The true feasibility of moving away from fossil fuels

One of the great misconceptions of our time is the belief that we can move away from fossil fuels if we make suitable choices on fuels. In one view, we can make the transition to a low-energy economy powered by wind, water, and solar. In other versions, we might include some other energy sources, such as biofuels or nuclear, but the story is not very different.

The problem is the same regardless of what lower bound a person chooses: our economy is way too dependent on consuming an amount of energy that grows with each added human participant in the economy. This added energy is necessary because each person needs food, transportation, housing, and clothing, all of which are dependent upon energy consumption. The economy operates under the laws of physics, and history shows disturbing outcomes if energy consumption per capita declines.

There are a number of issues:

  • The impact of alternative energy sources is smaller than commonly believed.
  • When countries have reduced their energy consumption per capita by significant amounts, the results have been very unsatisfactory.
  • Energy consumption plays a bigger role in our lives than most of us imagine.
  • It seems likely that fossil fuels will leave us before we can leave them.
  • The timing of when fossil fuels will leave us seems to depend on when central banks lose their ability to stimulate the economy through lower interest rates.
  • If fossil fuels leave us, the result could be the collapse of financial systems and governments.

[1] Wind, water and solar provide only a small share of energy consumption today; any transition to the use of renewables alone would have huge repercussions.

According to BP 2018 Statistical Review of World Energy data, wind, water and solar only accounted for 9.4% 0f total energy consumption in 2017.

Figure 1. Wind, Water and Solar as a percentage of total energy consumption, based on BP 2018 Statistical Review of World Energy.

Even if we make the assumption that these types of energy consumption will continue to achieve the same percentage increases as they have achieved in the last 10 years, it will still take 20 more years for wind, water, and solar to reach 20% of total energy consumption.

Thus, even in 20 years, the world would need to reduce energy consumption by 80% in order to operate the economy on wind, water and solar alone. To get down to today’s level of energy production provided by wind, water and solar, we would need to reduce energy consumption by 90%.

[2] Venezuela’s example (Figure 1, above) illustrates that even if a country has an above average contribution of renewables, plus significant oil reserves, it can still have major problems.

One point people miss is that having a large share of renewables doesn’t necessarily mean that the lights will stay on. A major issue is the need for long distance transmission lines to transport the renewable electricity from where it is generated to where it is to be used. These lines must constantly be maintained. Maintenance of electrical transmission lines has been an issue in both Venezuela’s electrical outages and in California’s recent fires attributed to the utility PG&E.

There is also the issue of variability of wind, water and solar energy. (Note the year-to-year variability indicated in the Venezuela line in Figure 1.) A country cannot really depend on its full amount of wind, water, and solar unless it has a truly huge amount of electrical storage: enough to last from season-to-season and year-to-year. Alternatively, an extraordinarily large quantity of long-distance transmission lines, plus the ability to maintain these lines for the long term, would seem to be required.

[3] When individual countries have experienced cutbacks in their energy consumption per capita, the effects have generally been extremely disruptive, even with cutbacks far more modest than the target level of 80% to 90% that we would need to get off fossil fuels. 

Notice that in these analyses, we are looking at “energy consumption per capita.” This calculation takes the total consumption of all kinds of energy (including oil, coal, natural gas, biofuels, nuclear, hydroelectric, and renewables) and divides it by the population.

Energy consumption per capita depends to a significant extent on what citizens within a given economy can afford. It also depends on the extent of industrialization of an economy. If a major portion of industrial jobs are sent to China and India and only service jobs are retained, energy consumption per capita can be expected to fall. This happens partly because local companies no longer need to use as many energy products. Additionally, workers find mostly service jobs available; these jobs pay enough less that workers must cut back on buying goods such as homes and cars, reducing their energy consumption.

Example 1. Spain and Greece Between 2007-2014

Figure 2. Greece and Spain energy consumption per capita. Energy data is from BP 2018 Statistical Review of World Energy; population estimates are UN 2017 population estimates.

The period between 2007 and 2014 was a period when oil prices tended to be very high. Both Greece and Spain are very dependent on oil because of their sizable tourist industries. Higher oil prices made the tourism services these countries sold more expensive for their consumers. In both countries, energy consumption per capita started falling in 2008 and continued to fall until 2014, when oil prices began falling. Spain’s energy consumption per capita fell by 18% between 2007 and 2014; Greece’s fell by 24% over the same period.

