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.  


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.


*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.

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

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.

1,326 thoughts on “Understanding Why the Green New Deal Won’t Really Work

  1. Greece now selling negative-yielding debt. 😀

    “Greek debt, viewed as poisonous just years ago, is now in high demand as investors seek stable assets amid a global economic slowdown – and a possible recession.

    “The country joined the list of negative-yield eurozone nations Wednesday after its latest bond offering.”


      • if I understand this correctly, Greece is asking investors to pay for parking their funds in their government bonds, which supposedly they will repay after some set period, after taking some of the principal as fee for the “rental space” in their “safe haven”. sounds shaky to me.

        • That is not the case according to a banker friend of mine. He says what is happening is, anticipating money printing and lower interest rates, bond speculators are bidding up existing bonds, speculating. This is the last man standing game where somebody at the end of the line gets stuck with a bond they paid a lot for, with little, or zero, or even negative interest ( based on the coupon value and the price they paid). Governments are not issuing bonds at negative rates.

          • I found a site that explains what happens with negative yields. Bonds are sold for more than their par value (available at maturity). For example:

            With negative-yielding bonds, investors won’t receive enough in coupons or par value payments to make up for the cost of the bond. For example, take a look at this bond:

            Maturity: 3 years
            Par value: $100
            Coupon: 0%
            Price: $105
            During the three years in which the investor is holding onto the bond, they will not receive any interest payments. When the bond matures, the investor will only receive $100 even though they paid $105 for it. This leads to a negative yield of 1.6%.

            • but it’s a safe investment…

              guaranteed to ONLY lose 1.6%…

              this is the 2019 new normal stage in the economic endgame…

              what will be the next (weirder) stage?

            • would it not be better to buy fiat, gold or silver and keep it in a fire-proof safe at home? maybe diamonds, rubies, emeralds? you can bolt safes to the floor or wall these days. add some lead bricks for extra weight. those can be converted to bullets or fishing weights, as needed.

    • Maybe they have ‘agreed’ to buy at neg 1%, in the expectation of it going to neg 2% before they have to pay.
      Its a short-term ‘investment’ based on negative expectattions for Greece?
      Or am I misunderstanding the dynamic?

  2. Here in no. Ca theres a forced power outage by pg&e and so people are using back up generators, many of which run gasoline. I just went this am to fill up a 5 gallon container and all fuel stations in our area are empty/closed. So I have enough in a 2nd container for today but then will have to siphon from our 2 vehicles. I’m just running the generator during the day until 10 pm, local noise curfew, then moving ice from the freezer to refrigerator until the next day, rinse, repeat. The fuel situation will reach a point in which people can’t even make it to work.

    The weird thing is it’s in the 40s at night & mid 70s in the day, humidity is low and winds lightly breezy. How is that a fire hazard? Since peloton& schiff are from ca. I’m wondering if this is. A trump hit job. A bit conspiratorial but it fits.

    • Thanks for the at-the-site update.

      Fuel stations operate using electricity, so if the electricity is off, the stations cannot pump gasoline or diesel. If electricity is off, both people with gasoline powered cars and electric cars are soon in trouble.

      If a situation should arise when only gasoline was not available (hurricane in the Gulf of Mexico causing temporary pipeline outage, for example), then it would only be the gasoline powered cars in trouble.

      With the conditions you describe, especially if it is windy, there might be overproduction of wind and solar during the day that needed to be taken away. This could cause fires, just like importing electricity could.

      • Based on service station response to South FL hurricanes, not a long term problem gas station buys a generator(they really are not that expensive, relatively. Not as efficient. But this is the first time. There will be a lot of lessons learned. First thing I did last month fill the fuel tanks.

        The point of ports and rigs is very valid, want fuel open wallet. Oh, if it goes on long enough not available. Though for fire avoidance (a somewhat localized thing) not an issue diesel powered truck makes delivery from the refinery that is out of the affected zone.

        The power lines are already de-energized(out-of the-loop) which is the problem. Wind and solar curtailment is already done. CAISO has already curtailed close to 800,000 MWH this year.


      • Can we please keep unnecessary political statements out of this blog? There is plenty of ammo against Trump, but most of us aren’t letting it fly. This is about economics and resources.

        • So economics and resources are not political? Interesting!

          Well, there’s plenty of “ammo” against everyone in public life. And this being the case, wouldn’t your comment be better addressed to Chrome mags, who speculated without apparent irony that the PG&E power outages may be the work of President Trump—an absolutely unnecessary, slanderous and disrespectful political statement?

          Perhaps you would care to explain why Chome mags should be allowed to make unnecessary and uncalled-for political statements of a derogatory nature while I should not be allowed to exercise the same privilege in response?

