Recession Ahead: An Overview of Our Predicament

Many people have the impression that recessions come from financial missteps, such as the US subprime loan fiasco. If energy is involved at all, the problem comes from high oil prices as supply becomes inadequate to meet demand.

The real situation is different. We already seem to be on the road toward a new crisis; this crisis is likely to be much worse than the Great Recession of 2008-2009. This time, a major problem is likely to be energy prices that are too low for producers. Last time, a major problem was oil prices that were too high for consumers. The problem is different, but it is in some ways symmetric.

Last time, the United States seemed to be the epicenter; this time, my analysis indicates China is likely to be the epicenter. Last time, the world economy was coming off a high growth period; this time, the world economy is already somewhat depressed, even before hitting headwinds. These differences, plus the strange physics-based way that the world economy is organized, explain why the outcome seems likely to be worse this time than in 2008-2009.

I recently explained what I see as happening in a presentation for actuaries: Recession Likely: Expect a Bend in Trend Lines. This post is based on this presentation, omitting the strictly insurance-related portions.

The big thing that the vast majority of people do not understand is how important energy is to the economy. Because of this issue, I started my presentation with this slide:

Slide 3

After an opportunity for discussion, I offered the explanation that the role of food for humans is very much parallel to the need for energy of various types for the world economy. Food provides people with the energy required if they are to have the ability to think, move and speak. Energy products of many kinds enable the activities that we associate with GDP. For example, energy consumption enables machinery to operate and goods to be transported.

Slide 4 – Larger image at this link.

Using data from Smil, as well as more recent BP data, we can estimate how fast energy consumption has been growing over a very long period–nearly 200 years. We can see that the highest energy consumption growth occurred in the 1961 to 1970 period; the second highest growth occurred in the 1951 to 1960 period. These are periods we associate with rapid GDP growth and prosperity.

On the next slide, I show the same data displayed in a different way.

Slide 5 – Larger image at this link.

On this slide, I make two changes in the way the data are displayed:

  1. The increases in energy consumption are split into two components: (a) energy used to support population growth and (b) all other, which I describe as energy used to support improvement in “living standards.”
  2. A different graphing approach is used.

Note that when population growth corresponds to the full amount of energy consumption growth (in other words, at times when there is no red area above the blue area), energy consumption per capita is flat. High growth in energy consumption per capita seems to correspond to rising living standards, as occurred in the 1950s and 1960s.

While I label the “all other” category as if it is simply changes in living standards, there are other components, as well. One breakdown might be the following:

  1. True improvement in living standards.
  2. Additional energy investments required to offset diminishing returns.
  3. Increasing use of energy for overhead items that don’t get back to individuals, such as energy used to fight pollution or to allow globalization.
  4. Efficiency improvements allowing available energy to be more productive.

Efficiency improvements (Item 4) will allow more energy to be available for improvement in living standards, while Items 2 and 3 in the above list act in the opposite direction. We do not know to what extent these items really offset each other. Thus, “All other” = “Improvement in Living Standards” is only a rough approximation.

Slide 6 – Larger image at this link.

We can see from Slide 6 that whenever there is no red area above the blue area (flat living standards or flat energy per capita), adverse events seem to happen.

For example, the US Civil War (1861-1865) came at a time of low energy consumption growth. The Great Depression of the 1930s came during another period of low energy consumption per capita growth. World War I came at the beginning of this period, and World War II came at the end. The collapse of the central government of the Soviet Union in 1991 ushered in a decade of low world energy consumption growth, in part because of the loss of the central currency of the Soviet Union.

The “China Coal” note at the end pertains to the way that China and its coal supply has helped pull the world economy forward since 2001. This benefit seems to be already declining.

Slide 7 – Larger image at this link.

Slide 7 shows China’s energy production by fuel. Coal production (in red) soared after China was added to the World Trade Organization in December 2001. Beginning about 2012, China’s coal production began to plateau. Depleting mines and low prices for coal have kept production flat. Imports can be used as substitutes, to some extent, but it is difficult to keep costs low enough and provide adequate total supply.

With the loss of growth in China’s coal production, its economy has had to cut back. Each year, we read about coal mine closures and miners needing to find new jobs. We know that China discontinued its paper and plastic recycling business as of January 1, 2018. China has also been cutting back on solar subsidies, leading to fewer jobs installing solar panels. All of these types of changes reduce the number of people who can afford to buy high-priced goods, such as new homes, vehicles and smart phones.

Slide 8 – Larger image at this link.

It is becoming increasingly clear that China is being forced to cut back on heavy industrialization because of its coal difficulties. Slide 8 shows automobile purchases for six large economies. China is by far the largest of these economies in terms of auto sales. China’s auto sales began to slide in 2018 and are sliding further in 2019 (about -11%).

If we look back at the time of the 2008-2009 recession, we see that auto sales of the US dropped precipitously. The United States was the country that led the world into recession. The inability of US citizens to buy cars was a sign that something was seriously wrong. Now we are seeing a similar pattern in China.

China has reported that its GDP growth rate has been slightly lower during 2019, but we really don’t know how much lower. The amounts it publishes are too “smooth” to be believed. The actual GDP growth rate is believed to be lower than the recently reported 6.0%, but no one knows by precisely how much.

Figure 8b – CNBC Chart of changes in auto sales by country, based on data through October 2019. (Not part of original presentation.) Source

Figure 8b gives a little more information about recent car sales by country. We can see from this chart that based on data through October 2019, world automobile sales are expected to fall by about the same percentage (3%) in 2019 as during the recession year of 2008. I find this disturbing.

We can also see the huge impact that China has had on keeping world private passenger auto sales rising. The world economy looked like it was headed into recession in January, 2016, when world oil prices were very low, but a spike in China’s automobile sales at that time helped keep total world automobile sales rising and allowed world oil prices to rise from their low point.

In the next sections, I provide some background regarding this story.

Slide 9

Slide 10 – Larger image at this link.

Slide 10 shows the way that I visualize the world economy self-organizing and growing. The economy grows by adding new “layers” of businesses, products, consumers and laws. Unneeded products, such as buggy whips, are dropped from the bottom. Unprofitable businesses close. In some sense, the economy is hollow because of these deletions. It cannot easily go backward because, for example, the support services for widespread use of transport using horses are lacking.

Energy is used to operate all aspects of the system. One part of the system is a self-organizing financial system that helps decide, through wage levels, who gets the benefit of the goods and services that are made. This financial system includes self-organizing interest rates and self-organizing commodity prices.

The most important connection within the economy is the one I show at the center as “Consumers = Employees.” Consumers are very dependent on their wages as employees. If the economy is to continue to operate, workers must receive high enough wages to purchase the goods and services the economy produces. Even the lower-paid workers need to be able to afford food, housing and transportation, or the economy will tend to collapse.

Slide 11

When we look back through the history on Slides 4, 5 and 6, we see that the growth of energy consumption is very important in how economies operate. The theories of Ilya Prigogine explain why this is the case; when adequate flows of energy are available, self-organizing systems are able to grow.

