Understanding Why the Green New Deal Won’t Really Work

The reasons why the Green New Deal won’t really work are fairly subtle. A person really has to look into the details to see what goes wrong. In this post, I try to explain at least a few of the issues involved.

[1] None of the new renewables can easily be relied upon to produce enough energy in winter. 

The world’s energy needs vary, depending on location. In locations near the poles, there will be a significant need for light and heat during the winter months. Energy needs will be relatively more equal throughout the year near the equator.

Solar energy is particularly a problem in winter. In northern latitudes, if utilities want to use solar energy to provide electricity in winter, they will likely need to build several times the amount of solar generation capacity required for summer to have enough electricity available for winter.

Figure 1. US daily average solar production, based on data of the US Energy Information Administration.

Hydroelectric tends to be a spring-dominated resource. Its quantity tends to vary significantly from year to year, making it difficult to count on.

Figure 2. US daily average hydroelectric production, based on data of the US Energy Information Administration.

Another issue with hydroelectric is the fact that most suitable locations have already been developed. Even if additional hydroelectric might help with winter energy needs, adding more hydroelectric is often not an option.

Wind energy (Figure 3) comes closest to being suitable for matching the winter consumption needs of the economy. In at least some parts of the world, wind energy seems to continue at a reasonable level during winter.

Figure 3. US daily average wind production, based on data of the US Energy Information Administration.

Unfortunately, wind tends to be quite variable from year to year and month to month. This makes it difficult to rely on without considerable overbuilding.

Wind energy is also very dependent upon the continuation of our current economy. With many moving parts, wind turbines need frequent replacement of parts. These parts need to be precisely correct, with virtually no tolerance for change. Sometimes, helicopters are needed to install the new parts. Because of the need for continued high-technology maintenance services, wind energy cannot be expected to continue to operate for very long unless the world economy, with all of its globalization, can continue pretty much as today.

[2] Depending upon burned biomass in winter is an option, but we already know that this path is likely to lead to massive deforestation.

Historically, people burned wood and other biomass to provide heat and light in winter. If biomass is burned for heat and light, it is an easy step to using charcoal for smelting metals for goods such as nails and shovels. But with today’s population of 7.7 billion people, the huge demand for biomass would quickly deforest the whole world. There is already a problem with growing deforestation, especially in tropical areas.

It is my understanding that the Green New Deal is focusing primarily on wind, hydroelectric, and solar rather than biomass, because of these issues.

[3] Battery backup for renewables is very expensive. Because of their high cost, batteries tend to be used only for very short time periods. At a 3-day storage level, batteries do nothing to smooth out season-to-season and year-to-year variation.

The cost of batteries is not simply their purchase price. There seem to be several related costs associated with the use of batteries:

  • The initial cost of the batteries
  • The cost of replacements, because batteries are typically not very long-lived compared to, say, solar panels
  • The cost of recycling the battery components rather than simply leaving the batteries to pollute the nearby surroundings
  • The loss of electric charge that occurs as the battery sits idle for a period of time and the loss related to electricity storage and retrieval

We can get some idea of the cost of batteries from an analysis by Roger Andrews of a Tesla/Solar City system installed on the island of Ta’u. The island is in American Samoa, near the equator. This island received a grant that was used to add solar panels, plus 3-day battery backup, to provide electricity for the tiny island. Any outages longer than the battery capacity would continue to be handled by a diesel generator. The goal was to reduce the quantity of diesel used, not to eliminate its use completely.

Based on Andrews’ analysis, adding a 3-day battery backup more than doubled the cost of the PV-alone system. (It added 1.6 times as much as the cost of the installed PV.) The catch, as I pointed out above, is that the cost doesn’t stop with purchasing the initial batteries. At least one set of replacement batteries is likely to be needed during the lifetime of the system. And there are other costs that are more subtle and difficult to evaluate.

Furthermore, this analysis was for a solar system. There seems to be more variation over longer periods for wind. It is not clear that the relative amount of batteries would be enough for 3-day backup of a wind system, or for a combination of wind, hydroelectric and solar. The long-term cost of a solar panel plus battery system might easily come to four times the cost of a wind or solar system alone.

There is also the issue of necessary overbuilding to make the system work. On Ta’u, near the equator, with diesel power backup, the system is set up in such a way that 40% of the solar generation is in excess of the island’s day-to-day electricity consumption. This constitutes another cost of the system, over and above the cost of the 3-day battery backup.

If we also eliminate the diesel backup, then we start adding more costs because the level of overbuilding would need to be even higher. And, if we were to create a similar system in a location with substantial seasonal temperature variation, even more overbuilding would be required if enough capacity is to be made available to provide sufficient generation in winter.

