How Renewable Energy Models Can Produce Misleading Indications

The energy needs of the world’s economy seem to be easy to model. Energy consumption is measured in a variety of different ways including kilowatt hours, barrels of oil equivalent, British thermal units, kilocalories and joules. Two types of energy are equivalent if they produce the same number of units of energy, right?

For example, xkcd’s modeler Randall Munroe explains the benefit of renewable energy in the video below. He tells us that based on his model, solar, if scaled up to ridiculous levels, can provide enough renewable energy for ourselves and a half-dozen of our neighbors. Wind, if scaled up to absurd levels, can provide enough renewable energy for ourselves and a dozen of our neighbors.

There is a major catch to this analysis, however. The kinds of energy produced by wind and solar are not the kinds of energy that the economy needs. Wind and solar produce intermittent electricity available only at specific times and places. What the world economy needs is a variety of different energy types that match the energy requirements of the many devices in place in the world today. This energy needs to be transported to the right place and saved for the right time of day and the right time of year. There may even be a need to store this energy from year to year, because of possible droughts.

I think of the situation as being analogous to researchers deciding that it would be helpful or more efficient if humans could change their diets to 100% grass in the next 20 years. Grass is a form of energy product, but it is not the energy product that humans normally consume. It doesn’t seem to be toxic to humans in small quantities. It seems to grow quite well. Switching to the use of grass for food would seem to be beneficial from a CO2 perspective. The fact that humans have not evolved to eat grass is similar to the fact that the manufacturing and transport sectors of today’s economy have not developed around the use of intermittent electricity from wind and solar.

Substituting Grass for Food Might “Work,” but It Would Require Whole New Systems 

If we consider other species, we find that animals with four stomachs can, in fact, live quite well on a diet of grass. These animals often have teeth that grow continuously because the silica in grass tends to wear down their teeth. If we could just get around these little details, we might be able to make the change. We would probably need to grow extra stomachs and add continuously growing teeth. Other adjustments might also be needed, such as a smaller brain. This would especially be the case if a grass-only diet is inadequate to support today’s brain growth and activity.

The problem with nearly all energy analyses today is that they use narrow boundaries. They look at only a small piece of the problem–generally the cost (or “energy cost”) of the devices themselves–and assume that this is the only cost involved in a change. In fact, researchers need to recognize that whole new systems may be required, analogous to the extra stomachs and ever-growing teeth. The issue is sometimes described as the need to have “wide boundaries” in analyses.

If the xkcd analysis netted out the indirect energy costs of the system, including energy related to all of the newly required systems, the results of the analysis would likely change considerably. The combined ability of wind and solar to power both one’s own home and those of a dozen and a half neighbors would likely disappear. Way too much of the output of the renewable system would be used to make the equivalent of extra stomachs and ever-growing teeth for the system to work. The world economy might not work as in the past, either, if the equivalent of the brain needs to be smaller.

Is “Energy Used by a Dozen of Our Neighbors” a Proper Metric?

Before I continue with my analysis of what goes wrong in modeling intermittent renewable energy, let me say a few words about the way Munroe quantifies the outcome of his energy analysis. He talks about “energy consumed by a household and a dozen of its neighbors.” We often hear news items about how many households can be served by a new electricity provider or how many households have been taken offline by a storm. The metric used by Munroe is similar. But, does it tell us what we need to know in this case?

Our economy requires energy consumption by many types of users, including governments to make roads and schools, farmers to plant crops and manufacturers to make devices of all kinds. Leaving non-residential energy consumption out of the calculation doesn’t make much sense. (Actually, we are not quite certain what Munroe has included in his calculation. His wording suggests that he included only residential energy consumption.) In the US, my analysis indicates that residential users consume only about a third of total energy.1 The rest is consumed by businesses and governments.

If we want to adjust Munroe’s indications to include energy consumed by businesses and governments, we need to divide the indicated number of residential households provided with energy by about three. Thus, instead of the units being “Energy Consumed by a Dozen of Our Neighbors,” the units would be “Energy Consumed by Four of Our Neighbors, Including Associated Energy Use by Governments and Businesses.” The apparently huge benefit provided by wind and solar becomes much smaller when we divide by three, even before any other adjustments are made.

What Might the Indirect Costs of Wind and Solar Be? 

There are a number of indirect costs:

(1) Transmission costs are much higher than those of other types of electricity, but they are not charged back to wind and solar in most studies.

A 2014 study by the International Energy Agency indicates that transmission costs for wind are approximately three times the cost of transmission costs for coal or nuclear. The amount of excess costs tends to increase as intermittent renewables become a larger share of the total. Some of the reason for higher transmission costs for both wind and solar are the following:

(a) Disproportionately more lines need to be built for wind and solar because transmission lines need to be scaled to the maximum output, rather than the average output. Wind output is typically available 25% to 35% of the time; solar is typically available 10% to 25% of the time.

(b) There tend to be longer distances between where renewable energy is captured and where it is consumed, compared to traditional generation.

(c) Renewable electricity is not created in a fossil fuel power plant, with the same controls over the many aspects of grid electricity. The transmission system must therefore make corrections which would not be needed for other types of electricity.

(2) With increased long distance electricity transmission, there is a need for increased maintenance of transmission lines. If this is not performed adequately, fires are likely, especially in dry, windy areas.

There is recent evidence that inadequate maintenance of transmission lines is a major fire hazard.

In California, inadequate electricity line maintenance has led to the bankruptcy of the Northern California utility PG&E. In recent weeks, PG&E has initiated two preventative cut-offs of power, one affecting as many as two million individuals.

The Texas Wildfire Mitigation Project reports, “Power lines have caused more than 4,000 wildfires in Texas in the past three and a half years.”

Venezuela has a long distance transmission line from its major hydroelectric plant to Caracas. One of the outages experienced in that country seems to be related to fires close to this transmission line.

There are things that can be done to prevent these fires, such as burying the lines underground. Even using insulated wire, instead of ordinary transmission wire, seems to help. But any solution has a cost involved. These costs need to be recognized in modeling the indirect cost of adding a huge amount of renewables.

(3) A huge investment in charging stations will be needed, if anyone other than the very wealthy are to use electric vehicles.

Clearly, the wealthy can afford electric vehicles. They generally have garages with connections to electrical power. With this arrangement, they can easily charge a vehicle that is powered by electricity when it is convenient.

The catch is that the less wealthy often do not have similar opportunities for charging electric vehicles. They also cannot afford to spend hours waiting for their vehicles to charge. They will need inexpensive rapid-charging stations, located in many, many places, if electric vehicles are to be a suitable choice. The cost of rapid-charging will likely need to include a fee for road maintenance, since this is one of the costs that today is included in fuel prices.

(4) Intermittency adds a very substantial layer of costs. 

