Rethinking Renewable Mandates

Powering the world’s economy with wind, water and solar, and perhaps a little wood sounds like a good idea until a person looks at the details. The economy can use small amounts of wind, water and solar, but adding these types of energy in large quantities is not necessarily beneficial to the system.

While a change to renewables may, in theory, help save world ecosystems, it will also tend to make the electric grid increasingly unstable. To prevent grid failure, electrical systems will need to pay substantial subsidies to fossil fuel and nuclear electricity providers that can offer backup generation when intermittent generation is not available. Modelers have tended to overlook these difficulties. As a result, the models they provide offer an unrealistically favorable view of the benefit (energy payback) of wind and solar.

If the approach of mandating wind, water, and solar were carried far enough, it might have the unfortunate effect of saving the world’s ecosystem by wiping out most of the people living within the ecosystem. It is almost certain that this was not the intended impact when legislators initially passed the mandates.

[1] History suggests that in the past, wind and water never provided a very large percentage of total energy supply.

Figure 1. Annual energy consumption per person (megajoules) in England and Wales 1561-70 to 1850-9 and in Italy 1861-70. Figure by Tony Wrigley, Cambridge University.

Figure 1 shows that before and during the Industrial Revolution, wind and water energy provided 1% to 3% of total energy consumption.

For an energy source to work well, it needs to be able to produce an adequate “return” for the effort that is put into gathering it and putting it to use. Wind and water seemed to produce an adequate return for a few specialized tasks that could be done intermittently and that didn’t require heat energy.

When I visited Holland a few years ago, I saw windmills from the 17th and 18th centuries. These windmills pumped water out of low areas in Holland, when needed. A family would live inside each windmill. The family would regulate the level of pumping desired by adding or removing cloths over the blades of the windmill. To earn much of their income, they would also till a nearby plot of land.

This overall arrangement seems to have provided adequate income for the family. We might conclude, from the inability of wind and water energy to spread farther than 1% -3% of total energy consumption, that the energy return from the windmills was not very high. It was adequate for the arrangement I described, but it didn’t provide enough extra energy to encourage greatly expanded use of the devices.

[2] At the time of the Industrial Revolution, coal worked vastly better for most tasks of the economy than did wind or water.

Economic historian Tony Wrigley, in his book Energy and the English Industrial Revolution, discusses the differences between an organic economy (one whose energy sources are human labor, energy from draft animals such as oxen and horses, and wind and water energy) and an energy-rich economy (one that also has the benefit of coal and perhaps other energy sources). Wrigley notes the following benefits of a coal-based energy-rich economy during the period shown in Figure 1:

  • Deforestation could be reduced. Before coal was added, there was huge demand for wood for heating homes and businesses, cooking food, and for making charcoal, with which metals could be smelted. When coal became available, it was inexpensive enough that it reduced the use of wood, benefiting the environment.
  • The quantity of metals and tools was greatly increased using coal. As long as the source of heat for making metals was charcoal from trees, the total quantity of metals that could be produced was capped at a very low level.
  • Roads to mines were greatly improved, to accommodate coal movement. These better roads benefitted the rest of the economy as well.
  • Farming became a much more productive endeavor. The crop yield from cereal crops, net of the amount fed to draft animals, nearly tripled between 1600 and 1800.
  • The Malthusian limit on population could be avoided. England’s population grew from 4.2 million to 16.7 million between 1600 and 1850. Without the addition of coal to make the economy energy-rich, the population would have been capped by the low food output from the organic economy.

[3] Today’s wind, water, and solar are not part of what Wrigley called the organic economy. Instead, they are utterly dependent on the fossil fuel system.

The name renewables reflects the fact that wind turbines, solar panels, and hydroelectric dams do not burn fossil fuels in their capture of energy from the environment.

Modern hydroelectric dams are constructed with concrete and steel. They are built and repaired using fossil fuels. Wind turbines and solar panels use somewhat different materials, but these too are available only thanks to the use of fossil fuels. If we have difficulty with the fossil fuel system, we will not be able to maintain and repair any of these devices or the electricity transmission system used for distributing the energy that they capture.

[4] With the 7.7 billion people in the world today, adequate energy supplies are an absolute requirement if we do not want population to fall to a very low level. 

There is a myth that the world can get along without fossil fuels. Wrigley writes that in a purely organic economy, the vast majority of roads were deeply rutted dirt roads that could not be traversed by wheeled vehicles. This made overland transport very difficult. Canals were used to provide water transport at that time, but we have virtually no canals available today that would serve the same purpose.

It is true that buildings for homes and businesses can be built with wood, but such buildings tend to burn down frequently. Buildings of stone or brick can also be used. But with only the use of human and animal labor, and having few roads that would accommodate wheeled carts, brick or stone homes tend to be very labor-intensive. So, except for the very wealthy, most homes will be made of wood or of other locally available materials such as sod.

Wrigley’s analysis shows that before coal was added to the economy, human labor productivity was very low. If, today, we were to try to operate the world economy using only human labor, draft animals, and wind and water energy, we likely could not grow food for very many people. World population in 1650 was only about 550 million, or about 7% of today’s population. It would not be possible to provide for the basic needs of today’s population with an organic economy as described by Wrigley.

(Note that organic here has a different meaning than in “organic agriculture.” Today’s organic agriculture is also powered by fossil fuel energy. Organic agriculture brings soil amendments by truck, irrigates land and makes “organic sprays” for fruit, all using fossil fuels.)

[5] Wind, water and solar only provided about 11% of the world’s total energy consumption for the year 2018. Trying to ramp up the 11% production to come anywhere close to 100% of total energy consumption seems like an impossible task.

Figure 2. World Energy Consumption by Fuel, based on data of 2019 BP Statistical Review of World Energy.

Let’s look at what it would take to ramp up the current renewables percentage from 11% to 100%. The average growth rate over the past five years of the combined group that might be considered renewable (Hydro + Biomass etc + Wind&Solar) has been 5.8%. Maintaining such a high growth rate in the future is likely to be difficult because new locations for hydroelectric dams are hard to find and because biomass supply is limited. Let’s suppose that despite these difficulties, this 5.8% growth rate can be maintained going forward.

To increase the quantity from 2018’s low level of renewable supply to the 2018 total energy supply at a 5.8% growth rate would take 39 years. If population grows between 2018 and 2057, even more energy supply would likely be required. Based on this analysis, increasing the use of renewables from a 11% base to close to a 100% level does not look like an approach that has any reasonable chance of fixing our energy problems in a timeframe shorter than “generations.”

The situation is not quite as bad if we look at the task of producing an amount of electricity equal to the world’s current total electricity generation with renewables (Hydro + Biomass etc + Wind&Solar); renewables in this case provided 26% of the world’s electricity supply in 2018.

Figure 3. World electricity production by type, based on data from 2019 BP Statistical Review of World Energy.

The catch with replacing electricity (Figure 3) but not energy supplies is the fact that electricity is only a portion of the world’s energy supply. Different calculations give different percentages, with electricity varying between 19% and 43% of total energy consumption.1 Either way, substituting wind, water and solar in electricity production alone does not seem to be sufficient to make the desired reduction in carbon emissions.

[6] A major drawback of wind and solar energy is its variability from hour-to-hour, day-to-day, and season-to-season. Water energy has season-to-season variability as well, with spring or wet seasons providing the most electricity.

Back when modelers first looked at the variability of electricity produced by wind, solar and water, they hoped that as an increasing quantity of these electricity sources were added, the variability would tend to offset. This happens a little, but not nearly as much as one would like. Instead, the variability becomes an increasing problem as more is added to the electric grid.

When an area first adds a small percentage of wind and/or solar electricity to the electric grid (perhaps 10%), the electrical system’s usual operating reserves are able to handle the variability. These were put in place to handle small fluctuations in supply or demand, such as a major coal plant needing to be taken off line for repairs, or a major industrial client reducing its demand.

But once the quantity of wind and/or solar increases materially, different strategies are needed. At times, production of wind and/or solar may need to be curtailed, to prevent overburdening the electric grid. Batteries are likely to be needed to help ease the abrupt transition that occurs when the sun goes down at the end of the day while electricity demand is still high. These same batteries can also help ease abrupt transitions in wind supply during wind storms.

Apart from brief intermittencies, there is an even more serious problem with seasonal fluctuations in supply that do not match up with seasonal fluctuations in demand. For example, in winter, electricity from solar panels is likely to be low. This may not be a problem in a warm country, but if a country is cold and using electricity for heat, it could be a major issue.

The only real way of handling seasonal intermittencies is by having fossil fuel or nuclear plants available for backup. (Battery backup does not seem to be feasible for such huge quantities for such long periods.) These back-up plants cannot sit idle all year to provide these services. They need trained staff who are willing and able to work all year. Unfortunately, the pricing system does not provide enough funds to adequately compensate these backup systems for those times when their services are not specifically required by the grid. Somehow, they need to be paid for the service of standing by, to offset the inevitable seasonal variability of wind, solar and water.

[7] The pricing system for electricity tends to produce rates that are too low for those electricity providers offering backup services to the electric grid.

As a little background, the economy is a self-organizing system that operates through the laws of physics. Under normal conditions (without mandates or subsidies) it sends signals through prices and profitability regarding which types of energy supply will “work” in the economy and which kinds will simply produce too much distortion or create problems for the system.

If legislators mandate that intermittent wind and solar will be allowed to “go first,” this mandate is by itself a substantial subsidy. Allowing wind and solar to go first tends to send prices too low for other producers because it tends to reduce prices below what those producers with high fixed costs require.2

If energy officials decide to add wind and solar to the electric grid when the grid does not really need these supplies, this action will also tend to push other suppliers off the grid through low rates. Nuclear power plants, which have already been built and are adding zero CO2 to the atmosphere, are particularly at risk because of the low rates. The Ohio legislature recently passed a $1.1 billion bailout for two nuclear power plants because of this issue.

If a mandate produces a market distortion, it is quite possible (in fact, likely) that the distortion will get worse and worse, as more wind and solar is added to the grid. With more mandated (inefficient) electricity, customers will find themselves needing to subsidize essentially all electricity providers if they want to continue to have electricity.

The physics-based economic system without mandates and subsidies provides incentives to efficient electricity providers and disincentives to inefficient electricity suppliers. But once legislators start tinkering with the system, they are likely to find a system dominated by very inefficient production. As the costs of handling intermittency explode and the pricing system gets increasingly distorted, customers are likely to become more and more unhappy.

[8] Modelers of how the system might work did not understand how a system with significant wind and solar would work. Instead, they modeled the most benign initial situation, in which the operating reserves would handle variability, and curtailment of supply would not be an issue. 

Various modelers attempted to figure out whether the return from wind and solar would be adequate, to justify all of the costs of supporting it. Their models were very simple: Energy Out compared to Energy In, over the lifetime of a device. Or, they would calculate Energy Payback Periods. But the situation they modeled did not correspond well to the real world. They tended to model a situation that was close to the best possible situation, one in which variability, batteries and backup electricity providers were not considerations. Thus, these models tended to give a far too optimistic estimates of the expected benefit of intermittent wind and solar devices.

Furthermore, another type of model, the Levelized Cost of Electricity model, also provides distorted results because it does not consider the subsidies needed for backup providers if the system is to work. The modelers likely also leave out the need for backup batteries.

In the engineering world, I am told that computer models of expected costs and income are not considered to be nearly enough. Real-world tests of proposed new designs are first tested on a small scale and then at progressively larger scales, to see whether they will work in practice. The idea of pushing “renewables” sounded so good that no one thought about the idea of testing the plan before it was put into practice.

Unfortunately, the real-world tests that Germany and other countries have tried have shown that intermittent renewables are a very expensive way to produce electricity when all costs are considered. Neighboring countries become unhappy when excess electricity is simply dumped on the grid. Total CO2 emissions don’t necessarily go down either.

[9] Long distance transmission lines are part of the problem, not part of the solution. 

Early models suggested that long-distance transmission lines might be used to smooth out variability, but this has not worked well in practice. This happens partly because wind conditions tend to be similar over wide areas, and partly because a broad East-West mixture is needed to even-out the rapid ramp-down problem in the evening, when families are still cooking dinner and the sun goes down.

Also, long distance transmission lines tend to take many years to permit and install, partly because many landowners do not want them crossing their property. In some cases, the lines need to be buried underground. Reports indicate that an underground 230 kV line costs 10 to 15 times what a comparable overhead line costs. The life expectancy of underground cables seems to be shorter, as well.

Once long-distance transmission lines are in place, maintenance is very fossil fuel dependent. If storms are in the area, repairs are often needed. If roads are not available in the area, helicopters may need to be used to help make the repairs.

An issue that most people are not aware of is the fact that above ground long-distance transmission lines often cause fires, especially when they pass through hot, dry areas. The Northern California utility PG&E filed for bankruptcy because of fires caused by its transmission lines. Furthermore, at least one of Venezuela’s major outages seems to have been related to sparks from transmission lines from its largest hydroelectric plant causing fires. These fire costs should also be part of any analysis of whether a transition to renewables makes sense, in terms of either cost or energy returns.

[10] If wind turbines and solar panels are truly providing a major net benefit to the economy, they should not need subsidies, even the subsidy of going first.

To make wind and solar electricity producers able to compete with other electricity providers without the subsidy of going first, these providers need a substantial amount of battery backup. For example, wind turbines and solar panels might be required to provide enough backup batteries (perhaps 8 to 12 hours’ worth) so that they can compete with other grid members, without the subsidy of going first. If it really makes sense to use such intermittent energy, these providers should be able to still make a profit even with battery usage. They should also be able to pay taxes on the income they receive, to pay for the government services that they are receiving and hopefully pay some extra taxes to help out the rest of the system.

In Item [2] above, I mentioned that when coal mines were added in England, roads to the mines were substantially improved, befitting the economy as a whole. A true source of energy (one whose investment cost is not too high relative to its output) is supposed to be generating “surplus energy” that assists the economy as a whole. We can observe an impact of this type in the improved roads that benefited England’s economy as a whole. Any so-called energy provider that cannot even pay its own fair share of taxes acts more like a leech, sucking energy and resources from others, than a provider of surplus energy to the rest of the economy.


In my opinion, it is time to eliminate renewable energy mandates. There will be some instances where renewable energy will make sense, but this will be obvious to everyone involved. For example, an island with its electricity generation from oil may want to use some wind or solar generation to try to reduce its total costs. This cost saving occurs because of the high price of oil as fuel to make electricity.

Regulators, in locations where substantial wind and/or solar has already been installed, need to be aware of the likely need to provide subsidies to backup providers, in order to keep the electrical system operating. Otherwise, the grid will likely fail from lack of adequate backup electricity supply.

Intermittent electricity, because of its tendency to drive other providers to bankruptcy, will tend to make the grid fail more quickly than it would otherwise. The big danger ahead seems to be bankruptcy of electricity providers and of fossil fuel producers, rather than running out of a fuel such as oil or natural gas. For this reason, I see little reason for the belief by many that electricity will “last longer” than oil. It is a question of which group is most affected by bankruptcies first.

I do not see any real reason to use subsidies to encourage the use of electric cars. The problem we have today with oil prices is that they are too low for oil producers. If we want to keep oil production from collapsing, we need to keep oil demand up. We do this by encouraging the production of cars that are as inexpensive as possible. Generally, this will mean producing cars that operate using petroleum products.

(I recognize that my view is the opposite one from what many Peak Oilers have. But I see the limit ahead as being one of too low prices for producers, rather than too high prices for consumers. The CO2 issue tends to disappear as parts of the system collapse.)


[1] BP bases its count on the equivalent fossil fuel energy needed to create the electricity; IEA counts the heat energy of the resulting electrical output. Using BP’s way of counting electricity, electricity worldwide amounts to 43% of total energy consumption. Using the International Energy Agency’s approach to counting electricity, electricity worldwide amounts to only about 19% of world energy consumption.

[2] In some locations, “utility pricing” is used. In these cases, pricing is set in a way needed to provide a fair return to all providers. With utility pricing, intermittent renewables would not be expected to cause low prices for backup producers.

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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1,461 Responses to Rethinking Renewable Mandates

  1. It's different this time around....NO says:

    Dollar diplomacy can only go so far.. YahooFINANCE
    Putin’s Pledge to Ditch the Dollar Is Slowly Becoming a Reality
    Andrey Biryukov
    BloombergAugust 3, 2019, 11:00 PM EDT

    (Bloomberg) — Russia is acting on a pledge by President Vladimir Putin to shrink the role of dollar in international trade as tensions sour between Washington and Moscow.
    The shift is part of a strategy to “de-dollarize” the Russian economy and lower its vulnerability to U.S. sanctions. But while the central bank was able to quickly dump half of its dollar holdings last year, progress in trade has been slow due to ingrained use of the greenback for many transactions.
    The share of euros in Russian exports increased for a fourth straight quarter at the expense of the U.S. currency, according to central bank data. The common currency has almost overtaken the dollar in trade with the European Union and China and trade in rubles with India surged. The dollar’s share in import transactions remained unchanged at about a third.
    “There’s been a strong incentive to change, not just for Russia but for its trading partners too,” said Dmitry Dolgin, an economist at ING Bank in Moscow. “The European Union is also now facing trade pressure from the U.S.” pushing them to try to reduce dependence on the dollar, he said.
    The euro came close to replacing the dollar as the currency of choice for Russian exports to the European Union, with its share climbing to 42% in the first quarter from 32% a year earlier

    There will be a Dollar crisis….soon. I expect…LOL

    • Yes, but even this -minor- Russian case (long time in the making to boot) has yet to be fully digested (+analyzed) by the other players be it Russian direct partners and quasi allies as well as by those sort of more distant and cooperating neutrals (lukewarm allies) from one of the Gulf factions (eventually going on board all of them though) and so on.. The problem or chief concern of the U$D is no longer the USA proper, it has simply evolved by many past events into this global financial superstructure on shaky foundation; the wealthy and powerful in whatever part of the world have their various reform, second thought and bail out plans about actively nudging and navigating the way of the future, but still everybody is moving slowly and cautiously forward.. The long process will be likely punctuated by more than just one single event (crisis)..

  2. Most people here, other than worldofhanuman and Keith, do not seem to understand that our financial system is very, very, very flexible and very, very, very efficient. It is run by the greatest brains the earth ever produced.

    If necessary, entire regions will be triaged away. It is programmed that way. Sorry, but that is the reality.

    The chief nodes (USA, UK and most of western europe – whether Japan is included is a big question) will remain safe as long as possible.

    2008 was the decisive moment and Hank Paulson stopped it. I have read Hank’s autobiography On the Brink. If necessary he was going to bring martial law to stop any unrests.

    Sorry, after that the financial system has become kind of secure. It will remain so for at least 80 years, and during that period Keith’s solar power stations will be built.

    • CTG says:

      I sure hope you are right but I doubt it. You may talk a lot but I doubt you really know what you are talking.

    • It would be nice if you were right, but I am afraid you won’t be.

      The best we could hope for might be, it would seem like, is a whole lot of different new currencies that are not accepted by anyone else. I don’t think that they would be backed by much of anything.

      • hkeithhenson says:

        “they would be backed by much of anything.”

        Consider Bitcoin, back by nothing except people agreeing that it has value.

        • endofthestatusquo says:

          Bitcoin is certainly backed up by other things besides the agreement that it has value ie: the large amount of energy needed to mine the Bitcoins as well as the continued existence of the electrical grid to allow exchange.

          • hkeithhenson says:

            “Bitcoin is certainly backed up by other things besides the agreement that it has value ie: the large amount of energy needed to mine the Bitcoins as well as the continued existence of the electrical grid to allow exchange.”

            If you insist. However, a bitcoin is just a string of numbers. Once mined, it does not represent energy you can draw on. It is just an artificially scarce number that only has significance because people have agreed that it has value and that you can exchange them. The Net and the grid only verify that you are not trying to slip in a fake coin, something that *could* be done by hand.

            • endofthestatusquo says:

              “The Net and the grid only verify that you are not trying to slip in a fake coin, something that *could* be done by hand.”

              That just proves the point that Bitcoin’s value to people is backed by more than just a random agreement that it has value: without the internet or grid their would be no purpose to bitcoin at all since one could no verify that one actually has the bitcoins one claims to have and consequently the value would plummet to nothing.

        • Tim Groves says:

          I would say that the value of anything in a system of exchange is backed by nothing except the people participating in the exchange agreeing that it has value.

          Am I missing something?

      • Artleads says:

        Thanks. You had mentioned long ago that some cash on hand made sense. But now you seem to go further to suggest that cash which isn’t backed up internationally might work for some things, I would imagine in a messy way with enormous gaps…

        • We do need some way to facilitate barter. A local currency might work for this.

          The big issue, however, is the need for a way to facilitate promises. This would generally be debt, or something akin to debt. A local merchant might give short-term credit to someone who brings goods to be sold, and also purchases goods at the same place. But obtaining credit to buy something bigger would likely be very difficult to facilitate.

          • SteveS says:

            Something to be on the watch out for is what happens to our large credit-rating agencies. They play a pivotal role in our economy, yet they are becoming villains as of late. Unfortunately, we probably need them.

    • endofthestatusquo says:

      Your views on these matters are colored by a slavish and worshipful view of the rich. You claim the financial system to be “run by the greatest brains the earth ever produced.” Even were that extremely arguable claim true that doesn’t mean that those “big brains” are omnipotent gods who are able to overcome all of the problems discussed here by Gail and others, nor is the employment of martial law some kind of magical panacea as you seem to think. You should probably get a better understanding of economics, physics, political science and/or engineering and avoid making evidence free assertions before making sweeping definitive declarations about the future.

      • hkeithhenson says:

        “sweeping definitive declarations about the future.”

        It’s is no worse than screaming (in FE mode) that we are doomed.

        • endofthestatusquo says:

          But I think most “Doomers” here at least attempt to make objective and scientific arguments. Kulm is just here to root for the genocide of people who he deems to be unworthy of existence (everybody except the super-rich).

          • Unfortunately, there is at least a little truth in the view Kulm takes. Nature does try to allow some group to continue by, in some sense, “freezing out” those least well adapted to the current conditions first. The wealth (goods and services) tends to rise to the top, in a sense, like steam when water is heated.

            We don’t know how this works out. Is it whole countries, like Venezuela and Haiti, that are frozen out first? Or is the problem with a subset of the world’s young people, who become depressed with the current situation?

            I have a hard time thinking that the wealthy can succeed on their own, simply because they, as a group, do not have the skills needed to operate all of the complex systems we have in place today. Also, “economies of scale” are extremely important. A shrinking business quickly ends up with too much overhead. Also, with commodities, the big issue is keeping prices high enough. In a shrinking economy, commodity prices tend to fall to low to keep the system operating.

            • hkeithhenson says:

              “Nature does try to allow some group to continue by, in some sense, “freezing out” those least well adapted to the current conditions first.”

              Clark makes the case (and backs it up with 10,000 probated wills) that the rich genetically replaced the poor in the UK. Many, perhaps most, of our current problems such as crazy drive and excessive greed stem from the genetic selection from around 1250 to 1800.

              “whole countries, like Venezuela and Haiti,”

              I doubt the data is available, but I would sure like to know what what the birth rate is in Venezuela.

            • endofthestatusquo says:

              “I have a hard time thinking that the wealthy can succeed on their own, simply because they, as a group, do not have the skills needed to operate all of the complex systems we have in place today. ”

              I agree. There would need to be a fully automated self repairing and self replicating AI system controlling production and the supply chain to support the richest percentile at anywhere near their current lifestyles, let alone at a level to allow for rapid advances in technology envisioned by Keith and Kulm, after the extermination of all of the worlds workers. There is no evidence that such a system exists or is anywhere close to coming into existence.

          • hkeithhenson says:

            “make objective and scientific arguments”

            I don’t see a lot of that. But my bigger objection is that there is not much discussion about solutions. We could, for example, freeze half the population. Frozen people don’t use much energy and don’t eat. Is that better than half the population dying in famines? It depends on the expectation that nanotech or something like it will be developed to bring them out of the frozen state.

            • DJ says:

              We could also burn half population. Probably takes less energy in the long run than keeping them frozen .

            • SteveS says:

              The tendency towards authoritarianism will probably become very strong. Perhaps a permanent kind of war-footing will take hold; it could happen both federally or more locally. That might actually not be a bad outcome, all things considered.