Few economists today include energy consumption in their models, however. Economic theory has grown over time in its own “ivory tower.” Like other academic subjects, it depends on early theories and the process of peer review. The views expressed must also be pleasing to those in power, who would like everyone to believe that politicians, rather than the laws of physics, are in charge.

Slide 12

There are many types of self-organizing systems that grow. They all, directly or indirectly, require energy. Plants and animals of all types are self-organizing systems that grow. Hurricanes grow using the energy that they get from warm water.

Governments grow from the tax revenue that they are able to collect; they use the revenue to buy energy products such as electricity to operate governmental offices, oil to build roads and operate police cars, and natural gas to heat buildings.

The Internet grows through the revenue collected to provide its services. The Internet uses revenue to buy computers (made with energy products) and electricity to operate those computers.

Slice 13

Nearly all 0f the energy we use is hidden. For example, modern food production is very much dependent on energy consumption. Agricultural machines are made using energy products. Soil amendments, including organic soil amendments, are transported using fossil fuel energy. Refrigeration is possible through the use of energy. Hybrid seeds are only possible through energy consumption. Planting seeds by digging with a stick would only use human energy, but such a process would be terribly inefficient.

Slide 14

Slide 15

Most of us can easily recognize today’s goods and services, such as those listed.

Slide 16

Promises of future goods and services act like promises of future energy supplies. This happens because creating goods and services that people can actually use requires energy supplies of the appropriate type.

When people get cash or a check, they expect to use it to buy goods and services. Creating these goods and services requires energy consumption. If there is no energy of the right type available, the goods and services won’t be available to fulfill the promises.

Slide 17 – Larger image at this link.

Promises of future goods and services tend to grow faster than actual goods and services because it is these promises that, in some sense, “pull the economy along.” For example, if a young person gets a loan, (s)he can often buy a new car. The fact that a new car is being purchased leads to more jobs in the supply line leading up to new car production. Or, if a business takes out a loan or sells shares of stock, it can use the proceeds to hire employees. It is these growing wages that keep the system operating.

As long as the economy is growing rapidly, the mismatch between growing debt and actual output doesn’t become apparent. As the economy slows, some workers find themselves working fewer hours. Some businesses become less profitable and lay off workers to try to restore profitability. The catch is, with fewer workers, the economy slows even more. It usually takes more debt, at lower interest rates, to get out of such an economic slowdown.

Slide 18

Slide 19

There is a lot of confusion about prices. “Demand” is what people, through their wages and debt, can afford. As economists tell us, price depends on supply and demand.

In the short term, prices tend to bounce around a lot. The short term buyers of oil are oil refineries. They need to keep their employees busy. If they see a shortage of oil, they may bid up the price of oil to allow their workers to continue to be employed.

Over the longer term, prices of all energy products tend to depend on consumers’ ability to afford finished products, like cars, homes and cell phones. Producing these objects and shipping them takes energy. They also use energy as they operate.

Slide 20 – Larger image at this link.

The various energy prices shown here are simply a few of the many, many energy prices that we see around the world. Strangely enough, prices of all energy products tend to fluctuate together, over the longer term. Prices depend on affordability of end products, such as cars, homes, computers, food and clothing. Our problem since about 2012 has been lack of affordability of end products.

The primary way of raising affordability is by increasing productivity. Increased productivity is made possible by increasingly leveraging human labor with devices that are built with energy and are operated using energy. For example, a worker with a ditch digging machine is much more productive than a ditch digger with only a shovel. An analyst is more productive with a computer and Internet access than with only pencil and paper.

With higher productivity, more goods are produced in total. As long as not too much of this productive output is skimmed off the top (by governments, or by business hierarchy, or to pay for the devices and their fuel), it is possible for each worker to afford more goods and services, raising total demand.

An alternative way of raising affordability is by adding more debt at ever-lower interest rates. This approach tends to make goods such as cars, homes, and factories appear more affordable because their monthly payments are lower. This added-debt approach only works as long as the economy is growing quickly enough. If the economy slows too much, the added debt leads to financial crashes of many types.

Slide 21

Slide 22

Many people think that they know the amount of oil that can be extracted based on the current technology and the assumption that prices will eventually rise high enough to extract all of the fossil fuels that seem to be available. For example, the International Energy Agency has prepared reports in which it shows expected oil availability if oil prices rise to $300 per barrel.

The catch is that even if oil prices can bounce high, it is not clear that they can stay very high. The current price of oil is only in the $55 to $65 per barrel range. A price of $300 per barrel will allow oil extraction using very advanced technology. We don’t have any evidence that oil prices can stay this high because demand comes primarily from wages. Prices cannot stay high without adequate support from wage levels.

Of course, the issue is not just oil prices staying sufficiently high. Natural gas, coal, uranium and electricity prices all have difficulty rising high enough and staying high enough. Commodity prices such as copper and steel have the same issue.

Slide 23

There are many people who say, “Of course, oil prices will rise. Oil is a necessity.” They forget that it is really a two way tug of war between producers getting a high enough price to be profitable and consumers getting a low enough price to be affordable. There will be a winner and a loser.

People also forget that most commodity use is hidden. We see the fuel we buy for our personal vehicles, but there are a huge quantity of oil products required for shipping goods, paving roads, growing food, and for many other uses that we are not aware of. While we might be able to pay a little more to fill our gasoline tank, most of us would not be able to simultaneously pay more for food, transported goods of all kinds and road maintenance.

Slide 24 – Larger image at this link.

Economists often assume that if energy prices rise, wages will rise, as well. If we look at the data historically, however, it doesn’t work that way at all. What happens is the opposite: average wages tend to rise as long as oil prices stay low. Once oil prices spike, average wages tend to flatten out.

The amounts shown on Slide 24 are average wages, computed by taking the total inflation-adjusted wages for the population in total and dividing by population. When oil prices spike, recession soon sets in. The reason why average wages fall is partly because more people become unemployed. Other workers find it necessary to accept lower-paying jobs.

Slide 25 – Larger image at this link.

Many people focus on the run-up in oil prices to July 2008. An equally important point is the fact that the world economy has not been able to maintain these high prices since July 2008. The general price trend has been downward. The cuts by OPEC have not had a material impact.

Slide 26

Citizens of the United States, Europe, and Japan are used to thinking of high energy prices as being a problem because they are from countries that require substantial imported energy to maintain their GDP. For example, Greece will sell fewer trips on its tour boats, if oil prices are high. This will have an adverse impact on employment and the ability to repay debt with interest.

If a country is an oil exporting country, low oil prices are an even worse problem. This happens because oil exporting countries tend to earn a large share of their revenue from taxes on the sale of oil. These taxes can be much higher if oil is selling for, say, $120 per barrel than if it is selling for $60 per barrel. These tax dollars are used to provide subsidies to offset the high cost of imported food. They are also used to build industry and infrastructure to provide employment to the population.