A common belief is that intermittency can be handled by rather small changes, such as time-of-day pricing, smart grids and cutting off power to a few selected industrial customers if there isn’t enough electricity to go around. This belief is more or less true if the system is basically a fossil fuel and nuclear system, with a small percentage of renewables. The situation changes as more intermittent renewables are added.

Once more than a small percentage of solar is added to the electric grid, batteries are needed to smooth out the rapid transition that occurs at the end of the day when workers are returning home and would like to eat their dinners, even though the sun has set. There are also problems with electricity from wind cutting off during storms; batteries can help smooth out these transitions.

There are also longer-term problems. Major storms can disrupt electricity for several days, at any time of the year. For this reason, if a system is to run on renewables alone, it would be desirable to have battery backup for at least three days. In the short video below, Bill Gates expresses dismay at the idea of trying to provide a three-day battery backup for the quantity of electricity used by the city of Tokyo.

We do not at this point have nearly enough batteries to provide a three-day battery backup for the world’s electricity supply. If the world economy is to run on renewables, electricity consumption would need to rise from today’s level, making it even more difficult to store a three-day supply.

A much more difficult problem than three-day storage of electricity is the need for seasonal storage, if renewable energy is to be used to any significant extent. Figure 1 shows the seasonal pattern of energy consumption in the United States.

Figure 1. US energy consumption by month of year, based on data of the US Energy Information Administration. “All Other” is total energy, less electricity and transportation energy. It includes natural gas used for home heating. It also includes oil products used for farming, as well as fossil fuels of all kinds used for industrial purposes.

In contrast with this pattern, the production of solar energy tends to peak in June; it falls to a low level in December to February. Hydroelectric power tends to peak in spring, but its quantity is often quite variable from year to year. Wind power is quite variable, both from year to year and month to month.

Our economy cannot handle many starts and stops of electricity supply. For example, temperatures need to stay high for melting metals. Elevators should not stop between floors when the electricity stops. Refrigeration needs to continue when fresh meat is being kept cold.

There are two approaches that can be used to work around seasonal energy problems:

  1. Greatly overbuild the renewables-based energy system, to provide enough electricity when total energy is most needed, which tends to be in winter.
  2. Add a huge amount of storage, such as battery storage, to store electricity for months or even years, to mitigate the intermittency.

Either of these approaches is extremely high cost. These costs are like adding extra stomachs to the human system. They have not been included in any model to date, as far as I know. The cost of one of these approaches needs to be included in any model analyzing the costs and benefits of renewables, if there is any intention of using renewables as more than a tiny share of total energy consumption.

Figure 2 illustrates the high energy cost that can occur by adding substantial battery backup to an electrical system. In this example, the “net energy” that the system provides is essentially eliminated by the battery backup. In this analysis, Energy Return on Energy Invested (EROEI) compares energy output to energy input. It is one of many metrics used to estimate whether a device is providing adequate energy output to justify the front-end energy inputs.

Figure 2. Graham Palmer’s chart of Dynamic Energy Returned on Energy Invested from “Energy in Australia.”

The example in Figure 2 is based on the electricity usage pattern in Melbourne, Australia, which has a relatively mild climate. The example uses a combination of solar panels, batteries and diesel backup generation. Solar panels and backup batteries provide electricity for the 95% of annual electricity usage that is easiest to cover with these devices; diesel generation is used for the remaining 5%.

The Figure 2 example could be adjusted to be “renewable only” by adding significantly more batteries, a large number of solar panels, or some combination of these. These additional batteries and solar panels would be very lightly used, bringing the EROEI of the system down to an even lower level.

To date, a major reason that the electricity system has been able to avoid the costs of overbuilding or of adding major battery backup is the small share they represent of electricity production. In 2018, wind amounted to 5% of world electricity; solar amounted to 2%. As percentages of world energy supply, they represented 2% and 1% respectively.

A second reason that the electricity system has been able to avoid addressing the intermittency issue is because backup electricity providers (coal, natural gas, and nuclear) have been forced to provide backup services without adequate compensation for the value of services that they are providing. The way that this happens is by giving wind and solar the subsidy of “going first.” This practice creates a problem because backup providers have substantial fixed costs, and they often are not being adequately compensated for these fixed costs.

If there is any plan to cease using fossil fuels, all of these backup electricity providers, including nuclear, will disappear. (Nuclear also depends on fossil fuels.) Renewables will need to stand on their own. This is when the intermittency problem will become overwhelming. Fossil fuels can be stored relatively inexpensively; electricity storage costs are huge. They include both the cost of the storage system and the loss of energy that takes place when storage is used.

In fact, the underfunding issue associated with allowing intermittent renewables to go first is already becoming an overwhelming problem in a few places. Ohio has recently chosen to provide subsidies to coal and nuclear providers as a way of working around this issue. Ohio is also reducing funding for renewables.

 (5) The cost of recycling wind turbines, solar panels, and batteries needs to be reflected in cost estimates. 

A common assumption in energy analyses seems to be that somehow, at the end of the design lifetime of wind turbines, solar panels and batteries, all of these devices will somehow disappear at no cost. If recycling is done, the assumption is made that the cost of recycling will be less than the value of the materials made available from the recycling.

We are discovering now that recycling isn’t free. Very often, the energy cost of recycling materials is greater than the energy used in mining them fresh. This problem needs to be considered in analyzing the real cost of renewables.

 (6) Renewables don’t directly substitute for many of the devices/processes we have today. This could lead to a major step-down in how the economy operates and a much longer transition. 

There is a long list of things that renewables don’t substitute for. Today, we cannot make wind turbines, solar panels, or today’s hydroelectric dams without fossil fuels. This, by itself, makes it clear that the fossil fuel system will need to be maintained for at least the next twenty years.

There are many other things that we cannot make with renewables alone. Steel, fertilizer, cement and plastics are some examples that Bill Gates mentions in his video above. Asphalt and many of today’s drugs are other examples of goods that cannot be made with renewables alone. We would need to change how we live without these goods. We could not pave roads (except with stone) or build many of today’s buildings with renewables alone.

It seems likely that manufacturers would try to substitute wood for fossil fuels, but the quantity of wood available would be far too low for this purpose. The world would encounter deforestation issues within a few years.

(7) It is likely that the transition to renewables will take 50 or more years. During this time, wind and solar will act more like add-ons to the fossil fuel system than they will act like substitutes for it. This also increases costs.

In order for the fossil fuel industries to continue, a large share of their costs will need to continue. The people working in fossil fuel industries need to be paid year around, not just when electrical utilities need backup electrical power. Fossil fuels will need pipelines, refineries and trained people. Companies using fossil fuels will need to pay their debts related to existing facilities. If natural gas is used as backup for renewables, it will need reservoirs to hold natural gas for winter, besides pipelines. Even if natural gas usage is reduced by, say, 90%, its costs are likely to fall by a much smaller percentage, say 30%, because a large share of costs are fixed.

