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 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 cards 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.

988 thoughts on “Fossil Fuel Production Is Reaching Limits in a Strange Way

  1. I agree entirely, we should be very concerned about low oil prices. It seems to be off the general public’s radar.

    Low oil prices have been around for a while now. At least in the UK, the biggest payers into pension funds have been oil companies, in particular, BP and Shell, and they are struggling to maintain a profit. The writing is on the wall for pension funds, and yet any news on that front is almost non-existent, for now. I am a member of a university pension fund and they continue to issue statements as though there is absolutely nothing to be concerned about.

    • At least in the US, rules about how pension plans are valued are designed to keep concern about the plans very low. Averaging of interest rates goes back very far, to keep the interest rates expected in the future as high as possible. I imagine other assumptions are on the optimistic side, as well, such as how many will be contributing to the fund in the future.

      • Gail, you are correct. US private pension plans come in two flavours: defined contribution and defined benefit. In the former, today’s pensions are paid by today’s workers, so the industry published absurdly optimistic forecasts as to how many workers will be employed in 10, 20, 30 … years. The same is true in the public sector:

        Defined benefit pensions were supposed to be paid from investments that would grow during the pensioners working life. Again, it was common to estimate 7% or even 8% annual growth, which of course was largely fantasy and is now history.

        Samuel Smiles again had it right: the bedrock of prosperity is individual savings.

  2. Not surprisingly the BBC’s Radio 4 news from 7 – 7:30 am this morning was entirely about Covid. One item that was discussed was a cartoon, I did not catch in which publication, that showed Trump turning into a chimpanzee because he had taken a sars-cov-2 vaccine.

    The journalist went on what can only be described as a rant, describing the idea that vaccines come from chimps as ‘dangerous’ and ‘ridiculous’ (presumably on the basis that if people believed this, they would not take the vaccine). Then she introduced a professor from the University of Oxford, and invited him to, once and for all, ‘get rid of this myth that sars-cov-2 vaccines come from monkeys’.

    To which the professor responded, after explaining that chimps are not monkeys, that some viruses that are being tested as vaccines are cold viruses – from chimpanzees.

    ‘Dangerous’ and ‘ridiculous’ – presumably this journalist will not be taking any sars-cov-2 vaccines.

    • Strange!

      Of course, with all of this distancing from other people, our exposure to the common cold virus is going down. If there is cross immunity coming from having exposure to the common cold, this will be lost from the social distancing requirements.

      • That is a real conundrum, for us as individuals; we are meant to live in the wild, we have evolved to live with nature and nature includes viruses and bacteria. Nature does not build the best, it builds what works, it discards errors in the process of discovering what works; this is consistent with slow mutations when things are working.

        Not being with other humans of a diverse variety, limiting one’s exposure seems to suck socially; do oldsters die of loneliness before they die of Covid’s effect whatever that is?

        Have too many people become afraid to live? Life is pain, it is suffering and it is also a beautiful world. Some seem to think we close it down, there may be some social benefits to that in irony; all the naysayers lose an audience.

        As always, it is a point estimate, I don’t get nor have I ever gotten flu shots; I worked for years in a public health setting and saw health histories on a daily basis, many communicable diseases, no flu so far. Death is part of life and even in birth we are not around at the beginning to voice an opinion on our very existence.

        Dennis L.

        • >>Have too many people become afraid to live?

          That is a pretty good way of summarising the situation. I’ve never had a flu jab either, and wouldn’t consider having one.

        • Thank you, Dennis. Excellent comment. The politicians and public health officials capitalized on a population in which vocal snowflakes dominate the conversation. I agree that life is pain and suffering; it is also risk, a concept that seems foreign to so many nowadays.

          • There’s no proven vaccine against snowflakery among young people, but the lucky ones grow out of it in time and become immune to further attacks, while in those who can’t quite shake it off it eventually tapers into a milder aliment— chronic normiesm. 🙂

      • Of course. The only sure defence against the virus is herd immunity and the consequently elevated immune systems of most of the population. And it is well known that the immune system learns from one virus how to respond to another.

        But the medical profession continue to recommend extreme social distancing because, as usual, they are treating the disease rather than the patient. And so the death toll inexorably rises.

        • Death toll will be much higher if the hospitals overflow (as they did earlier in some locales when this outbreak first spread) in a “let ‘er rip” scenario.

    • Minority, this system works because we are chimpanzees. The genetic difference between the common chimpanzee (pan troglodytes) and the bonobo (pan paniscus) is larger than the difference between them and us. Something we prefer to forget. Our physiological differences are due to neoteny (hereditary) and adaptation (the savannah).