[4] Even in sunny, warm California, it appears that substantial excess capacity needs to be added to avoid the problem of inadequate generation during the winter months, if the electrical system used is based on wind, hydroelectric, solar, and a 3-day backup battery.

Suppose that we want to replace California’s electricity consumption (excluding other energy, including oil products) with a new system using wind, hydro, solar, and 3-day battery backup. Current California renewable generation, compared to current consumption, is as shown on Figure 4, based on EIA data.

Figure 4. California total electricity consumption compared to the sum of California solar, wind, and hydroelectric production, on a monthly average basis. Data used from the US Energy Information Administration through June 30, 2019.

California’s electricity consumption peaks about August, presumably due to all of its air conditioning usage (Figure 5). This is two months after the June peak in the output of solar panels. Also, electricity usage doesn’t drop back nearly as much during winter as solar production does. (Compare Figures 1 and 5.)

Figure 5. California electricity consumption by month, based on US Energy Information Administration data.

We note from Figure 4 that California hydroelectric production is extremely variable. It appears that hydroelectric generation can vary by a factor of five comparing high years to low years. California hydroelectric generation uses all available rivers, so any new energy generation will need to come from wind and solar.

Even with 3-day backup batteries, we need the system to reliably produce enough electricity that it can meet the average electricity generation needs of each separate month. I did a rough estimate of how much wind and solar the system would need to add to bring total generation sufficiently high so as to prevent electricity problems during the winter. In making the analysis, I assumed that the proportion of added wind and solar would be similar to their relative proportions on June 30, 2019.

My analysis suggests that to reliably bridge the gap between production and consumption (see Figure 4), approximately six times as much wind and solar would need to be added (making 7 = 6 +1 times as much generation in total), as was in place on June 30 , 2019. With this arrangement, there would be a huge amount of wind and solar whose production would need to be curtailed during the summer months.

Figure 6. Estimated share of wind and solar production that would need to be curtailed, to provide adequate winter generation. The assumption is made that hydroelectric generation would not be curtailed.

Figure 6 shows the proportion of wind and solar output that would be in excess of the system’s expected consumption. Note that in winter, this drops to close to zero.

[5] None of the researchers studying the usefulness of wind and solar have understood the need for overbuilding, or alternatively, paying backup electricity providers adequately for their services. Instead, they have assumed that the only costs involved relate to the devices themselves, plus the inverters. This approach makes wind and intermittent solar appear far more helpful than they really are.

Wind and solar have been operating in almost a fantasy world. They have been given the subsidy of “going first.” If we change to a renewables-only system, this subsidy of going first disappears. Instead, the system needs to be hugely overbuilt to provide the 24/7/365 generation that backup electricity providers have made possible with either no compensation at all, or with far too little compensation. (This lack of adequate compensation for backup providers is causing problems for the current system, but it is beyond the scope of this article to discuss them here.)

Analysts have not understood that there are substantial costs that are not being reimbursed today, which allow wind and solar to have the subsidy of going first. For example, if natural gas is to be used as backup during winter, there will still need to be underground storage allowing natural gas to be stored for use in winter. There will also need to be pipelines that are not used much of the year. Workers will need to be paid year around if they are to continue to specialize in natural gas work. Annual costs of the natural gas system will not be greatly reduced simply because wind, hydro, and water can replace natural gas usage most months of the year.

Analysts of many types have issued reports indicating that wind and solar have “positive net energy” or other favorable characteristics. These favorable analyses would disappear if either (a) the necessary overbuilding of the system or (b) the real cost of backup services were properly recognized. This problem pervades studies of many types, including Levelized Cost of Energy studies, Energy Returned on Energy Invested studies, and Life Cycle Analyses.

This strange but necessary overbuilding situation also has implications for how much homeowners should be paid for their rooftop solar electricity. Once it is clear that only a small fraction of the electricity provided by the solar panels will actually be used (because it comes in the summer, and the system has been overbuilt in order to produce enough generation in winter), then payments to homeowners for electricity generated by rooftop systems will need to decrease dramatically.

A question arises regarding what to do with all of the electricity production that is in excess of the needs of customers. Many people would suggest using this excess electricity to make liquid fuels. The catch with this approach is that the liquid fuel needs to be very inexpensive to be affordable by consumers. We cannot expect consumers to be able to afford higher prices than they are currently paying for fossil fuel products. Also, the new liquid fuels ideally should power current devices. If consumers need to purchase new devices in order to utilize the new fuels, this further reduces the affordability of a planned changeover to a new fuel.

