Fossil Fuel Production Is Reaching Limits in a Strange Way

Strangely enough, the limit we seem to be reaching with respect to fossil fuel extraction comes from low prices. At low prices, the extraction of oil, coal, and natural gas becomes unprofitable. Producers go bankrupt, or they voluntarily cut back production in an attempt to force prices higher. As the result of these forces, production tends to fall. This limit comes long before the limit that many people imagine: the amount of fossil fuels in the ground that seems to be available with current extraction techniques.

The last time there was a similar problem was back in 1913, when coal was the predominant fossil fuel used and the United Kingdom was the largest coal producer in the world. The cost of production was rising due to depletion, but coal prices would not rise sufficiently to cover the higher cost of production. As a result, the United Kingdom’s coal production reached its highest level in 1913, the year before World War I started, and began to fall in 1914.

Between 1913 and 1945, the world economy was very troubled. There were two world wars, the Spanish Flu pandemic and the Great Depression. My concern is that we are again headed into another very troubled period that could last for many years.

The way the energy problems of the period between 1913 and 1945 were resolved was through the rapid ramp-up of oil production. Oil was, as that time, inexpensive to produce and could be sold for a very large multiple of the cost of production. If population is to remain at the current level or possibly grow, we need a similar “energy savior.” Unfortunately, none of the alternatives we are looking at now yield a high enough return relative to the required investment.

I recently gave a talk to an engineering group interested in energy research talking about these issues. In this post, I will discuss the slides of this presentation. A PDF of the presentation can be found at this link.

The Low Oil Price Problem

Oil prices seem to bounce around wildly. One major issue is that there is a two-way tug of war between the prices that citizens can afford and the prices that oil companies require. We can look back now and say that the mid-2008 price of over $150 per barrel was too high for consumers. But strangely enough, oil producers began complaining about oil prices being too low to cover their rising cost levels, starting in 2012. Prices, at a 2019 cost level, were at about $120 per barrel at that time. I wrote about this issue in the post, Beginning of the End? Oil Companies Cut Back on Spending. Oil prices now are in the $40 range, so are way, way below both $120 per barrel and $150 per barrel.

Interest rates and the availability of debt also play a role in oil prices. If interest rates are low and debt is readily available, it is easy to buy a new home or new car, and oil prices tend to rise because of the higher demand. When prices are too low for producers, central banks have been able to lower interest rates through a program called “quantitative easing.” This program seems to have helped oil prices to rise again, over a three-year period, after they crashed in 2008.

OPEC producers are known for their low cost of production, but even they report needing high oil prices. The cost of extracting the oil is reported to be very low (perhaps $10 per barrel), but the price charged needs to be high enough to allow governments to collect very high taxes on the oil extracted. If prices are high enough, these countries can continue the food subsidies that their populations depend upon. They can also sponsor development programs to provide jobs for the ever-growing populations of these countries. OPEC producers also need to develop new oil fields because the old ones deplete.

Oil production outside of the United States and Canada entered a bumpy plateau in 2005. The US and Canada added oil production from shale and bitumen in recent years, helping to keep world oil production (including natural gas liquids) rising.

One reason why producers need higher prices is because their cost of extraction tends to rise over time. This happens because the oil that is cheapest to extract and process tends to be extracted first, leaving the oil with higher cost of extraction until later. 

Some OPEC countries, such as Saudi Arabia, can hide the low price problem for a while by borrowing money. But even this approach does not work well for long. The longer low oil prices last, the greater the danger is of governments being overthrown by unhappy citizens. Oil production can then be expected to become erratic because of internal conflicts.

In the US and Canada, oil companies have been funded by bank loans, bond sales and the sale of shares of stock. These sources of funding are drying up, as many oil companies report poor earnings, year after year, and some are seeking bankruptcy protection. 

Chart 6 shows that the number of drilling rigs in operation has dropped dramatically in both the United States and Canada, as oil companies cut back on drilling. There is a lag between the time the number of drilling rigs is cut back and the time production starts to fall of perhaps a year, in the case of shale. These low drilling rig counts suggest that US and Canadian oil production from shale will fall in 2021.

Of course, unused drilling rigs cannot be mothballed indefinitely. At some point, they are sold as scrap and the workers who operated them find other employment. It then becomes difficult to restart oil extraction.

How the Economy Works, and What Goes Wrong as Limits Are Reached

Slide 7 shows one way of visualizing how the world economy, as a self-organizing system, operates. It is somewhat like a child’s building toy. New layers are added as new consumers, new businesses and new laws are added. Old layers tend to disappear, as old consumers die, old products are replaced by new products, and new laws replace old laws. Thus, the structure is to some extent hollow.

Self-organizing objects that grow require energy under the laws of physics. Our human bodies are self-organizing systems that grow. We use food as our source of energy. The economy also requires energy products of many kinds, such as gasoline, jet fuel, coal and electricity to allow it to operate.

It is easy to see that energy consumption allows the economy to produce finished goods and services, such as homes, automobiles, and medical services. It is less obvious, but just as important, that energy consumption provides jobs that pay well. Without energy supplies in addition to food, typical jobs would be digging in the dirt with a stick or gathering food with our hands. These jobs don’t pay well.

