Many people expect energy shortages to lead to high prices. This is based on their view of what “running out” of oil might do to the economy.
In this post, I look at historical data surrounding inadequate energy supply. I also consider some of the physics associated with the situation. I see a strange coincidence between when coal production peaked (hit its maximum production before declining) in the United Kingdom and when World War I broke out. There was an equally strange coincidence between when the highest quality coal peaked in Germany and when World War II broke out. A good case can be made that inadequate energy supply is associated with conflict and fighting because leaders recognize how important an adequate energy supply is.
Some of my previous analysis has shown that if we view energy in terms of average energy supply per person, the world as a whole may be again entering into a period of inadequate energy supply. If my view is correct that inadequate energy supply leads to increased conflict, the recent discord that we have been seeing among world leaders may be related to today’s low supply of energy. (My energy analysis considers the combined energy supply available per person from fossil fuels, nuclear, and renewables. It is not simply an oil-based analysis.)
The physics of the low energy situation may be trying to “freeze out” the less efficient portions of the economy. If successful, the outcome might be analogous to the collapse of the central government of the Soviet Union in 1991, after oil prices had been low for several years. Total energy consumption of countries involved in the collapse dropped by close to 40%, on average. The rest of the world benefitted from lower oil prices (resulting from lower total demand). It also benefitted from the oil that remained in the ground and consequently was available for extraction in recent years, when we really needed it.
The idea that oil prices can rise very high seems to be based on the oil price increases of the 1970s and of the early 2000s. While oil prices can temporarily rise very high, it is hard to make a case that they can remain high for an extended period. For one thing, high oil prices tend to cause recessions and lower employment. In such an environment, affordability of energy products is lower, and oil prices tend to fall. For another, it is easy for the Federal Reserve to get oil prices back down by raising interest rates. In fact, the Federal Reserve is raising interest rates right now.
In my opinion, we should be more concerned about low oil prices than high because we live in a world economy with huge debt bubbles. Debt bubbles are part of what enable today’s high employment. Debt bubbles support employers that are close to the edge financially; they also support buyers who would not be able afford automobiles or college educations, if loans were to become more expensive because of higher interest rates. Employment in the affected industries would be cut back, leading to recession.
Because of these issues, pricking the debt bubble is likely to lead to a major recession and, indirectly, lower energy prices, as in late 2008 (Figure 12). These lower prices are not good news because energy providers of all kinds need fairly high energy prices to survive–probably equivalent to oil at $80 per barrel or higher. If energy prices stay persistently low, the world is likely to see much lower oil supply, in part because oil exporters need the tax revenue that they obtain from high-priced oil to fund their programs.
A Self-Organizing Economy Needs Energy to Fulfill Its Promises
The problem that has arisen many times in the past is that energy supply becomes inadequate, relative to what the economy needs to operate. This energy shortfall is virtually never explained to the public. It is only apparent to the occasional researcher who realizes that this might be the issue.
The amount of energy that a networked economy needs to operate depends on:
- The number of people alive at the time,
- The industry that has been put in place, and
- The promises, such as retirement promises, that have been made to citizens.
Adequate energy supply is important for jobs and their pay levels. A rising supply of energy per capita tends to add jobs. The Asian countries shown in Figure 1 are some examples of countries where rising energy supply has given rise to more non-agricultural jobs.
Figure 1. Energy consumption per capita based on BP Statistical Review of World Energy 2018 total energy consumption data and UN 2017 Population Estimates of three selected countries. Energy consumption includes oil, natural gas, coal, and many smaller types of energy consumption, including wind and solar.
The jobs added rarely pay high salaries compared to those in the developed world, but they have helped raise the standard of living of those who have obtained them.
A falling supply of energy consumption per capita tends to make jobs that are high-paying more difficult to obtain. If energy per capita falls, there may still be a reasonable number of jobs, but many of them won’t pay well. High energy jobs such as building new schools and resurfacing roads tend to disappear, while jobs requiring little energy consumption, such as waitress and bartender, are added. Figure 2 gives some examples of European countries that have seen declines in energy consumption per capita in recent years.
Figure 2. Energy consumption per capita based on BP Statistical Review of World Energy 2018 total energy consumption data and UN 2017 Population Estimates of three selected countries. Energy consumption includes oil, natural gas, coal, and many smaller types of energy consumption, including wind and solar.
When jobs that pay well become more difficult to find, a significant share of the population starts believing that there is no room for additional immigrants, regardless of how needy they may be. This seems to be part of the dynamic many countries have been encountering recently.
If growth in energy supply is inadequate, other physics-related issues also arise:
- Inadequate economic growth, because it takes energy to create goods and services
- A tendency toward debt defaults, and the resulting deflation of asset bubbles
- Downward pressure on wages, in situations where machines or lower-paid workers can be substituted for somewhat routine work
- Difficulty collecting adequate tax revenue
- A tendency toward aggressive behavior between countries and actual wars
Physicist François Roddier has examined how economies allocate resources when there is a problem with scarcity. He finds that when there is inadequate total energy supply, this shortage is reflected in growing wage and wealth disparity. Thus, the goods and services made possible by energy supplies are disproportionately allocated to a small proportion of individuals at the top of the economic hierarchy, while those at the bottom receive a falling share.
He likens the increasing share of wages/wealth going to the top to steam rising. At the same time, he sees the falling share of energy consumption going to those at the bottom of the hierarchy as freezing out those who are contributing the least to the economy. Using this approach, some portion of the economy can be maintained in a period of temporary energy scarcity, even if the most vulnerable parts are lost.
How a Few Past Low-Energy Problems Resolved
First Low-Energy Consumption Period: Following Peak Coal in the United Kingdom, 1913
Figure 3. United Kingdom coal production since 1855, in a figure by David Strahan. First published in New Scientist, 17 January 2008.
The UK problem in the 1914 time-period was a coal problem. The coal whose delivered cost was lowest had been produced first. It was near the surface and geographically close to where it was ultimately to be used. Many types of costs rose as the easy-to-extract and deliver coal was exhausted. For example, more worker-hours were needed per ton of coal extracted.
If the costs of extracting and delivering coal rose, a person might think that these higher costs would be passed on to consumers as higher prices. (This is the hypothesis behind the ever-rising oil price theory.) Thus, a person might expect that coal prices would rise because coal companies needed more revenue to handle what was becoming an increasingly inefficient mining and delivery process.
This wasn’t the way it really worked, though, because customers couldn’t afford the higher costs. The wages of most citizens didn’t rise because the amount of goods and services the economy could produce depended upon the quantity of coal that was produced and delivered. If the economy were to take workers from outside the coal industry to compensate for the industry’s higher need for labor, it would further act to reduce the economy’s total output, because the new coal workers would no longer be performing their previous jobs.
Mining companies (sort of) solved their wage problem by paying miners an increasingly inadequate wage. Strikes by workers and lockouts by employers became an increasing problem in the 1910 to 1914 period. Probably not coincidentally, World War I started in 1914, just after UK coal production hit its peak in 1913. The war provided jobs for miners and others who could not otherwise find jobs that paid a living wage. Workers leaving for the war effort left fewer for mining.
Ultimately, World War I worked out well for the UK. The fact that it was on the winning side allowed the UK to remain the dominant world power until 1945, despite its declining coal production. Being dominant, the British pound sterling remained as the world reserve currency. This status made it easier for the UK to borrow, allowing it to import coal, even when it otherwise lacked funds to pay for it.
Second Low-Energy Consumption Period: 1920 to World War II, in the United States
The situation here seems to be more complex. The low energy problem that underlay World War I hadn’t really been resolved; it had mostly been moved elsewhere. Also, Germany, which was the other major European coal producer besides the UK, was reaching a peak in its predominant type of coal production, hard coal (Figure 4). Because of the these issues, European demand for imported goods from the US dropped dramatically. In particular, the US had been a big supplier of food to Europe during World War I, but this source of demand disappeared after 1918, when soldiers returned to their fields.
Figure 4. Hard coal production in Germany 1792 to 2002. Chart by BGR.
With respect to US demand for coal, the big issue besides low demand from Europe was internal US demand. Mechanization was starting to replace unskilled workers, both on farms and in factories. Mechanization of farming created a double problem: it added more food than was really needed, and it created a combination of winners and losers. The winners were those with the new mechanization who could produce food cheaply; the losers were those who still used processes that required much more manual labor. Available food prices fell far below the non-mechanized cost of food production. City dwellers were also winners thanks to the lower food prices.
Wage disparity became an increasingly serious problem in the 1920s (Figure 5). Workers with low wages could not afford to buy many goods and services. The laws of physics requires energy consumption (“dissipation”) whenever heat or motion are produced. Thus, physics requires that energy products be used in the manufacturing and delivery of goods and services. Following this logic through, the low wages of workers displaced by mechanization further acted to reduce demand for US energy supplies, over and above European coal problems.
Figure 5. U. S. Income Shares of Top 1% and Top 0.1%, Wikipedia exhibit by Piketty and Saez.
Debt levels grew in the Roaring 20s, partly driven by the apparent advantages of the new mechanization. In 1929, the debt bubble began to collapse, showing the underlying weakness of the economy.
