done by Peter Turchin, Joseph Tainter, and others how collapse has played out in the past. The situation is different this time, however, because the world economy is very interconnected. Oil consumption depends on electricity consumption, and vice versa. Our financial system is also extraordinarily important. For these reasons, a collapse may occur more quickly than in the past.

Differences Between My View and the Standard View

One of the big differences between the way I see the economy and the standard view of the economy is the answer to the question of “Who is in charge?” The standard view is that politicians and economists are in charge. They have all of the answers. The dire collapse outcomes that afflicted early civilizations could not possibly affect us. We are too smart. We know how to adjust interest rates correctly. We can even make QE available to lower long-term interest rates. We can also add more technology and other complexity than has ever been added in the past.

The answer I see to the question, “Who is in charge?” is, “The laws of physics are in charge.” Politicians play a fairly minor role in directing the fate of economies. If there is not enough energy available of the type needed (inexpensive and matching the current infrastructure), the economy may very well collapse. It is nature and the laws of physics that call most of the shots.

Another big difference between my view and the standard view is the observation that a decrease in oil supply (or total energy supply) affects both the supply and demand of energy. Because both supply and demand are affected, we don’t know which direction oil and other energy prices will move. They may move erratically, as interest rates are adjusted by regulators. A more complex model is needed.

Climate change becomes less of an issue in my view of the future, for several reasons. First, humans don’t really have very much control over the direction of the economy, so talking about anthropogenic climate change doesn’t make a whole lot of sense. The laws of physics that allowed human population to rise are also allowing climate change to happen. Second, we seem to be limited in our ability to use renewables to fix the situation. Furthermore, the possibility of collapse in the near future makes the various scenarios that hypothesize the use of large amounts of fossil fuels over many years in the future seem very unrealistic. Perhaps efforts to fix climate change should be focused in new directions, such as planting trees.

Help from Others

The subject matter of this post requires the knowledge of information from a wide range of academic areas. I could not have figured out all of this information on my own. I have been fortunate to have been able to learn from of a wide range of experts. Quite a number of academic groups have seen may articles, and invited me to speak at their conferences. In particular, I have had a long-term involvement with the BioPhysical Economics organization and have spoken at many of their conferences. I have learned much from Dr. Charles Hall, although at times I don’t 100% agree with him.

I have also learned from the many commenters on OurFiniteWorld.com. They form a self-organizing system of people from a wide range of backgrounds. Earlier, my involvement at TheOilDrum.com as “Gail the Actuary” allowed me to get acquainted with a range of researchers, looking at different aspect of the energy problem.

In future posts, I intend to expand further on the ideas presented in this post.

*Here I am using the term afford loosely. What borrowers can actually afford is the current required monthly payments.

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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825 Responses to The world’s weird self-organizing economy

  1. Harry Gibbs says:

    “Much of the modern economy relies on the work of auditors: the accountants who independently verify a company’s financial records.

    “This work is crucial in providing accurate reports to shareholders and, ultimately, for safeguarding the economy at large.

    “Recent scandals and financial crises have shown that accounting failure can easily lead to thousands of job losses and billions of dollars in bail-outs, says author and award-winning journalist Richard Brooks…

    ““The current system now relies nearly entirely on the so-called “big four” accounting firms — KPMG, Ernst and Young, Deloitte and PwC… they have “lost sight of their core purpose”, with only a third of their revenue coming from auditing and the rest earned from “consultancy services”… the firms are now selling billions of dollars worth of business advice to the same companies they are supposed to independently audit.”

    http://www.abc.net.au/news/2018-07-12/richard-brooks-accountants-who-broke-capitalism/9971084

    • They are almost employees of the companies that they audit.

      • craig moodie says:

        Where are the regulators in all this?

        • They rotate back and forth between working for the government and working for the auditing firms.

          The systems become so complex that the only people who understand them are insiders within the industry. This happens in insurance and other industries too. Petroleum regulators need to have worked in the petroleum industry (or have been trained through graduate school in the science) to figure out what is happening. Regulation is a problem, everywhere.

          In the insurance industry, if one company goes under, the plan is to have the other pay for its liabilities, up to certain statutory limits, through post-insolvency assessment funds. This only works if an occasional small company goes under. If there is an industry-wide problem, it is tough luck for all.

  2. charmianl says:

    I have some concerns that climate change and its impacts are viewed in this article as distant. In fact the world is already suffering large impacts such as fire, flood, drought, heat waves, hurricanes which impact the western world as well as less developed countries. We have only a short time to change our energy system to 100% renewable energy sources or we risk a short future.
    Unfortunately fossil fuels are subsidised to the tune of around $500bn pa by the G20,even though the G20 governments keep pledging to reduce this, whilst renewables get only one quarter of this in subsidies world wide. See reports from the IMF and the Overseas Development Institute.
    Renewables subsidies are generally driven by government policies to build a new industry and are now being phased out as the industry employs over 1.2 million people worldwide. The reduction and withdrawal of subsidies has seen new renewable installations now being built without subsidy and producing the cheapest electricity as solar and wind electricity are the cheapest form of electricity being very low cost in operation. This low operational cost has driven the wholesale price of electricity down throughout Europe and hence provides economic benefit to electricity users.
    In addition this cheap electricity provides major reductions in carbon emissions, with UK electricity down one third in its CO2e/kWh in recent years.
    Given that we only have around five years before all our carbon budget is gone if we wish to have a 66% chance of keeping temperature rise below 2degC, it is imperative that we all recognise that climate change action is an urgent requirement and continuing our present path is taking us closer to that existential threat. Would you get on a plane with a 66% chance of reaching its destination?

    • Whether distant or not, there is essentially nothing that humans can do about climate change. The things we can do may or may not work in the way we intend, because of the interconnections within the economy. We know of a few things that might be helpful, like planting trees. Deforestation is going on in the lower income parts of the world, even as rich countries replant their own trees. The rich world’s push to add palm oil as a biofuel encourages deforestation. So does the push to import paper from Indonesia. Europe’s push to use wood pellets for heating cannot be helpful.

      This is a chart Euan Mearns put together a few years ago.


      • Rodster says:

        I find it rather odd how the line in the sand keeps moving or to use a football analogy they keep moving the goalpost.

