Energy Is the Economy; Shrinkage in Energy Supply Leads to Conflict

It takes energy to accomplish any of the activities that we associate with GDP. It takes energy to grow food: human energy, solar energy, and–in today’s world–the many types of energy used to build and power tractors, transport food to markets, and provide cooling for food that needs to be refrigerated. It takes energy to cook food and to smelt metals. It takes energy to heat and air condition offices and to power the internet. Without adequate energy, the world economy would come to a halt.

We are hitting energy limits right now. Energy per capita is already shrinking, and it seems likely to shrink further in the future. Reaching a limit produces a conflict problem similar to the one in the game musical chairs. This game begins with an equal number of players and chairs. At the start of each round, a chair is removed. The players must then compete for the remaining chairs, and the player who ends the round without a chair is eliminated. There is conflict among players as they fight to obtain one of the available chairs. The conflict within the energy system is somewhat hidden, but the result is similar.

A current conflict is, “How much energy can we spare to fight COVID-19?” It is obvious that expenditures on masks and vaccines have an impact on the economy. It is less obvious that a cutback in airline flights or in restaurant meals to fight COVID-19 indirectly leads to less energy being produced and consumed, worldwide. In total, the world becomes a poorer place. How is the pain of this reduction in energy consumption per capita to be shared? Is it fair that travel and restaurant workers are disproportionately affected? Worldwide, we are seeing a K shaped recovery: The rich get richer, while the poor get poorer.

A major issue is that while we can print money, we cannot print the energy supplies needed to run the economy. As energy supplies deplete, we will increasingly need to “choose our battles.” In the past, humans have been able to win many battles against nature. However, as energy per capita declines in the future, we will be able to win fewer and fewer of these battles against nature, such as our current battle with COVID-19. At some point, we may simply need to let the chips fall where they may. The world economy seems unable to accommodate 7.8 billion people, and we will have no choice but to face this issue.

In this post, I will explain some of the issues involved. At the end of the post, I include a video of a panel discussion that I was part of on the topic of “Energy Is the Economy.” The moderator of the panel discussion was Chris Martenson; the other panelists were Richard Heinberg and Art Berman.

[1] Energy consumption per person varies greatly by country.

Let’s start with a little background. There is huge variability in the quantity of energy consumed per person around the world. There is more than a 100-fold difference between the highest and lowest countries shown on Figure 1.

Figure 1. Energy consumption per capita in 2019 for a few sample countries based on data from BP’s 2020 Statistical Review of World Energy. Energy consumption includes fossil fuel energy, nuclear energy and renewable energy of many types. It omits energy products not traded through markets, such as locally gathered wood and animal dung. This omission tends to somewhat understate the energy consumption for countries such as India and those in Middle Africa.

I have shown only a few example countries, but we can see that cold countries tend to use a lot of energy, relative to their populations. Iceland, with an abundant supply of inexpensive hydroelectric and geothermal electricity, uses it to heat buildings, grow food in greenhouses, mine “bitcoins” and smelt aluminum. Norway and Canada have both oil and gas supplies, besides being producers of hydroelectricity. With abundant fuel supplies and a cold climate, both countries use a great deal of energy relative to the size of their population.

Saudi Arabia also has high energy consumption. It uses its abundant oil and gas supplies to provide air conditioning for its people. It also uses its energy products to enable the operation of businesses that provide jobs for its large population. In addition, Saudi Arabia uses taxes on the oil it produces to subsidize the purchase of imported food, which the country cannot grow locally. As with all oil and gas producers, some portion of the oil and gas produced is used in its own oil and gas operations.

In warm countries, such as those in Middle Africa and India, energy consumption tends to be very low. Most people in these countries walk for transportation or use very crowded public transport. Roads tend not to be paved. Electricity outages are frequent.

One of the few changes that can easily be made to reduce energy consumption is to move manufacturing to lower wage countries. Doing this reduces energy consumption (in the form of electricity) quite significantly. In fact, the rich nations have mostly done this, already.

Figure 2. World electricity generation by part of the world, based on data from BP’s 2020 Statistical Review of World Energy.

Trying to squeeze down energy consumption for the many countries around the world will be a huge challenge because energy is involved in every part of economies.

[2] Two hundred years of history shows that very slow growth in energy consumption per capita leads to bad outcomes.

Some readers will remember that I have pieced together data from different sources to put together a reasonable approximation to world energy consumption since 1820. In Figure 3, I have added a rough estimate of the expected drop in future energy consumption that might occur if either (1) the beginning of peak fossil fuels is occurring about now because of continued low fossil fuel prices, or (2) world economies choose to leave fossil fuels and move to renewables between now and 2050 in order to try to help the environment. Thus, Figure 3 shows my estimate of the pattern of total world energy consumption over the period of 1820 to 2050, at 10-year intervals.

Figure 3. Estimate by Gail Tverberg of World Energy Consumption from 1820 to 2050. Amounts for earliest years based on estimates in Vaclav Smil’s book Energy Transitions: History, Requirements and Prospects and BP’s 2020 Statistical Review of World Energy for the years 1965 to 2019. Energy consumption for 2020 is estimated to be 5% below that for 2019. Energy for years after 2020 is assumed to fall by 6.6% per year, so that the amount reaches a level similar to renewables only by 2050. Amounts shown include more use of local energy products (wood and animal dung) than BP includes.

