Today’s Energy Predicament – A Look at Some Charts

Today’s energy predicament is a strange situation that most modelers have never really considered. Let me explain some of the issues I see, using some charts.

[1] It is probably not possible to reduce current energy consumption by 80% or more without dramatically reducing population.

A glance at energy consumption per capita for a few countries suggests that cold countries tend to use a lot more energy per person than warm, wet countries.

Figure 1. Energy consumption per capita in 2019 in selected countries based on data from BP’s 2020 Statistical Review of World Energy.

This shouldn’t be a big surprise: Our predecessors in Africa didn’t need much energy. But as humans moved to colder areas, they needed extra warmth, and this required extra energy. The extra energy today is used to build sturdier homes and vehicles, to heat and operate those homes and vehicles, and to build the factories, roads and other structures needed to keep the whole operation going.

Saudi Arabia (not shown on Figure 1) is an example of a hot, dry country that uses a lot of energy. Its energy consumption per capita in 2019 (322 GJ per capita) was very close to that of Norway. It needs to keep its population cool, besides running its large oil operation.

If the entire world population could adopt the lifestyle of Bangladesh or India, we could indeed get our energy consumption down to a very low level. But this is difficult to do when the climate doesn’t cooperate. This means that if energy usage needs to fall dramatically, population will probably need to fall in areas where heating or air conditioning are essential for living.

[2] Many people think that “running out” of oil supplies should be our big worry. I believe that lack of the “demand” needed to keep oil and other energy prices up should be at least as big a worry.

The events of 2020 have shown us that a reduction in energy demand can occur very quickly, in ways we would not expect.

Oil demand can fall from less international trade, from fewer international air flights, and from fewer trips by commuters. Demand for electricity (made mostly with coal or natural gas) is likely to fall if fewer buildings are occupied. This will happen if universities offer courses only online, if nursing homes close for lack of residents who want to live there, or if young people move back with their parents for lack of jobs.

In some ways, the word “appetite” might be a better word than “demand.” Either high or low appetite can be a problem for people. People with excessive appetite tend to get fat; people with low appetite (perhaps as a side-effect of depression or of cancer treatments) can become frail.

Similarly, either high or low energy appetite can also be a problem for an economy. High appetite leads to high oil prices, as occurred back in 2008. These are distressing to oil consumers. Low appetite tends to lead to low energy prices. These are distressing to energy producers. They may cut back on production, as OPEC nations have done in the recent past, in an attempt to get prices back up. Some energy producers may file for bankruptcy.

Figure 2. Weekly average spot oil prices for Brent, based on data of the US Energy Information Administration.

Just as people can die from indirect effects of too little appetite, an economy can fail if it cannot keep its energy prices (appetite) up. In fact, an economy will probably collapse quite quickly if it cannot keep oil and other energy prices up. The cost of mining or otherwise extracting energy supplies tends to increase over time because the cheapest, easiest-to-extract supplies are taken first. The selling price of energy products needs to keep rising as well, in order for producers to be able to make a profit and, therefore, be able to continue production.

We know that historically, many economies have collapsed. Revelation 18:11-13 tells us that in the case of the collapse of ancient Babylon, the problem at the time of collapse was inadequate demand for the goods produced. There was not even demand for slaves, which was the type of energy available for purchase at that time. This lack of demand (or low appetite) is similar to the low oil price problem we are encountering today.

[3] The big reduction in energy appetite since mid-2008 has particularly affected the US, EU, and Japan. 

We would expect lower energy prices to eventually lead to a decline in energy production because producers will find production unprofitable. On a world basis, however, we don’t see this pattern occurring except during the Great Recession itself (Figure 3).

Figure 3. World per capita energy consumption, based on data from BP’s 2020 Statistical Review of World Energy. On a worldwide basis, energy production and consumption are virtually identical because storage is small compared to production and consumption.

Note that in Figure 3, energy consumption is on a “per capita” basis. This is because energy is required for making goods and services; the higher the population, the greater the quantity of goods and services required to maintain a given standard of living. If energy consumption per capita is rising, there is a good chance that living standards are rising.

The countries of the US, EU, and Japan have not been very successful in keeping their energy consumption per capita level since the big drop in oil prices in mid-2008.

Figure 4. Per capita energy consumption for the US, EU, and Japan, based on data from BP’s 2020 Statistical Review of World Energy.

The falling per capita energy consumption for the US, EU, and Japan is what one would expect if economic conditions were getting worse in these countries. For example, this pattern might be expected if young people are having difficulty finding jobs that pay well. It might also happen if repayment of debt starts interfering with young people being able to buy homes and cars. When fewer goods of these types are purchased, less energy consumption per capita is required.

The pattern of falling energy consumption per capita cannot continue for long without reaching a breaking point because people with low wages (or no jobs at all) will become more and more distressed. In fact, we started seeing an increasing number of demonstrations related to low wage levels, low pension levels, and lack of government services starting in 2019. This problem has only gotten worse with layoffs related to the pandemic in 2020. These layoffs corresponded to substantial further reduction in energy consumption per capita.

[4] China, India, and Vietnam are examples of countries whose energy consumption per capita has risen in recent years.

Not all countries have done as poorly as the major economies in recent years:

Figure 5. Some examples of countries with rising energy consumption per capita, based on data from BP’s 2020 Statistical Review of World Energy.