        I remember hearing and reading, don’t go over 350ppm because that’s the end of humans. We are around 400ppm and we’re still here.

        • Sungr says:

          Reading the scientific studies works a lot better than listening to the idiots on Foxnews.

          • I have seen a whole lot of idiotic scientific studies. The more I see, the less I agree with you.

            To a significant extent, “scientific studies” seem to be just one more way of employing more people and driving the cost of education up. Most of them are simply useless. It is not that they are wrong; it is that they are a waste of resources. Others, because the authors don’t understand that we live in a self-organizing world, are totally wrong. Too many of the results of the studies are taken as “fact,” when they are not really fact.

            • Sven Røgeberg says:

              You write: «To a significant extent, “scientific studies” seem to be just one more way of employing more people and driving the cost of education up. Most of them are simply useless. It is not that they are wrong; it is that they are a waste of resources.«
              The one useful function I can think of is that by employing more people dealing with science and research, you contribute to the spreading of knowledge of logical reasoning and scientific methods in the population. More individuals capable of critical judgements as a result? More readers of OFW?

            • It could be that more people are capable of critical thinking. But there will still be a lot of people who think that if something is published in a recognized journal, it must be right. They also think that the only way of looking at big problems is to break them down into tiny little pieces, and piece together what prior researchers said, plus a tiny bit more. That approach only works if the prior researchers understood made a correct analysis. (And maybe not even them.)

            • John Doyle says:

              Not just science. Everywhere. Universities which should be neutral ground, now have to go cap in hand for sponsors and, naturally, these sponsors want a favourable result. The only remedy is for the Federal governments to pay for the universities without privatisation. They should not be a ‘for profit” endeavour. They provide the ground work for the private sector to use and profit from. The government can pay, easily. It’s an investment, like roads and other infrastructure.

            • The government seems to always have an “agenda.” I have talked young people out of graduate school, and they talk about how difficult it is to get a tenure track teaching position. They need to write papers and they need to get grants. The US government has more than willing to hand out grants to study climate change related issue. So people who had been interested in energy problems end up being sidetracked into climate related issues. Same with physics related issues–look at climate instead. And of course the government has a desired result it wants. If you want to get another grant, the result of the research on this grant needs to come out the way the government would like it. Either that, or the research has to be on such a narrow piece of the analysis that it really doesn’t matter how it comes out.

              Peer reviewers are another issue. I asked one young person why he had left concerning points out of the conclusions section of his paper. He said he was afraid peer reviewers wouldn’t accept it, unless the results sounded sufficiently in line with the green agenda.

            • John Doyle says:

              Universities have been well and truly compromised by the privatisation rot. So it stands to reason governments will use them for their own purposes too. FE’s idea that they are hotbeds of extreme left wing activism is one opinion, not without some merit. It’s certainly believed by the extreme right wing and they are hard at defunding universities such that tenure is now rare and many staff work for extremely low pay, such that they have to seek outside jobs as well to survive.

            • Worldwide, there has been a lot of belief that education will be of great benefit to those receiving it. There are definitely diminishing returns to sending more young people to college. The university education system has greatly inflated in size, without proportionate benefit. What used to be dorms are now apartments, with each student getting his own bedroom and bath. It reminds a person of the health care system bloat.

              There is no way that governments can afford to fund such a bloated system. So they have to pass the costs to everyone else. Students end up paying a lot more themselves. If buildings are built, naming rights are sold to business. Every conference room is named after a corporate donor. Faculty find themselves more dependent on grant money. Too much reliance is placed on very low-paid adjunct faculty members. I am close enough to the system that I can see many of these issues.

            • Fast Eddy says:

              Universities have become hard core breeding grounds for left wing PC whackos…. indoctrination camps….

        • There are different ways of counting CO2–with or without conversion of other gasses to CO2 equivalents. So the numbers are likely not all comparable. Also, we may very well be past any turning point.

          • Davidin100millionbilliontrillionzillionyears says:

            Rodster…

            yes…

            it’s amazing that when it was 3 parts per 10,000 then everything was okay…

            but 4 parts per 10,000…

            OMG!

            5 parts per 10,000?

            they say we’re doomed!

      • adonis says:

        once the collapse hits and humans die-off nature will take over sucking up all that excess co2 to create a new earth what goes around comes around

      • Sungr says:

        Gail said- “Whether distant or not, there is essentially nothing that humans can do about climate change. ”

        So you are saying that we should just ignore climate consequences since ” there is essentially nothing that humans can do about” it? I would suggest that most of the topics on this forum involve human situations or behaviors that we will not be able to change ie fossil fuel useage.

        It’s pretty obvious that humans will not able to cut back on their appetite for fossil fuels- so maybe we just stop discussing the topics of your blog- oil prices & availability etc because we really can’t do anything about these behaviors anyway?

        • The story connecting fossil fuel use to climate change needs to changed to add, of course, we would be dead without fossil fuels.

          • as i’ve said all along we are caught in the closing vice of our own making

            which annoys the ”do something” folks

            collectively we burn stuff to keep ourselves employed—if we stop burning, then our employment infrastructure ceases to be

            when that happens, not if, the system of our very existence ends, and those of us left after a few years will revert to a farmcart economy.—tho the inca did ok without wheels i believe

            • Fast Eddy says:

              I used to think I had to do something…. but then I realized… there is nothing that can be done…

              It does take a lot of weight off of the shoulders… so what … we die… quelle surprise there…

              It would be nice if I was of the age of some of the DPs on this site… if I was 70+ I’d actually be pretty pleased with the situation …. I’d already be an old goat with a failing power plant so death would not be so unwelcome … and I’d get to witness the Apocalypse…

              How good is that!

              I really do not understand why 70+ year olds would waste their time scratching in the dirt prepping.

              Preposterous! Madness! Insanity!

            • Artleads says:

              But won’t nuclear mayhem, disease and social chaos make that farmcart economy nigh impossible?