Alternatively, owners of solar panels might be encouraged to use the summer overproduction themselves. They might set the temperatures of their air conditioners to a lower setting or heat a swimming pool. It is unlikely that the excess could be profitably sold to nearby utilities because they are likely encounter the same problem in summer, if they are using a similar generation mix.

[6] As appealing as an all-electric economy would seem to be, the transition to such an economy can be expected to take 150 years, based on the speed of the transition since 1985.

Clearly, the economy uses a lot of energy products that are not electricity. We are familiar with oil products burned in many vehicles, for example. Oil is also used in many ways that do not require burning (for example, lubricating oils and asphalt). Natural gas and propane are used to heat homes and cook food, among other uses. Coal is sometimes burned in making pig iron and cement in China.

Figure 7. Electricity as a share of total energy use for selected areas, based on BP’s 2019 Statistical Review of World Energy.

Electricity’s share of total energy consumption has gradually been rising (Figure 7).* We can make a rough estimate of how quickly the changeover has been taking place since 1985. For the world as a whole, electricity consumption amounted to 43.4% of energy consumption in 2018, rising from 31.2% in 1985. On average, the increase has been 0.37%, over the 33-year period shown. If we assume this same linear growth pattern holds going forward, it will take 153 years (until 2171) until the world economy can operate using only electricity. This is not a quick change!

[7] While moving away from fossil fuels sounds appealing, pretty much everything in today’s economy is made and transported to its final destination using fossil fuels. If a misstep takes place and leaves the world with too little total energy consumption, the world could be left without an operating financial system and with way too little food. 

Over 80% of today’s energy consumption is from fossil fuels. In fact, the other types of energy shown on Figure 8 would not be possible without the use of fossil fuels.

Figure 8. World Energy Consumption by Fuel, based on data of 2019 BP Statistical Review of World Energy.

With over 80% of energy consumption coming from fossil fuels, pretty much everything we have in our economy today is available thanks to fossil fuels. We wouldn’t have today’s homes, schools or grocery stores without fossil fuels. Even solar panels, wind turbines, batteries, and modern hydroelectric dams would not be possible without fossil fuels. In fact, for the foreseeable future, we cannot make any of these devices with electricity alone.

In Figure 8, the little notch in world energy consumption corresponds to the Great Recession of 2008-2009. The connection between low energy consumption and poor economic outcomes goes back to many earlier periods. Energy consumption growth was unusually low about the time of the Great Depression of the 1930s and about the time of the US Civil War. The vulnerability of the financial system and the possibility of major wars are two reasons why a person should be concerned about the possibility of an energy changeover that doesn’t provide the economic system with adequate energy to operate. The laws of physics require energy dissipation for essentially every activity that is part of GDP. Without adequate energy, an economy tends to collapse. Economists are generally not aware of this important point.

Agriculture is dependent upon fossil fuels, particularly oil. Petrochemicals are used directly to make herbicides, pesticides, medications for animals and nitrogen fertilizer. Huge quantities of energy are necessary to make metals of all kinds, such as the steel in agricultural equipment and in irrigation pumps. Refrigerated vehicles transport produce to market, using mostly oil-based fuel. If the transition does not go as favorably as hoped, food supplies could prove to be hopelessly inadequate.

[8] The scale of the transition to hydroelectric, wind, and solar would be unimaginably large.

Today, wind, hydroelectric, and solar amount to about 10% of world energy production. Hydroelectric amounts to about 7% of energy consumption, wind about 2%, and solar about 1%. This can be seen on Figure 8 above. A different way of seeing this same relationship is shown in Figure 9, below.

Figure 9. World hydroelectric, wind and solar production as share of world energy supply, based on BP’s 2019 Statistical Review of World Energy.

Figure 9 shows that hydroelectric power is pretty well maxed out, as a percentage of energy supply. This is especially the case in advanced economies. This means that any increases that are made in the future will likely have to come from wind and solar. If hydroelectric, wind and solar are together to produce 100% of the world’s energy supply, then wind and solar, which today comprise 3% of today’s energy supply, will need to ramp up to 93% of energy supply. This amounts to a 30-fold increase in wind and solar between 2018 and 2030, based on one version of the Green New Deal’s planned timing. We would need to be building wind and solar absolutely everywhere, very quickly, to accomplish this.

[9] Moving to electric vehicles (EVs) for private passenger autos is not likely to be as helpful as many people hope.