The problems of the late 1920s to 1930 bore a striking resemblance to those of today. Wage disparity had become a major issue because of displacement of many workers mechanization and immigration. In response, tariffs were added: the Fordney-McCumber Tariff of 1922 and the Smoot-Hawley Tariff of 1930. Limits were also set on the number of immigrants, in the hope that reduced competition from immigration would help raise the wages of unskilled workers.
Eventually, the low-demand-for-energy problem was solved with World War II. The extra demand of World War II added many women to the work force for the first time. US energy consumption grew thanks to the war effort. The large wage increase about this time (Figure 6) primarily reflects the addition of many more workers to the labor force.
Figure 6. Three-year average growth in wages and in average personal income, based on data of the Bureau of Economic Analysis. Disposable personal income includes transfer payments such as Social Security and Unemployment Insurance. It also is net of taxes. The denominator in this calculation is total US population, so the changes reflect the effect of adding a larger share of the population to the workforce.
World War II was a winning strategy economically for the United States. Wages rose rapidly during the early 1940s, as did “Disposable Personal Income,” which is closely related. In addition, the US dollar took over as the reserve currency from the British pound in 1945. This gave the United States the power to import more goods and services (including oil) than it would have been able to if it had been more limited in its ability to borrow.
If we analyze US coal production, we see the interplay between geological limits and demand (really, what is affordable by consumers). With respect to geological limits, US anthracite coal hit an apparently geologically limited production peak in 1918. It hit when there was a fall-off in demand for imported food from Europe, so coal prices were almost certainly falling (Figure 7).
Figure 7. US coal production by type, in Wikipedia exhibit by contributor Plazak.
The US production of the second-highest quality coal, bituminous coal, rose rapidly between 1870 and 1918, when its production path suddenly changed to a jagged plateau, which lasted until about 1930. Coal production then dropped precipitously, as the economy sank, and did not rise again until the time of World War II. This pattern very much follows the “demand” pattern expected based on the earlier discussion. The wage disparity of the 1920s seems to have led to flattening production, with a steep drop with the problems of the 1930s. Looking out at 1990 on Figure 7, bituminous coal may have hit a geological production peak. Energy prices are this time were low (Figure 10), again pointing to low prices being associated with peaks in the production of a type of energy supply, not high prices.
Production of the two lowest qualities of coal (sub-bituminous and lignite) coal did not begin until 1970. The rapid ramp-up of coal supplies helped cushion the peak in oil production in the United States, which occurred (coincidentally or not) the same year, 1970. We see a shift toward ever-lower quality of energy resources, but we do not see a pattern of spiking of prices associated with peak demand. Instead, low prices seem to be associated with peaks in production.
Third Low Energy Consumption Period: Dip from 1980 – 1984, Related to High Interest Rates
A person might expect the peaking of US oil production in 1970 to have had a major impact on US energy consumption, but a much larger drop in energy consumption occurred in the 1980 to 1983 period, when the US raised interest rates to a high level, causing recession.
Figure 8. Chart produced by the Federal Reserve of St. Louis (FRED) showing a comparison of 10-year Treasury interest rates and the annual change in GDP rates (where GDP growth includes inflation).
The resulting dip in oil consumption sent oil prices from an average inflation-adjusted price of $110 per barrel in 1980, down to $32 per barrel in 1986. At such low energy prices, energy exporters have difficulty collecting enough tax revenue and obtaining enough funds for new wells. Only the sturdier exporting nations could survive.
The energy exporter that did not survive was the Soviet Union. It took until 1991 for the financial strains of low oil prices to collapse the central government of the Soviet Union. With its collapse, much of the industry of the Soviet Union permanently was destroyed, reducing energy consumption by close to 40%. Even thirty years later, the per capita energy consumption of the former Soviet nations remains far below its mid-1980s plateau level (Figure 9).
Figure 9. Per Capita Energy Consumption by Part of the World, based on data of BP Statistical Review of World Energy 2018 and 2017 UN Medium Population Estimates. The Russia+ grouping is the Commonwealth of Independent States, shown in BP Statistical Review of World Energy 2018. It is slightly smaller than the former Soviet Union.
Analysis
Looking at these situations, there is little evidence with respect to UK and German coal production that geological peaks in production are associated with high prices. Instead, they seem to be associated with conflict among nations.
Apart from conflict, the other issue associated with peaks in coal production seems to be falling demand, and thus falling prices. The reason for geological peaks is likely to be inadequate profitability. Inadequate profitability occurs because rising costs of production and transport can no longer be recouped with higher prices. A person might say that the limit on rising coal production is the affordable price. It is reasonable to expect that the same is true for oil.
There is also little evidence that energy scarcity causes high prices, if energy scarcity is defined as low energy consumption per capita for all types of energy products combined. Instead, energy scarcity tends to cause wage disparity. Energy scarcity is also a concern for government leaders because they can see the need for an adequate supply of inexpensive energy, if they are to be able to compete in the world marketplace. Goods made with an expensive energy mix tend to be high-priced, and thus they tend to be noncompetitive in the world market.
Local customers are also unlikely to be able to afford goods made with expensive energy products, because the additional wages are being used to support what is essentially a less efficient type of production. There are many ways that energy costs can rise, including:
- Need for more human labor
- Higher wages for labor, perhaps because of more education or location
- Need for the use of more energy products in the making of new energy products
- Need for more debt financing
- Higher interest rates
- More machinery, including pollution-control equipment
- Need to lease land at higher cost
- Higher taxes
Regardless of where the extra costs come from, they don’t actually produce more of the energy products that are essential to making the economy operate as it should. The higher costs are simply a drag on the economy, which must be hidden in some way. Approaches for hiding the problem include reducing interest rates, outsourcing manufacturing to low-wage countries, and replacing some unskilled workers with computers or robots.
Prices seem to be tied more to what customers can afford than to the cost of production. Note that when energy supplies were low in the 1920 to 1930 period, oil prices declined. This pattern occurred because growing wage disparity led to more people who could not afford very many goods and services made with oil products.
Figure 10. Historical inflation-adjusted oil prices, based on inflation adjusted Brent-equivalent oil prices shown in BP Statistical Review of World Energy 2018.
Looking at Figure 11 below, we see a situation where US average wages seem to rise only if oil prices are low. If oil prices are high, it becomes more economic to send manufacturing to countries using cheaper energy products and offering lower wages. Such substitution leads to fewer US jobs and recession.
Figure 11. Average wages in 2017$ compared to Brent oil price, also in 2017$. Oil prices in 2017$ are from BP Statistical Review of World Energy 2018. Average wages are total wages based on BEA data adjusted by the GDP price deflator, divided by total population. Thus, they reflect changes in the proportion of population employed as well as changes in wage levels.
The Federal Reserve is very much aware of the fact that high oil prices lead to high food prices, and thus are a problem for the economy. It may also be aware of other issues related to high oil prices, such as loss of competitiveness in the world market.
The Federal Reserve has a powerful tool for fixing the problem of high oil prices–its Open Market Committee can raise short-term interest rates, and thereby make loans more expensive. For example, if interest rates can be changed so that auto loan interest rates rise from 5% to 6%, this makes automobile monthly payments more expensive, and thus reduces demand for cars. Indirectly, this reduces demand for oil, both for manufacturing them and for operating them.
In fact, the Federal Reserve seems to have been a major contributor to the Great Recession of 2007-2009. It first lowered interest rates in the early 2000s and helped create a debt bubble, particularly in sub-prime housing. It later raised interest rates. The higher interest rates plus high oil prices popped the debt bubble.
Quantitative Easing (QE) is a program that was added in recent years to adjust interest rates, over and above the impacts available from changes to short-term interest rates. Figure 12 shows that these interest rate changes seem to have had a close correspondence to turning points in oil prices. QE was added in late 2008 to reduce interest rates, and thus raise oil prices. Removing QE seems to have had the opposite impact.
Figure 12. Monthly average spot Brent oil prices based on US Energy Information Agency data, together with dates when the US began and ended Quantitative Easing.
What we are facing going forward is a debt bubble made possible by a long period of very low interest rates. The Federal Reserve now seems to be intent on popping this bubble by raising short-term interest rates and selling Quantitative Easing securities at the same time. If the Federal Reserve does succeed in popping the debt bubble, oil prices (as well as other energy prices) could fall very low again. If I am right, we can expect another major recession. It will be characterized by low demand, low commodity prices and layoffs in many industries.
Conclusion
The more a person looks at the story of how rising oil prices might allow oil extraction indefinitely, the less reasonable it seems. If the story about oil prices rising endlessly were true, we would have seen coal prices rise endlessly in Europe a century ago, when it was the dominant form of supplemental energy available. It didn’t happen.
Instead, what we need to be concerned about is the possibility of rising conflict. The energy situation may become increasingly like a game of musical chairs, if the amount available from sellers at an affordable price falls too low. The winners will attempt to obtain an adequate supply for themselves. It is not clear that this strategy can have winners, but perhaps I have not considered all of the possible outcomes.
One of the issues with inadequate energy supplies is the difficulty in obtaining adequate tax revenue. If tax revenue is an issue, there is likely to be a push to reduce donations to organizations that act to bring countries together, such as the European Union and the United Nations. Subsidies of all types are likely to be on the chopping block. Government services of all types are also likely to be reduced or eliminated, from bridge repairs to retirement programs for the elderly.