Finally, Slide 7 shows an important equivalence between consumers and employees. If consumers are going to be able to afford to buy the output of the economy, they need to have adequate wages.

A typical situation that arises is that population rises more quickly than energy resources, such as land to grow food. For a while, it is possible to work around this shortfall with what is called added complexity: hierarchical organization, specialization, technology, and globalization. Unfortunately, as more complexity is added, the economic system increasingly produces winners and losers. The losers end up with very low wage jobs, or with no jobs at all. The winners get huge wages and often asset ownership, as well. The winners end up with far more revenue than they need to purchase basic goods and services. The losers often do not have enough revenue to feed their families and to buy basic necessities, such as a home and some form of basic transportation.

The strange way the economy works has to do with the physics of the situation. Physicist Francois Roddier explains this as being similar to what happens to water at different temperatures. When the world economy has somewhat inadequate energy supplies, the goods and services produced by the economy tend to bubble to the top members of the world economy, similar to the way steam rises. The bottom members of the economy tend to get “frozen out.” This way, the economy can downsize without losing all members of the economy, simultaneously. This is the way ecosystems of all kinds adapt to changing conditions: The plants and animals that are best adapted to the conditions of the time tend to be the survivors.

These issues are related to the fact that the economy is, in physics terms, a dissipative structure. The economy, like hurricanes and like humans, requires adequate energy if it is not to collapse. Dissipative structures attempt to work around temporary shortfalls in energy supplies. A human being will lose weight if his caloric intake is restricted for a while. A hurricane will lose speed, if the energy it gets from the warm water of the ocean is restricted. A world economy with inadequate energy is likely to shrink back in many ways: unprofitable businesses may fail, layers of government may disappear and population may fall, for example.

In the discussion of Slide 7, I mentioned the fact that if we try to “stretch” energy supply with added complexity, many workers would end up with very low wages. Some of these low wage workers would be in the US and Europe, but many of them would be in China, India and Africa. Even though these workers are producing goods for the world economy, they often cannot afford to buy those same goods themselves. Henry Ford is remembered to have said something to the effect that he needed to pay his workers enough so that they, themselves, could buy the cars they were making. To a significant extent, this is no longer happening when a person takes into account international workers.

The high interest rates that low-wage workers pay mean that loans don’t really help low-wage workers as much as they help high-wage workers. The high interest on credit card debt and personal loans tend to transfer part of the income of low-wage workers to the financial sector, leaving poor people worse off than they would have been without the loans. 

COVID shutdowns are extremely damaging to the world economy. They are like taking support sticks out of the dome on Slide 7. They produce many more unemployed people around the world. People in low wage countries that produce clothing for a living have been particularly hard hit, for example. Migrant workers and miners of various kinds have also been hard hit.

We Seem to Be Reaching a Major Turning Point

Oil production and consumption have both fallen in 2020; oil prices are far too low for producers; wage disparity is a major problem; countries seem to be increasingly having problems getting along. Many analysts are forecasting a prolonged recession.

The last time that we had a similar situation was in 1913, when the largest coal producer in the world was the United Kingdom. The UK’s cost of coal production kept rising because of depletion (deeper mines, thinner seams), but prices would not rise to compensate for the higher cost of production. Miners were paid very inadequate wages; poor workers regularly held strikes for higher wages. World War I started in 1914, the same year coal production of the UK started to fall. The UK’s coal production has fallen nearly every year since then.

The last time that wage disparity started to spike as badly as it has in recent years occurred back in the late 1920s, or perhaps as early as 1913 to 1915.  The chart shown above is for the US; problems were greater in Europe at that time.

With continued low oil prices, production is likely to start falling and may continue to fall for years. It is hard to bring scrapped drilling rigs back into service, for example. The experience in the UK with coal shows that energy prices don’t necessarily rise to compensate for higher costs due to depletion. There need to be buyers for higher-priced goods made with higher-priced coal. If there is too much wage disparity, the many poor people in the system will tend to keep demand, and prices, too low. They may eat poorly, making it easier for pandemics to spread, as with the Spanish Flu in 1918-1919. These people will be unhappy, leading to the rise of leaders promising to change the system to make things better.

My concern is that we may be heading into a long period of unrest, as occurred in the 1913 to 1945 era. Instead of getting high energy prices, we will get disruption of the world economy.  The self-organizing economy is attempting to fix itself, either by getting more energy supply or by eliminating parts of the economy that aren’t contributing enough to the overall system. Conflict between countries, pandemics, bankruptcies and economic contraction are likely to be part of the mix.

Coal Seems to Be Reaching Extraction Limits as Well 

Coal has essentially the same problem as oil: Prices tend to be too low for producers to extract coal profitably. Many coal producers have gone bankrupt. Prices were higher back in 2008, when demand was high for everything, and again in 2011, when quantitative easing had been helpful. 