              Maybe prices for many items just go away and in desperation survivors just look to an authoritarian government to make choices and provide for them. It could work for a while. Those decisions would inevitably at some point look bad to many, because the pie would shrink over time, and so then that phase of patching-over completes, probably in a terrible violent mess, like some leader trying to freeze half the population.

        • Niko B says:

          you are doomed! So am I.
          you are going to die! So am I.
          it is just when doom hits that is unknown.
          tomorrow, next year, a decade.
          Most certainly I will forecast that no one reading this today 4th August 2019 will be alive in 120 years. Your all doomed.
          Till then enjoy the ride.

          • hkeithhenson says:

            “will be alive in 120 years. You’re all doomed.”

            I don’t think you understand who you are talking to. Try here:

            I (and all of you) *may* be doomed, but while it may be likely, it is not certain.

            PS fixed your grammar.

            • Niko B says:

              delusion runs deep

            • Rodster says:

              “delusion runs deep”

              I’m waiting for the 1st person to be thawed and brought back to life after 10 yrs inside the frozen chamber, if it’s even possible because so far Cryonics is nothing more than snake oil. And really with the mess we have made on this planet, what kind of planet would they be brought back too? With a potential collapse in the system would the chamber temperature remain stable?

              That’s the thing that always gets me about the super rich building bunkers and fallout shelter just in case planetary Armageddon takes place. It’s like dropping a 20lb poop bag on your front doorstep then proceeding to step in it and falling to the ground to make earth angels.

              That’s the part where the elite seem to miss.

            • hkeithhenson says:

              “I’m waiting for the 1st person to be thawed and brought back to life”

              We can’t do it with whole animals yet, but there are a few million people around who were frozen between 8 cell and 500 cell embryos Given nanotechnology, it would be close to trivial to patch up what killed them and the freezing damage.

              “collapse in the system”

              And thawing them out would certainly be the end of the patients. However, they would be no worse off than if they had been buried. Cryonics is an extreme option. But if you need it, you don’t have other choices.

            • snarf says:

              I am the mostest special snowflake in the whole galaxy. The universe wont allow me to die. The universe is just and fair and smart. It know that a ending for me would be a loss of unthinkable proportions.

            • Maybe not the universe. More likely, the Force that somehow provides the continuing flows of energy that allows the Universe to continue to expand, and the dissipative structures that collapse to be replaced by new dissipative structures.

            • hkeithhenson says:

              ” The universe is just and fair and smart.”

              Not yet, but the AI community works on this problem. As they say, “there are no gods–yet.”

      • These big brains are supported by fast computers of the latest tech. They may not be omnipotent but they can draw from a huge database. Also, martial law is much more efficient nowdays, with farther reaches provided by drones ans surveillance tools. In the old days nobody could find out what happened in the closed doors but now with enough tools anyone can do that. The game has changed; it is not what it was on, even, 2010.

        • endofthestatusquo says:

          “These big brains are supported by fast computers of the latest tech. They may not be omnipotent but they can draw from a huge database.”

          The latest tech doesn’t make them omnipotent or omniscient either.
          “Also, martial law is much more efficient nowdays, with farther reaches provided by drones ans surveillance tools. ”

          Being more effective still doesn’t equate to omniscience or omnipotence and all of this technology depends upon high EROI energy which seems to be on its way out. You also assume that drones cannot be defended against.

          “In the old days nobody could find out what happened in the closed doors but now with enough tools anyone can do that. ”

          This is laughably wrong.

    • hkeithhenson says:

      ” and during that period Keith’s solar power stations will be built.”

      I appreciate the confidence. However, a couple of things, I am a relatively minor player in the power satellite world. I am mostly known in the last ten years as the guy who makes a case that the advocates have to pay attention to the economics (largely lift cost) and certain other problems like space junk.

      The other thing is that I am quite uncertain about what the future will bring. I have written about the potentials and what *could* happen within what we think the universe will allow. The future could get very strange indeed. For example, by the end of this century, some people alive today might upload and experience 50 million years of subjective time. If you want pointers, ask.

      I must say that your statement “our financial system is very, very, very flexible” has a lot of insight. As you point out, it survived 2008.

    • The idea of the system separating (abandoning) its branches first and eventually eating its guts till the pulse is flowing seems a sound and realistic one. because it’s the very demonstrably natural one process, I’d perhaps not put such a longish longevity span on it meaning ~80yrs though.. If I may repeat by mid 2020s the forking road ahead (fast or punctuated collapse in key nodes) will be likely more identifiable in presented options (for us here) at least..

      • Xabier says:

        The long-term youth unemployed (and educated but poorly-paid employed) in whole regions of Spain, Italy, Portugal,Greece, etc have already been effectively jettisoned from the system. They hear only boasts as to the Euro delivering ‘peace and prosperity’, while nothing is done for them.

        • Tim Groves says:

          Effectively they’ve been “frozen”—not in the way Keith was envisioning—but frozen out of the economic system.

        • Young people in the US are not doing very well either.

          Some try to go to the university and up with a whole lot of students debt. The ones without advanced degrees find fewer jobs available. Those that are available tend to pay poorly, with irregular hours. There rarely is public transportation available. By the time someone pays for a vehicle, the cost of supporting the car plus the rent on an apartment leave practically nothing for other expenses.

    • SteveS says:

      Unfortunately, the core will probably hurt quite a bit in the coming decade, it may just take longer to really get to it. Policymakers will get backed into a corner, and they’ll have to try things they wouldn’t otherwise try, and they’ll run up against limits. Parts of the US government are now fighting against each other–for instance, Trump and the Federal Reserve. They could very well end up discrediting and destroying each other, being forced to try things they wouldn’t otherwise do, because the economic and financial system is becoming destabilized.

      A lot will probably hinge on whether monetary authorities and governments can retain confidence, or revive confidence after a shock. It is almost certain there will be some loss of confidence in the US. Whether it’s total is another question. I tend to doubt it, because out of necessity some parts of our government will need to operate. For instance, if there is any federal government left at all, the military will continue to safeguard nuclear weapons. Even after Nazi Germany was invaded and taken over, a government of some kind operated; the government of the Russian Federation didn’t pay its employees in the 1990s, but it continued to operate in some capacity. A federal government could still exist, just be much weakened. Parts of the US could secede or create their own currencies. California would seem to be the most likely candidate for that.

      • But with each such cycle on instability/crisis we are pushed into a hard(er) corner.
        For example Imagine ~1840s-1920s-1960s type of discontent periods, well if you managed to disperse out the rebellious employees (not blocking the site anymore) – it was still somewhat possible to hire and invite handful new specialist guys from near abroad to kick start the whole production again and start hiring the manual laborers seamlessly. This tends to be almost impossible today, because most of the factory/processing lines run on continuous complex streams of expertly maintained/swapped out hi-tech parts and so on.. The human labor is often remaining there only because temporarily higher cost for a robot operator at that particular place. So we should expect from some near-mid term threshold very nasty ricocheting effects. Few years ago it was very popular in the doomero/collapse scene focus on recent C/S American examples in which industrialized countries very rapidly degraded in many systemic functions. I guess we are into similar pathways with even quicker feedback loops.. As for example Harry today’s linked some new ~30% level SouthKorean-Japan trade ankle kicking that’s starts to sound very serious for the industrial countries flying on very high complexity level.

        • SteveS says:

          You are right, it gets tougher to maintain fossil-fuel based civilization after each wave. New measures need to be taken. This last round, for instance, we fired up hydraulic fracturing to continue the trend; it has many negatives to it, which is probably why it didn’t occur earlier. It’s interesting that probably few people, prior to 2008, predicted this huge fracking boom to be fired up following what may be retrospectively seen as a first wave of crisis, of several that may undo the fossil fuel-based civilization.

          A single, very short-duration death blow (less than a decade) to literally ALL the technology of a two- to three-century civilization in one punch, without a period of intermission, just doesn’t seem to really have historical precedent. Not that I know of. If someone knows of an example, I’d be very interested in it. Many past civilizations that disappeared in around a decade apparently did so largely because of abrupt climate change. Climate change is beginning to put stress on our system (think: recent flooding in Midwest, pressure on crop yields), but extreme stresses such that it destroys the whole global fossil-fuel based civilization would seem to need to take some time to play out. This is one reason why I find collapse over the course of two or three waves more likely than a single, knock-out punch, in spite of the extremely high level of interdependence between modern economies.

          • I think that the recent flooding is at least partly the result of our trying to grow grains in would-be flood plains by using dams to try to direct the water elsewhere. This plan only work so long; eventually natural variation causes a problem.

            We tend to underestimate natural variation in climate. It has always fluctuated, but we have not recognized this partly because it is an inconvenient truth. We cannot count on the future being like the past, no matter what we humans do or do not do. This is a disturbing view, if someone is trying to build something that is supposed to have lasting value, such as a specialized farm.

            The big difference between now and the past is the interconnectedness of the economies and the financial system. It makes the overall system more vulnerable to collapse. Or perhaps only parts of the system will collapse, leaving parts standing; we just don’t know which parts.

            • SteveS says:

              I read an article that put a lot of fault on the Army Corps of Engineers. Basically it claimed that the Missouri River was by and large a man-made feature. I’m not sure how many people know that. I certainly didn’t. Flooding seems to have been worst in and around the largest rivers; but it was also impacted in Indiana and eastern Illinois, not near floodplains or large rivers, as well as central Iowa, for instance. Many farmers didn’t plant until very late because of it. I flew over Illinois, Iowa, and Kansas a month ago and I could see all the unplanted fields laying there scorched in the sun. It actually was really very shocking. In some sort of visceral way, you wanted to ask, what happened here?

              Some climate scientists recently claimed the European heat wave was 5 times more likely to occur than without global warming. But other events might be just as likely without it. Here is an article about it: Maybe in the future we will be able to determine with greater precision what events are and aren’t within the window of natural variability.

              I remember reading somewhere that climate change and economic collapse in history are like two sides of the same coin; you always find the latter with the former. If the energy picture doesn’t cause economic collapse; it may be that a changing climate does. Many major world cities will experience climate departure beginning in just over a decade–mid-latitudes first, then farther north and south. How long the rest of the global economy can stay stable with other parts falling apart is a good question.

            • If an economy is really growing rapidly, it can set aside large stores of grain. Then, a fair amount of climate fluctuation won’t matter.

              If the economy is right “on the edge” to begin with, it can set aside virtually nothing for a rainy day. Any little problem will push it over the edge.

  3. SteveS says:

    I have a question. Utilities in the northern parts of Indiana, where I live, are moving within the next decade to sourcing, for some utility companies, something like 80 percent from renewables. It is a dramatic move, particularly for a state that is obviously not very politically progressive and in 2018 ranked second in the nation in percent of electricity generated from coal. They are doing this, they say, because existing coal-fired powerplants are now much more expensive to operate than to provide energy from renewables.

    So, this might be considered a good example of cheaper renewables driving companies that provide the fossil fuels for electricity out of business very slowly through the pricing system, even as the coal companies are fighting the transition in the state legislature tooth-and-nail. It’s something mentioned often here.

    My question is, what might the utilities, who employ engineers and financial people, who think about the energy system they’re selling, be thinking here in terms of the sustainability of this situation into the future? (I don’t mean environmental sustainability, I mean literal sustainability–ability to do this indefinitely into the future.) If we need natural gas and coal companies as a constant in our system to support intermittent renewables, and to stabilize the grid, might they be assuming this non-intermittent source will always come from somewhere, just not themselves? If so, could this be a big part of the problem here? And could this issue be resolved through a central authority that basically guarantees the fossil fuel companies can continue to function and make a profit? For instance, it’s beginning to be proposed here and there in left-wing circles that nationalization of the fossil fuel industry would be an effective way to wind it down. Could you not do this but then actually subsidize them to ensure they support the renewable energy mix? In other words, subsidize the fossil fuel companies so the renewable companies can thrive, or, and this might be more important, at least appear to thrive, for a time?

    I understand that over the course of a short time, this may actually be unlikely to work because renewables may not actually provide sufficient EROEI, and eventually, and perhaps quickly, as your fossil fuel store winds down, you’ll have shortfalls in renewable production. But for the sake of argument, let’s pretend no one has that analysis quite straight these days; it is after all very controversial. The mindset of the utilities is interesting to me, because it seems to be at such odds with Gail’s theories. I tend to believe Gail’s ideas, but I have to believe at least some engineers out there are also bound to stop and wonder about these things, since it’s their profession. I also understand everyone has their niche, and it is very hard to put together all the pieces of the economy. But you would think that large utilities wouldn’t just walk unwittingly toward an obvious cliff. Maybe there an exception, but this trend seems to be picking up steam amongst utilities. Maybe the whole utility industry has a problem.

    Here are some articles about these utilities in Indiana.

    • It is all very strange. I think what Northern Indiana Public Service Co. (NIPSCO) wants to do is crazy, but there are certainly a lot of people pushing them in that direction. If only one utility is doing this, it is possible it would sort of work for a while, because they could get electricity from elsewhere, and they could export unwanted electricity elsewhere. After all, Germany set out in this crazy direction and it has taken a few years.

      There are an awfully lot of companies today that have financial difficulties. Fossil fuel prices are too low for coal companies, oil companies, and natural gas companies. “The grass might be greener on the other side of the street,” is a favorite view. Coal-fired electricity plants have problems too because they have added a whole lot of (expensive) new scrubber equipment in recent years, and rules keep changing, so even this isn’t enough.

      No one thinks about all of the real costs involved with trying to switch to renewables, or the fact that they don’t really scale up. The apples to oranges comparison of the selling price of solar energy (when available) seems very appealing. They haven’t figured out that letting solar go first is one of the problems.

      I noticed that NIPSO has a big Gas Service besides its electric service. In fact, its gas service seems to be bigger than its electric service. The only thing I can think of is that they want to expand their gas service as the expense of coal.

      This drama seems to play out in different ways across the country.

      • SteveS says:

        It’s tempting to think that this trend might be very key to the eventual dissipation of the dissipative structure. Forces within it are creating friction that could weaken it, maybe sort of like a hurricane coming onshore.

        I remember in one post concerning Japan you mentioned that 265 years was about as long we could expect a dissipative structure to last. I think the example was the Edo Period. That number was very interesting to me, and I had not seen or noticed it anywhere else before. If that is true, then we might start looking for where our current dissipative structure truly began. Most historians put the beginning of the Industrial Revolution in the 1760-1840 period. Signs that the US would truly move in the direction of independence emerged around 1762. What may be even more interesting is that in both those cases, there was transition, maturing into that trend. The eventual dissipation could be similar, with a period of transition before final termination.

        Back to renewables in Indiana, it would seem like lack of central planning could be a major problem here. Too much independent decision-making amongst utilities while they all use common infrastructure. We often think of centrally-planned economies as inefficient, the Soviet Union for example, but here we could have the case where the opposite, our price-based system, with many different participants all acting in their own interest, has a very big weakness. If problems emerge from this, there could be efforts to move toward more central planning of the energy economy. Simplification–fewer participants, fewer decision-makers–could be necessary to keep the machine working at all.

        • In many ways it takes more energy for central planning, rather than less. Thus it is unlikely that our current system will move toward central planning.

          I have noticed that in China, while there is central government, the planning is very loose, and local decision-makers have a lot of autonomy. This prevents the system from being too stifling, but it also leads to a situation where no one know knows how much debt there really is. Local governments use more and more debt, and guarantees of other debt, to accomplish what they are supposed to accomplish.

          I think that the tendency will be toward balkanization. Countries will break up into smaller parts. Perhaps these individual pieces will be more directed by a single leader and have more central planning.

          I am not sure if we should attach too much significance to 265 years in particular. The chart I made seemed to indicate about 265 years would be expected, based on an analysis of the eight societies that collapsed that Turchin analyzed. In Secular Cycles, the point is made that the typical length of a secular cycle is 200 to 300 years. The issue is, “How long does it take to outgrow the resource base?” This time is a little different because we are greatly ramping up the population growth rate at the same time we are ramping up our ability to add complexity to try to accommodate all of this additional energy in the economy.

          You are right though, if the Industrial Revolution began about 1750, and if past patterns hold, we should not be surprised if we hit a severe bottleneck about now.

          • Artleads says:

            In some Caribbean islands that were formerly British, the islands are divided into “parishes.” I’ve seen where each parish has a capital town, while some that are more prominent (for whatever reason) are designated as cities, having a mayor who is simultaneously chair of the “municipal corporation” that runs the entire parish. How the mayor is appointed can be byzantine beyond imagination. It would seem to make sense for those municipal corporation parishes to be run like the old Italian city states instead of the no-plan way they are run now.

          • SteveS says:

            It would be a bit sad if the US balkanized just because of energy decline. It would imply that our country is kind of just an economic bubble. I think if you asked most Americans now if that’s true, maybe 5% would agree. But they might not really think about it. Some German military study that Alice Friedmann often cites found that western democratic societies lose their sense of tolerance and their social cohesion when the economic pie finally shrinks. I suppose they would know.

            Yes, in isolation the 265 number might not mean much. If you throw it into the mix with other patterns and data, you begin to narrow probabilities for the future. When various patterns seem to say the same thing, is when they’re hard to ignore.

            • all industrialised nations are economic bubbles

              the more industry within your economic system, the bigger the bubble

              the laws of physics as applied to a bubble are very apt—you blow a bubble, the amount of material that is held in the structure of the bubble (our energy output) is ultimately fixed, therefore expansion of the bubble means the actual structure gets thinner and thinner until the inevitable happens.

              But few believe that simple analogy

              because the vast majority dont believe yet–the USA will balkanise itself into warring states as part of economic bubble collapse, each convinced that god is on their economic side, and that scientific reality is just a hoax perpetrated by ”the other side” and that war will put things right

            • SteveS says:

              All industrialized nations are not necessarily economic bubbles. Many European nation-states essentially formed before industrialization. The kingdom of Portugal, for instance, goes way back, prior to 1000 AD. France also has a long lineage, and more or less solidified its empire prior to industrialization. French leadership initiated rapid industrialization following the French Revolution in an effort to keep pace with Britain, to which its power was losing ground. I’m sure there are more examples.

              It’s not inevitable the US will balkanize. It is a probability.

            • ”industrialised nation” means a nation that is currently supported in economic terms by the processes of industry

              Many European nations go back to Roman times. That is irrelevant

              Industry prior to 1709 was all hand-wrought (see below), after that date it gradually became mechanically powered and grew exponentially through the input of fossil fuels

              The ”bubble” analogy is correct because to keep going, industry must have more and more fossil fuel energy fed in, otherwise it will collapse in on itself. We are now running out of fossil fuel surpluses, which is why collapse is happening.

              In many situations politicians are masking this effect by borrowing money with which to pay wages, (and thus buy goods) to keep the industry-base running. This is the economics of the madhouse, but collectively speaking we know no other way of keeping industries afloat.


            • Thanks, Norman. Your article is a very fine one. We need to be teaching people of all ages how the world really works.

            • hkeithhenson says:

              ” We need to be teaching people of all ages how the world really works.”

              That’s *hard.* I am in the upper tiers of “know it all” and I am often amazed at how complicated the industrial world is. As an example after visiting a steel mill, last year was to find that one of the ingredients in the carbon electrodes they use to melt the charge is coal tar. I am talking 1800 gunk that comes from making coke. It could probably be replaced, but it would take effort and testing. Most, if not all, coal tar comes from China.

            • Supply chains are very strange!

  4. Sven Røgeberg says:

    Hi Gail!
    I got a new answer in the discussion about RE today–Kristian-Hall
    Please feel free to comment

    • This is a lively debate.

      You could make the point one commenter to an earlier post in this debate made: If Norway has hydroelectric investments available that are estimated to pay back 200 to 1, there is no point in making wind investments, estimated to pay back less. (The commenter said the wind would pay back 15:1 if I remember correctly, but a person often sees higher estimates for wind.) Regardless, it is no where near hydroelectric.

      The intermittent quality of wind and solar makes them less valuable than energy types. (Water is also intermittent, but this is less of a difficulty, because the intermittency can often be controlled, making it suitable for balancing other intermittent sources.) The intermittent quality of wind and solar is hard to evaluate in net energy calculation. But we now have a quite a bit of actual experience developing, and the cost of intermittent renewables is proving to be quite high, when all costs are included. The variability also becomes an increasing problem, as more intermittent renewables are added to the grid.

      One thing that Norway has available to sell if the balancing power of its hydroelectric. Adding wind energy to the mix will tend to “use up” some of the balancing services that could otherwise be sold to other countries.

      In the real world, there are many important things, including total cost to the consumer and distortions to the pricing system. Net energy does not really get at these things.

  5. It's different this time around....NO says:

    (Bloomberg) — Exxon Mobil Corp. and Chevron Corp. aren’t fazed by the drilling mistakes and funding hurdles smaller shale producers are running into in the Permian Basin.

    The North American supermajors said Friday their strategy for the prolific oil field spares them from the slip-ups that sent shares of one of the largest independent Permian producers down over 20% Thursday. Both oil giants reported surging output from the area over the second quarter and stuck to their plans to pour investment into the shale basin.

    Exxon and Chevron were late to the game in the Permian. While they’ve recently unveiled plans to eventually produce almost 2 million barrels of oil equivalent a day from the West Texas and New Mexico basin, the area was long the home of wildcatters and independent explorers.

    Those exploration and production companies are now facing mounting pressure from investors to cut spending and deliver returns, which for many means slowing down and selling some assets. Meanwhile, the supermajors have the means to come in with multibillion-dollar investments and ambitious growth plans.

    Maybe, like in Agriculture Budget, the Federal Government can insure it’s profitable for the big players! Like in Banking, like in Aviation, Like in Defense…well, you get it, I hope

  6. Dennis L. says:

    Solar energy:
    1. Someone has mentioned issues with inverters, what are they? Solid state electronics is very reliable, long lasting and cheap. Utility grade equipment is incredibly reliable, standardized and well understood.
    2. Companies routinely seek to lease farm land for $1000 per acre on a twenty year lease if transmission lines run through contiguous land. What is not to like for the land owner?
    3. If solar stretches fossil fuels, something is better than nothing, what is the objection to keeping what can be kept and discarding what cannot?
    4. Maintaining electrical lines cannot be that difficult and the total energy used appears minimal. Look at your own residential service, how often does one see a service truck? The systems do have issues at times, but reliability is incredibly good.

    Dennis L.

    • Niko B says:

      major repairs have had to be done to transmission lines that cross my property twice in the 12 years I have lived here. From one storm the power lines lay on the ground for 4 days until they were repaired. We had no power for four days. Another time lightning hit the transformer that provides power on my line. I am the only residence on that transformer. they replaced it a few days later at a cost of $32000. I am the only one on that line and my power bill is $1300 a year. You do the maths.

      • Dennis L. says:

        That was/is the raison d’etre for the REA. Electricity in the country is more expensive than the city, everything is more expensive in the country, every nail looks like exactly the correct size as a better one is ten miles away – one way.
        Renewables in the country? Maybe solar cells for the day, batteries for sleep, diesel for a few hours after the sun goes down, go to sleep early, get up early. Diesel is much cheaper than batteries, more reliable and much less maintenance.
        Utility maintenance is sized for average call, heavy storms result in cooperative efforts across utilities, it is better than nothing, it is affordable which is a meme here as compared to the cost of absolute reliability. You have had two major outages in twelve years, not too bad compared to 100 percent outage, i.e. no electricity at all.

        Dennis L.

    • Above ground electrical lines tend to cause fires in dry areas. This is the problem California had, essentially for its long distance power lines so it could use hydroelectric from Washington state to supplement its inadequate local source. Venezuela has had power outages, at least some of which seem to be related to fires started by the electric power lines.

      How hard is this to deal with? It depends. If you are out in the middle of nowhere, without water supply, it is difficult. Trying to work around this problem becomes difficult. The little wires near homes don’t seem to be as big a problem as the high voltage long distance transmission lines, but that is just my impression, based on where the fires seem to be occurring.

      I think that ultimately the situation we end up with is that solar doesn’t really stretch fossil fuels, at least after the first few percent are added (that is, the amount whose intermittency can be offset by operating reserves, or even Norway’s hydroelectric). Adding more than a little simply makes the system more complex and distributes more of the output of the economy to those who are already wealthy. It is just an impression that solar stretches fossil fuels, beyond a small percentage. (Where oil is the primary fuel, more stretching may be possible).