The shape of this curve is far different from the one most forecasters expect because they assume that prices will eventually rise high enough so all of the fossil fuels that can be technically extracted will actually be extracted. I expect that oil and other fossil fuel prices will remain too low for producers, for reasons I discuss in Section [4], below. In fact, I have written about this issue in a peer reviewed academic article, published in the journal Energy.

Figure 4 shows this same information as Figure 3, divided by population. In making this chart, I assume that population drops only half as quickly as energy consumption falls after 2020. Total world population drops to 2.8 billion by 2050.

Figure 4. Amounts shown in Figure 3, divided by population estimates by Angus Maddison for earliest years and by 2019 United Nations population estimates for years to 2020. Future population estimated to be falling half as quickly as energy supply is falling.

In Figure 4, some parts of the curve are relatively flat, or even slightly falling, while others are rising rapidly. It turns out that rapidly rising times are much better for the economy than flat and falling times. Figure 5 shows the average annual percentage change in energy consumption per capita, for ten-year periods ending the date shown.

Figure 5. Average annual increase in energy consumption per capita for 10-year periods ended the dates shown, using the information in Figure 4.

If we look back at what happened in Figure 5, we find that when the 10-year growth in energy consumption is very low, or turns negative, conflict and bad outcomes are typical. For example:

  • Dip 1: 1861-1865 US Civil War
  • Dip 2: Several events
    • 1914-1918 World War I
    • 1918-1920 Spanish Flu Pandemic
    • 1929-1933 Great Depression
    • 1939-1945 World War II
  • Dip 3: 1991 Collapse of the Central Government of the Soviet Union
  • Dip 4: 2020 COVID-19 Pandemic and Recession

Per capita energy consumption was already growing very slowly before 2020 arrived. Energy consumption took a big step downward in 2020 (estimated at 5%) because of the shutdowns and the big cutback in air travel. One of the important things that energy consumption does is provide jobs. With severe cutbacks intended to contain COVID-19, many people in distant countries lost their jobs. Cutbacks of this magnitude quickly cause problems around the world.

For example, if people in rich countries rarely dress up to attend meetings of various kinds, there is much less of a market for dressy clothing. Many people in poor countries make their living manufacturing this type of clothing. With the loss of these sales, workers suddenly found themselves with much reduced income. Poor countries generally do not have good safety nets to provide food for those who are out of work. As a result, the diets of people subject to loss of income became inadequate, leading to greater vulnerability to disease. If the situation continues, some may even die of starvation.

[3] The pattern of world energy consumption between 2020 and 2050 (modeled in Figures 3, 4 and 5) suggests that a very concerning collapse may be ahead.

My model suggests that world energy consumption may fall to about 28 gigajoules per capita per year by 2050 (for a reduced population of 2.8 billion). This is about the level of world energy consumption per capita for the world in 1900.

Alternatively, 28 gigajoules per capita is a little lower than the per capita energy consumption for India in 2019. Of course, some parts of the world might do better than this. For example, Mexico and Brazil both had energy consumption per capita of about 60 gigajoules per capita in 2019. Some countries might be able to do this well in 2050.

Using less energy after 2020 will lead to many changes. Governments will become smaller and provide fewer services such as paved roads. Often, these governments will cover smaller areas than those of countries today. Businesses will become smaller, more local, and more involved with goods rather than services. Individual citizens will be walking more, growing their own food, and doing much less home heating and cooling.

With less energy available, it will be necessary to cut back on fighting unfortunate natural occurrences, such as forest fires, downed electricity transmission lines after hurricanes, antibiotic resistant bacteria, and constantly mutating viruses. Thus, life expectancy is likely to decline.

[4] It is “demand,” and how high energy prices can be raised, that determines how large an energy supply will be available in the future.

I keep making this point in my posts because I sense that it is poorly understood. The big problem that we should be anticipating is energy producers going out of business because energy prices are chronically too low. I see five ways in which energy prices might theoretically be raised:

  1. A truly booming world economy. This is what raised prices in the 1970s and in the run up to 2008. If there are truly more people who can afford homes and new vehicles, and governments that can afford new roads and other infrastructure, companies extracting oil and coal will build new facilities in higher-cost locations, and thereby expand world supply. The higher prices will help energy companies to be profitable, despite their higher costs. Such a scenario seems very unlikely, given where we are now.
  2. Government mandates and subsidies. Government mandates are what is maintaining demand for renewables and electric vehicles. Conversely, government mandates are part of what is keeping down tourist travel. Indirectly, this lack of demand relating to travel leads to low oil prices. A government mandate for people to engage in more travel seems unlikely.
  3. Much reduced wage disparity. If everyone, rich or poor, can afford nice homes, automobiles, and cell phones, commodity prices will tend to be high because buying and operating goods such as these requires the use of commodities. Governments can attempt to fix wage disparity through more printed money, but I am doubtful that this approach will really work because other countries are likely to be unwilling to accept this printed money.
  4. More debt, sometimes leading to collapsing debt bubbles. Spending can be enhanced if it becomes easier for citizens to buy goods such as homes and vehicles on credit. Likewise, businesses can borrow money to build new factories or, alternatively, to continue to pay wages to workers, even if there isn’t much demand for the goods and services sold. But, if the economy really is not recovering rapidly, these approaches can be expected to lead to crashes.
  5. Getting rid of COVID-19 inefficiencies and fearfulness. Economies around the world are being depressed to varying degrees by continued inefficiencies caused by social distancing requirements and by fearfulness. If these issues could be eliminated, it might boost economies back up to the already somewhat depressed levels of early 2020.