There have been stories in the press in the past week about China limiting coal imports from Australia, so as to make more jobs for coal miners in China. The big conflict among countries relates to “not enough jobs that pay well” and “not enough profitable companies.” These indirectly are energy issues. If there was more “affordability” of goods made with high-priced coal, there would be no problem.

Coal production worldwide has been on a bumpy plateau since 2012. In fact, China, the largest producer of coal, found its production stagnating, starting about 2012. The problem was a familiar one: The cost of extraction rose because many mines that had been used for quite a number of years were depleted. The selling price would not rise to match the higher cost of extraction because of affordability issues.

The underlying problem is that the economy is a dissipative structure. Commodity prices are set by the laws of physics. Prices don’t rise high enough for producers, if there are not enough customers willing and able to buy the goods made with high-priced coal.

We Have a Major Problem if Both Coal and Oil Production Are in Danger of Falling Because of Low Prices

Oil and coal are the two largest sources of energy in the world. We can’t get along without them. While natural gas production is fairly high, there is not nearly enough natural gas to replace both oil and coal.

Looking down the list, we see that nuclear production hit a maximum back in 2006 and has fallen since then.

Hydroelectric continues to grow, but from a small base. Most of the good sites have already been taken. In many cases, there are conflicts between countries regarding who should get the benefit of water from a given river.

The only grouping that is growing rapidly is Renewables. (This is really Renewables Other than Hydroelectric.) It includes wind and solar plus a few other energy types, including geothermal. This grouping, too, is very small compared to oil and coal.

Natural Gas Has a Low Price Problem as Well

Natural gas, at first glance, looks like it might be a partial solution to the world’s energy problems: It is lower in carbon than coal and oil, and it is fairly abundant. The problem with natural gas is that it is terribly expensive to ship. At one time, people used to talk about there being a lot of “stranded” natural gas. This natural gas seemed to be available, but when shipping costs were included, the price of goods made with it (such as electricity or winter heat for homes) was often unaffordable.

After the run-up in oil prices in the early 2000s, many people became optimistic that, with energy scarcity, natural gas prices would rise sufficiently to make extraction and shipping long distances profitable. Unfortunately, it is becoming increasingly clear that, while prices can temporarily spike due to scarcity and perhaps a debt bubble, keeping the prices up for the long run is extremely difficult. Customers need to be able to afford the goods and services made with these energy products, or the laws of physics bring market prices back down to an affordable level.

The prices in the chart reflect three different natural gas products. The lowest priced one is US Henry Hub, which is priced near the place of extraction, so long distance shipping is not an issue. The other two, German Import and Japan Liquefied Natural Gas (LNG), include different quantities of long distance shipping. Prices in 2020 are even lower than in 2019. For example, some LNG imported by Japan has ben purchased for $4 per million Btu in 2020.

The Economy Needs a Bail-Out Similar to the Growth of Oil After WWII

The oil that was produced shortly after World War II had very important characteristics:

  1. It was very inexpensive to produce, and
  2. It could be sold to customers at a far higher price than its cost of production.

It was as if, today, we had a very useful energy product that could be produced and delivered for $4, but it was so valuable to consumers that they were willing to pay $120 for it. In other words, the consumer was willing to pay 30 times as much as the cost that went into extracting and refining the oil.

With an energy product this valuable, a company producing it would need virtually no debt. It could drill a well or two, and with the profits from the first wells, finance the investment of many more wells. The company could pay very high taxes, allowing governments to build roads, schools, electricity transmission lines and much other infrastructure, without having to raise taxes on citizens.

Besides using the profits for reinvestment and for taxes, oil companies could pay high dividends. This made oil company stocks favorites of pension plans. Thus, in a way, oil company profits could help subsidize pension plans, as well.

Now, because of depletion, we have reached a situation where oil companies, and in fact most companies, are unprofitable. Companies and governments keep adding debt at ever lower interest rates. In fact, the tradition of ever-increasing debt at ever-lower interest rates goes back to 1981. Thus, we have been using debt manipulation to hide energy problems for almost 40 years now.

We need a way to counteract this trend toward ever-lower returns. Some people talk about “Energy Return on Energy Investment” or EROEI. I gave an example in dollars, but a major thing those dollars are buying is energy, so the result is very similar.

I think researchers have set the “bar” far too low, in looking at what is an adequate EROEI. Today’s wind and solar don’t really have an adequate EROEI, when the full cost of delivery is included. If they did, they would not need the subsidy of “going first” on the electric grid. They would also be able to pay high taxes instead of requiring subsidies, year after year. We need much better solutions than the ones we have today.

Some researchers talk about “Net Energy per Capita,” calculated as ((Energy Delivered to the End User) minus (Energy Used in Making and Transporting Energy to the End User)) divided by (Population). It seems to me that Net Energy per Capita needs to stay at least constant, and perhaps rise. If net energy per capita could actually rise, it would allow the economy to increasingly fight depletion and pollution.

Conclusion: We Need a New Very Inexpensive Energy Source Now

We need a new, very inexpensive energy source that buyers will willingly pay a disproportionately high price for right now, not 20 or 50 years from now.

The alternative may be an economy that does poorly for a long time or collapses completely.