One issue is that it is possible to mandate the use of EVs, but if the automobiles cost more than citizens can afford, many citizens will simply stop buying cars at all. At least part of the worldwide reduction in automobile sales seems to be related to changes in rules that are intended to reduce auto emissions. The slowdown in auto sales is part of what is pushing the world into recession.

Another issue is that private passenger autos represent a smaller share of oil consumption than many people would expect. BP data indicate that 26% of worldwide oil consumption is gasoline. Gasoline powers the vast majority of the world’s private passenger automobiles today. While an oil savings of 26% would be good, there would still be a very long way to go.

One study of EV sales in Norway suggests that, with large subsidies, these cars are disproportionately sold to high-income families as a second vehicle. The new second vehicles are often used for commuting to work, when prior to the EV ownership, the owner had been taking public transportation. When this pattern is followed, the savings in oil use from the adoption of EVs becomes very small because building and transporting EVs also requires oil use.

Figure 10. Source: Holtsmark and Skonhoft The Norwegian support and subsidy policy of electric cars. Should it be adopted by other countries?

If one of the goals of the Green New Deal is to level out differences between the rich and the poor, mandating EVs would seem to be a step in the wrong direction. It would make more sense to mandate walking or the use of pedal bicycles, rather than EVs.

[10] Wind, solar, and hydroelectric have pollution problems themselves.

With respect to solar panels, a major concern is that if the panels are broken (for example, by a storm or near the end of their lives), water alone can leach toxic substances into the water supply. Another issue is that recycling needs to be subsidized, to be economic. The price of solar panels needs to be surcharged at the front end, if adequate funds are to be collected to cover recycling costs. This is not being done in the US.

Wind turbines are better in terms of not being made of toxic substances, but they disturb bird, bat, and marine life in their vicinity. Humans also complain about their vibrations, if the devices are close to homes. The fiberglass blades of wind turbines are not recyclable, and many of them are too big to fit into standard crushing machines. They need to be chopped into pieces, in order to fit into landfills.

Adding huge amounts of 3-day battery backup for wind turbines and solar panels will create a new set of recycling issues. The extent of the recycling issues will depend on the battery materials used.

Of course, if we try to ramp up wind and solar by a huge factor, pollution problems will rise accordingly. The chance that raw materials will prove to be scarce will increase as well.

There will also be an increasing problem with finding suitable sites to install all of the devices and batteries. There are limits on how densely wind turbines can be spaced before the output of one wind turbine interferes with the output of other nearby turbines. This problem is not too different from the problem of declining per-well oil production caused by too closely spaced shale wells.  

Afterword

I could explain further, but that would make this post too long. For example, using an overbuilt renewables system, there is not enough net energy to provide the high salaries almost everyone would like to see.

Also, the new renewable energy systems are likely to be more local than many have hoped. For example, I think it is highly unlikely that the people of North Africa would allow contractors to build a solar system in North Africa for the benefit of Europeans.

Note

*There are two different ways of comparing electricity’s value to that of total energy. Figure 7 uses the more generous approach. In it, the value of electricity is based on the amount of fossil fuels that would need to be burned to produce the electricity amounts shown. In the case of electricity types that do not involve the burning of fossil fuels, these amounts are estimated amounts. The less generous approach compares the heat value of the electricity produced to the total heat value of primary energy sources. Using the less generous approach, electricity corresponds to only about 20% of primary energy supply. The transition to an all-electric economy would be much farther away using the heat value approach.

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.
This entry was posted in Alternatives to Oil, Financial Implications and tagged , , . Bookmark the permalink.

844 Responses to Understanding Why the Green New Deal Won’t Really Work

  1. Dennis L. says:

    So finance, GE makes gas turbines among other things. Less debt, less growth, less growth, less need for energy products which leads to less income to service debt and pensions. Does not sound like a virtuous cycle to me.

    https://www.zerohedge.com/markets/ge-freezes-pension-benefits-20000-employees-lower-debt-burden

    Only one word for this, bummer.

    Dennis L.

    • I know that the many coal company bankruptcies in the past few years have led to cutbacks in pension benefits and current wages for coal miners. This is a problem, too.

      China has probably had the biggest cutbacks relating to unprofitable coal mines. I don’t know what the impact would have on wages. I presume that Chinese workers do not have pension plans, as such.

  2. Volvo740 says:

    On the New EV v.s. Existing ICE car debate. My take: It is extremely difficult to compete (on cost) with equipment that has already depreciated to some extent. Teslas are a good example: Initial depreciation for the first several years could be $10,000 per year. On top of that there is usually higher fees on newer cars.