In summary, the issue we are facing is that oil demand (and thus prices) were far too low for oil producers because of wage disparity before the COVID-19 crisis arrived in March. Trying to get demand back up through more debt seems likely to lead to debt bubbles, which will be in danger of collapsing. There may be temporary price spikes, but a permanent fix is virtually impossible. This is why I am forecasting the severe drop in energy consumption shown in Figures 3 and 4.

[5] We humans don’t need to figure out how to fix the economy optimally between now and 2050.

The economy is a self-organizing system that will figure out on its own the optimal way of “dissipating” energy, to the extent possible. In physics terms, the economy is a dissipative structure. If the energy resource is food, energy will be dissipated by digesting the food. In the case of fossil fuel, energy will be dissipated by burning it. We may like to think that we are in charge, but we really are not. It is the laws of physics, or perhaps the Power behind the laws of physics, that is in charge.

Dissipative structures are not permanent. For example, hurricanes and tornadoes are dissipative structures. Plants and animals are dissipative structures. Eventually, new smaller economies, encompassing smaller areas of the world, may replace the existing world economy.

[6] This is a recent video of a panel discussion on “Energy Is the Economy.”

Chris Martenson is the moderator. Art Berman, Richard Heinberg and I are panelists. The Peak Prosperity folks were kind enough to provide me a copy to put up on my website.

Video of Panel Discussion “Energy Is the Economy,” created in October 2020 by Peak Prosperity. Chris Martenson (upper right) is the moderator. Richard Heinberg (upper left), Art Berman (lower left) and Gail Tverberg (lower right) are panelists.

A transcript of this panel discussion can be accessed at this link:

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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2,764 Responses to Energy Is the Economy; Shrinkage in Energy Supply Leads to Conflict

  1. Ed – I am interested in energy issues.
    Ed says:

    I believe the Great Reset is about
    1) reducing the number of humans to 500 million.
    2) transferring ownership of everything to the global oligarchs
    3) compressing those 500 million into a small high density foot print

    I believe this will be done by
    1) compress people into high density high rise housing blocks
    2) nerve gas the people in the blocks
    3) they will be called safe bubbles after a virus with a high fatality rate is released

    The rulers will each have their 100 mile by 100 mile estates on which they can do whatever they want.

    Yes, economy of scale will be lost and high tech produces like advanced microprocessor will not be possible but 10 year old tech will be.

    The project depends on winning the Whitehouse, that is control of the US military. If they fail they will sent to military tribunals at Gitmo and put down. If they win I and you will be put down.

    • kulmthestatusquo
      kulmthestatusquo says:

      Plus kick out Six Billion Third Worlders from Civilization.

    • the human mind creates patterns out of its experiences.

      the mind evolved to make these patterns with far less than 100% evidence.

      survival would be hindered if the human mind waited for 100% evidence.

      the Great Reset is a mental pattern that was invented with far less than 100% evidence.

      it could be true, but the evidence is lacking.

  2. Re: ROI Poll

    Sinn Féin has risen to 30% in the latest ROI poll, and consolidated its place as the opposition party in Ireland.

    ROI governments were dominated by Fine Gael and Fianna Fáil, two right wing parties, for decades after the 1921 partition of Ireland. ROI politics has now realigned to a more usual left-right dichotomy, with FG as the Irish TP and with SF dominating the left, social democratic side. Either wing is on about 45% at present, and the rest are independent TDs.

    SF are up 5 points on their Feb. 2020 GE performance and they are now firmly established as the opposition party. It is the largest party on an all-island basis, and it is committed to a border poll on Irish unity. The next ROI GE is not until 2025, by which time Scotland is likely to have had its referendum on Scottish independence.

    In government in NI, and the established opposition in ROI, SF is about as well placed as it could hope to be in preparation for 2025.

    > Sinn Féin surge to record poll high as Fine Gael lose ground New warning signs for embattled Fianna Fáil as it trails in fourth place in Dublin in the latest Business Post/Red C poll

    Sinn Féin’s support has risen to its highest level since Red C began polling in 2003

    Sinn Féin’s support has surged to a record high at the expense of Fine Gael, in the latest Business Post/Red C poll.

    The party has increased its support by three points to 30 per cent, which is the highest level it has reached since Red C began polling in 2003. It is also well ahead of the 25 per cent share of the vote that the party secured in last February’s general election.

    In contrast, Fine Gael’s support has dropped by four points to 33 per cent since last month’s Red C poll. This follows a controversy about Tánaiste Leo Varadkar’s leaking of a draft GP contract to a friend in a doctors’ union.

    Fine Gael has also been facing questions about how Seamus Woulfe, the former Attorney General in the Fine Gael-led minority government, was appointed to the Supreme Court last July.

    Sinn Féin’s surge in support means that it is the second most popular party in the state, significantly ahead of Fianna Fáil, which is up by one point to 12 per cent. The Green Party is down by one point to 5 per cent.

    According to the Red C Poll, Sinn Féin is broadening its support base which in the past was concentrated among young age groups. It still has far more support among voters aged 18-34 (41 per cent) than Fine Gael (19 per cent ) or Fianna Fáil (10 per cent).