If oil prices are too low, oil exporting countries will tend to cut back on oil production. In fact, this has been happening for OPEC for the entire year of 2019.

Similar problems occur if commodity prices of any kind (coal, natural gas, uranium, steel, copper, etc.) stay too low for an extended period. Producers go bankrupt, or they stop production, or they pay their employees so poorly that the employees go on strike. Sometimes, they may even start rioting. Many of the riots around the world today are related to low commodity prices.

Slide 27

Slide 28 – Larger image at this link.

The world experienced spiking oil prices in the period leading up to mid-2008. These high prices caused a recession and much lower prices followed. The chart on Slide 28 gives a somewhat exaggerated view of what goes wrong with high oil prices.

If the price of oil suddenly spikes to two or three times its previous price, both the price of food and gasoline are likely to increase. This change tends to lead to a big shift in a family’s budget. Debt payments, such as for a home and car, are pretty much fixed, so the big increase in food and gasoline prices must be taken out of the budget earmarked for everything else. This leads to cutbacks in discretionary spending such as vacations, restaurant meals, and charitable contributions.

In a short time, there are layoffs in discretionary sectors. Those who are laid off are more prone to defaults on loan payments. The problem soon escalates to a recession, with high unemployment and low oil prices.

Slide 29

Strangely enough, central banks push back against high oil prices as well. They know that high oil prices lead to high food prices. Citizens of energy-importing countries will be unhappy with elected officials if oil and food prices rise. Thus, central banks tend to raise short-term interest rates, as soon as they become concerned about high oil and food prices.

The recession that follows will quickly bring food and energy prices back down. If food and energy prices fall, the low prices will be the problem of the energy producers. Oil exporters will find their tax revenue too low, but the high-price problem of oil importers will be gone.

Figure 29b- Slide from a different presentation, showing the trend in interest rates. Larger image at this link.

You will recall that the rapid energy consumption growth periods were 1961 to 1970 and 1951 to 1960. During these periods, the economy was growing almost too quickly. The Federal Reserve was able to keep raising interest rates, as a way of holding down economic growth. It was not until 1981 that the pattern changed from raising interest rates to falling interest rates.

Since 1981, the US Federal Reserve and other central banks have been reducing interest rates. Lowering interest rates and rising debt levels, as mentioned previously, makes goods appear more affordable because of lower monthly payments. The concern now is that interest rates are about as low as they can go. Central banks no longer have room to offset recessionary tendencies (because of slow growth in energy consumption) by lowering short-term interest rates.

Slide 30

Most people never consider the possibility of low energy prices leading to collapse. It looks to me like this is the danger facing us today. Let’s start by looking back at what happened in 1991.

Slide 31 – Larger image at this link.

When the central government of the Soviet Union collapsed in 1991, the individual republics making up the Soviet Union were left on their own to find new currencies and new trading partners. Satellite countries of the Soviet Union were affected as well. Slide 31 shows that the consumption of many types of resources dropped for many years for the whole area. The low point was not reached until 1998.

Slide 32 -Larger image at this link.

If we look back to see what had happened previously, the Soviet Union was an oil producer and exporter. When oil prices were high in the 1973 to 1980 period, the Soviet Union prospered. But then low prices came along, at least partly because the US Federal Reserve raised interest rates to almost 20% in the 1980-1981 period. (See Figure 29b.)

The long-term low oil prices, in some sense, indicated that the world economy was producing too much oil; some inefficient area(s) of production needed to leave. The Soviet Union may have been singled out by the self-organizing economy because it used energy products in a less efficient manner than other economies. Its adverse outcome may also have reflected the fact that its cost of production was higher, leaving less of the sale price for reinvestment and taxes.

Slide 33

The Soviet Union is an example of what can happen if oil prices stay too low for several years. The central government of such an economy can collapse.

Slide 34

When commodity prices are too low, the economies of countries exporting those commodities are stressed. This is why we see so many uprisings in commodity-producing countries right now. Iraq with its oil has been having protests. Chile, with its copper and lithium exports, has been seeing protests. South Africa with its exports of coal, precious metals and gems has been having riots. With some escalation, any of these low-price situations could lead to an overturned government.

Slide 35

Slide 36

In Slide 36, I give an example of two different kinds of ingredients in a cake:

  1. Ones that are substitutable: the flavoring, which can be vanilla, almond, or something else
  2. Ones that are not substitutable: the flour, which is the energy product

With too small a quantity of flour, all we can do is make a smaller cake. Perhaps we can substitute a different energy product, but electricity most certainly will not do! Some bacteria eat electricity, but humans do not. Substitutability is limited, even within energy products/carriers.

Economists make models focusing on the special case when a material is not essential for the economy. This gives a misleading impression. If they had looked back at what happened when energy supplies were low relative to population growth, as we saw on Slide 6, they could make much better models.

Slide 37

We seem to be sitting on the edge of some form of collapse for at least parts of the world economy, right now.

Without enough energy consumption growth, top-level organizations, such as the European Union, the United Nations and the World Trade Organization, are especially at risk of collapse.

Slide 38

Slide 39

One of our big problems today is excessive wage disparity. High-wage workers rarely have trouble being able to afford homes, cars, vacations, and air conditioning. It is non-elite workers, the ones who have not been able to find high-paying jobs, who have an affordability problem.

The wage disparity problem is an outgrowth of how the physics of the economy works. If there are not enough goods and services to go around, the physics of the economy effectively “freezes out” some of the workers. Under this arrangement, there will be some survivors even if there is not quite enough for everyone. In some sense, the “best adapted” are able to survive. If the inadequate supply of finished goods and services were spread around evenly, there might be no survivors at all.

Slide 41

The thing that is key is that workers need to be able to afford finished goods and services produced by the economy. If too large a share of wages goes to high paid workers, or to owners of robots, there is not enough left over for the “regular” employees.

Slide 42

Many workers have seen their jobs disappear as their employers moved production to another country where wages were lower. Or, jobs can remain, but the wages will fall from the low-wage competition.

Slide 43

US income disparity seems to be as great as it was in about 1930, at the time of the Great Depression.

Slide 44

Slide 45 -Larger image at this link.

If we look at historical world energy consumption by fuel, we observe that it has been rising the vast majority of the time. The little dip that we see about 2008-2009 occurred at the time of the Great Recession. It doesn’t take much of a cutback in energy consumption to cause a major problem.

Back at Slide 20, I remarked,

The primary way of raising affordability is by increasing productivity. Increased productivity is made possible by increasingly leveraging human labor with devices that are built with energy and are operated using energy.

The world economy requires growing energy supply, of suitable kinds, to operate. If the quantity of energy available is reduced, productivity is likely to nosedive. This is true even if the reduction is intentional and seems to be for a good cause, such as reducing CO2 emissions.