            • a farmcart economy puts everyone at a distance—when you have to walk to war, wars can’t last very long because you run out of energy to fight

              when you have to walk to get your food, food becomes self limiting through the energy needed to get hold of it

              disease is the same, it can only spread so far, then it becomes self abating, social chaos is self abating if there’s no powered transport—it runs out of energy

              nuclear spillage is the one thing that wont run out of energy and might screw all of us

            • Artleads says:

              “nuclear spillage is the one thing that wont run out of energy and might screw all of us”

              So all the energy will go to preventing that spillage?

            • up to a point yes—until the futility of it becomes obvious

            • InAlaska says:

              The benefit of “doing something” lies more in making you feel better than in actually solving the problem. We are all more or less afraid of what is coming and the antidote to fear is action. Even if it is nothing more than rearranging the chairs on the deck of the Titanic, using your hands and wits in action feels better than doing nothing at all.

            • Fast Eddy says:

              Absolutely agree…. otherwise despair can overwhelm one’s thoughts…

              My main issue with the DP thing is when claims are made that this is a way to survive the end of BAU…. giving false hope to those who latch onto these ideas… and they end up wasting precious time and money on a pipe dream … I know – I did it…. and I want to make sure that anyone considering this understands that it is no solution

              I am here to help. For free!

            • Right. And if you try something (garden, for example) you can tell how much can reasonably raise and store. Not a whole lot, in my case.

            • Fast Eddy says:

              And then try it … while completely unplugged from BAU…..

        • Fast Eddy says:

          Why would we want to keep talking about a ho ax?

      • Duncan Idaho says:

        Using Euan Mearns as a source of climate change is like using Idi Amin as a human rights example.

        • I have a great deal of confidence in Euan. I have known him for years, from Oil Drum days. He has a great deal more realistic view than people who are motivated by selling more of the subsidized devices.

          • Duncan Idaho says:

            I have a great deal of confidence in Euan.

            I have a great of confidence in climate science.

            • Calling it “climate science” indicates one place where you have been misled. It consists of modeling a self-organizing system with an inadequate model. Even if a number of different “experts” are involved, they manage to assume Business As Usual will continue. They have no idea what the real relationship between variables needs to be, because they have not studied the role of energy and the economy.

            • Volvo740... says:

              There might also be other side effects such as a large methane “burp”. There is no guarantee that even in a collapse scenario, CO2 levels will level off.

            • Duncan Idaho says:

              Well, I’ll go with the pro’s.
              They have been underestimating a bit, but it is better than the surreal denial.
              If you’re younger than 30, you’ve never experienced a month in which the average surface temperature of the Earth was below average.
              The last month that was at or below that 1900s average was February 1985. Ronald Reagan had just started his second presidential term and Foreigner had the number one single with “I want to know what love is.”

          • Greg Machala says:

            I second Gail’s remarks about Euan.

            • Seppo Korpela says:

              As you know there is a difference between the words “complex” and “complicated”. We live in a complex world.

            • Kurt says:

              The earth has been a lot colder and a lot hotter. Humans adapt.

            • I was surprised to learn all of the changes in climate that humans and pre-humans managed to live through, in the one million+ years since they learned how to control fire. Our current civilization seems to be the result of a fluctuation in climate that is warmer than the “standard” ice age climate. With this warm climate, human population could grow. But simply looking at the length of past non-ice ages would suggest that without the activities of humans, there would be a possibility that we could be heading back into another ice age. This is one view of When Will the Next Ice Age Begin?

              It makes several points:

              Just 30 years ago, after a prolonged global cool spell, many climate scientists, including some now focused on global warming, posited that Earth might already be seeing the onset of the next big chill.[The article was written in 2003, so we are now talking 45 years ago.]

              Another quote:

              Evidence from sea sediments and other sources had consistently put the duration of the previous warm spell at about 10,000 years, and it was presumed that this provided at least a rough hint of the longevity of the current interglacial.

              The notion that cooling was imminent was challenged several years ago. Some scientists gleaned more details about the previous warm spell, which occurred 130,000 years ago, and concluded that it lasted twice as long as they had previously estimated — 20,000 years instead of 10,000.

              Another quote:

              It may seem that human-driven global warming, although perhaps a disaster on the scale of centuries, may be a good thing in the long run if it fends off the next ice age awhile.

              But many climatologists note that the complex interplay of greenhouse gases, orbital shifts and other influences on climate remain poorly understood. In fact, some experts say, there is a chance that human-induced warming could shut down heat-toting ocean currents that keep northern latitudes warmer than they otherwise would be. The result could be a faster descent into glacial times instead of a delay.

            • they don’t adapt with cities of 30 m people sitting on coastlines
              but whats the point of saying that

              people will up and move when sea levels rise—won’t they?

              at that point one is inclined to give up

            • Fast Eddy says:

              Still have the coastal property 50m from the ocean… it’s still there… neighbours keep reassuring me … some of them have lived there for many decades…. and the ocean is not rising

            • djerek says:

              The best scientists who are looking at the empirical case are still projecting an incoming ice age (or at minimum another Maunder Minimum type mini-ice age):https://www.technocracy.news/russian-scientists-predict-ice-age-within-15-years-because-sun-is-cooling/

            • Duncan Idaho says:

              It may seem that human-driven global warming, although perhaps a disaster on the scale of centuries, may be a good thing in the long run if it fends off the next ice age awhile.

              With even rudimentary science knowledge “awhile” is going to be 10’s of thousands of years. Probably much longer. Homo sapiens have never lived with a CO2 level in the 400’s (most of our primate ancestors also)– we will see if that works out- or not)

        • Fast Eddy says:

          DelusiSTANIs don’t like him much…. he’s probably the most credible analyst .. in that space

          I wonder how Leo’s ocean level concrete eco resort is coming along…. must be just about finished now… just in time for the 7m sea level rise

        • Tim Groves says:

          Resorting to innuendo and personal attacks comes as second nature to Duncan. Notice how easily these wonderful progressive humanitarians turn nasty when the facts don’t fit their agenda.

          Duncan, it’s a huge death cult you’re in and you are trapped within its consensus trance—the intellectual equivalent of being within the event horizon of a black hole. I’m sorry I can’t be of any practical help to someone as willfully blind and constricted as you’ve made yourself, and I can’t even pity or sympathize with you as it’s all your own fault.

