How the Peak Oil story could be “close,” but not quite right

A few years ago, especially in the 2005-2008 period, many people were concerned that the oil supply would run out. They were concerned about high oil prices and a possible need for rationing. The story was often called “Peak Oil.” Peak Oil theorists have also branched out into providing calculations that might be used to determine which substitutes for fossil fuels seem to have the most promise. What is right about the Peak Oil story, and what is misleading or wrong? Let’s look at a few of the pieces.

[1] What Is the Role of Energy in the Economy?

The real story is that the operation of the economy depends on the supply of  affordable energy. Without this energy supply, we could not make goods and services of any kind. The world’s GDP would be zero. Everything we have, from the food on our dinner table, to the pixels on our computer, to the roads we drive on is only possible because the economy “dissipates” energy. Even our jobs depend on energy dissipation. Some of this energy is human energy. The vast majority of it is the energy of fossil fuels and of other supplements to human energy.

Peak Oilers generally have gotten this story right, but they often miss the “affordable” part of the story. Economists have been in denial of this story. A big part of the problem is that it would be problematic to admit that the economy is tied to fossil fuels and to other energy sources whose supply seems to be limited. It would be impossible to talk about growth forever, if economic growth were directly tied to the consumption of limited energy resources.

[2] What Happens When Oil and Other Energy Supplies Become Increasingly Difficult to Extract?

Fossil fuel producers tend to extract the fuels that are easiest to extract first. Over time, even with technology changes, this tends to lead to higher extraction costs for the remaining fuels. Peak Oilers have been quick to notice this relationship.

The question that then arises is, “Can these higher extraction costs be passed on to the consumer as higher prices?” Peak Oil theorists, as well as many others, have tended to say, “Of course, the higher cost of oil extraction will lead to higher oil prices. Energy is essential to the economy.” In fact, we did see very high oil prices in the 1974-1981 period, in the 2004-2008 period, and in the 2011-2013 period.

Unfortunately, it is not true that higher extraction costs always can be passed on to consumers as higher prices. Many energy costs are very well “buried” in finished goods, such as food, cars, air conditioners, and trucks. After a point, energy prices “top out” at what is affordable for citizens, considering current wage levels and interest rate levels. This level of the affordable energy price will vary over time, with lower interest rates and higher debt amounts generally allowing higher energy prices. Greater wage disparity will tend to reduce the affordable price level, because fewer workers can afford these finished goods.

The underlying problem is that, from the consumer’s perspective, high oil prices look like inefficiency on the part of the oil company. Normally, being inefficient leads to costs that can’t be passed along to the consumer. We should not be surprised if, at some point, it is no longer possible to pass these higher costs on as higher prices.

If higher extraction costs cannot be passed on to consumers, this is a terrible situation for energy producers. After not too many years, this situation tends to lead to peak energy output because producers and their governments tend to go bankrupt. This seems to be the situation we are reaching for oil, coal and natural gas. This is a much worse situation than the high price situation because the high price situation tends to lead to more supply; low prices tend to collapse the production system.

The underlying problem is that low prices, even if they are satisfactory to the consumer, tend to be too low for the companies producing energy products. Peak Oilers miss the fact that a two-way tug of war is taking place. Low prices look like a great outcome from the perspective of consumers, but they are a disaster from the perspective of producers.

[3] How Important Is Hubbert’s Curve for Determining the Shape of Future Oil (or Coal or Natural Gas) Extraction?

Figure 1. M. King Hubbert symmetric curve from Nuclear Energy and the Fossil Fuels. Total quantity of resources that will ultimately be extracted is Q.

Most Peak Oilers seem to believe that if we see Hubbert shaped curves in individual fields, we should expect to see a similar shaped curve for total oil supply or for the supply of other fossil fuels. They think that production patterns to date plus outstanding reserves can give realistic views of the future extraction patterns. Frequently, Peak Oilers will assume that once production of oil, coal or natural gas starts to fall, we will still have about 50% of the beginning amount left. Thus, we can plan on a fairly long, slow decline in fossil fuel production.

However, many Peak Oilers will agree that if the energy used to extract energy is subtracted, the result will be more of a Seneca Cliff (Figure 2). Seneca is known for saying, “Increases are of sluggish growth, but the way to ruin is rapid.”