One reason that a very long transition will be needed is because there is not even a path to transition away from fossil fuels in many cases. If a change is to be made, inventions to facilitate these changes are a prerequisite. Then these inventions need to be tested in actual situations. Next, new factories are needed to make the new devices. It is likely that some way will be needed to pay existing owners for the loss of value of their existing fossil fuel powered devices; if not, there are likely to be huge debt defaults. It is only after all of these steps have taken place that the transition can actually take place.

These indirect costs lead to a huge question mark regarding whether it even makes sense to encourage the widespread use of wind and solar. Renewables can reduce CO2 emissions if they really substitute for fossil fuels in making electricity. If they are mostly high cost add-ons to the system, there is a real question: Does it even make sense to mandate a transition to wind and solar?

Do Wind and Solar Really Offer a Longer-Term Future than Fossil Fuels?

At the end of the xkcd video shown above, Munroe makes the observation that wind and solar are available indefinitely, but fossil fuel supplies are quite limited.

I agree with Munroe that fossil fuel supplies are quite limited. This occurs because energy prices do not rise high enough for us to extract very much of them. The prices of finished products made with fossil fuels need to be low enough for customers to be able to afford them. If this is not the case, purchases of discretionary goods (for example cars and smart phones) will fall. Since cars and smart phones are made with commodities, including fossil fuels, the lower “demand” for these finished goods will lead to falling prices of commodities, including oil. In fact, we seem to have experienced falling oil prices most of the time since 2008.

Figure 3. Inflation adjusted weekly average Brent Oil price, based on EIA oil spot prices and US CPI-urban inflation.

It is hard to see why renewables would last any longer than fossil fuels. If their unsubsidized cost is any higher than fossil fuels, this would be one strike against them. They are also very dependent on fossil fuels for making spare parts and for repairing transmission lines.

It is interesting that climate change modelers seem to be convinced that very high amounts of fossil fuels can be extracted in the future. The question of how much fossil fuels can really be extracted is another modeling issue that needs to be examined closely. The amount of future extraction seems to be highly dependent on how well the current economic system holds together, including the extent of globalization. Without globalization, fossil fuel extraction seems likely to decline quickly.

Do We Have Too Much Faith in Models? 

The idea of using renewables certainly sounds appealing, but the name is deceiving. Most renewables, except for wood and dung, aren’t very renewable. In fact, they depend on fossil fuels.

The whole issue of whether wind and solar are worthwhile needs to be carefully analyzed. The usual hallmark of an energy product that is of substantial benefit to the economy is that its production tends to be very profitable. With these high profits, governments can tax the owners heavily. Thus, the profits can be used to aid the rest of the economy. This is one of the physical manifestations of the “net energy” that the energy product provides.

If wind and solar were really providing substantial net energy, they would not need subsidies, not even the subsidy of going first. They would be casting off profits to benefit the rest of the economy. Perhaps renewables aren’t as beneficial as many people think they are. Perhaps researchers have put too much faith in distorted models.


[1] This is my estimate, based on EIA and BP data. With respect to electricity, EIA data shows that in the US, residential users consume about 38% of the total. With respect to fuels that are not used for transportation and not used for electricity, US residential users consume about 19% of these fuels. Combining these two categories, US households use about 31% of non-transportation fuels.

With respect to transportation fuels, the closest approximation we can get is by looking at petroleum use, divided between gasoline and other products. According to BP data, on a worldwide basis, 26% of petroleum is burned as gasoline. In the United States, about 46% of petroleum consumption is burned as gasoline. Of course, some of this gasoline usage is for non-residential use. For example, cars used by police and sales representatives are typically powered by gasoline, as are small trucks used by businesses.

Furthermore, the US is a major importer of manufactured goods from China and other parts of the world. The embodied energy in these imported goods never gets into US energy consumption statistics. In theory, we should add a little energy consumption by foreign manufacturers to supplement total reported US energy consumption.

The selection of “about a third” is based on these considerations.










1,605 thoughts on “How Renewable Energy Models Can Produce Misleading Indications

  1. Even when we considered the green new deal being undertaken without all the consequences of the last two articles by Gail:
    Even if we take into account the gigantic task outlined here:
    Let us assume we built 1500 wind turbines a day.
    Let us consider we generoulsy take 1000 workers for one turbine for one day, that would require 1,5 Mio workers.
    World population grows at about 226.000 a day so all the work force of the GND would be outpaced for new workers seeking a job in just 6 days.
    This would not even make a dent in our predicament.

    • If the world economy collapses, the downhill slide of CO2 emissions is likely to be greater than shown in the graph in the article. Problem solved!

        • not necessarily doomphd a transition into “veganism” so no die-off just a big change in our eating habits

          • respectfully disagree, adonis. change in eating habits will mostly be toward cannibalism, if anything, perhaps too much animal protein and fat in diet. not sustainable, either.

            • sounds horrible, but history is on my side of this argument. BTW, everything will be on the menu, including grass and tree bark. “Adiaronaks”, native american for “bark eaters”.

          • A world full of cranky and self-righteous, unbalanced Vegans like my sister?

            Count me out!

            • Pretty sure it’ll turn out as a mix of the break-up of Yugoslavia, the Road, and Cannibal Warlords of Liberia (YouTube – check it out).
              Plus the fact that humans can NOT eat about 98% of any wild growing plants/grasses/bushes/tree leaves, but we CAN eat about 98% of wild animals… Easy to see.

      • i think the elders know the collapse is coming probably this year and measures have been prepared for the contracting world economy such as negative interest rates and an emphasis to digital money that is why i am investing in silver as most of the big players are too this is why a seneca cliff collapse could wipe out the middle class and their lifestyle in one fell swoop that is why the C02 reduction story was created so the world would be cheering when the collapse in C02 levels occurred

        • “that is why the C02 reduction story was created so the world would be cheering when the collapse in C02 levels occurred”

          That’s a logical leap for you?

        • Junk silver has always proved readily convertible to small amounts of cash for daily needs in economies in crisis – safer than holding gold, too. Of course, assuming cash will still be around……

          • Bark-eating: Fins (and I think Norwegians?) used to eat some bark even in good times, so that their stomachs would be used to it – best to get in practice now !

            I think they used to put it into various kinds of ‘hard bread’, although I might well be wrong on that. Maybe you can just chew the stuff?

            Reminds me I must look into making hard biscuits that survive for months without needing to be put in air–tight containers.

            • The sami in northern norway/sweden/finland ate bark year round, they knew how to prepare it. And how to harvest without killing the tree.

              Probably an appreciated addition of carbs to a diet of meat, fish and milk.

              The farmers further south only ate when famine, bitter, maybe slightly poisonous bread.