      • John House says:

        Gail, excellent analysis, as usual. With respect to your comment about climate change, I see your point, however, I think you may be minimizing the impact on energy systems. For example, increased hurricanes reduce off-shore drilling operations, more floods in places such as Houston, New Orleans, etc., impact oil refineries and transport, worsening heat waves increase the amount of energy used to cool homes and businesses as well as the amount of water needed to be pumped. Warming inland water temperatures impact the ability of nuclear plants to cool their spent fuel, on and on it goes. So, while we may not be able to do anything about climate change, I think that it is already playing a major part in the economy and fossil fuel use.

        • I don’t think that climate is playing a major ports in the economy and fossil fuel use. Warmer winters should be helpful to the economy because less fossil fuel will be used for heating. Warmer summer might raise air conditioning use. I know that as far south as Atlanta, heating is a much bigger cost and air conditioning.

          Offshore oil is not a huge share of the US total. It normally gets back online pretty quickly after hurricanes. We haven’t had a big disruption for years.

          • Volvo740... says:

            Droughts can lead to large people migrations. Natural disasters can lead to high repair costs and capital destruction. There are probably some effects on the economy from climate change already. Maybe stimulating GDP in the same sense that throwing rocks at windows is “good for GDP”.

            • An awfully lot of what is done has pretty small benefit.

              If we think about it, educating young people in Africa doesn’t itself add jobs, except teaching jobs. I was reading an article about how few women in India work outside the home.

              https://www.economist.com/leaders/2018/07/05/why-india-needs-women-to-work

              What can be done? Many of the standard answers fall short. Promoting education, a time-tested development strategy, may not succeed. Figures show that the more schooling an Indian woman receives, the less likely she is to work, at least if she has anything less than a university degree. Likewise urbanisation, another familiar way to alleviate poverty: city-dwelling women are half as likely as rural ones to have a job.

              A lot of fossil fuel investment is needed if jobs are going to be available. The same thing is true about having a large share of the population go to college. If college doesn’t really add much to the knowledge base needed for a job, it is just overhead for the economy.

        • InAlaska says:

          John House, I think you’re right. A functioning ecosystem is the basis for the economy and anything that destabilizes the ecosystem has to be given as much weight as economic considerations. If it is true that climate change is lagging by 40 years between emissions and effect, that means that the disruptions will grow so drastic in the next 4 decades as to dwarf anything that a failing economy can produce. In reality it is the dynamic interplay between these two titanic forces (environment and economy) that will be morbidly fascinating to watch as events unfold.

      • david higham says:

        That chart shows only a small part of the story. The carbon content of the oxidised wood
        only accounts for a small part of atmospheric CO2 increase.The most important contributor to that increase is fossil fuel usage. The graph of CO2 emissions from fossil
        fuel use over time in this article is more relevant.

        https://www.skepticalscience.com/looking-for-connections.html

        • The chart doesn’t claim to tell the whole story. There are so many things going on at the same time it is hard to figure out what is going on. We clearly are going in the wrong direction on forests, however.

      • Fast Eddy says:

        Oh wow….

        Al Gore… calling Al Gore…. time for a new movie….. it’s all about the trees bruther… see the correlation ….

        And the Geebel WEEblers are staring at those to visuals right now…. in a catatonic state…. with spittle dribbling down their chins…. like one of those kids you see who survived 8 minutes without oxygen during birth…. and ride around in a cart using their tongue to steer.

    • Rodster says:

      “We have only a short time to change our energy system to 100% renewable energy sources or we risk a short future.”

      But 100% renewable energy is still highly dependent on fossil fuels !

    • JesseJames says:

      Utter BS

      • Greg Machala says:

        We can get very close to 100% renewable if we live as hunter-gatherers with global population levels ~100,000 or so.

        Solar panels are not renewable without huge volumes of energy input (fossil fuels). Wind turbines are not renewable either and batteries certainly aren’t. Renewable energy is a physical impossibility. You can’t renew energy that has been used. The infrastructure to capture energy is not renewable either. I don’t know where the words renewable energy ever came from!

        • Duncan Idaho says:

          During most of homo sapiens existence (200,000– maybe 300,000 if the new evidence in Morocco holds up) out population has been 1-10 million.
          Of course we had robust ecosystems to live in.
          7.6 billion on a ecologically challenged planet?
          We are idiots.

    • Fast Eddy says:

      You are being silly

  3. adonis says:

    interesting take on renewable energy which tells of a guaranteed economic collapse within ten years if we continue with renewable energy plans https://www.huffingtonpost.com/entry/renewables-storage-electric-vehicles-global-economy_us_5a5f8997e4b054e35176a473

    • Greg Machala says:

      I agree that burning massive amount of fossil fuels to build “renewable” devices (that basically capture energy from the sun and wind and store it in batteries) will be a massive economic drain. Once the “renewable” devices are built there is no point ever where you can flip a switch and say we don’t need to burn any more fossil fuels. They cannot stand on their own. Therefore the have no future return on investment. They will suck what little life is left out of the economy to build devices that have no useful future. “Renewable” energy is an inseparable part of a fossil fuel ecosystem. If you turn off fossil fuels: no one will have jobs, no appliances will be built! There would be no energy to take care of the electric grid.

      Given the precarious state of society today, ten years is a long time! It seems our economic system is near its peak. Anything can happen: war, financial collapse, natural disaster, energy shortages, disease outbreak, grid failure or even the collapse of our resource base. It seems like everywhere you look there is trouble brewing.

      • Davidin100millionbilliontrillionzillionyears says:

        thanks, adonis…

        Greg, I agree with most of that…

        one thought:

        I think it’s possible that humans have enough remaining obtainable FFs to rebuild the world economy to run mostly on electricity, though not all from “renewables”… coal and natural gas will always power much of electricity production…

        but, key word is “possible”…

        I don’t think it’s probable, largely due to the many issues you raise…

        but, perhaps we get to a 50% electric world, where the greenies are all fired up about getting to 100%…

        all of this can happen once and only once…

        then failure, due to the near total depletion of FF…

  4. Baby Doomer says:

    The oil market’s shock absorbers are nearly gone

    “After replacing Iranian volumes, there will be essentially no spare capacity left,” Michael Wittner, global head of oil research at Société Générale, wrote in a report on Monday. “This would be extremely bullish.”