    Compare that to the cost of keeping my old 740 running? Last year I “invested” in a head rebuild and a new head gasket. Could do the work myself so just $500, but even handing this to a mechanic for $2500 is cheaper than running a Tesla year one. I think it’s entirely possible that I can get another 200,000 miles out of the car.

    Another thought: Batteries of all kinds are a headache. The less you drive your ICE car, in most cases, the longer it will last. But batteries wear all the time, whether used or not, and they also self discharge at a certain rate. Leave your EV for a few weeks, and it’s not going to have the same travel distance left in it, whereas with a gas/diesel engine, 99.5% of the fuel is still there.

    I think therefore it’s unlikely that in a recession, when many are tightening the budgets, that we can expect a significant uptick in EV sales. I think there would have to be something done at a legal level to get them off the road, and I can think of one country where that will be difficult: USA.

    • doomphd says:

      I believe it takes oil and natural gas to mine coal and maintain nuclear and even hydroelectric power sources. we often focus here on EVs as “coal cars” (makes a nice simple joke) but the truth is they are very dependent upon all fossil fuels to make and maintain, including their batteries, as Gail points out. a James Howard Kunstler solution is to abandon most private transport and become more reliant upon public transport, like trains and subways, similar to the present day denizens of major metropolitan cities. the Los Angeles metro area is slowly heading this way, with trains and subways appearing along the freeway routes. perhaps the present suburbs will convert or revert into “truck farms”, feeding the expanded cities until the human population shrinks a bit, heading to a lot as supplies dwindle.

    • EVs are great for taxis and other very high milage vehicles that don’t dive very far from a central hub.

      For retirees and others who drive quite little, they don’t make sense.

      • It depends on the “tax domicile” as well, fuel is very cheap in the US.. (yes this is a bit negated by very thirsty gargantuan car fleet and distances). In other countries you have to choose between expensive gasoline/diesel, cheaper LPG/natgas (few places), expensive brand new EV, cheaper DIY EVs, public transport (+ e/bike), .. etc..

        • Grant says:

          EVs are only relatively cheap to run (in many cases) because they are not subject to the same taxation for fuels and road use as more traditional methods of movement.

          Once the tax attracting options have been intentionally excluded from the market at some scale (10% or more?) the opportunities to over-tax ICE in order to be able to under-tax electric (in terms of infrastructure spend as a most obvious example of typical tax dollar use, local and national) will become less supportable. The need for road maintenance, to take one example, would not be reduced by default. Indeed with heavier vehicles (due to the batteries) maintenance requirements might well increase on a like for like basis.

          Some see the solution as a combination of reducing usage to minimise wear and tear and increasing taxes on ‘travel’ for which one popular concept is a road use tax levy.

          In theory in a fully electronic 5G comms world the whereabouts of everyone is known at all times and can be pinpointed accurately and directly related to a “mode of transport”. Thus one simply has an automated personal billing account that takes a payment for any movement you make with no (or very minimal) need for action in most situations.

          The elimination of personally allocated (i.e. “owned”) transport in favour of autonomous EV Pod rental would greatly simplify the taxation opportunity as well as the technical challenges for the entire concept of “Autonomous” “driving”.

          That in turn could allow for greatly enhanced pod based “public transport” alternatives – travel option that provide mass transit like facilities but personalised to take users directly (or at least more directly) from one end of the journey to the other.

          A selling point for such a concept might be required for the masses to accept such intrusion into their personal movements. Personal safety might be one pitch. “Knowing where you are all the time means we can keep you safer and ultimately eliminate crime ….”

          National security might be another justification. Tracking people 24/7 could become relatively simple. Sensors to detect what they are carrying (having already tracked what has been delivered to them) should allow some elimination of some types of “terrorist” activity.

          Would a small payment per mile be too much to ask for such a personal security service?

          No? Sign here (not that you would need to sign in a fully chipped interconnected world …)

          • As there are fewer and fewer vehicles on the roads, the cost of road upkeep will become an increasingly large share of total cost, because freezing and thawing never stop. Neither do major storms and earthquakes, which can also damage highways. Also, collecting the cost from taxpayers in total will become less of an option, because financially they would be less able to afford the cost of another tax. So the higher cost will need to be collected from the vehicles on the road.

            • Volvo740 says:

              The roads are never mentioned by Greta or others! There is simply no renewable story there. Maybe wood roads?

            • How about slaves making cobblestone roads?

            • Grant says:

              Once people recognise the need to return to animal power, paved roads, especially cobblestones, would not be good for the animal’s hooves.

