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

  1. Bad news again. I have always thought that the fatality rate was not relevant, there are much more important issues with SARS-Cov-2.The following link persuades me I was right:
    according to the article “In a young, low-risk population with ongoing symptoms, almost 70% of individuals have impairment in one or more organs four months after initial symptoms of SARS-CoV-2 infection. There are implications not only for burden of long COVID but also public health approaches which have assumed low risk in young people with no comorbidities.”

    • More fear mongering and F.U.D. (Fear, uncertainty, doubt) to get the Sheeple to crave forced injections. The CDC’s and the WHO have been downgrading their numbers. But here in the US there have been 218,000 deaths out of 331 million people. Run the numbers and CV19 looks more like the Flu.

      • The economy will probably collapse before a vaccine is ready

        Hence no reason to fear the virus, and no reason to fear the vaccine… Life’s good 😉

        • I fear the virus, for the reasons I have shown above. I can survive the collapse in a good shape, I don’t bet the same with the virus. And the vaccine is pure bullshit.

            • Fear is one of the best evolutive advantages for many species, including humans.
              When faced with a danger, fear makes you cautious, and move away from danger. This is how you survive.
              I guess the fear Franck Herbert talks about is not exactly the same idea, maybe rather anguish or trouble.
              We miss words to express so many different notions.

            • Those who let fear get the better of them often turn into nervous wrecks. It could be fear of the extremely dangerous or it could be little everyday things that 95 percent of the population take in their stride. Doctor’s offices and mental homes are full of them.

              It’s all about maintaining a good balance between the sympathetic and the parasympathetic thingy. Too much fear will tend to upset it and turn people into masses of quivering jelly.

              Most people are at least weary of fierce wild animals such as lions, tigers or bears, that have the ability to savage a person to death. Others panic at the sight of a mouse, a spider, a centipede or a cockroach in the house. My contention is that COVID-19, if it exists at all, is in terms of lethality more comparable to a mouse than to a tiger.

              By contrast, an economic collapse, while it may not frighten you, has the potential do do as much damage to human life and as a large tsunami. The prospect scares the willies of me.


            • People don’t understand how close we might be to collapse. Without electricity (except that from batteries) today, I am reminded how quickly things could “go south.”

            • Tim, the economical collapse does not scare me because we are all in together and there will be many losers, but, I hope, a few winners. Where I live I guess I have better chances to go through the collapse a better way than many other people – those who live in town or do not have supply of food or water very closed to their home.
              If necessary I can go hunting in the woods (no kidding!), or buy milk, eggs, vegetables to my local farmers. The river is very closed and the water is clean (coming from the mountain). I also have a garden which is really important in the times coming.

        • We’ve been talking about collapse for too long and it still hasn’t happened. Fast Eddy was disappointed that Covid 19 changed nothing and he left again. We had a poster from Italy who thought that this was a sign of the Great Tribulation. And yet no great tribulation has taken place.

          I prefer to deal in the here and now. So that’s why I continue to address the sham and fraud Covid 19 has been turned into. Because something tells me we will be dealing with “forced injections” long before we see a collapse. The concern is that those forced injections will not be effective or safe and if you don’t comply the governments around the world will make life so difficult for you by cutting off your freedom of movement.

          Thankfully we are beginning to see more civil unrest as the new lockdowns are making citizens from around the world pushback against the authorities.

          • Looking at abandoned London, I wouldn’t say that “Covid-19 changed nothing”… Maybe people just have short attention spans (certainly true of FE, I’d say).

            What’s most disturbing and indicative of your “forced injection” concerns is the fact that the less deadly the disease supposedly is, even by the gov.s’ own flawed metrics, the greater the insistence on lockdowns and other draconian measures, with no relief in sight.

            • No, Fast Eddy was Wishing upon a Star for a full blown collapse so we can all live out the movie “The Road”. He thought Covid 19 would push everything over the edge and bring on “The Collapse”. It didn’t happen in fact the Stock Market went back up, the economy is still functioning, people are still buying smartphones and online sales are up. In my area stores are open including restaurants.

              Things have changed NO doubt in London as they have in New York and Miami but the lights are still on, people are buying cars and the hundreds of nuclear power plants are still operating. Still no collapse.

            • Or perhaps Fast Eddy concluded that the planners had opted for an attempted controlled demolition of the present economic system, then he inferred that a techno-fascist regime would follow, and thought it best to disappear from the radar. Just a guess.