Figure 2. Seneca Cliff by Ugo Bardi.

Peak Oilers also tend to limit the amount of resources that they consider extractible, to exclude those that are particularly high in cost.

Even with these adjustments, it seems to me that the situation is likely to be even worse than most Peak Oil analyses suggest because of the interconnected nature of the economy and the fact that world population continues to grow. The economy cannot get along with a sharp reduction in energy consumption per capita. Some governments may collapse; many debtors may default; some banks may be forced to close. The situation may resemble the “societal collapse” situation experienced by many early economies.

One concern I have is that the Hubbert model, once it became the standard model for what energy supply might be available in the future, could easily be distorted. With enough assumptions about ever-rising energy prices and ever-improving technology, it became possible to claim that any fossil fuel resource in the ground could be extracted at some point in the future. Such outrageous assumptions can be used to claim that our biggest future problem will be climate change. After hearing enough climate change forecasts, people tend to forget about our immediate energy problems, since current problems are mostly hidden from consumers by low energy prices.

[4] Is Running Out of Oil Our Biggest Energy Problem?

The story told by Peak Oilers is based on the assumption that oil is our big problem and that we have plenty of other fuels. Oil is indeed our highest cost fuel and is very energy dense. Nevertheless, I think this is an incorrect assessment of our situation; the real issue is keeping the average cost of energy consumption low enough so that goods and services made from energy products will be affordable by consumers. Even factory workers need to be able to buy goods made by the economy.

Figure 2. Historical oil, natural gas, and oil production, based on Statistical Review of World Energy, 2017.

The way the cost of energy consumption can be kept low is mostly a “mix” issue. If the mix of energy products is heavily weighted toward low cost energy-related products, such as coal and labor from low wage countries, then the overall cost of energy can be kept low. This is a major reason why the economies of China and India have been able to grow rapidly in recent years.

If underlying costs of production are rising, mix changes cannot be expected to keep the problem hidden indefinitely. A recession is a likely outcome if the average price of energy, even with the mix changes, isn’t kept low enough for consumers. Energy producers, on the other hand, depend on energy prices that are high enough that they can make adequate reinvestment. If they cannot make adequate reinvestment, the whole system will tend to collapse.

A collapse based on prices that are too low for producers will not occur immediately, however. The problem can be hidden for a while by a variety of techniques, including additional debt for producers and lower interest rates for consumers. We seem to be in the period during which the problems of producers can be temporarily hidden. Once this grace period has passed, the economy is in danger of collapsing, with oil not necessarily singled out first.

Following collapse, large amounts oil, coal and natural gas are likely to be left in the ground. Some of it may even cease to be available before the 50% point of the Hubbert curve is reached. Electricity may very well collapse at the same time as fossil fuels.

[5] How Should We Measure Whether an Energy-Producing Device Is Actually Providing a Worthwhile Service to the Economy?

The answer that some energy researchers have come up with is, “We need to compare energy output with energy input” in a calculation called Energy Return on Energy Invested (EROI). This approach looks like a simple ratio of (Energy Output)/(Energy Input), but “the devil is in the details.”

As I looked through the workings of the Limits to Growth model, it occurred to me that the EROI calculation needs to line up with how the economy really operates. If this is the case, we really need a very rapid return of the energy output, relative to the energy input. Also, in the aggregate, the energy output needs to scale up very rapidly. Furthermore, the energy output needs to match the types of energy needed for the devices the economy is currently using. If the output is different (such as electricity instead of fossil fuels), the EROI calculation needs to be adjusted to reflect the expected energy cost and time delay associated with a changeover in devices to match the new type of energy output.

In a footnote, I have attached a list of what I see as requirements that seem to be needed for EROI calculations, based on the LTG model, as well as other considerations.1

Of course, in a setting of many researchers working on a subject and many peer reviewed papers, a concept such as EROI is gradually modified and enhanced by different researchers. For example, EROI is turned around to become the Energy Payback Period. This is used to show prospective buyers of a device how helpful a particular device supposedly is. Researchers who are trying to “push” a type of energy product will find ways to perform the EROI calculation that are as helpful as possible to their cause.