We seem to be heading for a contraction in energy supplies now because of continued low energy prices. Fossil fuels are, in some sense, leaving us, whether we like it or not. World coal production has been flat to falling since 2012. IPCC scenarios assume a very different  pattern: Fossil fuel use, especially coal, will grow indefinitely, presumably because of high prices and improved technology.

Many people are hoping that wind, solar, and hydroelectric will someday replace fossil fuels. I consider this highly unlikely because all three are made using fossil fuels. Furthermore, these “renewables” in total represented only 10% of world energy supply in 2018. The 10% is divided as follows: wind, 2%; solar, 1% and hydroelectric 7%.

Slide 46 – Larger image at this link.

There clearly is a correlation between GDP growth and energy consumption growth. China with its growing coal use was pulling the world economy along, especially in the 2002 to 2012 period. Recently, it has lost much of this ability.

In my opinion, Trump’s tariffs are not the cause of our current trade problems. Tariffs seem to be enacted whenever growth in energy consumption per capita is very low. Tariffs were enacted both immediately before the US Civil War and at the time of the Great Depression. The problem is that jobs that pay well indirectly require significant energy consumption. When growth in energy consumption per capita is low, it becomes impossible to find enough jobs that pay well for everyone. Tariffs are used in an attempt to keep jobs that pay well at home.

Slide 47

We don’t know quite what will happen. The closest analogy is the Great Depression of the 1930s. More financial problems seem likely. In fact, they could escalate quite quickly. More strikes, such as those currently going on in France, seem likely. The situation is likely to play out a little differently in various countries.

The physics of the situation seems to try to keep some parts of the system operating, if at all possible. But, as mentioned at Slide 10, the self-organizing system deletes parts of the economy that are no longer needed. We no longer have an economy that can operate with horse and buggy, for example. We can’t just “go backwards” to an economy of an earlier era.

Slide 48

We are already seeing changes in this direction. Hong Kong’s protests are in the news practically daily. Germany is experiencing job layoffs. We know that in an interconnected world, a recession that starts in one large country is likely to eventually affect much of the rest of the world.

Now we are in a waiting period, waiting to see what happens next. Major changes seem likely over the next five years, but they could happen much sooner.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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638 Responses to Recession Ahead: An Overview of Our Predicament

  1. John says:

    Thanks for the thoughtful analysis which raises some interesting points. Yet, one has to view the global, financial deleveraging taking place as a relentless influence on rates of inflation. Without fundamental adjustments in the structural deficits of the public sector (domestically and among our trading partners) affording greater policy flexibility to the central banks (monetary policy), there will be no resurgence in economic growth. The short-term ‘sugar high’ accompanying the Trump administration tax cuts have failed to sustain markedly improved GDP. Our current economic condition does bring to mind an old, Northern New England quip: “We tend to get six months of winter and six months of rough sledding!”

    Again, thanks for the analysis!

    • I think of inflation as primarily coming from demand rising higher than supply back prior to 1981. This was when wages were rising very rapidly as women entered the workforce and energy consumption was rising very rapidly. The amount of goods being produced was rising very rapidly, but wages were rising even more rapidly. When oil prices spiked, employers did not want to lose their employees, so they gave them cost-of-living raises, further feeding the inflationary tendency. There may have been relatively new welfare programs feeding demand, also. Inflation was also helped by the fact that Europe, Japan, and the Soviet Union’s economies were also growing rapidly, thanks to post-war rebuilding and cheap energy supplies.

      After 1980, rising debt was used to try to keep up wages and give the illusion of real growth. You are right that deleveraging reduces inflation. I am afraid that it pops debt bubbles. The chart below is one way I have described what I fear will happen.

  2. I spent decades as a bicycling bike-ped-transit Advocate, and finally gave up after the 2014 plunge in gas prices. Nobody is going to forgo driving with ~$2 gas. I read several books, e.g. The Long Emergency, Afterburn, The Long Descent, oilposter.org, etc, all suggesting imminent peak oil and that high barrel (and thus pump) prices would become a more permanent feature. Now, it turns out, we’re floating on what seems an ocean of oil and we’re stuck with record cheap gas probably for generations to come. So I really don’t believe all the hype anymore, and certainly aren’t planning my life by it. Sadly, we NEED oil scarcity to force the hand of alternatives; trip consolidation, biking, walking, transit use, and other non-petrol means. But it ain’t a happenin’: the latest IEA reports only show huge increases in oil production for years to come. Very discouraging indeed if you care about the environment & climate, quality of life, healthy communities, etc.

    • The problem is not the problem that the peak oilers imagined. The problem is that people cannot afford goods made with oil and other energy products. It sits around in a glut. The alternatives are more expensive. We can’t possibly afford them, either.

      I think that the reduced use of coal, relative to oil and gas, is part of the cost problem. It is the average cost that must be low enough. Coal is a very inexpensive fuel. Using less of it is a problem. Using more high cost renewables adds to the problem of the average cost of energy products being unaffordable.

      The stories peak oilers told us about what transitions might be possible don’t really make sense. Oil, gas, and coal are leaving us through low wages and thus low prices. We don’t have a way of fixing this.

      The jury is still out on climate change. The climate is changing, but there is essentially nothing we can do about it. Fortunately, or not so fortunately, the economy is likely to crash before the changing climate makes much more difference than it has to date. The self-organizing system will fix the climate, just like it fixes everything else. We sit around worrying about things that we can’t fix.

      • Rodster says:

        It took awhile and then some for me to understand the Peak Oil theory as being economics and not a supply issue. “Energy has become too expensive for the consumer and far too inexpensive for the energy producers”.

        But, but gas prices are really super low, so you’re wrong say the naysayers. Ah, but prices at the pump are super low because the average consumers are dealing with massive wage disparity, inflation etc. They can’t buy gas at the prices the energy producers need them at, which would be in the $6-8 a gallon and not have the global economy collapse like it did in 2008.

        So when fuel prices go up then consumers cut back because of higher transportation cost throughout the just in time network so food prices go up as well. That causes an oversupply of oil so prices work there way back down.

        • Rodster says:

          “Energy has become too expensive for the consumer and far too COSTLY for the energy producers”.

        • The problem is that we are dealing with a networked system. There are two modes of failure. Peak oilers imagined that there was only one failure mode. They could not see what really goes wrong.

      • Artleads says:

        “I think that the reduced use of coal, relative to oil and gas, is part of the cost problem. It is the average cost that must be low enough. Coal is a very inexpensive fuel. Using less of it is a problem. Using more high cost renewables adds to the problem of the average cost of energy products being unaffordable.” (Gail Tverberg)

        This is what I don’t think is clarified and ironed out NEARLY enough. Coal is not some polite aside that the naive like me can miss. It must be BOLDLY emphasized, over and over again.

        The fact that coal mining has been a macho sport where you butcher workers and land to see how much damage on them you can inflict is a huge problem with coal. Coal must be processed with sophistication and refinement. Same for other mining, but the ease and low cost of coal recommends it for major emphasis.

