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.

Footnote:

[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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1,605 Responses to How the Peak Oil story could be “close,” but not quite right

  1. Harry McGibbs says:

    “Student-loan delinquencies surged last year, hitting consecutive records of $166.3 billion in the third quarter and $166.4 billion in the fourth. Bloomberg calculated the dollar amounts from the Federal Reserve Bank of New York’s quarterly household-debt report, which includes only the total owed and the percentage delinquent at least 90 days or in default.”

    https://finance.yahoo.com/news/u-student-debt-serious-delinquency-140103419.html

    • Harry McGibbs says:

      “On Friday, the 15th of February, a Federal Reserve report revealed that the US manufacturing data had dwindled deeply in January, mostly effectuated by the biggest fall in auto production since the era of recession, the latest indication that the US economy had been losing momentum.”

      https://www.financial-world.org/news/news/economy/1055/us-auto-posts-biggest-drop-since-recession-manufacturing-output-sinks/

      • Duncan Idaho says:

        Basically, 2017 and 2018 marked years in which the previously slow and imperceptible declines in institutions and economic activities started to accelerate to the point of notice by even the generally ignorant masses. The political fallout, the trend toward nationalism and xenophobia has become all too obvious. People are scared and confused. They will resort to protectionist thinking in an attempt to restore what they consider the normal order. But it is a futile effort. From this point forward the rate of decline and collapse will just increase.

        • Davidin100millionbilliontrillionzillionyears says:

          I agree…

          even the trend towards socialism (in the USA) will be futile…

        • chrome mags says:

          “The political fallout, the trend toward nationalism and xenophobia has become all too obvious. People are scared and confused.”

          Yeah, it’s all over the news. People are going nuts doing all sorts of crazy stuff from boiling water challenges, overdosing on drugs they know are extremely dangerous to just plain going berserk shooting people. Try not to be in a 24 hr. mini market when shtf with 100 other people. Bound to be dangerous.

    • No wonder young people are unhappy!

  2. jupiviv says:

    Alice Friedemann has an article about batteries:

    http://energyskeptic.com/2019/can-zinc-batteries-save-us/

    “The New York Times had two articles about zinc air batteries in September 2018. Right now, finite natural gas is the dominant way of balancing unreliable, outright missing, or intermittent power from wind and solar. So other energy storage solutions simply have to be invented to replace natural gas, and zinc air is one way to do this. Zinc air batteries are only proposed for energy storage, not electric vehicles.

    Penn (2018) states that there are only 25 years of zinc reserves left. As if that weren’t alarming and astounding enough, the article goes on to say that lithium reserves are even smaller – just 5% of zinc reserves.

    It also takes far more energy to create batteries to store energy for a much shorter time of operation before the battery needs to be replaced. If you look at the energy stored over the lifetime of a storage device, compared to the energy used to build it, compressed air energy storage and pumped hydro storage ate orders of magnitude cheaper and more effective than batteries, with zinc-bromide near the bottom:”

    • Duncan Idaho says:

      I like Friedemann’s analysis—-
      But the saga continues:
      The Catholic church is still making excuses for paedophilia
      https://www.theguardian.com/world/2019/feb/17/catholic-church-still-making-excuses-paedophilia-pope

    • Gregory Machala says:

      I agree. But, this isn’t new information. The limitation of batteries is a well known and document hurdle in the transition to “renewables”. The wish has has always been that better batteries will be invented. But, it has not happened. The same refrain is used for fusion power…it is always 15 years away. It doesn’t take much research to conclude that batteries take a lot of resources and energy to produce (and even more energy to recycle) and they have short lives. Not an effective combination to supplant natural gas.

      • Duncan Idaho says:

        Yep–
        Lithium Ion batteries were first commercialized by the Japanese in the early 1990’s.
        It has been a while——

  3. Davidin100millionbilliontrillionzillionyears says:

    “I don’t want you to be hopeful. I want you to panic. I want you to feel the fear I feel every day. I want you to act. I want you to act as you would in a crisis. I want you to act as if the house is on fire, because it is.” – Greta Thunberg

    • Tim Groves says:

      I’ve been gently advising people to chill out about the climate “crisis” since well before this highly intelligent, serious and articulate young lady was born. By suspect that by the time she’s even half my age, she will look back on her current antics with the sort of embarrassment sensible people of my generation feel about having once worn “hippy” style Afghan coats or “disco” style flared trousers and huge shirt collars worn outside their jackets.