            • Brian Fagan, an archeologist from UCSB writes about the “chumash” native americans in coastal California. a mainstay of their diet was acorns from the live oaks that populate the CA coastal mountains. i think the dried powders can be stored in bug-tight containers for long periods. the squirrel ‘competitors’ also make a tasty meal.

            • Beside bark also some lichens where mixed in for instance flour, at least in scandinavia. The bark bread i once tasted was a rye and bark mix, quite decent taste, although I don’t know the proportions of bark used in the bread.

              Acorns can also be used but you have to get rid of the tannins. The native european oaks have a much higher amount of tannins than many of the american oak species. At least for the european oaks boiling is not enough, you also have to leach them.

      • It would be an enormous help but it would not “solve” the problem given the greenhouse gases already in the atmosphere. However, I don’t see a total collapse happening during the graphed period, though serious declines are likely.

        • The big issue in the upcoming collapse is the financial system and its problems. People who are only focused on how much oil is in the ground tend to miss the financial aspect.

          • has a good article out on ”NotQE4”. I personally find it difficult to assess where we are in the process. It appears we can do QE because we have the Petro dollar still. Why wouldn’t every country do this? I think it only works for some and only for a limited time.

          • Emissions are more important than financial aspects, with regard to a habitable planet. But, yes, financial aspects come into play when looking at how much oil can be produced. However, the collapse in emissions suggested by your graph, will not “solve” our problem (which is really more of a predicament), even if it helps mitigate the damage.

            • Why anyone ever has more than a passing comment on climate change/CO2/etc is beyond me. There is nothing you or I or any of us can do without entirely crashing the system.

              Keep pushing, Sysiphus.

              I’ll stick with adapt or die.

            • naaccoach, the system will crash anyway, as Gail has shown time and time again. And that is just taking into account financial angles. There is a multitude of environmental issues also, which will cause collapse (societies can’t insulate themselves from the environment they exist in). If non-environmental issues can promote more than a passing comment, I’m quite sure environmental issues should also. After all, a habitable planet is the base requirement for any society to exist.

              Whilst it’s true that no individual or small group of individuals can do anything about the environmental crises, it is also true of other crises. But we still want to talk about them.

  2. Another article about the Oil Patch, Democrat policies, education …

    Headline: Drilling ban proposals divide Democrats in U.S. oil states

    More than $1 billion of the state’s $2.4 billion in oil-and-gas revenue goes to public schools, according to the nonprofit New Mexico Tax Research Institute. Expecting another windfall this year, state lawmakers approved a 16% increase in school spending to $3.3 billion, to pay for a longer school year, higher teacher salaries, and increased support for low-income districts.

    Governor Lujan Grisham also announced plans for a scholarship program, funded largely by oil and gas revenues, that would make the state’s colleges free for anyone with a 2.5 grade point average – an estimated 55,000 students.

    Jessica Sanders, a science teacher in Rio Rancho, sees the impact in her classroom, which until the recent improvement in funding lacked basics such as enough writing implements, projectors and computers for students.

    “When people talk about shutting down the oil and gas industry, I don’t think people are seeing how that will affect me and my students,” she said.
    End Quote


      • If they really can make electric power for 1.69 cents per kWh, then it looks like it is possible to make synthetic oil for about what we pay for it today. I wonder if anyone else has made the connection? It seems likely, but I have not seen it yet.

        • I’m not convinced that you are putting in the layer of taxes that needs to be in the calculation as well. Governments need to get revenue from energy products. This is related to energy products needing to be able to provide a surplus to aid the rest of the economy.

          I think someone would need to try it and see. No one with the current gas to liquids plants wants to replace $55 per barrel oil with its products.

          • “layer of taxes ”

            I am not considering them at all. I don’t know what the taxes are on crude oil. I know there are heavy taxes on gasoline. Governments may have to tax other things. But I would think that a revenue stream of 100 million bbls/day at $50-$60 per bbl (~$2 T/year) would be of considerable interest even without high taxes.

            It’s carbon neutral. The output of the F/T plant has to be refined into products and distributed so the existing oil companies, refineries, and pipelines would still be of use. Also, if there was more synthetic oil than needed, they could sequester CO2 at around $20/ton.

            The effect of zero-interest money has not been considered. If the whole system costs around $13 T, the payback would be around 13% per year. It would take about 6.5 years to repay the investment in a given PV and F/T plant. For the next 20 years or so the cost of oil would fall to the maintenance cost and could be taxed more.

            • “I am not considering them at all. I don’t know what the taxes are on crude oil.”

              Start here.

              Or here its even got a pretty picture.


              It is not hard look it up stuff on the internet. Took me about a minute to find. Using “US taxes per barrel of oil” as the search string.

              I already showed above that New Mexico’s collects $2.4 BILLION for a small part of the Permian. Which is ~10% of the state’s budget. It is way higher for the places you want to build.


            • The second URL is interesting. I didn’t know Japan produced any oil.

              But consider Egypt, They used to have oil deposits in the Sinai Peninsula, but I think they are now depleted. West of the Nile, there is 700,000 km^2 of desert. At 100 km^2 each that’s enough for 7000 of these installations. At 34,000 bbl per plant per day, that would be ~238 million bbl/day, which is about twice what the whole world uses today.

              This is how they could avoid buying oil.

              I tend to be more concerned with the physics, chemistry, and first-order economics. It is to be expected that synthetic oil would be more expensive than pumping it out of the ground and it might not support high taxes.

              But if we are concerned with CO2, and don’t want to give up our oil-powered civilization, then something has to be done. Relatively low-cost sunlight to carbon-neutral oil looks to be possible with current technology.

            • The majority of the price of oil is taxes. We keep hearing about “net energy.” I think that quite a bit of this net energy is transferred to governments through tax dollars (including royalties, carbon taxes, and taxes under a lot of other different names), so it can go to build roads, schools, and other things to help the economy as a whole.

              This is a chart showing “government take” as a percentage of operating income by Barry Rodgers Oil and Gas Consulting from about 2013 (thus, when prices were high). Basically, where EROI is high, taxes are high; where EROI is low, taxes are lower. Governments understand how the “game is played.” Often, they put rates into the tax code that change based on the price of oil. The higher the price of oil, the more taxes are paid. Barry Rodgers has recomputed these taxes as percentage of operating income.

              The highest tax rate is 90% of operating income. Needless to say, this leaves the company with very little for reinvestment. From this map, Saudi Arabia and the Middle East are at the top level of tax revenue. They run their whole economies on the tax revenue of oil and gas. Without the taxes, they cannot feed their people. That is why they are almost desperate now. They are withholding production, in the hope of getting prices up. Otherwise, they keep raising their level of debt.