            • Rodster, again I think there may be miscomprehension regarding the time scale. The Titanic was struck fatally in a relative instant, but took a number of hours to sink.

            • >>No, Fast Eddy was Wishing upon a Star for a full blown collapse so we can all live out the movie “The Road”.

              Yes he was, he told us often enough. That was because he saw the human race as trashing the planet to such an extent there is a chance we could end life on Earth. And the sooner we are gone, the better for the rest of life on Earth.

              >>He thought Covid 19 would push everything over the edge and bring on “The Collapse”

              The collapse has only just started. In the USA and UK, millions of small and medium sized companies, and some big companies (airlines, cruise companies, hotel chains) have gone / are going out of business. The principal reason is lockdowns. And what are our political leaders more or less universally giving us more of – lockdowns.

              2021 is going to be a very rough year.

      • Rodster, you don’t seem to understand what I am saying.
        Nonetheless I don’t think a vaccine would ever work and even then I would do all I can to avoid the injection.

        • I don’t believe we will have forced injections, the people will not accept that, they are rioting already from lack of jobs etc.

          OTOH we might see vaccination as a prerequisite to be able to apply for certain jobs, to be able to get on an airplane and so on. Hopefully the ramifications of all these lockdowns will become apparent soon enough that we will have to say OK, we must start living again and not hide from an undefeatable virus.

          • “OTOH we might see vaccination as a prerequisite to be able to apply for certain jobs, to be able to get on an airplane and so on.”


            If you don’t accept the BS injections, you can’t get a drivers license, can’t leave your house, can’t get on a plane, can’t visit your doctor or dentist, can’t get a job etc. As i’ve mentioned in a previous comment, if you don’t accept the injections by the Puppet Masters they will make your life miserable.

            • After what we’ve seen happening in Western Europe and the Anglosphere, I wouldn’t put anything past these well-intentioned health totalitarians. I’m afraid it’s all over for the West. Democracy is a total sham, degraded and disparaged by the very people we voted into office.

              At this point in time, we can no longer laugh off Godfree Robert’s claims about China being a nicer camp in which to be concentrated in!

              I would say more about that, but I worry that it might negatively impact my social credit score.

              George Orwell got quite a lot right in Nineteen Eighty-Four. I believe he was basically writing a satire caricaturing life in the UK in the late 1940s, But our current Puppet Masters have taken it as a textbook and turned Orwell’s tragic dystopia into farce.

              At times like this, I just drift away. To my tropical fantasy. Living on coconuts growing on the trees. Sometimes I wish I could just drift away. Yes, the Kings were very prescient as well as very satirical too—bless ’em.


    • Continuing fatigue doesn’t sound good. The likely possibility that this is a lab-made virus, funded in part by Fauci, needs to be further investigated.

      • I totally agree; The hypothesis of a lab-made virus that was called “conspiracy theory” at the beginning now seems accepted by most scientists including the french CNRS
        In this interview Etienne Decroly explains how easy it is to create a virus from genetic data. Any of his student is able to do this and they don’t even think about consequences doing it in theorical exercises.
        Really worth reading article.

        • He says that there is a wide gap in the evolutive chain between known wild bat coronaviruses and SARS-COV-2 (genetic, geographical and ecological). And that many leaks occured in the last years

      • People have been suffering from chronic fatigue syndrome (CFS) for decades. According to the Mayo Clinic,

        CFS is a complicated disorder characterized by extreme fatigue that lasts for at least six months and that can’t be fully explained by an underlying medical condition. The fatigue worsens with physical or mental activity, but doesn’t improve with rest.

        Other characteristic symptoms include:

        Sleep that isn’t refreshing
        Difficulties with memory, focus and concentration
        Dizziness that worsens with moving from lying down or sitting to standing
        This condition is also known as myalgic encephalomyelitis (ME). Sometimes it’s abbreviated as ME/CFS. The most recent term proposed is systemic exertional intolerance disease (SEID).

        The cause of chronic fatigue syndrome is unknown, although there are many theories — ranging from viral infections to psychological stress. Some experts believe chronic fatigue syndrome might be triggered by a combination of factors.

        There’s no single test to confirm a diagnosis of chronic fatigue syndrome. You may need a variety of medical tests to rule out other health problems that have similar symptoms. Treatment for chronic fatigue syndrome focuses on improving symptoms.

        • Probably. Or I could turn the engine on and use the power from the gasoline powered engine to charge it. So there are ways to fix the problem.