    “It’s hard to see where supply will come from to meet growing demand,” said Tortoise’s Sallee.

    https://money.cnn.com/2018/07/10/investing/oil-prices-saudi-arabia-spare-capacity/index.html

    • Davidin100millionbilliontrillionzillionyears says:

      “It’s hard to see where supply will come from to meet growing demand…”

      but demand will be declining…

      it’s guaranteed…

      we just don’t know when…

  5. MG says:

    We could categorize the states as follows:

    – the energy providers (e.g. Venezuela, Saudi Arabia)
    – the goods and services providers (Germany, Japan)
    – the energy and goods and services providers (USA, Netherlands)

    The most vulnerable states are energy providers, as, finally, they are unable to provide energy and they must transform into goods and services providers, importing the energy, or they collapse and their population is forced to migrate into other functioning states.

    The energy per capita consumption falls firstly due to the inability to consume the energy, not the inability to extract it. (E.g. the population of Russia can not consume as much energy as it was before 1990, but Russia could find consumers elswhere.) The inability to extract comes later, when the lacking imports of the new technology for energy extraction prevent energy providers to provide energy that can be consumed (like it was in Russia after the collapse of the Soviet Union).

    Making things affordable is in fact making them accessible. The low energy per capita consumption of Russia is the reason why the population of Russia is not able to consume more energy.

    Firstly, you need to be able to consume the energy, i.e. have corresponding cars, devices, machines etc., and then your energy consumption can rise. If you do not have them or your existing machines are out of order, you are not able to use the machines or you do not need such machines anymore, as you are old or e.g. move to live in a city, where you do not have to mow the lawn etc., your ability to consume energy falls.

    So, the use of machines (made using energy) makes you able to consume energy.

    • MG says:

      And there must be more and more machines, and less and less people, so that the system can continue, as the machines secure affordability (aka accessibility) of the more and more distant energy sources, e.g. deeper in the ground or in the more distant areas not suitable for the life of the humans.

    • I’m not sure this is correct interpretation.

      As Russian per capita standing both in wealth and consumption bounced back, be it a function of recycling proceeds from selling energy in boom times of the West and China (since ~2000s). The fact the boom times were based on fraudulent debt expansion, resulting in consumer crap and over building of not needed shoddy infrastructure is another matter.

      Anyway, the real truth will be likely revealed only in proper destabilization phase (GFC v_xy, blackouts, ..), I’d argue countries like Russia and Norway would fare much better for the near/mid term after that.. most of ME-oily hell holes not so much, I’ll give you that.

      • MG says:

        Yes, the colder climates will fare better than the Middle East without water. No water = no sanitation.

        • But civilization grew up where the weather was relatively warm. Population in Norway and other northern countries had a hard time maintaining itself. When plagues came through, it was disproportionately affected. The need to make do with a short growing season and the need to have a large amount of wood for heat are major obstacles to living in cold countries. Civilization grew up in Africa. That is where humans are perhaps best adapted.

          • Fast Eddy says:

            Just finishing up the Deep History of Earliest States…

            When plague hit the cities…. there was a mass exodus …. as people escaped by the thousands to rural areas….. which spread the plague to those areas….

            And I am thinking… they didn’t have automobiles….

            And I am thinking… DPs believe that they will be left alone by the city dwellers….. that the city dwellers will just remain in the cities festering in the disease and violence… waiting for their pantries to empty….

            And I am thinking … as soon they realize that clean water is a problem… they are piling into vehicles and heading to the countryside….

            And I am thinking …. the DPs are in for a wicked surprise when BAU ends.

          • MG says:

            The reason for the rise of the first civilizations was the warm climate and the fertilizers to the fields brought by the flooding rivers. And the biomass (wood) transported by the rivers.

            The civilization always needs stored energy in the form of wood, coal etc. Without them, it collapses, because it is not only the actual heat of the sun, but also the additional energy of the fuels that allow humans to fight other species and cook the food, e.g. heating the water to make it free from microbes.

            The stored energy is mainly used to fight other species and cook the food. No civilization can do without it.

            The lack of clean water in the warm areas is the same serious problem as the lack of biomass in the cold areas. Either of them is a limiting factor for the human population. The lack of the stored energy always shrinks the human population. We need to intake water, so that we do not dry up when producing energy from food.

            • Thanks! You make many very good points. Thank you very much.

              Thinking about the situation, the problem holding back population growth in warm areas has been two fold:

              1. A need to hold down all of the diseases that are holding population growth back.
              2. A need for cheap food, to feed the expanding population.

              The rich world have been able to fix these problems with relatively little investment into the warm areas themselves. They ways they fix them are

              1. Antibiotics and a few medicines that save many lives; also, some basic hygiene. Things like mosquito nets to keep away diseases such as malaria and dengue. The return on investment has been very high for these investments.

              2. Imported food from the surpluses of the US and other countries. This imported food tends to drive local farmers out of business.

              One major problem remains, and that is fresh water. This seems to be the biggest problem in warm areas. Many young girls spend hours carrying water each day. This is a barrier to schooling.

      • Duncan Idaho says:

        Bingo!
        Russia, with the larges resources on Earth, and a small, well educated population, plus a the largest country on the planet. Imports practically nothing. Huge agriculture expansion.

        https://www.rt.com/business/423834-russia-agriculture-exports-expansion/

        • MG says:

          Its the new bigger machines that allow them to increase the food production. They must import them.

          • Imports from Belarus of agri mechanization doesn’t count much as import in reality – it’s basically undeclared extended Russia proper territory.. Besides Russians are good at scouting for western managers (predominantly Germans) to run their companies for their market needs, not as mere re-exporting assembly lines.

            Recently there was documentary on VW-Porsche guys relocated there helping them with
            industrial R&D incubators, now such places are on their own (domestic staffed) about to launch hybrid production among other stuff. How many other countries can pull that off: US, DE, FR, SouthK, JAP; only the top..

            • Ann says:

              Then there’s this:

              “An emerging sexually transmitted infection that you’ve probably never heard of “could become the next superbug”, according to recent headlines. What exactly is Mycoplasma genitalium, and how worried should we be?