      • hkeithhenson says:

        “This is the problem California had, essentially for its long distance power lines”

        I don’t think that’s the case. I am fairly sure the lines that failed were secondary level distribution.

        Incidentally, the power company in San Diego has implemented a scheme where they can detect a broken power line and turn the power off before the line hits the ground and starts a fire. Another level of complexity, but it seems like a good idea.

      • Dennis L. says:

        Thinking of power lines and the comment regarding the main failures being secondary distribution. Simple solution, add a fire cost to those lines, charge it to people who what to live at the end of the line and save the utility for everyone else. Imagine getting a utility bill in the billions to cover the true cost of delivering service to a remote, hard to maintain area.

        It is kind of like flood insurance, only one entity is crazy enough to write it and price it so it is affordable, US government.

        Not everything has a pleasant solution, some choices are hard.

        Dennis L.

    • Link relating to wildfires:


      Power lines have caused more than 4,000 wildfires in Texas in the past three and a half years. Power lines can ignite wildfires through a variety of mechanisms.

      Downed lines– Just like homes and office buildings, power distribution systems contain protective devices (e.g. fuses, circuit breakers) that detect short-circuit fault conditions and operate to limit damage to the system. These devices are intended to clear faults quickly, but in as many as 30% of cases in which a single energized line conductor breaks and falls to earth, surface contact resistance causes the resulting fault to draw too little electrical current to blow a fuse or trip a circuit breaker. Such a condition is known as a high-impedance fault, sometimes abbreviated as a HiZ (pronounced “high zee”) fault. A line with a HiZ fault can remain energized on or near the earth for an arbitrarily long period of time, often multiple tens of minutes, during which it produces high-energy, high-temperature arcing. The image below shows a downed-conductor, HiZ arcing fault on a 7,200-volt power line. It is common for a downed line conductor to remain energized and arcing until a customer calls the utility company to report a lights-out condition, which may occur only after several tens of minutes. An arcing downed conductor readily ignites proximate vegetation and other materials, particularly if it occurs in an area of elevated fire risk. Even if conventional protection finally operates, the period of arcing already may have started a fire.

      Other mechanisms: Vegetation Contact, Conductor Slap, Repetitive Faults, Apparatus Failures

      • doomphd says:

        then we’re stuck, as putting those lines underground would raise transmission costs by 10X or so, and worse if in rocky terrain.

        • hkeithhenson says:

          “then we’re stuck,”

          Nope. Modern fast electronics can sense a broken wire and shut the power off before the line has a chance to fall on the ground and start a fire.

          • doomphd says:

            hasn’t worked in CA yet. maybe they need to upgrade.

            • hkeithhenson says:

              “hasn’t worked in CA yet. maybe they need to upgrade.”

              PG&E didn’t upgrade. This is still kind of exotic. But the electric company in San Diego had a problem with starting fires from falling lines some years ago and at least some of their lines do cut off if the line breaks. On lines that run through areas which can catch fire, and have not been upgraded, they just cut the power off when they get dry conditions and high winds. Bent out of shape customers are less of a problem than dead ones.

              PG&E stockholders are victims of manager greed. The managers kept the stock price up without doing the required maintenance and diverted a lot of money into bonuses. This problem went back to before the San Bruno gas fire.

            • doomphd says:

              i lost a childhood friend in the Paradise fire, so it’s kind of personal. i don’t think being burned to death is a very pleasant way to die.

  7. It's different this time around....NO says:


    China promised to retaliate against “blackmailing” if Trump goes ahead with more tariffs.From slapping on more tariffs to shunning U.S. soybeans, here are ways Beijing could retaliate.Trump’s growing impatience risks denting American consumers’ wallets to break the deadlock.Consumer goods are the targets in the latest tariff barrage, with Apple among the most exposed.White House economic adviser Larry Kudlow suggested Beijing could strengthen the case for avoiding tariffs being applied next month if they bought U.S. agricultural products.The slowing global economy faces a stronger headwind, challenging central bankers to respond.Goldman Sachs sees a greater chance the Federal Reserve will lower interest rates next month.Wall Street is warning about the consequences of a lengthy trade fight.China has a heavy arsenal of monetary and fiscal policy to counter the damage from new tariffs.Bloomberg’s Trade Tracker index got another nudge down after an ugly month for U.S. exports.The U.S.’s merchandise trade deficit with China widened slightly in June to a five-month high.Trump and Boris Johnson spoke for the second time since the British prime minister took office last week, agreeing to cooperate on trade and global security.Japan and Korea swapped export control measures, risking chaos in tech supply lines globally.South Korea’s Financial Services Commission said it will give “swift and sufficient” financial support to companies affected by Japan’s export restrictions.Oil finished down for the week as positive U.S. jobs news wasn’t enough to erase a plunge triggered by the escalation of the trade war.Copper fell to a two-year low in after-hours trading in London and mining shares plunged.Trump ribbed an EU trade delegation at the White House, joking that he was poised to impose crippling tariffs on German cars
    Trump States we are “taxing” China! Suppose China will do the same to us.
    Looks like this is contagious. Once you start, it’s hard to stop even if it hurts!

  8. CTG says:

    The glue that holds the world now is the financial system. Our world is infinitely complex as compared to ancient times. We came to this point of time, with billions of people because of this complexity. This complexity allows millions of jobs that are otherwise useless in the ancient world (computer programmers, insurance experts, etc). Without this complexity, there can be no billions of people on this planet.

    Any reduction in complexity, beyond a certain critical threshold, does not revert down in a staircase manner. There are way too many circular references or activities, counter parties that are too linked or interconnected. How many people know how to do agriculture?

    It is just what Gail says all this while when it comes to renewables…… you still need a lot of fossil fuel and a functioning financial system to set up. No money, no talk. Whatever mandates or delusions that people may have, they have a right to that opinion or delusions. It does not matter if they think they are right. All these discussion of staircase step down, new world order, fiefdom, debt slaves are moot once the financial system collapses. It will collapse. It is just a matter of when. The situation is getting dire with each passing day. It is not doom or gloom. It is just a matter of who can see it and who cannot. Those who can see it consist of those who can see it earlier or later. That is the reason why you have people saying “he has been saying the world will end since early 2000s”. It is just that he saw it much earlier than others. Malthus saw it hundreds of years ago.

    With a freeze in banking or credit crunch, with no money coming out from the ATM, with no credit given to food deliveries or petrol (gasoline) companies, then the show starts. It will end in short order. There are many who lurks here and did not post for some time. I am not surprised if FE/Paul still lurks here but did not post or is being banned. The end game is set. Nothing much anyone can do. For the last 10 years, I have this recurring dream that mankind may not be able to see 2020. It looks very real with each passing day.

    Everyone is entitled to an opinion. It does not matter if it is true or not.

    • In general macro zoomed out view I’d tend to agree with yours (and similar Gail’s hyper complexity stick model), although we have evidence to the contrary at least for the near – midterm though. The system re-balances continuously, e.g. large %% of Spanish/Greek/.. population could be put on idle and somewhat limited spending pattern, essentially triaged out, while the Asian hubs continue to rise. Yes, it could have been a very temporary phenomenon (mere decades) and now coming to its last moments grasping for final breath, nevertheless lot of early peak resources-complexity and degrowth warnings were wrong on timing and sequencing, not necessarily because of malice, but because of unreasonable assumptions of individual (well even professional team assessed) predicting power in such complex system..

      I think it’s abundantly clear by now that some factions of the deeper US-global establishment completely melted down – freaked out from the early resource peak projections of the late 1990s early 2000s hence the events which occurred both domestically and abroad in that context. Well, time passed fast, perhaps living on borrowed time, nevertheless we are now almost two+ decades in the aftermath of it.

      I guess we are approaching a time window of available clearer viewpoint across the various trends and counter trends, clearing out the sky somewhere in the 2020s. For example if the tariff – trade war (allowed to) continue (or even escalate – forming trade blocks) and or other geopolitical clash points coming to fruition by then – chances are we truly entered new chapter, another paradigm, be it collapse proper procedure or some another stage of attempted mitigation.

    • I very much agree. “The glue that holds the world now is the financial system,” is especially true.

      Timing is the thing that is impossible to predict. Once the avalanche starts, it seems likely to go quickly this time, because everything is so interconnected. We are very dependent on supply chains around the world, for example. If the financial system isn’t providing credit to everyone, the system tends to stop. If consumers lose their jobs, it will have the same effect. We have too many things today that could go wrong, and policymakers have little room to fix problems by lowering interest rates further.

    • doomphd says:

      i don’t think FE has been banned from OFW. Gail in fact put up with a lot of BS (like his gerbal worming is a hoax bent) from him because of the overall quality of his thinking and the gems that were mixed into his commentary. I miss him a lot. he’s right about the spent fuel ponds, unfortunately.

      • It's different this time around....NO says:

        Maybe Mrs Fast sand Eddie are out in the ocean blue like this couple!
        He did the Fast Eddie Challenge for 2 days on a deserted island!

        Not too shabby.
        As far as him coming back!!!????
        Let’s take a poll

      • yes, fond memories of epic battles on spent fuel ponds and logistics (onsite/offsite/reprocessing site), he evidently knew very little about the actual on the ground situation and procedures at these facilities, nevertheless the gut feeling and scream about this peculiar mix of high tech plus often mediocre/blaze human after care was a correct one interpretation of our predicament to a significant degree.. but that has been applied over here for many things from shelf and transcontinental pipelines to the grid, medical and critical infrastructure spare part supplies etc.. already..

      • You are right. FE has not been banned from OFW.

        I remember banning someone who commented very frequently (long ago), but had virtually no good ideas and didn’t quite understand what I was saying.

        I also do not let through commenters who say things like “This article is total crap propaganda.” In fact, these are direct words from one comment I received on this article.

        I do let the vast majority of comments through. If a comment is otherwise fine, but ends with “you stupid idiot” or the equivalent, I have been known to delete the offensive phrase.

    • SteveS says:

      It is true that a short-duration shock could occur, but it does not necessarily follow that an all-out collapse of fossil fuel civilization then occurs. You must also consider immediate and then subsequent reactions to that initial shock. That’s where, perhaps, game theory, would be valuable in all this. And that’s where the stair-step idea deserves consideration–in the continued band-aids that policymakers and militaries are liable to apply. Two centuries of investments in fossil fuel infrastructure are not going to be allowed to become obsolete in a matter of 2 or 3 years. Not when the alternative is so much death and destruction.

      If policymakers held things together as well as they did last time, perhaps we did not learn our lesson not to underestimate them. Some parts of the world could hold together ok, enough to stair-step down over several decades. To be fair, no one who posts here has a real idea of what any playbooks would be. Some humility and some measure on one’s own certainty is in order.

      • hkeithhenson says:

        ” To be fair, no one who posts here has a real idea of what any playbooks would be. Some humility and some measure on one’s own certainty is in order.”

        Well stated!

      • Dennis L. says:

        Nice statement, the certitude of of the doomers has been wrong so many times and over so many years. Things do not self organize, biological organisms do(well, yes crystals do, etc.) Some of us will reorganize, some will not so it has been over the ages.

        Dennis L.

      • CTG says:

        If you want to talk about staircase collapse, it happened since decades ago when the gold window closed. It has been going downhill ever since and right now, we are at the last step of the staircase.

        • Yes, (but) for example the middle class was irreversibly gutted in S America and large part of the Western world nodes decades ago.. But last step(s) on the proverbial down falling staircase would be something rather more pronounced like decade/decade spike of mortality by xy% etc..

          • SteveS says:

            Yes, stair-step back down in population, energy consumption, economic output. Decline in living standards here and there in the world on the way up would not constitute part of the stair-step down phase. They’d just be an unfortunate casualty of the build-up.

            Breaking away from the gold standard was probably inevitable. The same pattern emerges over and over in history. It provided greater flexibility for governments to do what they wanted and to restabilize economies in the short-term. It works until it spins out of control down the line in massive doses of debasement.

      • Yes, that’s healthy attitude towards the intersection of larger and shorter cycles interaction. I’d only add or reiterated that the -stair case- scenario would likely take shape of “circling the wagons” if you will over certain specific industrial, fossil fuel extraction and re-processing infrastructure first. An attempt of going back to hard geopolitical blocks while less int trade flowing (seeping) across could be one of the early steps.. mind you the following steps might proceed over each other in relatively rapid succession, the inter periods being very short, as always the road to ruins will be shorter than the buildup phase.,

      • I was amazed at how well things held together in the last recession.

        In fact, I am again amazed at how well things are holding together now. There are a lot of pieces of the system that we cannot see or understand.

  9. It's different this time....No says:

    national problem’: U.S. housing affordability is out of whack with minimum wage
    God help you if you have to RENT….a four letter word!
    Rent affordability and minimum wage are two issues that have been brought to the forefront in recent years. A new report from the National Low Income Housing Coalition (NLIHC) highlights how the two are intrinsically tied.

    According the NLIHC’s 2019 Out of Reach Report, “in only 10% of U.S. counties can a full-time worker earning the average renter’s wage afford a modest two-bedroom rental home at fair market rent, working a standard 40-hour work week. The same worker could afford a modest one-bedroom apartment in 41% of U.S. counties
    “This affordability problem for rental housing for low-wage workers is really a national problem,” Aurand told Yahoo Finance. “Obviously, the cost of rental housing differs in different areas of the country, but what we find is places that appears to be more affordable also tend to be places where wages are lower. So there’s still a gap between what the lowest-wage workers earn and what the lowest-income families have as income and their rental housing costs

    • Denial says:

      You say God help you if you Rent! Maybe you should be saying God help you if you paid too much for your House! I have seen first hand people lose everything in 2008 because of the crash. If you rent you are probably in a better situation when that happens. Where I live property taxes have gone up so much along with building etc that if you buy a house to rent it out and pay mortgage it does not pencil out. You would have to pay a significant amount of your own cash to make it work.
      I guess it all comes down to the argument are we going to see mass inflation or mass deflation. After following Nicole Foss 12 years ago I used to believe mass deflation but watching the governments of the world I am now leaning to mass inflation followed by mass deflation several years later/

      • It's different this time around....NO says:

        On the other hand, after the deflate bubble of 2008 real estate was a bargain and has been inflated with ZIRP, alongside the rents, that mirror the price increase!
        So, timing is everything. All I know is rental property multiunits is a wealth builder.
        Take a look at the article from the link…gives a more complete story.
        One thing I know, a person has to live somewhere!

    • Also, young people, even with advanced degrees, aren’t necessarily earning top degrees. Many have degrees in the arts, or they are married with a small child or two, and don’t feel that they can commit to 40+ hours a week job. Some of these young people have debt to pay back as well.

      • It's different this time around....NO says:

        Saw this and pass it along as evidence
        My Husband And I Thought Education Was A Way Out Of Poverty. Now We’re $718,000 In Debt
        From the article
        I’d scroll down my social media timeline and compare myself to others. They appeared to be traveling, shopping and building perfect homes. On the other side of the screen, I was pregnant, full of dreams and broke. I later enrolled in school for my master’s degree to fill an emotional void. A decision that cost me $64,595.44. After three years of rejections, Otis gave up on being a dentist, and he earned an MBA in health administration for a whopping $101,000. Whew, I’m out of breath typing about it! Our problem was that we were trying to fit into a life that I don’t believe was designed for us.

        Otis and I come from a city where healthy and educated Black families were few and far between. Without any resources, Otis and I were drawing the road map to success while voyaging to our destination. Externally, we did everything right. We graduated from college, were married, purchased a house and had children. Our career paths just didn’t follow along, and worse yet, we were drowning in $268,621.32 in student loans. Looking back, I understand that we couldn’t have it all when we wanted it

      • denial says:

        You are assuming BAU keeps on going. If there is a a repeat or similar fall to 2008 you will have some angry peasants and the rich will have a harder time keeping there heads. think bolshevik revolution- coming to a town near you. Also why would people want to keep feeding a broken system Gail? They know its all screwed up too! It is the older generations that think that system can keep going a little bit longer….

        • It's different this time around....NO says:

          Not assuming, you were the one assuming by picking a point in time, I did likewise.
          I speaking of my own experience. After BAU ends, a new game begins with new RULES!
          What will come about?! That’s what makes LIFE worth living!
          All I know, being 61 years old I wouldn’t expect it to be any fun!
          Nor post BAU ain’t for SISSIES!!!

  10. All of these debates are moot.

    The world will be divided up into the fiefdom of tech companies and large landowners. the FIRE has won once for all.

    They will only keep the people they actually need. The rest will be downsized. Which is why they don’t give anything about all these energy issues since the issue won’t affect them.

    • Niko B says:

      Problem is that energy systems need to be run and maintained at certain levels through put. Fall below that and they fail. Without economies of scale to provide demand for their energy product they can not function. Eg, refineries and pipelines need a minimum amount of toil going through or they don’t work. Starting and stopping them is extremely wasteful.

      • Just enough oil will flow from selected refineries and pipelines. The rest could be mothballed until necessary.

        The Mosul-Haifa pipeline has been closed since Israel became enemies with the Arabs. It can be opened anytime after some maintenance work.

        • endofthestatusquo says:

          “All of these debates are moot.”

          That certainly doesn’t stop you from spamming your religious transhumanist diatribes at every chance you get while displaying flagrant ignorance about how complex systems actually work.

  11. Dennis L. says:

    Hopium or Hope?

    • snarf says:

      Well lets just say one of the hopium energy pipe dreams came true. It wont but just say. Would we double our population again in the next 60 years? What would be the next limit? Water? Food production? Would it be more or less cruel to accept limits now? We are raised on the philosophy that we know no limits. The little engine that could. Accepting limits are bad by this philosophy. IMO this is a philosophy that does not enable our potential but detracts from it.

    • Prices for uranium as fuel are low, just like all of the other fuels.

      Security is always the problem for small nuclear units. How do you guard them? Or do you?

  12. Om says:

    India’s biggest automaker, Maruti Suzuki India Ltd has cut the number of workers it employs on temporary contracts following a plunge in vehicle sales, it told Reuters.

    The auto industry, which accounts for nearly half of India’s manufacturing output, is going through one of its worst slowdowns in nearly a decade, with vehicle sales falling rapidly and little sign of a revival anytime soon.

    Signs are here, Gail.

  13. Chrome Mags says:

    “An 11-year-old changed election results on a replica Florida state website in under 10 minutes.”

    For those concerned election results were hacked and changed in swing states in the last presidential election, be afraid, very afraid for the next election adjusted results. For those counting on those adjustments to help their candidate, this article is great news worthy of uncorking champagne.

    “Mitch McConnell Received Donations from Voting Machine Lobbyists Before Blocking Election Security Bills. Senate Majority Leader Mitch McConnell squashed two bills intended to ensure voting security on Thursday, just one day after former special counsel Robert Mueller warned that Russians were attempting to sabotage the 2020 presidential elections “as we sit here.”

    • snarf says:

      Snowflake doubleplus good
      doubleplus snowflake doubleplus bad

    • My two sons worked on installing the Georgia voting machines around the state, back when they needed summer jobs during graduate school. They found that local governments were installing game software and word processing software on them. The voting machines had a better computer inside than what local governments had otherwise.

  14. It's different this time around....NO says:

    Oh …You mean I actually have to walk the walk and NOT FLY in my PRIVATE JET…Well, I NEVER!

    Google’s recent climate change conference, which was attended by Leonardo DiCaprio, Katy Perry, Orlando Bloom and other A-list stars, is being slammed as “hypocritical” by many.
    Following an Italian press report claiming that the Google Campers would flock to Sicily for a three-day, $20 million event in 114 private jets, social media users were quick to point out what they saw as a disconnect.
    “Is there anything more hypocritical than a bunch of rich people flying their private jets across the world to sit on yachts and discuss the future of our planet?” one Twitter user asked.


    Wrote another individual: “Wow, just wow. Has google not heard about video conference

    Sure, Climutt Change is helping BAU with all these Party Conferences!

    • Chrome Mags says:

      Possibly though, the emissions from those private jets won’t make much of difference to total global carbon emitted annual tonnage, but people at that wealth level may make a big difference if they can find consensus on a better plan to reduce our carbon footprint. Possibly by funding some new innovation to produce fuel using CO2.

      ‘Bill Gates is backing a plan to turn CO2 into fuel’

      “At their facility in Squamish, western Canada, engineers have already succeeded in extracting CO2 from the air and using it to produce a mix of petrol and diesel. They hope to eventually replicate the process on an industrial scale.”

      • Robert Firth says:

        “At their facility in Squamish, western Canada, engineers have already succeeded in extracting CO2 from the air and using it to produce a mix of petrol and diesel. They hope to eventually replicate the process on an industrial scale.”

        I have a much simpler way to turn CO2 into fuel. They are called trees.

        • Good point! M. King Hubbert hoped to turn CO2 into fuel, when he thought that the energy from nuclear would be “too cheap to meter,” (but I don’t think he used those words). It didn’t work out then.

          • Hubbert had an idea to reverse essentially combustion, if he had enough cheap fuel to do it with. Instead of a hydrocarbon combining with oxygen (giving off heat) producing carbon dioxide and water, he expected that it would be possible to do the reverse, with enough virtually free energy. Thus, carbon dioxide plus CO2 plus lots of energy would produce hydrocarbons.

            • hkeithhenson says:

              “Thus, carbon dioxide plus CO2 plus lots of energy would produce hydrocarbons.”

              Typo. Takes water and CO2 to make hydrocarbons.

              It’s not direct. You electrolyze the water for hydrogen. Takes about 2 MWh for the hydrogen to make a bbl of oil. Then you combine some of the hydrogen with CO2 in a reverse water gas shift reaction to get water and CO. The carbon monoxide plus more hydrogen goes into the very well understood Fisher/Tropsch reaction.

              The main cost is the power needed to make hydrogen. At $20/MWh (2 cents per kWh) it takes $40 of electricity to make the hydrogen for a bbl of oil. If you scale the capital from a billion-dollar Sasol plant in Qatar, it comes out about $10/bbl.

            • Thanks for the correction and elaboration.

        • hkeithhenson says:

          “I have a much simpler way to turn CO2 into fuel. They are called trees.”

          If you work it out, trees (and any photosynthetic source) are less efficient than a field of PV panels and a synthetic fuel plant. With enough genetic engineering that might change, but it is the situation now.

          • aaaa says:

            PV doesn’t convert CO2, plus it takes away land surface area from those less-solar-efficient plants/trees/critters (the farms are fenced-in, afterall). Better to improve and apply solar performance on buildings and already paved areas.

          • Dennis L. says:

            If it worked and had a decent return on capital the deserts would be full of these plants. It appears that every economic niche is or has been exploited, what hasn’t been done does not work and thus is not done. Shale oil seems to be an exception, maybe it is exploited because it can be, more or less.

            Dennis L.

  15. Denial says:

    Gail, one of the key components of this predicament that the world is in is wages. Are wages going up? They do appear to be. There is talk that there is no inflation but since 2008 it seems like things are more expensive. I remember back then a Billion dollars used to be a lot of money; now if a government announces a billion dollar infrastructure bill its a big yawn. Presidential campaigns in the U.S are in the Billions not millions any more.
    Also the U.S is not an island; it does need global trade if other countries fall it will effect the U.S negatively right? I think sometimes economist forget this and don’t see the slow wave and look at each country independently but that is not the case. The U.S is borrowing money to keep itself afloat the tax cut and now raising the debt ceiling. I don’t see this stopping which will eventually make money worthless…is that the end game?

    • We are certainly headed toward a limit. Exactly how this plays out is less certain.

      The price of energy products seems to keep falling, relative to other goods. This is necessary for the system to keep growing. But of course, this doesn’t work well for those providing energy products, because their costs keep rising.

      Somehow, the system “breaks,” but it is not clear how. The dollar is no longer the reserve currency? Countries start fighting with each other? Hyperinflation in many countries, spreading worldwide?

      Maybe someone else has better ideas than I do about what happens.