These Asian countries could outcompete the US, EU, and Japan in several ways:

  • Big undeveloped coal reserves. These resources could be used as an inexpensive fuel to compete with countries that had depleted their own coal resources. Coal tends to be less expensive than other types of energy, especially if pollution problems are ignored.
  • Warmer climate, so these countries did not need much fuel for heating. Even Southern China does not heat its buildings in winter.
  • Pollution was generally ignored.
  • New, more efficient factories could be built.
  • Lower wages because of
    • Milder climate
    • Inexpensive fuel supply
    • Lower medical costs
    • Lower standard of living

The developed economies were concerned about reducing their own CO2 emissions. Moving heavy industry to these Asian nations meant that the developed economies could benefit in three ways:

  1. Their own CO2 emissions would fall, whether or not world emissions fell.
  2. Pollution problems would be moved offshore.
  3. The cost of finished goods for consumers would be lower.

Moving heavy industry to these and other Asian countries meant the loss of jobs that had paid fairly well in the US, Europe, and Japan. While new jobs replaced the old jobs, they generally did not pay as well, leading to the falling energy consumption per capita pattern seen in Figure 4.

[5] The growing Asian economies in Figure 5 are now reaching coal limits.

While these economies were built on coal reserves, these reserves are becoming depleted. All three of the countries shown in Figure 5 have become net coal importers.

Figure 6. Coal production versus consumption in 2019 for China, India and Vietnam based on data from BP’s 2020 Statistical Review of World Energy.

[6] World coal production has remained on a bumpy plateau since 2011, suggesting that its extraction is reaching limits. (Figure 7)

Figure 7. World energy consumption by type, based on data from BP’s 2020 Statistical Review of World Energy. “Renewables” represents renewables other than hydroelectricity. Total world consumption is approximately equal to total world production, since stored amounts are small.

Figure 8, below, shows that growth in China’s coal production was the major reason for the big rise in world coal consumption between 2002 and 2011. In fact, this rise in production started immediately after China joined the World Trade Organization in 2001.

Figure 8. World coal production by country based on data from BP’s 2020 Statistical Review of World Energy.

China’s rapid growth in coal production stopped in 2011. The problem was that extraction from an increasing share of coal mines became unprofitable: The cost of extraction rose but coal prices did not rise to match these higher costs. China could build new mines in locations more distant from where the coal was to be used, but transportation costs would tend to make this coal higher-cost as well. China could increase its coal consumption by importing coal, but that would also be more expensive.

Figure 9. Coal production for selected areas based on data from BP’s 2020 Statistical Review of World Energy.

In Figure 9, above, we see how dramatically higher China’s coal production has been, in comparison to coal production in other areas of the world. After China’s coal production stalled about 2011, it bounced back in 2018 and 2019 as the country opened mines in the north of the country, farther from industrial use.

Figure 9 indicates that the US’s coal production was on a long plateau between 1990 and 2008; more recently, the US’s production has fallen. Coal production for Europe was falling even before 1981, but the data available for this chart only goes back to 1981. Declining production again results from the cost of production rising above the prices producers could obtain from selling the coal.

Whether or not world coal production will increase in the future remains to be seen. Normally, a person would expect a long bumpy plateau in coal production, such as the world has experienced since 2011, to precede a fall in production. This would be similar to the pattern observed in the US’s coal production. This pattern would also be similar to the shape modeled by geophysicist M. King Hubbert for many types of resource production.

Figure 10. M. King Hubbert symmetric curve from Nuclear Energy and the Fossil Fuels.

[7] World oil production through 2019 has continued upward in an amazingly steady pattern, despite low prices. Its major problem has been unprofitability for producers. 

Figure 7 above shows the total amount of oil produced has continued upward in almost a straight line, except for a dip at the time of the Great Recession.

In fact, every person needs goods and services made with energy products. Rising energy consumption per capita will mean that, on average, every person is getting the benefit of more energy supplies. Figure 11 shows information similar to that on Figure 7, except on a per-capita basis.

Figure 11. World per capita energy consumption by type based on data from BP’s 2020 Statistical Review of World Energy. Total world consumption is approximately equal to total world production, since stored amounts are small.

Figure 11 indicates that on a per capita basis, oil supply has been approximately flat. In a way, this should not be surprising. Oil is absolutely essential in many ways. It is used for agriculture, transportation and construction. Oil is also used for its chemical properties in medicines, herbicides, pesticides, lubricants, and many other products. Oil is very energy dense and can be easily stored.

Because of its special properties, many people have assumed that oil prices will always rise. We saw in Figure 2 that this doesn’t actually happen. Low prices have continued for long enough now that they are becoming a serious problem for producers. Many companies are seeking bankruptcy. One analysis shows that 230 oil and gas producers and 214 oilfield services companies have filed for bankruptcy since 2015.

Oil exporters find their countries in financial difficulty, because at low prices, the taxes that they can collect are not sufficient to maintain the programs needed for their people. If the programs cannot be maintained, citizens may become unhappy and revolt.

At this point, oil production during 2020 is down. Figure 12 shows OPEC’s estimate of oil production through July 2020. World oil production is reported to be down about 12%. The highest month of supply was about November 2018.