Most of us have never been taught about resource wars. The wide availability of fossil fuels eliminated the need to even think about a possible lack of energy resources, or other limited resources such as fresh water. Unfortunately, resource conflict may be back in some new 21st century version in the not too distant future.
Needless to say, I am not advocating conflict and cutting programs. It is just that energy problems and financial problems are very closely linked. This is the way that things seem to work out.
Well, Mexico comes out ahead——
But not the good list:
https://4.bp.blogspot.com/-kH8XeqkvX1A/W4l46FY72CI/AAAAAAAAiLk/fUQdjdBPa2Uf-iRFxtsDDMTiSaBlirsMwCLcBGAs/s640/RussiaWealthIndependent.PNG
this how the Russian Revolution of 1917 happened
https://youtu.be/OHZ3Qww9kIY
this time is gonna be against one percent
japan’s Throwaway Children
In a country that frowns upon foster care, 33,000 children from abusive homes are growing up in state institutions.
In the United Kingdom, United States and other developed countries, abused or neglected children are often sent to live with a foster family. But that rarely happens in Japan, one of the world’s wealthiest and most progressive societies.
Close to 90 percent of Japan’s troubled children are placed in state institutions – out of sight and out of mind.
Some 33,000 children currently live in such institutions in this society that frowns upon the use of foster care. But critics say the excessive reliance on 131 child nursing homes across the country represents a form of abuse in itself.
With child abuse cases rising to a record 73,000 cases last year, the problem of institutions and where to place troubled children is unlikely to go away.
https://youtu.be/I50yAoCnA64
Japanese men locked in their bedrooms for years
The condition known as Hikikomori is one of the biggest social and health problems facing Japan – about 1 million people, mostly men, have locked themselves in their bedrooms and will not come out
https://youtu.be/sxYs2Pv86WA
japan is literally dyeing socially and economy wise
If you stop and think about it, growing population adds a huge number of jobs to the economy. There is a need for more homes, more stores, more cars, more water supply, more roads, more food, more schools, and more of practically everything that you can think about.
Now suppose that you have shrinking population instead. And what population you do have increasingly tends to be elderly. Then you don’t need as much of anything as you already have. But you likely need to maintain all of the roads, and water lines, and train lines, because there are people living all over.
I understand that there are quite a few unoccupied Japanese homes out in the hinterland, owned by the government. Any surviving children chose not to inherit the homes, partly because the inheritance taxes were so high, and partly because there were no suitable jobs in the area; they personally did not want to keep up farming.
The government has to do something of this sort, if there is no market for these homes. If they are just added to the market, prices will drop considerably.
There is literature about animals not doing well when population density gets too high. I know Craig Dilworth mentions some in “Too Smart for Our Own Good.” I think the same problem afflicts humans. But the problem may be more than population density. It may also be, “No reasonable place for me in the economy.”
but gail do you not think that these problems has
increase way too much because of industrial civilization
I always knew he was part of the Swamp.
But I didn’t know that Anderson Cooper was one of those TV people who looks shorter in real life.
https://wattsupwiththat.com/wp-content/uploads/2018/09/CNN-florence-cooper-flood1.jpg
Just further proof that News today is nothing more than entertainment. That’s why you have idi-ots and more-ons standing outside giving the viewing public a play-by-play of events while a hurricane is passing thru. It’s all about the ratings. As i’ve said before, a Hurricane is the Weatherman’s Superbowl. It’s that time of year when they feel really important and not ignored.
Brexit has placed Irish unification firmly back on the agenda, but there are still plenty of dissenting voices
https://www.theguardian.com/world/2018/sep/16/united-ireland-brexit-irish-unification-back-on-agenda
Despite its citizens having voted 56% to stay in the European Union, Northern Ireland’s economy and constitutional scaffolding is now being buffeted by Brexit winds.
Being bounced out of the EU to an uncertain fate has prompted one in six Northern Ireland voters to switch allegiance, delivering a majority for unification, according to a recent poll. “The possibility is no longer a pipe dream,” said Tommy McKearney, 66, a former IRA member and hunger striker. “I don’t think it’s imminent. It’ll be over the next 20 to 30 years – in a lifetime, but not in my lifetime.”
Demography is key. When British negotiators carved Northern Ireland from the newly independent south it was 65% Protestant, 35% Catholic. A century later it is 48% Protestant, 45% Catholic. Unionists remain the biggest bloc, but are not an overall electoral majority. In last year’s general election the Democratic Unionist Party won a mere 1,168 more votes than Sinn Fein.
“It’s a massive demographic shift. In five to 10 years there’ll be a Catholic majority in Northern Ireland,” said Peter Shirlow, director of the University of Liverpool’s Institute of Irish Studies. It will take longer for those numbers to translate into the electorate. “But a majority for a united Ireland is going to happen, no doubt about that.”
When British royals visit Ireland these days they receive hugs. The rebellious colony of uprisings, famine and resentment is now a prosperous, confident republic which no longer defines its identity in opposition to Britishness. Adoring crowds mobbed Prince Harry and Meghan Markle in Dublin in July, a sequel to the Queen’s groundbreaking visit in 2011. Pope Francis, in contrast, spent much of his visit last month apologising for clerical sex abuse.
Sinn Fein, the political wing of the IRA during the Troubles, is pushing for a border poll while trying to ease the sting for unionists. A draft document entitled Irish Unity – An Activist’s Guide floats changing the Irish flag and anthem. The party’s leader, Mary Lou McDonald, has suggested rejoining the Commonwealth.
Unionists with business, farming and fishing interests would be pragmatic if a united Ireland was the only way to remain in the EU. “They’re willing to adapt to that.” Kevin Meagher, a former Labour Party adviser on Northern Ireland said, “British politics will not lament Northern Ireland’s exit from the UK. There will be an audible sigh of relief.”
A chorus of politicians, academics, pollsters and even republicans say Brexit’s impact on unionism is overstated. One reason is the estimated £10bn annual subvention from London to Belfast. Dublin cannot match this. Unification would in all probability mean slashing public sector jobs and services in the north and hiking taxes in the south, incentives for voters on both sides of the border to vote no.
“Tiocfaidh ár lá,” goes the republican slogan. Our day will come. An expression of longing masquerading as prophecy. Maybe it will come. But Ireland’s dreamers will need to be patient. And careful what they wish for.
Burn more COAL
Duke spokeswoman Paige Sheehan said about 2,000 cubic yards (1,530 cubic meters) of ash were displaced at the L. V. Sutton Power Station outside Wilmington and that contaminated runoff likely flowed into the plant’s cooling pond. The company has not yet determined whether the weir that drains the lake was open or if contamination may have flowed into the Cape Fear River. That’s roughly enough ash to fill 180 dump trucks.
Florence slammed into the North Carolina coast as a large hurricane Friday, dumping nearly three feet (1 meter) of rain and swelling the region’s rivers. The resulting flooding forced swift-water rescues and left several people dead.
Sheehan said the company had reported the incident to state and federal regulators “out of an abundance of caution.”
The coal-fired Sutton plant was retired in 2013 and the company has been excavating millions of tons of ash from old waste pits and removing it to safer lined landfills constructed on the property. The gray ash left behind when coal is burned contains toxic heavy metals, including arsenic, lead and mercury.
Duke has been under intense scrutiny for the handling of its coal ash since a drainage pipe collapsed under a waste pit at an old plant in Eden in 2014, triggering a massive spill that coated 70 miles (110 kilometers) of the Dan River in gray sludge.
In a subsequent settlement with federal regulators, Duke agreed to plead guilty to nine Clean Water Act violations and pay $102 million in fines and restitution for illegally discharging pollution from coal-ash dumps at five North Carolina power plants. The company is in the process of closing all of its coal ash dumps by 2029.
Spokeswoman Megan S. Thorpe at the state’s Department of Environmental Quality said state regulators will conduct a thorough inspection of the site as soon as safely possible.
“DEQ has been closely monitoring all coal ash impoundments that could be vulnerable in this record breaking rain event,” Thorpe said. She added that the department, after assessing the damage, will “hold the utility accountable for implementing the solution that ensures the protection of public health and the environment.”
There are at least two other coal-fired Duke plants in North Carolina that are likely to affected by the storm.
The H.F. Lee Power Station near Goldsboro has three inactive ash basins that flooded during Hurricane Matthew in 2016, exposing a small amount of coal ash that may have flowed into the nearby Neuse River. The old waste pits are capped with soil and vegetation intended to help prevent erosion of the toxic ash beneath.
The Neuse is expected to crest at more than nine feet (3 meters) above flood stage Monday and Sheehan said the company expects the same ash basins are likely to be inundated again.
At the W. H. Weatherspoon Power Station near Lumberton, Sheehan said it had already rained more than 30 inches (75 centimeters) by Saturday evening, causing a nearby swamp to overflow into the plants cooling pond. The Lumber River is expected to crest at more than 11 feet (3.3 meters) above flood stage Sunday, which would put the floodwaters near the top of the earthen dike containing the plant’s coal ash dump.
Environmentalists have been warning for decades that Duke’s coal ash ponds were vulnerable to severe storms and pose a threat to drinking water supplies and public safety.