              Back in 2013, I put together the slide below based on an analysis that Barry Rodgers (author of the map) had done with respect to US and Canadian oil, published in the Oil & Gas Journal. His point was that it was easier for Canadian Shale to be profitable than US oil, because Canadian Shale paid a lot less taxes.

              Note that in the US, “government take” exceeds the company’s capital expense and operating expense, combined.

              There is no need for an oil and gas company to be profitable in the US to pay taxes; the royalties come off the top. It is well known that Alaskan citizens pay no state income taxes because of oil taxes. They get checks back each year, instead. Other states are very dependent on oil tax revenue also.

            • Any objective analysis puts the EROI of PV at under two when batteries are used. The prototype process you are spinning numbers from also uses batteries. You never responded to the poster who politely asked about the unbelievably big quantities of water used and stadium size gas storage. You didnt respond twice. Every aspect of what the fantasy that you create with supposed $ numbers is simply not achievable due to the incredible complexity facilitation and logistics the processes would have in the real world.

              Lets just put that aside. The PVs have a eroi of two if batteries are used. lets just suppose the facilitation and logistical problems have solutions that are not three or ten times of the cost you cite. The massive facilitation and materials transport are all going to use energy. All of the personnel involved will have to eat heat their shelters and assume get compensated. The compensation burns a huge amount of energy. The power source itself is omost a energy sink not a source. How on earth could this scheme possibly be a energy source not a sink once the other consumptions of energy that must occur with the facilitation, material transport and storage, needs and compensation of workers are subtracted from a energy source that is two steps from a energy sink?

              Inherent to your use of pricing commodities in $ is fossil fuel consumption. The entire kit and kaboodle money, financial system, resource extraction and pricing, labor, simply does not exist without fossil fuels. IMO your assumption that money pricing and all of the things that fossil fuels provide that support many types of energy sinks not just the boondoggle you are proposing will still exist and be supported by a energy sink you propose can only be described as delusional. It could be described as uninformed but we know you are no dummy. Why not just propose corn derived ethanol as your energy sink of choice?

            • “Any objective analysis puts the EROI of PV at under two when batteries are used. The prototype process you are spinning numbers from also uses batteries.

              No batteries. At 1.69 cents per kWh, they could not have batteries.

              > You never responded to the poster who politely asked about the unbelievably big quantities of water used and stadium size gas storage.

              I responded with the cost of water at about a dollar a ton. The water needed is close to the oil produced in volume, so it isn’t that big a deal even if you make it by osmosis in the shipping ports and pump it to the F/T plants.

              > You didn’t respond twice. Every aspect of what the fantasy that you create with supposed $ numbers is simply not achievable due to the incredible complexity facilitation and logistics the processes would have in the real world.

              The Sasol plant I use for analysis has been operating for 12 years. It has a known cost. The power cost is from a bid on a PV farm. Hydrogen electrolysis cells are well-known technology. The only part that has not been deployed at scale is the CO2 capture. The MIT approach looks good, but if it does not work out, there are others to capture the CO2.

              “Let’s just put that aside. The PVs have a eroi of two if batteries are used. lets just suppose the facilitation and logistical problems have solutions that are not three or ten times of the cost you cite.

              No batteries. The plant makes hydrogen when the sun shines. If you are going to run the F/T plant 24/7 you need to store hydrogen and CO2. Probably underground. The plant makes around 4500 tons of oil a day. So a few days storage should be a reasonable cost.

              “The massive facilitation and materials transport are all going to use energy. All of the personnel involved will have to eat heat their shelters and assume get compensated. The compensation burns a huge amount of energy. The power source itself is omost a energy sink not a source. How on earth could this scheme possibly be a energy source not a sink once the other consumptions of energy that must occur with the facilitation, material transport and storage, needs and compensation of workers are subtracted from a energy source that is two steps from a energy sink?

              It takes a considerable workforce to build something like Sasol did, took them several years and it cost about a billion dollars. But the nature of such chemical processing plants is that they don’t employ many people. The 90 square km of PV might need more maintenance labor.

              “Inherent to your use of pricing commodities in $ is fossil fuel consumption. The entire kit and kaboodle money, financial system, resource extraction and pricing, labor, simply does not exist without fossil fuels.

              No argument. This is a preliminary proposal to replace oil-out-of-the-ground with a carbon-neutral substitute. But there is no reason I can think of why synthetic fuel will not work fine in engines and all the other uses of oil.

              “IMO your assumption that money pricing and all of the things that fossil fuels provide that support many types of energy sinks not just the boondoggle you are proposing will still exist and be supported by a energy sink you propose can only be described as delusional. It could be described as uninformed but we know you are no dummy. Why not just propose corn derived ethanol as your energy sink of choice?”

              Look, if this does not make synthetic fuel at around the same cost as conventional oil, then there is no reason to build them. It’s just the consequence of bolting together existing F/T technology and reasonably priced hydrogen from very low-cost PV.

              If you have a better proposal to keep hydrocarbon based civilization going while we turn off the oil wells to get the CO2 under control, please say so. I am flexible, this has only come up in the last month or so. Open to any better ideas.

            • Thank you for your civil response Mr. Henson.

              I could be wrong. Wouldnt be the first time

              When we “pay” for things the manufacturer can use that payment for other oil energy produced products. Ditto for the employee.

              Whether $ as we know it could hold any of its value without some natural based energy resource is really questionable. Post fossil fuel $ based analysis is useless IMO. Its like trying to calculate with base ten when the base has been changed to base two and still be accurate. Another analysis method doesnt exist. If you could develop that instead of leveraging off a system that has its base in fossil fuels that would certainly be a impressive accomplishment and lend credence to your imaginative ideas.

              Supply chains depend on fossil fuel energy surpluses to work. I think its impossible to create a energy surplus to support that when the very creation itself is dependent on those supply chains.

              In liu of that i dont see of synthetic oil production supporting industrial civilization. It would be in itself a product of fossil fuels. It might provide energy for a bit after fossil fuels go away but its complexity and energy inputs that give it life guarantees that it would not continue.

              As far as the do you have a better idea. No. Inherent to that question is the premise that ideas will solve this. That doesnt mean that a really poor idea gets better. That does not mean that citing numbers that dont apply is valid.

              “Do you have a better idea?” That statement is an assertion. It asserts that ideas are a solution to resource depletion. I dispute that assertion. Ideas didnt create natural resources they only manipulate them. Imo pretending that ideas have inherent power is part of the problem. Culturally we are taught that that assertion reflects tenaciousness and is a positive quality. I dispute that. Placing value on intellect when that same intellect has failed to create appropriate lifestyles is the prime example of our dysfunction IMO.

              Perhaps we will be better creatures as hunter gatherers. perhaps not. Im not qualified to judge that.

            • I have to chip in on this statement from above.