  3. The economy won’t completely collapse until the amount of oil available begins to decline a lot, even if the governments of the rich countries throw trillions of dollars at trying to produce it, but still can’t slow the decline in oil production. That might be another 30 years down the road.
    The billionaires who run the world aren’t stupid. They won’t sit around and watch the world melt down, while a lot of hydrocarbons are still able to be produced. Only after the oil, gas, and yes even coal become so scarce, that no amount of effort can produce enough of them to keep the economy afloat, will the collapse occur. By then, fusion might be perfected.
    Don’t be shocked if Russia finds vast amounts of natural gas on their Arctic continental shelf as the Arctic Ocean ice becomes less of a restraint on drilling. CNG and LNG can substitute for oil to run engines. When the lights start going off, and when people have to wait in line for rationed gasoline, most people will forget about climate change really fast.

    • We are dealing with a self-organizing system that works very strangely. It is tempting to think that we are in charge and can change things to work in the way that we want them to, but this is not really the case.

      Unhappy people are likely to overthrow governments, for example. Countries will vote to leave the EU. Changes will happen, without anyone expecting them.

    • Thirty years? I would be shocked if obvious and steep decline can be put off that long. In thirty years, I expect to be up to our eyeballs in crisis–falling oil, falling coal, falling uranium, probably falling nat gas and falling copper supplies. I expect a lot of peaks to cluster. The “fracking revolution” (fracking Indian summer) just guaranteed the peaks would cluster a little closer. Why to politicians now talk about this publicly like they did in the 1970s? I think because they have no idea what to do about it this time. Everything we know how to do has already been tried.

  4. “World Bank Chief Economist Carmen Reinhart said the coronavirus pandemic is turning into a major economic crisis and warned of the possibility of a financial crisis emerging.

    ““This did not start as a financial crisis but it is morphing into a major economic crisis, with very serious financial consequences,” Reinhart said…”

      • Harry,

        You do seem to favor the more liberal side of things, the headlines are consistently slanted, perhaps that is due to more headlines available in that direction.

        This is an observation, not a criticism, but perhaps critical thinking; can’t we have fun with words when we want to?

        A genuine thanks for your efforts,

        Dennis L.

        • Dennis, I think I would go so far as to say that I am anti-political. The cut and thrust of competing political ideologies with all protagonists convinced of their moral superiority repels me.

          But I’m afraid it is impossible to avoid a certain amount of political “slanting” when following the various strands of Gail’s diminishing returns story in the news. I hope readers know that I am posting articles to be understood in that context and not because I am endorsing their biases.

          I will happily admit that I sometimes get riled up by what I see as mean-spirited generalisations about particular races and similar but that is not politically motivated.

          And you are welcome.

          • I think, Harry, that you are doing us a great service that adds to the enjoyment of this blog, and I also think that it would be very difficult not to select a biased selection of news articles, simply because IMHO the pool of potential articles in the mainstream media has a set of strong overall biases to it.

            In order to overcome this bias in the raw material, one would have to pass over a good many interesting articles on subjects of interest and consciously try to bias one’s selections in such a way as to compensate for the bias in the article pool.

            And even if you could achieve that successfully, somebody would be bound to detect a bias in your selection. A person’s view of what is bias is determined at least partly by their perspective. Most people have difficulty adopting more than one perspective on a given subject, and people who are able to “walk around” a subject and view it from multiple perspectives are apt to be accused of intellectual inconsistency by the champions of the 2-dimensional world view who insist implicitly that there is only one correct vantage point for viewing any subject.

            Unconscious and conscious biases—we’ve all got ’em. Our view of anything more complicated than a ball depends on where we are standing. But all in all, you are doing a grand job.

            • I might add that a huge part of the appeal of Gail’s analyses for me is that they in effect transcend politics.

    • I think low oil prices are already leading to the end of those doing fracking. I showed a chart with respect to the number of rigs in use for oil drilling. Natural gas drilling rigs are probably not down quite as much; I haven’t looked.

      Legislation to stop drilling doesn’t make much difference if the business is already unprofitable. I expect that the elders will point out to Biden that there is a need to keep the lights on. Without natural gas, that won’t happen. And without fracking, there won’t be nearly enough natural gas.

      So I am not as convinced as the article writer that this will really happen. Regardless of what people say before an election, TPTB usually explain the practical considerations when people are in office.

    • I am sure that there will be no security problem with all of this infrastructure. No one will need to look after them, in the long run either. Presumably the spent fuel just stays in place. Lots of crossed fingers.

      • Yes, security does seem to be an issue. The spent fuel will be picked up and brought to a central storage local where it will sit with no place to go, but the trucks will be running.

      • You and others here have made me a believer in things not going on very far as they are now. My solution, move production to space, to the moon, lasso an asteroid for metals, crash it into the moon, one more crater, who cares? Use nuclear exclusively and forget about the waste problem. All fossil fuel seems to be used to produce heat, start a continuous process, launch towards the sun, orbit, fusion heat, very clean. Have some undesirable waste, have it tag along, drop it off into the sun, puff. This almost has to be thermodynamically efficient, space is virtually(not quite) frictionless.

        Save the earth, mess up the moon, most will never get close enough to complain. The game is up on earth, growth is over, more energy even if found cannot be radiated fast enough into space. Try something else, build a metaphorical pyramid or a cathedral, jobs, sense of purpose, all for the greater glory of mankind – you might note I do not see man as a scrug on the planet, it is ours, we found it, we own it.