Both Greece and Spain experienced high unemployment rates, and both have needed debt bailouts to keep their financial systems operating. Austerity measures were forced on Greece. The effects on the economies of these countries were severe. Regarding Spain, Wikipedia has a section called, “2008 to 2014 Spanish financial crisis,” suggesting that the loss of energy consumption per capita was highly correlated with the country’s financial crisis.

Example 2: France and the UK, 2004 – 2017

Both France and the UK have experienced falling energy consumption per capita since 2004, as oil production dropped (UK) and as industrialization was shifted to countries with a cheaper total cost of labor and fuel. Immigrant labor was added, as well, to better compete with the cost structures of the countries that France and the UK were competing against. With the new mix of workers and jobs, the quantity of goods and services that these workers could afford (per capita) has been falling.

Figure 3. France and UK energy consumption per capita. Energy data is from BP 2018 Statistical Review of World Energy; population estimates are UN 2017 population estimates.

Comparing 2017 to 2004, energy consumption per capita is down 16% for France and 25% in the UK. Many UK citizens have been very unhappy, wanting to leave the European Union.

France recently has been experiencing “Yellow Vest” protests, at least partly related to an increase in carbon taxes. Higher carbon taxes would make energy-based goods and services less affordable. This would likely reduce France’s energy consumption per capita even further. French citizens with their protests are clearly not happy about how they are being affected by these changes.

Example 3: Syria (2006-2016) and Yemen (2009-2016)

Both Syria and Yemen are examples of formerly oil-exporting countries that are far past their peak production. Declining energy consumption per capita has been forced on both countries because, with their oil exports falling, the countries can no longer afford to use as much energy as they did in the past for previous uses, such as irrigation. If less irrigation is used, food production and jobs are lost. (Syria and Yemen)

Figure 4. Syria and Yemen energy consumption per capita. Energy consumption data from US Energy Information Administration; population estimates are UN 2017 estimates.

Between Yemen’s peak year in energy consumption per capita (2009) and the last year shown (2016), its energy consumption per capita dropped by 66%. Yemen has been named by the United Nations as the country with the “world’s worst humanitarian crisis.” Yemen cannot provide adequate food and water for its citizens. Yemen is involved in a civil war that others have entered into as well. I would describe the war as being at least partly a resource war.

The situation with Syria is similar. Syria’s energy consumption per capita declined 55% between its peak year (2006) and the last year available (2016). Syria is also involved in a civil war that has been entered into by others. Here again, the issue seems to be inadequate resources per capita; war participants are to some extent fighting over the limited resources that are available.

Example 4: Venezuela (2008-2017)

Figure 5. Energy consumption per capita for Venezuela, based on BP 2018 Statistical Review of World Energy data and UN 2017 population estimates.

Between 2008 and 2017, energy consumption per capita in Venezuela declined by 23%. This is a little less than the decreases experienced by the UK and Greece during their periods of decline.

Even with this level of decline, Venezuela has been having difficulty providing adequate services to its citizens. There have been reports of empty supermarket shelves. Venezuela has not been able to maintain its electrical system properly, leading to many outages.

[4] Most people are surprised to learn that energy is required for every part of the economy. When adequate energy is not available, an economy is likely to first shrink back in recession; eventually, it may collapse entirely.

Physics tells us that energy consumption in a thermodynamically open system enables all kinds of “complexity.” Energy consumption enables specialization and hierarchical organizations. For example, growing energy consumption enables the organizations and supply lines needed to manufacture computers and other high-tech goods. Of course, energy consumption also enables what we think of as typical energy uses: the transportation of goods, the smelting of metals, the heating and air-conditioning of buildings, and the construction of roads. Energy is even required to allow pixels to appear on a computer screen.

Pre-humans learned to control fire over one million years ago. The burning of biomass was a tool that could be used for many purposes, including keeping warm in colder climates, frightening away predators, and creating better tools. Perhaps its most important use was to permit food to be cooked, because cooking increases food’s nutritional availability. Cooked food seems to have been important in allowing the brains of humans to grow bigger at the same time that teeth, jaws and guts could shrink compared to those of ancestors. Humans today need to be able to continue to cook part of their food to have a reasonable chance of survival.