          I hope the problem is fixed in hours rather than days.

          • sOUNDS LIKE THAT WOULD WORK AS IT GENERALLY DOES WHEN PEOPLE ARE DRIVING AND have their phones plugged in to keep the charge up. I can’t say where in your car the plug in port would be, but there must be many handy people in this group who would know.

            • I drove my car and got the battery on my phone charged back up to 62%. So I can comment again. I also saw a truck starting work on the downed power lines and downed tree. Maybe power will be back in not too long.

              My neighborhood seems to have been harder hit than some other neighborhoods I saw. Businesses mostly seem to have power. We are a very long way from where the storm originally hit, so I didn’t expect much of an impact. Atlanta is a long way from the coast and has quite high an elevation.

            • It would be useful for people to keep their car gas tanks as full as feasible. From here on out, we can expect outages at any moment, and the car might be a helpful energy source in the interim.

            • The amount of fuel in gas tanks does make a surprising amount of difference, in terms of amount stored.

              Weinstein’s the Atlanta area have had problems with gasoline shortages in the past, when there were problems with refineries being shut down (lack of electricity). The pipeline to Atlanta would not get filled. Politicians would say that price gouging would not be tolerated. This meant that there were long lines at gas stations. Some people stayed home from work and other activities for lack of gasoline.


  2. “Financial crisis fashion: the boom in Lehman Brothers merch: Shirts, hats and ‘banker bags’ from now-defunct companies are fetching significant sums…

    “Today, sporting a Lehman duffel bag says you’ve got a handle on your pre-2008 Wall Street history and an evolved sense of irony. It also communicates status to those in the know, showing that you have something rare and have probably parted with a few hundred for it.”

  3. Re: Tories post-Brexit immigration policies are now published

    The Tories have published their new immigration policies, with minimal media attention. Any cap on numbers has been scrapped. The salary threshold has also basically been scrapped.

    Brexit allows the TP to ‘take back control’ of its migration policy. However it was never realistic, as some Brexit supporters imagined, that TP (let alone LP) would use the new powers to reduce immigration.

    The British state is a capitalist state and it exists to represent the interests of organised capital. TP agreed with CBI earlier this year to drop any caps and to reduce the lower salary threshold, and the policy is now official.

    CBI wants as many incoming workers as the capitalist economy can absorb, and it has entirely got what it wants.

    The UK is not a predominantly high skill economy (none are) and the expansion of the economy depends also on the expansion of the supply of low and medium skill workers. Most new jobs in UK, and in other ‘mature’ capitalist economies, are not high skill.

    The capitalist economy must always grow GDP in order to maintain profitability and to service the structural debt. The capitalist state relies, especially post-2008, on more workers to grow GDP as productivity growth is collapsed.

    In the post-imperialist period, that means more domestic workers, as the fall of the British Empire cut off the supply of colonial labour forces to British capital. Post-Brexit, more workers will come from outside of Europe rather than from EU and indeed that is already the trend.

    The inward migration rate to UK is currently over 700,000 per annum (350,000 net) and TP has indicated that it intends to maintain that level for decades to come.

    It is all entirely ‘logical’ thus far.

    One problem is that of ‘democracy’.

    It is becoming ever starker that bourgeois ‘democracy’ is a fake democracy. TP broke three successive GE manifesto pledges to reduce migration to the tens of thousands, and it is now on its second GE pledge to ‘reduce it overall’, which cannot be taken seriously. CBI gets what it wants.

    TP and LP get together at GEs to pretend that TP is anti-migration and that LP is especially ‘for’ it – to split the votes between them. In reality, they are both capitalist state parties who maintain the capitalist economy.

    In a sense, it is ‘logical’ too that bourgeois ‘democracy’ is a ‘fake’ democracy. It follows from the bourgeois ‘class basis’ of the capitalist state. It is what one would expect, however ‘cognitively dissonant’ it may be with how bourgeois democracies present themselves.

    Also, they seem to have their fingers crossed that global capitalism will continue much longer. Gail has raised doubts about that.

    97% of the over-80s are still ethnic British (ONS). With 34% of school kids now of another background, and a collapsed domestic fertility rate of 1.57 per woman, it is clear that Britain is headed to a majority ethnic population, which is ‘logical’ to the capitalist economy in the post-imperialist period.