        Producing coal must go together with planning, reforestation, conservation, the end of real estate development as we know it…

        • Phil D says:

          I think in many places, like Germany, remediation must be done after a coal mine stops producing. Whether or not that remediation restores the land to its former state…I don’t know…your mileage may vary on that.
          One issue with coal that Gail missed is that there is a quality issue. High quality coal is mostly depleted and is being replaced with lower quality coal, at a similar price.
          Oil suffers from a corollary problem to the coal problem: the quality is more or less the same as it was 40 years ago but the cost of extracting it is rising rapidly. EROEI is falling.

          • Artleads says:

            I’ve thought that the prevailing types of remediation, when they DO occur, do so after the mining is done. This sequence of the event is most counterproductive. The mining is over. The incentive for the remediation is therefore small. It would seem better to start the remediation before mining even begins. Forests of trees need to be planted away from the center of things and toward site edges. Since mining tends to leave vast caverns behind, an industry of fill is needed to operate before and during mining to generate and organize the fill to go in those caverns. With that sequence, the planting of trees and preparation of the fill could bring more economic activity and value to the site.

      • Jonzo says:

        Gail, you come across as a very smart person, but you lose credibility when stating complete falsehoods like this “The jury is still out on climate change.”

        “The climate is changing, but there is essentially nothing we can do about it.” That is a true statement, but don’t mix up the two statements.

        Humans ARE the cause of Global Warming. END OF STORY. The collapse of the severely overextending human race will occur, in part, due to Global Warming, and the on-going “sixth mass extinction” which humans are causing.

        • Humans require the use of fossil fuels, or we die off as a species.

          Back, over one million years ago, humans evolved to require at least some cooked food as part of our diet. With cooked food, we could get along with smaller teeth, jaws, and gut. More of the food energy could go toward a bigger brain. For many years, humans (and pre-humans) could get enough energy from burning wood and other biomass that they did not require fossil fuels. They did, however, take biomass resources that other species would use, leading to the die-off of other species, long before fossil fuels.

          Read my post Supplemental Energy Puts Humans in Charge.

          Now, however, our population is so large that there is no possibility of using biomass alone for our needs. Wind and solar are fossil fuel extensions. They are expensive, when all costs are considered. They are not replacements for fossil fuels.

          Talking about giving up fossil fuels is like talking about giving up food. You are likely not to get a whole lot of takers. The fact that people need to eat is a big part of the problem.

          I consider all of the climate change hoopla to be sort of a new religion, sponsored by politicians. It is based on wishful thinking.

          • my theory about humans==food==and fire has always been this basic timeline:

            early hominids would have found partially cooked animals killed by random fires, and realised they tasted good

            when fire-making was discovered, cooking animals was a logical step

            other animals were always around, so hanging up uneaten food in caves was also logical

            fires would have thus produced smoked meat, giving long term preservation

            if fires were made in scooped earth hollows, some of those hollows would have been in clay riverbanks etc, often in the same place.

            over time, it would have been noticed that water would have been retained there because the clay would have been fired. It’s a simple step then to shaping clay to make primitive pots and firing it deliberately.

            You then have the two fundamental problems of long term survival solved–water storage and food preservation.

            • DB says:

              Excellent speculations. Probably impossible to evaluate in the archaeological record, but entirely plausible.

            • rilygtek says:

              There is a serious flaw in that reasoning. Animals generally run away from fires. Rarely will you find animals dead from forest fires or any other type of natural disaster. They sense it and bolt away in the opposite direction. And since humans can not digest raw meat, I doubt any proto humans would eat meat damaged from fire if they didn’t eat it raw anyway.

              We ate plants and fruits damaged from fire, because it is what our bodies are evolved to deal with and what we are used to eat early on in our history as a species.

              This obsession with meat as the reason why humans evolved large brains is flat out wrong. We learned how to cook the starches into digestible carbohydrates. Eating meat and fish is most likely an invention originating from people surviving in harsher climates.

            • i was suggesting two long term survival factors, (hence the ref to water storage)

              the third advance was tool making

              You need a food source that doesn’t run away—which means veg or shellfish

              there is strong evidence that hominids were shore-oriented for much of their development, but opening shellfish requires tool use,
              Men would be likely off hunting or whatever (and getting killed themselves) , while women looked after hungry kids.

              Which is why women are smarter at survival. And live longer.

              My suggestion is that women were the early toolmakers necessary to access high protein food resources

            • rilygtek says:

              Women also have generally better dexterity than men. Carrying firewood and edible roots back to base camp does not require fine motor skills.

              Humans are plant eaters. Eating meat isn’t what primates normally do, neither raw nor cooked.

              Hunting is a rather new invention for mankind. We were gatherers and wielders of fire eons before hunting, or more likely fishing, became the “new” thing during hardships of the ice ages.

            • DB says:

              Meat eating very likely is an old adaptation that predates the emergence of even proto-humans. Among the many pieces of evidence:
              * physiological dependence on nutrients that are difficult or impossible to get in sufficient amounts from plant sources (such as vitamin B12 and iodine)
              * our closest primate relatives, chimpanzees, also eat meat
              * evolution of human teeth, with earlier shapes even better suited to meat eating than shapes found in modern humans
              * extensive archaeological finds of animal bones and butchery at prehistoric sites going very far back in time

              Here’s another irony of our fossil fuel age: true and complete vegans must supplement their diets with products (such as vitamin B12 tablets) that can be manufactured only with fossil fuels and industrialization.

            • The reason the meat we eat has Vitamin B12 is because the animals were fed Vitamin B12 supplements!

              B12: Why it’s not just a vegan issue

              The vitamin B12 (also known as cobalamin) is vital for proper health.

              What you might not know is that B12 is produced by bacteria found in soil as well as in the guts of animals (including humans) – but in order for the bacteria to make B12 the soil needs to contain the mineral cobalt. The B12 produced within our guts is too far down our digestive system to be absorbed by our body but is excreted in our feces. Our closest relatives, gorillas, get their B12 from accidental eating of soil (and their own feces) containing B12 when naturally eating their plant-based diet.

              Due to declining soil quality from intensive over-farming making the soil deficient in cobalt, and because our vegetables are super-washed (because we would rather not eat soil/manure) vegans don’t get enough B12 without supplementation and fortification.

              Early humans received plenty of B12 from the good quality (cobalt-rich) soil that was yet to be intensively farmed and drained of nutrients, and because they drank dirty (“natural”) water from rivers which also contained B12 and B12 producing bacteria.
              . . .

              But most factory-farmed animals are kept indoors and never even see soil during their lifetimes, so would certainly be deficient without supplementation. These horrible artificial conditions make the “vegan diet is unnatural” argument seem somewhat ironic. In fact, around 95% of all B12 supplements manufactured are actually given to farmed animals.

            • DB says:

              Thank you, Gail. Good hygiene (not eating foods from contaminated soil) might account for humans needing to get vitamin B12 from other sources now.

              Gorillas and other primates eat their own feces, and not just accidentally. And many primate species sometimes eat meat as well as insects. None of these are practical options for vegans.