      Of course, it’s not her I object to, but the globalist propa-ganda industry making use of her talents to fill even more impressionable young heads with the same sort of c-r-a-p they’ve successfully shoveled into her head.

      • kevin moore says:

        The poor girl looks like she’s not sleeping well. Should we be truthful to the young? Should we tell them something much worse than climate change is unfolding? Oh Greta. I hope she finds some enjoyment in life.

    • Davidin100millionbilliontrillionzillionyears says:

      if she is that fearful about the one issue that she knows about…

      I wonder how she would feel about the myriad issues we discuss here at OFW…

      “I want you to act.”

      sorry, Greta, there are no actions that will solve this dilemma…

      either we burn all possible FF to keep BAU limping along…

      or poverty for you and your generation…

      if they live long enough, it will be both…

      • SuperTramp says:

        Sorry, we do don’t really realise what we are dealing with and it’s full implications.
        The greatest chemistry/ physics experiment ever undertaken by humanity on a planetary scale. It is a vast, dynamic system that has been in a relatively stable state (I.e equilibruim) enabling civilization to arise. We are poking at a sleeping beast and literally unwisely jarring it to react. When it does to noticably return the shove, the beast will not return to sleep. Remember, no whining….

    • The Agenda of indoctrination for the age of ‘globulal verming’ is simply to prepare the next generations for constrained consumerism. Funnily enough, it is most heavily applied in Europe, which already has got smaller energy footprint vs the US. It partly reflects the end of domestic resources ‘bridge to nowhere’ as the oil and natgas shot of the 1970s and onwards visibly wanes into oblivion today. But also the propaganda and actual law construct is way stricter and sort of all-encompassing from kinder garden through all schooling levels..

      The protest in France were/are to significant degree about reaching a threshold by which even 60-80-120mpg sipping lite scooters, primary mode of transportation (and last joy) for large segment of population are getting squeezed by gasoline taxes, insurance costs and also increasing vehicle cost as even the cheap imported Chinese brands have to now comply with emission EURO-4 standard and later.. Not mentioning the threats of complete shutdown of city centers not only for cars but any combustion engine based mobility.

  4. Duncan Idaho says:

    Americans — particularly millennials — are alarmingly late on car payments
    (It’s the case of Red States– Blue States doesn’t seem to be an issue– we in the Blue States can only socialize the Red Staes so long– might be time to put down the beer, fire up the F250, and get a job?)
    https://finance.yahoo.com/news/car-payments-missed-credit-scores-171533526.html

    • Davidin100millionbilliontrillionzillionyears says:

      CA is right in the middle percentage-wise in the 3.00-3.99 range…

      therefore CA clearly has more auto loan delinquents than any other state…

      congratulations, CA…

      you are a national leader!

      bravo!

      • Duncan Idaho says:

        Probably–
        It’s the Valley– you could be in Georgia.
        (Must admit, I kinda like Georgia)
        I don’t live in California.

        • Davidin100millionbilliontrillionzillionyears says:

          just trying to give CA credit where credit is due…

          pun intended…

          • Duncan Idaho says:

            Yea, but the data is clear that our Red State Friends are just not pulling their weight (and they are usually overweight).
            I know it is tough, but we can’t support them forever.
            Maybe put down the beer, fire up the pickup, and head for employment rather than the 711?

            • Davidin100millionbilliontrillionzillionyears says:

              yes, but the data is clear that CA has many more auto loan delinquents than any other state…

              here in the northeast, the numbers look better…

              anyway, (as Norm says) the USA probably won’t hold together too much longer…

              soon we may all go our separate ways…

              would you really prefer that?

            • By the way, there are a lot of people who live in red states, including me. My voting preference is mostly “none of the above,” but I call my preference “independent”. I am not overweight (BMI < 25) and I don't drive a pickup or drink much beer. Forget the stereotypes.