              ///////Whether $ as we know it could hold any of its value without some natural based energy resource is really questionable.//////

              There is no question about it. If you are in doubt, try cooking £$ notes and eating them, with a side of coins.—or shoving them in your fuel tank if you don’t fancy that.

              The only function of cash is as an exchange medium for energy, or to hold as a promise of energy exchange

              Money took over from barter, because its ‘promise value’ was easier to carrry around and use as an exchange medium. If there’s nothing to exchange then money can have no purpose.

              This is why Bitcoin is the ultimate insanity in finance.

            • think you would agree that humans have shifted energy sources in the past. Wood to coal, to oil, and natural gas, even nuclear.

              If we have an excess of oil and we want carbon or hydrogen, converting from one to the other is a project for a bunch of chemical engineers.

              There is nothing magical about any energy source,

              What has changed in the last month? There are several companies offering power at 1.69 cents per kWh. That’s cheap enough to make synthetic oil for about what we pay for it today.

              It would involve vast investment, and pave over a substantial area of desert, but it looks a workable solution that solves both the energy problems and the carbon buildup. It’s one of the few uses of renewables I have seen that make sense.

              The big problem to date is that there are no agreed solutions to get humanity off fossil fuels without utter economic disaster. Gail is absolutely correct that intermittent renewables are not helpful for electricity. However, intermittentcy doesn’t mater when making synthetic fuel this way.

              There may well be other solutions to FF and the carbon buildup, But this is the first I have run into which makes even marginal sense in terms of physics and economics.

      • Well yes Democrats do need to face issues but are the Republicans any less clueless ???
        With drill baby drill, abiotic oil? The U.S being oil dependent for as far as the eye can see!! I get it that democrats are clueless but your bias against one over the over makes me question your motives..

        • The Republicans miss the point that moving assets and income from the wealthy to the poor would be helpful. Also, being efficient is not really helpful, as in moving jobs to robots; what we really need is lots of jobs that pay fairly well. Furthermore, huge companies and globalization are self-defeating. There is too much energy waisted in the huge corporate structure, and in moving partially finished products around the world, so as to minimize labor costs. Someone has to be able to afford to buy the finished products, if the system is not to flat line.

        • “Well yes Democrats do need to face issues but are the Republicans any less clueless ???”
          Examine your language. x “needs to face”. Y ” is clueless” You start with a posit of equality of x and y but then immediately demonstrate propaganda in a complete inequality both in your choice of verbs and selective use of adjectives.

          Both parties are clueless however fossil fuel extraction does in fact allow industrial civilization. Renewables will not. From my perspective One is much more deceiving than the other. One will extend bau longer without collapse than the other. I think thats desirable. You may not.

          “makes me question your motives..” ahhh. Groomed by the russians? Racist? For discussing a topic with (IMO) a considerable amount of objectivity and courage that she has studied with great diligence a great part of her adult life? Ever hear of something called the first amendment? Yes thats number one on bill of rights. Your comfortable threatening it by disregarding the actual issues and attacking by suggesting ulterior motives? Time to call me names now rather than be accountable?

  3. Music to my EARS!

    We are all screwed!’ The U.S. is like a banana republic and a depression could be on the way, warns money manager.

    ‘When this thing implodes, we are all screwed. On a global scale, we have never before created such a magnificent bubble. These central bankers are clueless, and they have proven that beyond a doubt. All they can do is to try to keep the bubble going.’
    That’s Michael Pento of Pento Portfolio Strategies giving his timely Halloween-week assessment of the current climate in an interview on

    Pento, whose holdings lean heavily on Treasurys TMUBMUSD10Y, +0.00% and gold GC00, +0.35% , expects the interest-rate cuts to keep coming in the face of record household and corporate debt.
    “It’s not that it’s QE. It’s QE on steroids,” he said. “Everybody knows that this QE is permanent just like any banana republic would do, or has done.”
    With all the imbalances in the system, Pento says the Fed is well aware the next recession won’t be a mild one, so it keeps pumping to avoid that fate.
    “The plunge in the stock market would be huge and from a much higher level,” he said. “Back in the Great Recession, unemployment claims spiked. We had millions of people laid off, and the same thing would happen today only… much worse.”

    Makes me DANCE

    • “The disparity”

      The people are different. It’s not entirely cultural, there was heavy genetic selection involved in the UK, and I presume most of Europe, especially Germany and the Netherlands. For hundreds of years, the smart, hard-working people got relatively rich and had twice as many surviving children as the poor. The selection happened less intensely in China and likely Korea and Japan but for a longer time.

      This won’t matter in a couple of generations when genome upgrades become common.

      • I doubt we will ever see genetic upgrades! But your main point I think is accurate. Of more relevance, though, is that the welfare states have run the same experiment in reverse. This is clearly visible in many US cities, where welfare mothers have feral children one after another, because each one gets them more subsidy. After three generations, these children are largely ineducable and genetically incapable of being socialised. They also seem to be losing the time binding ability that raised us from the apes in the first place, and if we go over that cliff there is no safe landing, anywhere.

        And if the handouts ever stop, Detroit will make the collapse of Easter Island look like a walk in the park.

      • The Western Europe, like other developed parts of the world, are so “genetically endowed” that they are now totally dependent on the imported workforce.

        Your genetic theory is ridiculous, because if the soil is poor, then also the population is poor, when ther is lack of the easy to get resources, energy etc., the population is poor, no matter how genetically endowed it is.

        • The soil in Iceland is very poor, but the population certainly are not. The soil in Yucatan was poor, but the Maya built a civilisation there. The soil in Fez was barely arable, but that city hosted, and still hosts, the world’s oldest university.

          I hope three counter examples are enough.

          • How confident are we that we actually know the characteristics of the soil in Yucatan and Fez in ancient times? I have not looked at these locations, I am afraid.

            David Montgomery, in Dirt: The Erosion of Civilizations hypothesizes that declining soil characteristics (shallower depth of top soil, increased salination, decreased fertility) were part of what led to collapse of civilizations. Soil needs to be built up from erosion of bedrock (among other things). Tilling the soil tends to lead to the erosion of soil faster than it can be built up.

            In many cases, it seems to me the problem is resources per capita falling sufficiently low that whenever there are climate fluctuations, the civilizations go downhill quickly. Or they become vulnerable to other nations beating them in a military fashion. Or they become vulnerable to epidemics, or overthrown governments. All of the pieces seem to work together.

            • I wonder if there is any way to maintain soil and still feed a population. Your blog opens up more ideas for exploration than can be handled with time given.
              Soil is of acute interest to me, it is a large chunk of my wealth and it is real and not subject to financial manipulation, it may decline in paper value by half, but maintained by current standards it will still make the same income in real crops based on transforming nitrogen, carbon dioxide, etc. into a crop along with solar energy – in that sense a renewable use of solar energy.