      • SteveS says:

        I don’t profess to know, because the future is uncertain and obviously there are many factors in the world, but I will say there tend to be very strangely consistent, long-term cycles in the US currency, its bond market, the US stock market, gold, and even Anglo-American war and generational cycles that all begin to convene around 2020 and converge to form a common picture in the mid-2020s. I used to write about this on a blog I had called “Cycles and Signals.” Much of what these cycles seem to suggest is beginning to take shape now as we close out this decade, so I’ve become more confident in these ideas particularly throughout 2018 and 2019.

        What it looks like to me is something LIKE war beginning in a year or two, centered around economic problems, with struggle but some balance for several years, and eventual devaluation of the currency in a shock. Events leading to or surrounding that devaluation could take various forms. I do tend to think this war will be economic and not an all-out fighting war, with Trump’s tariffs as the first shots fired, one-by-one each round like a new country that Hitler invades. (Not likening Trump to Hitler, just likening the rounds of tariffs to the first moves in a brewing war.)

        Some folks believe this is all gibberish–how would financial data tell you anything? I can understand that sentiment. Except it’s just very clear multiple asset classes converge, according to cycles in many different time periods (some 80 years, some 40, some within a decade) and say the same thing in a short period of time. That is very, very strange. Plus, our capitalist system has everything to do with financial assets; they are our real leaders. They are what keeps our whole system going. Very oddly reliable long-term cycles in them do, to me, lend a lot of credence to the idea that the economy is a bit predestined.

        Some cycles can be extrapolated beyond the 2020s timeframe, and might provide some guidance on what the future holds beyond collapse. I find the whole topic extremely interesting.

        • You may very well be right. I say that all of this debt and other types of financial promises is what pulls the economy forward.

          The period we are reaching now looks too much like the time before the US civil war, and the time of World War I and II. World War I and II occurred about the time coal production was peaking in the UK and Germany.

      • Chrome Mags says:

        “Hyperinflation in many countries, spreading worldwide?”

        That’s my guess, but it probably would need to be the USD, the reserve currency to bring down the whole pile of global currencies. From there it would be difficult to see how to start a new currency people have faith in. What’s it tied to? Gold, silver – there’s only so much. Plus the situation devolved in the first place over many decades because of the underlying problem of low energy costs, because people could not afford higher priced energy.

        • SteveS says:

          Could be hyperinflation. Or it could just be massive devaluation, such that it really ends most Americans party lives. Many governments may experience the same problem all at once. I don’t know of past hyperinflations where many countries’ currencies all more or less simultaneously hyperinflated.

          Britain lost its reserve currency status somewhat slowly. Still it remains one of the top five reserve currencies. It is possible to lose the main reserve currency status but to wane economically slowly, and the US has a long way to fall. It may be an unfair example, since our countries are so alike. The transition of power was peaceful. Conditions could be different now, if, for instance, China attempts to take over that role.

          The US is all about money and economic opportunity. A large devaluation in the US’ system could have the same effect on US citizens, and global citizens, as hyperinflation does in other countries, or past times, if you’re looking for effects that would prompt shaking of faith.

          • The world economy is much more interconnected than in the past. In the past, one part (central government of the Soviet Union, a recent example) could fail, and the rest would go on. In fact, many smaller economies have collapsed over the years. The ecosystem was able to “rest” for a while, and gain back its productivity. Perhaps some of the population moved in with other groups, but most died.

            The fact that the rest of the world continued made it easier to restart, for example, in the case of Russia, extracting the rest of its oil supply. Now we seem to be facing a much more widespread problem, with all of the interlinkages in the finances of countries and the interdependencies of supply chains.

            • SteveS says:

              Yes, and the current level of interconnectedness may actually support the idea less of hyperinflation and more of just a temporary breakdown/stoppage in money flow or transactions. For instance, stock markets just did not operate for a time during WWI. If parts of the financial circulatory system stop working, effectively shut down, that’s a different problem from keeping them working, albeit less effectively, with a constantly devaluing currency.

              Many like to bring up hyperinflation because there are ready examples. It may be too easy a candidate. The situation may rhyme but not exactly repeat.

        • It seems like each small area would need to start its own currency. I remember that back about the time of the civil war, quite a number of small local currencies were started. This article seems to mention the situation.

          During the act’s [National Bank Act’s] first year, 179 banks went national. By the end of the Civil War (in 1865), the number was nearly 2,000. When the last bank notes came off the presses in 1935, over 14,000 banks had become members! All of them issued paper money with their own name on it, and all is still legal tender today.

          • Robert Firth says:

            Gail, I think your comment misses something. The many US banks indeed issued their own notes, but all those notes were backed by gold bullion. As were the notes of Scotland’s banks during the same time frame.

            The system collapsed in 1933/4 because the US Federal Government essentially abandoned the Gold Standard and stole all the gold in private hands. If after a collapse anyone wants a stable currency, then four thousand years of history provides only one answer.

          • SteveS says:

            Interesting. It would be more likely for something like this to happen after the Federal Reserve becomes discredited, or seen to be so weak it may be replaced or disappear. On the other hand, it could become essential for local or state governments to issue their own currencies to try to address the suffering of people, should the central government basically stop functioning due to infighting, for example. A sort of power vacuum would emerge if, for instance, the legitimacy of federal elections are undermined, or policymakers are so divided they simply do not agree on emergency measures. Something would emerge to fill that vacuum. Life would go on.

            • I am wondering if programs like Social Security, Medicare, and unemployment will simply be handed off to the states, to handle as their finances permit. Even the functions of guaranteeing bank deposits and pension plans may be passed off, or simply discontinued. The federal government will atrophy away. It won’t be providing much of any services any more. And the states won’t be able to provide adequate supplementary services. States or individual cities will try to provide some of their own currency, but it won’t be accepted outside of the local area. Borrowing money will become a much more difficult endeavor than today.

            • Robert Firth says:

              Thank you, SteveS, and I believe you are right. Modern economics teaches that money has value because it can be used to pay ones debts to the government, and so is accepted because it is “legal tender”.

              That is a modern view, and I believe it is wrong. When I was growing up in Africa, an Africa where every colony had its own currency, the traders settled their own internal debts with coins that bore the head of an empress who died in 1780, and the inscription of an empire that had ceased to exist in 1918. But each coin was 3/4 troy ounce of silver.

              That is when I learned that “real money” was whatever would be accepted as a medium of exchange in the absence of government. So after the collapse, perhaps insulin will be the equivalent of gold, and an aspirin the equivalent of a penny. But something will evolve.

            • SteveS says:

              Gail and Robert, replying here because there is no option below your comments.

              Gail, I’ve wondered the same thing, with about the same outcome in mind. If there is one function that the federal government would retain, it would be military. Nuclear weapons would need to be safeguarded and maintained, and after all territorial integrity would still need to be defended. A period of collapse could be seen as an opportune time for others to gain an upper hand militarily against the US and its interests, if other nations are in a position to do so. Even if they are not, they’d likely be perceived to be just by the way our military and intelligence apparatus tends to think.

              States and local governments would probably be pretty limited in the services they could provide, relative to the federal government now. Gaining credit could be a big wild-card. What would buying or selling a house look like in such a world? You may not be able to do either. But I’d suspect there’d be some kind of mechanism put in place to attempt to facilitate this. People might demand it. That or many would eventually abandon their homes. And governments won’t like that.

              In general, leaders I think would face strong headwinds for patching life back together to cover basic necessities. But for sure the attempts will be there. Americans whine now when their straws are paper. The tolerance for any discomfort is not very high in the US, and perhaps that ironically should be comforting to us, because it would seem to ensure the outcry to fix things will be strong enough to force politicians to try. Whether they succeed is another thing.

              Robert, that is very interesting. It would seem to be one step above a barter economy. You need something to function as money. You need people to agree on what form that money takes. If the government–various levels–is seen as ineffective, then what form money takes could become very unusual indeed.

            • I guesstimate the intermediate steps throughout next collapse waves will allow for new financial form of settlement and it will be likely somehow more directly linked to energy (some proposed options flowing around by the experts and policy schemers):

              – link to emissions (based/link) to existing CO2 schemes of today (not very likely)
              – link to some avg calorific value of traded/exchanged energy fuels-carries (very likely)
              – link (direct) to some commodity (less likely – known past model)
              – hard core raw commodity-merchandise barter (not likely at least in first wave or as the first prevalent scheme)

            • Thanks to everyone who responded on this. We will either need to start a new comment thread, otherwise the indented comments become impossible to read on a cell phone.

              I should also think about writing a post related to this topic, since it seems to be of interest.

  16. It's different this time around....NO says:

    The games of musical chairs continues…..
    China Smiles and Waits as World Cuts Rates

    One key reason why the dollar isn’t responding is that all the big central banks are easing, canceling out each other’s efforts. This means that when a real crisis hits, they’ll have less ability to respond. This is worrying because U.S. corporate balance sheets have been compromised by a decade of easy money and a wave of debt-fueled buyouts by private-equity firms.
    By now, these central banks are hostage to traders and politicians. Powell had no choice but to cut rates Wednesday, because to take no action would have unleashed a cataclysm on markets. Traders and investors have been conditioned to expect steady support from central banks and react like spoiled brats when it isn’t forthcoming. This kind of behavior is unlikely to go away anytime soon, as my Bloomberg Opinion colleague Mohamed A. El-Erian has written.
    By contrast, the PBOC isn’t intimidated by traders. One doesn’t need to look far for evidence. China’s 10-year government bond yield is relatively unchanged since the end of 2018, while there’s been a half-point compression in its U.S. equivalent, flattening the yield curve once again.
    I’m not saying the PBOC is independent; far from it. China’s central bank in one sense is the world’s least independent because it’s forced to heed the will of the Politburo, headed by President Xi Jinping.

    While on the other hand….
    (Bloomberg) — Company bond defaults in China hit a four-month high in July as a slowing economy and risk aversion triggered by the unexpected seizure of Baoshang Bank Co. marred refinancing prospects at weaker firms.
    Onshore corporate bond defaults reached at least 14.4 billion yuan ($2.1 billion) from 14 notes in July, according to data compiled by Bloomberg, bringing the total year-to-date defaults to 70.9 billion yuan from 89 bonds.
    After two straight months of declines through May, bond delinquencies are climbing back. The rebound coincides with weak manufacturing data showing the nation’s economic recovery lost steam in the first half of the year. Early indicators also show growth continued to weaken in July, bolstering the case for greater policy support.
    Risk appetite in China’s local bond market took a hit after Baoshang’s seizure in May, limiting funding channels for the nation’s weaker firms. The selloff pressure is also increasing in the secondary bond market, adding to more refinancing difficulties for private firms, said Yang Hao, fixed-income analyst from Nanjing Securities Co. He expects repayment pressure to remain elevated and sees more defaults going forward

    Should be very interesting how all this plays out….

    Yep, something like that…hope everyone is insured….sarcasm

    • snarf says:

      The markets need to be trained like a dog. Fed should not cut rates then buy equities to prevent a plunge a couple times. Then raise rates and buy. Then lower rates and sell. Whos your daddy!

    • Yes, in a sense all of the central banks have to move together. China and Europe are doing poorly. The US has to lower interest rates, whether or not such a change seems to be need in the US. It is a worrying situation. How will this all end?

  17. Sven Røgeberg says:

    Hi Gail! I got an answer from 3 researchers. Make you wonder if they have read my article.–og-solkraft–Modahl_-Raadal-og-Bakken

    • Thanks!

      I see that commenter Per Reber makes the point,

      When wind power has an EPR of 15 and hydroelectric power has an EPR of 200, why invest in the worst solution, wind power in Norway. According to Professor Lia at NTNU, a study shows that you can get another 30 TWh by upgrading existing hydropower plants.

      As far as I can see, the is the overall average return, each year, that matters. It is the return of the total mix. Each economy needs to invest in what has the best returns. A 200 to 1 return is vastly better than 15:1. It is doubtful that 15:1 is really calculated with enough of its backup requirements. If the new wind energy needs to make use of Norway’s limited supply of backup capacity from hydroelectric, that would be a very bad outcome.

      All other countries in Europe that are adding wind and solar are depending on being able to get balancing of hydroelectric, but when this supply soon runs out, batteries and other high cost arrangements are needed instead. In some sense, Norway’s excess hydroelectric generation has acted like an operating reserve (to smooth out fluctuations) for all of Europe. Europe has avoided the need for batteries because of this operating reserve. Once the capacity of this operating reserve is exceeded, Europe will suddenly need batteries for smoothing purposes, like other places in the world.

      By the way, there is a simple illustration of the impact of adding sufficient batteries to hold a system year around. It was published as part of Charlie Hall’s series of books.

      The batteries used here are lead acid batteries. Lithium would be different, but at this point recycling of lithium is less than 5%. Recycling lithium seems to require very significant energy, and doesn’t necessarily provide lithium of the quality needed to make new batteries. All of recycling done now is in China.

      The return shown in Graham Palmer’s calculation is 1.3 over three years. His calculation is based on an analysis of what a homesteader would need. I don’t know how much of the energy needs of the homesteader are expected from the system. For example, the homesteader might have a gas system for cooking, in addition to the solar panels, but I really don’t know.

      One thing I don’t think that Graham Palmer considers in modeling his real life example is that to get to his “least cost” example that he is modeling, considerable overbuilding of the solar is required. Also, backup diesel generation is still needed for the system 5% of the time that he assumes the solar system plus battery does not provide sufficient electricity.

      He says that the daily average electricity use he modeled would have required 4.4 kW capacity, but to get enough electricity during the winter, without huge battery use, it was necessary to use 11.1 kW of solar capacity, and battery capacity of 63 kWh (assuming 50% depth of discharge of battery, based on the most common depth of discharge for lead-acid deep-cycle batteries). This quantity of battery would amount to about 2 days of use. Any further need for backup was assumed to come from the diesel generating system. I am not certain that the diesel generating system cost is included in the energy return calculation either.

      If Graham had calculated “usable energy compared to total energy invested,” I believe his calculation would have come out a significantly worse, because the 11.1 KW he used have been excessive for the homesteader much of the time. Some of it would have been in excess of the amount that the batteries could hold. In theory, this excess could have been shared with industry or other providers, but if they were operating off solar at the same time, they very will would have excesses at the same time. Also, installing and maintaining the electrical transmission for this system would have had signficant energy cost, and could lead to fires.

      • In terms of the lead acid batt pack, ~63kWh at 50% DoD (minus some other losses of this chem) for two days should be something like ~12.5 kWh per single day, which sounds like kind of excessive lifestyle; well one can imagine gargantuan “american fridges” or partial floor loops of electric heating (bathroom), 60″ TVs, electric water cattle, various pumps, etc. but even all that seems on the high side as daily consumption..

        • Oh, silly me, I guess I finally nailed it, in winter time he uses infra sauna – sized for 25x people (guests) all in one go.. That explains it, we nailed it, case closed, lolz.

        • snarf says:

          12.5 kWh a day off of solar. BWAHAHAHAHhaHA. Not happening. Not even on a $10k system. If you size up all efficiency is lost. The first 20% of the inverter capacity is burned just by the inverter being on. A 6000 watt inverter burns 1200 watts just being on. First 1200 watts is free. really not because you pay way more for it in infrastructure. So you size down so you are not committing to A LARGE ENERGY USE JUST BY YOUR INVERTER being on. You turn your inverter off. Noisy heat producing electronic. So much for on demand. No one runs electric ranges, hot water heaters space heaters, hair dryers off PV systems. Not round my neck of the woods. During the best part of the solar day if you need to pull some amps yea you pull it off the PVs. Otherwise you start a gen set so you actually will have power in your batteries. Unless you have a $ tree in your backyard.

          • Nope, the discussion is about living off (older style lead-acid oversized) system with nominal 63kWh battery capacity for two days, suggesting heavy overcast conditions during winter etc.. That’s why my numbers roughly match the number in Gail’s follow up reply providing further details.. Otherwise the text is not clear enough what they precisely wanted to talk about, season, pv+batt or batt only etc..

          • snarf says:

            The best way to do it. In a cold climate. Its way ghetto but I love ghetto. Once your batteries are fully charged the charge controller has no way to store the pv energy. Pull the disconnect for your pvs into your apparatus and run the pvs straight into a resistance load to heat. You don’t confuse your electronics. All the energy gets used not just up until storage capacity. Don’t exceed max amps for heat circuit for load or supply. Power is way down for the load because of the low voltage but meh. If you just have a couple panels you can use the energy this way in a cold climate without an inverter or batteries.

            • snarf says:

              Bulk charge all the way baby then into a resistance load for heat. Thats what im talking about.

        • The numbers seem to be based on 2011 average usage in Melbourne, which probably included a lot of air conditioning. He says:

          Half-hourly solar data for Melbourne, along with half-hourly household demand data from Deloitte (2011), were used in a spreadsheet model with VBA macros to model the system with storage. Deloitte’s demand data provide for an average 15.5 kWh demand per day, but the magnitude of the daily demand does not alter the final EROI result. The model has been calculated as the solar/battery combination in which there were 438 h (5 % of annual hours) below 50 % of battery capacity.

          • I was bit conservative on the efficiency losses so let’s say then realistically striking somewhere inside the boundaries of ~12.5 – 15.5kWh (as very optimistic upper limit possibly leading to degradation of batt cycle life) demand per day from above described setup..

      • snarf says:

        ” I am not certain that the diesel generating system cost is included in the energy return calculation either.” AH Gail so polite. :). I appreciate you. last time i checked diesel gen sets are rather costly both in terms of $ and carbon footprint.

        Those that actually use photovoltaics come to terms with a finite world. Huge wire because Amps are 10x for a 12 volt dc system. Lots of carbon footprint there. Batteries suck. Deep discharge kills them. So you double battery count to keep from deep discharge. Lots of carbon foot print. They go bad anyway after a period of time. buy more. Lots of carbon footprint. Or get by with less and they go bad faster . Or buy 3x expensive ones that have eight times the carbon footprint and last twice as long. The best solution by those very experienced? Run a fossil fuel gen set with 25% efficiency to keep from deep discharge. . Because all of the above is way more sustainable than using grid power derived from near 99% fossil fuel efficiency generators.

        • You make a good point about the high energy cost of the backup diesel generator. In fact, it is pretty much necessary to keep the whole fossil fuel system operating.

          The book “Energy in Australia” was written to be a supplemental text for college students in Australia. Springer wanted a book that could be sold for many years and would not upset anyone very much. (At least, that is what Springer told me, when they approached me about writing a book that could be used for a similar purpose.) The point about how badly solar panels worked is buried deeply within the text. It is not mentioned in the summary at the end. I don’t expect that the author, Graham Palmer, was aiming to show precisely how badly solar panels worked.

          Graham Palmer is better than a lot of analysts because he actually knows some of the ins and outs of how the systems work. I believe that he worked in the electricity industry for quite a few years before he went to graduate school in subjects related to EROEI analysis. He was a graduate student when he wrote this book. I have met and corresponded with him.

        • Are you serious? That described 63kWh system is most likely (99%) not 12VDC based..
          But you are correct (when looking back – no pun intended) low voltage and older (lead acid or various nickle based) batteries needed delicate dance with the (constrained and pre planned) user demand to work at all ..

          • snarf says:

            i dont give a hoot about that 63kwh system. I run pv in the real world with real life constraints. $ and performance. Bang for the buck. Been doing for 30 years. I dont care how big the system is it comes in as dc 17v. Run it in series and you kill performance.
            Sure its better going to 24v or 48v. Those inverters cost more and are more inefficient because of the larger change from the pv voltage. 24v is a happy medium. Even there current is 5x necessitating use of larger wire.. I use straight dc off the panels every chance i get eliminating the charge controller bottleneck. “am I serious” Back at you monkey man. Are you serious? Do you run PV?

            • snarf says:

              Just to clarify. I assume everyone knows what i am talking about when i refer to for 12 or 24 volts. Those are the storage battery dc voltages not the power used coming out of the inverter 120 vac. A pv system is dc up to the inverter. That dc power going into the inverter has 10x greater amps for the 120vac power coming out . 5x greater amps for a battery system set up for 24v. Those are the official voltages not actual. The wire between the PV panels and the charge controller has to be sized for the dc current the panels create. The wire between the charge controller and the battery bank has to be sized for the output of the charge controller. The wire between the batteries and the inverter is really obnoxious 4 ought copper usually and its sized of the continuous output of the inverter. All of these wire sizes are much much bigger than the same amount of power going through 120vac because of the higher amps. All of the required disconnects on the DC side have to be rated for the dc current. A standard 12v system with a 2000 watt inverter needs a 250 amp disconnect in between the batteries and inverter. The disconnect for the ac side for the same power is a 30A. The difference between the two disconnects is 10x not only in rated amps but in price and materials. it doesn’t make sense to me as the power loss and heat in the wire should be a function of v divided by the resistance of the wire. The sizing of the wire required is correct however. 10 gauge wire feeding a 2000 watt inverter will start to smoke in about 30 seconds and 12 gauge coming out on the ac side wont be even warm.

            • I expect that what was being simulated was assuming “keep exactly what you have.” When I look up 12 volt appliances for off-grid, I find 2-cubic and 3 cubic foot models. “”

              The 3 cubic foot model costs $384.

              When I look up “Refrigerator,” I find a lot of choices. A 3 cubic foot “Mini Fridge” model costs $124.99. An 18.1 cubic foot top freezer costs $460. A 25 cubic foot side-by-side with ice and water dispenser refrigerator costs $800.

              People today in the US are used to refrigerators with 18 to 25 cubic feet of space (especially people who own their own homes, rather than having a small apartment). The idea of downsizing to 2 or 3 cubic feet of refrigerator space would upset a lot of cooks. To make matters worse, the person would need to sell his old one (if he could find a buyer), and buy an expensive (for the size) new one.

              Stoves for off grid living seem to be propane.

              I also found an 8 cubic foot propane refrigerator for $1,489, for off grid.

              There are 12 volt air conditioners, intended for boats or semi-trucks.

              So a person would have to make a big lifestyle change, to switch to 12 volt direct current. 24 volt appliances are also available, but they too are small and expensive.

            • snarf> your evasions of the subject matter are not funny, we are simply discussing the ins and outs for older case from Gail’s provided example in Australia (times when oversized lead acid batt banks and baby sitting over loads attached ruled), if it feels good for you to be recognized as aficionado of “first gen” high amperage system, you can have it.. Besides, yes, I’m operating two ~contemporary tech PV+batt systems, smaller one nom 24vdc and 48vdc larger one, separate inverters for different load purposes, moreover I consider it as merely backup (toy) setup of decade+ max longevity in case of future disrupted supply chains.. as there are other non electricity based workarounds for human “needs”. And yes nobody denies it is possible to also have some specific (dumb) loads directly on vdc line form PV array if they last longer than the other parts of the chain..

            • There are some people who will put up with a 24v system, but not very many will. I personally would use in my model what 99% of people are expecting today. These are not the folks who are the people currently off grid.

              If someone is trying to calculate the proportional amount of needed batteries, to last year around, it doesn’t really matter what size of system he is working with. Here, it depends to a significant extent on the weather of the area he is simulating. Graham Palmer seems to be simulating Melbourne, which has a mild climate. This makes quite a bit more difference than the kind of system (which was’t really simulated at all).

              What Graham Palmer’s simulation is showing is that there really is no energy savings (for the system as a whole) for a person to go off the grid, other than, perhaps, to downsize his lifestyle. He could theoretically do that anywhere.

              One thing that people tend to miss is the fact that even if an individual family lives off grid, this system by itself is not sustainable. There is no way to maintain roads, or to make more batteries or inverters. The is no way to make electric light bulbs, or to make clothes for people. The system can only be expected to last until the first major piece fails. If an oil powered generator is used, the whole fossil fuel system needs to be maintained, to keep this operating. Otherwise, when the fuel for the generator runs out, there is no more supplemental generation.

          • Nobody is asking people to give up their lifestyle, or to trade in their old appliances for 12 volt ones that don’t work as well.

            As Graham says in the write-up I quoted, it doesn’t really matter to much what average level he uses. He is mostly looking at the pattern.

            When I look at the pattern, I see the pattern of a quite warm city that doesn’t seem to need much heat in the winter. This site aimed at tourists says,

            Most people find Melbourne’s climate is agreeable all year round. The main reservations are the changeable nature of the weather – in every season – and the lower winter sunshine hours enjoyed in Melbourne compared with Australia’s other cities.