Any kind of governmental organization requires energy. Having a single leader takes the least energy, especially if the leader can continue to perform his non-leadership duties. Any kind of added governmental service (such as roads or schools) requires energy. Having elected leaders who vote on decisions takes more energy than having a king with a few high-level aides. Having multiple layers of government takes energy. Each new intergovernmental organization requires energy to fly its officials around and implement its programs.

International trade clearly requires energy consumption. In fact, pretty much every activity of businesses requires energy consumption.

Needless to say, the study of science or of medicine requires energy consumption, because without significant energy consumption to leverage human energy, nearly every person must be a subsistence level farmer, with little time to study or to take time off from farming to write (or even read) books. Of course, manufacturing medicines and test tubes requires energy, as does creating sterile environments.

We think of the many parts of the economy as requiring money, but it is really the physical goods and services that money can buy, and the energy that makes these goods and services possible, that are important. These goods and services depend to a very large extent on the supply of energy being consumed at a given point in time–for example, the amount of electricity being delivered to customers and the amount of gasoline and diesel being sold. Supply chains are very dependent on each part of the system being available when needed. If one part is missing, long delays and eventually collapse can occur.

[5] If the supply of energy to an economy is reduced for any reason, the result tends to be very disruptive, as shown in the examples given in Section [3], above.

When an economy doesn’t have enough energy, its self-organizing feature starts eliminating pieces of the economic system that it cannot support. The financial system tends to be very vulnerable because without adequate economic growth, it becomes very difficult for borrowers to repay debt with interest. This was part of the problem that Greece and Spain had in the period when their energy consumption per capita declined. A person wonders what would have happened to these countries without bailouts from the European Union and others.

Another part that is very vulnerable is governmental organizations, especially the higher layers of government that were added last. In 1991, the Soviet Union’s central government was lost, leaving the governments of the 15 republics that were part of the Soviet Union. As energy consumption per capita declines, the European Union would seem to be very vulnerable. Other international organizations, such as the World Trade Organization and the International Monetary Fund, would seem to be vulnerable, as well.

The electrical system is very complex. It seems to be easily disrupted if there is a material decrease in energy consumption per capita because maintenance of the system becomes difficult.

If energy consumption per capita falls dramatically, many changes that don’t seem directly energy-related can be expected. For example, the roles of men and women are likely to change. Without modern medical care, women will likely need to become the mothers of several children in order that an average of two can survive long enough to raise their own children. Men will be valued for the heavy manual labor that they can perform. Today’s view of the equality of the sexes is likely to disappear because sex differences will become much more important in a low-energy world.

Needless to say, other aspects of a low-energy economy might be very different as well. For example, one very low-energy type of economic system is a “gift economy.” In such an economy, the status of each individual is determined by the amount that that person can give away. Anything a person obtains must automatically be shared with the local group or the individual will be expelled from the group. In an economy with very low complexity, this kind of economy seems to work. A gift economy doesn’t require money or debt!

[6] Most people assume that moving away from fossil fuels is something we can choose to do with whatever timing we would like. I would argue that we are not in charge of the process. Instead, fossil fuels will leave us when we lose the ability to reduce interest rates sufficiently to keep oil and other fossil fuel prices high enough for energy producers.

Something that may seem strange to those who do not follow the issue is the fact that oil (and other energy prices) seem to be very much influenced by interest rates and the level of debt. In general, the lower the interest rate, the more affordable high-priced goods such as factories, homes, and automobiles become, and the higher commodity prices of all kinds can be. “Demand” increases with falling interest rates, causing energy prices of all types to rise.

Figure 6.

The cost of extracting oil is less important in determining oil prices than a person might expect. Instead, prices seem to be determined by what end products consumers (in the aggregate) can afford. In general, the more debt that individual citizens, businesses and governments can obtain, the higher that oil and other energy prices can rise. Of course, if interest rates start rising (instead of falling), there is a significant chance of a debt bubble popping, as defaults rise and asset prices decline.

Interest rates have been generally falling since 1981 (Figure 7). This is the direction needed to support ever-higher energy prices.