“Unfortunately, Duke Energy has spent years lobbying and litigating and still has not removed the coal ash from its dangerous riverfront pits in the coastal area, some of which are in the floodplain,” said Frank Holleman, a senior attorney at the Southern Environmental Law Center who has battled the company in court. “When a hurricane like Florence hits, we have to hope and pray that our communities do not suffer the consequences of years of irresponsible coal ash practices by the coal ash utilities
https://finance.yahoo.com/news/florences-rains-coal-ash-landfill-collapses-carolinas-052143866–finance.html
Not only the nuke waste ponds to worry about….but the coal Ash ponds/sites also…
Then there is the degradation of the many solar panels in the state, and what they can do to the drinking water. If it is not one thing, it is another!
From the depths of the internets, apparently the original inspiration (or more) for both Huxley and Orwell has been Russian writer/engineer Zamyatin..
http://www.orwelltoday.com/weorwellreview.shtml
So maybe we should beware of people who write books like this:
https://www.amazon.co.uk/gp/product/B075MV9KS2/ref=oh_aui_d_detailpage_o03_?ie=UTF8&psc=1
We think we are gods ourselves, now.
The UK…. is dying…
The John Lewis Partnership has been hit by the fight for survival on the high street after heavy discounting by struggling rivals helped trigger a 99% fall in first-half profits at the retailer.
The employee-owned business, which also includes the Waitrose supermarket chain as well as the eponymous department stores, said pretax profits before one-off items fell to £1.2m in the six months to 28 July, from £83m a year in the same period a year earlier. The dive was largely prompted by the first pretax loss at the John Lewis department stores in at least a decade.
Sir Charlie Mayfield, chairman of the partnership, said the results had been hit by heavy discounting at other retailers, which forces its department stores to lower prices under their signature “never knowingly undersold” pledge. He said: “These are challenging times in retail … gross margin has been squeezed in what has been the most promotional market we’ve seen in almost a decade.”
https://www.theguardian.com/business/2018/sep/13/john-lewis-profits-dive-99-percent
Of course the article suggests this is related to Brexit… it has sweet F789 all to do with Brexit
I am truly amazed that they didn’t blame Russia.
Ms May-hem will be on the phone organising a rewrite shortly!
https://wolfstreet.com/2018/09/15/why-have-us-electricity-sales-surged-in-2018-after-stagnating-for-years/
https://wolfstreet.com/wp-content/uploads/2018/09/US-electricity-generation-by-fuel-08-2018-.png
This is just the Beginning….more to come other broken promises…right Gail
Sears CEO: Retiree Pensions Are Killing Us, Not Online Shopping
https://finance.yahoo.com/news/sears-ceo-retiree-pensions-killing-233252162.html
The statements came in a blog post by Lampert in which he outlined that since 2005, Sears has contributed over $4.5 billion to its pension fund. That amount would be significantly lower—and crucially, could go toward funding the company’s operations—if federal interest rates had been higher since the 2008 financial crisis.
“Had the Company been able to employ those billions of dollars in its operations, we would have been in a better position to compete with other large retail companies, many of which don’t have large pension plans, and thus have not been required to allocate billions of dollars to these liabilities,” he wrote. Filings show that Sears pays roughly $300 million annually in retiree pensions, according to CNN.
Sure, it’s always the little guys fault…sure it is…next shoe to drop….Social Security and Medicare
One of the groups I will be speaking to on the next couple of weeks is a group of life and annuity actuaries. They saw the high debt yields of the 1960s to 1980s and assumed they would continue forever. They also saw that stock markets were doing well, when the high dividends of early years were included. They didn’t considered the difference between inflationary growth and other growth, and they were not aware of the role that energy played in allowing economic growth. Pensions became popular when it looked like pensions could be funded for practically nothing. It also looked like 401(k) savings by individuals would build to very high amounts, and everyone could live happily ever after.
I was a casualty actuary, working on products such as workers’ compensation (paying benefits to injured workers) and medical malpractice (paying benefits related to injuries caused by medical injuries theoretically caused by negligence). I could see what silly results the life actuaries models were producing. The lines of coverage I was working on involved many long term payouts as well, and I was making financial models of how these would work out. It was many years before I left casualty actuarial consulting that I was certain something was dreadfully wrong. It wasn’t until I started investigating on OurFiniteWorld.com and TheOilDrum.com that I completely figured out what was going wrong.
I left actuarial consulting to work on the problem because I saw I had a conflict of interest, writing about a problem that my employer was deeply involved in. While I was a casualty actuary, firmwide a large share of my colleagues were life and pension actuaries.
In the case of Years, doubt the pensioners were the main culprit
Sears’ CEO blames the media for company’s decline — but his obsession with Wall Street set it up for failure
https://www.businessinsider.com/how-eddie-lampert-set-sears-up-to-fail-2017-5
The man in charge of Sears, Edward S. Lampert, has blamed the company’s decline on everything from shifts in consumer spending to the rise of e-commerce, and even — at times — the weather. More recently, he’s taken to attacking the media, saying reports speculating on a Sears bankruptcy are thwarting his efforts to turn the business around.
But what sets Sears apart from other suffering retailers is something that’s not as obvious as the rise online shopping and falling foot traffic in shopping malls. It’s the steps that Lampert took when he first acquired the company: putting shareholders like himself in front of everyone else, he drained the company of vital resources.
When Sears was flush with cash, this took the form of billions of dollars of share repurchases, even as the stores suffered years of underinvestment. Repurchases, or buybacks, are common among cash-rich companies, but also derided in some corners as a waste of a company’s resources as they only serve to create the appearance of improving earnings
Lampert has turned from buybacks to dismantling what was once America’s largest and most successful retailer, said David Tawil, president of New York-based Maglan Capital. Tawil has spent his career working in corporate restructuring and bankruptcy proceedings. Sears spun off its Lands’ End brand to investors in 2014 and is exploring “alternatives” that could include sales of Kenmore appliances and Craftsman tools.
“Eddie has orchestrated for himself, and for the benefit of shareholders, the most protracted liquidation in history,” Tawil said in an interview with Business Insider
Now Eddie is taking aim at the retirees….same as Uncle Sam will with the current budget deficit gets unmanageable….
“Sure, it’s always the little guys fault…sure it is…next shoe to drop….Social Security and Medicare”
Yeah, the entitlement cuts and increase in eligibility age are coming soon after the midterm elections. Can’t afford both, tax cuts for corporations/wealthy and entitlements. Something has to give and as you say it’s the little guy’s fault. So off to work we go…
Such notoriety has made New Zealand’s isolation, once deemed an economic handicap, one of its biggest assets. The nation allows emigres to essentially buy residency through investor visas, and rich Americans have poured a fortune into the country, often by acquiring palatial estates.
https://www.bloomberg.com/features/2018-rich-new-zealand-doomsday-preppers/
Hope HRC isn’t one of them!
Should I be buying some $US about now, in readiness for our new ‘plutocracy…not’!
On another note, was there a book out recently summarising the net value of Science once the costs have been added in?
I remain of the opinion that slash and burn agriculture was our peak lifestyle achievement as it combined the best of hunter and gatherer; notwithstanding the shi.te we were taught throughout our ‘education/training’ formative years.
NZ is cool, especially the South Island.
Great fly fishing! (it not a matter of life or death- its more important than that).
The culinary experience could use a bit of a upgrade– but maybe it is traveling in my social class.
Here is my review of Gail’s blog, as predicted:
https://baudoom.wordpress.com/2018/09/15/blog-review-gail-tverbergs-our-finite-world-not-a-peak-oil-blog/
OFWers are invited to comment. If there is a gap between the closure of Gail’s current post and her next, it might provide a useful interlude for you. I haven’t yet decided whether to include a photo in the post – it looks a bit bare without one. A photo of Gail’s famous Leonardo Sticks might look well, but it’s not my photo to use.
ask Gail for permission to use it.
There are plenty of Leonardo Sticks photos available online. One of them I found was in an advertisement on Amazon. I haven’t asked anyone if I can use the photo. (Of course, it is extra advertising for the sellers.)
I am not trying to sell anything on the OFW. If I were putting together a book for sale, I would probably need to get permission to use the photo, and I might be charged for the privilege. I would need to research the situation more. The toy is made in China, with some US sellers.
So feel free to use the photo.
Thank you, I have added one to my blog post now.
That is a very nice review. Thanks!
I put together about a 60 slide presentation, to give in two versions. (There are extra unused slides at the end.) The first one will be on Monday (day after tomorrow), and the second will be on Sept. 27. I need to make a post out of the presentation, unless this is way too much. It is a very big file as a PDF.
The World’s Fragile Economic Condition
There are no doubt a few language issues that could be fixed up (like plural subject; singular verb).
Thanks Gail. It looks like you will be getting some wet weather in the Atlanta area soon.
It is raining today, and it is supposed to rain on Tuesday. It is supposed to be relatively cooler tomorrow (high of 80 degrees), but not raining. I am not sure what, if anything, we are getting from Florence.
Something for us to look forward to!
Wow – there is an incredible amount of learning and insight condensed into that presentation. Great stuff!
I wrote two different versions of the presentation. Once is a casualty actuary version, which I think is the one I put up. The other is a life and pension version. I will be giving a talk in Bermuda about the life and pension version, to a group of over 250 people, many of whom are actuaries. The actuary who invited me wrote back and said “This is great!”