The problem, though, is that if more stringent EROI requirements are put into effect, wind and solar can be expected to do much less well in EROI calculations. They very likely drop below the threshold of being useful to the economy as energy producers. This is especially the case if they are added to the economy in great numbers to try to significantly replace fossil fuels.

Regardless of their value as energy producers, there might still be a reason for building wind and solar. Building them probably does help the economy in the same sense that building unneeded roads and apartment buildings does. In theory, all of these things might someday be somewhat useful. They are helpful now in that they add jobs. Also, the building of wind and solar devices adds “demand,” which helps keep the price of coal in China high enough to encourage additional extraction. But in terms of truly keeping the world economy operating over the long haul, or in terms of scaling up to the quantity of energy supply that is really needed to operate the economy, wind and solar do very little.

[6] How Should Net Energy Be Defined?

Net Energy is defined by EROI researchers as (Energy Output) minus (Energy Input). Unfortunately, as far as I can see, this calculation provides virtually no valid information. Instead, it promotes the belief that the benefit of a device can be defined in terms of (Energy Output) minus (Energy Input). In practice, it is very difficult to measure more than a small fraction of the Energy Inputs needed to produce an Energy Output, while Energy Output does tend to be easily measurable. This imbalance leads to a situation where the calculation of (Energy Output) minus (Energy Input) provides a gross overestimate of how helpful an energy device really is.

If we are dealing with a fish or some other animal, the amount of energy that the animal can expend on gathering food is not very high because it needs to use the vast majority of its energy for other purposes, such as respiration, reproduction, and digestion. In general, a fish can only use about 10% of its energy from food for gathering food. Limits to Growth modeling seems to suggest a similar maximum energy-gathering usage percentage of 10%. In this case, this percentage would apply to the resources needed for capturing, processing, and distributing energy to the world economy.

Perhaps there is a need for a substitute for Net Energy, calculated compared to the budgeted maximum expenditure for the function of “Energy gathering, processing and distribution.” For example, the term Surplus Energy might be used instead, calculated as (10% x Energy Output) minus (Energy Input), where Energy Inputs are subject to suitably wide boundaries. If an energy product has a very favorable evaluation on this basis, it will be inexpensive to produce, making it affordable to buyers. At the same time, the cost of production will be low, leaving plenty of funds with which to pay taxes.

Alternately, Surplus Energy might be calculated in terms of the tax revenue that governments are able to collect, relative to the new energy type. Tax revenue based on fossil fuel production and/or consumption is very signification today. Oil exporting nations often rely primarily on oil-based tax revenue to support their programs. Many countries tax gasoline consumption highly. Another type of fossil fuel tax is a carbon tax. Any replacement for fossil fuels will need to replace the loss of tax revenue associated with fossil fuels, because taxation is the way Surplus Energy is captured for the good of the economy as a whole.

When we consider the tax aspect, we find that any replacement for fossil fuels has three conflicting demands on its pricing:

(a) Prices to the consumer must be low enough to prevent recession.

(b) Prices must be high enough that the producer of the replacement energy supply can earn adequate after-tax revenue to support its operations.

(c) The mark-up between the cost of production and the sales price must be high enough that governments can take a very significant share of gross receipts as tax revenue.

The only way that it is possible to meet these three demands simultaneously is if the unsubsidized cost of energy production is extremely low. Wind and solar clearly come nowhere near being able to meet this very low price threshold; they still rely on subsidies. One of the biggest subsidies is being allowed to “go first” when their energy supply is available. The greater the share of intermittent wind and solar that is added to the electric grid, the more disruptive this subsidy becomes.

Afterword: Is this a criticism of Peak Oil energy researchers?

No. I know many of these researchers quite well. They are hard working individuals who have tried to figure out what is happening in the energy arena with very little funding. Some of them are aware of the collapse issue, but it is not something that they can discuss in the journals they usually write in. The 1972 The Limits to Growth modeling that I mentioned in my last post was ridiculed by a large number of people. It was not possible to believe that the world economy could collapse, certainly not in the near term.