Figure 12. OPEC and world oil production, in a chart made by OPEC, from the August 2020 OPEC Monthly Oil Market Report.

Figure 13 shows oil production for selected areas of the world through 2019.

Figure 13. Oil production for selected areas of the world based on data from BP’s 2020 Statistical Review of World Energy. Europe includes Norway. Russia+ is the Commonwealth of Independent States.

Middle East production tends to bounce up and down. If prices are low, the tendency is to reduce production, as occurred in 2019.

US production rose rapidly between 2008 and 2019, but dipped in 2016, as prices dropped way too low.

Europe’s oil production (including Norway) reached its highest point in the year 2000. It has been declining since then, causing concern for governments.

The production of what I call Russia+ dropped with the collapse of the central government of the Soviet Union in 1991. Oil prices had been very low between 1981 and 1991. It appears to me that these low prices were instrumental in the collapse of the central government of the Soviet Union. Production was able to rise again in the early 2000s when prices rose. My concern now is that a similar collapse will happen for some oil exporters in the next few years, due to low prices, and it will lead to a major decline of world oil production.

[8] Natural gas is the fuel that seems to be available in abundant supply, if only the price could be made to rise to a high enough level for producers. 

Natural gas production can be seen to be rising on both Figures 7 and 11. The fact that natural gas consumption is rising on a per capita basis in Figure 11 indicates that production is rising robustly–enough to offset weakness in coal production and perhaps help increase the world standard of living, to some extent.

We can see from Figure 14 below that the increase in natural gas production is coming from quite a number of different areas, including the US, Russia and its affiliates, the Middle East, and Australia. Again, Europe (including Norway) seems to be in decline.

Figure 14. Natural gas production for selected areas of the world based on data from BP’s 2020 Statistical Review of World Energy. Europe includes Norway. Russia+ is the Commonwealth of Independent States.

The problem for natural gas is again a price problem. It is difficult to get the price up to a high enough level to cover the cost of both the extraction of natural gas and the infrastructure and fuel needed to transport the natural gas to its destination.

We used to talk about “stranded natural gas,” that is, natural gas that can be extracted, but whose cost of transportation is simply too high to make the overall transaction economic. In fact, historically, a lot of natural gas has simply been burned off as a waste product (flared) or re-injected into oil wells, to keep up pressure, because there was no hope of selling it profitably at a distance. It is this formerly stranded natural gas that is now being produced.

Figure 15. Historical natural gas prices based on data from BP’s 2020 Statistical Review of World Energy. LNG is liquefied natural gas transported by ship. German imported natural gas is mostly by pipeline. US Henry Hub gas is natural gas without overseas transport costs included.

The increase in investment in natural gas production in recent years has been based on the hope that prices would rise high enough to cover both the cost of extraction and transportation. In fact, prices have tended to fall with crude oil prices, making the overall price far too low for most natural gas producers. Prices in 2020 have been even lower. For example, recent Japan LNG prices have been about $4 per million Btu. Thus, natural gas seems to have exactly the same problem as coal and oil: Prices are far too low for producers.

[9] The world economy is a self-organizing system, powered by energy. It can be expected to behave in a very strange way when diminishing returns become too much of a problem. 

In the language of physics, the world economy is a dissipative structure. This has been known at least since 1996. The economy is a self-organizing system powered by energy; it is not possible to significantly reduce energy consumption without a major collapse.

The economy has many parts to it. I have illustrated the situation in the following way:

The fact that consumers are also employees means that if wages fall too low (for a significant share of the population), then consumption will also tend to fall too low.

Prices are set by the market. Contrary to the popular view, prices are not based primarily on scarcity. Instead, they are based on the quantity of finished goods and services that consumers in the aggregate can afford. If wage disparity gets to be too great a problem, commodity prices of all types will tend to fall too low.

[10] Economists and modelers of all kinds have completely misunderstood how the economy actually operates.

Our academic communities each seem to exist in separate ivory towers. Economists don’t talk to physicists. Physicists know that dissipative structures cannot last indefinitely. Humans are dissipative structures; they each have limited lifetimes. Hurricanes are also dissipative structures that last only a limited time.

Most economists and modelers have never considered the possibility that today’s economy, like that of ancient Babylon, could be reaching collapse because of low demand, and thus, low prices.

Economists don’t realize that once energy resources become too depleted, energy prices are not likely to rise high enough for producers to make a profit; instead, the overall system will tend to collapse. Central banks have been trying, without success, to get commodity prices up to the point where they can be profitable for producers, but they have not been successful to date. I am doubtful that even more new tricks, such as Universal Basic Income, will work, either.

The erroneous belief systems of most economists and modelers leads to all kinds of strange results. The economy is modeled as if it will grow indefinitely. Most modelers assume that if we have oil, coal, or natural gas in the ground, plus the technical capability to pull these resources out, we will eventually pull them out. Perhaps a later civilization, built on the remains of our current civilization, can do this, but our current civilization cannot.

Climate change models are applied to fossil fuel assumptions that are absurdly high, given the problems with low energy prices that we are currently encountering. No one stops to model what will happen to the climate if fossil fuel consumption is decreased very quickly, which seems to be a real possibility in 2020. The loss of aerosol emissions (smog, for example) from fossil fuels will tend to spike world temperatures, even with reduced CO2 emissions from fossil fuels.

