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. Harry McGibbs says:

    “The Virus Is Surging. Growth Is Slowing. And Millions [of Americans] Are About to Lose Jobless Benefits.

    “The Cares Act was a gamble that the coronavirus would be eliminated quickly. That was a bad bet, and Americans are set to pay the price for it once again.”

  2. Harry McGibbs says:

    “Great Reset or grating global conspiracy theory? Either way, don’t dismiss genuine anxiety:

    “…Earlier this month, [Australian] Senator Pauline Hanson moved a motion to reject the World Economic Forum’s “Great Reset”. The senator asked Parliament to “note that adopting the policies would devastate the economic wellbeing and individual freedoms of Australians” and that the Australian government should boycott all World Economic Forum events in protest over The Great Reset agenda.

    “The motion referred to a theory that the global elite are planning to impose a new world order, using the COVID-19 pandemic as cover.”

  3. Harry McGibbs says:

    “Great Reset or grating global conspiracy theory? Either way, don’t dismiss genuine anxiety:

    “…Earlier this month, [Australian] Senator Pauline Hanson moved a motion to reject the World Economic Forum’s “Great Reset”. The senator asked Parliament to “note that adopting the policies would devastate the economic wellbeing and individual freedoms of Australians” and that the Australian government should boycott all World Economic Forum events in protest over The Great Reset agenda.

    “The motion referred to a theory that the global elite are planning to impose a new world order, using the COVID-19 pandemic as cover.”

    • Think of the Great Reset as a way for the rich to get richer and the poor to get poorer. It is a story that “plays well” to a rich audience, but for real people, it doesn’t work well.

      For example, we heard about the “everything rented” idea yesterday. The folks owning and renting everything stand to make out well on this. Everyone else gets left out.

      • Dennis L. says:


        One can be a landlord, commercial/apartment but if the tenants can’t pay rent it is an expense. It would seem the world and the US are perhaps tapped out financially, there is nothing left to leverage.

        A farm landlord can own thousands of acres but without a market and without people to farm the land, it is an expense. Economics is a human construct.

        Buffet now purchases his paper(BRK stock) with government paper, dollars. This seems to be the same game, were he to purchase all the company stock, there would be no market for the stock, no marginal price.

        It is a weird time.

        Dennis L.

        • Kowalainen says:

          It is clear that he thinks that the guvmint won’t be able to get this sucker under control.

          Everybody wants good news where there is none to be had.

        • I am afraid you are right!

        • Robert Firth says:

          Dennis, I believe the globalists have thought of that. They will own all the stuff they rent to you, and they will also own the jobs they will give you to earn your keep. The rents will be deducted directly from your paycheck, and the system will roll right along.

          • Dennis L. says:

            Robert, a guess.

            Wasn’t the USSR something like this? In the end workers pretended to work while the government pretended to pay them.

            We are coming to an understanding the world is a self organizing system with some rather weird numbers showing up per G. West, such as ratios including 1/4 which are independent of economics. Economics is a human construct, most obvious natural systems don’t have one person or group owning all the wealth.

            There is a chimpanzee story in my mind where a very strong chimp monopolizes all the females and the next two chimps in strength take the dominate chimp and literally rip his arms off.

            My experience with small business was the capital owned the owner, without workers to make it work, it was worthless. The idea the beatings will continue until morale improves doesn’t seem to work very well.

            We do have an illusion of ownership, car leasing is an example, but here people can and do walk away, work less, go on the dole, whatever. This is sort of what welfare is, LBJ had as a goal monopolization of the black vote, there is a very nasty quote in regards to that, as long as there was excess, it worked, now not so much. Its goal seemed to be votes, power as long as a middle class existed to tax and supply the benefits.

            It is a weird time.

            Dennis L.

            • Mirror on the wall says:

              That is what happened to King Charles I of England and King Louis XVI of France. Only not their arms but their heads.

              Ironic, they said that they were ‘the head’ of the society. Well they were heads after that.

              Boom boom.

            • @Mirror on the wall

              Less advertised are how Charles II and Marie Therese (Marie Antoinette’s daughter and the effective ruler of France 1815-1830) behaved when they returned to power.

              They avenged everyone who cut off their parents’ heads

            • Mirror on the wall says:

              The Bolsheviks avoided that trap by taking out the kids too.

              No kids, no heirs, no re-establishment, no revenge.

              Perhaps they learnt the lesson of history.

  4. Harry McGibbs says:

    I may have posted an article above twice, in which case apologies. My comments are automatically subjected to a time-delay before posting and sometimes don’t seem to appear at all, which makes it easy for me to forget where I am, lol.

    “Some advocates have continued to promote the G20 as the natural forum to discuss major issues confronting the world.

    “But the G20 faces three major challenges: legitimacy, effectiveness and membership.”

    • The G-20 looks like a group that could very well disappear in the future. If it really isn’t serving a purpose well, funding is likely to become a problem as well.

      I deleted the extra copy of the article above.

      • Harry McGibbs says:

        Thank you. WTO on borrowed time, too, one feels.