The one ray of hope, from a researcher’s perspective, is the fact that people are always looking for solutions. They may be able to provide funds for research at this time, even if funds for full implementation are unlikely.

This entry was posted in Financial Implications 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.

2,885 thoughts on “Fossil Fuel Production Is Reaching Limits in a Strange Way

    • Weak demand + a colossal and unstable bubble of corporate debt sounds like a bad combination.

      “According to a UNCTAD report, corporate debt bubble might explode and cause another global financial crisis, especially in the post COVID-19 economy when many companies will face heightened financial stress.

      “It said that the most immediate areas of concern lie in the shadow banking system that had been ignored by the post-2010 financial regulations.”

      https://www.businesstoday.in/current/economy-politics/75-trillion-global-corporate-debt-bubble-unctad/story/419608.html

      • As the article says, “The non-financial corporations indebtedness stood at $75 trillion globally, up from $45 trillion in 2008.” There has been a huge increase in indebtedness by the companies which are in the worst shape financially. There is a substantial chance that this debt will explode.

      • true.

        similar in China, which is on the leading edge of the lockdown/unlock curve.

        they locked first, then unlocked first, and the result was weak demand domestically.

        (irrational) fear has permanently changed the behavior of many consumers.

  1. Carbon

    6 protons
    6 neutrons
    6 electrons

    The building blocks of life.
    Black Magic.

      • Coal is the inexpensive to produce fuel. It created a huge number of jobs at the same time. There was suddenly a concentration of jobs and wealth in the same area. It suddenly made sense to pave the roads to the mines, something that hadn’t been possible before, because farming did not provide the same kind of concentration. The availability of the roads allowed businesses of other kinds to flourish.

        The availability of coal allowed homes to be heated without deforesting the neighboring land. It allowed many businesses to form, particularly smelting metals. Suddenly machines of many kinds could be made, inexpensively.

        As far as I can see, it is the average cost of energy production that is important. Or perhaps it is the average EROEI. Without coal at a disproportionately high EROEI, it is not possible to keep EROEI up high enough (or average energy price low enough).

        Coal still tends to be the cheapest fuel. China allowed the world to rapidly ramp up its coal use. Unfortunately, coal extraction has been on a bumpy plateau since 2012. This is a big reason the world is doing so poorly now. The cost of coal extraction (plus shipment to the areas where it is needed) has risen too much, relative to the wages of workers.

        It is lack of growth in per capita coal consumption, as much as anything, that is causing growth of the world economy to collapse.

        https://gailtheactuary.files.wordpress.com/2020/08/per-capita-energy-consumption-by-type.png

        • I also believe that safety standards in Chinese mines were very poor, resulting in many injuries and deaths: in the West they rose considerably after WW2, making mining even less profitable.

        • You are correct. The overall numbers don’t tell the whole story. We need to subtract the amount of energy used to acquire, transform, and transport it to the end user.

          • Right! That has been growing as well. New coal fields are being developed in the north of China, in Inner Mongolia and perhaps other places. The cost of transportation is higher from the more distant location, even if the mines are less exhausted.

            • That Chinese next gen coal is transported as electricity via new HV links across the desert not as coal rail cargo. But obviously it’s another layer of extra expense to build these towers/connectors..

            • Most likely it is buried HVDC cables.

              The problems with HVDC isn’t the cables, rather the inverters. But those issues is now history.

        • Well, to be fair/historically accurate, during the pre-coal era some important stretches of roads had been actually paved in stone, for postilions, key mil routes, key AG routes (to granaries-mills etc..)
          Obviously an network on minuscule scale in comparison to later ages, yet again there were fewer humans and overall econ throughput as well..so..

        • Speculation: what about the coal seams under the shallow sea shore bed.. ? One could imagine something like the Muskianic Boring Co. system of tiny prefab tunnels adapted for such automatic retrieval of coal and or even better = burning it in situ based on modular power plant buried there (oxygen in – electric cable out), perhaps it won’t be much more expensive say than offshore natgas.. after some initial splash down of few $B/T ..

          ps I’m expecting IP licensing fees for this scheme, lolz..

          • Perhaps you jest–hard to say

            but maybe I’ve missed some recent development in technology, but i was under the impression that electric power output from coal required the interim media of steam to make it happen?

            • The in situ burners produce syngas that can be further processed to light hydrocarbons on offshore coal rigs.

              It’s not rocket science. The Germans produced diesel and gasoline from coal during WW2. The same with SA during apartheid. In fact Sasol still produces syngas at their facilities.

              https://youtu.be/75cVPG78eD4

              The challenge is to recover the heat produced and use that to power near by infrastructure and the rigs themselves by steam turbines.

            • I think you still miss the point Kowalienien

              Coal gas or oil have one thing in common, they will burn and give you direct heat, but all need an intermediary to do more than that

              I think there are only 2 prime intermediaries (happy to be corrected here)

              1 steam in boilers
              2 controlled explosion in IC engines

              Both give the necessary explosive forces to gain rotary motion

              other FF byproducts we can ignore, they too depend on the above one way or another

              without rotary motion, FFs might as well be left in the ground for all the use they are

            • No, Norman.