            • Duncan Idaho says:

              Please Gail—
              I’ve spent quite a bit of time in Georgia.
              Not everywhere is Atlanta (a great place, if you could remove several thousand churches).
              But even Atlanta is truck centric.

            • kevin moore says:

              Your silly stereotype doesn’t fit the demographic most likely to be delinquent on an auto loan according to The Urban Institute. BTW isn’t there other places to go to vent your predjudices? If you really understood our dire predicament would you be so occupied by “red” and “blue” states.

            • Baby Doomer and Duncan Idaho have a lot in common.

            • Duncan Idaho says:

              Red and Blue?
              Pepsi, and Pepsi Lite?
              One needs to emerge from that small box—–

    • I checked to see how the map lines up with income disparity, and it doesn’t match up very well. This is an income inequality map.

      The very unequal states are New York, Connecticut, Lousiana, California, and Florida. I expect that these states have a few very high earners, but not too many at the very bottom.

      The Southeast States seem to have quite a few near the bottom, especially young people.

      This is a map showing the percentage of the country’s population that is black or African American. It matches up quite well with the high auto delinquency map. (Back in 2008-2009, blacks were very much over-represented in the subprime auto loan problems as well.

      • Chrome Mags says:

        We live in CA, and it’s definitely a state with a lot of people with money and as such not really a very good state to live in if you’re not well to do, because of the cost of housing. If someone makes a low wage, better to find a state with greater equality, cheaper housing.

  5. Baby Doomer says:

    Are we on the road to civilization collapse?

    Studying the demise of historic civilisations can tell us how much risk we face today, says collapse expert Luke Kemp. Worryingly, the signs are worsening.

    http://www.bbc.com/future/story/20190218-are-we-on-the-road-to-civilisation-collapse

    • Baby Doomer says:

      We’re ripe for a total breakdown. No clean water, no food, no law and order. Just chaos..

    • Interesting article! Not a whole lot new for those of us who have been studying the subject, however.

      I haven’t met Luke Kemp. He is a “Research Associate at the Centre for the Study of Existential Risk.” The blurb says, “Luke is working on how catastrophic risks are interconnected, how we can better predict them, and how we can translate foresight into action in the present. He is a an honourary lecturer in environmental policy at the Australian National University (ANU), holds a PhD in international relations from the ANU and was a senior economist (at Vivid Economics) for several years.” https://www.cser.ac.uk/team/luke-kemp/

      This is a link to a page showing the entire staff. https://www.cser.ac.uk/team/ Research Associate is a fairly junior position.

      • Baby Doomer says:

        Gail,

        How old do you think our current industrial civilization is?

        • If we look at Wrigley’s analysis, coal consumption first began to ramp up in about 1650. If we use that as a starting point for the fossil fuel age, we are at about 369 years.

          If would be possible to use a lot of other dates later date. The fact that population was able to expand to the “New World” greatly helped prevent collapse earlier. There were many smaller collapses. Peak coal in UK and in Germany lead to low price situations and fighting.

          • Xabier says:

            I would be inclined to date our civilisation from the beginning of the general use of coal-fueled machines to help mining and manufacturing operations, transport, rather than just domestic heating, which I suppose gives us 200 years or so? Tick, tock……

      • Baby Doomer says:

        According to this article the average civilization last around 336 years..And according to Wiki our industrial civilization is around 259 years old (1760-2019)..Which means we have around 77 years left..Personally I doubt we even make it half that long..But some say I’m a dreamer..

        • I think that how long a civilization lasts depends on how fast the population is growing. That, in turn, depends on how fast resource utilization can be ramped up. Based on that observation, the lifetime of the current civilization should be quite short.

          The one thing that the article did add was the chart showing how long civilizations seem to have lasted.

      • Gregory Machala says:

        Nice chart. I do think our current “civilization” is structured on a global scale and dwarfs all other prior “civilizations”. We also have the vast majority of the global population dependent on artificially produced goods and services. If these servcies “collapse” we loose our lifeline and perish very quickly. The artificial walls between ourselves and the natural world would fall, leaving us defenseless. Many will be exposed to elements they never before experienced – heat, cold, diseases, starvation, weather and wild animals. .