    Net UK migration targets & £35,800 salary threshold scrapped

    The UK government has abandoned its net migration targets and ditched the £35,800 minimum salary threshold for indefinite leave to remain (ILR), according to a report published by The Telegraph. New rules remove any remaining trace of Theresa May’s attempts to reduce net UK immigration numbers to the tens of thousands.

    Under the UK’s new, points-based immigration system – set to launch on 1 January 2021 – skilled migrants will no longer need to earn a minimum of £35,800 to be able to settle in Britain. Instead, the threshold will be lowered to £25,600. According to The Telegraph report, the new rule was ‘quietly slipped in’ and will take effect on 1 December 2020.

    The new rules will also allow so-called unskilled migrants, earning a minimum salary of £20,480 but accumulating enough points to allow for UK entry to fill job roles where there is a shortage of workers, to settle in the UK after six years and apply for British citizenship.

    The rule change was discovered by the Migration Observatory based at Oxford University, following a review of a 507-page rule book on the new UK visa and immigration system. The Migration Observatory described the change as ‘the final nail in the coffin of the net migration target.’

    Deputy director of the Migration Observatory, Rob McNeil, said: “They are acknowledging that the bluntest of all the instruments the government used to get to that target of tens of thousands has been kicked into touch.”

    Claims weaken immigration control

    The chairman of anti-immigration group Migration Watch, Alp Mehmet, slammed the rule change as ‘quite outrageous.’ He said: “It will weaken immigration control further and risks helping drive settlement beyond even the record highs of a decade ago. It will also reduce the incentive for employers to train British workers.”

    “To make matters worse, these major changes are being sneaked in through the back door with scant detail and a lack of advance warning.” Mehmet said….

    • “97% of the over-80s are still ethnic British (ONS). With 34% of school kids now of another background”.

      Most of those from ‘another background’ are actually Eastern European Christian white.

  4. This is to help Oh Dear understand the pitfalls of I.Q. measurement.
    Your are a smart guy, your I.Q. should be large enough to understand it.
    No hate, just some playful ribbing. Let’s not take ourselves too seriously.

    • Thanks, but one would have to review all of the literature. Even then there is no consensus.

      I actually have not stated any position on the ratio of genetic and social factors in IQ outcomes, so you may be making assumptions.

      If others want to debate that stuff right now, then that is up to them, but I am not really in the mood for it.

      Thanks, anyway.

      • I am amazed at how different the abilities of different people are, in directions that are not measured by IQ tests. Remembrance of names and events varies greatly, for example. I have a niece who, if given a date, can remember practically everything that happened on that date–what the weather was, what she was wearing, you name it. I know a woman who has a more or less perfect memory for names of people, even ones she met long ago, fairly briefly, and the names of children told to her once by parents.

        Concentration does not necessarily go with unusual ability to remember. A couple of people I know with outstanding memories have problems with concentration.

        Some people like to do things very precisely, in a very well ordered manner. Others have a real problem with organization.

        Some people can detect tiny whiffs of smells or tastes much better than others. Some people hear better than others. Some people see better than others. Some people are color blind, in different ways.

        I am sure that in the right circumstance, a particular unusual ability will come in handy. That is why “selection of the best adapted” works as well as it does.

        • Gail, your niece makes me think about a character in a short story written by Borges. It is called “Funes el memorioso”.
          In Funes case, that skill is encumbrent because Funes cannot think globally or conceptualize. He can see only details. A dog is not a dog, it is the yellow dog that was in the kitchen at 5pm for example.

          • There are good things and bad things about such a detailed memory. It certainly doesn’t help for generalization.

            I don’t have an exceptionally good memory. Names, in particular, I don’t remember well. But I can see patterns well.

    • I certainly do not have a religious or ‘moral’ position on IQ, as if one is a ‘good’ person only if one has a certain opinion on the matter.

      That sort of approach to science belongs in the Middle Ages along with hocus pocus and religious bigotry.

    • Jason, “There are some ideas so absurd that only an intellectual could believe them.”― George Orwell

      High-IQ world-citizens like Taleb are able to succeed wherever they go. They are poster children starkly in contrast to the “blank-slate” theory they pathetically promote. The fact that one of Taleb’s main listed arguments is “morality” gives away the game. The best science is bereft of morality and will follow outcomes and indications no matter where they lead or what they imply.