Early researchers were not aware that the physics of energy extraction extends to the economy as a whole, rather than ending at the wellhead. Because of this, they tended to overlook the importance of affordability. Affordability is important because there is a pricing conflict between the low prices needed by buyers of energy products and the high prices needed by producers. This conflict becomes especially apparent as the world approaches energy limits; this conflict was not easily seen in the data reviewed by Hubbert. Once Hubbert missed the affordability issue, his followers tended to go follow the same path.

Researchers needed to start from somewhere. The start that Peak Oil researchers made was as reasonable as any. They were convinced that there was an energy problem, and they wanted to convince others of the problem. But this was difficult to do. When they would develop an approach that they thought would make the energy problem clear to everyone, other researchers would modify it. They would take whatever aspect of the research seemed to be helpful to them and would tweak it to support whatever view they wanted to encourage–often with precisely the opposite intent to what the original researchers had expected.

Thus, the approaches that Peak Oil researchers thought would show that there was a likely energy shortage ahead ended up being used to “prove” that we have an almost unlimited amount of fossil fuel energy available. It seems as though the world has such a strong need for happily-ever-after endings that self-organization pushes research in the direction of showing outcomes people want to see, even if they are untrue.


[1] The following is from an e-mail I sent to some energy researchers concerned about EROI calculations:

A concern I have is that EROI really needs to match up with the concept of Fraction of Capital to Obtaining Non-Renewable Resources (FCONRR) in the Limits to Growth model. If a person looks at how the 2003 World3 model functions, the person can figure out several things:

1. FCONRR is what I would call a calendar year “in and out” function. Forecasting EROI using a model year approach gives artificially favorable indications. FCONRR calculations line up fairly well with many fossil fuel EROI calculations, but not with the usual model approach used for capital devices used to generate electricity.

2. I would describe FCONRR as corresponding to “Point of Use (POU) EROI,” not Wellhead EROI.

3. If a newly built device causes a previously built capital device to be closed down before the end of its useful lifetime (for example, solar output leads to distorted electricity prices, which in turn leads to unprofitable nuclear), this has an adverse impact on FCONRR. Thus, intermittent renewables need to be evaluated on a very broad basis.

4. In the model, FCONRR starts at 5% and gradually increases to 10%. This is equivalent to overall average calendar year POU EROI starting at 20:1 and falling to 10:1. The model shows the world economy growing nicely, when total FCONRR is 5%. It gradually slows, as FCONRR increases to 10%. Once overall FCONRR exceeds 10%, the model shows the world economy contracting.

5. I was struck by the fact that FCONRR equaling 10% corresponds to the ratio that Charlie Hall describes as the share of energy that a fish can afford to use to gather its food. Once a fish starts using more than 10% of its energy for gathering food, it is all downhill from there. The fish cannot live very long, without enough energy to support the rest of it functions. Similarly, an economy cannot last very long, without enough energy to support its other functions.

6. In the model, necessary resources out depend on the population. The higher the population, the more resources out are needed. It is falling resources per capita that causes the system to collapse. This is why FCONRR needs to stay strictly below 10% and energy consumption must be ramped up rapidly. This would suggest that average POU EROI needs to stay strictly above 10:1, to keep the system away from collapse.

7. If there are not enough resources out in total, for a given calendar year, this becomes a huge problem. The way this works out in practice is that if a device uses a lot of upfront capital, these devices can sort of work out OK, if (a) only a few are built each year, (b) they have very high EROI, and (c) they last a long time. Thus, hydro and dams can work. But devices with an EROI close to 10:1 cannot work, especially if they need to be scaled up quickly and need a lot of supporting infrastructure.

8. Clearly, using the FCONRR approach, eliminating a high EROI fuel is as detrimental to the system as adding a low EROI device with a lot of upfront capital spending required. It is the overall output compared to population that is important. The quantity of output is even more important than the EROI ratio.

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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1,556 Responses to How the Peak Oil story could be “close,” but not quite right

  1. Harry McGibbs says:

    “The long-awaited earnings recession has finally arrived, but investors are still too optimistic and should anticipate more disappointment as the year drags on, according to Morgan Stanley.”