              I eat a vegetarian (mostly vegan) diet myself, but I recognize if industrial civilization collapsed, I’d eventually have to diversify my diet to the extent possible (if I survived). In most environments, it’s a challenge to get all of the necessary nutrients from locally available food sources. In such circumstances, those who write off a particularly rich source of nutrients, such as animals, put themselves at a disadvantage for health, survival, and reproduction. I’m not aware of any non-agricultural society that relied solely on plants for food before European contact, but perhaps I’m mistaken. It seems that vegetarian, and especially vegan, diets may only be possible in agricultural and industrial societies.

            • DJ says:

              Optimal Foraging Strategy tells me most hunter gatherers were eating meat and tubers/root vegetables, unless living in a niche where nuts or starchy fruits were available year round.

              Root vegetables having at most 800 kcal/kg and animal parts doubling that must have made the latter attractive.

            • It depends on how much effort was required to source animal food, and how often it could be accessed. Also, could it be used before it spoiled.

              We know that in most peasant societies in somewhat recent years, meat was a rare treat. We also know that with respect to longevity, societies that go light on meat have a very definite advantage. Our relatives in the animal kingdom eat some meat, but it only comprises a small percentage of their total calories.

              Optimal Foraging Strategy sounds like something someone came up with to justify a high-meat diet. Perhaps in response to a research grant from a meat-producer’s association?

            • to me it seems a matter of simple logistcs

              if you have a means to carry concentrated energy in the form of , say—smoked meat, then a few pounds of it will let you move around for several days, to hunt and kill more meat-energy sources. Energy is not being expended to carry energy

              it isn’t possible to carry enough grain on your back to allow you to do this because it isnt
              concentrated enough. You use too much energy to carry energy. You must eat as you move around
              this is time consuming

              we follow the same principle now.

              If you travel by horse drawn coach (horses are grass fed,) then you can only go 15 miles before the horses are exhausted.

              If on the other hand you fill up a car with concentrated fuel, you can travel 500 miles.

              To me the principle seems exactly the same, and starts to explain how humankind expanded across the world—not a complete explanation of course, but a big part of the jigsaw

            • For hunter-gatherers on the move, meat (including fish and worms) is optimal. It is light to carry. Meat is nearly always safe to eat, while unfamiliar plants may be poisonous. Meat helps build up the size of a person, so that they have more ability to tackle prey. I expect that fish and worms dominated the meat supply.

              For hunter-gatherers in one general location, I expect that a diet of primarily plant foods is optimal. It doesn’t fight back. It is filled with vitamins, minerals, and fiber that the human body requires. (This, by itself, may make a meat-based diet problematic.) It is often in plentiful supply. Root vegetables, and (grains at a later date) provide lots of calories. Grains can be stored, making settled life possible. Plant food often requires cooking to get enough calories out, however, so its total energy cost includes both the gathering of the food and its cooking. In some cases, grains require other processes as well. This was one of the reasons that slave labor became necessary/desirable, if early cultures could figure out a way to obtain slaves.

            • DJ says:

              https://en.m.wikipedia.org/wiki/Optimal_foraging_theory

              The part of humans liking animal meat because of caloric density is homemade. I think most can’t imagine how HARD it is to eat 3-4 kg of potatoes or similar each day.

            • rilygtek says:

              Typical cart before the horse reasoning.

              It is totally pointless to carry food when you can wield fire and own a fishing rod, bow and arrow and on top of that can easily survive on a plant-based diet.

              We are not talking a out happy campers out in nature here needing to carry food with them because they are incompetent survivors.

            • had you digested my comment, instead of over-reacting you would have accepted that i said it was only part of the human jigsaw

              not all of it

            • DJ says:

              https://journals.openedition.org/aof/6383

              How norwegians not starved during wwii (but maybe mostly how we could starve norwegians today to save us from climate change)

            • Rationing seemed to produce positive health benefits in the UK, because it tended to lead to better health outcomes:

              Food rationing started in 1940 and finally ended in 1954. A system of food rationing to ensure fair distribution of available food. To ensure good health, the amounts of available foods to cover people’s nutrient needs were calculated by scientists and statisticians. The wartime food shortages forced people to adopt new eating patterns. Most people ate less meat, fat, eggs and sugar than they had eaten before, but people who had previously consumed a poor diet were able to increase their intake of protein and vitamins because they received the same ration as everybody else. Thus, many people consumed a better diet during wartime food rationing than before the war years and this had a marked effect on health outcomes; infant mortality rates declined, and the average age at which people died from natural causes increased.

              Perhaps the abundance of US food is part of the US’s health problem. Restaurants feel an obligation to serve ridiculously large portions. Packages of food in grocery store always seem to be overly large. COSTCO and other wholesale clubs are especially bad in this respect.

            • DJ says:

              Many, not all, HG have had one or a few staples, and some of these have been seasonal, making preservation necessary, but maybe not “carrying food around”.

            • DJ says:

              Norway also had improved mortality rates. Their rations gave the right to buy certain amounts, so poor didnt get more of anything.

              Instead think less of what industrial agriculture could give and more of what could be gathered, grown by oneself, or fished.

              Indirect proof of how superior paleolithic food is 🙂

            • DJ says:

              Maybe most obvious less alcohol, less/no tobacco?

        • Phil D says:

          “Humans ARE the cause of Global Warming. END OF STORY.”

          This is a categorically false statement. Show me one, just ONE, experimental result that proves this. It doesn’t exist; the whole theory of AGW is based on models that are forced to model climate using one input variable (CO2) and the result is their poor forecasting performance.

          Most likely, temperatures are rising as a continuation of the planet’s emergence from the Little Ice Age in the mid to late 1800s.

          • DB says:

            Exactly right, Phil D. Both scientists and non-scientists often forget that there is only one way to determine causal relationships — through controlled experiments. Observational research, which is the basis for climatology and many other scientific fields, can help identify potential causes, but such evidence does not allow establishing them with confidence.

            • rilygtek says:

              Yes, and bloody good luck conducting a conclusive experiment on a system the size of a planet.

              We have absolutely no clue, but a reasonable assumption is that heavy industry for the last two centuries powered with fossil fuels certainly have an impact on the ecosystem, as for example with the measurable increase of CO2 levels leading to a greening of earth. But is that really a problem?

            • DB says:

              Yes, you’re right, rilygtek, that we have no clue, or at least no certainty, about the cause of warming (if there has even been warming, which also is a matter of debate) because we can’t do the experiments. For some topics, we are inherently condemned to this kind of uncertainty for precisely this reason. The unfortunate part is that both scientists and non-scientists often try to claim certainty when they cannot logically or empirically.

          • Robert Firth says:

            Phil, I hate to disagree with you, but the global warming models are not driven by CO2 as the input variable. They are driven by research grants. Science was a lot more honest when “scientists” were paid to cast horoscopes, and their real research was an unpaid obsession. As with Johannes Kepler, for instance.