      It’s beyond obvious that different human cohorts (whether one calls them races, sub-species, clades, or whatever) have different innate characteristics, just as men and women have different characteristics, and different dog breeds have differing talents and temperaments from birth, primarily based on human intervention in their coupling. Certain human cohorts have the same current divergent level of violent criminal (or “criminal”*) behavior whether in their native countries or transplanted abroad with or without a slavery background. Magic Dirt is a lie. Every organism cultivates the environment around itself to favor its own way of being. Japanese knotweed changes the soil structure around where it grows. Humans are not different. Import the uncivilized and you will get uncivilization.

      *Look up Jacob Zuma, rape.

      It’s only in our modern era that a cynically-imposed religion of egalitarianism has arisen (for political and tribal motives of its own, imo, as if it could somehow be otherwise!), partially filling a vacuum left by the scientific challenges posed to traditional religions. In an age of gene-splicing, DNA-based medical therapies, and ancestry-tracing, we are supposed to believe that evolution operates upon all living organisms EXCEPT FOR HUMAN BEINGS. That—to me—is in no way different from my Rapture-Ready sister’s Christian fundamentalism averring humans are Absolutely Not Animals.

      There’s a great deal of hubris in casting aside 99.9% of the observations if not the judgments of history, including those of many serious thinkers on the topic who were trying to be fair-minded and scientifically observational. For people interested in generally-non-vituperative rational discussion of issues surrounding HBD (Human BioDiversity) I would recommend the Unz Review as a place to dip one’s toe.

      Decades of modern American racial experimentation has not (to any extent that I can see) resulted at all in any particular general uplift or improvement in blacks’ basic capacities to function in modern civilization in the aggregate sense. They may or may not have collective strengths which will carry them along once industrial civilization has gone by the wayside. That is how evolution works: it is not a question of “progress”, but one of fitness for purpose. If the purpose is painting an inspiring Sistine Chapel, well… Basquiat won’t get you there. If the purpose is taking a machete to one’s neighbor with a minimum of compunction, you might have a more satisfactory result with a Rwandan leading your group. Swedes may be orchids, and Afghans knotweed. We have reached the point where we can’t afford energetically to keep orchids alive artificially and indefinitely.

      “We need to” accept the ongoing process playing out before us and decide where our own strengths and social allegiances will confer upon us the greatest chance of individual survival going forward. If whites think blacks/browns will be in any way forbearing towards us, all current data suggests that will not be so. Blacks should also not count on any solidarity whatsover from browns. If whites were to vanish from the US scene, Asians and Hispanics would deal with blacks in a less-forgiving fashion than whites, I believe.

      Like the US, the UK and Europe are also struggling to integrate populations who are “just not that into” the rule of law, or feminism, or gay rights, or secularism. etc. etc. Seeing the US’s difficulties, Europe could have avoided this obvious pandemonium, but no. Despite being its beneficiaries, migrants themselves are not at all interested in egalitarianism beyond the extent (we can hardly blame them) that they can use egalitarians’ weakness to promote their own biological interests. In this, I have an image from my childhood of bully kids who’d grab your wrist and punch you in the face, saying over and over, “why are you hitting yourself? why are you hitting yourself?”. France, why are you hitting yourself? England, why are you hitting yourself? Sweden, why are you hitting yourself?

      I leave the US out of this since I recognize it as having been little more than an Economic Zone for the entirety of its political existence. I feel much more compassion for the Indigenous of Europe who will never be recognized by modern institutions as requiring protection along the lines of Australian Aboriginals or Tibetans or Eritreans or East Timorese… or Israelis.

      This problem for Westerners, anyway, will never end until they eradicate from their societies those with contrary indoles (as most of the rest of the world does…. they won’t). The fact that this needs to be pointed out to anyone is an indication itself of how deep the corrosion and delusion has become. Entities and groups which are violent and which stick together can and do easily overcome oceanic amounts of pious-yet-weak-kneed rectitude. Those who renounce any solidarity of a lighter hue as “racist” and who embrace atomization will clearly be overcome, and they deserve that end. Civilization is something which is perhaps hard-won, but also easily lost. GWBush apocryphally called the US Constitution just “a god-damned piece of paper.”

      A good deal of discussion on this site has circled around the pitfalls of—essentially—too much intelligence (intelligence engendering technology as a matter of course and thus ruining the environment and getting out of control). Like that theorem (Fermi’s paradox?) about extra-terrestrial species having killed themselves off before being able to reach our planet, we could postulate intelligence as an ultimately recessive trait, and that (should humans survive) will be back to a level of Idiocracy before too long. The decline in global IQ has already been registered.