  2. Sven Røgeberg says:

    «There is a new economic theory that has emerged on the left called Modern Monetary Theory (MMT). It is basically the opposite of conservative austerity economics. While Reaganites will argue that you must cut government spending to help grow the economy, MMT adherents assert that currency itself is a public monopoly, and so the only limit to government spending is inflation, not the total money the government is taking in, since if the government ever needs more money, it can just print it, because there is no other competition for spending in the economy.

    This matters now because the Green New Deal has finally manifested in legislation co-sponsored by top 2020 contenders like Kamala Harris, Bernie Sanders, Kirsten Gillibrand, Cory Booker, and Elizabeth Warren. Alexandria Ocasio-Cortez’s companion Q&A cites two pieces, one in Forbes and the other in Huffington Post, which assert that the question of “how do you pay for the Green New Deal?” has already been answered. The HuffPo piece was written by Professor of Economics and Public Policy at Stony Brook University, Stephanie Kelton, who was also the Chief Economist for the Democrats on the U.S. Senate Budget Committee. Yesterday, she posted a thread outlining some legitimate economic questions that MMT claims to answer.»

    • Harry McGibbs says:

      “What if there really is a magic money tree? What if governments can spend as much money as they want, without raising taxes or borrowing? What if they can pay for free college education for all, free health care, decent social housing, shiny new infrastructure and a universal basic income – all without worrying about deficits or debt accumulation?

      “…[The] notion of free money for all is a deeply seductive one. Unfortunately, there are some big flaws in MMT – institutional, economic, and political…”

    • Greg Machala says:

      Energy runs the economy – not money. Money is just a promise of the future availability of energy. There is nothing modern about it. Money is ancient. As long as resources are abundant and cheap, money works. But, as resources per decline, so to will the standard of living – regardless of how much money is printed.

      I would argue that it is only cheap energy that can successfully run a large, complex industrial economy like the US. Now that energy is expensive and less affordable to the general economy, we are left with lower quality goods and services than people have been accustomed to. So, the first knee jerk reaction of people is that we have a money problem. They don’t realize that the real problem is resources (which power the economy) are becoming more scarce and expensive to extract. It is tempting to thing that we can print money and use that to extract more resources. But it still takes energy to get energy and resources – not just money.

      People see money as prosperity. But, it is really the control of resources that is the real source of prosperity. Money used to be a proxy to control resources because resources were cheap to extract. Now, the tables are turning. Resources are becoming more valuable than money.

      • Dennis L. says:

        Lower quality goods and services?
        Automobiles have never been better, required less maintenance.
        Medical care in the right setting has never been better and is getting better due to AI.
        Dental care has never been better.
        Education has never been better – look at the MIT courses on line, Coursera – the education monopoly has been broken.
        If anyone wants to do quantum computing IBM makes it available on line for free
        What is broken is the Catholic Church which with all its imperfections was a cornerstone of Western Civilization for the majority of the population. We need it and it needs a fix of some sort.
        Price’s Law was originally the square root of the work force did 50 percent of the work, maybe with modern learning is is ls less than that.
        The world is unfolding as it should, there is so much that is positive.

        Dennis L.

        • Greg Machala says:

          “Automobiles have never been better, required less maintenance.
          Medical care in the right setting has never been better and is getting better due to AI.” – For whom? They well-off maybe. But, IMO the average American is seeing a decline in the quality of goods and services they can truly afford. And I am not talking about taking huge loans to get these goods and services. I mean truly afford! I am spending weekends helping my friends repair their aging cars because they cannot afford a newer one.

          “Lower quality goods and services?” Yes. Only the well off can truly afford the best goods and services the economy has to offer. Those that are falling out of BAU no longer have access to the same quality of products and services. More than 1/4 of Americans are on food stamps. Homelessness is becoming a huge problem. The vast majority of Americans are living pay check to pay check with no retirement. One health problem could bankrupt them. Most Americans are one pay check away from bankruptcy. Compare that to the 60s when incomes were growing and one person could earn enough to support a stay-at-home mom and save money too.

          We are becoming a two-class country…the rich and the poor. I think that is because affordable energy and resources per capita are declining. As long as the economy can hold together, the rich can have access to the best of the best while the poor barely scrape by living increasingly harsher and shorter lives. Well, until something breaks.