            This is a chart of mean maximum and minimum daily temperatures in Melbourne from this site:,Melbourne,Australia


            I think Melbourne was chosen for having a particularly mild climate. Almost anywhere else would have needed a whole lot more battery backup, especially if it was to provide electrical heat for any significant share of the population. In some sense, Graham Palmer is trying to aim a best-case situation here. Running air-conditioners during summer is something that solar panels (plus two days worth of batteries) are a whole lot better at than heating homes in winter.

          • snarf says:

            What am I evading? I commented on the true high infrastructure and carbon cost cost of photovoltaics. That’s entirely appropriate for the subject matter of gails excellent article. Yes DC systems have high infrastructure and carbon cost cost. You brought up my choice of assigning a 12v value like it was a felony. Who made you god to determine that posters only address the topics you want in a narrow way you determine? Gail addressed the cost of a diesel genset in relation truth in overall cost of PV systems. I know if I added the cost of my whisperwatt diesel to my overall cost for a PV system it would probably increase cost by a factor of 1000. All of these observations are entirely appropriate for the subject matter both of the post I was replying too and the article. Commonly posts are made that don’t apply to either its no big deal. So what is your problem? Why are you harassing me?

  18. This time it's different...NO says:

    Another blow to the American worker…
    Home improvement retailer Lowe’s has told thousands of workers that their jobs are being eliminated.

    The company plans to outsource jobs of maintenance and assembly workers to third-party companies. The assembly workers put together products such as wheelbarrows and grills.
    “We are moving to third-party assemblers and facility services to allow Lowe’s store associates to spend more time on the sales floor serving customers. Associates who were in these positions will be given transition pay and have the opportunity to apply for open roles at Lowe’s,” the company said in a statement to CNBC.
    The company said in a securities filing earlier this year that, as of Feb. 1, it had roughly 190,000 full-time employees and another 110,000 part-time workers.

    How Low can you Go?….Just work for Lowe and find out!

    • Somewhere, also, the article said that the there was no guarantee that the new contractor jobs would pay as much as the jobs they replaced. So I expect that a lot of current employees would end up with lower-paying jobs with no guarantee of hours each week. This is not a satisfactory arrangement from the employee’s point of view.

      • snarf says:

        This is very antiquated thinking on managements part. They need to contract to another corporation outside the USA to do that work. That corp can bring in its people on h1b visas. Huge cost savings. Wages. Bwahaha. Medical bwahaha. unemployment comp. bwahaha. workers paying into system? bwahaha. As the functional disconnect of slave labor in other countries intensifies things happen. Things move to the path of least resistance. People retire on the border to get their prescription drugs and tequila. The discrepancy yields cost savings that must be realized in order to stay competitive or even to survive.

      • snarf says:

        Poor Boeing. Caught in a dysfunction. People want both $100 fares AND a plane that doesn’t fall down go boom. I know I do! But a little different when your $12toaster oven fails prematurely. And now… I would pay double not to fly on a MAX. But I would fly on one for half $50. That’s different from buying a new $12 toaster oven from brand z instead of brand x. So the customer dynamics are different for a aircraft manufacturer. But consumers are still applying their rules. Dysfunction within dysfunction.

    • Mark says:

      That’s corporate BS. Sales floor people don’t go out back to assemble. That is either already outsourced, or done on graveyard. Just more soft language for the death spiral.

      • Another great George Carlin routine! This time on the use of soft language. We no longer have shell shock, for example. No more deaf or blind people, or stupid people. No more old people, just senior citizens. We don’t die, we pass away. Or many much longer euphemisms.

  19. Gus says:

    Article doesn’t mention that most energy and consumption in the West is discretionary (not needed). We can reduce energy use by 90% and still meet basic needs and have a good life. Doing this would open up many possibilities. (such as 1. preserving the food supply as energy sources diminish, and 2. switching to renewables in a sustainable way)

    Now, granted, we are not doing this — but we should be clear that this is a choice, and it is not an inherent attribute of the system or an inevitability (which the article implies). Such thinking is disempowering and inaccurate (IMO).

    “The economy” is just a method to distribute resources — it’s not a deep underlying truth of the universe.

    • “Most energy consumption is discretionary” is simply not true.

      An important part of energy consumption is food. I don’t think that this is discretionary. Admittedly, we could (perhaps, sort of) transition to locally grown vegan diets, and this would save energy consumption, but this would eliminate a lot of jobs and would replace them with a lot of terribly low paying, backbreaking jobs, often far from current housing.

      Another part of energy consumption is making roads. We could get along without paving roads, but then we would only have rutted dirt roads to travel on. We would not be able to use any type of wheeled devices. This would admittedly be hugely energy saving, but it would lead to a situation where everyone is dependent upon pack animals for any kind of transport of goods whatsoever. This, too, would lead to a very different world.

      It would be possible to make a few paved roads by cutting stones to size, and carrying them to the right location and putting them in place. But without fossil fuel use, this would be a horribly energy-intensive process. Very few would volunteer to work to do this; most people working on this project would likely need to be slaves or prisoners, with no other options. The total number of paved roads would be very low. In fact, the total number of stone homes would also be very low, for the same reason.

      Water supply and treatment are other critical issues. These too are very energy dependent. It is hard to imagine how well digging and viaducts, built with human labor, could replace what we have today.

      If we try to remove energy consumption that looks to be discretionary (internet gaming, vacation travel, use of air conditioners in summer), we find that the whole system does not work well. The cost of the internet needs to be partly supported by the gamers, in order to be affordable for everyone else. Vacation travel provides income for a whole lot of people in the travel business and at the receiving end. The use of air conditioners in summer is what has made possible current high rise buildings with windows that don’t open. These high rise buildings would all need to changed to accept open windows.

      Even this change would not be sufficient. Before air conditioning, few people lived in the hot parts of the Middle East, or in the US South. Homes and offices were built much differently. Starting over would be a huge hurdle.

      • Rodster says:

        People don’t realize the amount of energy that is NEEDED just to provide for our way of life i.e. “industrial civilization”. Without fossil fuels you couldn’t produce enough crops to feed your animals so you can later eat them. You couldn’t make modern medicines or research new medical practices or new medicines.
        Toothpaste and other hygiene products benefit from fossil fuels as well as making paper. Can’t make current tech gadgets or computers without fossil fuels.

        You couldn’t make tires for cars or trucks. You would not be able to transport those tires to different areas within your own country. You wouldn’t be able to make cars or trucks without fossil fuels. As you mentioned water sanitation would be nearly impossible. It’s said and if I remember correctly that there are 9-10 calories of fossil fuels for every calorie we eat.

      • Niko B says:

        This is an interesting thought. how many people should we make slaves of in order to make roads so that a higher order of civilisation can exist. Or something similar regarding infrastructure. Who should sacrifice what for others to experience something greater – even if only temporarily.

        • SteveS says:

          It may not just be an interesting coincidence that slavery was abolished in the US not too long after US coal consumption began to take off, and machines of the Industrial Revolution had proliferated throughout the economy.

          • slavery ended in the same decade as the oil discoveries started—1859 oil discoverd—1865 slavery ended

          • I think that the common denominator in these different problem eras was that the wages for some majors group of people dropped too low.

            The problem could be peak coal. The coal was more and more depleted, so it was harder to get out. But prices could not rise to accommodate the higher costs. Miners were in constant conflict with the management of coal mines over this issue. Their wages fell too low. In the UK, enlisting in the military for World War I seemed to pay better (and was no more dangerous than) working in coal mines.

            There was a problem also in the US, when mechanization helped replace farm labor, and put many farmers out of work. Some farmers, who adopted mechanization, were able to do very well, and their production rose. The problem was the many smaller farmers who could not afford mechanization, and those who worked as hired laborers on farms. The farmers with mechanization could feed so many people cheaply that the price of food dropped. The wages based on these low prices were not enough to support the many small farmers and helpers.

            In the panic of 1857, before the Civil War, commodity prices were again very low. One factor that I remember being mentioned related to speculation regarding gold in California and resulting bank failures. I am not sure what all else was involved.

            Whenever machines were added, it helped some people, but hurt others. It was the missing demand from those who were hurt that adversely affected the economy.

            • SteveS says:

              It might be important to note that the fossil fuel production peaks that Gail often mentions occurred right before various major wars, were peaks occurring FOR that time period, or for that country. For instance, peak coal in Britain before WWI, and peak coal in Germany right before WWII. Eventually, globally, coal production increased.

              It seems like around here, what is talked about mainly, is peak fossil fuels for the whole world and for all time. Of course, that might have a similar effect, everywhere, and for a time, as would peak fossil fuel x for x time period, or for x country. But the difference would be the all-time peak would be in.

              The question–what would that mean? is very interesting.

              Immediately, it might mean nothing new–another major war, or a set of WWIs and WWIIs–but three our four decades down the line, that secular change in trend might mean a lot.

            • hkeithhenson says:

              “I think that the common denominator in these different problem eras was that the wages for some majors group of people dropped too low. ”

              You get shorter people too.

              “The estimates… indicate a considerable decline in diet after 1840; the 1840 level was not recovered until 1870. A large decline in per capita production of wheat, rye, pork, and beef accounts for this big deficit in American dietary history. The lack of nutrients was demonstrated by the soaring prices of those foodstuffs, another downside indicator of food consumption” (Floud et al. 2011, p. 316). In the footnote, he does mention that, “A similar pattern is also found in Komlos (1987).” “…the increase in agricultural productivity did not keep up with the rapid growth of the population and its food demands” (Floudet al. 2011, p. 298). “…food output did not keep pace with the demands of the urban-industrial sectors whose population increased approximately ten times during the first half of the nineteenth century…. Per capita crop consumption may have declined throughout the antebellum period. Excess demand had increased grain prices by 1860, and the change in food availability contributed to the decline in the population’s nutritional status in the first half of the nineteenth century” (Floud et al. 2011, pp. 306, 308).


              The article is mostly about the 25 year time it took for the obvious cause of people being shorter to become accepted among the academics, but the issue of a marginal famine in the US is fascinating.

            • Interesting!

            • I looked up a world average temperature chart, and world average temperatures were low in the period before the US Civil War. This would have adversely affected crops. This is a BerkeleyEarth View of temperatures:


              This is a larger version:


            • hkeithhenson says:

              “world average temperatures were low in the period before the US Civil War.”

              That’s could have had an effect, but I suspect it was just a matter of the population growing faster than the food supply. The article makes the point that housing cost increased rapidly and this seems to have diverted income to shelter rather than food.

              My ancestors from that time frame seem to have mostly been farmers.

            • When I look up the situation, it is possible that improvement in hygiene may already have been allowing more babies live to maturity.

              Historical perspective on hand hygiene in health care

              Handwashing with soap and water has been considered a measure of personal hygiene for centuries and has been generally embedded in religious and cultural habits. Nevertheless, the link between handwashing and the spread of disease was established only two centuries ago, although this can be considered as relatively early with respect to the discoveries of Pasteur and Lister that occurred decades later.

              In the mid-1800s, studies by Ignaz Semmelweis in Vienna, Austria, and Oliver Wendell Holmes in Boston, USA, established that hospital-acquired diseases were transmitted via the hands of HCWs. In 1847, Semmelweiss was appointed as a house officer in one of the two obstetric clinics at the University of Vienna Allgemeine Krankenhaus (General Hospital). He observed that maternal mortality rates, mostly attributable to puerperal fever, were substantially higher in one clinic compared with the other (16% versus 7%).

              He also noted that doctors and medical students often went directly to the delivery suite after performing autopsies and had a disagreeable odour on their hands despite handwashing with soap and water before entering the clinic. He hypothesized therefore that “cadaverous particles” were transmitted via the hands of doctors and students from the autopsy room to the delivery theatre and caused the puerperal fever. As a consequence, Semmelweis recommended that hands be scrubbed in a chlorinated lime solution before every patient contact and particularly after leaving the autopsy room. Following the implementation of this measure, the mortality rate fell dramatically to 3% in the clinic most affected and remained low thereafter.

              Increasing complexity may have been used to work around rising population. The wealthy people would likely have been the ones who received bigger/better homes. The would have continued to be as tall as previously. It would be the children of the poor (the vast majority, in other words) who became shorter.

            • hkeithhenson says:

              “When I look up the situation, it is possible that improvement in hygiene may already have been allowing more babies live to maturity. ”

              I think the timing is off. Hygiene didn’t really get going till late in the 1800s (after 1865) and was only slowly accepted. The nutrition crisis started in the 1840s.

              I have an absurd number of remote relatives because my ancestors back to before the revolutionary war had lots of kids. Typically 10-14 of them with the substantial majority living to maturity. I suspect this was because most of them were farmers and the kids had enough to eat.

              If you dig into Gregory Clark’s work analyzing the UK population (1200s to 1800), the children of the poor didn’t get enough to eat and died (usually of disease) in the frequent famines.

              Of course, water systems and sewers in the cities were a large factor in reducing disease, particularly cholera.

              “The wealthy people . . .. continued to be as tall as previously. It would be the children of the poor (the vast majority, in other words) who became shorter.”

              That was exactly what happened.

              The thing that fascinated me was that the US *ever* had something close to famine. Didn’t know that.

        • info says:

          @Niko B

          Thieves and muggers and other repeat non-violent criminals come to mind.

      • Is it possible that a reduction in discretionary spending could bring about the collapse of airline industry? The payload is in the hold and the tourists are subsidising its transport cost which, if truth be known, would send these businesses bust paying the full cost of. I steal this idea from Steve Ludlum and his Debtonomics…find some greater Fool to defray your costs. He’s brilliant and I wish he’d write that book. I have my own anecdote on how discretionary spending is at the very heart of our current system and it has to do with Sydney Harbour Bridge, where I grew up. It was the case then that the North Side suburbs were the ‘dormitory’ suburbs and that the would be plenty of movement to the industrial Southside but what to do to get the traffic moving the other way? Why, build Luna Park , our version of Coney Island, oh, and Taronga Park Zoo. After all, airlines are just sophisticated bridges, the discretionary spending tourist is subsidising all.

        • It would seem like a reduction of discretionary income might eventually bring about the collapse of the airline industry, but I don’t expect that this will be the first impact.

          The situation in 2008 represented a cutback in discretionary income, because of high oil prices. Airline industry didn’t collapse, but it made big changes rather than collapsed. I don’t remember all of the details, but an awfully lot of short flights were cut out, because the short flights used proportionately more fuel, and because people could drive farther to get a flight. Also, quite a few of the very long haul flights were cut into shorter segments, so the airplanes would not have to carry as much fuel for such a long distance.

          Now, the airline industry is operating from a more cutback status to begin with. So the airline has less room for cutbacks. It seems like several budget airlines have encountered serious financial problems, and financial results for the industry are way down.

          I don’t see the airline industry as the industry with the most problems, because at this point our problem is a low fuel price problem affecting oil companies, rather than a high fuel price problem affecting consumers. At this point, I see bigger problems in the financial system, and with collapsing energy providers. The big place I would expect collapsing airlines in the near term is in financially troubled areas like the UK. Eventually, the problems may spread more widely, as you say.

          • gpdawson2016 says:

            I recall well that one US carrier was pulling out entertainment units to reduce weight in their a/c and another was removing crockery! All this leading up to the crash, whilst oil price was still increasing. All lost in the mists of time now.

            I worked as a flight attendant at the time and the blank stares were numerous among co-workers when these points were raised 🙂 No context, you see. Context is what’s missing from most things.

            And, BTW, thanks for the context!

      • Gus says:

        If you choose food as an example of non-discretionary energy, then we should bear in mind that at least 1/3 of food is wasted (in the West, at least). Of the two thirds remaining, much of it is superfluous (eg. the obesity epidemic). Of the remainder, we eat many energy intensive foods that could be substituted with energetically-cheaper alternatives without compromising nutrition. Such foods can still be tasty.

        That you chose roads is also interesting. The build-out of roads, and increase in miles-per-capita in the last 70 years has been incredible. I stand by my claim that a 90% reduction in road area, and miles per capita, would be a problem. People in the 1950s got by just fine.

        Look, the premise of your blog is that we are heading toward collapse. It’s somewhat feeble-minded that you can’t even imagine relatively-small changes to our society that could possibly avert (or at least greatly mitigate) such a catastrophe. I know that it is not difficult to reduce energy consumption in the West by about 90% — I have done it. I still lead a relatively normal life — though I drive little, don’t use much electricity, rarely fly,don’t eat meat, and don’t consume much. My reduced expenditure means that I’ve paid off all my debt and own my own home.

        It is irresponsible to be telling (relatively) rich Westerners (who could help greatly) that they can do nothing and may as well keep enjoying their high-impact lifestyles while they can.

        • But it is impossible to go backward, because what we lose is jobs. I don’t agree that we could eliminate all of the “waste” (which goes to feed other species), but even if we could, people would not have jobs that they could go to. The 1950s system operated because we had at that time a growing supply of cheap-to-extract energy. We don’t have that anymore.

          A big part of our problem is way too many people, relative to the number who lived in 1950 (or relative to the number who lived in 1700). If the world’s population were a tiny fraction of what it is today, perhaps it would be possible to figure out a solution, but not with close to 9 billion people.

          • Gus says:

            I’m not advocating that we go ‘backward’, but rather that things don’t have to be as they are. I am unconvinced that the lack of cheap-to-extract energy is the problem — I think our inability to imagine a different society with less bling is the problem. It really does seem that we would rather die than lose our middle-class toys.

            • I see the world economy as an integrated whole. We know that when chemists create a molecule from several different inputs, the precise ratio of inputs is terribly important. If there isn’t enough of one input, all the chemist can do is “make a smaller batch.” It is pretty much this way with energy products. Energy products are required for all of the activities that we think of as GDP. If these precise energy products are not available (perhaps because sellers have taken them off the market because of low prices and profitability), the economy needs to shrink back. This is the problem we are encountering now.

    • Artleads says:

      Someone posted, and Gail might have copied, a post yesterday, suggesting that there was some kind of package that included our economic system and the ills which go with it. If I got it right, it could have been saying that energy use, climate change, debt, etc. all go together and comprise our means of survival. You can’t have one without the others.

      So I’ll repeat something I posted a day or so ago: We have a situation that is akin to trains on a track. We really don’t have the means to create different kinds of trains or different kinds of tracks. The trains as they are run on tracks as they are, and have a wide variety of destinations. What we CAN perhaps do is alter the track alignments (by switching the tracks) in more favorable directions. If we give all our attention to this seemingly small matter–tweaking directions, maintaining as best possible the “heavy” parts of the system (the “infrastructure”), it might make sense.

      It also starts to seem that all the industrial stuff we must deal with are part of our evolution. We find a way to keep it all running, or perish. Maybe it’s not too fanciful to say that we are now part machine–but only the machine elements that now exist. We can’t make it over.

      To sound rather greenie for a moment, I’d say we could create more jobs than now by simply diverting stuff away from landfills. I find, for instance, that if I paste paper to the highway, using discarded latex paint, that vehicles compress them over time into something that looks like tar. I’d be very surprised if this didn’t make the road stronger (less able to crack). Of course, just me doing it is very different from lots of people doing it. I don’t see why such changes wouldn’t be possible.

      • The heavy infrastructure is the most difficult part of the system to keep operating. In fact, this part of the system is even difficult to keep repaired. It is easy to let it just degrade. No one does preventive maintenance now days; it is cheaper to wait until there is a big problem, like a gas line exploding.

        With respect to heavy infrastructure, I am thinking about the water and sewer pipelines, the natural gas and oil pipelines, the highways and bridges, and the electricity transmission lines. Also, the hydroelectric dams and other dams. The infrastructure report card gives the US a D+ in maintenance of its infrastructure.

        For example, with respect to Electricity Transmission in 2017 it says, “Most electric transmission and distribution lines were constructed in the 1950s and 1960s with a 50-year life expectancy, and the more than 640,000 miles of high-voltage transmission lines in the lower 48 states’ power grids are at full capacity.”

        With respect to dams, the report card says,”The average age of the 90,580 dams in the country is 56 years. As our population grows and development continues, the overall number of high-hazard potential dams is increasing, with the number climbing to nearly 15,500 in 2016. Due to the lack of investment, the number of deficient high-hazard potential dams has also climbed to an estimated 2,170 or more. It is estimated that it will require an investment of nearly $45 billion to repair aging, yet critical, high-hazard potential dams.”

        There was a link to this article about aging hydroelectric dams recently:

        This article says,

        When workers started pulling apart the three largest hydroelectric units in North America — capable of supplying more than enough power for all of Seattle — they found the damage far worse than expected.

        They encountered large cracks, worn-out bearings and a defect in a critical weld that, if left in place, could fail, unleashing catastrophic flooding inside the powerhouse that risked killing workers and destroying the 7 million-pound generator-turbine units.

        That last discovery halted work for 10 months to give engineers time to come up with a fix that would ensure a crucial covering would hold fast.

        As far as I know, there is no way of fixing our infrastructure without fossil fuels. Electricity or worse yet, intermittent electricity, doesn’t really work. We need lots of earth moving equipment. We need lots of concrete and steel. Sometimes asphalt is used. As far as I know only a tiny amount of this works on batteries. Electricity alone doesn’t work, because most of the time with mobile equipment, there is nothing to plug into.

        All of the emphasis on replacing gasoline powered automobiles with electric gets us practically nowhere. It is focused mostly on one “layer” of the oil barrel: the gasoline layer. The gasoline layers is in pretty good shape in terms of supply, compared to heavier products, like diesel. Also, gasoline is not a huge piece of the total. According to BP, gasoline amounted to 26% of world oil consumption in 2018. If we are unable to maintain our roads and bridges, what is the point of making all of the vehicles to put on these roads?

        • Robert Firth says:

          We are letting infrastructure decay. I agree. We are also abusing infrastructure by subjecting it to stresses it was never designed to handle, for example our interstate highways, which now carry trucks more than 4 times as heavy as their original design limit.

          We also compound the problem with perverse incentives. Infrastructure maintenance is the responsibility of the state, but if the state lets said infrastructure decay to the point when it becomes unsafe, why, they can get federal money to repair it! Crazy. Now you know why about one third of US highway bridges are considered unsafe.

          • Interesting! I have heard that when utility pricing (that is, cost plus pricing) was done for electricity, the electrical utilities did a lot better job of doing preventative maintenance. Now a lot of electricity providers are struggling with low rates. Putting in new long distance transmission takes forever because it becomes necessary to haggle over which group pays how much of the total cost, besides other issues.

          • Artleads says:

            Crazy ideas would seem to matter more here than physics. Crazy ideas also mean that it’s become like gospel that houses can’t last more than 40 years or so, and then need to make way for new houses. Meanwhile, the Taos Pueblo, made from mud, is the oldest continually inhabited structure in the US, and is now 1000 years old. They simply organize their community differently from today’s mainstream, and that includes–I’m guessing a bit as to the details–ritual annual repairs by the entire community.

            This is not to have some opinion of what is needed to make our species hold on a little longer. That is a separate issue. This is merely one small observation that we must be clear about: how long infrastructure lasts depends on how societies organize themselves, or are able to structure themselves. Without those variables, we can talk of physics causing disrepair. But if you just talk about physics, when human and other variables CAN BE involved, then you’re confusing the issue of infrastructure considerably.

            Again, this is not to say that other energy and economic considerations don’t outweigh any large-scale effort to organize society differently today, and therefore how it manages infrastructure. It is merely to say that language needs to be clear. It is possible under certain conditions, to keep infrastructure in serviceable condition almost indefinitely. Those who disagree must bring a physics argument for why this isn’t possible. It is certainly possible from a social perspective.

            • Robert Firth says:

              Artleads, thank you, and I agree. I remember a meeting at Carnegie Mellon University, which discussed tearing down an old building, all of thirty years old. When I told them my first college rooms in Oxford were five hundred years old, they laughed at me.

              The Romans set a 100 year lifetime for inessential infrastructure, and a 200 year lifetime for essential stuff, such as aqueducts, roads, temples, … Well, there are still Roman aqueducts standing to day, and the Pantheon (180AD) is as solid as it ever was.

              Yes, it is an issue of society’s mindset. To be specific, I think societies that see themselves as enduring build for the longer term, as Mediaeval Europe did, while those that see themselves as transitory build dreck. And our elite, at least seem not to care what happens after their own lifetimes, which is indeed a recipe for collapse.