I think now that I will write up the presentation in two pieces–slides 1-33, and then the later part. After I put it together, a few follow-on things became more clear as well.
China electricity consumption up 9% Jan-July year over year. That’s an amazing result.
http://www.xinhuanet.com/english/2018-08/16/c_137394912.htm
I think that China is changing from combined heat and power (which is very efficient–just use the waste heat from coal-fired electric generation plants in the middle of town, piped through tubing) to electric heating.
It is amazing how much it is possible to pump up electricity use, if a country decides to use a less efficient heating approach. Its major benefit is that it can operate using electricity generated farther from where it is created, reducing in-city pollution.
There are no doubt other benefits as well–more people working making the electric heaters, for example.
I would not take the increase as representing how fast the economy is growing.
“Investors may be forgetting the lessons from Lehman Brothers collapse
” … Put simply: Then [circa 2008], like now, investors are ignoring the role overly loose monetary and fiscal policies are playing in boosting asset prices beyond what’s justified by the fundamentals. That’s the very definition of a bubble.
“This time, when the bubble pops (which it eventually will, likely from a combination of trade war consequences and high inflation), policymakers have already exhausted their toolkits. What will be used to stem the tide?”
https://www.cbsnews.com/news/lehman-brothers-collapse-investors-may-be-forgetting-the-lessons-from-financial-crisis/
Of course, this piece doesn’t mention the “laws of physics” fundamentals dealt with on OFW — but still, maybe worth a read.
My view is the decline occurring by way of increasing costs of energy against the need for more energy for more growth, is incremental. However, what we see isn’t necessarily a perfectly angled line downward, because monetary manipulation has held decline at bay, but of course forces build up and there at some point must be a stair step down. I think that’s what we have had since 08. What happens next will be another stair step down, but when is anyone’s guess. Months, years, who knows.
The next stair step down though should prove extremely difficult to counter act. Without much room down in interest rates the only other alternative will be to go back to QE, but this time it will have to be on an even grander scale and likely include some funds making it’s way to lower income producers. The danger there is high inflation, but we cannot avoid the inevitable.
https://www.ftadviser.com/investments/2018/06/27/book-review-us-v-them-the-failure-of-globalism-by-ian-bremmer/
Stange, but after reading this book review of Ian Bremmers latest book, where energy matters is not just «far outside in the distance», but completly lost sight of, this song kept spinning in my head:
There must be some way out of here
Said the joker to the thief
There’s too much confusion
I can’t get no relief
Businessmen, they drink my wine
Plowmen dig my earth
None of them along the line
Know what any of it is worth
No reason to get excited
The thief he kindly spoke
There are many here among us
Who feel that life is but a joke
But you and I, we’ve been through that
And this is not our fate
So let us not talk falsely now
The hour is getting late
All along the watchtower
Princes kept the view
While all the women came and went
Barefoot servants, too
Outside in the distance
A wildcat did growl
Two riders were approaching
The wind began to howl
“The hour is getting late”…
yes, 2020 is coming soon…
Of course, if the poor people who starved from lack of grain had lived, they would have had more children, and the next round would have been even worse.
I once meditated and experienced that I was God.
https://m.youtube.com/watch?v=i3_uSLo2VdE
how did it feel to not care to be involved at all with 7 billion somewhat crude and selfish creatures?
I actually experienced that every soul was a sleeping God. I had just woken up. That is basically what every mystery school have been teaching for many millennia.
The experience didn’t last. I then realized what the old Greeks had discovered: Our experience of the physical world is entirely psychological, and they are never the same.
We are experiencing our strange minds.
It’s an interesting question.
“Today a young man on acid realized that all matter is merely energy condensed to a slow vibration, that we are all one consciousness experiencing itself subjectively, there is no such thing as death, life is only a dream, and we are the imagination of ourselves. Here’s Tom with the Weather.”
― Bill Hicks
Martin W Ball wrote of an experience after taking DMT. He experienced expanding beyond his body to the point where he became the universe and also God. Then he realised that we literally are only one. Upon realising that there was only one – himself, God – he felt unbearably lonely, beyond what he had ever felt before and longed to be back in his human body.
That is why Bill Hicks said there is no such thing as death, in that we must therefore reincarnate and are immortal, until we “return to the light”. I find that quite a chilling thought and don’t want it. Does every universe then equate to a god? Then the question comes to me – is it possible to be nobody or does everybody have to be somebody? Because if I have to be immortal then I don’t want to be somebody. And already my brain is tied up in knots.
And if we are all one, then we have each been members of the notorious oppressor groups in history and simultaneously also our own oppressors! Bizarre! And then we are also everybody else we see in the street!
since there are more people alive today than have ever lived, reincarnation is not mathematically possible. try picking what’s behind door number three.
Ah, but if we are everything, including our own dog and next door’s cat, and also all the bacteria on Earth, well, where does that leave us? And if it’s all an illusion anyway… Please prove that reincarnation does or doesn’t happen – and that the universe is an illusion – or not. You can’t, I can’t, either way. Nobody can even prove that they have had a single night dream in their life, because nobody has ever fllmed one as evidence. The evidence is all anecdotal. And my dreams, assuming I have really had them, have included examples of precognition and clairvoyance – that is why I am highly suspicious of them. I therefore can’t even deny that I am God, much as my Richard Dawkins side would like to, because ultimately I can’t prove that I am not.
Besides the hypothesis that reincarnation can occur across species lines, once we start throwing empiricism to the winds and speculating on metaphysical possibilities, there is no reason why one soul departing from one body can’t reincarnate in another one in the past, or even in the present, or I might reincarnate as my own grandpa.
My own personal view is that the soul is another one of our imaginary friends. We assume we have one, pretend we have one, and behave as if we have one, but the soul is a psychological illusion analogous to the rainbow as an optical illusion.Perhaps a conscious entity needs the illusion of having a soul in order to stop itself from going gaga.
I don’t assume I have one – I just don’t know if I do or not. It’s a question that has spawned masses of philosophical conjecture, of course. And the word ‘soul’ comes with a lot of unhelpful baggage, of course. I personally don’t consider myself religious. What troubles me is the things that shouldn’t happen, the episodes of the paranormal in my own life. Dreams can be bizarre enough, and Jung spoke of the Collective Unconscious. I’ve had examples of precognition and clairvoyance in my own dreams, and one dream when I was 6, and pining for my dead granddad to come back, taught me about bodily decay in particularly graphic form. Just how can we explain these occurrences.
I had another dream about working in a family restaurant, somewhere in the Middle East or North Africa – I was a teenaged Arab, though in a smart waiter’s uniform, which looked kind of late 1940s / early 1950s. The dream went into considerable detail, over what seemed like some hours, as I cooked and prepared lots of food. In real life, I dislike cooking, as I hate getting messy or getting my fingers wet or sticky for too long. When I woke up, I thought, “Who the hell’s dream was that?! It certainly wasn’t mine.” Earlier this year I read the re-published diaries of Jacques Vallee, and I was amused to read that he’d also had a dream in which he was somebody else, so I’m pleased I’m not the only one!
Of course, I get ridiculed for this sort of thing and it is often insinuated that I am romancing. The problem is, as I’ve mentioned, that proof of dreams is entirely anecdotal. None has ever been filmed, and in this materialistic world of ours, try talking about anything else where the evidence is anecdotal, e.g. UFOs (of the weird but intelligently driven kind) or close encounters. Yet we accept that dreams exist, even if their seemingly paranormal facets are not generally accepted.
Not possible. Fast Eddy is God and Creator
Is she black?
Saving the planet…. one load of rocket fuel at a time.
https://www.zerohedge.com/news/2018-09-14/cryptic-tweet-elon-musks-spacex-says-it-has-signed-first-moon-tourist
still space x have not sent one guy to other space since
Established the company
https://www.bloomberg.com/news/articles/2018-09-14/trump-said-to-want-200-billion-in-china-tariffs-despite-talks
“President Donald Trump instructed aides on Thursday to proceed with tariffs on about $200 billion more in Chinese products despite his Treasury secretary’s attempt to restart talks with Beijing to resolve the trade war, according to four people familiar with the matter.
But an announcement of the new round of tariffs has been delayed as the administration considers revisions based on concerns raised in public comments, the people said. Trump may be running low on products he can target without significant backlash from major U.S. companies and consumers, two of the people said.”
I’m a bit confused by this article. Trump said to move forward on $200 billion in tariffs, but actually they are not for now?
The Spice epidemic in Northern England.
https://www.youtube.com/watch?v=iL-0287WLFA#action=share
I’m not sure what collapse would look like but I can imagine the start of it might look like a bit like this. These synthetic drugs were available legally, then the authorities got on top of it and criminalised all of them. Since then, the problem has been driven underground and into the arms of criminals and things have become a lot worse and the sight of people in a zombie like state has become common place in cities and towns.
Of course now some politicians are beginning to become alarmed and demand an even harder crack down.
I saw lots of zombies in London last night: I believe they are called ‘commuters’.
Poor sods, mechanically pushing their way out of the 19thc train station back to their cramped housing units in a ‘gentrified’ suburb – brought back horrible memories of when I too was economically active.