          • Chrome Mags says:

            That’s it Greg. Here’s a really simple example of what is happening. My wife likes Collared Greens, so I always pick up a bunch of organic leaves at Safeway because the store she goes to doesn’t have them. This last time I was there I picked up a bunch and my hand jetted upward because I expected it to be slightly heavier – it’s the same price but half as many leaves. So I thought, oh well, and went and got some almond milk, got it home and instead of the rich almond milk I remember, it’s now water with a hint of almond milk taste. Our water bill use to be about $90. bi-monthly, so about $45. a month. Now it’s $125 a month, or $250. for two months and there are all sorts of volume penalty’s if you water your foliage which they didn’t use to have. The Association we live in privatized the water/sewage so they have investors wanting continuous price increases. It’s slated to continue to increase every year from now on 10% a year. We may have to let the foliage fend for itself which my mid-Summer will mean it’s all dead and fire hazard, then have to tear it all out and have a barren property. My truck is a 1997, my wife’s car is a 2002 and I maintain them both religiously for fear of having to replace them. Ever watch YouTube? Noticed lately the massive increase in ads dotted throughout the videos?

            It’s all going downhill but all any of us can do is try to keep going. It’s easy to see though that at some point it just won’t work for the majority of people anymore. I wonder what happens then. Do we all live in our vehicles while the super wealthy fly gold plated private jets?

            • Dennis l says:

              What is your skill set? What can you do for me?

            • Gregory Machala says:

              It does seem like (the US) is heading for a two-tier system. A few people of insane wealth and the rest under massive amounts of debt and poverty. If too much of the working class falls out of the system the resulting instability could put the whole of industrial civilization in peril. I don’t know what will break. But, I think it is inevitable. A massive debt default, energy/resource shortage, power outage, natural disaster, disease. We are all on a runaway train and it is moving very very fast and accelerating.

              Industrial civilization cannot be sustained much longer. The insane luxuries like computers, air conditioning, instant communication, air travel, engineered homes, supermarkets, automobiles, profitable jobs, retirement, indoor plumbing, and on and on and on cannot be sustained even for a handful kings and queens. It requires global cooperation and resources and a full workforce to build and maintain it. And most of all, it has to be profitable. Which implies the energy to power it all is abundant and cheap.

        • I posted a video a couple of weeks ago showing the horrible quality of some of China’s newly built apartments that people buy as investments. Some were falling apart three years after they were built.

          • psile says:

            The same problems are appearing in Sydney, everyone’s just in it for the money

            The saga of Opal Tower, the 36-storey Sydney apartment building evacuated on Christmas Eve after frightening cracking, has helped to expose the deep cracks in Australia’s approach to building apartments.

            An interim engineering assessment released yesterday indicates concrete panels cracked due to their manufacture and assembly deviating from the original design. Though the building is structurally sound and in no danger of collapse, repairing the faults will be costly, slow and disruptive to residents.

            The tower’s size, age (it is less than six months old) and the timing of its cracks might have made it particularly newsworthy, but badly built apartment blocks are far from unusual. Right now across Australia’s cities many buildings have significant leaks, cracks and fire safety failings.

            So we can’t just address faults in individual developments. We need to identify the systemic flaws in how “compact city” policies have been planned and implemented.

            • Cutting corners to keep costs down seems to be a popular approach to solving the “lack of affordability” problem. If the results cannot be detected by the first buyer walking through the development, the deception can be kept hidden.

      • Whether or not energy runs the economy, adding more debt adds the promise of future goods and services made with energy. One of the big dangers now is that the debt bubble will collapse. If anyone can concoct an excuse to add more debt it tends to kink the problem down the road a bit. From this point of view, MMT somewhat makes sense.

        But I would’t recommend that an individual country take this approach on its own. It currency is likely to fall very low relative to the currency of other countries.

  3. Baby Doomer says:

    Saudi Arabia goes on the hunt for global oil and gas

    Why would you go hunting if you had 260 Gbs left in your backyard?

    Doesn’t pass the smell test..