We are led to believe that an economy similar to today’s economy can operate solely on renewables. This is simply absurd. Figures 7 and 11 show that there are nowhere near enough renewables to support today’s population, even if substitution were possible for fossil fuels. In fact, we need fossil fuels to make and maintain solar panels, wind turbines, electric transmission lines, hydroelectric plants, and nuclear power plants.

If we cannot keep fossil fuels operating because of continued low prices, today’s economy can expect a disturbing change for the worse.

This entry was posted in Financial Implications, Introductory Post and tagged , , , by Gail Tverberg. Bookmark the permalink.

About Gail Tverberg

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

2,368 thoughts on “Today’s Energy Predicament – A Look at Some Charts

  1. The Federal Reserve kept its key policy rate unchanged Wednesday and said it would keep interest rates near zero for at least the next three years, a much longer period than analysts’ had expected.
    https://www.msn.com/en-us/money/markets/federal-reserve-holds-rates-steady-suggests-no-hikes-until-at-least-2024/ar-BB1973GQ?li=BBnbfcN

    “You know, that might be the answer – to act boastfully about something we ought to be ashamed of. That’s a trick that never seems to fail.”
    ― Joseph Heller, Catch-22

    • “… said it would keep interest rates near zero for at least the next three years, a much longer period than analysts’ had expected.”

      there’s that unintended “expected” humor again.

      I expect near zero rates for as long as there are rates.

    • Subsidized wind and solar are unfair competition for all types of electricity generation. Allowing them to go first is the biggest subsidy of all. This is something the WSJ never mentions. Adding more renewables is not a sustainable pattern.

        • You are right Dan! Gail never mentions the subsidies that oil and coal companies get. This site definitely has a slant against the Greenies around here. I am an old and ornery and don’t belong to a “political” team so you won’t hear the Rah, Rah from me! I am always looking for a political slant these days…..but as far as your above question I believe that oil companies get about 20 billion a year in subsidies not to mention other perks. There is no way they would be fracking here right now if they did not get subsidized in some way. I would love for Gail to do a paper on that but….

          • The big subsidy that these companies have gotten is investors willing to invest in them, even though they are unprofitable. And banks willing to invest in them, even though they are unprofitable. At some point, this unprofitability will come home to roost. Banks will have defaulting loans. What looked like capital gains will turn into capital losses, as investors attempt to sell. Bond owners will find that the bonds that they hold will not really be repaid.

            Part of the taxes that these oil and gas companies are royalties that continue, no matter how unprofitable the companies become. These cannot offset the need for excessive investment for oil and gas, for little real return.

            With respect to coal, some of the big losers have been the employees, and their pension plans. Coal companies keep going bankrupt. Their employees get paid poorly, but they are promised pensions. Their pension benefits tend to get lost in bankruptcy. Coal has not been able to pay as high taxes as oil (its primary selling point is its low price), so areas with high employment from coal industries (like West Virginia) tend to do poor economically.

        • the story below about the Ontario GEA is the basic story, repeated in Germany and California and elsewhere.

          when you finish reading it, you should then realize that fossil fuels get relatively little subsidies compared to the outrageous subsidies involved in solar and wind.

          • That does nothing to answer my question. But it does prove my point. Anecdotal evidence is very cheap these days.

        • The only oil subsidy I am aware of is for buyers of oil as a fuel to heat their homes, in a few places in the northeastern part of the US, where oil is still used for home heating. These subsidies normally only go to poor people. These are considered “oil subsidies,” because otherwise these people would be too poor to buy fuel, so less oil would be purchased.

          The only subsidies I am aware of for coal relate to trying to develop coal capture and storage, to try to get carbon emissions down. This has not been very successful.

          This is a blog with a chart. https://blogs.ei.columbia.edu/2019/09/23/energy-subsidies-renewables-fossil-fuels/

          Oil, especially, tends to be heavily taxed. Coal also pays taxes. Taxation of renewables varies, but mostly it gets a lot of benefits through the tax system.

            • Also, when environmental pressure groups and organisations like the IMF talk about fossil fuel industries being subsidised to the tune of $ trillions they are basing these figures on the difference between consumer fuel prices and the full societal and environmental costs of using these fuels. This is not actual money going into the industry’s pockets.

              In other words, they are making the childish and specious argument that all financial accountability for harm from the use of fossil fuels should rest with the producers and the fact that it does not constitutes a colossal subsidy.

        • The whole point is that Gail never said that coal and oil are getting zero subsidies, Dan’s misleading passive-aggressive implicating notwithstanding.

  2. On CNBC: The supplement Dr. Fauci takes to help keep his immune system healthy

    “If you are deficient in vitamin D, that does have an impact on your susceptibility to infection. So I would not mind recommending, and I do it myself taking vitamin D supplements,” Fauci, 79, said during an Instagram Live on Thursday, when actress Jennifer Garner asked Fauci about immune-boosting supplements.

    “If you are deficient in vitamin D, that does have an impact on your susceptibility to infection. So I would not mind recommending, and I do it myself taking vitamin D supplements,” Fauci, 79, said during an Instagram Live on Thursday, when actress Jennifer Garner asked Fauci about immune-boosting supplements.