        • Xabier says:

          The peculiar and distinctive character of our civilisation is the destruction of the age-old agricultural base, as a self-renewing way of life underlying the complex life of the towns and cities, and which could endure and even thrive when they periodically collapsed.

    • Rodster says:

      My favorite part of this article said: “The collapse of our civilisation is not inevitable. History suggests it is likely, but we have the unique advantage of being able to learn from the wreckages of societies past.

      We know what needs to be done: emissions can be reduced, inequalities levelled, environmental degradation reversed, innovation unleashed and economies diversified. The policy proposals are there. Only the political will is lacking. We can also invest in recovery. There are already well-developed ideas for improving the ability of food and knowledge systems to be recuperated after catastrophe. Avoiding the creation of dangerous and widely-accessible technologies are also critical. Such steps will lessen the chance of a future collapse becoming irreversible.

      We will only march into collapse if we advance blindly. We are only doomed if we are unwilling to listen to the past”

      ————————————————————————————-
      And there lies the problem. We are doing the EXACT SAME STUPID MISTAKES as prior civilizations who collapsed, except we are doing it are a much far GRANDEUR scale and at accelerating speed. No chance we will have a different outcome that past civilizations met, which is, collapse. Except this time is different because we are ALL tied to “OIL” and that is the life blood of our globalized, highly complex networked civilization. Just look at the chaos that Brexit is creating, just imagine if a major world economy collapsed and what that would do to the global financial system. One word comes to mind………..”POOF”.

      • Clearly, this author is spouting the same nonsense as everyone else. He doesn’t understand how a networked system works.

        • Rodster says:

          I agree, to use a Fast Eddy favorite word, “hopium”. Brexit has the potential for causing massive chaos in Europe especially if the Brits decide to walk away with no deal in place. Greece caused massive financial worries for international markets when they nearly defaulted on their IMF/EU bailout loans. And that was a small country compared to a major economic powerhouse like the US or China. Just imagine what it would be like if we woke to the news that the US was going to default on it’s loans or China entered a depression.

          The same people who use the words “Great Recession” to describe what happened in 2008 instead of Great Depression 2.0 are the same people who think our highly complex, networked and globalized civilization that runs on and requires “oil” to just function can somehow escape this mess without the house of cards collapsing is beyond me.

        • Gregory Machala says:

          I agree! We are ignorant, delusional and pervasive to the natural world and we use a finite resource fend off nature. Not a good combination.

        • djerek says:

          Ernst Jünger puts it more poetically:

          “And yet the Zeitgeist was powerful, the character compelling; the decision, good or bad, wrong or right, could not be otherwise. That is why nothing is learned from history. The doer imagined he could determine the future; but he was sucked in by the future, he fell prey to it. At the crucial moment, what was necessary happened. It is subsequently mirrored in its own irrevocability.
          Now things become sinister. The nameless force, to which even gods must bow, dims the vision.”

        • Gregory Machala says:

          Learn from history? I think we largely ignore history! We continue building on past mistakes making them even more grandiose. We do this by injecting increasingly large amounts of finite energy and resources. Well, until we reach an equilibrium where we can no longer produce energy and resources fast enough to keep the illusion alive (where we are now).

          • Lastcall says:

            Isn’t it the case that we learn from our mistakes, and that the history we are taught is that written by the victors. So how can we learn when a one sided version is all that we hear.
            Look at some of the absolutely terrible ‘heroes’ and decisions we have chosen to idolise. Churchill comes to mind. We still have a Royal family despite their history.
            We chose to live in a fantasy world.

            • we have a royal family/Queen to stop anyone else having the job of head of state

              who would you nominate for that job?

              Churchill had his faults (who doesn’t) but if he hadn’t kept the UK as an aircraft carrier until 1942, Hitler would have achieved world domination—(including the USA)

            • GBV says:

              “Hitler would have achieved world domination”

              So tired of the “Nazis are evil” propaganda. I wish people would stop suggesting things like the above unless they actually a) had a conversation with Hitler, b) fought on either side during WW2, and c) can disprove the old saying, “victors write the history books”.