          And while we’re at it, perhaps you would consider a similar interjection against every commenter who makes unnecessary political statements in these comments and not just the one’s you personally disagree with. There has been a steady trickle of sophomoric ones aimed at Mr. Trump ever since he was elected, in case you haven’t noticed.

          Thanks in advance.

          • In a way i agree with Merrifield. Way to much polarity and hate out there. IMO generated by identity politics. Now from my perspective the hate and propaganda being created by the left and identity politics is far more destructive and untruthful.

            If you hear a hate message against trump it has many consistencies. The major one is the idea that trump is a dictator. A racist. unlawful. These things are so despicable that dialogue is ended. Purpose served. Conflict with no hope of resolution created. But overall the more consistent message is emotional. Justified hate. Very disturbing.

            Whenever i hear an appeal for moderation i certainly agree. But can there really be moderation without respect? There can not be respect when there is hate.

            Moderation is finding the middle ground. This comes from dialogue. Dialogue can not occur without respect. Moderation can not manifest from a place of hate. Appeals for moderation without genuine willingness for dialouge are merely attempts to suppress.

    • I can well understand why PG&E feel the need to turn off the power. Those 4 MPH winds can be deadly! Especially as decades of tree-hugger supported legislation prevents Smokey Bear from doing controlled burns.

      But more than that, the power companies are now facing the risk of class action suits every time there’s a major wildfire.

      Still, it’s a bit of an own goal installing all those wind turbines if you need to turn off the power every time the wind blows. It’s amazing people are not rioting about this in CA. Simply amazing.

      • The huge amount of long distance transmission in California is partly to support all of the use of renewables, including hydroelectric imported from Washington State. As more wind and solar are added, more transmission to these relatively small installations, often away from cities, is needed.

        People who looked at the EROEI of wind and solar ignored all transmission-related issues. First, it is necessary to build a lot more transmission lines that are on average, lightly used, because the wind and solar are available only a small part of the day/year. Then, it is necessary to service these lines, or they cause huge amounts of fires, especially in a dry area like California. (Venezuela’s outages also seem to relate to fires relating to wires from its hydroelectric facility, bringing electricity to major cities. Those wires had not been properly maintained either. Texas has problems with fires too. Germany is burying some transmission underground, at great cost. )

    • Merely grid-tied type doesn’t work in blackouts.. And off grid is not 100% solution either, because it will be eventually confiscated either by (quasi) govs or gangs.

    • As they say, a picture is better than a thousand words. What really happens, when an economy tries to depend on electricity and solar panels, is now becoming apparent. It couldn’t happen to a more appropriate state than California! They were the home to electricity crises in the 2000-2003 period as well. Their many schemes to get around actually producing their own electricity, at the true cost of production, are backfiring.

      • “California is the state with the largest population and the largest economy in the United States. However, it is second in energy consumption after Texas. California’s energy consumption per capita are some of the lowest in the United States as a result of a long term policy of energy efficiency.
        Energy consumption in California is dominated by transportation, due to high number of motor vehicles and long commutes. California also is responsible for about 20% of total jet fuel consumption in the United States. The second largest energy sector is industry. Energy consumption of the state’s residential sector per capita is lower than that of any other state except Hawaii thanks to relatively mild climate.[2]
        California has large energy resources, being among the top producers of oil, hydroelectricity, solar, biomass, and geothermal energy in the United States.”

        • I think that I would say, ” California’s energy consumption per capita are some of the lowest in the United States as a result of a long term policy of outsourcing industrial processes, and not counting the energy cost of these outsourced processes. California is a major importer of energy in many ways.”

  3. There is an unappreciated point about hydroelectric power which is that it is not a renewable resource. Dams silt up and require huge amounts of energy to clear.

    “Professor K. Mahmood of George Washington University in Washington, DC, “roughly estimated” for a 1987 World Bank study that around 50 cubic kilometres of sediment – nearly one per cent of global reservoir storage capacity – is trapped behind the world’s dams every year. In total, calculated Mahmood, by 1986 around 1,100 cubic kilometres of sediment had accumulated in the world’s reservoirs, consuming almost one–fifth of global storage capacity. ”

    Good luck removing 50 cubic kilometers of soil every year to counter this effect + 1100 to get back to square one.


    • Can’t find China’s overall figures for auto sales in Sept but US manufacturers still struggling:

      “Ford Motor Co’s (F.N) July-to-September vehicle sales in China fell 30%, as the U.S. automaker continued to lose ground in a prolonged sales decline in its second biggest market.”