    The article also links to an article about a University of Chicago study. Vitamin D deficiency may raise risk of getting COVID-19, study finds

    The research team looked at 489 patients at UChicago Medicine whose vitamin D level had been measured within a year before being tested for COVID-19. Patients who had vitamin D deficiency (defined as less than 20 nanograms per milliliter of blood) that was not treated were almost twice as likely to test positive for COVID-19 compared to patients who had sufficient levels of the vitamin.

    • Thanks to you, we am doing it and have been. We are ahead of the curve. Now, what is your next great inspiration? You are doing pretty dang well on looking forward.

      Dennis L.

      • Actually, I believe I played a major oll in prompting Gail to promote having an adequate vitamin D level. It was a little while after I nudged her to start taking magnesium.

        Dennis, if you are out farming you will probably be getting quite a bit of sun from April to September. But I think it would be wise to supplement with vitamin D from now until the end of March.

        I personally take the entire vitamin alphabet everyday, but I’m somewhere between a fanatic and a maniac about it and I don’t recommend everybody to emulate my silliness.

        I do it partly because Big Pharma/Big Medicine tells us not too and partly because I like the theory that vitamins are among the raw materials that our bodies need to rebuild and repair themselves and so it can’t be bad to be well supplied with them.

        • Exactly, anybody doing a bit (or a lot) of physical work/activity must be on magnesium supplements (or such treated water) among other things as you mentioned (vitamins and “rare/trace elements”)..

          It’s not that hard to search for key deficiencies induced by local conditions, as food and drinking water is affected / impoverished everywhere near ‘civ” prevailing conditions.

    • “For many years I have offered my opinion that sunlight provides benefits that are not gained just from taking vitamin D pills. Recent research is confirming that opinion, and many scientists now believe that low vitamin D blood levels are only a marker for not getting enough sunlight.”

      “It takes only a few minutes of exposure of a small area of skin to reap the benefits of sunlight.”

      https://www.drmirkin.com/health/morehealth/sunlight-more-than-vitamin-d.html

      • “It takes only a few minutes of exposure of a small area of skin to reap the benefits of sunlight.”

        Not in Saskatoon in December it doesn’t.

        All sunlight is created equal, but filtering it through the atmosphere creates significant inequalities. Try sunbathing when the sun is almost overhead at 70, 80 or 90 degrees and see how many minutes of it you can stand. Then try again when the sun is much lower down at 30, 20 or 10 degrees above the horizon and note whether there is any difference in the quality of the radiation.

        Around the time of the winter solstice, at Saskatoon, Canada or London, England, at 52º North, the Sun only makes it up to 15º above the horizon at noon. That sunshine at that low angle has to travel through a lot more atmosphere than the sun over Singapore or Caracas, and that atmosphere filters out most of the UVB radiation that the skin needs in order to synthesize vitamin D.

      • I try to walk 10,000 steps each day. Nearly all of this is outside. Given the hilliness of the area, it takes me about 1.5 hours (total) to do this. So I am outside in the sunshine a fair amount of time. I often visit with neighbors during this time as well.

    • All a bit late in the day from Dr Faux-i, isn’t it?

      These people are utterly compromised and have no commitment at all to public health, or assisting the public to help themselves in any way.

      He also sweepingly dismissed ‘plants and potions’ as being of any help: he would no doubt have refused to drink the vegetable elixir made for me by my cousin’s gypsy wife once, which put me back on my feet in hours when I was dreadfully sick. Fever and inflamed throat gone, weakness gone.

      She is a witch of course (no joke); and prettier than Dr F to boot. Oh, and it was FREE.

    • I’m unsure what you mean.

      near zero rates are permanent; can’t be raised without putting an unbearable burden on the interest payments on the mountains of debt created by govs/CBs.

      this debt can never be paid down, and will only grow bigger, because govs/CBs now need and will continue to need to create money on their computers, so the rates are locked in.

      this is the economic Endgame. The economy has multitudes of moving pieces, but there are at least two pieces which now seem to be out of other options: near zero rates and plunge protection for stock markets.

      with these two pieces, the can gets kicked down the road for a while longer.

      there might be other permanently fixed pieces, but these are the main two.

      • Said with a smile on my face and not a smirk. I thought someone was going to make hundreds(that is a guess) of small nuclear reactors and save the day. Going from a chicken in every pot to a reactor on every block I guess.

        Still an optimist, but it is getting to be more work.

        Dennis L.

        • Great idea. The waste heat (65%) from the reactors can be piped into the homes on the block to provide hot water and space heating. And later the citizens can save on electric light, because they will glow in the dark.

    • Zero interest rates likely are associated with investments that are not really profitable, so that they cannot pay interest on debt.

      In such a situation, new investments that are intended to produce future goods and services don’t make sense. For example, new oil and gas wells don’t make sense. New coal mines don’t make sense. New wind turbines and solar panels don’t make sense, except to the extent that they are subsidized by past profits, indirectly coming from fossil fuels. We find many business-related investments are no longer profitable. Office buildings and building housing restaurants, for example. They need to be taken down. Burning would be a cheaper solution. In fact, it would be closer to the “normal” solution at the end of lives of ecosystems.