              But hey, I’m just a 1/4th Japanese-Canadian who had the privilege of having family in “internment camps” out in British Columbia, where their waterfront Vancouver property was confiscated by the Canadian government. TOTALLY different than concentration camps, right?

              Also, Axis forces do all the dominating/murdering/conquering/raping… not Allied forces, right? And people who die killing others on foreign soil are war heroes, while those who died defending their native soil are war criminals, yes?

              Perhaps everyone should take a step back and consider we’ve been living in a historical fantasy land since at least the 1940s…

            • I’m afraid Brits did not exactly fight AJH but rather tried preserving the skeleton of their empire as much as possible, that was clearly the top priority. The ‘aircraft carrier’ was largely possibly thanks to prior disgusting action of Chamberlain feeding the beast with CEE allies..

              There is older ~scifi/alt history movie with Rutger Hauer, it depicts the summit of US-Germania taking place sometime in the mid ~1960s. I guess the novel on which it is based is probably even better.

              AJH was not fool*, he knew logistics, also knew by late 1930s that without North African and more importunately Caucasian-Caspian oil he can’t stabilize midterm vs the other top global empires who had secured access to wast fossil bonanzas (USSR-Caspian, US-Texas/Gulf of Mexico, JAP-Indonesia).

              AJH was naive* not slaughtering the allied evacuating troops when France collapsed, still hoping for another final deal with the UK. Should he done it, the internal UK politics would be likely very different and we would have the above ‘Rutger Hauer’ scenario of US not entering the war and Russians (loosing) – likely retreating beyond Ural mountain range and effectively mounting only low intensity guerrilla simmering conflict.

            • Xabier says:

              worldof

              I had the privilege to meet, as a student, one of the diplomats, by then a very frail old man, who dealt with Hitler, and later Stalin: the French were also very eager to ‘feed’ – as you rightly say – the Central Europeans to Hitler.

              He recalled walking into a meeting when the French ambassador immediately said:

              ‘Of course, you are going to give him Czechoslovakia, aren’t you?’

              Just like that, a whole country handed over.

  6. chrome mags says:

    https://www.vox.com/world/2019/2/18/18229695/venezuela-trump-military-guaido-maduro

    “Trump just issued an ultimatum to the Venezuelan military: abandon Maduro or else”

    “Trump said on Monday at Florida International University. “If you choose this path, you will find no safe harbor, no easy exit, and no way out. You will lose everything.”

    I have to laugh, really, I mean if anyone is gullible enough not to recognize all that bluster as bluff, an attempt to manipulate action at a distance, then go invest in land on Mars.

    • Not having illusions about potentates anywhere, the US strategy seems still the same, lets sanction some of the top brass (and or oligarchs) and they will betray, switch sides, immediately. But what a novelty not everybody is as corrupted/able as before.. at least from certain vector of applied pressure..

      It worked brilliantly for decades on every continent, it stumbled in Russia ~two decades ago, it was averted in Turkey few yrs ago, and it will have surprisingly lesser impact even in the South American realm these days, even-though some realignment towards US accommodating politics happened there very recently in several countries, but it’s a temporary, transient change.

      Well, such overall trend of the old trusty levers of power meddling into others not working anymore must be very frustrating experience to watch, hence the propensity to act in very dangerous ways..

      The Russians clearly stated ‘we had enough on the receiving end of Western hand’ be it from Napoleon, WWI-intervention into civil war, WWII-patriotic war, cold war and USSR collapse. Next time the question of national survivor will be dealt differently, they now talk about geophysical asymmetric response, it’s a cheaper deterrent than full scale parity armament which without the fraudulent debt capability eats too much domestic resources for other civil development.

      Specifically, they decided to have autonomous delivery vehicles (navy-space-airforce) and just few dozen devices to create wave of tsunamis on the US coastal areas and or setting off calderas and fault zones on the land. So, for the first time the US public will be immediately (threatened) to be drawn into real nasty effects of war. A medicine perhaps for long time missing there.. in the public space..

      Not saying Venezuela will be the immediate trigger point, but rather another failure threshold pushing US for even crazier action to the road of the final confrontation.