      “General Motors Co’s (GM.N) July to September vehicle sales in China fell 17.5%…”


      • That’s $3.2T should this go daily for a year, so not much in the great scheme of things and given past action. I guess next proper GFCver_xy must attempt to print in dozens T per each major industrial hub, so lets say unless we see ~ $60-100T global print fest nothing major is happening out there..

        • So GFCver_xy means printing fest where separate printing operations would be of amounts comparable to the global word product… Financial markets would be unrecognizable. How wouldn’t this lead to panic on main street?

          GFCver2 seems to be coming in 2020. There will likely be a printing fest, though likely not of the magnitute you indicated. My guess is that some parts of the world will have to lose like China and Europe. This enables the USA to take a greater part in the global resource stream. USA will perhaps need the border wall.

          • Did the “world money” panic in the 2008 aftermath as the major global IC hubs printed ~10T+ in aggregate.. ? Nope.

            Now, lets perform mental time travel and imagine trying to explain someone in 1980-90s that in two-three decades QEing Ts and setting effective negative rates would be part of normal toolbox..

      • I found a new article about China’s auto sales in September. (Just slow in being published!)


        China auto sales sink in September as economy cools

        China’s auto sales plunged 12 percent in September, adding to economic challenges for the country’s leaders amid a worsening tariff fight with Washington.

        Sales in the biggest global market fell to 2 million sedans, SUVs and minivans, an industry group, the China Association of Automobile Manufacturers, reported Friday.

        Demand has weakened as economic growth cooled after Beijing tightened lending controls to rein in a debt boom.

        Yes, tightening lending controls will lead to fewer automobiles sold.

    • About 1.2 to 1.3 million Indians die from pollution every year, mainly because of car emissions. But to an economist, fewer needless deaths is an economic crisis. By contrast, about 450,000 die from malaria. Perhaps the World Health Organisation should stop killing mosquitos and start killing motor cars.

      • How many Indians die from the effects of cooking over biomass stoves?

        I have no idea, but according to the Clean Cooking Alliance:

        Exposure to smoke from traditional cookstoves and open fires – the primary means of cooking and heating for nearly three billion people in the developing world – causes more than 4 million premature deaths, including more than 1.2 million deaths in India, every year.

        Robert, this latter figure is close to the figure you quote for pollution deaths in India, but the Clean Cooking Alliance is blaming them all on dirty cooking. Of course, they have an agenda…

        • Thank you, Tim. I tend to doubt their claim. Back in Africa we cooked over wood stoves, and I don’t recall any health problems. Gee, all you need is a chimney; the hot gases will rise into it by themselves. And you can make a cheap but effective one out of two layers of aluminium foil.

          Likewise in the US we knew many people who had regular barbecues, no chimneys but in the open air, and they weren’t dropping like flies.

          The problem with car pollution is that it contains chemicals far more dangerous than anything given off by burning wood or charcoal. And there is no cost effective way of scrubbing them out, which is why the German car makers had to cheat on the emissions tests.

          Possibly useful reference:


          • I thought that part of the problem with burning wood was the black soot that results and gets carried are far as the poles by wind. (Coal would have the same problem.) This black soot settles on ice and causes it to absorb the sun’s rays more quickly. Thus, burning wood leads to shrinking polar ice caps. I suppose this is the case regardless of the shape of the stove used.

          • I agree with you, Robert.

            Still,I expect that many Indians are combining open air stoves with tobacco smoke, vehicle emissions and living at high density with lots of nearby neighbors doing the same thing.

            I’ve read that living in a big First World city is about as bad for the lungs as smoking 20 cigarettes a day, mostly due to the automobile exhaust. There are lots of stories about this online. Breathing in some of the Chinese cities is equivalent to smoking 60 ciggies a day.

            Roughly speaking, both smoking tobacco and breathing polluted city air will raise one’s risk of developing lung cancer and emphysema, but doing both simultaneously will multiply the risk to the point where you can no longer put the damage down to “bad luck”. So if you absolutely must smoke, you should seriously consider moving to the sticks.

  4. ““For now, Japan’s problem is unique, but if low rates are prolonged, which I think they are likely to be, this will be a serious challenge for the U.S. and other nations,” says Masaaki Kanno, who worked at the BOJ from the 1970s to the 1990s and is now an economist at Sony Financial Holdings Inc. 

    ““The bottom line is that the global economy is facing the question of how we are going to live” without interest income on safe assets such as government bonds, he says.”


      • “With the slumping world economy already forcing the Fed and European Central Bank to lower borrowing costs, policy makers are primed to do more.

        “Yet they are also aware that at some point they will have to stop using that tool as stimulus for fear of hitting the so-called reversal rate, at which cheap money turns contractionary…

        ““Negative rates have diminishing marginal returns in terms of expectations for inflation and incentivising investment and spending,” said Constance Hunter, chief economist at KPMG.”