Figure 7. Chart of 3-month and 10-year interest rates, prepared by the FRED, using data through March 27, 2019.

The danger now is that interest rates are approaching the lowest level that they can possibly reach. We need lower interest rates to support the higher prices that oil producers require, as their costs rise because of depletion. In fact, if we compare Figures 7 and 8, the Federal Reserve has been supporting higher oil and other energy prices with falling interest rates practically the whole time since oil prices rose above the inflation adjusted level of $20 per barrel!

Figure 8. Historical inflation adjusted prices oil, based on data from 2018 BP Statistical Review of World Energy, with the low price period for oil highlighted.

Once the Federal Reserve and other central banks lose their ability to cut interest rates further to support the need for ever-rising oil prices, the danger is that oil and other commodity prices will fall too low for producers. The situation is likely to look like the second half of 2008 in Figure 6. The difference, as we reach limits on how low interest rates can fall, is that it will no longer be possible to stimulate the economy to get energy and other commodity prices back up to an acceptable level for producers.

[7] Once we hit the “no more stimulus impasse,” fossil fuels will begin leaving us because prices will fall too low for companies extracting these fuels. They will be forced to leave because they cannot make an adequate profit.

One example of an oil producer whose production was affected by an extended period of low prices is the Soviet Union (or USSR).

Figure 9. Oil production of the former Soviet Union together with oil prices in 2017 US$. All amounts from 2018 BP Statistical Review of World Energy.

The US substantially raised interest rates in 1980-1981 (Figure 7). This led to a sharp reduction in oil prices, as the higher interest rates cut back investment of many kinds, around the world. Given the low price of oil, the Soviet Union reduced new investment in new fields. This slowdown in investment first reduced the rate of growth in oil production, and eventually led to a decline in production in 1988 (Figure 9). When oil prices rose again, production did also.

Figure 10. Energy consumption per capita for the former Soviet Union, based on BP 2018 Statistical Review of World Energy data and UN 2017 population estimates.

The Soviet Union’s energy consumption per capita reached its highest level in 1988 and began declining in 1989. The central government of the Soviet Union did not collapse until late 1991, as the economy was increasingly affected by falling oil export revenue.

Some of the changes that occurred as the economy simplified itself were the loss of the central government, the loss of a large share of industry, and a great deal of job loss. Energy consumption per capita dropped by 36% between 1988 and 1998. It has never regained its former level.

Venezuela is another example of an oil exporter that, in theory, could export more oil, if oil prices were higher. It is interesting to note that Venezuela’s highest energy consumption per capita occurred in 2008, when oil prices were high.

We are now getting a chance to observe what the collapse in Venezuela looks like on a day- by-day basis. Figure 5, above, shows Venezuela’s energy consumption per capita pattern through 2017. Low oil prices since 2014 have particularly adversely affected the country.

[8] Conclusion: We can’t know exactly what is ahead, but it is clear that moving away from fossil fuels will be far more destructive of our current economy than nearly everyone expects. 

It is very easy to make optimistic forecasts about the future if a person doesn’t carefully examine what the data and the science seem to be telling us. Most researchers come from narrow academic backgrounds that do not seek out insights from other fields, so they tend not to understand the background story.

A second issue is the desire for a “happy ever after” ending to our current energy predicament. If a researcher is creating an economic model without understanding the underlying principles, why not offer an outcome that citizens will like? Such a solution can help politicians get re-elected and can help researchers get grants for more research.

We should be examining the situation more closely than most people have considered. The fact that interest rates cannot drop much further is particularly concerning.

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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1,252 Responses to The true feasibility of moving away from fossil fuels

  1. milan says:

    well, well, well, take a gander at this:

    Exxon Mobil Corp.’s worst refining performance in almost two decades may revive questions about the so-called integrated model engineered by founder John D. Rockefeller and espoused by every CEO in the company’s 149-year history.
    A surprise loss in a business line Exxon typically relies on to prop up more volatile units eroded first-quarter profit and cast doubt on the strength of the oil titan’s comeback from its annus horribilis in 2018.
    In the last decade, when other oil companies spun off refining businesses to concentrate on drilling for crude, Exxon steadfastly adhered to the wells-to-retail model. The refining loss is particularly stinging for Exxon Chief Executive Officer Darren Woods, who rose through the ranks of the fuel-making side of the company rather than the oil-exploration business of his chief competitor for the top job, Senior Vice President Jack Williams, and predecessor Rex Tillerson.
    Exxon’s structure “remains fundamentally strong,” Williams said during a conference call on Friday. It’s part of “our advantage versus the industry that’s going to help us manage through this volatility.”