              M. genitalium is small bacteria that was first identified in 1981, and at that time it was unclear if it was a STI. Its true nature was only definitively confirmed in 2015 by a large UK survey of people aged 16-45 which found the infection was more common in those who had had more partners.”

              Can progress to pelvic inflammatory disease and sterility.

              https://www.newscientist.com/article/2174057-how-worried-should-you-be-about-a-new-superbug-sti/

              Wasn’t there a movie about this? Children of Men. 2006.

            • you can avoid it by not running into the bush nekkid like Eddy says

            • MG says:

              The wages of the Russian population are low and Russia, as energy provider, is severly hit by any sanctions from the side of the countries needed its energy for their industries: Russia needs to export energy to milder climates to get the needed machinery. That is why the ties of Russia with Germany (and also China) will only strngthen, Donald Trump can do nothing about it. It is physics.

            • More good points! Thanks!

        • Fast Eddy says:

          Russia’s Top 10 Imports

          The following product groups represent the highest dollar value in Russia’s import purchases during 2017. Also shown is the percentage share each product category represents in terms of overall imports into Russia.

          Machinery including computers: US$45.3 billion (20% of total imports)
          Electrical machinery, equipment: $26.7 billion (11.8%)
          Vehicles: $21.4 billion (9.4%)
          Pharmaceuticals: $10.8 billion (4.8%)
          Plastics, plastic articles: $8.8 billion (3.9%)
          Optical, technical, medical apparatus: $6.2 billion (2.7%)
          Articles of iron or steel: $5.3 billion (2.3%)
          Iron, steel: $4.8 billion (2.1%)
          Fruits, nuts: $4.7 billion (2.1%)
          Rubber, rubber articles: $3.6 billion (1.6%)

          • Davidin100millionbilliontrillionzillionyears says:

            thanks, Eddy…

            I seem to remember vaguely that Russia is trying to become as self sufficient as possible…

            I would bet (a lot of money) that they are trying to reduce all of those imports…

            • MG says:

              The life in Russia is so fantastic that:

              1 in 3 young Russians wants to emigrate: Survey

              https://www.presstv.com/DetailFr/2018/07/02/566815/Russia-survey-emigration-statistics-Putin-economy-sanctions

              All of them into the areas with milder climate:

              “Of those young people who said they wanted to emigrate – 31 percent – Germany was the most popular destination and favored by 16 percent of respondents.

              Seven percent wanted to move to the United States and six percent to Spain.”

              Do not forget that Russia has mostly continental climate, i.e. very cold winters (like 40 Celsius degrees during the winter and 40 Celsius degrees during the summer). The most of its shoreline is situated in even colder areas of the north. That is why they historically attacked Baltic states and Poland, i.e. wanted to move to milder areas.

              The harsh climate of Russia needs a lot of energy for its ammendment to suitable living conditions for humans.

            • Davidin100millionbilliontrillionzillionyears says:

              also, those numbers show that total imports must be about $225 billion…

              (45.3 is 20% so 45 x 5 = 225)…

              that seems kinda small for a country the size of Russia…

            • DJ says:

              $1500/cap imports. (UK $9900/cap)

          • Exports ~ $530b .. so your argument?

            I hope you recall the PR stunt how oligarchs at the table were forced to sign a deal with Kremlin, either reinvest in domestic production (factories) or you are out of the country for good… Lot of increased production out of this one for real after few years time actually happened..

            I’m not claiming they are not importing a lot of western stuff or not being JIT-import failure bulletproof..

            As said earlier you also have to derate that import list by some factor, since a lot is imported from the ring of “friendly-protectorate” neighboring states (former USSR proper), I gave the example of Belorussian tractors and trucks or what have you..

            • Fast Eddy says:

              My point is that Russia will be no better off than the rest of the world when BAU goes down …. they are completely plugged in …

              And they are not immune to spent fuel pond radiation

        • MG says:

          The population of Russia in proportion to its area suitable for low energy life is high. It is a country with harsh climate for the humans.

    • By the way, there is nothing low about Russia’s energy consumption per capita. It was very high before the collapse; it is still high now. I think its climate is part of the problem. Also, many of its buildings were built before insulation was up to current standards.

      • MG says:

        Yes, I agree, the energy consumption per capita of Russia is high and it has to do with the climate. On the other hand, this fact makes it more economical for Russia to export the energy to milder climates than to consume it at home. In the milder climates, the production costs of the machines are lower, the domestic productions in cold climates can not compete with milder climates, also taking into account the need for additional energy in the form of vodka for heating the human bodies, that makes it impossible to do any sophisticated activities for those who consume it.

  6. djerek says:

    More details on the crunch incoming g for nuclear power in the US: https://www.zerohedge.com/news/2018-07-11/us-asleep-wheel-nuclear-industry-faces-collapse

    That’s going to be a lot of electricity generation to replace.

    • I agree that the nuclear industry is on the edge of collapse, but I am not sure the reason has much to do with natural gas, and its huge future supply. I think it more has to do with the crazy pricing structure of wind and solar making costs too low for many types of producers. Nuclear is among the providers most affected.

    • Greg Machala says:

      The crumbling nuclear power industry is no different than all of the other instances of crumbling infrastructure projects nation-wide. Bridges, roads, buildings, education, etc. Bottom line is that there isn’t enough cheap energy to keep rebuilding and replacing all of these things.

      • On general note, usually one has to cross the 40-50s of age boundary to start appreciate the entropy thing fully and so on, .. time is speeding around, what could be appraised in my youth as good enough is now in dangerous state and crumbling down, who knew..

        • Greg Machala says:

          It is amazing to me that we are struggling to maintain the infrastructure we have now and there are still folks who believe that if we just replace all ICE cars with electric cars and solar panels everything will be fine. I agree with Gail’s assessment that everything is complex, interconnected and evolving.

          • Fast Eddy says:

            That is because most people are too stuuuuupppid to understand that concept

            • Davidin100millionbilliontrillionzillionyears says:

              simple concept:

              the nuclear industry was built using cheap FF…

              now FF much more expensive…

      • Duncan Idaho says:

        The nuclear industry has one strong point that’s different— U235 has a half life of 24,000 years.
        Get it?