              Syngas contains energy.

              The in situ “burns” with a strongly “reduced” flame, basically producing an incredibly hot “carbon” gas/plasma ready to react with water as it is injected together with the oxygen producing methane and other light hydrocarbons from the reactions.

              The light hydrocarbons can be burned to produce steam or propel a vehicle.

              The excess heat from the process can power the coal rigs and power generation using steam turbines and/or
              Stirling engines.

    • 6 protons
      6 neutrons
      6 electrons

      so 666, that number of the beast created by the superstitious minds of unscientific ancient men.

      • Robert Graves suggests that the number was a political slogan, DCLXVI, addressing the Emperor Nero’s persecution of the Christians. DC stands for Domitius Caesar (Nero’s original name was Lucius Domitius).

        Graves, “The White Goddess”, Ch XIX The Number of the Beast. I offer no comment on the plausibility of this suggestion.

        • Yes, this is a popular theory, but the number also has a couple of OT antecedents, or three antecedents if you count the creation story, where man was created on the sixth day (“it is the number of [a] man,” there being no indefinite article in Greek). In the OT, both 666 and 66 are associated with monetary metals, and in the Revelation with buying and selling. These two interpretations are not mutually exclusive.

          https://penelope.uchicago.edu/~grout/encyclopaedia_romana/gladiators/nero.html
          It therefore is not surprising that Nero was perceived by Christians as a persecutor of their faith. For Eusebius, he was “the first that persecuted this doctrine” (II.25.4); for Tertullian, “the first emperor who dyed his sword in Christian blood, when our religion was but just arising at Rome” (Apology, V); for Sulpicius Severus, “he who first began a persecution” of Christians (Sacred History, II.28).

          After Nero’s suicide in AD 68, there was a widespread belief, especially in the eastern provinces, that he was not dead and somehow would return (Suetonius, LVII.1; Tacitus, Histories II.8; Dio, LXVI.19.3). Suetonius relates how court astrologers had predicted Nero’s fall but that he would have power in the East (XL.2). And, indeed, at least three false claimants did present themselves as Nero redivivus (resurrected). The first, who sang and played the cithara or lyre and whose face was similar to that of the dead emperor, appeared the next year but, after persuading some to recognize him, was captured and executed (Tacitus, II.8). Sometime during the reign of Titus (AD 79-81) there was another impostor who appeared in Asia and also sang to the accompaniment of the lyre and looked like Nero but he, too, was exposed (Dio, LXVI.19.3). Twenty years after Nero’s death, during the reign of Domitian, there was a third pretender. Supported by the Parthians, who hardly could be persuaded to give him up (Suetonius, LVII.2), the matter almost came to war (Tacitus, I.2). Such fidelity no doubt can be attributed to the magnificent reception (and restoration of Armenia) that Tiridates, the brother of the Parthian king, had received from Nero in AD 66 (Dio, LXII.1ff).

          As popular belief in Nero’s actual return began to fade, he no longer was regarded as an historic figure but an eschatological one. The Martyrdom and Ascension of Isaiah dates to the end of the first century AD and is one of the apocalyptic pseudepigrapha of the Old Testament. In an interpolation, the so-called Testament of Hezekiah, Isaiah prophesies the end of the world, when Beliar (Belial) the Antichrist will manifest himself as the incarnation of the dead Nero.
          ——————————————–
          And more interesting stuff. An expectation that Nero would return from the dead to persecute the faithful one more time before the end of the world lingered for a few centuries in various Christian writings, although not every one agreed, St. Augustine remarking about this idea: “But I wonder that men can be so audacious in their conjectures:”

          Augustine comments in The City of God on II Thessalonians 2:7.

          “Some think that the Apostle Paul referred to the Roman empire, and that he was unwilling to use language more explicit, lest he should incur the calumnious charge of wishing ill to the empire which it was hoped would be eternal; so that in saying, ‘For the mystery of iniquity doth already work,’ he alluded to Nero, whose deeds already seemed to be as the deeds of Antichrist. And hence some suppose that he shall rise again and be Antichrist. Others, again, suppose that he is not even dead, but that he was concealed that he might be supposed to have been killed, and that he now lives in concealment in the vigor of that same age which he had reached when he was believed to have perished, and will live until he is revealed in his own time and restored to his kingdom. But I wonder that men can be so audacious in their conjectures” (XX.19.3).
          SNIP
          “Here is wisdom. Let him that hath understanding count the number of the beast: for it is the number of a man; and his number is Six hundred threescore and six” (13:18). The riddle seems to have been forgotten almost as soon as it was written and not solved until 1835, seemingly because the number was assumed to be in Greek or Latin—and not Hebrew.