      The only investments that seem to make sense are new homes for the wealthy, using their stored up savings, and new recreational vehicles and boats for these same folks. Also, home improvements, like the improved drainage system my husband and I recently had added. But these really don’t add to the economy’s productivity.

      • “Office buildings and building housing restaurants, for example. They need to be taken down.”

        I believe you’re rolling out a scenario (based on your analysis of the BAU model we have now), and not what you actually believe should be done.

        A centralized economic system is an upcoming moot issue. So infrastructure meant to support investments into a no-longer-viable system would be a moot issue too. So removing buildings just because they are no longer good for BAU to invest in would be unnecessary.

        The buildings–like restaurants–embody energy from the past, whatever they might have been used for. Form Based Planning only considers the existence and form of the buildings, which can change uses entirely. A defunct restaurant can use the building space to grow plants under such lights as there may be…or house people. So I don’t see the point of removing it.

        https://opticosdesign.com/blog/the-top-seven-things-i-teach-about-form-based-planning-and-zoning/

        • a restaurant or large diy store is a different physical shape to a building necessary to house people.

          other than very temporary accommodation, people need windows

          indoor plants need lighting/heating, much stronger than would be needed in a store, so would cost a lot more

          if the energy for lighting and heating exceeds that produced by the plants, the project would be non viable

          • There are often ways to knock out new window openings, and more elaborate ways to send down light through a shaft from above. The challenge of architecture today is to do such things cheaply and attractively. (Instead of trying to build entirely new things that take up land space and require new lines of infrastructure).

            The issues of cost are different in a non monetary system than in a monetary one. In the latter, short term profit is the key; in the former, the thinking is what can stand on its own long term, and how can the supply chains to keep it standing can be secured. Money then is a tool, not a driver for the project. And I assume that money as we know it won’t be here for long.

            • a pretty grim prospect for life and living

              really would be down to beggars not being choosers there.

              One could imagine that happening, if the housing market collapsed completely, due to home loans being un repayable on a nationwide scale.

              To get to that point would mean that the entire housing market had gone done, with lenders repossessing homes that would have no actual vale because no one would be available to buy them.

              then we really would be in serious do-do’s.

              Or economic system is held up by constant retention of house values

            • I don’t think homes can be repossessed. It would not work. It is difficult to even throw renters out. Better to let the owners get along without revenue.

            • I agree

              but to the people who own the rented homes, that is likely their main capital asset, and security for their debt so creditors will be claiming on them

              And those homes require upkeep

              krazy ol world aint it?

            • Norman, I wrote the following yesterday, and I hope it addresses the points you make on housing. Growing plants outside also seems extremely primitive, given environmental conditions. Food trees are another matter. Values change according to changing environments.

              HOUSING, THE ECONOMY AND THE ENVIRONMENT
              Artleads

              OUR TIMES ARE UNSTABLE BOTH ECONOMICALLY AND ENVIRONMENTALLY

              ” My sense is that by removing the capitalist system of home purchase/appreciation/profit on the sale, we can more effectively create a product that is self sustaining, rather than relying on government subsidies and financial contributions.” (quote of someone I might have influenced!!!!!) This statement is consistent with my understanding of reality.

              SINCE WE CAN’T PREDICT UPCOMING CHANGES TO LAND USE, EASILY REMOVED BUILDINGS ARE NEEDED

              – The usual definition of development is extremely limited. For me, it’s not about pro development vs anti development; it is about how to develop. The type of development that works by low impact and high volume. Since it precludes much complexity it frees up more construction activity.
              – In an age of pandemics, small buildings enabling social distancing may be optimal for many.
              – It is essential to use the cheapest building materials, and the simplest but practical tools, and look into what it might take to keep them viable long term.

              IN A NON MONETARY ENVIRONMENT, IT IS ESSENTIAL TO FOCUS EXCLUSIVELY ON HOUSING THE POOREST

              – If the bottom rung of a population pyramid is stable, the upper layers of the pyramid are likely to be stable too.
              – It is far cheaper and easier to provide housing for the bottom of the pyramid than the upper layers.

              WHAT KIND OF ORGANIZATION IS NEEDED?

              – We need to keep it simple.
              – Land owners might find it harder o sell and easier to lease.
              – In an unstable, hard to predict environment, leasing allows flexibility and change.
              – A 10-year lease gives lessors a stable income and lessees time to demonstrate the efficacy of their programs so as to garner their continued support.
              – To lessen organizational responsibility, such as for a land trust, is there a way to partner with one or more existing land trusts?

            • i agree with you Artleads.

              problem is, half my capital is locked into my house, a chunk of the other half is invested in other people’s houses with a building society.
              I am lucky enough to be mortgage and debt free, and comfortably off.

              My intention is to ease the future of my kids and grandkids, in whatever limited way I can. when they divvy up my worldly goods it won’t be enough to buy each of them a house, but some are doing ok on their own

              That situation applies to millions of other people.

              the fundamental problem has been created by deciding the planet itself is ‘property’ to be bought and sold at a profit (for someone).
              King or Emperor, or lowly property owner like me the problem varies only by degree:

              View at Medium.com

              Kings took land by force, and sublet it to the knights who supported them. They ‘owned it’.

              Which as a concept is nonsense, but nevertheless we are stuck with it. I will not surrender my ‘property’ or any profit on it, for the good of the community.