            • DB says:

              Thank you, Robert. I wholeheartedly agree. As a practicing scientist, I believe that the grant funding system is at the core of essentially all problems in science today. It probably affects all fields. The rot runs deep.

            • A similar problem affects not-for-profits. They need to get contributions. Often, the workers for the not-for-profit volunteer to work for the company at a lower-than-standard wage because they feel strongly about a cause. They will leave, it the not-for-profit doesn’t perform as expected.

              The not-for-profit has a particular goal in mind. For example, “Post-carbon Institute” or “The Sierra Club.” Don’t look at these groups for unbiased analysis either. They sometimes get grants. Getting donations in some ways works the same as grant money, because those making donations want to make certain that whatever is published agrees with their view. The not-for-profit can only support research that is consistent with their selected view, whether or not it is right.

          • Wolfbay says:

            Listened to an interesting lecture by a solar scientist at an English university. It’s seems there’s a very significant solar flare minimum starting now and she predicts colder winters because of this. She suggests we stockpile food.. When asked if she thought humans would stockpile she replied “no but when it snows in June we’ll get the idea” !
            I guess we’ll know in the next couple of years if she is correct.

    • PeterEV says:

      That’s interesting about the IEA. Exxon Mobil has a been publishing graphs that show a peaking in liquid oil supply around the year 2040. They’ve been doing that for at least 4 years and have been consistent. This link takes you to the graph I’m referring to:
      https://cdn.exxonmobil.com/~/media/global/files/outlook-for-energy/2016/2016-outlook-for-energy.pdf#page=62
      The fracking in the Bakken and Eagle Ford are facing a decline and a cut off from Wall Street financing. The trillion barrels of Shale Oil in the high desert area of Colorado and Utah needs water, 2 to 3 barrels of water to produce a barrel of “oil” that can be sent through a pipeline. The Colorado River can’t supply enough water to bring us to “Energy Independence” levels (~5 MBOE/day) let alone the 18 MBOE we need each day. The potential is there but the likelihood is not.

      So is there a disconnect between the IEA and Exxon or are they both telling us the same thing and we are not interpreting it correctly?

  3. Name says:

    Four more, and I go silent for couple of months.


    https://i.imgur.com/RMFYxlS.jpg (UC section)

  4. Davidin100millionbilliontrillionzillionyears says:

    the US is now an oil exporter… update…

    here’s the EIA data for September 2019 which shows the net 89k barrels per day of US exports of crude oil and petroleum products:

    https://www.eia.gov/dnav/pet/pet_sum_snd_d_nus_mbblpd_m_cur.htm

    lots of numbers but the top 2 lines give the story…

    line 2 shows the new record production of US crude at 12,463,000 per day…

    but then there is THIS:

    after adding in other hydrocarbon liquids, line 1 shows the US producing over 20 million barrels per day…

    AND…

    importing 8,668,000 per day…

    for a MASSIVE total of about 29 MILLION barrels per day of petroleum products…

    8,757,000 per day were exported, giving the net exports at 87,000 per day…

    the US then “consumes” about 20 million barrels per day of refined petroleum products…

    WOW…

    • Davidin100millionbilliontrillionzillionyears says:

      20 million barrels x 42 gallons per barrel = 840 million gallons…

      so about 2.5 gallons per person per day…

  5. Harry McGibbs says:

    “[In India] Consumption demand has fallen as disposable incomes have shrunk due to low growth.

    https://economictimes.indiatimes.com/markets/stocks/news/inadequate-demand-has-been-a-key-issue-impacting-growth/articleshow/72467123.cms

    “The sales of domestic vehicles declined across all categories in India by 12.05% in November compared to last year’s figures. ”

    https://www.dnaindia.com/business/report-automobile-sales-decline-by-12-in-november-siam-2805098

    “India’s power demand fell 4.3% in November from a year ago, representing the fourth straight month of decline… potentially reflecting a worsening industrial slowdown which has stifled overall economic growth.”

    https://www.livemint.com/news/india/india-slowdown-electricity-demand-falls-for-4th-straight-month-says-govt-data-11575983999906.html

    Coal’s use for power in India is set to shrink for the first time in at least 14 years as demand slows… Coal generation fell for a fourth month in November, the longest such streak in government data going back to 2005. That echoes a decline in consumption…”

    https://www.bloomberg.com/news/articles/2019-12-11/rain-industrial-slowdown-are-helping-india-kick-its-coal-habit

    “Global rating agency Moody’s on Monday said pressure on Indian finance companies continues to build up, with some banks heavily exposed to non-bank credit providers, hinting that India’s NBFC crisis is far from over, even after a year since the troubles began when a major shadow bank IL&FS Group abruptly defaulted.”

    https://www.livemint.com/industry/banking/pressure-on-indian-finance-companies-due-to-nbfc-crisis-moody-s-11575949486543.html

  6. Harry McGibbs says:

    “Tullow Oil has been plunged into crisis after it ousted its boss, slashed production forecasts and axed the dividend – sending shares crashing to a 20-year low…

    “It will trigger massive paper losses for thousands of retail investors, who hold around 15pc of Tullow’s stock between them.”

    https://www.telegraph.co.uk/business/2019/12/09/tullow-shares-crash-cutting-

  7. Harry McGibbs says:

    “The productivity of American workers in the third quarter fell a bit less than previously reported, but it still marked the first contraction of productivity in almost four years. Nonfarm business sector labor productivity, a measure of economic output for each hour worked, fell 0.2 percent in the third quarter…”

    http://www.xinhuanet.com/english/2019-12/11/c_138621473.htm

    • Harry McGibbs says:

      “The [US] trucking “bloodbath” of 2019 is taking another remarkably dire turn as the year draws to a close. Indianapolis-based Celadon, a truckload carrier that grossed $1 billion as recently as 2015, filed for bankruptcy on Dec. 9. It’s poised to be the largest truckload bankruptcy in history…”

      https://www.businessinsider.com/celadon-trucking-bankrtupcy-truckers-stranded-2019-12?r=US&IR=T

      • Harry McGibbs says:

        “Newsflash: The oil price is falling sharply, following a surprise rise in US crude stocks. US oil inventories rose by 822,000 barrels, defying expectations of a 2.8m drop. That suggests weaker demand for energy.”

        https://www.theguardian.com/business/live/2019/dec/11/saudi-aramco-market-float-ipo-general-election-pound-business-live

        • I don’t think that the oil price is falling sharply. WTI is currently $58.74. I didn’t find where your link was from. The American Petroleum Institute puts out a report every Tuesday on expected oil inventories; the EIA puts out a report every Wednesday on actual oil inventories. The two never agree.

          The EIA reports that crude oil in storage is about level. Crude oil and petroleum products (combined) are up a lot, about 17 million barrels, which is equivalent to 2.4 million barrels per day of additional amounts in storage. Some of this may be seasonal–storage of propane before winter, for example.