There’s something to be said for being an under-employed bum….
Everybody say I’m lazy
They all tell me get a job you slob,
I’d rather be a hobo walking round with nothing
Than a rich man scared of losing all he’s got…..
https://youtu.be/64XnI02Wh5c
Sorry, I can’t resist just one more:
Soon I’ll be just one of the commuters
Waiting for the subway train
I’ll be rushing up the stairs
And in the elevator
By the time that I get there
I’m gonna feel like a mole in the ground
I’ll be caught in the crush
I’ll be pushed and be shoved
And I’ll be trying to get the subway train
I’ll be fighting with my brief case
And my umbrella
Every morning and every night
Some people do it every day of their lives
https://youtu.be/wNJ7qgXwdcg
I’m getting some garden string to hold up my trousers, Tim: that should complete my under-employed look, non-commuter look. 🙂
In a land where the way of life is understood
Race-horses are led back to serve the field;
In a land where the way of life is not understood
War-horses are bred on the autumn yield.
Owning is the entanglement,
Wanting is the bewilderment,
Taking is the presentiment:
Only he who contains content
Remains content.
(Tao Te Ching)
“we are due a recession in 2020….”.
https://www.theguardian.com/business/2018/sep/13/recession-2020-financial-crisis-nouriel-roubini
It cites 10 reasons why. Could we find an eleventh? The word energy doesn’t appear in the article but oil price is mentioned as inflation trigger.
… And we know what happens than.
A popular prediction today, 2020:
“A decade after the collapse of Lehman Brothers sparked a plunge in markets and a raft of emergency measures, strategists at the bank have created a model aimed at gauging the timing and severity of the next financial crisis. And they reckon investors should pencil it in for 2020.”
https://www.smh.com.au/business/markets/the-next-financial-crisis-will-strike-in-2020-says-jpmorgan-20180914-p503o7.html
I wonder if we’ll look back on 2020 with hindsight.
for sure…
if you live to 2021…
It is always 2 years to go…..
Until it isn’t…..
it is always the present…
except when it’s the absent…
Ray Dalio has been doing TV shows circuit lately, promoting new book, saying recession in two years max.. Also talks late 1930s rhymes again..
“Debt stalks Africa once again. Over the past six years sub-Saharan governments have issued $81bn in dollar bonds to investors hungry for yield. Piled on top of this are murkier syndicated loans and bilateral debts, many to China and tied to big construction projects… Consider Zambia. In 2012 this southern African country could borrow more cheaply than Spain. Now bond yields have jumped above 16%, suggesting that investors fear that it will default…”
https://www.economist.com/leaders/2018/09/15/zambias-looming-debt-crisis-is-a-warning-for-the-rest-of-africa
“…not everything is rosy in this credit-fuelled affair. Kenya is the third biggest borrower from China in Africa and the strain of the mounting debt is showing. In fact, public outcry is still reverberating following the Jubilee government’s widely unpopular decision to impose a 16 per cent levy on petroleum products to fund the ballooning budget deficit. China has been on a massive lending spree, gifting it an iron grip on Kenya and other African countries that collectively owe the Asian giant more than Sh20 trillion.”
https://www.standardmedia.co.ke/business/article/2001295448/how-china-is-feeding-off-poor-africa
I am sure that some will think, “Great way to get yield.”
“China will not buckle to U.S. demands in any trade negotiations, the major state-run China Daily newspaper said in an editorial on Friday, after Chinese officials welcomed an invitation from Washington for a new round of talks… “The Trump administration should not be mistaken that China will surrender to the U.S. demands. It has enough fuel to drive its economy even if a trade war is prolonged,” the newspaper said in an editorial.”
https://www.cnbc.com/2018/09/14/china-will-not-surrender-to-us-demands-in-trade-talks–state-media.html
“Investment in factories, railways and other projects in China so far this year grew at its slowest pace in more than a quarter-century, pointing to challenges in government efforts to arrest an economic slowdown.”
https://www.wsj.com/articles/china-economic-activity-indicators-mixed-in-august-1536892284
“Ten years ago, China shielded itself from the global financial crisis with a wall of stimulus. Facing U.S. President Donald Trump’s tariff onslaught, that feat of self-preservation looks much harder to repeat. The simple reason is that even if President Xi Jinping’s government were to conclude that the economy needed massive spending to keep growth on track, he is hamstrung by China’s huge debt.”
https://www.japantimes.co.jp/news/2018/09/14/business/high-debt-limits-chinas-range-weapons-defending-trumps-tariff-blitz/#.W5tqs-hKjIU
“You only need to drive an hour out of Beijing to find an example of the Chinese property frenzy gone pear-shaped… The saga unfolded in a familiar way: people punted on places set to benefit from government policies, prices soared, officials squelched the boom, and late-comers to the party suffered.
“It’s a dynamic that has played out in places such as the tropical island of Hainan — and may be repeated anywhere investors get a whiff of big plans for a city or a region. Lately, investors have been flocking to Guangdong cities seen as benefiting from regional development.
“Langfang, a city of 4.7 million that’s south-east of Beijing, is a prime example. Prices boomed from late 2015 on speculation that the city would benefit from plans to move government offices out of the center of the capital to ease congestion. Peaking in August last year, prices have cratered on curbs such as residency requirements for purchasers.”
http://www.theedgemarkets.com/article/chinas-weakest-housing-markets-flash-red-cautionary-tale
Popping real estate bubbles creates a lot of problems for an economy. We should remember 2008. People in China have been investing in real estate to fund their retirements.
Also peak coal limits China’s options.
All we need is an ever-rising wall of stimulus.
“In many ways, all the talk about global central banks beginning a “great unwind” of their extraordinary monetary stimulus is positively quaint.
“After all, how can officials from the Federal Reserve to the Bank of Japan even pretend to know how to reverse what they’ve done over the past decade? I’m speaking specifically about propping up financial markets with easy money and allowing the world’s debt burden to balloon to almost $250 trillion.
“They kept interest rates at or below zero for an extended period — probably too long, if they’re being honest with themselves — and used bond-buying programs to further suppress sovereign yields, punishing savers and promoting consumption and risk-taking. Global debt has ballooned over the past two decades: from $84 trillion at the turn of the century, to $173 trillion at the time of the 2008 financial crisis, to $250 trillion a decade after Lehman Brothers Holdings Inc.’s collapse…
“This is the post-Lehman legacy. To pull the global economy back from the brink, governments borrowed heavily from the future. That either portends pain ahead, through austerity measures or tax increases, or it signals that central-bank meddling will become a permanent fixture of 21st century financial markets.”
https://www.bloomberg.com/graphics/2018-lehman-debt/?srnd=premium
No kidding!
The shorties might be prevailing one day afterall..
I was skeptical this is the time as of Q2/2018, but perhaps I was wrong.
Hard hitting piece on Muskovian failure in the Space domain:
—
Sep 10, 2018, 10:08am
SpaceX Abandons Plan To Make Astronaut Spacecraft Reusable; Boeing Sticks With Reuse Plan
Loren Thompson Contributor
Aerospace & Defense
Elon Musk’s Space Exploration Technologies Corporation — SpaceX — has disrupted the launch services market by offering prices below what anybody previously thought possible. But that isn’t all it has done. Musk’s enterprise has scored a number of technological firsts, convincing many that the commercial space sector is a viable business proposition rather than just a playground for billionaires like Jeff Bezos and Richard Branson.
However, as everybody by now knows, Musk’s imagination sometimes gets the better of him and he embraces ideas beyond his reach. A case in point was his commitment to building space capsules for transporting astronauts to the International Space Station that could be reused over and over again, in much the same way SpaceX reuses the first-stage boosters on its Falcon 9 rockets.
Musk didn’t stop there. In a 2014 statement he predicted that the Crew Dragon, as the capsule is called, would be capable of “propulsive landing with precision” — meaning it could make a powered touchdown at some pre-chosen place on land, rather than splashing down in the ocean. The unmanned supply spacecraft on which Crew Dragon is based are designed to splash down in the sea as a way of cushioning their landing, but Musk thought SpaceX could do even better than the Space Shuttle in returning from orbit to dry land.
Boeing, the other company that NASA selected to carry astronauts to the space station, said it could do the same thing. Boeing, a contributor to my think tank, is still on a vector to return its astronaut capsules to dry land, and then reuse them up to ten times. Over the last several months, though, and with little fanfare, SpaceX has backed away from both goals. It now says Crew Dragon, like the its cargo capsule, will land in the ocean, and therefore can only be used once to transport a crew.
The International Space Station is a unique research facility, but keeping it manned and productive requires regular delivery of astronauts and supplies.NASA
It can still be re-used for carrying cargo to low-earth orbit. Nonetheless, SpaceX’s quiet abandonment of what had been key selling points for Crew Dragon is a significant setback for SpaceX. It means Boeing will be the only company building a reusable space capsule for astronauts, and its spacecraft — called Starliner – will be the only one that touches down on land. That seems to be a reversal of fortunes for Musk, who once criticized the Boeing concept as backward-looking. Now it is the SpaceX approach that looks less than revolutionary.