              For that to happen, the UK would have to become a socialist dictatorship with absolute power of me and everyone else.

              To remove money from the equation would mean that I would be ration-fed, roughly at the level of N Korea, because surplus food would become impossible to produce. (For no better reason than money-less farmers would have no incentive).

              Na zi germany tried a command economy–check it out.

              Human nature being what it is, the people controlling all this would be getting fat and rich.

              ********

              Your definition of ‘easily demountable building’ built of the cheapest material is a trailer park—wheels are optional.
              The first requirement of a building is to keep the rain and bad guys out. Check the story of the big bad wolf and blowing houses down.

              I’m afraid you are advocating a command economy. Cash income can only come from surplus energy. It cannot be printed. We cannot afford to buy/access vast quantities of energy anymore.

              Command economies have been tried before,they have never worked.

              It’s called wish politics, wish science and wish economics. Alladin was granted three wishes too. It would have the same effect if we tried it.

              ****

              As to growing food, yes you can grow tomatoes under cover, but you absolutely cannot grow fields of wheat.

            • I have a property too (that apart for the inheritance from my sainted mother would have been inconceivable). I never worked for it and expect no profit from it. But it has a variety of supportive benefits in the now, including a slightly more valid voice in the owners association. And peace from getting out from under ever increasing rentals. Great blessing late in life. I’m also enabled to make “fixes” to an old house as an aspect of research in what can be done without money.

              What I’ve written about here is of no concern to home owners; it’s entirely aimed at those who can’t afford to rent or buy property. It deals with property sitting down unused, with owners unwilling or unable to fix them up, manage or rent them. Were there to be a responsible lessee land trust that could lease such properties, the owners would get income they don’t get now. A wise and sensitive land trust would make no repairs that weren’t somehow reversible or too subtle to be problematic. If they subdivided the house, they’d make their subdivision removeable. Yes, that requires a good deal of sophistication and design smarts. But it can be done. Residents have to shape up and help so as to have a better chance of having the lease renewed. If some windfall allows for the sale of the property to the lessee, so much the better. It would require insanely thorough management, which might depend on one individual. So we would want to institutionalize an individual’s management ideas. Such has happened repeatedly in our culture. The wider culture outside of a given locality could change in ways that support enlightened management within. No guarantees of anything.

              Income for the land trust would come from very low, fixed rents. There would be volunteer programs. Residents would be selected for their likelihood to volunteer and to pay their rent on time. Any responsibility that could be effectively off loaded to other agencies would lighten management load. That would require less individualism and more cooperativeness.

              Each resident’s unit, would include private growing space, “private” water catchment, “private” utilities, etc. This would not be a commune.

            • I think you have an awfully lot of faith that the future will look like the past. If jobs have disappeared in the center of town, no one will want to live there. If there is no public transport, people will not want to live in places which are popular now. We probably will have many fewer people, as time goes on, so fewer housing units will be needed. There will be a lot of empty offices, shopping malls and factories that could in theory be repurposed as housing, if needed. I expect windows that open and good ventilation will be important considerations. Many commercial buildings will not have these.

          • Norman, the Egyptians solved this problem over three thousand years ago. Why do you think that all those underground tombs show no trace of soot or other artificial sources of light? Thanks to a wonderful invention called “mirrors”.

            • on my first visit to an Egyptian tomb, I figured out mirrors immediately.

              That is so patently obvious it hardly needs saying. One assumes parabolic of course, to get the intensity. This in turn means someone has to be manipulating a series of mirrors minutely as the sun moves relative to the hole in the ground, and to account for the % light drop at each ‘mirror stage’. Which would be significant.

              We must assume polished silver. Don’t think they had glass to that size then. (could be wrong)

              That said, I find it difficult to believe that you imagine every other human activity could be undertaken by the same means.

              Indoor food growing implies tower farms.

              Tell me you’re not suggesting mirrors for tower farms?

              If so I’m going to put mirrors on my roof and start growing wacky baccy in my attic

        • An awful lot of green veggies are grown under lights now. I doubt that this would be done if growing veggies out in a distant field was economically or energetically preferable. So growing more food under lights will possibly be as doable as growing it any other way?

      • Thank you, Gail. As another datum, almost all my expenditure over the past two years has been on home improvements. Nothing fancy: solid wooden stair rails for the climb to my main floor; heat exchangers in four rooms to provide low cost cooling and heating; most recently a very efficient hot water heater. In all, less than EUR 4000, with some very good local craftsmen doing the work. That certainly added a little to the local economy (village population ~2000) and rather more to my own comfort. I made a promise to myself on moving here that I would spend as much as I could in the village (local minimarket, local baker, local carpenter, local hairdresser, …). It has not always been easy, but it has always felt right.

  3. Spiked has a report on…

    > Ontario’s green-energy catastrophe

    A transition to renewables sent energy prices soaring, pushed thousands into poverty and fuelled a populist backlash.

    ….But on 1 January, 2019, Ontario repealed the GEA, one month before its 10th anniversary. The 50,000 guaranteed jobs never materialised. The ‘decolonisation’ of energy didn’t work out, either. A third of indigenous Ontarians now live in energy poverty. Ontarians watched in dismay as their electricity bills more than doubled during the life of the GEA. Their electricity costs are now among the highest in North America….