        • It is also difficult to imaging a pension plan or insurance company being able to invest in negative yielding bonds. They would need to sell assets to pay interest, when it became due.

          • Do you see any immediate dangers to major life insurance companies secondary to these interest rate policies?

            Dennis L.

            • I think the financial system in general is at risk. It is hard to know which pieces have the most problems. Last time around, the US government bailed out AIG. AIG had a lot of life insurance policies. I know that both my parents and my husband’s parents had annuities from AIG that were favorably affected by the AIG bailout last time.

              GE has been having a lot of problems recently, relating to the long term care policies that it has on its books. We don’t think of GE as being a life insurer, but quite a few of its risks are financial risks similar to those of some insurers. So the financial risk is spread around.

              Derivatives are likely to especially be a problem this time around. I am not sure where all of these derivative problems are hiding. It may be that some of them are in insurance companies, in addition to being in the big banks.

  5. Gail may like this article. Lots of charts and graphs on energy

    This climate problem is bigger than cars and much harder to solve
    Low-carbon options for heavy industry like steel and cement are scarce and expensive.


    Climate activists are fond of saying that we have all the solutions we need to the climate crisis; all we lack is the political will.

    While it’s true enough as policy goes — we certainly have enough solutions to get started and make big changes — as a technical matter, it is incorrect. Truly defeating climate change will mean getting to net-zero carbon emissions and eventually negative emissions. That means decarbonizing everything. Every economic sector. Every use of fossil fuels.

    And actually, there are some sectors, some uses of fossil fuels, that we do not yet know how to decarbonize.

    It’s not just not knowing…….

    • Thanks for linking to this article. It helps fill in part of my knowledge gap. I know that there is a lot of direct use of fossil fuels in China to make cement and steel (actually, the pig iron preceding the steel). The questions is how to substitute away from fossil fuels for very high temperature applications. These are two charts from the article:

      As far as I know, these processes today are largely being done in China today, by burning coal. Their cost is likely less than the gray 3.5 cents per million Btu cost for natural gas line shown on the second chart. I cannot see any way costs can be raised above this line, without the end products becoming unaffordable. Any substitution is much more expensive.

      This is one of the big reasons that the Green New Deal won’t work. It doesn’t fix the need for concrete in quantity and steel in quantity. Without fossil fuels, we also don’t have asphalt. We end up with a situation of not having either roads or commercial buildings. All we have is wooden buildings that burn down easily. Or they get attacked by termites.

      • Wooden buildings aren’t all that hopeless. There is a Japanese age old tradition of changing out and replacing parts of wooden buildings over centuries. And in our time sprinkler systems can guard against fire. A surprising number of them where I come from have hung around for a century or two without sprinklers, by far the biggest danger to them being the meme that they can’t last, are not economical, will burn down, don’t represent progress. But wooden buildings aren’t the only alternative to concrete (and in fact, given depleted forests are not too appropriate for new construction). There is wattle and daub, which use minimum amounts of wod, and mud. But there is paper pulp that can substitute for mud. The latter depends greatly on BAU, which, as far as I can tell, will need to endure, but with commonsense changes along the way.

        • Constructional paper as used in Japan and Korea is simply extraordinary!

          I had a dreadful day looking at lots of new housing developments from a train window: I can hardly credit just how low the art of architecture has fallen.

          I’m not sure which is worse and more of an assault on the eyes; the low-rise (3-5 storeys) ‘eco-high-density- block; or the individual ‘luxury ‘houses.

          I’m so please to have ended up in a basic, working-class house of 1949, so much better and well-designed. And solid – all-brick. Built at a rare moment in the history of housing design in Britain. Just hoping that roof holds up!

        • 80% of the energy used in a building over its life is from heating or cooling compared to the embodied energy used in the building materials. The largest energy reductions come from living in smaller houses and houses that have areas that can be allowed to go cold in a cold climate while having separately insulated rooms that are heated and lived in.

          According to Robert Riversong the most “sustainable” buildings are straw bale followed by double stud or modified larson truss using cellulose insulation( wall design.)

          Wood trusses are by far the most efficient roof structure.

          The alternative “thermal mass” designs earthship or earthbag add very little value in cold climates but are useful in warm climates (oak ridge laboratory, univ of waterloo studies).
          They require A LOT of labor (calories) that often involves lots of laborer travel and usually a lot of heavy equipment for berms. They usually use a lot of concrete for packout and bond beams as well as a lot of wood as no truss roof and lots of big posts.

          Dont try to grow food in your house. High humidity not good for houses. you need overhead glass not just south facing anyway..