    https://www.msn.com/en-ca/money/topstories/exxons-refining-shocker-puts-rockefeller-legacy-in-doubt/ar-BBWlFIS?ocid=spartandhp

  2. Yoshua says:

    The WTI crude oil price looks like it’s just about break down from its rising wedge.

    https://pbs.twimg.com/media/D5L_ohKWkAcaUTS?format=jpg&name=medium

    • We will get to see in the next few weeks. Oil producers have been putting out pretty disappointing results at current price levels. The number of US drilling rigs dropped by 21 last week, which is a whole lot. At the same time, oil prices are noticeably high from the point of consumers. And the amount of oil in storage is growing, indicating that consumers cannot seem to afford the current price level. So we have a situation where everyone is unhappy.

      • Davidin100millionbilliontrillionzillionyears says:

        OPEC may have to cut production AGAIN…

        and again… and again… etc…

        • Reduction after reduction in oil supply is the way it going. Producers quit because the price is too low. Or their governments collapse, because they cannot collect enough taxes at the international oil prices. The whole idea that prices rise endlessly is nonsense.

          • The whole idea of international energy prices seems nonsense too, hopefully it will diverge alongside regional differences once more..

            • the fundamental problem underlying all this derives from the idea that we can turn the planet into property, and buy and sell it.

              when stuff is bought and sold, the system can only continue to function if there’s a constant supply of ‘more’ of everything that can be brought to market.

              right now there is universal chaos kicking off because supplies of marketable goods are getting less and less, (or becoming unaffordable) while the number of human beings wanting ‘stuff” is constantly increasing.

              Add to that the denial that is happening at all, and you’re left with collective insanity.

              View at Medium.com

            • Ed says:

              Thank you Norman, it is time we start talking about the collective insanity. It is so far detached from reality it has become dangerous. A cargo cult on steroids.

      • revoranger says:

        Ev bikes, scooters and motorcycles and autos are seeing more purchases and interest.

      • Yoshua says:

        Bloombergs commodity index doesn’t look so good either.

        https://pbs.twimg.com/media/D5TdxnMWwAIU14K?format=jpg&name=large

    • Davidin100millionbilliontrillionzillionyears says:

      WTI was over $66 on Thursday…

      now it’s in the $62’s…

      could reverse and go higher…

      but if $66 is the high for the year, that ain’t much…

      • BahamasEd says:

        Here’s my WTI chart using EIA weekly data, the line running from 145 on the left to 12 on the right is the price that I believe that the world economy needs to be below for growth. It’s now been 17 months of overpriced oil with the next lower high maybe around $70 but for any growth we need oil below $36 currently.
        I don’t know how it’s going to work out, it’s just the trend since 2008 and it hasn’t reverse yet.

        • Nice additional take on the classic ‘triangle of doom’ graph – the latest episode beyond 2015 was chiefly made possible thanks to a lift-athlon provided by the formation of OPEC+ and Chinese printing, and few other token things (Donnie-US corp). But entering ~2020-25-30 phase surely seems like the end of road for quasi BAU part of the story..

        • As I keep saying, “Our problem is that we cannot get the oil price (and other energy prices) up to a high enough level to keep business as usual operating.” Your view is very much in corresponds with this.

  3. GBV says:

    https://www.peakprosperity.com/podcast/114985/living-integrity

    Sometimes I’m critical of Chris Martenson, but I enjoyed this podcast – particularly the segment between 26 minutes and 34 minutes on depression vs demoralization.

    Thought I’d share it with all of you if you haven’t came across it yet.

    Cheers,
    -GBV

    • Duncan Idaho says:

      Coming from a privileged class on the East Coast, we must give Martinson some ease on his political literacy.
      I do enjoy his podcasts, and smile at his limited exposure.

    • Hubbs says:

      Chris Martenson, like Peter Schiff is very cerebral and knowledgeable, but I don’t know how to say it…. these guys don’t have any practical street smarts. I would not place any money on their “predictions.”