    By 2015, Ontario’s auditor general, Bonnie Lysyk, concluded that citizens had paid ‘a total of $37 billion’ above the market rate for energy. They were even ‘expected to pay another $133 billion from 2015 to 2032’, again, ‘on top of market valuations’. (One steelmaker has taken the Ontarian government to court for these exorbitant energy costs.)….

    In April this year, the market value for all wind-generated electricity in Ontario was only $4.3 million. Yet Ontario paid out $184.5million in wind contracts. Extraordinarily, if this trend were to continue throughout the whole of 2020, it would still result in a lower payout than under the former contracting system. Ontario corralled taxpayers into long-term electricity contracts at eye-watering prices for electricity that suppliers did not even produce….

    The disaster of the GEA has had political consequences, too. Unsurprisingly, in the 2018 elections, the Liberal Party, which had drafted the GEA when in power, suffered the worst election results in its 161-year history, falling from first to third place – a defeat so terrible it lost is status as an official party. Disdain for renewable energy is now a key indicator of voting intention….

    https://www.spiked-online.com/2020/09/17/ontarios-green-energy-catastrophe/

    • Dear Dear,

      If you can afford solar, it is something and something is better than nothing. That said, it can’t be done cheaply, I have tried. Panels are cheap, the rest of it is very expensive. I see a number of small solar farms around my farm, it works wonders for taxes, it is hell on the coop, they are eager to comply as in MN we have liberal government that is green. No judgment here, the numbers are what they are.

      Tough to beat a coal mine.

      Dennis L.

      • I follow a blog which goes into great detail on the realities of off-grid solar: as ever, maintenance and replacement of parts -so often left out of the equation – are the killer, panels being cheap as dirt.

        The owner is competent to do all of the work himself – it wouldn’t be at all viable if he had to pay any else to do it for him, which would be the case with most people.

      • Thank you, Dennis; a good analysis. But I am not sure “panels are cheap”. They are cheap to buy, but their manufacture is hugely polluting; while in use they leach more pollution into the environment; and decommissioning them is a nightmare. Much of the “green revolution” only works because it can ignore some massive externalities, which are outsourced to the Third World or to the future.

    • Also, growth in new small businesses is lagging. The total number of small business is falling.

      We may be heading into the second dip of a double dip recession.

  4. HOUSING, THE ECONOMY AND THE ENVIRONMENT
    Artleads

    OUR TIMES ARE UNSTABLE BOTH ECONOMICALLY AND ENVIRONMENTALLY

    – Long term community plans did not reckon on the economic instability,especially.
    Dennis Meadows: The Limits To Growth | Peak Prosperity
    http://www.peakprosperity.com/dennis-meadows-the-limits…When the end of growth is finally recognized by the masses there will be a tipping point. The global system is hyper complex and, as such, there is a degree of resilience to individual failure. But beyond a certain point failures will cascade.
    https://www.peakprosperity.com/dennis-meadows-the-limits-to-growth/
    R F:
    ” My sense is that by removing the capitalist system of home purchase/appreciation/profit on the sale, we can more effectively create a product that is self sustaining, rather than relying on government subsidies and financial contributions.” This statement is consistent with my understanding of reality.

    SINCE WE CAN’T PREDICT UPCOMING CHANGES TO LAND USE, EASILY REMOVED BUILDINGS ARE NEEDED

    – The usual definition of development is extremely limited. For me, it’s not about pro development vs anti development; it is about how to develop. The type of development that works by low impact and high volume. Since it precludes much complexity it frees up more construction activity.
    – In an age of pandemics, small buildings enabling social distancing may be optimal for many.
    – It is essential to use the cheapest building materials, and the simplest but practical tools, and look into what it might take to keep them viable long term.

    IN A NON MONETARY ENVIRONMENT, IT IS ESSENTIAL TO FOCUS EXCLUSIVELY ON HOUSING THE POOREST

    – If the bottom rung of a population pyramid is stable, the upper layers of the pyramid are likely to be stable too.
    – It is far cheaper and easier to provide housing for the bottom of the pyramid than the upper layers.

    WHAT KIND OF ORGANIZATION IS NEEDED?

    – We need to keep it simple.
    – Land owners might find it harder o sell and easier to lease.
    – In an unstable, hard to predict environment, leasing allows flexibility and change.
    – A 10-year lease gives lessors a stable income and lessees time to demonstrate the efficacy of their programs so as to garner their continued support.
    – To lessen organizational responsibility, such as for a land trust, is there a way to partner with one or more existing land trusts?
    Dennis Meadows: The Limits To Growth | Peak Prosperity
    PEAKPROSPERITY.COM
    Dennis Meadows: The Limits To Growth | Peak Prosperity
    Fifty years later, we interview one of the original researchers of the m

    • Artleads,

      Sorry, I am confused. Who is R.F.?

      I went back to Dennis Meadows interview on Peak Prosperity from December 2019. It doesn’t say anything related to the things you are talking about that I can discern.

      Your first link doesn’t work. The second one is related to Dennis Meadow’s December 2019 talk.

    • We need a global economy with hitherto theoretically impossible means of levitation and propulsion, operating at astonishing speed – just like a UFO……. 🙂

Comments are closed.