This isn’t the first time Boeing has built a reusable means of getting astronauts into orbit. It legacy Rockwell unit built the Space Shuttle. When NASA decided to turn to commercial companies for transport of cargo and crews to the space station, it gave competitors the option of developing reusable capsules for astronauts. But what SpaceX has learned conducting unmanned cargo missions into low-earth orbit is that it takes a long time to refurbish spacecraft once they have been immersed in salt water. Maybe up to a year. And it’s expensive.
So once it gave up on the goal of building an astronaut capsule that could precisely touch down on land, the plan for reusability began to look unattainable. Boeing thus will retain its title as the only company that has ever built reusable spacecraft designed to carry astronauts. This presumably will reduce the cost of keeping the International Space Station manned with scientists who can conduct research only feasible in a weightless environment.
The space station has actually been inhabited continuously since 2000, but once the Space Shuttle retired the only way to get astronauts there was on Russian rockets. NASA’s Commercial Crew Transportation program was conceived to restore America’s ability to lift astronauts into low-earth orbit. Boeing’s Starliner will ride on an Atlas V rocket made by United Launch Alliance. Atlas V has never failed in over 70 launches. SpaceX’s Crew Dragon will ride on the company’s Falcon 9 rocket, which has a less stellar track record.
NASA turned to commercial companies so that it could focus its own human spaceflight efforts on deep space missions to the Moon and Mars. The assumption was that commercial sources were sufficiently advanced to service the space station safely and cost-effectively. However doubts have been raised about SpaceX plans to fuel its rockets while astronauts are on-board, and other concerns are delaying certification of commercially built astronaut capsules.
One issue that cropped up recently was the absence of an experienced astronaut at SpaceX. Astronaut Garrett Reisman, who flew on the shuttle, left the company earlier this year. That leaves Boeing as the only company with an experienced in-house astronaut — Chris Ferguson, who is training with NASA crew members to fly on the first Starliner mission.
Time will tell what difference that might make for the certification of each company’s spacecraft. Neither spacecraft has flown yet.
In the US we are good at cars and consumer goods, and weapons of course.
The Russians are much better at the bigger stuff– let them continue to do space,
I’m not sure about that, even the South Koreans seemed to leap frog US on the carz recently.. Not mentioning Germans and Japanese obviously.. Moreover one of the few US brands of any importance-substance JEEP has been under the Italian ownership for past ~decade..
Anyway, the post was more about “However, as everybody by now knows, Musk’s imagination sometimes gets the better of him and he embraces ideas beyond his reach.”
And the way mil contractor Boeing might eventually reverse the situation, which also could signal the end times of the “tech stocks jockeys” and return of the core of mil-industrial complex on the scene (of everything).
I would not count on Musk and Boeing.
And I grew up around engineers and parties when their launches were a success .
I’m interested in homelessness planning, and 2 billion could go a long way to help. But I’m also familiar with all the delusional hoops one would need to go through in order to get any of it. The totally false assumptions about working through the channels…
https://www.planetizen.com/news/2018/09/100567-jeff-bezos-announces-2-billion-fund-support-homeless-services
http://www.chicagotribune.com/news/nationworld/ct-massachusetts-gas-explosions-home-fires-20180913-story.html
‘It looked like Armageddon’: Teen killed, homes destroyed by gas explosions north of Boston’
Could this have been cyber-warfare? Seems out of the blue, but I suppose it could have a less sinister explanation. Article says they are investigating the source, however for this to occur the gas-line pressure would have had to exceed normal pressures.
Complexity.
https://www.zerohedge.com/news/2018-09-13/global-shipping-rates-collapse-trade-war-fears-erupt
https://www.zerohedge.com/sites/default/files/inline-images/2018-09-13_08-14-25.png
https://www.zerohedge.com/sites/default/files/inline-images/827x-1.png
Ouch! Or, rather than trade wars, perhaps the cause is debt bubble not expanding fast enough.
Yes.
Well, people are happy at the Iowa Fair:
https://i.imgur.com/RBlv9tO.jpg
looks like EVs are getting more popular…
Looks like Michael Moore’s got a new girlfriend.
hey these are walmart guys
At least they will survive a prolonged famine.
Oh the irony!
“No improper interference in the flow of data.”
“We’re going to continue to be committed to a free and open Internet.”
Google executives and hundreds of staff got together to share their horror, shock and trauma in the wake of the 2016 election, give each other hugs (literally), discuss their concerns, and ponder the future and their role in it, which according to Google includes their job of “trying to educating policymakers.” “Often times that’s hard,” but obviously Google knows best!
And being Google, they videoed the proceedings. And being as “information wants to be free,” someone leaked the video and Breitbart got hold of it and put it online.
They really should have finished this event with a recitation of Kumbaya; then it would have been perfect.
https://youtu.be/FRf9UxsM-NE
Imagine running a business called Twitter… very serious meetings with serious people… talking about how to convince people to Tweet more often….
I think I’d have to blow my brains out….
Video just deleted, lolz..
They put it back in few hours, lolz squared..
Too many copies already circulating perhaps.
When something nasty happened, our ancestors – until only yesterday really – reached for their swords and spears, and their women said: ‘Beat them, or don’t bother coming back!’
Now, we seem to need ‘hugs’, and to ‘share our pain’, rather than inflict it…….
We always needed “hugs”, as anyone who has ever come within 200m of artillery fire will tell you. The notion that people “back then” were more attuned to war is nonsense for a lot of reasons. They just had to do it more often, and less willingly, than some of us.
Not at all: try reading about real tribal wars, there’s quite a lot in print.
Among the ancient Germans the women and children stood and cheered their men on. Only this week I read a splendid account of a tribal battle c1900 in Iran, written by a British captain who was observing – they clearly quite enjoyed it.
The officer himself was not at all disturbed by waking up in the morning to find bullet holes in his tent where tribesman had taken shots at him.
The physiological reaction to modern artillery, etc, is quite another matter.
But now we have civilian people in distress, weeping, talking about emigrating, etc, when nothing has actually happened to them, and seeking counselling for their wholly imaginary traumas.
Not at all impressive and we shouldn’t let them breed really.
Yes a lot of nonsense has been written about war, by people who couldn’t fight an actual war precisely because they are the sort who take such nonsense seriously. Unless you’re a sicko, the constant fear of death or worse that accompanies combat takes a heavy and enduring toll on the psyche. Without that fear your chance of survival = 0.
In the good old days before social media shaming, war is a force that gave us meaning. For the clan or the tribe. For honor and glory. For king and country! To punish the wicked and to act as God’s hammer. And best of all, to crush your enemies, see them driven before you, and to hear the lamentations of their women! That sort of stuff.
Roman matrons used to say to their sons: ‘Come back with your shield or on it.’ The British are said to have won their wars on the playing fields of Eaton. In the 20th century, we thought two world wars for the right to keep burning more fossil fuels, as Gail’s research indicates, without hugging our comrades, even when we were stuck in waterlogged trenches for months and being being pummeled by Howitzers. Hugging our comrades (except in the Arabian desert where according to T.E. Lawrence the local Beduin women were considered too filthy to contemplate, or among the Russians when the vodka was running freely) would have been a violation of everything the forces on all sides were fighting for.
But tell that to young people these days and they DON’T believe you.
http://img.picturequotes.com/2/500/499759/i-will-fight-for-oil-coal-and-natural-gas-quote-1.jpg
Not quite… I will send YOU to fight for oil…. for me
War greatly ramps up economies. It gives an excuse for spending. If the group choosing to take on the war is lucky, it may get control of cheap-to-extract resources.
came across an opinion piece in the Vancouver province this morning and guess what it says:
Joseph Maloney: Why are we refining Russian oil instead of using our own?
and then this…
“Alaska’s production is declining. Huge tankers still deliver oil to Washington refineries, but the amount is dwindling. It has to be made up from somewhere because, despite electric vehicles, demand for oil is projected to increase every year until 2040.”
https://theprovince.com/opinion/op-ed/joseph-maloney-why-are-we-refining-russian-oil-instead-of-using-our-own
I don’t think that the author of the opinion piece realizes that types of oil need to be matched to types of refineries. West Coast refineries are not set up to handle Canadian oil. There are refineries near Chicago/Whiting and along the Gulf Coast that do that.
The system self-organizes to keep costs down, including shipping costs. If it were cheap to build refineries to refine Canadian oil, it would have been done long ago.
Here is a fascinating discussion by astrobiologist Adam Frank about our civilization’s ability to surmount “The Great Filter,” the Fermi Paradox, Climate Change and Collapse. It is thought provoking and I guarantee that you will enjoy it: https://www.youtube.com/watch?v=rPY6N_qqAaE
Couldn’t get it to load. Will try later.
Thanks, interesting and he moves a long at a good rate unlike some lectures!
U.S Department of State conferring that terrorists in Syria use chemical weapons.
https://web.archive.org/web/20180911000325/https://sy.usembassy.gov/security-message-u-s-citizens-travel-warning-syria/
Zhakarova “Despite the fact that the plans of the militants and the White Helmets to stage a chemical weapons attack allegedly by government forces have been exposed, the preparations for this staged campaign continue in Idlib”
Animal Assad did it again! Too late to change the narrative now.
Russia might green light a chemical attack in Idlib, because this will divide the West between those who blame Assad for the attack and those who blame the terrorists. Divided the West is weaker.