          In ancient Greek and Hebrew, letters also represented numerals (as in Latin), their values assigned according to the order of the alphabet, alpha and aelph, for example, having the numerical value of 1. By adding these values, words could be represented as the sum of their numbers. This literation of numbers and numeration of letters was known as isopsephia by the Greeks and gematria by the Jews (which, in cabalistic practice, has been used to interpret Hebrew scripture). Suetonius relates an example of isopsephia when he records that graffiti appeared in both Greek and Latin lampooning Nero after he had his mother killed: “A calculation new. Nero his mother slew” (Life of Nero, XXXIX.2). In Greek, both “Nero” and “killed his own mother” have the same numerical value (1005). And, to be sure, it is intriguing that 666 encodes the name of Nero in such a way when Revelation, itself, was written in Greek.

          If the Greek spelling of Nero Caesar (Neron Kaisar) is transliterated into Hebrew (nrwn qsr), the numerical equivalent is 666—although it should be remembered that this number was not represented as a figure but as letters of the alphabet or written in full. In other words, the “number of the beast” was not expressed as “666” (indeed, discrete Arabic numerals would not be invented for another five hundred years) but by the phrase hexakosioi hexekonta hex or the numerical values of the Greek letters themselves, chi (600), xi (60), and stigma (6).

          But what is curious is not so much that 666 can be decoded to signify Nero but that the name is encoded in this particular number, especially since it could have been represented as readily in other ways. It only is when the words are transliterated from Greek into Hebrew and then calculated that the numeration adds up to 666 (nrwn qsr, 50 + 200 + 6 + 50 + 100 + 60 + 200). Even so, this is an alternate spelling, a letter being transliterated in “Neron” (nrwn instead of nrw) but not in “Caesar” (qsr instead of qysr). Although these forms do appear in the Talmud and an Aramaic scroll from Qumran, they no doubt complicated the solution to the puzzle.

  2. Gail,
    You have much on your plate, should you be curious it might be nice to know how much of that tremendous increase in the US defense budget went for the new space defense corps.

    Dennis L.

    • Found it, almost a line item, laughing.

      The $15.4 billion request continues to fund programs and activities that were managed by the Air Force but the budget was developed with strong input from the U.S. Space Force, said Chief of Space Operations Gen. John Raymond.

      “I personally worked on this budget very closely in both of my hats as commander of U.S. Space Command and chief of the Space Force,” Raymond told SpaceNews Feb. 10.

      “The mechanics of this budget was such that the money was still in the Air Force because we hadn’t stood up the Space Force yet,” Raymond said. “But we shaped this budget.”

      The $15.4 billion does not include about $800 million in personnel costs which for now remain in the Air Force budget because the Space Force does not yet have a separate accounting system, said an Air Force spokesperson.

      Approximately 16,000 Space Force personnel — except for Raymond, the chief of the Space Force — are airmen who previously were part of the Air Force Space Command and have been assigned to the Space Force. An estimated 6,000 airmen will be asked to leave the Air Force and transfer to the Space Force over the next year..

      Sorry, not able to link easily on this computer.

      Dennis L.

    • david, they are going to have 5G when they get to the moon, what could go wrong?

      Your note on C-19, thanks, I don’t always understand dear and philosophy, but I have will, don’t give up and always have hope – mankind will push on, war of attrition, there are 7B of us, we will just out last the damn thing.

      Dennis L.

      • from the view of evolutionary psychology, hope and optimism are a part of the evolved human mind.

        it’s definitely a survival benefit, and it’s not random that minds are biased towards hope/optimism.

        I have had a very good 2020, and I have some solid hope that 2021 will be as good.

        • I was in a very dire financial situation for several years. An important investment started to pay back in february. Lockdown hitted it but I’m still better than before. So I am also amongst the very few to live a somewhat happy 2020

          I saw last night US debate, btw, and I’m glad to see both contenders behaved civilizedly this time (I have usd savings, not happy with the US going civil war)

          Vaccine trials keep going, not impossible 2021 will be even better than 2020 , which was -financially speaking- much better than 2019

        • Certainly, many have not been touched by this ill-wind – not yet at any rate.

          Unfortunately, those who have not had a very good 2020 will probably have little sympathy for your success, and still less as they find themselves permanently impoverished, and that is going to be a major political and social fact.

          • Xavier, you’re always the voice of reason. Here the gov has just inaugurated an agency dedicated to fight “fake news and hate”, because not only they want to promote their truth but because they know so many people are starting to hate them

            Of course I publicly complaint about the general situation and target the gov (have written a couple of articles about their management of the pandemic) . In fact, people that are doing badly like me very much

      • There are certainly a lot of human bodies to get through, and something left of the ecosystem to continue to plunder and destroy for a little while yet.

        As Mao once said in a speech:

        ‘Even f the US kills millions of us, there will still be many more millions left!’

        But in what state, not only physical but mental, is the question……

    • The article says,

      . . .even among hospitalized patients, the very worst cases, the COVID-19 mortality rate since the beginning of the pandemic has plummeted from 25.6% to 7.6%. Even better, the drop in mortality is shared across all age groups.

      This is a 70% drop in mortality, at one large system.

      • Gail, the article is behind a paywall, so these are merely suggestions. There may be several reasons for the drop in mortality. (a) yes, the virus really is getting weaker; (b) our immune systems are catching up with it; (c) the doctors are providing better treatment; (d) the doctors are no longer providing lethal treatment. Your guess is as good as mine, but my take is that the effect is holistic, ie caused b several factors interacting.