          IMO it is very hard to beat a conventionally built small house with minimal footers built with stud walls. truss roof, and minimum wall insulation of 40 and ceiling of 60 from any conservation evaluation that is unbiased. thermal bypass by studs and rafters should be eliminated by one design or another. passive solar should be incorporated using glass(very high embodied energy).

          But as Gail mentioned in a earlier post location is everything. Many places we live now may not be inhabitable without fossil fuel energy inputs. Food not housing may indeed be the big limiter in the future at some point so it is debatable whether any building effort is justified. The “greenest” choice is not to build. Well insulated small buildings with passive solar will certainly be more preferable in cold climates. you cant eat 2x4s.

          • “The “greenest” choice is not to build.” I certainly agree. I expect that a similar statement is true about buying a new vehicle, especially if a person doesn’t drive it much. It takes a long time to pay back the embodied energy. With fairly flat population in developed countries, there really is little need for new building.

            In the US, it seems like we have followed the same pattern with homes as with cars. New homes have gotten bigger and bigger, as insulation has gotten better. Year to year natural gas consumption by the residential sector has been essentially flat since the 1970s, despite more large homes being built. At least until 2005, electricity consumption by the residential sector was increasing, however. Then came LCD screens and LED light bulbs.

          • I had to look up “truss,” And then wondered whether that could relate to the hip roof, where the hip is a triangle, with the apex at the ridge point of a roof. If so, how this might affect hurricane preparedness would be good to know.

            As to the best insulated walls, I would have thought thickness alone would dictate the degree of insulation. Some southwest adobe buildings have 4 foot walls.

            • A truss is a simple concept. All it is a bunch of triangles holding the roof and being held together by the roof. But like all simple concepts in use it gets, complicated. I’ll leave more in depth explanation to an architect or a structural engineer. But more or less you tailor it to the expected environment.

              If you want to build to survive “CAT5 guaranteed” structures, people are going to be living in tents, Nobody could afford housing. Code specifies requirements for expected risks. With a feedback loop see Hurricane Andrew. Structural engineers figure what is needed to hold the roof on and up in those conditions to pass code.

              Thickness alone does add insulation value. Again, complicated, what percentage of people want to live in the equivalent of a hobbit hole or fort. Imagine the difficulty designing useful windows for 4 foot walls.

              Adobe works wonderfully in that environment. Not only is it insulation but a marvelous thermal energy storage to assist when the daily highs are a 100+ F (38+ C) and the lows are 50 F(10 C).

              In Florida where daily summer highs tend to be 90s F(32 C) and the low 80s F(27 C) the value of that thermal mass is significantly reduced. Not to mention what happens when massive wind and rain starts impacting your painted mud bricks for days. just the humidity will be a challenge. Thinner means more living space for a given amount of material and building space.

              An example of something not covered is a flat roof(no trusses) and 5 or 10 feet of snow. Life is complicated most people never bother to think what makes it possible. Just their little piece. Light goes on, water stays outside, clean water, inside toilets, …


            • I dont know what a hip roof is. all i am familiar with is king post and howe truss types. Earth has a r of 1for one FOOT. Thermal mass only wors in moderate climates where the temperature rises above desired temp then falls below it. Adobe works in arizona. It fails in Montana. https://www.greenbuildingadvisor.com/article/earthship-hype-and-earthship-reality. poly iso foam has a r of about 6 per inch.. It has its own problems Dense pack cellulose has a r of about 4 per inch. Fiberglass has a r of about 3 per inch.

              They all have pluses and minuses

              convection is the biggest loss of heat. re blower test. now provide ventilation…

              Warm climate design is totally different from cold climate design. Vapor drive is reversed so the stacks are too.

            • T2M

              I enjoy reading this, since it confirms much of what I believe. Codes are truly stifling, and we need better ways to make building decisions. We really need more of a one for all/all for one local culture. I am in the process of seeing how light and cheap of a structure I can build (so no 4′ walls for me, although there are situations where they work). So anything that can rip or lift has to be well reinforced at the vulnerable points, mostly edges. Building decisions should be calibrated to the given space to be “built” on, not to some one-size-fits-all formula. Very glad to learn more about the truss. Ideal in hurricane country.

            • “I am in the process of seeing how light and cheap of a structure I can build” assuming u want strong too. assuming its on the ground not on wheels. assuming decent load bearing soil Studs can be found on craigslist for a buck. 16′ truss roof. 12×12 footers. 2 0r 3 #4 rebar continuos 24″ overlap. Studs and trusses 2 foot on center. studs under rafters. double upper sill plate. proper headers over openings. Shear strength from osb. No shear strength stucture fall down go boom like hard rock. inner walls with osb for cross brace shear no windows at corners. fiberglass insulation off craigslist. Get it CHEAP. double felt stucco over 2″ of polyiso exterior. Recycled brick floors. Brick is usually free if you haul. drywall interior.