      • Duncan Idaho says:

        Hint—
        Maduro is still the elected leader.
        He was to be gone long ago according to MSM.

      • Xabier says:

        The decision makers in the US have for too long lacked that European sense of vulnerability: I hope they sober up when facing the real possibility of serious domestic losses.

    • Gregory Machala says:

      Every president in modern history has attempted regime change somewhere in the world This is nothing new.

  7. Harry McGibbs says:

    “The global economy’s loss of momentum has left expansion now looking like its weakest since the global financial crisis, a development that has already sparked a shift among central banks.

    “A UBS model suggests world growth slowed to a 2.1 percent annualized pace at the end of 2018, which it says would be the weakest since 2008-2009…

    “China car sales dropped in January, and data last week showed U.S. retail sales posted their worst drop in nine years in December. In Europe, where the slowdown has been particularly marked, sentiment indicators continue to weaken, and the latest OECD leading indicator has also declined.”

    https://www.bloomberg.com/news/articles/2019-02-18/global-economy-stuck-with-downside-risks-in-the-near-term

  8. Sven Røgeberg says:

    Welcome to the US in 2043 after the The New Green Deal has transformed the society!
    https://theintercept.com/2018/12/05/green-new-deal-proposal-impacts/
    Here is another article about the activist and thinkers behind NGD:
    https://www.vox.com/energy-and-environment/2018/12/21/18144138/green-new-deal-alexandria-ocasio-cortez

    • Models are even better than myths used by our ancestors. People are inclined to believe them, no matter how ridiculous.

    • Ed says:

      Wow, it is great everything is free and all government services health, housing, education are high quality. And those who do not want to work will be economically secure (count me in).

  9. Greg Machala says:

    Most of us live on the receiving end of industrial civilization. We only see the output – the electric, battery, gas and diesel powered appliances and gadgets. It is easy to forget that what happens to deliver these goods and services is not more “modern” or “advanced” than this 100 year old picture is:

    We still shovel vast amounts of energy and resources down below to prop up an illusion of comfort and luxury above.

    • MG says:

      The fall from the energy cliff is abrupt: you have all fast glamour and technology of the age, but, suddenly, you see that the things are only the dead toys and there are empty masks and costumes scattered around the scene…

      • MG says:

        When you drive to the hospital to see your old mother, with your oldest brother soaked in alcohol sitting next to you and moralizing you: that is like the end of the world, too… Today.

        You know what is going on, but they do not know it and do not want to know it…

        • MG says:

          The difference between optimists, pesimists and realists is as follows:
          – the optimists see one aspect of the reality and based on that aspect they predict all will be fine
          – the pesimists see one aspect of the reality and based on that aspect they predict all will be bad
          – the realists see all aspects of the reality and based on those aspects they predict there will be an end

      • I am afraid you are probably correct.

    • In general, this sort of evolved surplus energy shortage story from the early peak oil debate, which eventually brought many of us over here is in the end just a probability scenario. A very high probability to our eyes, but in the end just a scenario, especially in terms of timing and sequencing. We don’t know which next recession and or future severe GFCv2/xyz event might unleash it.

      Frankly, we could be quite likely yet into some industrial echo boom, bumpy plateau and attempted adaptation before it unravels into heap of uncontrollable crash. And that could be decades more to go, at least for several IC hubs in the world.

      I’d like to see more actionable evidence where exactly are we on the timeline or process path. One of the few measures available to us mere tiny mortals is to observe what the big guys are doing. And if you look at policy by the big govs-industries there is a wide scale of tales and response action to look for. For starters looking just at the US vs China vs Russia vs EU should give us some answers. I’d venture to say China is likely the last one eventually getting part of the story right, yes they rode a massive everything stupid bubble but it was apparently tweaked according to certain priorities, e.g. their fast massive fast rail network is way over done even vs. their already world biggest car market and highway system etc. Russians investing in domestic agri sector. Europe administrating and banning various modes of consumption and importing GDP substrate humanoids from abroad. And US on exalted killing spree world wide (alongside energy hubs and its routes) for past ~20yrs.

      This is adaption, exclamation.

      Too late, not enough, wrong path, that’s debatable..

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