    Sinn Féin also has 38 per cent of the first preferences among 45-54 year olds, which is more than Fine Gael (30 per cent) and Fianna Fáil (11 per cent). Sinn Féin is level with Fianna Fáil when it comes to voters aged over 55 (15 per cent) but it trails Fine Gael (47 per cent)….

    https://www.businesspost.ie/ireland/sinn-fein-surge-to-record-poll-high-as-fine-gael-lose-ground-17fd617d

  3. Yoshua says:

    China doesn’t like competition. They don’t play by the rules.

    There’s still enough energy resorces in the world that can be produced economically to power China. There isn’t enough energy resources for everyone in the world.

    By releasing a virus into the world that does damage health and economies, they destroy other nations consumption and steal it for them selves.

    • worldofhanumanotg
      worldofhanumanotg says:

      That’s feasible scenario, why should there be any monopoly on dastardly “false flags” right? At this moment I’d not put it in highest %probability scenario cat though, but it is surely moving up on the top list.

  4. Yoshua says:

    “Profit at China’s industrial firms grew 28.2% YoY in Oct, fastest since 2011, almost triple 10.1% in Sept, indicting the economic recovery is gathering pace.
    Electronics sector’s contribution is particularly prominent, with profits up 12.6% in Jan-Oct”

    What’s China doing wrong? No Covid…no riots…no economic ruin.

    China didn’t get the elite message?

    • 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.
      Gail Tverberg says:

      Strange!

  5. “After weeks of political instability, protests and three president changes, Peru announced this week a risky economic move.

    “The South American nation, for the first time in its history, decided to launch an economic bond for more than 100 years, one of the few nations in the world that has achieved such a deadline for its debt.”

    https://www.inspiredtraveler.ca/why-did-peru-decide-to-borrow-for-more-than-100-years/

    • “Under a punishing Andean sun [Peru], Nazario Quispe digs his plow into the soil where he is growing dozens of different potato varieties — uncertain when he will be able to afford the seeds and supplies to sow them again.

      “Farmers like Quispe are responsible for the food that lands on 70 percent of Peruvian dinner tables, officials say, but months of pandemic lockdown and a souring economy have left many bankrupt and questioning whether to plant again.”

      https://egyptindependent.com/pandemic-pushes-perus-vital-peasant-farmers-to-the-brink/

    • 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.
      Gail Tverberg says:

      Craziness! A country with political instability being able to issue 100 year bonds!

  6. “Police and demonstrators have clashed in Paris as tens of thousands took the streets to protest against new security legislation, a controversy intensified by the beating and racial abuse of a Black man by officers that shocked France.”

    https://www.aljazeera.com/news/2020/11/28/protests-over-security-law-as-france-reels-from-police-violence

  7. “Hundreds marched through downtown Calgary [Canada] on Saturday to protest against mandated masks and other public health measures intended to prevent the spread of COVID-19, the same day record highs in new cases and hospitalizations were reported in the province.”

    https://www.cbc.ca/news/canada/calgary/anti-mask-rally-calgary-1.5820904

    • “More than 150 people have been arrested as anti-lockdown protesters clashed with police in central London after officers sought to break up the demonstration.”

      https://www.theguardian.com/world/2020/nov/28/met-police-anti-lockdown-protest-london

      • “German anti-lockdown protests shift to Polish border:

        “Objectors of coronavirus curbs have converged on Frankfurt-an-der-Oder on Germany’s border with Poland. Meanwhile, at viral hot spot Hildburghausen in Thuringia state, the local county chief is under police protection.”

        https://www.dw.com/en/coronavirus-german-anti-lockdown-protests-shift-to-polish-border/a-55761550

        • Robert Firth says:

          It is not Germany’s border with Poland: it is Germany’s border with Polish occupied Germany. Another historical injustice I hope soon to be rectified.

          • worldofhanumanotg
            worldofhanumanotg says:

            Big historical events move boundaries.
            Soviet’s “gift to Poland” when rolling back Adolf boyz erased thousands yrs of German presence in Eastern Prussia and Silesia, .. moving the boundary (and most of the inhabitants) several hundreds km westward. It was classic snap back reaction.

            Not sure, how and by whom this could be rectified though. Today’s Germany shows even less auto immune reaction to mushrooming caliphate cells within the state than Austria, which is kind of peculiar.

            Given the key caliphate strongholds are southern Swedish, British, Benelux (and French) cities, I doubt that even worsening German situation will focus on this eastern vector anytime soon. They will have other “duking out” running priorities in next decades elsewhere.

            Also in the very unlikely case the western pop finally wakes up and performs “reconquista” – this will be long internal process, again most likely with no bearing on the eastern flank. Actually, plenty of Poles, Magyars, Bavarians, Baltics, .. would be gladly volunteering to join the melee and help their neighbors..

            Not sure what was your angle, perhaps I’m missing something you might add..

          • kulmthestatusquo
            kulmthestatusquo says:

            Thanks to Woody Wilson who listened to the Poles and Czechs in USA.

            Soon, the Czechs will disappear, while Poland will once again be partitioned.

  8. Covid’s economic carnage also costs lives: Unemployment is soaring and Britain’s debt pile is a mountain.

    “…For our central bank to be hoovering up so much debt, so quickly, is simply unprecedented. And there’s little sign of serious thinking about how this monetary experiment will end.”

    https://www.telegraph.co.uk/business/2020/11/28/covids-economic-carnage-also-costs-lives/

  9. “Michel Barnier has told MEPs he is prepared for a further four days of make-or-break Brexit negotiations, with growing scepticism among EU member states about the utility of further talks.”

    https://www.theguardian.com/politics/2020/nov/28/last-ditch-brexit-deal-talks-resume-amid-growing-eu-scepticism

    [The EU has a habit of making 11th hour accommodations, so we shall see. My guess FWIW is that we shall have a patchy deal of *some* kind because the economic consequences of no-deal on top of Covid are just too dire for both the UK and the EU. Surely?!].