              Use people who do it full time. dont try to do it all. it will take 10x as long cost 2x and be half as good if you do.

              not an engineer. all structures should be engineered.

              nothing else even comes close. thats why 99 out of 100 houses are built like this.

              People think there is something better. earthship. eartbag. monolithic dome. tire bale. underground post beam. geodesic domes. barrel vault. ive built them all. They may be aesthetically better.
              people get sold an idea. that idea doesnt match the physical world.

              straw bale might come close to beating framed… Everthing is a compromise. Aesthetically material wise. sustainablity. labor. straw bale probably beats framing. dry climates only.

              i like tensile strength under my roof and in my walls for wind shear.

              light strong and cheap. . wood is a incredible material. it has tensile strength. it holds fasteners. the ability for a easy connection between wall and truss is huge.

              get on a framing crew. even if you get fired in a day you will learn a bunch. then get on that nail gun. if you can just make good cuts on the ground fast you wont get fired and learn.

              life is too short to pack tires.

              yurts may beat framed too…

            • Namke, you’re a fountain of practical knowledge. You’d be appalled by the things I try, but I love your spirit. 🙂 Really though, if you could bear to deal with people coming out of the left field, you could help them enormously with very specific issues they might be up against. (Not their general approach.) I don’t know if you have the patience for that, however. 🙂 Right now, I’m trying to make my own pop-up art exhibition booth. One month ago when I tried one, it was a disaster. (I’m fine with such disasters when I’m still here to talk about them). The parts of the booth have to be light enough for this senior to manage, and they must fit in my compact car for a single trip. But I’m trying not to depart the scene before making something similar that can withstand the strongest category hurricane. If I can do that in my own way, it’s up to the crowd what to do with it. I use cardboard.

      • One positive thing about houses which burned down was perhaps the elimination of accumulated dirt and disease.

        Certain Neolithic cultures in Central Europe deliberately burnt their houses down -the whole settlement , it seems, every 70 years or so.

        • I knew a guy got so frustrated trying to build his own house he lost it. Got drunk and fired it up. was there watching it burn when the fire trucks and police showed up. not a insurance scam just sick of it.

          2 years federal penitentiary.

    • Long those lines, we are in a forced blackout here in ca. My wife last night saw a product for sale – a box w/batteries that uses solar panels or plug in before an outage. I said to her, “yeah but that generator we’ve been using puts out 3500 watts and it maintains that level the whole time it’s running. It runs the frig a light even a toaster or coffee maker – that e box will start losing power as soon as it starts getting used. The generator was 400, the e box is 2000. Their big selling point is no carbon monoxide. But that’s why we have the generator outside. So she says the generator puts out 3500 watts?! I said yeah and constantly as long as it has fuel.

      It’s the age old argument between e & oil bi-products.

        • Curious, and probably off topic. What does this e box cost and what is the energy storage (WattHour)?

          Or just a link I am unable (back to being not so smart) find one.

          Thank you in advance,

      • Rather ironically, an Iraqi friend was brought up among black-outs in wartime Baghdad: she’s recently moved to California to work for Warner Bros; must seem like old times……

      • Genset beats any battery system for emergency use. Batteries leakage requires constant battery charging. Maintaing a PV system just for emergency use very wasteful and not cost effective. Perhaps a good idea to reduce energy consumtion a tad when grid out rather than to try to sustain high energy consumption… get a catylitic propane heater and a cooker.. Really all you need is some lithium batteries for lighting and propane to cook at heat if you dont have a freezer full of meat.

        • If water pipes freeze when it gets too cold out, you likely will need a moderate amount of propane for heat to keep from damaging your home with broken water pipes.

          • Quite right Gail. Im afraid i take the understanding that water being kept functional is high priority. Its nice if that is by design. A small house designed for low energy usage with separate insulated spaces both bathroom and kitchen come up into the core super insulated space. This is the “great room” of earlier times when it was understood that energy was limited and it was only common sense that multiple people shared heated quarters in winter.with modern pex piping water distribution thee is no reason that water cant be kept in warm areas and drained in freezing areas. rv non toxic antifreeze can also be used in areas that go cold. pex takes freezing much better than older more rigid piping not that its optimal. if you understand how water is distributed in your house there is no reason valves can not be installed. wherever water enters the house has to be the great room. If that is far from kitchen and bathroom that is indeed unfortunate in cold climates.