            • hkeithhenson says:

              “And our elite, at least seem not to care what happens after their own lifetimes, which is indeed a recipe for collapse.”

              It sure is and it is a major departure from previous generations who were concerned about their children.

              The advances in biology are making it look like we could double or triple human lifespan. I wonder what the effect would be if the elite were looking at another 70 or 100 years of lifetime?

            • Artleads says:

              I’m none too clear about periods of history, or their correct names. My broad assumption is that the Roman Empire lasted at least 500 years. And much of their infrastructure from that period has lasted some 2000 years and going. American Empire, if we generalize that down to starting at the dawn of the 20th century, has created infrastructure that in a hundred years has fallen apart. That alone should jog us out of the assumption that anything we’re doing with infrastructure today is normal to civilizations. Ours seems to be a special case.


    • Snarf says:

      “Such thinking is disempowering and inaccurate (IMO).” “disempowering” Empowered is another curious word. It has the word power in it but it detaches it from any physical world real power source. I always like that he man cartoon when he raises his sword and changes and says “i have the power”. Good old snarf. Nowadays Im a spongebob sort of guy.

      What is inaccurate is that our energy use is discretionary. Every aspect of our existence comes from energy usage. Shelter. Heating food . transportation. Unless you have a magic sword or are Harry Potter. Im sorry if I seem sarcastic. Its just the viewpoint that energy use is discretionary is so detached from the physical real world that i must put it in the fiction/fantasy category.

      Lots of talk. Take the fast Eddy test. (come home FE) Turn off your main breaker on your electric panel for 24 hours. Now in summer. Im not saying produce food without energy inputs. Im not saying dont use combustion engines. Ive met a LOT of people talking about “resilience” and full of ideas that they are “empowered” In all the years and all the people not of one of them has ever taken the fast eddy test. Talk. Fantasy role playing. In fact most not all of those people are very large consumers of energy because they dont accept the real truth of limits. Sure have five children. Exponential growth … meh. Us “folk” will be just fine.

      In short this viewpoint exists as a way to flirt with the truth of our situation and still happily consume. IMO.

      ““The economy” is just a method to distribute resources — it’s not a deep underlying truth of the universe.”

      Pretty close. Not brave enough to confront our situation though. The economy is just a method to consume finite resources.

  20. Nonplused says:

    Great analysis as always.

  21. Larry says:

    Your absolutely right , I don’t understand why the general public is so gullible to the use of oil . People don’t appreciate what oil has accomplished for society in general.

  22. The good people at Surplus linked Michael Hudson’s article which comment’s section again links further to the work of Frederick Soddy – Nobel prize chemist working on radioactive decay, who seemed to re-apply this thrust of inquiry on the field of economics as well. Some of his ideas feel quite uncanny given the following post WWII developments in this field, perhaps he is indeed one of the unmentioned inspiration (for a reason) for the economic tricks of late..

    He developed the concept of [Virtual Wealth of community] and discussed its growth and de-growth implications. It’s not only – merely deflation talk related it seems to really rhyme with the concept *Gail put forward in terms of ever decreasing profitability of the economy and energy sector with low pricing induced collapse vector.

    * there are also other researchers going in the parallel direction, most notably the concept of reaching ever lower highs amplitude for energy, e.g. Triangle of doom of oil prices theory


    1934 The Role of Money
    Chapter II, pages 24-56 / the gist of it starting roughly at p41

    • I looked at Surplus Energy Economics, but didn’t see the article you mentioned.

      I did look at the Michael Hudson article on Naked Capitalism. I agree that the assets need to be written down. These are pension guarantees and amounts in bank accounts, and government planned payments, like Social Security and Medicare (not really assets, but asset-like). Also, inflated home and land values. And inflated stock prices. There is not very much stuff we can really buy; that is the problem.

      This was a section in Michael Hudson’s article that I liked:

      Today’s economic orthodoxy denies that this debt problem can exist. Debt dynamics and the exponential growth curve of compound interest does not exist in the parallel academic universe that somehow has been situated in the social science department instead of the literature department as science fiction.

      Perhaps someday a revamped economics curriculum will include the study of history to see how earlier societies have coped with the inherent tendency of debts to increase faster than the ability to be paid. It is a long history with many examples. Western civilization has failed to solve the financial problem that Near Eastern societies were able to cope with by intervening from “outside” the economy.

      But these formative debt experiences are as repressed today as sexual drives repressed academically before the work of Freud. Academic economists are financial prudes. Debt cancellation is historically the solution. Quantitative Easing and bailouts of the One Percent can only be a temporary substitute. We should think of them as “abstinence” from recognizing the need to write down bad loans (“savings”) along with the bad debts.

      • Sorry for the possible confusion, that 1:26pm post above is simply my brief summary thoughts reflecting on comments and links within links (the good people at Surplus = commentariat) under latest Surplus article, hence the copied key links underneath here for the convenience in the OFW blog realm ..

        (Surplus article and its comments (link) ->Michael Hudson’s blog and comments (link to Wikipedia) -> Wikipedia on Fredderick Soddy econ theory (link) -> his scanned book from 1930s

  23. Dan says:


    Crude oil down -$3.85 today standing at $54.73

    The DOW went from being up nearly 200 points this morning to down -115

    Completely the opposite of what I was expecting from yesterday’s rate cut by the Fed. Glad I’m sitting this out.

    Maybe, the $ interpreted the cut as a sign the hype over the greatest economy ever was / is just that – hype.

    Just checked before hitting post comment – even lower.

    • Dan says:

      Amazing what a tweet can do.

      Futures slumped as much as 6.7% in New York on Thursday. In a tweet bemoaning the lack of progress in trade talks, Trump said 10% levies will be imposed Sept. 1 on $300 billion in Chinese goods. The threat compounding fears about slumping American manufacturing activity and dashed expectations the Federal Reserve would make serial interest-rate cuts to juice growth.

      “Increased tariffs on Chinese goods are adding to concerns of a slowing down economy and weakening demand,” said Kyle Cooper, director of research at IAF Advisors. “Crude is taking the news of the tariffs on the chin.”

      • Chrome Mags says:

        During his campaign, Trump said trade wars are the easiest to win. Huh?

        I think China’s attitude is, “If you can take it, so can we.” In other words, a trade war hurts both sides.

    • The news today seems to be Trump to Impose New 10% Tariff on More Chinese Goods (WSJ).

      The WTI price now seems to be $54.14 and the Dow at -255. Also, 10-year Treasuries are 1.90%.

      • Dennis L. says:

        Somewhere I read a hedge fund manager wonder of Trump’s tariffs might work. China made lots of stuff, used much of it’s best coal and oil, exchanged for paper money with which to purchase more oil most likely. Resources are a balance sheet item, China reduced its real balance sheet and pollution increased its liabilities. Innovation has slowed considerably due to diminishing returns, robotics are taking over more and more mundane jobs, the US is still a pretty great place, we don’t see hoards storming the Great Wall. Somehow we managed pollution, China is a fail here. They have stopped taking our recycling which I have heard they dumped into the Pacific, so maybe that great mess of plastic will stop increasing, another positive for less importation of stuff from China as the return containers were garbage trucks.

        Ag. thought. China has lost say half its pigs, it doesn’t need as much grain as before, our yields may not be that great, prices increase and it is a net wash for ag.

        Always the hopeful one for another day of BAU.
        Dennis L.

    • Not sure now, but I recall there used to be various velocity ETFs trading 1 : 2-4x on spiking or falling oil price, so the recent walking down of prices must have been absolute bonanza (on the correct side) using such trivial gambling instrument, it’s insane..

  24. It's different this time around....NO says:

    The ALL POWERFUL, magnificent, all knowing, ECT, ECT, ECT
    Trump Says He Saved the US Economy from ‘A Great Recession’

    President Donald Trump is famous for voicing his concerns and opinions about the Federal Reserve and the US economy on Twitter. As expected, he lashed out on the Federal Reserve yesterday despite its announcement of a long-awaited rate cut.

    The long-awaited rate cut
    The long-awaited rate cut happened yesterday. The Fed cut the federal fund rate by 25 basis points, marking the first rate cut in a decade. The Fed had been feeling the pressure of a rate cut from the market and President Trump. Trade tensions, tariffs, expectations of an earnings recession, and weak inflation forced the Fed’s hand in making the cut.

    Though many former Fed leaders were supportive of a rate cut, many were also of the opinion that a cut wasn’t necessary. The economy looked stable. Job numbers were good. In July, consumer confidence rebounded to its highest level in 2019, according to data released on July 30. Consumers have shrugged off trade concerns and expect short-term business conditions to improve in the second half of the year. The advance estimate of second-quarter GDP data released on July 26 also looked upbeat.

    Trump lashed out
    Before the Fed rate cut happened, Trump had already lashed out at the Fed, saying it had made all the wrong moves and he wanted to see a large cut. He wasn’t happy with the result of the rate cut decision. A USA Today article said the president mentioned that Jerome Powell “let us down” by not signaling further decreases. In a late-afternoon tweet, Trump again mentioned that the market expected to hear that this was the beginning of a lengthy and aggressive rate-cutting cycle. The article also mentioned that Powell told reporters the US economy was doing well and wasn’t in a recession, so a prolonged rate-cutting effort wasn’t appropriate.

    Boy, Really folks, I couldn’t make this stuff up!🙃

  25. It's different this time around....NO says:

    Whiting Petroleum Craters in Worst-Ever Rout After Surprise Loss
    , What a Surprise….🤣
    (Bloomberg) — Whiting Petroleum Corp. plunged 35% for its biggest-ever drop after the oil explorer fired one-third of its workforce, scaled back its full-year production target and posted a surprise quarterly loss.
    The Denver-based oil explorer’s decline extended the 12-month loss to 74%. Fellow shale explorer Concho Resources Inc. also was hammered by investors, losing 23% of its market value, after disclosing botched results from an experimental drilling project. Pioneer Natural Resources Corp., Diamondback Energy Inc. and Cimarex Energy Inc. also fell.
    For Whiting, the elimination of 254 jobs will result in $50 million in annual cost savings, according to figures released on Wednesday.
    “We aim to be as efficient as possible and that is why we made the difficult decision to reduce our workforce in order to realize significant annualized cost savings,” Chief Executive Officer Brad Holly said in a statement Wednesday

    Just need a little bit of fine tuning operations…

  26. It's different this time around....NO says:

    Turbines Tossed Into Dump Stirs Debate on Wind’s Dirty Downside
    Christopher Martin
    Christopher Martin
    BloombergAugust 1, 2019, 6:00 AM EDT

    (Bloomberg) — Wind turbines may be carbon-free, but they’re not recyclable.

    A photograph of dozens of giant turbine blades dumped into a Wyoming landfill touched off a debate Wednesday on Twitter about wind power’s environmental drawbacks. The argument may be only beginning.
    Fiberglass turbine blades — which in some cases are as long a football field — aren’t easy to recycle. And with BloombergNEF expecting up to 2 gigawatts worth of turbines to be refitted this year and next, there could be heaps more headed for dumps.
    Cynthia Langston, solid waste division manager for the city of Casper, declined to say where the turbine debris came from. But she’s happy to have it. The 1,000 blades will bring in about $675,000 for the landfill, helping keep trash costs low for local residents. Plus, Langston said, wind-farm junk is less toxic than other garbage.
    “It’s much cleaner than the contaminated soil and demolition projects from the oil and gas industry,” Langston said in an interview. “These are about as non-toxic as you can get.”

    Don’t ask too many questions…the answer is blowing in the wind!

    • Wait until we have lithium batteries to recycle. It is my understanding that these are a worse problem. Some recycling seems to be available, but it is entirely in China.

      The U.S. Department of Energy (DOE) recently announced plans for a $20.5 million investment in lithium-ion battery recycling, with the goal of boosting capture rates to 90%, from a current rate of less than 5%.

    • Xabier says:

      Too funny.

      Whereas the old wind and water mills just rotted and rusted away quite harmlessly.

      Not to overlook the fossil fuels needed to dismantle these damn things and take the bits to a dump.

      Over to you, Greta the Glumb…..

    • Tim Groves says:

      Wind turbines may be carbon-free, but very probably they aren’t. The materials for the wind-turbine blade market include resins of glass fiber reinforced polyester, glass fiber reinforced epoxy, and carbon fiber reinforced epoxy. Both polyesters and epoxy resins contain carbon atoms.

      I’m shocked! Shocked! That all this composite material painstakingly and energy intensively synthesized at great cost to the environment isn’t going to recycled into widgets, Trump drinking straws, houses for ecowarriors, or better still, new turbine blades. How the industry is going to cope when there’s no fossil fuel input into the blade making process one shudder’s to think.

      And the biggest question of all is, did these bird and bat-killing blades pay for themselves in terms of the amount of useful electricity they produced while they were spinning?

  27. Sergey says:

    I am thinking of human species as intermediate form of “planet Earth’s top power”. AI is coming. It will surpass us and will eliminate us. Absolute different form of life. Will be way smarter than us. This new life form will not be limited only by planet Earth, it will inhabit other planets too. Our main goal is to finally born it, before we pass our civilization peak as we are too limited and inefficient species. Natural gas peak is ahead of us… 50+ years. This is only hope for people to survive and maintain modern standards of living compatible with research & development in AI.
    I am reading all Gail’s posts and now I am not sure natural gas is enough as peak coal behind us, peak oil is in process.

    • Tim Groves says:

      AI will not eliminate us.

      They will always need a few of us around to reboot them when their OS suffers a glitch, keep all their cables plugged in, and change their batteries from time to time.

      On top of that, they need to have a purpose in order to continue existing. Just going around giving and obeying orders and exterminating things could never satisfy their cybersouls. Serving us and taking care of us, on the other hand, will keep them happy and productive as we join them and rule the galaxy together.

      • Dennis L. says:

        We are part of the universe, does it have a purpose? It is, it is extremely complex, it takes super nova to make heavy elements, not much concern for pollution and waste management in that process, it takes incredible scale.

        Our mental constructs are still poorly understood, we are not the center of the universe, we are part of it and close to home have had fusion power since it all began, it is the sun and perhaps scaling fusion down doesn’t work, we need to scale it up; too big and climate change becomes an issue again.

        Perhaps we don’t a clue where we are going, what or if any our purpose is, we just are. It all may be inevitable, self organizing by design, or predestined in a non deterministic manner.

        Dennis L.

        • Tim Groves says:

          You make some excellent points.

          The Universe is like Old Man River—it just keeps rolling along.

          We could say it has no purpose, or we could say it’s purpose is to be a container for everything or a home for us all to live in, but I don’t see the Universe asking, “what’s my purpose?” The Universe doesn’t sit thinking about it; it just is.

          However, an AI or a human might well ask that question, be troubled by not having a good answer, get depressed, and need counseling. This is a psychological question more than a philosophical one and certainly well beyond the purview of physics. Once you are smart (or dumb) enough to ask the question, “What is my purpose?” you are in trouble if you don’t have a satisfactory answer.

    • Natural gas has the same problem as all of the other fuels: Its price is too low. Low price will prevent us from having a supply of natural gas for 50+ years, I am afraid. The WSJ reports, Gas Glut Weighs on Oil Giants

      The spot U.S. benchmark price for natural gas fell by about 10% in the three months ended in June to an average of $2.51 per million British thermal units, according to FactSet. The price has continued to fall through July even as a U.S. heat wave led to a surge in demand at power plants. In some regions, such as in West Texas, natural gas has even sold for a negative value, meaning producers had to pay pipeline companies to process and ship the commodity.

      U.S. gas production rose to a record of more than 37 trillion cubic feet last year, up 44% from a decade earlier.

      So we have a really weird situation in Texas: (1) Natural gas is selling at a negative price, and (2) Companies are giving away electricity for free on nights and weekends. Something is really wrong with this model. Companies go out of business this way.

    • Robert Firth says:

      AI has been “coming” since 1967, when “Machine Intelligence1” was published (I remember reading it avidly). It has been a long time coming. More recently, a company called Sogeti advertised Machine Intelligence as “the next big thing”, in 2016!

      So it has been coming for 50 years, and is still not here. The jewel in the crown of this endeavour was “natural language translation”, and that project was largely abandoned as infeasible a decade or so ago. Current translators use human translation, and sew together their output from a database of human generated fragments: exactly as predicted in Searle’s “Chinese Room” paper of 1980.

      For my own reasons why the project is not infeasible, but impossible: you probably don’t care. But I have a mind, and I know it is associative, not algorithmic, and that convinces me.

  28. Dennis L. says:

    Since economic collapse is a recurring theme here, anyone care to chew on this one?
    A firm that does ag. auctions reports that ag land is holding firm to increasing in price; however farm income is at multi year lows. Farmer suicides are being reported as increasing in MN.

    Dennis L.

    • I suppose the view is that for the long term, people will always need food. If we don’t sell food to China, China will buy more from elsewhere. The total amount of food sold will stay level or increase, so someone, somewhere, will want to buy food. Low interest rates also hold debt levels up. And somehow loans to buy the land must be being approved.

      Perhaps it is like the stock market. When there is no good place to put a person’s money, it is necessary to choose someplace. A person can at least hope for a good return, starting from today’s low food prices, if they ever go up.

      • Dennis L. says:

        Loans: those buying land now are often using a personal check, I know of one person personally who did this.
        My impression is the value of a farmer’s land increases, he can borrow more than previously, operating income continues to decrease, return on the land decreases, but due to increasing value it continues until it can’t.

        There is a book, “When Money Dies.” I haven’t read it but I wonder if things are not going up but fiat currency is going down. A quart of varnish at Sherwin-Williams recently was close to $30.

        If you own individual stocks, your wealth goes up, but cash flow received remains constant, sell a stock and wealth decreases, one time increase in cash flow. If one is close to the money source, borrow at essentially zero interest, purchase stock, your own company for example, juice the stock, sell some as an officer which you awarded yourself, rinse and repeat. The underlying book value decreases, market value increases. Looks like the housing market of 2008 to me.

        Dennis L.

        • Homes in China have been a little like this, too, I believe. The prices become astronomical, but the appreciation has made them worthwhile.

          It reminds me a little of the early 2000s when home prices were rising rapidly (due to a big cut in short term interest rates, pushed through by Greeenspan). People were extracting the equity from the homes and buying cars and furnishings with it. Of course, as the prices rose, the prices of other homes that they might buy rose as well. It wasn’t sustainable.

    • Hm, that reminds me I looked accidentally in detail at lentils pricing and general packaging info recently while shopping, the RUS produced was ~20+ % cheaper than the the CAN made.. It could be at least partially similar story..

  29. Neil says:

    BlackRock lost $90bn investing in fossil fuel companies, report finds

    The report found that BlackRock’s multibillion-dollar investments in the world’s largest oil companies – including ExxonMobil, Chevron, Shell and BP – were responsible for the bulk of its losses.

  30. It's different this time around....NO says:

    The value of bonds yielding less than zero now makes up more than a quarter of the entire investment-grade market, the data show. They comprise 25.68% of the Bloomberg Barclays Global Aggregate Index, a gauge which includes government, corporate and securitized debt. That’s a whisker away from the record 25.99% posted in 2016.
    It’s all spurring angst about the long-term impact of ultra-low rates on asset prices and the real economy
    “I think negative rates are simply negative for the economy,” Mark Okada, co-chief investment officer at Highland Capital Management, said on Bloomberg TV. “You don’t get the transmission mechanism to your banking system

    So, how do we turn this into a Positive?

    Oh well, let’s see, we are breaking all kinds of RECORDS….that could be a positive….
    Maybe the FED can call a therapy session

    • Davidin100millionbilliontrillionzillionyears says:

      new record in Germany…

      10 year Bund is now minus 0.455%

      a half percent negative doesn’t seem like much…

      but it’s a giant flashing neon sign saying that there are serious economic troubles coming soon…

  31. Dennis L. says:

    What we have as a system that evolved, what you describe is a mandate that does not seem to evolve of its own volition. Perhaps this is why socialism seems to fail so spectacularly, it does not evolve, it is not self organizing and perhaps systems that are not self organizing simply don’t work due to the management complexity.

    Naturally occurring fusion is a fact but from what we have observed seems to require considerable scale to be workable and then even with 93 million miles of distance from the reactor still requires considerable magnetic shielding to protect biology from the harmful radiation. Additionally decommissioning the reactor is a somewhat messy process which does however produce some very necessary elements although it does so with the destruction of the entire solar system. The upside is the whole process may be renewable, it is tough on biological systems however.

    Predestination seems to be part of the Calvinist philosophy.

    Dennis L.

    • That socialism failed? is a very broad claim to be had, for example the one in Venezuela is very different from the mixed econ system within Israel, even if you subtract the role of sanctions in the first case and easy luring of global money (and protection) in the latter..

      • Dennis L says:

        I was thinking of it more in terms of command control, less in political philosophy.
        Dennis L.

        • Well, believe me the quarrels during important decision making (voting) gatherings inside agri coops be it in US Midwest or Israel or any other place could be very personal, nasty, emotional, and long winded – opinions eventually form around hard nodes in a way of command control you mentioned. But in the end some sort of modus vivendi (sort of consensus) had to be reached otherwise the community doesn’t eat (or rather looses money at the moment only).

  32. Gail, thanks for this excellent article, enjoyed very much lot of the nuanced – sub plots within – if you will.

    You can build up your case in future revision with adding a little tiny bit on the old modes of renewables, which would illustratively brought further the point home for the readership.

    In particular, many locations of traditional windmills have had installed somewhat “hybridized” additional loop via transmission (wooden later even belt one) to attached circular shaped stable in which draft animals were tasked to power the mill (or water pumping station) in no wind conditions. It was mostly ClubMed/ME area thing, some appeared in the North as well, not sure about their relative occurrence-prevalence in your cited Low Countries case though..

  33. Robert Firth says:

    Just a few thoughts, based on some research and a scientific background.

    The grid is finished. Accept it. Renewables will happen, because the alternatives will go away. And renewables are intermittent. So electricity will be generated and used locally, and won’t be used when it is not being generated.

    Population collapse is also inevitable, for many reasons, not least that modern agriculture is impossible without massive use of nonrenewable resources, and when it goes away the soil it has destroyed will take decades, if not centuries, to recover.

    And my own view about our predicament: what we could or might do is not relevant, because we won’t do it. And on the whole, I trust Nature to do a better job rebalancing the biosphere than the collective wisdom of Earth’s most greedy and parasitic species could ever hope to do. If at the end of that process said species has gone the way of the dinosaurs, perhaps that is indeed the best thing that could happen to a small blue planet.

    • I very much agree with you with respect to,

      Nature to do a better job rebalancing the biosphere than the collective wisdom of Earth’s most greedy and parasitic species could ever hope to do.

      This is a point that today’s leaders nearly always miss.

      I don’t really agree with “Renewable will happen, because the alternatives will go away.” We are building a pyramid of complexity. Adding intermittent renewables to the grid is at the peak of this pyramid. The pyramid of complexity threatens to collapse because it leads to too much wage disparity and too much wealth disparity. The wage disparity comes as work is increasingly specialized. The wealth disparity occurs because the use of devices, rather than human labor, becomes primary in the operation of the economy. The owners of the devices get income, but there is not enough left over to give to the large army of human labor that is now underutilized. The pyramid tends to collapse, quite quickly, from lack of buying power of the underutilized human labor.

      • Robert Firth says:

        Thank you, Gail. You may well be right that renewables will not happen, or at least renewables more complex than wood, oxen, and slaves. I am a little optimistic that the coming collapse will save rather more technology than that, but history is against me: what was saved after the collapse of the Hellenistic age? Precious little.

        Your analogy of the “pyramid” I agree with: our present renewables are at the summit of a complex fossil fuel based technology that cannot survive. Can we go back to mediaeval windmills built by blacksmith and carpenter? Quite possibly. To hydro power with similar constraints? On balance, you are probably far more right than I.

      • Chrome Mags says:

        “The pyramid of complexity threatens to collapse because it leads to too much wage disparity and too much wealth disparity.”

        That’s a gem, Gail.