      • DJ says:

        Is the infrastructure really crumbling?

        it isn’t rational to repair/replace infrastructure until it is old.

        While expanding infrastructure by a few % every year a large part of infrastructure will be in top condition just by being new.

        Now, when not having much expanded infrastructure for a generation or so, a large part of the infrastructure is old, but perhaps not crumbling.

        I think part of why the economy seems so good for so many is that we don’t have to spend much money building infrastructure, and can get away with not spending a lot on maintainance.

        • We have a lot of pre-1970 infrastructure in place. For example, roads, electricity transmission lines, pipelines, water systems, railroads, bridges. If we didn’t we would have major problems. We wait until things break to fix them. The electricity transmission system is especially affected by this issue.

          • DJ says:

            “We wait until things break to fix them.”
            Yes, and at some point more will start to break at the same time.

            • 60 years ago things were built with cheap energy

              now we are trying to fix things with expensive energy

              the problem is as simple as that

            • DJ says:

              But mostly we don’t have to fix it yet.

              So instead we can spend ridiculous amounts of money/resources on new cars, large houses, vacations and avocado toasts.

              Houses being the most dangerous because they to will have to be maintained.

            • Fast Eddy says:

              Was it Trump who said there was going to be a massive spend on upgrading crumbling US infrastructure? This was meant to be a mega stimulus….

              Haven’t heard much about that… no doubt because – as Norman states — the energy required to do this is too costly now.

            • This is especially true if we build wind and solar!

          • theblondbeast says:

            This is the “capital maintenance” problem I post about a lot. A growing capital base requires a growing percentage of energy just to stay in place – leaving less available for growth. It’s like if I gain wait (let’s hope not too much!) If I go from eating 2000 calories a day to 2100 I will put on a few pounds. But at some point my new bigger body will use all 2100 calories just to stay the same size. Continuing to eat 2100 wouldn’t produce growth. Energy for society works the same way since capital (roads, roofs, pipelines) requires constant (when averaged out) inputs of energy.

            The government could money-finance infrastructure as a jobs program. This worked in the great depression. But the problem will be that we can’t increase the supply of inputs fast enough due to diminishing returns – would compete with all other goods and services and cause price increase!

            Collapse could look like an inability to afford both growth and maintenance.

            • DJ says:

              After you have built new “capital” you have a delay before you have to do meaningful maintainance, and then much more delay before this cost will be large compared to initial cost.

              During this delay you could either build more new capital, or blow income on fun stuff.

              I argue most of us in the upper 10-50%ile income in the west is living in the blow income on fun stuff-phase. So that is part why no one agrees when you go doom on them.

            • DJ says:

              In Sweden replacement speed is 260 years for water and waste systems despite technical life time being considered 100 years.

              I can imagine the majority is built between 1900-1965 and almost nothing replaced.

              That would mean we have had 50 years of not spending meaningful amounts on either building out or replacing water systems, but with a larger part of the system becoming 100+ years old we are either forced to do it (with more expensive energy) or take the costs somewhere else (disease, bottled water).

            • theblondbeast says:

              @DJ – Agreed for any one specific installation. But that’s why I said “when averaged out.” You’re still right that we are allowing a gradual degradation and living off past cheap energy. It’s like letting a house run down – one day you’re letting the paint peel and chip, the next the roof leaks, and pretty soon the whole thing is a shack.

            • Artleads says:

              theblondbeast says:

              “It’s like letting a house run down – one day you’re letting the paint peel and chip, the next the roof leaks, and pretty soon the whole thing is a shack.”

              I understand almost nothing of discussions which depend on having paid attention to math and science. But as a past art conservator, I’m quite aware of the truth in what you say.

              I’m very lucky to have appliances–a rather old fridge, car, stove, etc.–that still work. And still the availability of cheap-enough replacements (for now). It would be back to digging in the earth with a stick otherwise. But where it comes to maintaining an old wooden house, i am spectacular. The trick is to fill even the smallest crack with spackle. Making this a daily ritual is best. I really believe this alone can keep a house standing forever.

              I try using a related approach to filling potholes and cracks on the highway in front, but that is much harder to do alone.

            • I’m a rustic from the uk

              wats spackle

            • Artleads says:

              Norman,

              It’s a paste you smear on to block/cover cracks and small fissures in walls, etc.. It dries quickly.

              Spackle, Putty, and Epoxy Wood Filler – House Painting Advice
              http://www.house-painting-advice.com/spackle.html
              Spackling Paste Conventional pre-mixed spackling paste, also referred to as spackle is heavy paste filler typically consisting of calcium carbonate and chemical binders. It can be used on wood, drywall, and plaster to conveniently fill holes up to ½ inches deep, small cracks, and other minor surface defects.

            • I think you are right about collapse looking like an inability to afford both growth and maintenance. Our maintenance needs keep increasing, and at least worldwide, population is growing. That is why there are so many immigrants in the rich countries.

  7. Yoshua says:

    Trump seems to be at odds with a self organizing economy.

    He criticized Germany at the Nato summit for buying Russian nat gas and sending billions of dollars to Russia, which is an enemy, and then the U.S has to spend billions of dollars to protect Germany against Russia.

    The U.S is on top of this losing billions of dollar in trade with Germany, while Germany is building another gas pipe line to Russia, the Nord Stream 2 that will double the capacity of nat gas to Germany from Russia.

    The U.S House and Senate voted to impose sanctions on European companies that finance Nord Stream 2 by cutting them off the dollar payment system…which equals death for energy companies since energy is priced in dollars.

    Merkel said that she lived in East Germany while it was a Soviet Union satellite…but today Germany is united and independent.

    • craig moodie says:

      So where does Drumpf expect Germany to source their gas from ?, if not from Russia. Certainly not from the US, if you believe Art Bermans research. Drumpf is a colossol buffoon.

      • Greg Machala says:

        Trump is no more a buffoon than Hillary, Obama, Clinton, Bush Jr., Bush Sr., Cheney, Rumsfeld, Rice etc. Their job is to put lipstick on the pig. If they can rig the system in their favor and make money doing that….great for them and their lackeys. Unlike many folks I think fondly of Jimmie Carter. I think Jimmie genuinely cared about the country and its people. Well, look how history treated him. We are a cruel and barbaric people at heart. We even routinely re-enact horrific wars of the past. Down to the period correct uniforms too I might add!

