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.

Recommendations

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.)

Notes:

[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. el mar says:

    The whole so called civilisation is like an indoor firework. Both are powerd by finite explosive, flammable substances. They start and they end – like any dissipative structure powered by finite high density energy. First like “musical chairs” with fights about the usable remainders, later like a seneca cliff. At last, there is nothing you can do about it!

  2. Harry McGibbs says:

    “The worry I have is not so much the vagaries of the stock market, but rather the perception of the future direction of the stock market and its impact on hiring… When the CEO and upper management believe that the economy will slow down, they will hit the brakes. This entails laying off employees, instituting a hiring freeze and—through attrition—when people leave, they won’t be replaced. When enough companies do this, it becomes a self-fulfilling, downward spiral.”

    https://www.forbes.com/sites/jackkelly/2019/08/15/how-the-wall-street-stock-market-plummet-of-800-points-could-dramatically-hurt-the-job-market/#1528a99520ab

    • Harry McGibbs says:

      “Truckers have for months been sounding the alarm about a “bloodbath” in their $800 billion industry… Trucking is often looked at as a leading indicator of where the rest of the economy is headed. As 71% of America’s freight is moved on trucks, companies foreseeing needing fewer trucks is typically an omen of an economic downturn: If manufacturers are producing less and people are buying less, there’s less of a need to move goods.”

      https://www.businessinsider.com/trucking-truckers-bloodbath-signals-recession-inverted-yield-2019-8?r=US&IR=T

      • It wasn’t very long ago that the trucking industry ramped up demand by the implementation of a rule that trucks needed to have a monitoring system that would record accurately how many hours truckers worked. When this happened, there was a big demand for additional trucks, because truck drivers had been driving more hours than safety standards allowed. So many more trucks were built and truck drivers hired for these trucks. Needless to say, this raised shipping costs.

        Working in the opposite direction was the inability of customers to really afford higher shipping costs. They would use rail instead, for example. Also, China and other developing countries increasing ban on recycling is reducing truckloads of recycling that need to be shipped. They were sent to a local dump instead (my guess).

        And recently, I read about a proposed change in the law that would let truck drivers drive more hours. Many of the trucks are operator-owned. With the reduced hours, the truck drivers were covering fewer miles, so they were getting paid less by their employers. The truck drivers were having trouble making their monthly payments on their trucks with the more limited hours they could drive. Of course, if truck drivers can drive more hours, then we are back to the situation where fewer trucks are needed in total.

        So everything is conspiring to reduce truck demand.

      • Few day ago there was averted (for now) national shutdown strike of truckers – somewhere down there in the ClubMed area, Portugal?

    • Right. There is a problem of self-fulfilling prophesies.

  3. Harry McGibbs says:

    The risk of damage to supply-chains in financial crises/recessions rarely get a mention in the press:

    “In a recession, manufacturers have to be careful about the impact of slowing down payments to key suppliers. If you slow down how fast you pay them, their financial integrity may be impacted. Many global supply chains rely on Chinese suppliers and contract manufacturers. China’s industrial output slumped 4.8% in July, for its’ weakest reading in 17 years. Paying small suppliers more slowly in at risk economies could tip them out of business.”

    https://www.forbes.com/sites/stevebanker/2019/08/15/how-will-the-looming-recession-impact-global-supply-chains/#4bd6f78be12b

    • I don’t think the issue is just slowing payments to key suppliers.

      The issue is that key suppliers likely are hitting turbulent times as well, because all of their customers are cutting back on order. Doing this more quickly than others sounds good, but it pushes the bankruptcy time of the supplier forward. Or the supplier will have its credit rating downgraded, and not be able to get Letters of Credit.

  4. Harry McGibbs says:

    “Negative interest rates, toppling bond yields, greater regulation and rising recession signals have wiped out most of the value of European banks, with their shares now at meltdown prices approaching the days of the Berlin Wall…

    “That means the banks are worth now what they were when Greece, Ireland and Portugal needed bailouts, Cyprus ordered its banks to seize some deposits and Spain’s banks were saved from collapse only by a government rescue.”

    https://uk.reuters.com/article/uk-eurozone-banks/euro-zone-bank-share-meltdown-brings-prices-to-brink-of-1980s-idUKKCN1V517U

  5. Harry McGibbs says:

    “Government bond yields in the euro area hovered near record lows on Friday, reflecting heightened expectations for European Central Bank easing soon and concern about global recession risks… ECB policymaker Olli Rehn on Thursday flagged the need for a significant easing package in September, sending yields across the bloc to new lows.”