              Extinction Rebellion people seem to be happy to travel long distances by fossil power in order to attempt to persuade others about the benefits of reverting almost completely and almost instantly to a world using the ways of the past.

              So why to big business leader seem to be so reticent about making any public statements about such things?

              Do they spot some opportunities?

          • DJ says:

            Autonomous vehicles on roads built for them without other vehicles, bikes, pedestrians would be quite simple.

            But we have the roads we have with the vehicle fleet we have and pedestrians needing to cross the roads.

            • Grant says:

              True.

              But it could be done and would probably be easier to justify in terms of cost (both fiscal and environmental) to force that through for large parts of the transport system (depending on which country and whether we are talking urban or non-urban areas).

              Let’s face it – we are told this is a Climate Emergency so if the masses can be persuaded of that it should be easy enough to push through the least worst ‘solutions’.

            • DJ says:

              Yellow wests scared the shit out of macron over a slight tax hike. What do you think will happen when their almost new cars become illegal.

              While scaling up autonomous, how should folks get around?

              Since it probably is needed to rebuild new cities to isolate people from traffic and simplify for the vehicles, it would be better rebuilding cities with no/less need for transport.

            • Grant says:

              Demolishing and rebuilding cities (but why consider only cities?) would ba a good idea and probably cheaper than trying to “upgrade” old buildings to “passiv haus” standards. However still much more costly that re-regulating transport which, typically, has quite a short asset replacement period. Probably about 10 year from build to scrap on average in many countries (for various reasons). Manufacturers seem, recently, to have been accelerating the potential for early obsolescence and would be delighted with ever shorter live spans if allowed the excuse of (improving the technology (especially the attractive concept of ‘safety’) or the alleged opportunity of “saving the planet”.

              A Ford executive recently suggested that utility based ‘for hire or rental’ electric fleets might be efficiently managed with such high utilisation that the pods would be worn out and in need of replacement every 4 years.

              That may sound dreadful BUT, if done well, might be the most efficient and energy use effective way of running future transportation. Far more achievable, I would suggest, than rebuilding entire cities.

              Back a while ago major cities had food resourced relatively nearby. Farms for example, And especially fresh met sources that could be easily delivered to local markets. Pig farms, for example, require relatively little land and persisted in what are not suburbs of larger cities until about a century ago in some places.

              Modify the supply economy – especially the food supply economy – overnight to satisfy the apparent demands of Extinction Rebellion and others – could be beyind just challenging taken as a stand alone project.

              In combination with with totally replacing building stock, transportation and food supply lines while moving to a more agrarian society (what a waste of money all of those degree and college courses will prove to be …) in order to survive may just be slightly beyond the fiscal capability of any societal change that might be possible in the next decade or two. Or the next 5 years if ER are listened to.

              Then there are the flood defences we will need soon as global sea levels rise.

              And the question about what to do about personal security to prevent others invading, by one means or another, and taking advantage of the works carried out.

              Still, where there is a will to change it’s almost certain that something WILL change. Just not so easy to control what DOES change.

          • TrevorC says:

            You are absolutely correct about the high taxes on fossil fuel transport (especially here in UK) as compared with tax breaks for EVs. As soon as the percentage of EV cars rises a way will be found to tax them at the same rate as FF transport – mileage charges? And it will get much more expensive to run an EV car. Also juggling with taxes on personal transport to reduce distances covered and minimise wear and tear is pretty irrelevant as 90%+ of highway wear and tear is due to trucks. Cars do little more than ‘polish’ the road surface over time. Trucks do the deep and expensive damage. And currently in UK, at least, it seems that moving more and more ‘stuff’ around Europe – by more and more trucks – appears to be the basis of our economy.

            • We also seem to be a long way from making the many heavy long-distance trucks electric. It is not too hard to make some local delivery vehicles electric, especially if they are high milage and lightly taxed. Changing to electric can look like a cost savings, at least until the true cost of road upkeep, with fewer private passenger autos to pay part of the bill, is added back into the bill.

  3. CTG says:

    Jeff Snider writes very well. He is knowledgeable and you can check out his articles regularly at https://www.alhambrapartners.com/commentaryanalysis/

    He has charts and evidence and not just heresay.

    This one below talks about EU has no idea who to do next but the same thing again and again.
    https://www.alhambrapartners.com/2019/10/07/the-consequences-of-transitory/

    • I like Snider’s many charts, but I feel a little frustrated that he doesn’t dig deeper. For example, what all went wrong beginning in January 2018? He remarks that Germany’s economy started to head down then. China’s economy seems to have begun heading down at the same time. We know that China cut back severely on recycling as of January 1, 2018. US quantitative tightening began October 2017 and got up to full speed in 2018. I think there were other things going on as well, such as emissions rule changes in Europe and China, which adversely affected car sales.