      • Xabier says:

        I tend to favour predictions that extrapolate from all the worst features of what is actually going on now, and which do not look to sudden changes for the better or drastic improvements in human intelligence or nature.

        At the very least, human beings are likely to be very confused, and often self-deluded, animals which will make terrible choices and become violent and irrational when stressed.

    • Artleads says:

      Thanks. Maybe he was rushed at the end or something, but I liked the talk. Glad he touched on beauty.

    • Chrome Mags says:

      GBV, thanks for the link. In a sense I think Martenson is correct about ‘Integrity’ from a philosophical standpoint, however, misses the point that integrity is devolving right alongside diminishing returns. Meaning, corporations, people, businesses, etc. are more and more willing to reduce or eliminate any kind of integral ideas to grab as much as possible on the way down, no matter how destructive it might be. We’re way past ever having an integrity transition. All people have to do now is watch the ship list (riots) and take on water (migration) and so on until collapse fully takes hold.

      • Xabier says:

        Every government in trouble sends the tax collectors in, and they never care if they might be driving you into destitution, or how fair it is.

        Moreover, corporations and vested interests can now try to lock us into their new technologies, even if that, too, forces us into near- destitution, and despite the fact we really might not want to use them and pay that monthly contract fee.

        Monthly contracts for imposed ‘essentials’ are the new feudalism, are they not?

        The wheels will grind us ever finer until…..

        It should give a certain zest to living now: this really is as good as it is ever going be, if you are still solvent and comfortable – and that is most of us.

        • Businesses figure out a way to sell water at a high price, for example. In their view, this encourages conservation. But from the point of view of the poor, it leaves too little funds for buying the necessities of life. This conflict is what causes the system to collapse.

      • Artleads says:

        I’m not sure. I could see the lack of integrity everywhere 50 years ago. It might not have been too late then to create a better today, but neither did I know how to put my concerns into transmittable form nor had society sufficiently worked through the error of its ways. I suspect that critical mass has something to do with it. We certainly have more of that today than 50 years back. It’s the ideas that seem like the problem, and those have a mind and trajectory of their own.

  4. Baron says:

    The post war near miraculous growth in the West, leading to a standard of living never even dreamt of, was underpinned by two factors: abundance of cheap energy and the availability of credit. By the end of the century the latter was overdone, credit was extended to those who didn’t qualify, energy became too expensive essentially because the AGW fruitcakes pushed for sources of energy other than fossil based that are by far too expensive to fuel another long term bout of growth.

    It’s the time for the East to have a go, the Western model of economic management’s finished. Anyone young enough should learn Mandarin.

    • Davidin100millionbilliontrillionzillionyears says:

      China significantly raised their standard of living in this century…

      how?

      FF and debt…

      the East has given it a go, and it has been just like the West…

    • Well, you have to take into account even ‘Asia’ is not a monolith entity, they are all on dissimilar development-maturity path. For instance Japan ran its industrial colonial empire even before WWII there, nowadays their mainland is the most saturated and aged region out there.. The city states like HK, Singapore and ~Taipei/wan are also past the most vibrant period. And the so-called new comers like Vietnam are just relatively small and apart from usual focus on city/industry hubs not that smart anyway (lush forests turned into ~3rd global biggest coffee plantations etc)..

      And the proverbial biggest gorilla China itself is mostly producing shoddy quality stuff also having huge antagonist issues with direct or longer distance neighbors, similarly Japan used to have, be it on a bit lower bad blood intensity for sure for now..

      But you could be right that these ‘antsy’ more integrated societies in Asia could in some scenario out live the crumbling West for a while.. that’s one of the scenarios I put some %% years ago as well..

  5. interguru says:

    “When CO2 emissions linked to the production of batteries and the German energy mix — in which coal still plays an important role — are taken into consideration, electric vehicles emit 11% to 28% more than their diesel counterparts, according to the study, presented at the Ifo Institute in Munich.

    Mining and processing the lithium, cobalt and manganese used for batteries consume a great deal of energy… The CO2 given off to produce the electricity that powers such vehicles also needs to be factored in, they say. When all these factors are considered, each Tesla emits 156 to 180 grams of CO2 per kilometre, which is more than a comparable diesel vehicle produced by the German company Mercedes, for example”

    http://brusselstimes.com/business/technology/15050/electric-vehicles-emit-more-co2-than-diesel-ones,-german-study-shows.