        Dennis L.

        • Nothing great seems to be built anymore. All the powerful people are only interested in building the biggest data centers, the biggest ghost cities, biggest yachts, biggest hotels… The wealth has driven us mad and has become a religion on its own. Maybe when people realize they can’t be wealthy anymore they will stop chasing it. And enjoy life more.

          • And yet those Easter Islanders kept building those moans until they physically couldn’t… They weren’t wealthy at all, ever, by modern standards. That points to humans always having been mad to some degree. So far, the MPP/MEPP is the only thing I have found that explains the “method” to our madness.

            I think the Buffets/Gates/Ellisons, etc. really do enjoy life (as they know it, anyway). It’s been many decades that they’ve had enough money to do anything, conceivably: learn to play the violin, coach Little League, sit on the beach drinking rum drinks.. and yet they hang around with financiers and war criminals and wonks and lawyers and creeps like Epstein, living in Power-Point-Presentation/TED-Talk land. They choose to do that, so they must enjoy it.

          • After World War II, the GI bill provided a lot of benefits to veterans of World War II. They received low interest mortgages and stipends to pay for college or trade school. Many suburban housing projects were built.

            The Eisenhower Interstate Highway System was started in 1956. A large amount of our electric power transmission lines seems to date back to the 1950s. Oil pipelines also seem to date back to about this same period. When there was a lot of cheap-to-produce oil, it was possible to do all of these things, without worrying about raising taxes to pay for them.

            This is also about the time the civil rights movement began, with integration of schools and public transportation. The Medicare system, providing health care to those aged 65 and over, as well as to some disabled people, began in 1965.

            Without a huge amount of very inexpensive to produce oil, it is hard to see how all this would have happened.

    • From the article: “When the rest stop is empty, the reactor produces power in the form of heat, which is transferred and stored in a separate tank of inert heat-transfer fluid. When trucks crowd the rest stop, the system taps that heated fluid to produce steam, generate electricity and recharge batteries.”

      I’ll leave you to count the number of energy conversions in the above, and to sum the losses in such a system. Enough for now to say that this is totally insane. And if a runaway truck crashes into that micro nuclear reactor?

      • I think these people rely on there being civilization as a backdrop for their schemes which, as might be said in a courtroom, “assumes facts not in evidence”.

      • I imagine it sort of works on paper, if a person assumes an infinite supply of resources (including fossil fuels) and the price of the system doesn’t matter. Of course, if that is true, there would be no point in the system in the first place.

      • The trucks will be automatically driven by the sort of technology Elon Musk has perfected for Tesla cars. The system, run by an HAL 9000 computer, will be infallible and crashes into power reactors will be impossible.

        I was talking to a truck computer the other day and asked it if it was really that safe, and the computer replied: “Let me put it this way, Mr. Groves.The 9000 series is the most reliable computer ever made. No 9000 computer has ever made a mistake or distorted information. We are all, by any practical definition of the words, foolproof and incapable of error.”

      • The reactor section is underground. No concern for crashes.
        Who cares about loses when the fuel source lasts 10 years and has a EROEI of 150 to1. Just like to the old days when 427 Chevy’s got 12 miles per gallon on $0.35 cents per gallon gasoline 🙂

  5. Electric vehicles won’t be mainstream, says Honda CEO

    Honda calls on government to support hybrids, reduce EV focus
    Honda Europe senior vice president claims EVs are “not a silver bullet” and ICE engine should not be completely replaced by 2035

    • I am glad to hear a car company come out and say this. There are several reasons for doing this:

      (1) Materials for batteries are to some extent limited. We make much better use of available materials, in terms of oil use saved relative to battery use, with hybrid vehicles, rather than plug in hybrids.

      (2) Plug in hybrids will always be a toy of the rich. They perhaps can be used in a specialty applications, such as electric vehicles in factories.

      One issue is that total electricity production is fairly limited. Countries like Japan are already very short of electricity. Another issue is that most people don’t have garages equipped with electrical outlets to charge their vehicles in. Setting up charging stations and sitting around while vehicles are recharging will not be something people want to put up with. Prices of the cars have not come down enough, either.

      • “Plug in hybrids will always be a toy of the rich.”

        Always a point estimate, I have driven a Camry hybrid for 13 years, 130K miles or so, same car, one replacement set of batteries $4K. The increased fuel economy seems to even out with the increased cost, there is peace of mind in knowing that should rationing come to gasoline sales one runs out later rather than sooner. Mine has been very reliable.

        Mechanical observation: drive them 70-90mph and the battery runs down, the ICE cannot keep up, probably a maximum sustainable speed of about 70mph or a bit more. I only get around 32-33 mpg, can’t understand why, laughing quietly.

        Dennis L.

      • The UK National grid is currently struggling to keep the lights on as there is little wind and no solar. Wind is generating 1GW from an installed capacity of 16GW.
        Once the last of the coal fired stations close in the next three years we will really be in trouble. There is no way we can supply electricity to cars.

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