      Snider writes very often (about three times a week), so he can’t delve very deeply.

      Perhaps the nice charts are his contribution. In a self-organizing system, others can take them and put together other pieces to tell a broader story of what is really happening.

      I haven’t read many of Snider’s posts. And I am not terribly familiar with German statistics, so his many charts add a new dimension.

      • One could argue the Chinese recycling ban was not solely about economic downturn..
        They are evidently on many fronts moving up to more environmental friendly tech and higher value chain. Recently we discussed the western desert “clean coal” and HSR, but there are also other sector where it materializes in steps, as long as the money spigots continues to work..

        • I think the Chinese recycling ban was one of the causes of the economic downturn. This meant that containers that previously could be shipped to the US with goods, and then back with recycling, thanks to small subsidies by do-good organizations, now had to be shipped back empty. This indirectly made shipping of other goods more expensive. Either that, or shippers would become less profitable.

          Also, there was the loss of most of an industry of jobs in China. This would tend to reduce world demand for fossil fuels.

          Other countries have followed suit, adding to this impact.

      • CTG says:

        Jess Snider is excellent but he is not an “energy guy”. I read his posts because he offers a very different perspective on what is happening on the other side of the “human civilization” coin – the financial world. It is not easy to understand how the repo’s implication would impact the world. I have to read many sources and his is one that is easy to understand and it will complement what I know.

        It does seem to me that humans have made a very huge and extremely complicated mess in the financial world with band aids over band aids over band aids of solutions. It looks like it is at a breaking point now. Many things that are not suppose to happen are happening at an alarming frequency and they might be out of control. One of the things put forward (nobody knows if it is true because it is too complicated) is that US is issuing a lot of debts (way too much now) and there is just not enough cash around to buy them up. These things don’t happen last time.

        Will the trade deal, impeachment, Brexit or anything that is unknown (or known) that will derail the entire financial world (since it is just so complex that many experts don’t even know what is going on)?

        • Xabier says:

          As Tainter indicated: civilizations are partly defeated by their own accumulated ‘solutions’ – we do seem to be the lucky ones who are living in the Era of Consequences, on every front…..

          • DJ says:

            Thats interesting with Garrett, assume something ridiculuos like -5% real global gdp and still energy demand rises quite quickly.

            How long before bankers and politicians all over the world hanging from lampposts if gpd-5% year after year?

      • Name says:

        CO2 emission price went up from 8 EUR per tonne, to 25 EUR. Also Germany adds 300MW of photovoltaics per month, which lowers efficiency of burning fossil fuels.

  4. MG says:

    The fresh bread every morning in Slovakia is endangered: falling profits force the bakeries to dismiss workforce, as the cost of inputs rise

    https://index.sme.sk/c/22230558/cerstvy-chlieb-kazde-rano-je-v-ohrozeni-pekari-uz-nevladzu.html?ref=trz

  5. Harry McGibbs says:

    “In her inaugural speech, the new International Monetary Fund Managing Director Kristalina Georgieva warns over a “synchronized slowdown” in global growth.

    “Fund expects slower growth in nearly 90% of world in 2019… A major downturn could put $19 trillion in corporate debt at risk of default – 40% of the total in 8 major economies.”

    https://www.google.com/amp/s/www.fxstreet.com/amp/news/imfs-georgieva-fund-expects-slower-growth-in-nearly-90-of-world-in-2019-201910081407

    • If there is $19 trillion in corporate debt at risk, a person wonders how much governmental debt is at risk. Also, how much debt of individual citizens. And how many promises by governments, such as Social Security and Medicare, that are not considered debt, but act a whole lot like debt.

      • Robert Firth says:

        Gail, I think history provides the answer. The intrinsic value of government debt is zero, because the debt will never be repaid. It will be rolled over for as long as possible, and then repudiated.

        The exchange value of government debt is whatever you can get the greater fool next door to pay for it. This can sometimes be useful, if you sell debt in a more stable currency and buy instead a recently devalued currency, but that takes knowledge and careful timing.

        I was a victim of government promises, in the form of the UK “graduated retirement scheme”. Between 1961 and 1975, higher earners paid extra into a separate pension account. When the scheme was scrapped in 1975 your accrued pension was frozen, in money terms! So by the time you retired it was near enough worthless.

        • Xabier says:

          That’s why I like my wood shed: money earned translated directly, by me, in to seasoning firewood, which I can use at what rate suits me and as I judge fit. How Victorian of me!