    https://www.reuters.com/article/eurozone-bonds/euro-zone-bond-yields-linger-around-record-lows-on-recession-risks-idUSL8N25C0ZZ

    • Harry McGibbs says:

      ““Negative yielding debt has quickly become a new normal, which is a staggering place to find ourselves,” said David Absolon, investment director at Heartwood Investment Management, the UK asset management arm of Sweden’s Handelsbanken.”

      https://expertinvestoreurope.com/tacking-the-plague-of-negative-yielding-debt/

      • Harry McGibbs says:

        “Two decades ago, well over half of the global bond market boasted yields of at least 5 per cent, according to ICE Data Indices. The post-crisis splurge of central bank bond buying and rate cuts lowered this to under 16 per cent a decade ago, but investors could still find plenty of higher yielding debt. Today, a mere 3 per cent of the global bond market yields more than 5 per cent — the lowest share on record.

        “Indeed, truly high-yielding debt is now almost an endangered species. Bonds with yields of more than 10 per cent amount to just 0.4 per cent of the global fixed income universe, according to ICE.”

        https://www.ft.com/content/34c4944c-bab2-11e9-8a88-aa6628ac896c

        • I’ll bet that return on investment was a whole lot higher two decades ago as well. The price of oil two decades ago was very low. It didn’t take much investment to buy the equivalent of a barrel of oil. Now the price is something like 2.5 times as high (I didn’t actually calculate this–it might be a little off.)

      • Just remember to pass the negative debt around quickly, in the hopes that the negative yield will fall even lower, sort of like the can of sardines in the link a couple of days ago.

  6. Harry McGibbs says:

    “Mexico’s central bank on Thursday cut its key lending rate for the first time since June 2014, citing slowing inflation and increasing slack in the economy, and fueling expectations that further monetary policy easing could be on the way.”

    https://uk.reuters.com/article/us-mexico-economy-rates-cut/mexicos-central-bank-cuts-rates-for-first-time-in-5-years-as-economy-sputters-idUKKCN1V526I

    • Harry McGibbs says:

      “Argentina’s historic market collapse has sparked fears that South America’s second-largest country is on track for yet another default.”

      https://www.cnbc.com/2019/08/15/argentina-stock-market-crash-ramps-up-fears-of-another-debt-default.html

      • its as well to bear in mind that when Argentina went into a state of collapse , Galtieri started a war to divert people’s attention away from the problem

        Its a familiar tactic by nutcase presidents

        • War is a tried and true way to increase government debt and provide employment to young people. I was utterly amazed at how much the US’s GDP rose when it entered WWII. All of the newly employed women helped a lot too!

          • Rodster says:

            There’s some truth to the saying: “All wars are Bankster Wars”.

          • HDUK says:

            I read or watched (but can’t remember where) that the US used a third of its oil reserves in WWII which would explain the huge increase in GDP also. Increasing use of cheap energy per capital as always is the driver of ‘real’ economic growth. It may have been in the ‘Crude Awakening’ film but I have watched and read so much about energy since I realised its importance I have lost track. It was one of the reasons why chemical farming became so prominent as all those chemical industries had to be maintained due to the jobs and profits they created. TNT became Fertiliser.

            • doomphd says:

              That’s an amazing amount of oil resources to use, when the USA was not even attacked save for Pearl Harbor. I think it shows the value of education and creativity that the Germans once had, to scare others to consume so much of their valuable resources in defense. Principally the A-bomb, but they were also working upon intercontinental ballistic missiles to deliver, and almost got them. The Japanese had a few innovations as well, in submarine warfare.

            • Consuming all of these resources, by putting a lot more people to work, was what as needed to get the US out of the depression.

              US field oil production was as follows, in thousand barrels per day:

              1943: 4,125 (about the same as 1940)
              1944: 4,584
              1945: 4,695
              1946: 4,749

              Crude oil imports were very low:

              1943: 38
              1944: 122
              1945: 204
              1946: 236

              Instead, it looks to me as though US coal mining increased, and oil production very gradually increased. The capability to increase coal production was already in place; all that was needed was the higher prices that war would offer. (Production had dropped during the Depression because of low demand.) Oil needed a lot more infrastructure to increase by much.