    • “Four out of five companies are not ready for the end of the Brexit transition period, according to the “alarming” results of the latest polling.

      “With little more than a month until the UK leaves the single market and customs union, of more than 1,700 businesses surveyed by EY, 80pc did not “know the full extent of Brexit risks” or “have sufficient preparations in place”.

      “One in five firms said that they expected the UK’s final departure from the EU to present “a bump in the road” with normal service resuming shortly afterwards.

      “But whether or not a UK-EU trade deal is reached, change will be “inevitable and protracted”, the consultancy firm cautioned.”

      https://www.telegraph.co.uk/business/2020/11/28/four-fifths-businesses-worry-not-ready-brexit/

  10. “What Janet Yellen’s appointment as US Treasury Secretary would mean for markets:

    “…She is seen as someone who’ll coordinate well with the Federal Reserve and be market friendly, Deutsche Bank said.”

    https://markets.businessinsider.com/news/stocks/janet-yellen-appointment-treasury-secretary-means-for-markets-2020-11-1029846210

    • “In 2020, it’s just another week for a global-markets machine that has managed to keep humming through some of the largest shocks in economic history…

      “But the danger is that all this year’s drama may have desensitized the investing world, resulting in a rally which spits out records regardless of fundamentals. Complacency, not COVID-19, could be the new threat to returns.”

      ttps://www.sentinelsource.com/news/national_world/wall-street-records-break-quietly-in-market-that-has-seen-it-all/article_d7860f84-bf88-5adf-a52e-f37ce2f0119e.html

  11. “Why I’m losing hope in India: …it breaks my heart to have to suggest to today’s rising generation that this crisis is different than others we have weathered, that the walls are closing in again, and the opportunity set for India is shrinking, perhaps for a very long time.

    “The national dream of emulating China’s rapid growth is receding — by some economic yardsticks, we can’t even keep up with Bangladesh.”

    https://www.bloombergquint.com/opinion/why-im-losing-hope-in-india

    • “Saffron falls prey to coronavirus lockdowns as demand drops:

      “Farmers in Iran and India’s Kashmir region, the world’s first and second-largest growers respectively, are struggling. Afghan growers, who had been encouraged by western governments to increase saffron production, are once again cultivating opium poppies.

      “Prices for the labour-intensive spice — more than 100,000 saffron crocus flowers are handpicked for every kilogramme of saffron — have plummeted this year. Covid-19 forced the closure of the hospitality industry globally and curtailed festive or religious ceremonies on which the trade depends.”

      https://www.ft.com/content/5fa2199d-187d-47c0-9423-75a9229ac9b3

      • 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.
        Gail Tverberg says:

        When there isn’t enough demand, even for something as narrowly used as saffron, the price drops. The farmers who were trying to make their living growing it and picking it suddenly need an alternate crop.

  12. “In the past two decades, China has poured billions of dollars into the construction of ports, railways, highways and hydropower dams in Africa.

    “But the continent is staring at a loan drought in the medium term as China and other lenders fear debt defaults in the fallout from the coronavirus pandemic, analysts say.”

    https://www.scmp.com/news/china/diplomacy/article/3111760/china-turns-cautious-lending-africa-amid-default-crisis-fears

    • “China has hit Australian wine with tariffs that will double or triple its price, making the market “unviable” for exporters, according to the trade minister, Simon Birmingham.

      ““This is a devastating blow to those businesses who trade with China in the wine industry,” Birmingham said.”

      https://www.theguardian.com/business/2020/nov/27/china-imposes-swingeing-tariffs-on-australian-wine-in-devastating-blow-to-exporters

    • Robert Firth says:

      Harry, for decades the West has poured “foreign aid” into Africa. Whatever did not disappear due to corruption was spent on ridiculous high technology vanity projects: ports that no ships visited, railways that went nowhere, highways with no vehicles, and hydropower that produced nothing of value. China seems to be following the same path, with the same result: a continent of white elephants that will never repay the cost of their construction.

      When will the modern world learn that prosperity must be built bottom up, not top down?

    • 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.
      Gail Tverberg says:

      Most of these will never pay back adequately to repay their debt, I am afraid.

  13. The “green” gravy train is starting to roll:

    “Green New Deal policies align environmental goals with economic growth, job creation, social justice and equality. So far, governments have invested $321 billion in “green” policies for the economic recovery from the pandemic, said Rodolfo Lacy, environmental director of the The Organisation for Economic Co-operation and Development (OECD). But that’s out of $9 trillion in total stimulus funding.

    “OECD wants those trillions to go green, Lacy said.”

    https://www.forbes.com/sites/jeffmcmahon/2020/11/29/as-green-new-deal-goes-global-greta-thunberg-goes-largely-unheard/?sh=3ac8b95055d9

    • “The value of oil company shares owned by UK public pension funds has fallen by £2bn in less than four years as pressure mounts on retirement schemes to withdraw their support from environmentally damaging fossil fuel producers…

      “Dividends from fossil fuel companies have historically provided a vital income stream for pension funds, but payouts have been cut this year as producers have struggled with reduced demand.”

      https://www.ft.com/content/f74502ad-8ae9-4715-a297-364ab8418c11

      • “A devastating global pandemic and a reckoning with Wall Street appear to have broken the resolve of the shale wildcatters who turned the U.S. into the world’s biggest oil producer.