          The value of an ash log in maintaining my health and happiness will be the same in 5, 10, 15 years as it is today.

          Beats any annuity (though these have, apparently, always been paid) or retractable government ‘promise’.

        • I hadn’t heard about the UK graduated income retirement scheme before. It is somewhat parallel to all of the pension plans that were put into place in a similar timeframe in the United States, but these were private, rather than government entities. These were often “defined benefit” programs that planned to give some percentage of ending wages. The obligations on these weren’t frozen, and these have become a problem. Actuaries greatly overestimated future earnings and share growth. They did not separate inflation from non-inflationary factors, either. The models were terribly optimistic, in retrospect.

          • Robert Firth says:

            US companies in those days had many incentives to make wild promises. First, it was a cheap way to pacify the unions: promise jam tomorrow so you don’t have to pay for jam today. Secondly, there was an immediate incentive to be over optimistic, because the more future growth you assume, the less you have to pay into the fund now. Until it all came unstuck, at which point the government bailouts started. The “Railroad Retirement System” was one of the first, back in 1983.

            Government schemes have become even more pernicious, because they are almost all linked to inflation, which means they retain their purchasing power, That works in an expanding economy, but in a contracting economy its main effect is to transfer wealth from workers to non workers, so making the contraction worse. US Social Security is well into this death spiral; Medicare is in even worse shape.

    • kevin moore says:

      She seems like the kind of person that ends up heading an organization when insiders see disasters ahead. A goat. The IMF have helped keep the charade alive. They have done nothing that would help us deal with the reality of our predicament.

  6. Denial says:

    I try to look at the stories and see if they match and they don’t. For example I am reading that fracking is failing and a lot of companies are pulling back investment…but if you look at employment for that region in the Permian Basin …unemployment is very low housing cost are going up etc…if they can’t make money with low oil prices then how is everything still going strong in that region? Companies have the same information that we do…If they saw that they were losing money they would be cutting back already..Maybe the breakeven numbers for oil are wrong and they can make money at $50 a barrel.

  7. There is a WSJ article today about Tesla’s battery problems in its shared ownership gigafactories.

    Tesla Needs Its Battery Maker. A Culture Clash Threatens Their Relationship.

    Five years after committing to invest billions of dollars in a shared battery factory in the Nevada desert, Panasonic has a strained relationship with the electric-car pioneer. The Gigafactory was supposed to boost profits, cement Panasonic’s future in automotive electronics and give Tesla easy access to the most important—and expensive—component of its vehicles.

    . . .

    Mr. Musk has pushed Panasonic to cut what it charges for the battery cells as Tesla builds another costly factory in China. Panasonic Chief Executive Kazuhiro Tsuga has resisted the pricing requests, and says he is hesitant to go into China with Tesla. Production has fallen behind schedule, and the race to catch up has thrown the Panasonic battery unit deeper into the red.

    At this year’s annual meeting in June, shareholders criticized Panasonic for getting in over its head. Hurt by the Tesla problems, Panasonic has seen its stock fall nearly 50% since the start of last year.

    . . .

    “Elon makes these repeated price-cut requests, and one time I told him we would consider a complete withdrawal of my people and facilities from the Gigafactory in response,” Mr. Tsuga said in his September comments to reporters. “That’s how a negotiation with Tesla goes.”

  8. Dan says:

    I’m completely for being “green” when and where possible, mainly through a decrease in frivolous consumption. Of course I’m aware that frivolous consumption is responsible for jobs, leisure, etc.. It plays a role in our civilization. Like many of you I spend way too much time reading the tea leaves. I’m sure there are better uses of my time but we are witnessing something spectacular.
    Harry does a much better job than all of us keeping us supplied with ample doom news, which there is plenty. The convergence of energy scarcity (EROEI) and economic growth (debt) stalling on a rock with 8 billion people on it armed with nuclear / chemical / biological weapons with degraded broken ecosystems makes for poor survival odds. So, knowing there isn’t much to be done I suggest people go Fast Eddy and enjoy the ride while the getting is good.

    US Producer Prices Unexpectedly Plunge In September – Biggest Drop Since 2015
    https://www.zerohedge.com/economics/us-producer-prices-unexpectedly-plunge-september-biggest-drop-2015

    “Close To A Standstill”: IMF Warns Global Growth Will Be Cut To Lowest Since Lehman
    https://www.zerohedge.com/health/close-standstill-imf-warns-global-growth-will-be-cut-lowest-lehman

  9. Distilled 3rd/4th turning under 10min..

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