            • Jan says:

              There are ideas that WW2 was influenced by resources. Reportedly Hitler started march on Stalingrad in winter because of declining oil delivery from Romania. Stalingrad failed on logistic problems, they partly used horses. There is a guy on youtube working on this. Of course energy shortages might have helped to the disastrous situation of unemployment that got Hitler to power. Generally people following such ideas are suspicious to be exculping Hitler.

            • I pointed out earlier that Britain was facing Peak Coal at the time World War I broke out. Germany was facing Peak Hard Coal when World War II broke out. They both had problems with prices too low to support more extraction.

              https://www.japantimes.co.jp/news/2019/07/01/business/economy-business/japan-sticks-plan-raise-consumption-tax-despite-weak-tankan-results/#.XVk32i3MxTY

        • neil says:

          Relax. Argentina has a crisis and a currency collapse every few years. That’s when it’s not having them more than once in a year.

          • Tim Groves says:

            Quite correct. Argentina is one of the more financially volatile nations. They get a right wing government and money flows into the country. Then they get a left wing government and the money flows out again.

            By the way, Leopoldo Fortunato Galtieri Castelli was in power for just under six-months, but he will be remembered long after many of Argentina’s more illustrious leaders are forgotten because he came up against the Iron Lady, aka Attila the Hen. She was only a grocer’s daughter but she taught Sir Geoffrey Howe.

            • Argentina used to be an oil exporter at one time.

              Now that prices are low, it cannot even get adequate taxes on the oil that is extracted for its own use, because of low oil price. These are some of the issues underlying Argentina’s problems.

          • Duncan Idaho says:

            Last time I was Fly Fishing in Argentina, nobody noticed.
            Good wine, beautiful women, and great fishing.
            Plus, small population. Going back the States was a drag.

            • hkeithhenson says:

              “small population.”

              Which brings up a question: how big a population must we have for a civilization of our level or higher?

              I suspect the population required is rather high, at least if you want things like computers. There are only 3 large semiconductor fabs in the world, which indicates that a world with a billion people in it might not be able to make computer chips.

            • the one we have right now

              if you can’t understand that, then imagine a population decreased by, say half, just for the sake of discussion. A few million won’t have any effect (ref. world wars)

              to do that you have to get rid of 3.5 bn people over the next (say) 25 years.

              Which means there will have to be some kind of ’cause’ to make that happen.

              When that ’cause’ kicks in, (Methane release–rapid overheating most likely), then the level of panic, and wars of denial will finish off civilisation altogether, because the infrastructure that holds it all together will cease to exist under those conditions.

              I call it scrambling towards the stern of the Titanic

              You might be left with 1–2 bn, but they will not have the technical infrastructure to rebuild any kind of civilisation as we know it.

              After that, disease will reduce numbers to roughly pre-industrial levels. (basic healthcare –old age care will become impossible)

              I’d like to be proved wrong—but it would have to be more than just saying so, and not bouts of wish science

            • If population can be greatly reduced, and the globe is much warmer, perhaps coal in Alaska and elsewhere in the Arctic Circle will become economic. Then the world economy can perhaps grow again. It is hard to understand how a self-organizing economy really works. This is the way I can see more fossil fuels being extracted.

            • hkeithhenson says:

              Gail, perhaps I have missed something. Fossil fuel requires extraction to make it worth something in the economy. But it will not be extracted unless it costs less to extract than what it can be sold for.

              Re Alaska, the coal mines in the US have a shipping advantage and there is a lot of coal left.

              Also, looking into the future for conditions for a rebirth of coal . . . . that seems really unlikely.

            • We know that there is a lot of coal in Alaska, but it has never been economic to mine.

              If the world becomes a very different place (much fewer people in total, much warmer in Alaska) it may possibly make sense for a new reorganized economy to take place. If there are actually more people in Alaska, raising more food there, they may need the supplies (which are now local coal supplies, instead of high-cost distant supplies).

              Coal can be very inexpensive, if it is close to the users and no one worries too much about fighting the pollution it causes.

              Sorry I wasn’t very clear.

            • hkeithhenson says:

              “they will not have the technical infrastructure to rebuild”

              Why? Back in the 1970s, Herman Kahn figured out how fast the US could recover from a nuclear war that killed the cities. He considered the industrial capacity outside the cities as “B” country and the cities as “A” country.

              Looking at the history of “A” and “B”, “A” grew from “B” size in around 20 years (as I recall, it has been a really long time since I read this).

            • as you so often prove beyond any shadow of a doubt

              (and I mean that in a genuine sense)

              it’s possible to calculate a proof of just about anything—provided you don’t factor in everything.

              luckily I was hopeless ar arithmetic

    • Oil exporters need high oil prices. Mexico is struggling with both low oil exports and low prices.