        “Years of breakneck growth, at the expense of crude kingpins in the Middle East and Russia, have come to an end.”

        https://www.bloomberg.com/news/articles/2020-11-28/the-pandemic-has-broken-shale-and-left-oil-markets-in-opec-hands

      • 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.
        Gail Tverberg says:

        This is what I have been saying. Oil companies have historically been purchased by pension funds. Their high dividends were part of what made pension plans possible. With lower prices, the dividends have to be cut. This change hurts the viability of pension plans.

    • 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.
      Gail Tverberg says:

      It is hard to feel too bad about “Greta Thunberg Goes Largely Unheard.”

  14. Malcopian says:

    Here you see Mrs Mysterywoman (a.k.a. ‘Mirror on the wall’) on the left, and Norman in the middle explaining the one thing he knows (and it isn’t nine. eleven). Or is he just trying to say his name? Enjoy. 😉

  15. Dennis L. says:

    Went back and researched Christopher Columbus a bit, a very disagreeable man and his return to Spain was in chains. If I did some quick math correctly, he lived until 55 and then in considerable pain secondary to arthritis induced by infections.

    It is odd how things work, he was a terrible, cruel ruler of Hispaniola, yet history gave him credit and named the country of Columbia and the District of Columbia after him. He was bold, his navigation was not very good as he underestimated the size of the earth, but he could sell and got fame and some fortune as well as a place in the history books.

    Life is full of ironies.

    Dennis L.

  16. Dennis L. says:

    Link for my last post, forgot it, old man.

    https://www.youtube.com/watch?v=a_T4QayqtI4

    Dennis L.

  17. Dennis L. says:

    This is fascinating. Musk first tried to purchase a couple of ICBMs from Russia, too expensive, so he built his own. He did tell the Russians they didn’t have to include the nukes.

    He claims to be sort of self taught, read a lot of books and had a great team.

    “What Elon did was very different. He didn’t just throw some play money in. He put in his heart, his soul and his mind.
    Elon Musk founded SpaceX under the belief that “a future where humanity is out exploring the stars.”

    Metal in one end of factory, rockets out the other end. Incredible facility, rockets on a production line.

    Interesting note on N. Armstrong casting stones on his company, much like needing old scientists to pass before new science can arise.

    At 5:27 there is a section where Elon is failing, it is a recession, he has no money, close to a nervous breakdown. If you are not close to a nervous breakdown, you are not close enough to the edge – it is like nothing else in the world, playing the game. What the worst that can happen? You die, well you die anyhow, some dare, some fret.

    10:54 lands two, yes two boosters on their tails.

    Space suits look like science fiction, not the large clumsy suits we are used to seeing.

    Look at the control center, can you see what is missing? Things like this require a passion which is difficult to bottle.

    13:42, footage of rocket landing on a drone barge, look mom, no parachute!

    Did a bit or research, Elon has seven children, very busy man.

    Dennis L.

    • the chicks must be impressed!

      really, this is cool stuff.

      though, my understanding is that NASA gave/gives him billions to do his work.

      so it’s really government work by proxy.

      SpaceX doesn’t need to be profitable, just take the billions and produce stuff.

      I just wish they would get on with starting the moon colony and manned Mars mission.

      I would surely enjoy watching/reading about it, and failure would probably be just as entertaining as success.

      to the stars!

  18. DENNIS L. says:

    Some say it is the end of business as usual, some say all is lost, but this rocket has made the round trip seven times and looking at where it landed and the size of the barge, someone knows what they are doing.

    There are those who do and are damned for it, and there are those who do web site comments.

    Maybe moon dust?

    https://www.youtube.com/watch?v=aNOFnYV8BNs

    Dennis L.

    • Lidia17 says:

      It must be nice to be you, Dennis.

      • Lidia17,

        Please forgive, sometimes we get carried away with ourselves, “and there are those who do web site comments.” I am a guy and guys tend to push things a bit much. That was sarcastic, again I apologize, guy thing.

        OFW is not my first rodeo, I have been there since I read “Limits to Growth: and also “The Intelligent Investor.” I should have thrown away Limits, it never, never worked over almost fifty years. The best part of that book was going to Lisbon and sitting behind Colin Campbell’s family and getting to ask him a few questions. Still, oil never went to $300/barrel, the meeting was at Gulbenkian’s estate/museum/gallery. Lisbon is wonderful and at the river cocktail party on the Tagus, Charlie Hall was there and held court. discussing the end of the world. The stars were out, the wine was wonderful, oil propelled the party boat into the night. A bit of irony, yes?

        This site inspires me to look and see what will work, all of you have some very good ideas, one should explore both sides.

        Could it be that the Musks of the world are willing to go the edge when others cling to home – Columbus again? He was wrong four times, he didn’t get to China, but he found America and it would be fascinating to read his biography on how things went when he returned to Spain.

        Hunter gather sounds terrible to me as much as the excesses of our own age. Sort of binary choices ignoring gray areas.

        All the best,

        Dennis L.

        • Tim Groves – Japan
          Tim Groves says:

          I am a guy and guys tend to push things a bit much.

          Reminds me of my favorite John Wayneism:

          A man’s gotta do what a man’s gotta do.