    • China is getting into the electric vehicle business because it helps them ramp up their economy. They can use their own coal to power the vehicles, instead of imported oil. They can make lots of batteries, and they can mine lots of rare earth minerals. They would like to sell them to people outside of China. Even if they only sell parts (such as batteries) to people outside of China, it helps the economy of China grow.

      • chrish618 says:

        Unbeknown to most of us, China already totally dominates the global EV market, except at this point most of its sales are internal. From this launch pad they aim to totally dominate world sales, like they now do with solar panels. They have everything in place to do so and will beat the pants off any competitor on price. The only thing stopping them may be a collapse of their economy or the global economy (which go hand-in-hand anyway.)

  6. milan says:

    food price? Vancouver, Canada area
    Well, looky here watermelons for sale 8.99 each from 9.99 each lol
    Yeah, I guess we are now what a Bahama’s area island?
    Ridiculous.

  7. “At present, all signs point to higher oil prices.” https://oilprice.com/Energy/Energy-General/Why-An-OPEC-Oil-Supply-Surge-Wont-Happen.html

    This bloke just doesn’t seem to get it, that the oil is sold at auction, & bidders don’t want to pay more than they can profitably recover from the end-users of the products (IE, what the end users can AFFORD).
    By the way, does anyone know why Matt M. hasn’t updated http://crudeoilpeak.info/latest-graphs lately? (I found that info so interesting.)

    • Peak oilers seem to believe that oil prices rise because of scarcity, not because of high demand. Without understanding the financial system and where “demand” comes from, the whole concept of affordable supply (demand) is beyond the understanding of most peak oilers.

      There can be a small scarcity spike, but it is not long lasting enough lasting to help.

      I wrote to Matt, asking him about doing an update to his graph. He is a commenter on this site, from time to time, you may have noticed.

      • Artleads says:

        This should be easy for us to grasp. It should be the simplest thing. So where did we veer away to where the subject is such a mystery?

        • Climate change modelers seem to have the same problem.

          I think the problem comes from the simpleminded Supply and Demand model of economists.

          • Dan says:

            I believe the modelers have trouble because they think money is somehow equitably distributed are by its own will eventually fill in any low lying areas of the working economy. The point Gail makes is valid – prices are becoming too high for the average person to afford and too low to produce it. Hence the diminshing supply which makes the prices even higher in theory.

            Years ago I dated a woman who was struggling financially. She was a school teacher and was wanting me to help her payoff her car ($7500 if I remember right). I don’t make much more than the average school teacher but I do save and live frugally so I had it. I said it’s only $7500 so it should be easy to payoff. Her response was it might as well be 75 million.

            The point is the modelers don’t get is that once something becomes unaffordable to the average bear either the price will have to come down (which for now it seems to be doing / trying to) or no one is going to use it or can purchase it.

            It is easier to produce a nice graph than squeeze water out of rocks or in our case squeeze oil out of rocks 4000 feet under the earth.

            (For those wondering I didn’t help payoff the car and she broke up with me not long after – the next woman I dated I married and bought her a car so I’m still out $).

            Anyhoo, enjoy the quiet before the storm – it’s going to be a mother F’er.

          • Artleads says:

            Low energy affects supply and demand, so shortages don’t necessarily lead to high prices. Everybody should pin that on the wall.

  8. adonis says:

    i also heard that China is tripling their Navy fleet compared to the US obviously preparing for the inevitable War between them

  9. revoranger says:

    What is your vitae Gail? Just curious. It almost reads that you believe that energy must be.wasted to continue global progress. One chart you called it energy use when it actually showed only oil. What if I told your audience here you don’t have that long term luxury. The wells are going for even more diminished returns and one shale oil and gas engineer said this ride will be over soon.

    • I come with a financial background, through my training and work as a casualty actuary. I have been concerned about the oil and energy situation since 2005, and left actuarial consulting in 2007 to work full time on the issue. I have learned a great deal about a wide variety of subjects from many different sources since that time. I wrote for and was editor at The Oil Drum for several years. In this capacity, I learned a great deal about energy related issues. Commenters on this website have added to the mix.