        • the don is on a resource grab

          he must divert commerce/resources to the usa while they are still available to do so

          • Greg Machala says:

            As should every country.

          • Bingo, and that’s likely another additional argument for not expecting any over night reset of the situation. Yes, it’s possible such displayed boorish buffoonery in the plain open and the gallery of peculiar US admin staffers suggest the execution of that plan for last minute resource grab will fail on the grounds of sheer incompetence.

            However, I guesstimate there is enough time to have a sequence of soonish arival of GFC v2.0 (trimming Chinese wings and kicking out some more countries out of the consumer loop like Venezuela), while the West circles the wagons and stumbles around like headless chick for upto next ~15yrs. Only then with proper GFC v3.0, under the weight of it all the grand finale doom comes around..

        • Jimmie Carter, of course, did not realize that putting solar panels on the White House and wearing a sweater would not be enough to do much of anything. In fact, this “solution” would have an adverse result on the electric grid. But his heart was in the right place.

        • Fast Eddy says:

          Carter seems like a nice enough person … compared to the swamp monsters listed above….

          However he – like them — was not much more than a figurehead… a minion…. a senior manager… taking orders from the real power.

          Which is a good thing. The people and their elected officials are not capable of nor responsible enough nor smart enough… to run an empire….

      • Volvo740... says:

        Dala djupgas. Do you have an update, DJ?

    • Trump is exactly the type of person who is elected when energy per capita is not rising sufficiently. There are a lot of unhappy voters. They want changes. Someone who is sort of obnoxious is fine for that purpose. We had Hitler in Nazi Germany.

      • Tim Groves says:

        I wasn’t aware you grew up in Nazi Germany, Gail.

        By the way, given a choice between Adolf and Donald; which one would you rather have dinner with?

        Personally, I would rather have tea with Mussolini.

        • By “We,” I meant the world, not the US. I was thinking about saying Reagan, because he represented a departure from the many “nice” presidents we had before him. It was under him that financialization started taking place. It was at that time that the beneficiary of all gains started to be businesses and the top 1% (or perhaps 10%) of workers. The total return of the economy started falling. A different “squeezing out” process began. Non-elite workers suddenly started getting squeezed out.

          I just remembered that the Economist has a labor force participation chart for women.

          The article talks about machines taking over the agricultural labor that women used to perform. This is like the mechanization that took place in the 1910s and 1920s that led to the loss of work for many US farmers. Wealth was concentrated in the hands of the ever-more-wealthy. Poor families that that previously had had the benefit of the income produced by both the mother and the father were now much poorer, because the income of the mother (from work in the fields) had been lost to the productivity of machines. This is a different from of workers being driven out of jobs by mechanization, and the earnings going to the owners of the machines. This type of wage disparity growth seems to have been a significant contributor to the Depression of the 1930s. Now we are seeing it both in Indian and China, according to this chart. The article talks about women the ratio of female children to male children again falling, because with women having so little value, families don’t want girl babies.

        • Duncan Idaho says:

          I actually knew (know) two people who were in Nazi Germany during the war.
          Very insightful– and from a almost as detached and delusional culture as we are currently living.
          Only one is alive today, 96 years old.

      • The interwar period was even more *exalted, you even have had several attempts by communists taking over Western countries.. this was pre-countered by fascist leaning groups supported by bankers-industrialists, which indeed made it into admin in several countries afterall.

        * as reaction to sequencing of: late 19th century recession, WWI, post war desperation, revolutions, brief period of economic boom years (ostentatiously not equally shared across wider pop), market crash, depression, unemployment, ..

  8. craig moodie says:

    Sorry! colossal.

  9. Paul West says:

    Outstanding analysis as usual.I disagree about the need for long term fossil fuel usage to cause abrupt climate change. We already have enough CO2 (410 part per million) and other heat trapping gases in the atmosphere to create feedbacks which will collapse civilization.

    • Fast Eddy says:

      Yes Al Gore stated in his propaganda movie that sea levels would rise 7M by the early 2020’s….

      Maybe his fellow eco warrior Leo did not watch that movie?

      Sorry to tell you but we’ve burned just about all the FF we are ever going to burn …. and nothing has happened.

      Don’t sweat it

    • Davidin100millionbilliontrillionzillionyears says:

      Paul…

      4 parts per 10,000…

      OMG!

      what will we do if it gets to 5 parts per 10,000?

      we’re doomed (to perpetual sarcasm)…

      • Davidin100millionbilliontrillionzillionyears says:

        current OFW Paul World Rankings:

        1 Paul McCartney
        2 Slow Paul
        3 paulliverstravels
        4 Paul West

    • Aubrey Enoch says:

      When Earth ‘s population gets down under a billion, I predict that CO2 emissions will drop significantly.

  10. Fast Eddy says:

    Then look at this — can you find solar? I need a f789ing Hubble Telescope to find it… and I have pretty good eyesight….

    To ramp solar:

    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.

    http://en.wikipedia.org/wiki/Cubic_mile_of_oil

    “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. http://energyskeptic.com/2014/high-tech-cannot-last-rare-earth-metals/

    And people wonder why they post here and walk away with their entrails dragging on the ground behind them…

    How many articles does Gail have to write on this topic before it gets through to you MORE ons?

    Solar is NOT a solution — it is nothing more than a gesture to convince billions of id i ots… that there is life after fossil fuels.

    • Tim Groves says:

      The Delusistanis are within the gates again. They are flocking to this post like members of the Spanish Inquisition around a heretic.

      • Fast Eddy says:

        You can feel it to eh….

        I think they sacrificed their stewpppidddest mostly useless and re ta rded member… Pauliver… to test our resolve..

        Pauliver… we will send you back … with a very disturbing story for your mates….. you’ll want to tell them to keep their fingers away from the fence

        • Tim Groves says:

          Yes, by all means, let’s release the hounds. As soon as they finish their yoga practice.
          Then we can bet on which of the interlopers will make it back over the fence in one piece.

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