          IMHO, we don’t need the false hopium that oozes out of Peak Prosperity or the Druid or the World Made By Hand.

          But need your brand of optimism here, Dennis.

          All doom and gloom makes for a miserable existence.

          Please keep up the good work.

    • none of the following is meant as sarc.

      yes, the world still has plenty of net (surplus) energy flowing through the economy, mainly from FF.

      why not use some of it on non-essential space adventures?

      $7 million per day for each person on the ISS. Why not?

      why not try to set up a moon colony?

      though, it’s been 51 years since 1969, so what’s taking so long?

      then, why not send a few volunteers to Mars?

      they will never return alive, but so what?

      and what’s a few billion $ here and there for some attempts at turning sci-fi into reality?

      I enjoy sports (and betting) and billions are spent there.

      I also enjoy reading about space adventures.

      when are the low orbit space flights starting for (rich) civilians?

      in the space shuttle program, $196 billion for about 130 missions, one blew up after takeoff, and one blew up during reentry.

      so that’s 2 deadly failures, 2/130 = about 1.5% deadly.

      I want to see many low orbit space flights, to see the death rate, which I expect will be higher than 1.5%.

      entertainment!

      • Dennis L. says:

        david,

        We are all different, some will take the 1.5% risk going into space. My family tends to live a long time, the last years in a nursing home are not very good. Is life measured in hours safely spent or in experiences? For me, ‘Tis better to have loved and lost than never to have loved at all’, Tennyson.

        Life does not seem to work well in stasis, it either grows or dies, in the end maintenance consumes all resources. In tennis the worst score one can have is 5 games – 0 yours and game 6 40-love, your serve. That is a sure way to lose 5-7, hate it when that happens.

        I do apologize for sort of putting the space thing in people’s faces, bad habit.

        As always, interesting comments, thanks,

        Dennis L.

  19. Boris and TP are down again in the latest polls.

    The Express is sensationalising imo by calling it a ‘crisis’. Boris seems secure as PM and there seems to be no danger of him not overseeing TP until the end of the year when the Brexit transition period is set to end.

    Legally the transition period cannot be extended but it is possible that a deal will be agreed ‘provisionally’ by then and then be formally approved in the new year – or there could be a formal deal or ‘no deal’ by then. Either way, Boris seems secure for that.

    LP has hardly needed to do anything to rise in the polls. It is the ‘other option’ in most people’s minds. Nigel has not launched his Reform Party yet and TBP sits on 5%.

    The poll is BAU imo.

    Boris Johnson CRISIS: Labour surges ahead of Tories in poll

    LABOUR has moved three points ahead of the Conservatives in a new opinion poll despite splits emerging within the party over former leader Jeremy Corbyn.

    A poll of Westminster voting intention published by poll aggregator Britain Elects shows Sir Keir Starmer’s party gaining three points at 40 percent while the Conservatives drop one point down to 37 percent. The poll makes grim reading for the Liberal Democrats who languish a distant joint third alongside Nigel Farage’s Brexit Party and the Greens who are all on five percent.

    Labour’s lead comes despite a tough week for Sir Keir who has come under fire from the left of his party over the treatment of Mr Corbyn….

    https://www.express.co.uk/news/politics/1365886/boris-johnson-tory-party-sir-keir-starmer-labour-party-opinion-poll

  20. Tim Groves – Japan
    Tim Groves says:

    A country can get away with pretending to have no Covid, a little Covid or a lot of Covid. That’s because Covid is a political weapon, a psy-op, a phantom, a humbug, and a bogeyman—regardless of whether it’s a real disease caused by an actual virus or not.

    Somebody commented on TAE something that makes a lot of sense to me:

    If we were actually living through a catastrophic pandemic there would be no need to debate statistics, would there? The evidence would be right in front of our faces. We’d be too busy burying and mourning loved ones to find time or even care about arguing with anyone.

    TAE also quoted an article by Genevieve Briand, the assistant program director of the Applied Economics master’s degree program at Johns Hopkins, which was published by the University and later deleted for political reasons.

    • A Closer Look At US Deaths Due To COVID-19 (Gu)

    According to new data, the U.S. currently ranks first in total COVID-19 cases, new cases per day and deaths. Genevieve Briand, assistant program director of the Applied Economics master’s degree program at Hopkins, critically analyzed the effect of COVID-19 on U.S. deaths using data from the Centers for Disease Control and Prevention (CDC) in her webinar titled “COVID-19 Deaths: A Look at U.S. Data.” From mid-March to mid-September, U.S. total deaths have reached 1.7 million, of which 200,000, or 12% of total deaths, are COVID-19-related. Instead of looking directly at COVID-19 deaths, Briand focused on total deaths per age group and per cause of death in the U.S. and used this information to shed light on the effects of COVID-19.

    She explained that the significance of COVID-19 on U.S. deaths can be fully understood only through comparison to the number of total deaths in the United States. After retrieving data on the CDC website, Briand compiled a graph representing percentages of total deaths per age category from early February to early September, which includes the period from before COVID-19 was detected in the U.S. to after infection rates soared. Surprisingly, the deaths of older people stayed the same before and after COVID-19. Since COVID-19 mainly affects the elderly, experts expected an increase in the percentage of deaths in older age groups. However, this increase is not seen from the CDC data. In fact, the percentages of deaths among all age groups remain relatively the same.