      I also know how to look at online data, and make little exhibits from it that show relationships that many researchers miss. Several research organizations have invited me to give presentations of my work to them, and I have written up some of my work for academic publishers. I have also traveled quite a bit on vacations, to see close up how the system seems to work in a number of countries. I have corresponded with researchers from a variety of fields. I have the ability to pull together findings from many fields that many conventional researchers are lacking.

      You say, “One chart you called it energy use when it actually showed only oil.” Please point this out to me, and I will fix it. I try to get my labeling correct. I suppose I could miss something sometimes, but usually I have enough knowledgeable commenters that they will point out an error to me.

      I very much agree that the shale ride will soon be over. If we could get the price up to $300 or $500 per barrel, the shale ride could go on endlessly, but we cannot get the price to a high level, and keep it there. This is the fundamental problem. Prices are set by the laws of physics. They cannot rise higher than what can be supported by the aggregate demand of the consumers and businesses in the world. If there is too much wage disparity, it tends to bring prices down because the many poor consumers around the world cannot afford finished goods made with energy products, such as homes and automobiles.

  10. Harry McGibbs says:

    “…warning signs are flashing that another debt crisis is approaching, with concerns being raised not only by development campaign groups but by the International Monetary Fund and the World Bank. The IMF says 40% of low-income countries are either in debt distress or at high risk of being so. The Bank says debt in poor countries is a “rising vulnerability”.

    “Explaining how the world came to be on the brink of debt crisis 2.0 is relatively simple. It all began in the depths of the financial crisis just over a decade ago, when the response to the threat of a second Great Depression led to interest rates being slashed, to central banks boosting the supply of money through quantitative easing (QE), and to countries supporting growth through packages of tax cuts and public spending.

    “The biggest such fiscal package by far was announced by Beijing and it was instrumental not only in turning round the Chinese economy but also in hastening recovery elsewhere. China’s exceptionally high growth rates meant it needed oil, industrial metals and raw materials, and this was a boon to those developing countries rich in commodities…

    “Poor countries, assuming that the commodity boom would go on forever, borrowed in foreign currencies…

    “If another debt crisis does erupt, the international community is not well placed to deal with it. “

    https://www.theguardian.com/business/2019/apr/28/g20-must-heed-global-debt-warnings-to-stave-off-another-crisis

    • Harry McGibbs says:

      “A decade ago, in the midst of one of the worst financial crises in history, a white knight appeared. An enormous Chinese cash injection helped the world economy escape some of the worst pain from the credit crunch. It was a massive fiscal expansion, worth an estimated 7pc of Chinese GDP. Combined with interest rate cuts, it restarted the Chinese economic engine, helping revive others at the same time.

      “On the brink of another downturn, a further rescue attempt arrived, as interest rates were slashed, dropping from 6.4pc to 4.7pc in 2015. Lending boomed once more.

      “Now the world economy is wobbling again.”

      https://www.telegraph.co.uk/business/2019/04/28/chinas-stimulus-can-save-world-economy/

      • World economic growth is slowing. China is especially having a problem, despite what it reports in its (highly manipulated) reported GDP numbers. The question is how long the debt Ponzi Scheme can keep growing.

    • Harry McGibbs says:

      “If we find ourselves in a really serious downturn and conventional measures don’t offer any prospect of success, then it would be defensible to ward off an economic disaster by implementing a money-financed fiscal expansion [MMT].

      “But there are severe risks attached to such an approach.”

      https://www.telegraph.co.uk/business/2019/04/29/taboo-should-broken-extreme-circumstances/

      • For example, if Quantitative Tightening is causing a severe problem, and we hope that MMT will somehow offset it.

        • Yes, the Ponzi will get only way bigger..

          • Harry McGibbs says:

            MMT has been popping up more and more in the news of late – the hive mind preparing itself for its next financial leap of faith, as it continues trying to outwit the laws of physics.

            • I guess they attempt it full head on, resulting in massive volatile triage which in turn and to surprise of many planners folds even few of the former core IC hub countries – regions with it.. But other hubs would soldier on for a while, obviously on different footprint, less frivolous opulence like private carz, cheap vacation flights, overflowing fridges etc..

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