          The thing that was low the week ending December 6, 2019 was “Product Supplied,” if the latest’s weeks report is to be believed. (Perhaps it still has Thanksgiving distortions in it.) Total Product supplied for the latest week is 18.4 million barrels per day, compared to an average of 21.2 million barrels per day for the previous five week. There was no dip at all over the Thanksgiving week, in the weekly data. This makes me think that some businesses gave people the entire Thanksgiving week off (most schools around here do that, for example). They did not report at all during Thanksgiving week, so this problem was missed. They make up for the shortfall this week.

          • Harry McGibbs says:

            It was just a newsflash on The Guardian’s live-feed for business that caught my eye. The words “weaker demand for energy” drew me in!

            • I think the American Petroleum Institute should stop making its estimates. They are rarely even close. They come only one day before the “real thing.” Many reporters look at them and try to deduce too much from them.

      • Robert Firth says:

        A tragic outcome for the truckers, whose livelihood depended on the company. Driving in the US, I found the truckers to be among the most courteous and careful people on the road, until NAFTA let the Mexican cowboys in.

        If Trump has any sense (a proposition I regard as unproven), he will invest in a scheme to retrain the truckers to produce some of the goods they used to transport. Yes, hard; yes, maybe Utopian: but it would be a clear win/win for both the truckers and their communities.

        • rilygtek says:

          Just wait until these bad boys hit the roads en masse.

          “Autonomous cars may be one thing, but with the usage of autonomous trucks the utilization of trucking and the cost structure will drastically change.
          This is because sixty-five percent of U.S.’s goods are transported with trucks and these US trucks carry more freight than rail, pipeline, water, and air combined. Operating costs would decline by about 45 percent, saving the US trucking industry around $85 to $125 billion with autonomous trucks on the road.”

          View at Medium.com

          • The thing that is cut is wages. Without wages, demand falls lower for everything, including oil, gas, and coal. The system collapses.

            • rilygtek says:

              Consumption collapses.

              Although, I don’t consider that as a problem, except for the consumerism, which is going the way of the dodo anyhow. Money isn’t real anyway.

            • DJ says:

              So savings would be way in excess of $125B.

            • rilygtek says:

              Most likely. Less trucks needed. Automation does not replace workers in a one to one relation. It is orders of magnitude in difference.

          • Robert Firth says:

            Autonomous trucks seems like a very complicated and roundabout way to cut costs. How about we have guided trucks instead? Put a couple of metal rails on the road, set the trucks on bogies, and no automated guidance is needed. And maybe link a couple of dozen together, and have them pulled by one big engine at the front, which seems cheaper than separate engines on each truck.

            Funny that nobody has thought of this already.

            • DJ says:

              I think a first doable step would be to automate them from parking spot outside city to parking spot outside another city. And then have people driving the final miles.

            • rilygtek says:

              I think Elon Musk have the same sort of idea of using underground tracks for shuffling people around.

              It’s funny how it takes a genius to solve these previously unsolved challenges for transportation needs.

            • Musk is a tunnel vision genius

              ie–because he had a stroke of genius in creating paypal, he convinces himeslf that his cleverness is transferrable to any other project he chooses—eg interplanetary travel, for which end he hires clevere people who will happily burn through his loose change

              doesnt work like that

            • Harry McGibbs says:

              Joseph Tainter argues that, “Societies collapse when their investments in social complexity and their “energy subsidies” reach a point of diminishing marginal returns.” [Wiki].

              At that point, what look like solutions are in fact unhelpfully complex pseudo-solutions – Musk is the patron saint of those.

            • Tainter makes a good point. The energy subsidies come as much from the total quantity of energy available as anything else.

  8. Herbie R Ficklestein says:

    And TIMES “Person of the Year……drumroll please….
    https://news.yahoo.com/greta-thunberg-time-2019-person-124356542.html?bcmt=1
    Greta Thunberg Is TIME’s 2019 Person of the Year
    We can’t just continue living as if there was no tomorrow, because there is a tomorrow,” she says, tugging on the sleeve of her blue sweatshirt. “That is all we are saying.
    And we. all can relax because Al Gore says…
    This moment does feel different,” former Vice President Al Gore, who won the Nobel Peace Prize for his decades of climate advocacy work, tells TIME. “Throughout history, many great morally based movements have gained traction at the very moment when young people decided to make that movement their cause
    “I want you to panic,” she told the annual convention of CEOs and world leaders at the World Economic Forum in Davos, Switzerland, in January. “I want you to feel the fear I feel every day. And then I want you to act.

    When the wheels fall off of BAU. Greta, then you will not only feel fear and panic but actually be in FEAR and a constant state of PANIC!

    • Robert Firth says:

      One of the first young persons to make a morally based cause their own was a young girl born to Jacques d’Arc and Isabelle Romée in 1412. Her cause triumphed, but it did not end well for her. I believe that, however misguided, Greta Thunberg is on the side of the angels. Her enemies are not, and in this terrene world, the Adversary has great power.

      • Herbie R Ficklestein says:

        Lizzy Hale also claims Greta is a modern Joan of Arc! I’m impressed….

        BTW, who is Lizzy?

    • Xabier says:

      Gosh, that Gore person is dreadfully vomit-inducing, isn’t he? And historically illiterate…

      • Phil D says:

        Did you know he invented the Internet? 😉

        He’s a borderline laughingstock in his home country.

      • Robert Firth says:

        … and has one of the biggest carbon footprints of any human alive. And spent $9 million on a waterfront property that, according to his other persona, makes as much sense as buying real estate in downtown Atlantis.

  9. Harry McGibbs says:

    “China‘s new energy vehicle output fell 36.9% year on year to 110,000 units on November, continuing year-on-year declines posted each month since July…”

    https://www.spglobal.com/platts/en/market-insights/latest-news/metals/121119-chinas-new-energy-vehicle-output-continues-to-slump-lithium-prices-trend-lower

    • Harry McGibbs says:

      “China’s consumer prices rose at their fastest pace in almost eight years in November as food costs surged but producer prices declined for the fifth straight month, complicating policymakers’ efforts to boost demand as economic growth slows…

      “However, domestic demand stayed subdued as core inflation – which excludes food and energy prices – showed only modest pressure.”

      https://www.aljazeera.com/ajimpact/china-consumer-prices-soar-producers-continued-slump-191210021616971.html

    • There is a follows on effect from the big drop in China’s new energy vehicle output:

      S&P Global Platts most recently assessed battery grade lithium carbonate at Yuan 53,000/mt ($7,530/mt) last Friday, down Yuan 1,000/mt from the week before. Lithium hydroxide fell Yuan 1,000/mt over the same period to be assessed at Yuan 57,000/mt. Both assessments are on a delivered, duty paid China basis.

      Market sources said the operating rates of cathode materials producers were currently below 50% of capacity due to reduced orders from battery makers, and expected lithium chemicals prices had yet to hit bottom.

      No wonder we have riots in Chile.

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