      • “If whites were to vanish from the US scene, Asians and Hispanics would deal with blacks in a less-forgiving fashion than whites, I believe.”

        You bet!

        • Sticking together does not mean interbreeding; blacks and whites can help each other by NOT being the same. Good cop, bad cop (interchangeably).

          But if blacks and whites don’t stick together (like glue) they BOTH (in this new multi-polar world) are going DOWN!.

      • We need Indian rules like Kamala they know how to deal with the lower classes. They have done it for thousands of years.

        • Kerala? (sp) I’m not actually seeing blacks as a lower caste in a white system, but having a complementary system of their own. It seems to me that the racial strife we see now is due to there not being the latter. There needs to be fairer, more equitable separation. Of course, class and caste are likely to be around for some time, but it might not always work the way it does now.

  5. The Pell Plan

    People say New Zealand has done the best with CV19. I completely disagree. I would say they have done he worst. They have almost no immunity by individuals having had the disease. They are left isolated as a nation nobody in until a vaccine is created, tested, and distributed.

    I propose an alternative plan.

    1) every citizen under age 40 is exposed to CV19 via a nasal spray of CV19 particles. There will be very little harm in the age group. Pretest for vitamin D level hold off on people with low levels until they are supplemented up to safe levels then expose.
    2) encourage people ages 41 to 71 to do the same. Appeal to their love of country.
    3) require all none exposed to wear fully enclosing head gear feed by HEPA filtered air (powered by battery backpack) and gloves.
    4) let her rip

    • We don’t know that having COVID-19 will provide lasting protection against the illness. In fact, we already have several counter-examples showing that it doesn’t. Immunity may last only a fairly short time, weeks or months. In fact, this may be an obstacle to vaccines working very well.

      • And so?

        How long can all of humanity be kept in societal bunkers on the .01% off-chance one of us might become ill and perish?

      • I agree we do not now if there is lasting immunity. We need experiments to find out. I am willing to be exposed in such an experiment.

  6. Re: C 19 in UK

    This is pretty miserable stuff, and I can understand that some in UK are getting ‘frustrated’, what with the darkness of winter having officially ‘set in’ with the clocks gone back on Sunday morning.

    C 19 related fatalities are back up, at over 300 per day, and the ‘news’ is that the ‘second peak’ is going on for months. Meanwhile the economy – and perhaps patience – is ‘nose diving’.

    Still, news is that a vaccine will soon be ‘rolled out’ here. My own inclination is to let other people take it first, and to give it some months to see what happens, and maybe by then there will be no need for me to take it. I do not really like the idea of them TBH.

    So, sunnier days hopefully lie ahead. : )

    > Daily Covid-19 infections hit 24,701 in first DROP for a month but deaths rise to 310 – up from 191 last Wednesday – as Tory MPs and businesses urge Boris Johnson to ‘face down’ Sir Patrick Vallance and reject calls for second lockdown

    Department of Health statistics show 26,688 positive coronavirus tests were added to the Government’s count last Wednesday. It means today is the first time the daily number of cases has fallen on the amount recorded the week before since September 28, when the tally was affected by a counting blunder. But deaths are continuing to rise. Another 310 coronavirus victims were recorded today, up from the 191 posted this time last week. It can take infected patients several weeks to become severely-ill, meaning the death toll lags behind any spike in cases. It comes as Boris Johnson has been warned by his top scientific advisers that the UK is facing a second wave of coronavirus even deadlier than the first as they urge the Prime Minister to impose tougher lockdown rules. The Government’s Scientific Advisory Group for Emergencies (SAGE) has presented the PM with projections which suggest the peak of the second wave will be lower than it was in the first wave. However, the peak is expected to last for longer, with high numbers of daily deaths likely to continue for months, resulting in a ‘lampshade’ second wave.

    • I have been feeling a bit ‘Robert Dowland’ myself.

      ‘Semper Dowland, semper dolens.’

  7. First it was 2021; now it is 2022:

    I think Fauci, aside from his monetary interests to the tune of millions, has some kind of Munchausen’s-by-Proxy thing going on. He wants to be in the spotlight and to manipulate people, even to bad ends (see his checkered AIDS history).

    I think he gets off on jerking people around… masks/no masks, Tinder good, Thanksgiving bad.. bla bla bla.. mask controversy now “pains” him..

    “… mixed signals that are coming out from the government, that is not being very helpful.”

    Oy veh. Can someone please drag this guy off-stage with an old-time hook like at the Apollo Theatre?

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