        • The article also mentioned that issues related to your ” the doctors are no longer providing lethal treatment.”

          When the hospitals were attempting to operate at 100% of capacity, things did not go well. They needed to bring in new people to help. They needed to transfer sick patients to other facilities.

          I think part of what is happening is doctors are understanding better how to treat the various symptoms. Steroid treatment is especially helpful, since it is cheap and readily available, even on an outpatient basis. I hope some citizens are getting smarter and taking vitamin D. That would tend to reduce the mortality rate as well.

    • Steve Forbes need not worry version 4 of the virus is already being spliced together.

      “Hope is for suckers.”
      — Alan Watts

  3. Europe, inc. UK seems to be struggling with c 19. China eradicated it months ago but Europe sought to just ‘restrain’ it. Perhaps the current increase in c 19 is due to changes in the weather, with more people mingling indoors with no ventilation? And less vitamin D from the sun?

    I currently keep windows ajar with no heating on and I have adapted to a lower temperature. I find that the body soon gets used to 14 c; all feeling of temperature is gone after a few days. The key is to stay out of drafts which lowers skin temperature and makes the body aware of temperature. Long socks and a long, heavy robe help no end, no uncomfortable trousers needed.

    Offices and rail networks must be absolutely ghastly, especially with the heating turned up and people breathing germs. ‘Hell on earth’.

    C 19 is getting milder and fewer are passing of it. Vaccines are coming through. It seems a shame that European countries did not do a China and eradicate it in the first place, the damage to the economies will be all the greater for it. China does have a higher average IQ, maybe the politicians too?

    I would have to award the Tories 0 out of 10 for their handling of it. They left the borders open and allowed it to spread throughout the entire country. They did not even try to avoid it or to eradicate it. It has been an extremely poor show by the politicians. UK has practically the worst passings per capita and the worst damage to the economy – in the world. The place is a disaster area. Spain may be slightly worse.

    > Europe on red alert: Number of daily C ovid cases across continent DOUBLES to 200,000 in 10 days, with many countries seeing highest-ever infection levels

    Europe first reported 100,000 cases in a day on October 8, although the true figures in the spring were likely far higher than the official peak of 38,000 on April 4 (current infection rates are shown on a map top right, with rates in some of the worst-affected countries including the Czech Republic and Belgium shown on the graph left). Cases have continued to climb exponentially with France, Germany, Italy, Austria, the Czech Republic and others setting new 24-hour records in recent days. Europe as a whole is reporting more cases per capita than the United States for the first time since America’s outbreak began to spiral out of control in March (pictured bottom right, a patient is treated in ICU near Rome on Thursday).

    https://www.dailymail.co.uk/news/article-8871399/Number-daily-coronavirus-cases-Europe-doubles-200-000.html

    • I don’t quite feel the way you do about COVID. I don’t think that anyone can really defeat COVID. It is part of what pulls the world economy toward collapse. Our energy consumption per capita is falling. One of the things that we lose is the ability to fight COVID cases.

      This is a chart of EU and US cases relative to population. It is similar to one of the charts you linked to, except updated one more day. EU cases have been, and continue to, increase rapidly day by day, compared to the US and compared to where they were in the prior peak.

      https://gailtheactuary.files.wordpress.com/2020/10/eu-and-us-new-confirmed-covid-cases-to-oct.-22.png

      This is a chart not shown: New Deaths per Day, Normalized by Population, for the EU and the United States.

      https://gailtheactuary.files.wordpress.com/2020/10/eu-and-us-new-covid-deaths-oct-22.png

      You can see that EU deaths are climbing, but US deaths are not.

      I attribute this to a change in “mix” in the US. In the summer, most of the cases were in the US South. The US South has disproportionately more Blacks, as a share of the population. Blacks have low vitamin D levels. As a result they death rates is whole lot higher than for Whites. I have showed this chart before, showing vitamin D levels in the blood in the US by group:

      https://gailtheactuary.files.wordpress.com/2020/04/vitamin-d-status-of-3-us-ethnic-groups.png

      Chart originally from Schleicher, R. L., Sternberg, M. R., Lacher, D. A., Sempos, C. T., Looker, A. C., Durazo-Arvizu, R. A.,…Johnson, C. L. (2016). The vitamin D status of the US population from 1988 to 2010 using standardized serum concentrations of 25-hydroxyvitamin D shows recent modest increases. Am J Clin Nutr, 104:454-461. ajcn.nutrition.org

      • The UK government attributes the higher fatality rate among ethnic minorities here to geographical and socio-economic factors.

        They outright deny any genetic factor even though the frequency of the Neanderthal DNA sequence on chromosome three, that has been shown to be the main genetic factor that contributes to severe c 19 outcomes, is much higher in South Asian populations than in Europeans. It is virtually absent in Africa and East Asia. Africans and Europeans have genetically different immune systems, which determines how they respond to infections. The European immune system has been modified through Neanderthal admixture.

        They also disregard vitamin D as unclear.