  4. Baby Doomer says:

    New Jersey man involved in scary crash after autopilot Tesla veers off road

    NORTH BRUNSWICK, New Jersey (WABC) — A man in New Jersey was involved in a scary crash Sunday after his autopilot Tesla Model X suddenly veered off the road, and crashed through signs and bushes.

    The owner says the car’s autopilot forced him to jump the curb and mow down several signs before coming to a muddy stop along Route 1 in North Brunswick. Bits and pieces of the Tesla were scattered along the northbound side of the highway.

    • Greg Machala says:

      It amazes me to what extent people will trust their lives to “technology”. Remember that technology is crafted by human hands. Beneath the thin veneer of advertised perfection lies the shortcomings of human weakness.

      • SomeoneInAsia says:

        It need not be that amazing. Most people let themselves be taken in by first impressions rather than engage in a careful evaluation of what they see or hear. That’s how sci-fi movies work — by presenting a breathtaking spectacle of hi-tech stuff.

        Besides, technology did ‘deliver the goods’ during the halcyon days of cheap and abundant energy, as in improved living conditions, higher work efficiency etc. We now know of course that it’s the energy that should be given the credit, not the technology, but nevertheless the delusion is a very persistent one…

    • How many of these crashes will it take to get people to figure out that the feature is dangerous?

      • Gregory Machala says:

        I have read stories of people blindly following their GPS mapping app literally into lakes and ravines trying to find their destination. It’s nuts. I don’t even trust the switch on my table saw. When I change the blade, I unplug it. And the electronics of a saw are much less complex than AutoPilot. How can you put your life in such jeopardy to where you let a computer drive your car. Imagine how many things can go wrong. Way too many variables to trust a machine with.

  5. Yoshua says:

    Auto sales plunged in the last quarter of 2018 around the world. Today gasoline crack spreads have turned negative around the world.

    Saudi Arabia has decided to cut production to 9.8 mmbpd. SA obviously needs higher oil prices…but the global economy doesn’t seem to be able to handle higher oil prices.×900

    • Duncan Idaho says:

      We shall see.
      Our first ever actual oil shortage is coming up.
      We will get real time results.

      • I think we are already seeing what the effect is. We get a cut in demand to go with the cut in supply. So the result ends up being a wash in terms of prices and supply, or even results in added oil glut.

        • Duncan Idaho says:

          But we have not hit a shortage.
          That is in the future.
          Then we can see the results.
          Until then, it’s speculation.

    • Not much motivation to produce gasoline when crack spreads have turned negative. Too much gasoline out there.

      I presume the 9.8 million barrels a day is comparable to the 10,213,000 reported by OPEC for January. So it is down another 400,000 barrels or so. Production is reported to have been a bit over 11.0 million barrels per day in November.

  6. Duncan Idaho says:

    “Anyone who knows history, particularly the history of Europe, will, I think, recognize that the domination of education or of government by any one particular religious faith is never a happy arrangement for the people.”
    ~ Eleanor Roosevelt

  7. MG says:

    Ukraine has become an abundant source of working force for other, mostly EU, countries: Poland, Czech Republic, Russia, Germany, Isarael, Scandinavia, Slovakia… A half of the productive population works outside the country.

  8. Baby Doomer says:

    A record 7 million Americans are 3 months behind on their car payments, a red flag for the economy

  9. Baby Doomer says:

    With the US-Russian Nuclear Treaty in Tatters, Is ‘Doomsday’ Ticking Closer?

    • SomeoneInAsia says:

      I think a more pertinent question might be: Is there anything people like you and I can do about this?

      • Duncan Idaho says:

        It’s late stage capitalism–
        This is a predicament, not a problem.
        End stage regimes never produce good leaders.
        Nero or Caligula as Rome collapsed, and Trump in the decline of the US, for example.
        From an existentialist perspective, I do what I believe is right, without hope for results.
        But realistically, we are in a predicament.

        • TIm Groves says:

          Nero and Caligula were merely self-obsessed amateur artists.
          Trump, by contrast, is a ROCK STAR!!!!
          He even has his own version of a well-known Pink Floyd album.

    • We certainly are in a time now during which war is more likely. As long a prices stayed high enough, we could get enough out for everyone. But if prices won’t rise enough, we have a problem. That is when conflict occurs.

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