              Hopefully collapse in whatever form will be avoided, it is a hard life without energy. Not that it makes much difference, but I tend to agree with your last paragraph, it is not one thing but a system which appears to be self organizing which implies it is non deterministic – or there is less self will than we humans want to believe.

              Dennis L.

            • “to maintain soil”

              It’s not hard if you understand what is going on.

              The elements that are taken away by harvest, particularly phosphorous, have to be replaced.

              Biochar would be a big help too.

            • Thank you, Gail. For Iceland and Morocco, we have the historical record; in the former case ever since the country’s founding in 874; in the latter case since the Idrisid dynasty in 700BC or so. For Yucatan, we don’t have much history, apart from king lists and such, but the area is forested, and the older trees are a mine of information about climate and soil fertility.

              Though to be fair, the Maya did have a tendency to overpopulate, a problem solved by almost continual internecine warfare. Until a long period of drought led to collapse: having recorded king lists rather than weather, they were ill equipped to cope.

        • Arnold Toynbee proposes in “A study of history” that poor starting conditions are actually a winning concept. Something like a Nietzschean “What doesnt kill you makes you stronger”. Toynbee gives plenty of examples.

          • Yes indeed: Toynbee’s “Challenge and response”. Well argued, but I confess to being a skeptic. Historians are too fond of simple explanations, but Clio’s web encompasses more than our philosophies.

          • Yes, as long this continues to be “surplus planet” via Sun and Earth’s core activity, there are ways how to nudge nature’s biomes favorably to human nourishment needs. The problem is the past legacy path of the sheer overpop and humanoids role in effectively terraforming the planet on such scale. So we are likely standing towards the end of some big chapter. Not exactly a novel introspection on my part, but “the pain” will probably need to last several next generations more..

          • The philosophers of the 18th century often explicitly posed the question: ‘Why is this region comparatively poor in resources, but wealthy and accumulating capital? And this one in contrast blessed with everything, but still poor?’

            The answer was always found to be intense pursuit of industry and commerce, private enterprise, and secure property rights, with rulers unable to take whatever they pleased according to their whims – so if you made it, you kept it.

            This set us on the path which has led us here,after 250 years or so: a plundered planet and the greatest ever accumulation of capital, which is about to dissolve like fairy gold….

    • In the US, it is the rural areas that are having a lot of problem with the loss of jobs that pay reasonably well, also. Agriculture doesn’t hire many workers any more, other than low-paid seasonal harvesting workers.

      In Europe, my impression has been that the eastern part, which uses lots of coal, has been doing relatively better than the rest of Europe. This is no doubt changing, as the demand for automobiles falls around the world. Spain and Italy, without much energy resources, are in bad shape.

      • Things really picked up in Spain over the last few years, above all for the owner class – not at all good for exploited workers on poor-quality contracts and working ‘in the black’ (although the later can be pretty good in some areas) – the superficial figures looked quite good, but now it’s starting to go undeniably into reverse.

        Rural areas continue to die and empty out, villages populated by only over-60’s etc: all the attractions and amenities are in the cities.

  4. It occurs to me that if we return to our corporeal analogy for the global economy, which is ageing, bloated yet starved of good nutrition, and medicated to the gills with financial palliatives and stimulants after its near fatal stroke in 2008, then the protesters can perhaps be understood as cancerous cells, stimulated by imbalances in the system which gave them life into rebelling against it.

    We also now seem to have a situation wherein the social unrest, which has been brought about by dwindling prosperity and the financial inequalities that stem from that, is now starting to act as a primary driver for further declines in prosperity – a self-reinforcing feedback loop.

    The Hong Kong protests have pushed the territory into recession, for example, and Chile has just had to cancel the APEC summit and UN conference in Santiago. So the cancer is metastasizing and further undermining the health of the whole.

    “The world has never really recovered from the 2008 financial crisis. The current wave of demonstrations carries the resentment of many ordinary people who still feel let down and ignored by leaders and elites in a system rigged against them.”

    • Interesting! I am not the only one using an analogy of the economy to a human. In my analogy, the human needs to learn to consume only grass for nutrition. Here, it is described as “bloated yet starved of good nutrition.”

      The “cancer is metastasizing” is a perfect analogy for what is going wrong, as the problems spread around the world!

  5. This recently appeared on ZeroHedge:

    The level of debt is of concern and it appears to be most heavily concentrated in equipment which is a depreciating asset and given the incredible, modern electronics embedded in the modern tractor, combine, etc., the maintainable lifespan must become an issue at some point.

    The Amish model while not perfect and far from entirely self sustainable seems to work in that their equipment is very old, very low tech and their wealth goes into the land and trades which earn outside income. Also, they cluster in groups of say 200 people, their churches are low overhead as they worship in each other’s houses which rotate on a periodic basis.

    For a modern farm, even the machine shed in which to maintain equipment is huge and often heated with excellent lighting and concrete flooring. Compare this to Amish barns, much less infrastructure.

    It could be that active farmers get into a cycle where the debt on their equipment requires ever increasing amounts of land and increasing “efficiency” which in itself leads to lower prices, etc. It seems very difficult for a modern farmer to accumulate the basis of farming, land.

    There is a genuine connection with the land that occurs when it is “your” land. The culture of modern farming is on Youtube as far as the mechanical/dirt part. It is difficult to see behind this curtain of modern machines, buildings, grain bins, etc. into other aspects of that life. It is rumored that a major source of cash income for some farmers comes from YouTube videos the production quality of which is impressive. As in all things, it is the image that sells, hard to find the reality unless immersed in the actual culture.

    Dennis L.

    • They also can transfer their excess children out of the system. If they had to divide up the land to handle the many children added each generation, they would soon die out.

      • Gail, mediaeval feudalism solved that problem. The custom in other societies, of dividing the land among the sons, never caught on; because, as you say, it was ruinous. So the first son inherited the estate, however small; the second son went into the army, and any third son went into the church.

        These, by the way, were the main routes to upward mobility. For the female children, the ladder was through marriage. It was a most stable society, and it had to be, because, after the fall of Rome, the only alternative was barbarism. For a “personal view”, but one with great insight, I refer you to Kenneth Clark’s television series “Civilisation”

    • Yes, there are several YT video – content producers who show in detail how they farm (beyond) organic almost daily, and clearly 4/5 of their income is from this very “online show” activity, conferences, book sales etc.. And their establishment usually uses significant off the farm inputs either in grain, hitech tools, heavy load transport for breeding stock etc..

      They won’t be able to sustain themselves outside of BAU, but some of them could supplement their diet to certain extent. Usually, they also serve posh upscale market (low volume at high price), so that might just eventually morph into future symbiosis of protection by local warlord getting the best food..

      “The Amish” low tech approach has been discussed several times already, that’s also not exactly closed loop, but say 70% and up.. in many respects. So, perhaps good enough in the world of scavenging potential of the bygone era (e.g. metal parts)..