        They have reviewed UK studies and my guess is that they do not have a clue what they are talking about. My guess is that they have discounted any genetic factor because zero work has even been done on it in UK. Also they have an ideological bent to deny racial differences. It is just another failure of the absolutely useless Tory government.

        > Ethnic minorities have a higher risk of catching and dying from Covid-19 than whites because of their jobs and where they live, a Government report has concluded.

        Number 10’s Race Disparity Unit reviewed the findings of all major UK studies probing the disproportionate effect coronavirus has had on people from black and ethnic minority (BAME) backgrounds.

        It found that a range of socioeconomic and geographical factors were to blame for the discrepancy, with numerous studies showing that death rates are up to three times in BAME people. But the report said a part of the excess risk remains unexplained for some groups.

        https://www.dailymail.co.uk/news/article-8863025/Ethnic-minorities-likely-catch-die-Covid-19-jobs-geography.html

        • This is a link to a Nature article, talking about an analysis of COVID-19 deaths in the UK. Since the analysis is in the UK, we presume that income does not affect access to health care. https://www.nature.com/articles/s41586-020-2521-4_reference.pdf

          The article looks at a large number of potential influences in COVID-19 deaths, including as somewhat disguised socioeconomic factor called “IMD Quintile.” Basically, did the person live in a high income or low income area?

          The article computes hazard ratios on two bases:

          (1) Adjusted only for age and sex
          (2) Adjusted for all factors, including age and sex, socioeconomic factors, obesity, diabetes, hear disease, cancer, liver disease, and several other conditions.

          This is what the output looks like, including 95% confidence levels:

          https://gailtheactuary.files.wordpress.com/2020/04/factors-associated-with-covid-19-nature-williamson.png

          As you can see, the Black ethnicity comes out ahead of Southeast Asian, Mixed, and Other, on both bases. Adjusted only for age and sex, the ratio is 1.88 to White, which is the base class. Fully adjusted the ratio is 1.48. I know that in the US, Black women are fairly often obese, which may be part of the reason for the death rate, when looked at only by age and sex.

      • Gail wrote: “I don’t think that anyone can really defeat COVID.” — Check out what New Zealand has accomplished.

        Or Japan: Japan does have far more cases than NZ (adjusted for pop size), but deaths are very low. This is attributed to a culture of mask wearing and cleanliness, which means that most people who get exposed are exposed to a very low initial load of the pathogen. That gives their immune system time to ramp up its defenses before the virus multiplies to a dangerous level.

        Bat viruses tend to be tough to deal with when they first cross the species barrier. Bats fly all night while feeding, and all that exercise generates a lot of free radicals, so bats have evolved to generate a lot of antioxidants to fight the free radicals. (That is why bats live more than 10 times longer than rodents of similar size.) But all these antioxidants also make it tough for viruses to survive in bats, so the viruses evolve in an biological arms race with their bat hosts. But then if they jump to humans, we don’t have the bats’ superior bat defenses so bat viruses run wild in man, at least until the more vulnerable humans die off and the more resistant humans form the basis of the succeeding human gene pool.

  4. Well written article and indeed ☺️ very strange and amazing how the global system has held together in a such a manner of hook and crook.
    I came across this by accident…the Visual Capitalist and it has incredible graphic content
    that I know Gail will find useful in her research and essays….

    https://www.visualcapitalist.com/

    Thank you for your work and all the contributors to this forum. Been mainly on YouTube with my channels there and a couple of other sites.
    Oh noticed this article…the solution to pollution is dilution…

    Japan is planning to release millions of gallons of treated radioactive water from the destroyed Fukushima nuclear plant into the Pacific Ocean according to Kyodo News.
    Since a massive tsunami in 2011 destroyed Fukushima Daiichi nuclear reactors, more than one million tons of contaminated water have been collected with about 170 tons of new radioactive wastewater being processed per day. But storage tanks for the wastewater are reaching their limits.

    I agree …we ARE reaching out limits in every conceivable way…😜

  5. “While it is hard to compare one crisis to the next, several months of pandemic-era data now show patterns starting to emerge.

    “A clear trend has been public capital markets that have asserted a fresh level of dominance in swaths of U.S. debt finance. That means more of the upside — and downside risks — of lending to the U.S. economy during the pandemic rests in the hands of investors, retirement funds and pension plans.

    “Meanwhile, banks over the past eight months have shown a hesitancy to lend…”

    https://www.marketwatch.com/story/heres-the-2008-rerun-playing-out-at-big-banks-during-the-pandemic-11603396121

    • I can understand why banks would be hesitant to lend. Retirement funds, investors, and pension funds are kind of stuck. They have to put their money somewhere. Of course, if it doesn’t pay back, there will eventually be a problem, a person would think.

  6. “One in five New York City tenants did not pay rent in September, by one estimate, and there is growing concern of “an eviction tsunami.”

    “…“New York has been a tale of two cities — not just in terms of the pandemic, which is known, but also with rent affordability,” Ms. Wu said, noting the dearth of options on the lower end of the market.”

    https://www.nytimes.com/2020/10/23/realestate/nyc-housing-future.html

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