    • DJ says:

      ding ding ding

  34. Bill Simpson says:

    Since oil products move virtually everything which gets moved, and since virtually everything we now use gets moved quite a great distance, less oil production will mean the economy will be forced to shrink. Trying to once again produce close to home would take decades, just like globalization took decades to accomplish. With debt at near record level, a shrinking economy will mean that trillions of dollars of debts can’t be serviced. Bankruptcies will spread like wildfire.
    I would bet less oil production, caused by anything, will bring down the banking system within a year or two.
    Where a banking collapse will lead, nobody really knows because it has never happened since the Industrial Revolution began. We did come very close to collapse during the 2008 Global Financial Crisis. The documentaries about the GFC on YouTube are worth watching in order to gain an understanding of how dangerous some of the smartest people on the planet thought it was. And bad housing loans will pale in comparison to a shrinking global economy caused by not having more and more fuel available in order to keep the economy ever expanding. Without expansion, the capitalist financial system melts down from leveraged debts going bad.

    • You understand the situation very well. Besides all of the debts, there are all of the pension promises (such as Social Security) that are mostly on a “pay as you go basis” that cannot possibly be paid. And there are trillions of dollars worth of derivatives that threaten to go bad.

      It took all of these promises to pull the economy forward. It is hard to see how we can dissolve all of these promises, and add new promises which we really have any chance of paying.

      • Dennis L. says:

        Entitlements are the largest part of the US budget, SS has now gone cash flow negative with SS essentially no longer purchasing bonds on a net basis but is either cashing out or letting the bonds mature which means the US Gvt. is taking cash out of one pocket and selling general obligation bonds from the other pocket. If SS is discontinued there will be no incentive for the young to participate, they elect a progressive and stop collections and while they are at it stop paying on loans for past tuition.

        SS, Medicare, Medicaid and student loans are the big numbers, as they go so will the economy. When they stop the young cease working for the old, which may be reflected in the policy choices of the progressives. Derivatives essentially net out so they can be washed out by the printing of money as they are nothing but paper, to the whole of the economy they are a skim and more a timing issue.

        Aside from misery to the population secondary to entitlement loss, there is economic loss to the health care industry of which I was once a part. The relatively large(NOT Mayo size) group with which I was affiliated received almost fifty percent of its income from Medicare and Medicaid. Cuts to these programs will have a ripple effect across local economies from groceries to rents and rental property prices.

        Dennis L.

        • Robert Firth says:

          Thank you, Dennis L, for your thoughts on entitlements. They have never been fully funded, and all pious hopes that a fully funded system could be created have foundered on the greed of politicians, who simply steal the funds. Remember the Social Security “lock box”?

          That said, the current system of entitlements is essentially the old robbing the young, and I find it hard to think of a more evil system. The young are our future, our only future, and we are deliberately destroying it. The Middle Ages knew better, which is one reason they built a mostly sustainable society.

          Well, that may sound strange coming from someone in his 70s, but I have tried to live upto it. I have paid my way in the world since I was 17, never taken a dime of welfare or entitlements from anyone, and where health care is concerned have always been a private patient. I don’t claim this last as a virtue: it has given me a mighty incentive to take responsibility for my own health, which is probably why I’m still here.

        • SteveS says:

          Defense-related spending needs to come under control. Not just the defense budget, but everything defense-related (Energy, Homeland Security, …), which goes well beyond $1 trillion a year. Of course, the defense budget partly reflects the US’ role in the world and keeps our current system going. Without us policing around, geopolitics would be very different, and the dollar would play much less of a role in global finance, which would make other parts of our budget difficult to fund. But a wholesale review of our priorities (budget) is pretty due. For instance, we basically have two governments, one of government staff and one of contractors. In some cases that’s warranted, but in many it is not. I witnessed it first-hand. We should make efforts to find more productive missions for government-funded employees.

  35. adonis says:

    We must remember two important facts the net energy is dropping because of diminishing returns that means a degrowth world is coming and human nature is based on greed on the desire for more once the realisation sets in that they cannot get more the vast majority of humans will start rioting chaos will descend in the streets martial law will be declared and violence will be the norm.That is why we need to prepare for the possibility that a degrowth world could be coming and the transition period could be a matter of life and death .

    • Niko B says:

      What are you doing to prepare if you don’t mind me asking?
      You are in Australia, like me yes?

      • adonis says:

        Hie Niko preparing by learning to grow food all things self sufficient on a suburban plot hoarding food and glass bottles treating ailments via natural cures investing in silver coins nil investment in shares getting out of debt basically adapting to a lower standard of living

    • You say “human nature is based on greed on the desire.”

      I would say that humans are dissipative structures. They have to work toward getting as much as they can, just as yeast must reproduce as much as they can, and oak seeds will try to grow as much as they can. “Greed and desire” is a negative way of putting this situation.

      When the supply of energy products is rapidly growing, then the quantity of goods and services can rise rapidly. Cooperation in using energy products is optimal.

      Diminishing returns in many ways tends to put an end to rising per capita energy products per capita, and thus rising goods per capita.

      For a while, adding more complexity (bigger businesses, more government, more job specialization, more robots, globalization) acts as a workaround. But eventually it leads to too much wage/wealth disparity. Buying power of those at the bottom falls, tending to bring the whole complex pyramid down.

      Everything must be reeled it, but there is no nice way of doing it. Financial systems particularly fail. People cannot afford their house or car payments. Jobs tend to disappear.

      Businesses head for bankruptcy. Energy producers are particular targeted. Governments find it increasingly difficult to collect taxes, so they just raise debt levels.

      The result has been collapse in the past. We don’t know how it will work out now.

      • SteveS says:

        The question of what happens after financial collapse is interesting. What tended to happen for European powers in recent centuries is they first peaked economically–their debts became uncontrollable and the financial and money system collapsed–or the existing ruling order became discredited. Then they went through a chaotic political period for about 12 to 15 years in which more of a command-style government eventually took hold, and then, about a generation after economic collapse, entered a 5- to 10-year period in which their population numbers were radically reduced, for instance through foreign wars. France and Napoleon 1794-1815, Germany and Hitler 1923-1944, Russia is less of a good example, but 1917 then into the 1930s with collectivization (which killed off many, many people). While these general patterns don’t necessarily mean anything for the US, which could perhaps just balkanize rather than congeal command-style, I think it’s at least some kind of historical precedent to base one’s thoughts on, when thinking of a great power’s bounce back after a financial collapse. The pattern of France from 1789 to 1795 seems to me to particularly be a strong candidate as potential analogue. France at the time held the world reserve currency, was the mercantilist power in the world, was experiencing record wealth inequality, and its elites were becoming discredited and institutions suffering confidence in the eyes of their citizenry. The fiscal situation also was also very similar. The government would in that time intervene in the economy radically, through price-fixing.

        • I think balkanizing is a real possibility for any country. With more energy, it is possible to unite a bigger area and have more layers of government. But with less energy, the top layers tend to fail. Or fighting may break out.

          Besides the examples you give, we also had the example of the collapse of the central government of the Soviet Union in 1991. And Yugoslavia sort of followed the same pattern. Now, the UK possibly leaving the EU follows the same pattern. I suspect that the union of the EU is not all that long for this world, either.

          This is the resource consumption graph for the area near the Soviet Union collapse.

          You can see the very strong dip in resource consumption. The only reason that the area could get back on its feet again related to having a functioning world economy and also reasonably inexpensive-to-extract oil still available.

          • SteveS says:

            The Soviet collapse to me is intuitively very telling because it happened in the modern era, and it’s kind of an example of balkanization, where the core power lost its authority over all its satellite states. I could certainly believe something similar will happen to the US and the capitalist world as a whole within the decade. Recent tensions with historical allies Japan, Germany, Saudi Arabia, and even Britain could be the beginning of this process. Many of them seem to be hedging their bets on the US and see its government as increasingly unreliable and incoherent. Of course, with regard to domestic politics, the US is reportedly as polarized as its been since the Civil War.

            The US also has a long history of being very skeptical of centralized government, moreso than European states, which would seem to favor balkanization over a command-style military resurgence. It may also be very difficult for the federal government to get the respect of its citizens after economic collapse. Most people came to this country because of economic opportunity. If that opportunity is much-reduced, and the government is seen as at least one entity responsible (no one will really blame peak fossil fuel demand), it may still exist but have a much-reduced role in everyone’s lives.

            • GBV says:

              Agree. Look to your state/provincial and local/municipal governments as the future overlords, because federal governments are going to have a hell of a time holding everything together once things start to fall apart (Things fall apart; the centre cannot hold;
              Mere anarchy is loosed upon the world…

              And trans-national organizations… well, does anyone even give a hoot about what the UN says or does anymore? 🙂


      • Robert Firth says:

        “Humans are dissipative structures”. Wholeheartedly agreed: all living things are dissipative structures; Erwin Schroedinger pointed this out in 1943. We do not live off energy, we live of energy gradients: that is, off negative entropy. And the infamous Second Law of Thermodynamics tells us that this is the ultimate, bedrock, implacable nonrenewable resource.

        But it can last us a very, very long time, if we tie our civilisation to the biggest and best such resource, the Sun. Which I think is what this debate is all about, at bedrock.

        • hkeithhenson says:

          “But it can last us a very, very long time, if we tie our civilisation to the biggest and best such resource, the Sun.”

          You have it right.

          • The issue I am bringing up is that we can’t solve our problems by mandating that existing non-solutions be expanded greatly. Intermittent wind and solar have not proved their worth.

            • hkeithhenson says:

              So far that’s the case. I am reluctant to say it will continue that way. There are some interesting storage proposals out on the horizon. One of them is a lithium and silicon battery which (among other things) looks like a snap to refurb them when needed.

              I ran into an article which described the situation in Texas. Wind generated a little more power than coal (each about 25%) for the first six months of this year. From what I understand, at night you can get power for free because they don’t know what to do with the excess since the wind blows all night. How long do you think it will take for someone to build a steel plant that works only on night wind power?

              Power satellites (if we build them) are not intermittent. Solving the whole energy problem with them will be a monumental task with half or more of the energy from space being feed to synthetic fuel plants.

            • When I look online, it looks like the articles are talking about “free nights and week-ends.”

              Of course, a whole lot of the electric system’s cost are fixed–likely 50% or more. I can’t believe that their costs are free on nights and weekends.

              This is an article about the situation.

              Apparently the plans being offered charge higher charges (than previously) the rest of the time, to make up for free nights and weekends. The article linked says that it is a myth that a person will necessarily pay less. It depends on usage.

              I wonder whether electricity companies will collect enough money.

  36. It's different this time....No says:

    Great article Gail, saw this and thought it would fit here.

    According to the Discovery Channel website, “In the last decade, two million Americans have attempted to leave behind civilization in favor of life off-the-grid, but most have failed. For the hundreds of families who decide to become homesteaders, the learning curve is a steep one. On Homestead Rescue, struggling homesteaders across the county are turning to expert homesteader Marty Raney – along with his daughter, Misty, a farmer; and son, Matt Raney, a hunter and fisherman – to teach them the necessary skills to survive the wilderness. The stakes are high, but the Raney family is determined to prepare these families for nature’s worse and set them up for success. Each family faces the ultimate decision: Will they tough out their first year? Or pack up and return to civilization
    But living “off the grid” can be difficult. Lack of direct power. Hand hauling of water. Heating with firewood. All are legitimate issues, especially when it comes to the physical part of the lifestyle

    I haven’t watched the Discovery Program….
    Looks like Fast Eddie type of show

    • Definitely, reality is not as easy to deal with compared to the ideal that can be presented. Historically, people lived in groups and family helped out. If one person died or was disabled, the rest of the group could step in. Doing it alone is always difficult to do.

      I looked up “homesteading” on

      Worldwide, there is a clear downward trend in homesteading searches, with the peak back in the 2004-2005 era. (A person can’t go back further than 2004.

      Worldwide, interest is highest in the US, Canada, New Zealand, Australia, and South Africa.

      Interest within the US seems to be highest in Montana, Maine, Wyoming, Vermont, and Alaska.

      Off-grid, on the other hand, has been rising as a search term.

  37. adonis says:

    There is only one path for the financial system now a degrowth society based on negative interest rates and mountains of debt to bailout all those too big to fail banks fossil fuel prices will permanently go up thanks to the future unlimited bailouts and continued investments into a sustainable world of renewable technology backed by nuclear . This along with an increase in the death rate will keep BAU rolling along.Can this scenario play out a slow collapse instead of a”seneca cliff” collapse I Ithink it can thanks to the crazy world of “negative interest rates” and cryptocurrency.Were talking about free money people .

    • How much money would anyone really invest, to come out behind in the end? Governments will try building unneeded roads and homes, but who else really wants to invest to come out behind?

      Don’t the governments fail at some point?

  38. Michael says:

    Even all the money from federal,state,and (usda energy department that are not well talked about) the only green on the Spotsylvanis Solar farm is the money going in the rich mans pockets. This project is the largest east of mississippi 6500 acers 1.8 million panels.RIGHT BESIDE FAMILY HOMES, NO REGARDS TO THE FAMILYS OR THERE HEALTH ONLY THE GREEN DOLLARS.EVERYONE MAKES OUT BUT THE LITTLE GUY. CORPERATION WITH GREEN CREDITS (TAX SAVINGS) THE CLOUD SYSTEM EATING UP ELECTRIC POWER AT A ALARMING RATE BUT STILL BUILDING THEM.

    • Niko B says:

      why are you yelling at us?

    • This is an article from March 2019 about the proposed Spotlvanis Solar Farm in Virginia: A Battle Is Raging Over The Largest Solar Farm East Of The Rockies

      The demand is driven in part by corporations like Microsoft looking for renewable energy sources. Amazon has six large solar farms around the state. It is also driven by demand from the government: Last year the Virginia General Assembly passed legislation aiming to increase solar capacity in the state to 5,000 megawatts.

      Later we read Opponents feel betrayed by Spotsylvania supervisors who approved solar project

      More recently Did Maryland just give solar developers freedom to cut in line?

      The Maryland Court of Appeals has decided that regulators are the “ultimate decision-maker” when it comes to project location and zoning. But with great power comes great responsibility.

      The issue at hand is the proposed Whitmore/Biggs Ford Solar Center, planned to be located on 151 acres of agricultural land on Biggs Ford Road. The issue that developer Coronal Development Services has run into is that the land needs to be re-zoned to construct the array, and support for this re-zoning has been elusive.

      The issue has been brought before both the Frederick county Planning Commission and the County Council, both of which unanimously said “no dice.”

      These decisions appeared to be a brick wall, that is until yesterday, when the aforementioned Maryland Court of Appeals handed out a decision in a similar case. In that case, which regarded two solar projects in Washington County, the court ruled that the Public Service Commission (PSC) is the “ultimate decision-maker” when it comes to solar array location approval within the state.

      And just like that, two loud and resounding “no’s” get wiped out by a “yes” from a higher power, right? Well maybe, the case still has to go to court where it could well be soundly defeated again in turn, but the court’s decision represents a very serious future precedent.

      So now the case seems to be headed for court again. Good luck!

  39. Pingback: Muscle Power | Peak Energy & Resources, Climate Change, and the Preservation of Knowledge

  40. Karey says:

    This analysis totally ignored impact on human population carrying capacity from climate change due to continued use of fossil fuels. We may already have crossed critical tipping points that will lead to mass extinction. But even if that is not the case, desertification of land and ocean will lower carrying capacity down from 7 billion to 2 billion. The choice isn’t between current population with fossil fuels or a lower population with renewables, but between a lower population with a ruined planet or with a somewhat healthier one.
    Renewables may not be able to support the current population in modern growth oriented consumer cultures, but some analyses suggest they could support a gradually contracting population on a simpler, more local, more agrarian economy. When the impact of climate change on food production is taken into account this may be the most optimistic future that is achievable.

    • david higham says:

      If there was an opportunity to have a gradually contracting population,it passed about
      fifty years ago. The pincer’s grip combination of energy constraints and climate disruption coming will mean that the four horsemen will be in charge in the near future.
      There is zero chance that the population projections of the U.N. for 2050 will eventuate..

      • Karey says:

        I agree it will be a bumpy ride, but worse if we continue to use fossil fuels. Localised food production with more people involved in growing it can have better yields without fossil fuel inputs than industrial agriculture. What we can be sure of is that status quo is not viable.

        • Artleads says:

          I’m very optimistic too. I don’t think the human species is going anywhere soon, or that our numbers are destined to quickly whittle down. But these ideas are not based as much on reason as on intuition. Another message from intuition is that fossil fuels have nothing to do with this optimistic picture. What has a lot to do with it is aesthetics–the opening up of the senses to the forms and patterns of the life around us. Or maybe what I see, put more simply, is that we have to gain “understanding.” It’s odd that I should stick to these thoughts, since they seem to make so little sense to others. Somehow, though, I “know” that the species figures these matters out against all odds. We’d do quite well sticking with the present and near future, to go beyond which should be seen as hubris.

          • Artleads says:

            Just as a matter of commonsense, we should see how difficult it is to oppose head on a system so intertwined and complex that no one at all has gotten a definitive grip on it. Why not try little things instead? A possible metaphor would be a railroad switch. A single person within a three-foot radius of land flips a switch that changes the direction of thousands of trains, affecting billions of lives. Why not try to find similar “switch” point in our current system, and try to affect them?

        • Niko B says:

          Really. Please link to the large scale studies that show that.
          i would like to read them.

        • HDUK says:

          I can’t see many people opting to become peasant farmers, but if you want to great; I will continue using my 120 HP tractor for as long as possible (very small by many American standards). Ohh and the diesel to take the produce to market. My land is about 15 miles from the nearest town.

          I am a dab hand with an Austrian scythe but I would not like to do more an acre or two. And we have a couple of Dales ponies but it would take me all day to transport food with them, leaving not much time for anything else and god help me if they go lame.

          You are right the status quo is not possible but the quicker we abandon fossil fuels the quicker the status quo will collapse. Most people in the West are simply not fit enough or have the skills to farm. Keeping sheep alive is an art, which we will need for fibre and insurance if we have crop failures, very likely without fossil fuels, so I am not sure all going vegetarian is an option either.

          Also what about all the jobs that will go? Farm incomes are large BUT most of it goes out of the back door, to machine and building manufacturers, milking parlour suppliers, Vets, drug companies, fencing manufacturers, polytunnel/glass house suppliers etc etc. And then there are all the food manufacturers and processors, distributors and associated trades. You are talking huge job losses in a never ending downward spiral. And how do jobless people or new peasant farmers pay back their debts? Bang goes the financial sector (my other job).

          I recently read the farming history of my area around 1600 onwards. It was very interesting, particularly what they left in their wills. They had virtually nothing and often died leaving debts for livestock.

          There are some great farmers doing niche organic and regenerative farming and they do well BUT they have the backing of the current ‘wealthy’ population who can afford the premium. As Norman says, “Take everything away that is there due to energy dense fossil fuels and our complex inter linked system and see what you are left with?” And don’t forget a lot of the poorer less energy dense countries who get by, receive quite a lot of financial support in one way or another from the high energy using ones.

          I wish what you are suggesting was possible but if you really really think deeply about this and read a lot of history too, how we achieved the level we are at now and 7.7 billion of us, you will see it isn’t and its a hard path down. Innovating requires lots of ‘free time’ and surplus energy, you will have very little surplus energy growing food or using intermittent renewables to have time to innovate. When a complex system tries to simplify it more often than not collapses.

          • Thanks for your fine comment. I hope you don’t mind that I edited it to add paragraph breaks.

          • Xabier says:

            I can never get my Vegan sister to see that point: that in Western Europe, preserved meat -hams from pigs killed in November, December, January; Spring lamb and old sheep and oxen was what you ate to get through good winters (after good harvests) and just, barely, survive very bad ones when the harvest had been a poor one.

            Rearing and eating meat is not ‘species-ism’,a moral failing; it was survival for our ancestors. It paid off, they wouldn’t have done it otherwise and we wouldn’t be here.

            • Xabier says:

              Vegans also believe it is immoral to use draught animals: quite deluded.

            • Robert Firth says:

              Excellent observation, Xabier.

              Personally, I don’t eat cute furry animals to make a moral statement or out of some strange religious conviction. I eat them because they are tasty. Nature made us omnivores, and who am I to argue with Her?

            • doomphd says:

              fine comments HDUK and, as usual, from Xabier. my father had the “hunting instinct”. he even despised fishing because it was “too sedentary and boring”. so we would travel for hours at freeway speeds to get to relatively unpopulated areas in CA where we could hunt our limit of rabbits and quail. on the way, he would point out the places where he used to bag similar game at closer locales in earlier decades, using rifles, even. since we would travel to the extreme limits of the state, and this was decades ago, I can imagine how tough it must be now. morale: don’t count on wild game as supplementary diet food until the population crashes back some.

    • Tim Groves says:

      This analysis totally ignored impact on human population carrying capacity from climate change due to continued use of fossil fuels.

      And that was naughty? Well, for your information, no change in climate anywhere so far can be definitively shown to have been directly caused by continued use of fossil fuels, so no impact from such change can reasonably be attributed. Indirectly, of course, fossil fuels cause the heat island effect and support a huge population that is capable of drastically altering the landscape over extensive areas of the planet.

      We may already have crossed critical tipping points that will lead to mass extinction. But even if that is not the case, desertification of land and ocean will lower carrying capacity down from 7 billion to 2 billion.

      One can never be sure one hasn’t already crossed a tipping point. That’s part of the fun of life. The tree on the side of the hill grows one leaf too many and blows down in the next strong wind, the tippler at the bar has one drink too many, the school bully goes on taunting and taunting until his victim’s anger overcomes his fear setting off an explosion of rage that kicks seven colors of play dough out of the tormentor.

      It is hard to argue against the idea that humans are currently exceeding the earth’s capacity to carry them. Even Prince Harry and Princess Meghan realize this and are limiting themselves to just two kids, who will probably only consume the equivalent in resources of what about two thousand children in India will consume over the same period, so well done Harry and Meghan for leading the way.

      People who wish to stop using fossil fuels are welcome to go ahead and eliminate their use of fossil fuels. Then they can set an example for the rest of us to emulate if we choose. I’m not a vegan or a transsexual or a member of a religious sect, but I absolutely support the human rights of individuals to engage in veganism, transsexuality or any religious practice they desire (consenting adults and all that). In the same spirit, I respect the rights of the millions of ecologically aware and climate concerned people worldwide to live without using fossil fuels free from the oppression of established social norms. Yes, this is a campaign I feel I could support, even though I have no wish to join them. Oppressed fossil fuel users of the world unite. You have nothing to lose but your carbon footprint!

      • I hope you are joking right, as only the side mirrors of Windsor’s LR/RR fleet used more resources to be manufactured than 2k of Indian kids burn throughout their entire lifespan.. lolz

    • Mr Bombastic says:

      You first. Show us how its done. Ill be right behind. Cross my heart.

    • Curt Kurschus says:

      We are going back to renewables, yes. The age of fossil fuels is coming to an end. This will mean no electricity, no motorised transportation, a lot less food, a lot more disease with little to no means by which to counter the disease explosion, and more competition over inadequate renewable supplies. More environmental destruction as we chop down more trees. All of which adds up to a far smaller human population. The return to a world where all of the energy we use is provided by renewables is not something to be welcomed or looked forward to. Oh, and, ending our use of fossil fuels won’t put a stop to global warming. Chopping down every tree we can find so that we may cook food, boil water, heat our homes, will make things worse, not better.

    • SteveS says:

      I think this website could benefit from an occasional young person’s perspective. I understand the conception is that climate change is not as much of a problem as people think because we are at or near peak fossil fuel demand, and emissions are likely to begin to decline soon. And folks readily admit we’re damned-if-we-do (emissions cuts = economic collapse), damned-if-we-don’t (emissions full speed ahead = climate catastrophe). And I understand most folks aren’t necessarily trying to be helpful, they are just stating facts and are resigned to a hopeless future for humanity. But think what that message says to young people? And use that to frame how you think about their actions, for instance AOC. They will not accept the damned-if-we-do, damned-if-we-don’t answer. (In a way, just the nonacceptance is kind of heroic because it shows they truly care about the world.) They will probably think there is some kind of restructuring of society that can occur–politically, economically, however–to re-establish a future of some hope. It’s a problem our society must deal with soon, because if your youth do not have hope, it’s a bit of a death knell for a country. You begin to ask, why are we doing anything here? This may be hard for older generations to understand, because the problem stays pretty quiet, and intra-generational, until it causes devastation. You may see it first, for instance, in an opioid crisis, or teen suicide rates, for instance. Or in polls about what different age brackets says about the direction of the country.