    “The reason we have a higher number of reported COVID-19 deaths among older individuals than younger individuals is simply because every day in the U.S. older individuals die in higher numbers than younger individuals,” Briand said. Briand also noted that 50,000 to 70,000 deaths are seen both before and after COVID-19, indicating that this number of deaths was normal long before COVID-19 emerged. Therefore, according to Briand, not only has COVID-19 had no effect on the percentage of deaths of older people, but it has also not increased the total number of deaths.

    https://www.theautomaticearth.com/2020/11/debt-rattle-november-28-2020/

    • “Therefore, according to Briand, not only has COVID-19 had no effect on the percentage of deaths of older people, but it has also not increased the total number of deaths.”

      YES, okay, I see no reason to disagree with her statistics.

      YET, it seems true that since early 2020, most older people have been severely avoiding most close social contacts, unlike every other year in history including years with so-called “flu epidemics”.

      BUT even with this severe social limitation, the deaths are the same as previous years!

      it’s reasonable to figure that without the social limitation, deaths of older people would be massively higher.

      so let’s believe Briand’s statistics, but take a CLOSER LOOK at their meaning, to see that because this virus is not much more deadly than flu but is much more HIGHLY contagious, the death numbers have not risen higher because the higher rate of contagion has been countered by the social limitation.

      without the social limitation, Briand and the rest of us would be seeing much higher numbers of deaths.

      • Lidia17 says:

        “Social limitations” on the elderly also lead them to see doctors less frequently and receive less care in general. They move around less when all their activities are cancelled. In cases where they are imprisoned in their rooms for many months without visitors, they just lose the will to live. We have tortured many of them to death…

      • Tim Groves – Japan
        Tim Groves says:

        it’s reasonable to figure that without the social limitation, deaths of older people would be massively higher.

        so let’s believe Briand’s statistics, but take a CLOSER LOOK at their meaning, to see that because this virus is not much more deadly than flu but is much more HIGHLY contagious, the death numbers have not risen higher because the higher rate of contagion has been countered by the social limitation.

        Yes, David, you have a very good point there.

        Also, if the restrictions are indirectly causing a lot of excess deaths due to people not getting medical treatment, committing suicide, or just fading away in solitude, then these excess deaths should be balanced against the excess deaths Covid would have killed had it been allowed to run totally rampant like every other cold and flu virus is every year.

    • “If we were actually living through a catastrophic pandemic there would be no need to debate statistics, would there? The evidence would be right in front of our faces. We’d be too busy burying and mourning loved ones to find time or even care about arguing with anyone.”

      I will just repeat my impeccable logic:

      with no social limitation, there would be 10 times as many deaths of older people.

      which would have been BETTER, since the economy would have been unhindered by lockdowns, and these older unhealthier people would have died of something within a few years anyway.

      summary: about as deadly as flu but much more highly contagious.

      ergo: return to full personal freedom, no lockdowns, totally optional masks.

      so: older/unhealthier people will just have to suffer the consequences of being older/unhealthier.

      perhaps we’ll see more freedom after the vaccines are rolled out, first to healthcare workers, then others who work in public, then those high risk people.

      • Tim Groves – Japan
        Tim Groves says:

        Maybe much more contagious. Maybe not. How do we measure degree of contagion? The problem is that a bunch of people can share the air in a room for hours on end and apparently some of them get infected and some don’t.

        Is it up there wit Legionella pneumophila—the bacteria that causes Legionnaires’ disease?

        Medical opinion is that L. pneumophila IS NOT contagious—it doesn’t spread very much from person to person. But we all know how it got its name. It was living happily in the air conditioning when the American Legion held their convention in Philadelphia in 1976. Legionnaires’ disease is usually spread by the breathing in of aerosolized water or soil contaminated with the Legionella bacteria.

        Out of 2,000 Legionaries attending the convention, 149 became sick and 33 other persons associated with the hotel or in the area who also became sick. Of these total of 182 cases, 29 persons died. This is a death rate comparable with what we’ve seen in the Covid-19 data.

        According to the CDC, most healthy people exposed to Legionella DO NOT get sick. People at increased risk of getting sick are:
        People 50 years or older
        Current or former smokers
        People with a chronic lung disease (like chronic obstructive pulmonary disease or emphysema)
        People with weak immune systems or who take drugs that weaken the immune system (like after a transplant operation or chemotherapy)
        People with cancer
        People with underlying illnesses such as diabetes, kidney failure, or liver failure

        This reads like a list of the people at increased risk of getting sick from Covid-19.

        Covid-19 isn’t nearly as contagious as Norovirus. most healthy people exposed to Legionella DO get sick. According to the CDC,

        Norovirus is a very contagious virus that causes vomiting and diarrhea. Anyone can get infected and sick with norovirus. You can get norovirus from: Having direct contact with an infected person.

        Most norovirus outbreaks in the United States happen from November to April. In years when there is a new strain of the virus, there can be 50% more norovirus illness. Each year, on average in the United States, norovirus causes: 900 deaths, mostly among adults aged 65 and older.

        I’ve had norovirus, and I can tell you, it’s a great way to detox! I spent two days lying on the floor in front of the loo, unable to do anything but repeatedly drink water and throw it up every hour or so.

      • Robert Firth says:

        david… you have twice posted the same claim, with “impeccable logic” but not a shred of hard evidence. And that which is asserted without evidence can be dismissed without evidence.

        Copying your own combative tone: put up, or shut up.

    • info says:

      The coof accelerated deaths that already would have happen a few weeks to a few years down the line

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