Why would Russia want to do that, when Syria is on the verge of complete victory? It seems that every time the SAA is on the cusp of handing another great defeat to the terrorists Assad shoots himself in the foot by resorting to use chemical weapons against innocent civilians, bringing down on his head the ire of western world.
Yep, makes perfect sense. Even more so since neither Russia or Syria have chemical weapons in their arsenals. However, the U.S. and its lackeys do, and are not afraid to use them, since whose going to bring them to account? After all, they are still the playground bullies.
Recall how Obama said — if Assad crosses the line — with CW… we will take action ..
And what does Assad do … a few days later — but dump CW on his people….
And Americans believed it
Epitome of sheople.
“Why lithium-ion may rule batteries for a long time to come
“Materials scientist Gerd Ceder is overseeing a research effort to extend the capabilities of the dominant form of energy storage, using a new class of compounds.
“The US Department of Energy is launching a major research effort to develop a new generation of lithium-ion batteries largely free of cobalt, a rare and expensive metal delivered through an increasingly troubling supply chain.
“The three-year program, part of a broader effort to accelerate advanced vehicle technologies, could eventually lead to cheaper, longer-lasting consumer gadgets, electric cars, and grid storage.”
https://www.technologyreview.com/s/611982/why-lithium-ion-may-rule-storage-technology-for-a-long-time-to-come/?utm_source=newsletters&utm_medium=email&utm_content=2018_09_13&utm_campaign=the_download
On & on it goes — largely government-funded (private investors generally wouldn’t pay for it) — but, might time run out?
…and after this we will need a three-year programme to replace lithium.
First commercialized by the Japanese in the early 1990’s, it has been a while campers——
And nothing has appeared that has gained market strength.
Can you say bottleneck?
I bet you can!
As mentioned in that linked article, availability of Cobalt is the problem for some specific type of the lithium battery only, there are several chemistry and revisions at play. Some don’t use cobalt at all, there is also the related issue of vehicle vs standalone/storage specifications: weight, cycles, fast charge etc.. Lithium itself is not that big problem.
Recently I’ve found the NYT’s “revelation” how FED is fully responsibly for the boom and bust of fracking as highly odd happenstance. So, this has been either ordered to be published as plausible deniability for the near crash or there is some other factor known to guys above, which is hoped for to be at play in the pipeline for the near/mid term, it could well be related to “affordable” energy storage, who knows..
But lithium ion just doesn’t make the grade—
Cobalt is still most widely used due to high cost and low p/w. The real hype is in lithium-sulfur, but using sulfur comes with problems.
Errr- they use cobalt in lithium ion batteries.
I’m afraid theses just aren’t going to cut it.
Cobalt has a nasty origination problem, that has some horrific consequences.
“Global oil supply in August reached a record 100m bbl/day as higher output from Opec offset seasonal declines from producers outside of the cartel, the International Energy Agency (IEA) said in its latest monthly report on Thursday.
“Opec pumped out 32.63m bbl/day in August, the highest in nine months, as increased production from Libya, Iraq, Nigeria and Saudi Arabia outweighed a substantial reduction in Iran and a further fall in Venezuela.”
https://www.montelnews.com/en/story/global-oil-supply-hits-record-100m-bblday-in-august–iea/934347
“Oil prices fell on Thursday, slipping back from four-month highs as investors focused on the risk that emerging market crises and trade disputes could dent demand.”
https://www.cnbc.com/2018/09/13/oil-markets-trade-global-oil-demand-forecast-us-crude-inventories-in-focus.html
“When U.S. President Donald Trump fired the first salvos in his trade war with China, the market for hauling bulk commodities that power the Asian country’s economy responded with a surprising surge. Now shipowners are losing their swagger. Rates to haul iron ore and coal on 1,000-foot Capesize ships plunged by 39 percent since reaching their 2018 peak in early August. Fourth-quarter hedging contracts dropped 11 percent from their high last month.”
https://www.bloomberg.com/news/articles/2018-09-12/shipping-s-bullish-bellwether-on-trade-takes-turn-for-the-worse
“…manufacturing output growth continued to run at one of the weakest rates seen over the past two years, stymied by a further near-stagnation of global trade flows. Global export orders barely rose for a fourth consecutive month in August. Furthermore, in a sign of weakness spreading beyond the export sector, August also saw worldwide service sector… registering one of the softest performances seen over the past two years.”
https://seekingalpha.com/article/4205730-global-growth-close-2-year-low-broadening-slowdown
It is hard to get people excited, when the overall rate of expansion is still quite high, just a little down. The article says,
Worldwide, new export orders of goods have a PMI of about 50, so are about flat.
The only country shown with a PMI of under 50 is Brazil. Russia’s PMI was quite high, and has been falling.
Machinery and equipment PMI is down more than most, but is still above 50.
The biggest thing that is changing is prices. The global “Prices Charged PMI Index for Consumer Goods” (whatever that is) is headed back up again, the way it was headed up in 2011 when oil prices also rose.
“It is hard to get people excited, when the overall rate of expansion is still quite high, just a little down.”
Right – the OFW commentariat is particularly sensitive to any such downward trends!
Global auto sales are losing steam, although this is coming off some record highs in 2017:
“Global auto sales growth slowed down markedly in July owing mainly to year-on-year sales declines in the US, China, and Canada, as well as a sharp deceleration in vehicle purchases in India and a continued contraction in Mexico,”
https://www.gbm.scotiabank.com/scpt/gbm/scotiaeconomics63/GAR_2018-09-12.pdf
Tariff threats added lots of temporary surge in exports; now that impact in reversing.
It is hard to claim that a reduction of Iran’s exports will have a big impact, when other countries seem to be pumping out more (perhaps in response to higher prices).
“Global oil supply in August reached a record 100m bbl/day…”
So much for weaning ourselves off of oil, lol. With a rebel yell, she wanted more, more, more. I suppose this is Jevons Paradox coming back to bite us again. The more efficient the usage, the more we use, the more we want, the more we want to use more of every energy source available to make more stuff for an ever increasing population. Really amazing isn’t it – just keeps on growing by leaps and bounds. So far we haven’t hit a limit of how many barrels of oil can be consumed daily or population. It’s like an out of control experiment where the only rule is; GROW.
That is great news! Hopefully it will be all about MORE again next year.
And … AND…. there will be yet another conference at a luxury hotel in a wonderful destination again next year… and the private jets will land… the VIP environmental ministers will meet to slam back the best wine and food… followed by slamming the best who res money can buy…. followed by laughter and high fives all round … as they pile back into the private jets…. and head home…
Where they will of course completely forget about the conference ….actually there is nothing to forget… they would not even have discussed reducing car bon … or gl o bal w orming…. because they know we must burn more more more… and they are aware that G W is a ho ax….
It’s not a conference… its a junket… a perk… a high-end weekend out with the boys….
I wonder what the women do at these things… spa treatments? Or do they call in male es corts?
What… an…. absolute…. f789ing … JOKE!!!
“A leaderless world is sleepwalking towards a repeat of its near meltdown in late 2008 and early 2009 because it has failed to remedy the causes of the financial crash of a decade ago, former prime minister Gordon Brown has warned…
“The former prime minister, who lost the 2010 election following Britain’s longest and deepest recession of the post-war era, said there was less scope to reduce interest rates than was the case a decade ago, no evidence that finance ministries would be allowed to cut taxes or increase public spending, and no guarantee that China would be as active in providing stimulus…
“He said the global economy still lacked an early warning system and a system for monitoring financial flows so that it was possible to tell what had been lent to whom and on what terms. “We have dealt with the small things but not the big things,” he said…
““It is very difficult to say what will trigger it [the next crisis] but we are at the latter end of the economic cycle where people take greater risks. There are problems in emerging markets… In an interconnected world there is an escalation of risks. We have had a decade of stagnation and we are now about to have a decade of vulnerability.”
““In the next crisis a breakdown of trust in the financial sector would be mirrored by breakdown in trust between governments. There wouldn’t be the same willingness to cooperate but rather a tendency to blame each other for what’s gone wrong.
““Countries have retreated into nationalist silos and that has brought us protectionism and populism. Problems that are global as well as national and local are not being addressed. Countries are at war with each other on trade, climate change and nuclear proliferation.””
https://www.theguardian.com/politics/2018/sep/12/we-are-in-danger-of-sleepwalking-into-a-crisis-gordon-brown
You may recall that Gordon was close to the action last time:
“Damian McBride quoted Mr Brown as saying: “You don’t understand…If the banks are shutting their doors, and the cashpoints aren’t working, and people go to Tesco and their cards aren’t being accepted, the whole thing will just explode… It’ll be anarchy. That’s what could happen tomorrow. I’m serious, I’m serious… We’d have to think: do we have curfews, do we put the Army on the streets, how do we get order back?””
https://www.independent.co.uk/news/uk/politics/itll-be-anarchy-gordon-brown-discussed-putting-troops-on-the-streets-as-banking-crisis-worsened-8831362.html
Remembrance of the UK in 2008.
Or the 2000 UK fuel crisis, http://news.bbc.co.uk/2/hi/uk_news/924574.stm
http://news.bbc.co.uk/olmedia/920000/images/_924574_timeline_300.jpg