          • The cheap propane on demand chinese water heaters generally work well. Certainly well enough for emergency use. They must be vented . CO

            • On demand saves energy by not storing/heating water when it is not in use. Water freezes in pipes because it is not flowing(mostly). Simple trick is to let the taps trickle(has issues, how much flow is enough?). Water supply pipe house is below the freeze depth, obviously. Pretty inefficient as well.

              What about toilets? Don’t forget the vapor trap.


    • “not yet know how to decarbonize.”

      Can you name them? I can’t think of any that are ruled out by chemistry. Economics is another story, and we will have to come up with energy. (Like 15,000 reactors or 3000 power satellites.)

      • The world economy is unfortunately ruled by physics, and that is what puts an end to our use of high-priced energy products. Physics sets market prices.

        So, even if the chemistry looks good, it is the physics that makes the system not work as we would hope it would work. Chemistry is easier to see, but that doesn’t mean that that it is all that is important. Quite a few peak oilers have assumed that prices are simply man made. We can change the system if we like. It doesn’t really work that way, though.

        • “Dubai’s 900 MW solar tender sees lowest bid of $0.0169/kWh”

          I presume this is without a subsidy.

          It takes about 2 MWh or $34 worth of power to make the hydrogen needed for a bbl of synthetic oil. If the capital can be brought down to $10/bbl, then we are talking about unlimited synthetic oil at around $44/bbl.

          • “… around $44/bbl.”

            which brings to mind the Tim Watkins quote that was posted here two days ago:

            “This is the real peak oil demand in action. Not the techno-utopian fantasy of a world that no longer needs oil; but the stark reality of a world that can no longer afford it.”

            sure, $44 is more affordable than today’s oil prices, but as the world’s net (surplus) energy decreases, which will soon be the actual Physics behind the world economy (net could be about flat now but it is probably impossible to measure exactly)…

            then in the coming years, $44 will become less and less affordable to the average person…

            it’s the unstoppable Physics of the situation that will bring “peak oil demand” if it hasn’t already (11/2018 looks like the peak of oil)…

            $44 would only be good for a short while…

            and anyway, WTI and maybe Brent looks likely to be that low in a year or so…

            • No problem, gubbermints can tax all that synthetic oil and use the proceeds to fund a universal basic income so that even non elite workers will be able to afford to buy the oil and its products. There must be an app for it somewhere.

          • The ability to make solar energy for this low a cost is limited to desert areas near the equator. I expect that such areas will be lacking in other resources, including fresh water and locally grown food. Such areas will charge you a high tax for constructing these solar panels on their land. After all, they need some way of getting taxable income to support their population with imported food and perhaps imported water. These high taxes will raise the cost far above $44 per barrel. I would expect that if solar panels were added, they would really want them for themselves. The country would certainly have some costs associated with the solar panels. Some of this tax would be needed simply to try to keep the solar panels safe from those planning to harm them, because they are jealous.

            Saudi Arabia no doubt plans to use the output of the solar panels as an offset to making electricity 24/7/365 by burning natural gas and oil. It would be especially helpful for keeping oil consumption down, so it can be sold as an export.

          • Just because there is a fire sale on a commodity doesn’t mean realistic manufacturing plans can be forecast on that price. Actually the opposite. When there is a fire sale you can pretty much bet that source will end. The dubai infrastructure is in place and will probably produce energy for some years however. I wouldn’t bet on someone ponying up the capital for a manufacturing facility being built next to it to produce synthetic oil anytime soon. What cost do you use for constructing and maintaining the manufacturing facility to support your numbers? At your forecast of cost for the facility what would be its production capacity and estimated profit?

            • ” What cost do you use for constructing and maintaining the manufacturing facility to support your numbers? ”

              The ten-dollar per bbl capital cost was taken from the Sasol plant in Qatar. The cost was a billion bucks, the capacity 34,000 bbl/day.

              ” At your forecast of cost for the facility what would be its production capacity and estimated profit?

              Never got that far. I have been working for the last ten years to get the cost of power satellites down to 3 cents per kWh. Power from space is more desirable than ground solar because it is not intermittent. How much is the question? For _this_ application, you can store the hydrogen during the day and run the rest of the plant full time. So only the electrolyzers would be oversized,

            • You need very large storage to have enough stored up in the summer for winter, however. That has to be part of the cost too. Any problems with this storage (such as leaks, explosions) need to be considered too.

            • “You need very large storage ”

              Hydrocarbons are energy-dense. Plus we have lots of depleted oil wells that could be pressed into service.

              Also, reasonably near the equator, the electricity output of the solar farm should not vary that much with the seasons.