  6. Just want to thank whoever posted the link to the ‘’ website. I have been working my way back through his (Tim Watkins) recent posts. He really gets it.

  7. “The US Fed hopes that a 1.5% policy rate along with $60 billion a month in ongoing liquidity injections will be enough to keep stock markets afloat and avert a recession.  But monetary efforts work at a lag of many months, and a global downturn is already well underway. 

    “An unprecedented decade-plus expansion of record debt and asset valuations have compounded financial risks from here.”

    • “The US Fed hopes that a 1.5% policy rate along with $60 billion a month in ongoing liquidity injections will be enough to keep stock markets afloat and avert a recession.”

      I think these efforts will keep stock markets from sinking in 2020, and especially since the % rate can be reduced and the injections can be increased…

      and I expect these two things will happen in 2020…

      but, I also expect a very unusual situation where the markets hold up fairly well, but will be accompanied by a severe recession in 2020…

      CBs can create money on their computers to maintain markets, but that’s not enough to stop the coming recession…

  8. Getting off coal is fairly easy if we go to nuclear.

    Oil, however, is the lifeblood of our civilization and giving up oil would be an economic disaster. Famines would kill billions, worse than the effects of CO2.

    Recently, several companies in the Mideast have been offering PV for 1.69 cents per kWh. (Use Google news and search for 1.69 kWh PV,) In recent years I have worked on power satellites, trying to get the cost down to where they could be used for synthetic oil. Failed, could not get it down to less than 3 cents per kWh. But 1.69 cents per kWh corresponds to around $60/bbl synthetic fuel. We could live with that. And it is carbon neutral.

    It’s based on making hydrogen from water and pulling CO2 out of the air and feeding it to a plant like Sasol’s Oryx GTL MIT engineers recently demonstrated how to get CO2 out of the air at a cost per bbl of synfuel of about $2. The hydrogen would cost about $48/bbl and the capital for the plant works out to around $10/bbl. This has not been optimized. A serious study would probably cut the cost some. Preliminary numbers are up on the google group power satellite economics.

    It’s not cheap. The cost to replace the 100 million bbls/day of oil we use works out at $13 T. Done over ten years, $1.3 T/year.

    But it beats economic collapse from trying to get away from oil.

    It’s also possible to use the cheap power and the CO2 collector to store CO2 for about $20/ton of carbon. Taxes on carbon are twice that in some places.

    • The advantage that coal has had is that it is cheap. I don’t think that we can really use much oil unless we can dilute it out with cheap coal. What is important is the overall cost of the energy mix. Oil is the expensive part. Coal is what brings the average down. We can’t get along without coal, unfortunately. Or something else that will bring the overall cost down.

      • For making electric power, coal at best makes power for 4 cents per kWh. Power satellites, if they make sense to build at all, make power for 3 cents per kWh.

        Non-energy uses of coal such as making calcium carbide, are small enough that we can probably wait a long time to fix them. Cement is a harder problem, but much of it is fired with old tires. As tires start being made from synthetic oil, even cement will produce less net CO2.

        • I checked USGS statistics for cement. The US produces 2% of the world’s cement supply. The largest producer by far is China, with 58% of the world’s cement production in 2018. India is the second largest producer with 7% of the world’s supply. Both China and India are large coal users.

          I expect that the US practice of using old tires is only possible because of the tiny amount we produce, relative to the rest of the world.

        • As I think about the situation, the problem is that the price of finished products, such as concrete made from cement, cannot rise, relative to wages of average workers. Thus, it is necessary to compete with the price of used tires and coal itself, in the substitution. Having a price equivalent to that of oil doesn’t help.

          The reason that cement prices are so important is because other countries use a whole lot more cement that the US does. In many countries, both roads and buildings are made from concrete. The US is able to use less concrete than the world as a whole because it makes many of its roads from asphalt and many of its buildings from wood.

    • In what sense would the deaths of billions be a worse disaster? Not the deaths themselves, because we are all fated to die, and mostly – even with modern medical science – in distress.

      For human beings to be reduced greatly in numbers and the planet to be relieved of this impossible burden seems very desirable, not least for other forms of life.

      Our civilization is not worth preserving, it has failed: the cities are hideous, and foment mental illness; we pollute and degrade on a vast scale; the arts are mostly worthless these days, entirely corrupted by the gambling of financiers and speculators – the greatest artists today are not the stars of the art market but live in obscurity; the mental level of most people is very low and perhaps worsening, and a huge % are depressed, anxious and, increasingly, angry.

      These conditions can only worsen: over-population is itself one of the greatest evils.

      Our consumption of irreplaceable resources has not produced wonders, beautiful architecture, exquisite arts, and healthier, saner people – as the dreamers of the 19th century hoped – only the horror of universal banality and ugliness, saturated in propaganda and delusion, and physically degraded and poisoned populations: poisoned by the very industrial methods that bring them into existence.

      The civilisation of Mordor, not Lothlorien – and even the beautiful realm of the Elves had to pass one day……

      • “For human beings to be reduced greatly in numbers”

        This has consequences. Things like smartphones and advancing technology just would not exist with a small population.

        *if* we can reach nanotechnology, there is a good chance we could live much lighter on the planet, or better yet move into space and leave the world as a park.

  9. Calls Persist for Negative U.S. Yields Even as Fed Signals Pause
    (Bloomberg) — The Federal Reserve may be hinting at a pause in its policy easing, but Bruno Braizinha at Bank of America Corp. sees a risk that yields on some Treasuries will go negative by 2021 as the U.S. central bank cuts rates all the way to zero.
    While that may seem like a remote scenario to some, the strategist says the market can’t ignore the possibility that 5- and 7-year yields — both presently within a few basis points of 1.60% — could fall below zero. He says now’s the time to hedge against that prospect.
    Braizinha wrote about the risk of sub-1% yields in the U.S. just ahead of August’s historic Treasuries rally, which drove 10-year yields as low as 1.43% on Sept. 3. That rate has since rebounded to around 1.71%, but his central view is that the benchmark yield will go even lower — to around 1.25% — in the next three months. In addition to that, he also sees the Fed being forced to return to near-zero rates amid a deterioration in the American economy and an eventual realization by investors that a U.S.-China trade deal won’t be a panacea.
    “It’s important to acknowledge those risks and not overlook these scenarios,” he said by phone. “All the positive sentiment on trade is fading, and what’s changed now is that it’s more likely that at some point the Fed is going to have to cut again.”
    A day after the Fed signaled a pause on Oct. 30, yields plummeted across the curve. In Braizinha’s view, the moves reflected a bias that permeated the bond market based on expectations for worsening economic data, lower yields and a flatter curve.

    We are living in unreal times….one thing that keeps me going…

    Let’s Celebrate

    All RIGHT

Comments are closed.