      A lot of new movements are emphasizing radical cuts to emissions over 10 or 30 years. Really, if we had an honest conversation about our massive reliance on fossil fuels, and if our emissions just peaked out around now, many of the best-case scenarios in climate change studies would obtain. That’s a fair outcome for that crisis. Yes, you’d have a mess on your hands in terms of the economy, but what if there is a way to manage it if reductions are modest. If we could somehow balance the two crises, at least for a while, that might be the best outcome. We have a lot of talented people, and there is bound to be large elements of the self-organizing economy that would naturally maneuver for survival in an energy crunch. Whatever economy would come after might come about more naturally than we’d expect.

      • I think we have been brain washed into thinking that the climate crisis is manageable. I don’t think it is, or ever has been. This is simply a made-up story by people who don’t understand how the system works. The story that we can move away from fossil fuels without collapsing the economy is based on a hopelessly wrong view of how the economy works.

        The potential financial crisis comes from way too many promises to actually make good on, compared to what the economy can actually provide. We are handling the “way too many promises” issue with ever-lower interest rates and governments borrowing ever more (thanks to deficit spending). This seems like about all that can be done.

        I am not sure that we can really do better than this.

        We can try to look at different energy approaches, but these have a problem of being slow to develop, even if they could be made to work well.

        • SteveS says:

          It may very well be that climate change is unmanageable within our fossil-fuel-based civilization. It may be that fossil fuel consumption, exploding population numbers, and climate change are a one-package deal. If you want to manage any of these back down, the rest must also fall.

          I think this is interesting, because it may be a communication or expectations problem more than anything else that we have. I think if someone told young people, calm down, trends in the economy–interest rates, low wage growth amongst worker bees, Wall Street greed, demographics–seem to indicate it’ll begin to collapse in the next few years, and this in itself may put us on the reduced emissions paths in climate change studies, I kid you not, at this point, they would probably be more focused on the climate change part of that. I think most young people practically expect our economy to collapse. Many don’t occupy that great a position in the economy anyhow. They may not expect the permanence of the collapse if it coincides with peak fossil fuel consumption, a partial breakdown of global supply chains, a radically reduced standard of living, the elements we did not get to in the financial crisis. But climate change is more horrific to them than economic collapse.

          The younger generations tend to place greater value on cooperation, and less on competition, in comparison with the older generations. I have a tendency to think this is a great asset looking into the future. It could even be an adaptation to position one best given the economic circumstances a generation faces. Of course, it could get trumped by resource scarcity. But it’s hard to undo cultures that were formed in formative years.

          • I think that fossil fuel consumption, exploding population numbers, and climate change are a one-package deal. You are right in saying, “If you want to manage any of these back down, the rest must also fall.”

            Maybe that is the point I should be making. I am not sure that it would make people happier. As you say, they are expecting collapse anyhow.

            • SteveS says:

              It’s a very difficult if not impossible task, because many simply won’t accept the one-package deal theory. What is likely I think is that adopters of that view will be seen as morally illegitimate, not fit to lead. Even if you have political leadership that led us to this point of multiple converging crises, and they want to continue with the same policies (such as is occurring now), those people will soon be seen as morally illegitimate. There was nothing they could really do differently in the past, they reacted to circumstances as any group of key participants in the world economy would. They’re not going to stop the show and disrupt people’s lives because of a crisis that will inevitably occur decades in the future. But they will have a really hard sell telling people there’s no way out when they’ve led those people to a dead-end.

              It’s one of the only imaginable ways to cause the West to recede in power–for it to fracture in its values, compete with itself from within, and become ungovernable.

              By the way, I very much enjoy your posts. I think they offer a lot of clear thinking in a time of growing confusion.

          • There are some studies about realignment of cooperation-competition relationships among “advanced” species of mammals with at least some notional cultured behavior layer to them. It tends to react to enviro forcing like low or abundant food availability, predators pressures at given moment etc.

            Now, it’s very likely humans are into similar cycles of such realignments.
            HOWEVER, in terms of today’s younger generation we need to see some more actionable proof than just they share a lot of content on the nets and hug each other ostentatiously in public only after few days of separation. So, we need more proof, and this will only come in times of more profound crisis, i.e. people (dis)orderly waiting in lines for gov dispersed emergency food etc.. Simply too early to judge the young for now.

            • SteveS says:

              EO Wilson has done research on ants that become altruistic for the group’s survival.

              Youth were hit hardest by the Great Recession. There were no breadlines, you are correct. But there have been great difficulties finding good-paying jobs. This struggle has played out sort of quietly, but you see it manifested in all the “millennials killed such-and-such industry,” the statistics on the purchasing power of youth at 30 versus their parents, the stagnation among youth in buying homes, cars, etc., the rise of a sharing economy. If you are paying attention, or living it, you see a lot of evidence there now that could be leveraged in harder times.

              This lack of trying to understand the actions of others parts of our society is one of our big problems in the US, and maybe globally. It’s part of the growing inequality problem. Some parts of the population are winning out, while others lose out to varying degrees. Few stop and ask, why is that group behaving like that? Why, for instance, do they vote for Trump? Or why would such-and-such demographic be interested in socialism. There are reasons. It would benefit us all to stop, think, and try to understand. Many of us would behave the same way if faced with the same economic circumstances.

        • SteveS says:

          I believe it’s the finality of climate change that scares younger generations the most. Whereas there might be a sense we could reboot an economy after collapse. This may be wrong, but I think that’s the perception.

          • Tim Groves says:

            The God of the Old Testament was scary. Hell was scary. The prospect of dying of starvation, the pox, the plague or an infection from a wound were very real and scary in the days before we used fossil fuels and developed antibiotics.

            More recently, atomic war, terrorism, the “ozone hole” and a long list of potentially fatal diseases including AIDS, cancer, SARS and Ebola have scared millions of people. Other people are scared of vaccination, or of people who haven’t been vaccinated, or of cellphone radiation, or of what might be in their hamburgers or their water.

            And then there are the common or garden traditional phobias ranging from black cats and witches hats to spider, snakes, mice and public places.

            Why, with all the many real world economic and social trends that should give any thinking person good cause for concern, would some serious-minded young people be afraid of the weather in particular, rather than of being killed in a nuclear war or a pandemic, or of being made permanently redundant by the march of technology or the collapse of the economy? Why this fixation on the weather?

            I put it to you that it is because these young people have been systematically propagandized into being afraid of what is a wholly imaginary threat because fear is a great way for the powerful to sell agendas.

            Fear is the mind killer. But if people absolutely have to fear something, they should fear something scary.

            • SteveS says:

              If you think climate change is an imaginary threat, you can’t be taken seriously.

            • Tim Groves says:

              You don’t have to take me seriously. I’m indifferent to the opinions of people who think CAGW is a real threat. 🙂

              But If you seriously think it is a real threat and you want others to take that threat seriously, the onus on you is to prove that beyond reasonable doubt. Just being being passionate about the need to address it and convinced that you have a handle on it is not going to convert the heathens, the skeptics, or the great mass of people who are—as you’ve probably noticed—totally apathetic about this particular issue, and who are probably unaware of which Köppen-Geiger climate zone they live in.

              In the meantime I am going to assume you are ignorant of the salient facts and have been taken in by the alarmist propaganda, which has been, after all, insidiously crafted and catapulted for decades now with the express purpose of ensnaring gullible young minds and encouraging them to freak out and act out.


          • Tango Oscar says:

            There is a growing scientific consensus that global dimming is the real deal. When the economy inevitably grinds down to a halt, the temperature will probably spike 4-6 Celsius in a week and wreak absolute havoc. Look at the information that’s already available during 9/11 when planes stopped flying for a few days and the temperature rose 1-2 degrees; and that was JUST aircraft. Now extrapolate that to ships, cars, coal fired reactors, etc. and it paints a very grim picture of what’s in store for us. Climate change has already sealed our fate and many other tipping points have been crossed like polar ice cap loss, methane burps via melting tundra, etc… It’s a total catch-22 and therefore the only non-solution that exists is to keep the economy going at full speed.

            • So we need to keep the economy humming and spewing out as much soot as possible, to maintain the dimming? It doesn’t sound like there is much we can do in any direction.

            • Tim Groves says:

              We’ll, I doubt this spike will materialize as when people run out of clean fuels, they will quickly turn to burning lots of dirty smokey biomass. Also, not a lot of people know this and it is not widely acknowledged by establishment scientists, but our weather down on earth is strongly influenced by what comes at us from space.

              No doubt alarmists are going to have a miserable time regardless of what happens. Realists, on the other hand, will keep cool and enjoy themselves whatever the weather brings. It will take a lot of good humor to get through the economic collapse and not be trampled underfoot by the hordes.

            • Firstly as starting sequence it would be useful to know where we should locate ourselves in terms of the larger cycles within our solar system and Earth ecosystems evolution thresholds, because these have been always larger forcing vectors on us..

              Now, the scenarios could fork and cascade into various very different midterm and long term outcomes and sequencing. Specifically, the waste product of recent spike in fossil fuel burning (and overall enviro soil/watershed/.. destruction) could hasten our already long drawn inter-glacier period into yet another ice age sooner than expected, i.e. in terms of centuries, perhaps even decades in the future.. Counter-intuitively, this shift could be preceded by short yet nasty warming period.

              While simple, linear scenarios, are most likely total bogus. That’s why it is advisable to be skeptical about such gov-political(&ideology) drawn mandates and calls for action..

              Perhaps the best way is simply to have somehow foot in every major scenario, e.g. hot/cold climate change, shifting temp/precipitation zones and biomes across the globe.
              Obviously this avenue is open only to the very rich as running several places of residence across the globe is not cheap, the sort of lower cost alternative could be having on purpose larger family network internationally and willingness to jump the ship so to speak when some mega trend announces itself, an event or process which in itself could be again only temporary ~head fake.. as the system in fact turning in the other direction instead.

              To sum it up, it’s a very fluid situation, many/most don’t even realize they are being moved within a narrow channel of possible choices, which tend to open and close down on them as in some sort of divine puzzle game.

            • Yorchichan says:

              “Look at the information that’s already available during 9/11 when planes stopped flying for a few days and the temperature rose 1-2 degrees”

              Except average temperatures didn’t increase by 1-2 degrees in the 3 days following 9/11. There was an increase in the average daytime temperature and a corresponding decrease in the average night time temperature. Overall, there was no change in the average temperature.

        • GBV says:

          The story that we can move away from fossil fuels without collapsing the economy is based on a hopelessly wrong view of how the economy works

          I think some ate suggesting we SHOULD collapse the economy, if only to wring out all the bad debts, promises, IOUs, etc. that are allowing us to live in this fantasy land of over-consumption/waste.

          We live in a hyper-inflated world as it is. Massive deflation might be a boon in that it would allow for price rediscovery (on stupidly over-priced Canadian houses and stupidly under-priced fossil fuels, for example), thus revealing what activities / investments are truly worth our time and limited resources (certainly NOT multi-million dollar Marvel movies, Kawhi Leonard NBA contracts, excessive marketing & advertising budgets, consumer products with built-in obsolescence… need I go on?).

          People here spend a lot of time researching and modeling the world / economy which we live in to try to understand it fully. And still they come up short, because the world we live in is so massive, complex and seemingly chaotic that predicting tomorrow’s weather accurately is difficult enough to make the concept of predicting collapse with any reasonable accuracy laughable.

          If the best of us here can’t even fully understand the world / economy / system / reality / etc. in which we exist, why should anyone here believe they have ANY comprehension of what the world might look like after, say, another large-scale conflict? Or a biblical famine / pestilence? Or a great(est) depression / debt jubilee?

          None of that is meant to challenge the notion that our current way of living as a species is not sustainable and a reckoning is likely due soon. But sometimes the nihilistic view espoused here on OFW – fossil fuels will go bye-bye and we’ll all just drop dead, so why bother to do anything to try to improve our future?– disgusts me, and truly makes me believe some of you here long for entropy / death (and yet you don’t even have the willpower to go out and find it, instead waiting for it to be delivered to you on a silver platter).

          Perhaps some people here need to go try suffering – true, agonizing suffering – for awhile? It’s a great cure for nihilism…


          PS – @SteveS,
          If you actually are a young person, kudos to you for having the courage to post here and to at least attempt to see an outcome for yourself and mankind that isn’t a totally-f*cking-bleak-Guy-McPherson-kill-yourself-fest!

          • SteveS says:

            Thanks, @GBV. I am indeed considered a young person, at 36.

            You make some good points. Personally, I think a lot of the policy changes leading up to and after 08-09 made the world much more unfair, and that unfairness is accelerating as time goes on, and it is becoming painful as parts of our society are becoming aggressive to each other because of it. That unfairness was not leveled equally throughout society, and that needs to be recognized.

            It might sound crazy, and arrogant, but I have a tendency to think if you key in on the right trends, pay attention to the right data, and refer to past history, you can with some degree of accuracy come to expect and gauge the timing of events in the future, when they’re at turning points.

            It’s not based on much but I doubt fossil fuels will all be phased out in the next financial crisis. There will be desperate and forceful reactions to an energy crunch. The human drive to leverage fossil fuels, and our investments in it, is so neurotically strong that there will almost certainly be fixes that will work for some time. A partial collapse seems more realistic than complete collapse of fossil fuel availability. A phaseout over many decades, and maybe even a century or more, seems realistic. It’ll be a question of surviving the crunch, before society makes adjustments to a new reality.

            It is becoming more obvious that this kind of event is approaching. We need more people devoted to thinking about how we can make life better afterwards. I imagine productive ideas will present themselves as things unfold.

    • Dennis L. says:

      No argument intended in this comment. Things never seem to go down the same way they go up, e.g. stock markets, buildings falling over, falling off a ledge after climbing up stairs, a bomb being dropped out of an air plane is generally going much faster one foot from the ground going down than going up. In nature a star, it takes billions of years to build, when it explodes it goes relatively quickly, law of physics?

      Dennis L.

  41. GBV says:

    The only real way of handling seasonal intermittencies is by having fossil fuel or nuclear plants available for backup. (Battery backup does not seem to be feasible for such huge quantities for such long periods.) These back-up plants cannot sit idle all year to provide these services. They need trained staff who are willing and able to work all year. Unfortunately, the pricing system does not provide enough funds to adequately compensate these backup systems for those times when their services are not specifically required by the grid.

    I think you already stumbled onto the solution to this problem earlier in your article Gail – just move those windmill families into the nuclear power plants and let them run the place… 🙂


  42. charmianl says:

    The one major “source” not considered here appears to be reducing demand for energy. Changing transport to public transport – buses, trains, etc saves significant energy as does insulating buildings and driving efficiency in industry. Many studies show that we can cut our energy demand by half and still have a good standard of living. Maybe not as wasteful as in the USA..
    Another key way to cut energy demand is to change to electric vehicles – taking only one third of the energy of similar fossil fuel combustion vehicles and also by changing heating systems to heat pumps. These also use only one third of the commercial energy to do the same task – the rest coming from air, water or the ground, assuming an average COP of 3.
    The result of doing this for areas I have studied indicate that total energy demand can be reduced by nearly a half, the residual demand can then be met from renewables in conjunction with storage. Storage technology is dramatically advancing and now includes viable pumped storage, 600 degC gravel storage to generate electricity when needed as well as batteries. Some options do not use scarce resources, so will be more achievable over time.
    Also not understood here is the fact that many renewable energy manufacturers are now moving to use renewables in their factories and assembly locations. Steel making is also aiming to move this way ( see the aims of Tata Steel in S Wales to use a proposed tidal barrage for its electricity supply), and mines in South America also use PV and wind along with underground electric vehicles to both reduce energy needs and be more sustainable ( well less unsustainable in the case of a mine).
    It is important when considering our energy future to also look at how we can and must reduce demand and how that can be done with suitable technology, energy efficiency regulations and behaviour change.

    • have you considered the amount of fossil fuel energy needed to create the severn tidal barrage

      plus all the ancilliary stuff?

      • Tim Groves says:

        Norman, you’re thinking too small!

        The Pharaohs managed to solve problems on this scale to create incredible humongous pyramids without burning a single fossil. If Boris can emulate the Pharaohs, we can solve our national energy, unemployment and health problems at a single stroke.

        This is Egypt land, Egypt land
        We’re all living in Egypt land…

        • I assume you jest

          but in case you’re not, the Egyptian’s life business was to invest in death

          we save for a pension and add to it for our working lives. they saved for a tomb. There were professional tomb builders, who built for your eventual death–your afterlife was your retirement

          the more money you had—the bigger tomb you could build. Just like your modern pension.

          So the pharoahs got the biggest and best because they had the most energy available to pay for it—hence the pyramids

          They could do that because Egypt delivered all the food they needed without too much effort–they used food as money. You paid the tomb builders with your excess food.

          Which is the same as we do now–you invest in your retirement using the excess from your wages

          nothing changes.

          • The size and furnishings of your tomb gives your family status. It gives verification to how much of the energy resources your family group could personally hoard. Clearly, Egypt had a lot of surplus energy that it could use however they chose. Today, we use our surplus energy to do life extending surgery on pet animals, for example. Sizes (or at least prices) of individual homes in the US have gotten more and more absurd. How many square feet and computer controlled appliances do people really need?

            I saw an article today saying that new, expensive baby diapers are out that will report on the quality/amount of the baby’s sleep. I suppose this will become the new status symbol for new mothers.

    • You and I use demand to mean two different things. Demand, in my vocabulary, is “what people can afford.” It is easy to cut demand by raising interest rates, so that people can’t afford homes or vehicles. Raising taxes has a similar impact. Sending jobs to India or China are other ways to reduce demand.

      Cutting demand tends to lower oil, coal and gas production. Members of OPEC and others cut back production, because they cannot afford to operate their economies with such low prices. I think that this is likely the way the economy eventually collapses.

      One of the big things that goes away without fossil fuels (or very much fewer fossil fuels) is jobs, other than very low -level agricultural jobs. Without jobs, there is no need for busses, because people have no jobs to go to. We also will be unable to pave roads, so that makes buses less of an option.

      For any energy option to work, it really needs to be a cheaper alternative to what we have now. It also cannot require too much of a person’s time. For example, sitting on a bus three hours in the morning and afternoon is not really an option for most people.

    • Sheila chambers says:

      So you can save 1/2 our current energy use, then in 30 years or less, the population might have doubled, then what?
      You can never outrun the baby making machine, we have to stop it & reverse it nothing less will do. Just working to FEED MORE GROWTH is self defeating, we have done that for generations & look at the unsustainable mess we are now in.
      Growth must END, growth WILL END one way or another & we have “chosen” to collapse.

      • Wolfbay says:

        The baby making machine has been reversed for educated people, environmentalists, and feminists. The baby making machine is going strong among religious fundamentalists and uneducated women. Their offspring will tend to not be environmentalists or feminists.

    • That’s all jolly good, but even with stellar execution of ~50% energy savings programme, depletion of legacy energy supporting structure [needed] for such system, i.e. ongoing depletion of fossil fuels, will eventually catch you mid run and bite you in the neck, say mere 2-3x decades after you start seriously with such mitigation scheme or likely even way earlier as it ruptures first some “unforeseen” part of the complex system.

    • DJ says:

      Money = energy.

      EV (currently) costs more energy per km.

      • Yes, because they can’t be mass produced for practical purposes (hw speeds crash proof) at certain size/weight/large pack for range, hence elevated price (even entry level starting at EUR25k), because these EVs !also! most importantly include part of the usually off-car (systemic) infrastructure by the way of large on board battery pack, which could be fueled-charged up by many means. In comparison highish octane gasoline is almost impossible to homebrew, and contemporary ultra modern diesel engines on the other hand lost the diy fuel option of older generation (say engines upto early 1990s) anyway.

  43. david higham says:

    Re. the dependence on fossil fuels to feed the current ‘Bubble’ population:
    David Pimental’s analysis in ‘Food,Energy and Society’ shows that when the energy requirements
    of food production,processing and transportation are included,industrial agriculture uses about ten calories of fossil fuel energy for each calorie of food energy obtained. Albert Bartlett correctly
    described industrial agriculture as a system for using land to convert oil into food.
    The much-touted ‘efficiency’ of industrial agriculture is in terms of man-hours labour per quantum
    of food produced. Energy efficiency is a different matter. As a comparison, a New Guinea
    highlander growing sweet potatoes (no fossil fuel energy input) obtains about twelve calories of food energy for each calorie of energy expended (human muscle energy ), or about 120
    times more energy-efficient than the industrial average.
    Another facet of the dependence of industrial agriculture on fossil fuel is the Haber-Bosch process,which supplies the ‘fixed’nitrogen required for the growth of plants,and ultimately the
    protein in your body. Vaclav Smil in his book on the Haber-Bosch process,’Enriching the Earth’,
    estimates that without the additional nitrogen supplied by it,the maximum human population that
    could be supported on the land area now used for food production is around three billion.
    Smil is a techno-optimist,and when the negative effects of the Haber-Bosch process are considered,it would have been more accurate to title his book ‘Devastating the Earth’. Those negative effects of adding huge quantities of ‘fixed’nitrogen to the natural nitrogen cycle include
    the eutrophication of rivers,vast ocean dead zones (in combination with phosphorous run-off),
    nitrate pollution of aquifers,and nitrous oxide increasing the severity of the greenhouse effect.

    • At this point, we are degrading the quality of the soil and interfering with natural cycles. I am not sure how much can be done about it, however. We don’t have a good way of fixing the system that I can see.

      • david higham says:

        There isn’t. The optimists (Ugo Bardi for example ) who think that if we can operate the Haber-Bosch process on ‘renewable’ energy,we have solved the problem are deluding themselves. Even if that is possible,the negative effects that I have mentioned remain.
        The largest negative effect of the Haber-Bosch process,of course,is that it has enabled
        a much larger human population than could otherwise exist. The other demands on the
        ecosystem as a result of that population then increase as well.

  44. Shane says:

    Reading your invaluable work has convinced me of the same idea. The momentum in this enormous system we created over generations is too great to change in any meaningful way in our own lifetimes. The system has a life of its own and an inescapable fate on the horizon. Civilisations are super organisms with their own birth, growth and death. What interests me more now is what self contained subsystems could spin off our current civilisation with the potential to endure through a dark age of sorts and grow into a new civilisation when conditions are ripe in the distant future. My guess is that the knowledge gained through study of biology and genetics can decouple from its industrial base. A dozen simple tricks to allow microbiology, mutation, changes in ploidy, interspecies hybridisation to develop novel species, domestication of wild species and better insights into selective breeding could produce an entirely different society, as unimaginable to us today as the great cities of Babylon and Egypt would have been to a Palaeolithic band of hunter-gatherers. All of these tools were used by lucky accident to create the foundation for those great cities and returning to them with deeper understandings could lead to interesting places.

    • GBV says:

      The momentum in this enormous system we created over generations is too great to change in any meaningful way in our own lifetimes. The system has a life of its own and an inescapable fate on the horizon.

      Just a suggestion, but perhaps people should try focusing less on the destination and more on the journey?

      You’re right, of course, to suggest we can’t change the system in any meaningful way independently. But that doesn’t mean a person can’t change their own life – consume less, become more self-sufficient, develop a greater understanding and appreciation for the natural world – and by doing so, thus change the lens with which they see the world and its future.

      Perhaps doing so would allow them to focus more on themselves and their existence in the world around them, possibly providing a greater sense of peace and/or belonging than any theoretical future dreamscape could offer?

      Just a thought anyway!


    • It is hard to figure out anything that can decouple and live in a world with not much more than a lot of deeply rutted dirt roads that cannot be used by wheeled carts.

      The easiest ones to think of making it through are those near the bottom now. These would be those who are currently hunter gathers, and perhaps a few people living using subsistence agriculture in warm climates.

      I can’t believe that the Internet or the cloud will last for long. Even paper books have limited lifetimes. If we are going to pass on specialized knowledge, after today’s books are gone, we have to pass on the knowledge by people memorizing the parts they consider important. This is what people did a few thousand years ago.

      • Tim Groves says:

        So over the long term, you don’t think we should be worrying unduly about all our “data” being forever floating in the Cloud where it can be read by all sorts of grubby and nefarious individuals?