              Perhaps I should work out more of the math. At 34,000 bbl/day and 2 MWh/bbl, the plant would need a feed of 68,000 MWh/day as hydrogen. This amounts to 2.83 GW steady feed. it should take around 5 times for the nameplate to average conversion. That would require about 14.17 GW of nameplate PV farms. If you assume 147 MW/km^2, that would take 96 square km or close to 10 km on a side. For Qatar that would be about 1/1000 of its area.


              This would take more work, but the combination of GTL technology and really inexpensive solar power just might be one of the technologies that would let us get off fossil fuels to less expensive synthetics. This would give a more or less unlimited supply of diesel, jet fuel and (with more processing) even gasoline. It is one of the few uses of renewable intermittent energy where you don’t care that much about the intermittency.

  6. Looks like we are knocking on Recessions Door….
    Rising old used car prices help push poor Americans over the edge
    By Nick Carey
    ReutersOctober 11, 2019


    More than 7 million Americans are already 90 or more days behind on their car loans, according to the New York Federal Reserve, and serious delinquency rates among borrowers with the lowest credit scores have by far seen the fastest acceleration.
    The seeds of the problem are buried deep in the financial crisis, when in the midst of the worst economic downturn since the Great Depression, automakers slashed production. A decade later, that has made a relative rarity of used 10-year-old vehicles that are typically more affordable for low-wage earners.
    According to data provided to Reuters by industry consultant and car shopping website Edmunds, the average price of that vintage of vehicle is $8,657, still nearly 75% higher than in 2010 despite some softening in prices over the last year. The average new car, in contrast, has seen a price rise of 25% in that same time period.
    “This is pinching people at the worst point possible,” said Ivan Drury, Edmunds’ senior manager of industry analysis. “If you need basic A to B transportation, you have to get an older car that needs more repairs and has more wear-and-tear issues…

    Weak lending standards in recent years are partly to blame for the rising delinquency rates, which Warren Kornfeld, a senior vice president on Moody’s financial institutions team, said are approaching record highs despite a solid economy.
    Auto lenders are belatedly tightening lending standards, but it may already be too late, he said

      • Dear Sir, you can double list me anytime. Thank you ever so much for your contributions to our comment section, Harry.
        In that light, perhaps a song… naturally,

        BTW, the movie Judy with Renee Zellwenger is thumbs up👍

        • You are very welcome, GetHappy – a splendidly upbeat moniker and song for these ominous times.

      • Sounds pretty much like QE to me:

        “The Federal Reserve on Friday (Oct 11) announced a new program to boost liquidity in the US financial plumbing and allow the central bank to better manage interest rates, but without changing monetary policy.

        “In the new program, the New York Federal Reserve Bank will buy about US$60 billion a month in short term US Treasury debt through the second quarter of next year to ensure “the supply of reserves remains ample,” according to a statement.

        “However, the changes are “purely technical” and “do not represent a change in the stance of monetary policy.””


    • Somehow this deals with the post about aspects of the Green New Deal … well I guess people buying Tesla’s aren’t that badly affected. Though …

      Not to mention you need to get a better feed. The story is over 6 months old, though your article isn’t.


      Updated April 26th Originally dated Feb. 13th


      Among the more troubling facts from the report is the record 7 million Americans who are 90 days or more behind on their auto loan payments. It’s a signal, economists say, that Americans are struggling to pay bills despite other indications of a strong economy and low unemployment. Approximately 6.5% of all auto finance loans are 90-plus days past due.

      End quote

      I don’t think it is good news by the way.


      • It deals with financial limits, which are themselves an expression of energy and resource limits. ‘Non-elite’ consumers are getting tapped out even under the status quo. A transition to dilute, intermittent energy sources is unhelpful from this standpoint.

        • Here is a quote from the latest report:

          Click to access HHDC_2019Q2.pdf


          Aggregate delinquency rates improved in the second quarter of 2019. As of June 30, 4.4% of outstanding debt was in some stage of delinquency. Of the $604 billion of debt that is delinquent, $405 billion is seriously delinquent (at least 90 days late or “severely derogatory”, which includes some debts that have previously been charged off although the lenders are continuing collection attempts). The share of credit card balances transitioning into 90+ day delinquency has been rising since 2017, and continued to do so in Q2. Meanwhile the flow into 90+ day delinquency for auto loan balances has risen more than 70 bps since 2012 and experienced a slight seasonal decline this quarter. Student loan delinquency transition rates remain at high levels relative to other types of debt, and increased this quarter; 9.9% of student loan balances became seriously delinquent in the second quarter (at an annual rate).

          End Quote

          It is a 45 page PDF with a lot of information. with an actual history back to 2003 by quarters.

          Like I said a lot of information. I am not sure which data was important. 30 day delinquent, 90+, transition rates. Number of loans, to which credit scores. It is going to take me some time to digest.


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