      • Denial says:

        Yes but how is the Bakkaen and Eagle ford shale able to make money? Those both seem like intensive and expensive areas to pull oil out of….

        • You don’t have to make money. You just have to convince money that the price of oil will (of course) go up, and that at a high oil price, the reserves/resources you have in the ground will make a lot of money. So people will buy newly issued shares of stock, or bonds, even if you have recently filed for bankruptcy. It is crazy. Banks may even lend you more money.

  7. Harry McGibbs says:

    “New Zealand’s manufacturing activity contracted in July for the first time since 2012, a survey showed on Friday, as new orders and employment conditions worsened.”

    https://www.businesstimes.com.sg/government-economy/new-zealand-manufacturing-activity-shrinks-for-first-time-in-7-years

  8. Harry McGibbs says:

    “With entering Myanmar, African Swine Fever is continuing its spread through South East Asia. In addition, Russian authorities have reported that the virus has been found in frontier cities close to the border with China. Myanmar is the 4th country in South East Asia to have reported ASF, after Vietnam, Cambodia and Laos and the 8th in the whole of Asia, if also Russia, China, North Korea and Mongolia are taken into consideration.”

    https://www.pigprogress.net/Health/Articles/2019/8/ASF-confirmed-in-Myanmar-virus-hops-into-Siberia-461883E/

    • This virus looks like it is very difficult to stop. I expect that the amount of soybeans and grain needed to feed pigs worldwide will fall. Diets will tend to move away from pork. To some extent, more chicken and fish will be substituted, but “using less” or “going without” is another option. Meat-stretcher recipes will become popular.

      With a virus like this, we don’t know where it will stop. Will it somehow make its way to Europe? or to the US? In the US, we have so many pigs in indoor units that, as long as electricity is available, can continue to operate. Of course, if electricity becomes interrupted frequently, it seems like US pork supply will fall.

      • Harry McGibbs says:

        It has already reached Europe. I have no idea why the article I posted didn’t mention this:

        https://www.google.com/amp/s/mobile.reuters.com/article/amp/idUSKCN1US237

      • Xabier says:

        More dogs will be tortured and eaten in China, no doubt. Pet kidnappings will increase.

        • TIm Groves says:

          The Chinese may even start eating each other!

          If reports in today’s Mirror and Mail are to be believed, Chinese police are training at sticking terrifying giant forks in protestors a***s and turning ’em over until they’re done.

          • Chrome Mags says:

            More like a 1/4-1/3 curve and a great idea for security forces to maintain distance yet control of an individual.

          • Xabier says:

            Very droll. And a third copper takes the organs out and sells them?

            I think the Met should get them in London, it would add to the farcical nature of almost everything in Britain now.

            Rather like the tools used to bring knights down off their horses invented by the Flemings in the Middle Ages.

          • DJ says:

            How do you get the concerned citizens to lie down? Is it electric pitchforks?

            • Chrome Mags says:

              “How do you get the concerned citizens to lie down?”

              All they have to do is use the 1/4 prong to pull on the lower part of one leg (knee or calf) and whoosh, the person goes down. There’s a move in Tai Kwan Do and other martial arts to do the same by taking a foot and pulling on one lower leg. It works either way. I knew a guy and that’s how he won tournament and street fights. He’d use a foot to push on the back of a knee, then when the person got off balance he’d pull on a leg and down he’d go. Once a person is down he usually gives up fast because its a very vulnerable position. Remember, these are Asians – they know these tactics.

  9. FEDERICO ARTES says:

    The world is flood with easy money generated during the last decade due to the inefficient monetary policy. Useless money with no clear investment horizon to create wealth. This easy money is lacking of ideas to create wealth and just more and more inequality. Is just about a race to see who holds more money and a perfect excuse to avoid increasing wages. Is all about a big lie, where sovereign states have lost their ability to control anything.

  10. Harry McGibbs says:

    “Donald Trump is reportedly worried an economic collapse could dent his chance of re-election in 2020 after a change in a major market indicator sparked fears of a US recession.

    “The US president has spoken with a number of business leaders and financial executives this week to gauge their thoughts on the market’s volatility, according to White Housesources.”

    https://www.independent.co.uk/news/world/americas/us-politics/trump-recession-2020-election-economy-recession-yield-curve-inversion-china-trade-war-a9063446.html

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