      • Bei Dawei says:

        The G20 isn’t as “group” so much as a regular forum. It’s a way for the most important world leaders to talk without having too many not-so-important ones there as well. Who gets invited varies somewhat from event to event–the host gets to pick a few countries or international organizations that aren’t one of the 20. They don’t have a headquarters or secretariat or dedicated budget or anything like that. Anyway, aren’t they meeting through Zoom now? I can envision some world leader refusing his invitation in a fit of pique / populist politics, but the opportunity to schmooze with the others is usually irresistable. Anyway, how much could it cost?

    • Probably the biggest issue is the fact that total energy investment is down in 2020, and expected to remain low in 2021. In fact, it seems to have started dropping in 2015. “Clean energy” investment is rising as a percentage of the total partly because the total is dropping.×0.jpg

      Also, we get very little for our money with clean energy investment. What we get has to be subsidized by the fossil fuel economy. We can’t expect it to last any longer than the fossil fuel economy. Everything is interconnected.

      The Goldman Sacs report says,

      Green infrastructure is more capital and jobs intensive than traditional energy – an attractive regulatory framework and low cost of capital are essential

      Green infrastructure is 1.5-3.0x more capital- and job-intensive than traditional energy developments per unit of energy produced, on our estimates.

      We add to our debt bubble. We move toward inefficiency. The oligarchs benefit from the tax credits and other benefits of the subsidies of this industry, but no one else comes out well.

  5. Small modular reactors (SMRs) are the compact version of traditional nuclear fission reactors (nuclear power plants). Like their older brothers, SMRs use nuclear fission to generate carbon-free electricity, though on a much smaller scale than their relatives – typically in the 50 megawatt to 400 megawatt range.

    SMRs are currently deployed in submarines, aircraft carriers, and icebreaker ships, and have been for decades. If this DOE project is any indication of the future, they may power our cities one day too.

    • Submarines and icebreakers or whatever carry power plants within them to make them move

      before they begin to move they stock up with all the necessary materials to enable them to exist in the context of the crews that live on board.

      the same applies to a city

      put a small power plant in a city by all means, then start to worry about where you’re going to get the million other things that enable a city to exist

      stating with food

    • Small nuclear reactors do little for food and water availability. They depend on a world supply chain. They, of course, depend on fossil fuels, for their construction and maintenance. They cannot be put in place in 2020. They are, at most, a fix for a small piece of our problem.

  6. Herbie Ficklestein says:

    Another Collapse in the News

    Facing collapse, the famed Arecibo Observatory will be demolished
    The failure of two main cables sealed the observatory’s fate

    By Loren Grush on November 19, 2020 11:30 am The Verge
    The world-famous Arecibo Observatory in Puerto Rico, known for helping scientists peer into deep space and listen for distant radio waves, is set to be decommissioned and demolished after engineers concluded that the facility’s structure is at risk of a collapse. While teams will try to salvage some parts of the observatory, the decommission will bring an end to the popular 57-year-old telescope, which has been featured in numerous films and television shows.
    The decision comes after two major cables failed at the facility within the last few months, causing significant damage to the observatory. The National Science Foundation (NSF), which oversees Arecibo, assessed the impact of the cable breaks and found that the facility’s other cables could also fail soon. If some of the remaining cables break, engineers fear that the 900-ton suspended platform above the facility could come crashing down on Arecibo’s iconic 1,000-foot-wide dish. It’s also possible that three surrounding towers, which stand at more than 300 feet tall, could topple over in any direction, potentially hitting the visitor’s center or other important nearby buildings.

    • Robert Firth says:

      The telescope at Jodrell Bank opened in 1957. It was the world’s first fully steerable radio telescope, and remains one of the largest. It is still in full working order.

      It seems Lancashire engineers are rather better at simple routine maintenance that Puerto Rican engineers, or perhaps their managers don’t just embezzle the money.

      To be fair, however, they have a good incentive. As I found out in Pennsylvania, routine maintenance is paid for by the State (or Territory); emergency maintenance will be paid for by Washington. One reason (of many) that US governance is hopelessly dysfunctional is that it is full of perverse incentives. And to think that I once believed “Atlas Shrugged” to be fantasy.

      • Harry McGibbs says:

        Also, to be fair, local weather may have played a part. They don’t get category 4 hurricanes blasting through Jodrell Bank.

    • Everything we have needs to be maintained. Once resources for maintenance run short, hard choices need to be made.

  7. Harry McGibbs says:

    “We reassure ourselves that we are being virtuous by switching to an electric car [but]…

    “In much of DR Congo’s cobalt industry, there is little sign of corporate responsibility or social justice, the qualities that are meant to infuse environmentalism.”

    • Again, this has been discussed numerous time already.
      There are different types of batt chemistry available and actually in mass production for EVs or stationary storage, one of them is the cobalt type. It’s not needed, especially as the size of batt packs increases, which allows for other means of thermal management in also larger vehicles, cobalt used to be critical for cold regions and small battery / sub compact car size combo..

      • We need a global supply chain for whatever type of battery we choose to put in vehicles. The need to be compact and cheap. The vehicles have to carry around this extra battery load for their lifetime besides having big upfront costs. They tend to make most sense when the electric vehicles are driven many miles, as for a taxi. If everyone is mostly staying at home, their value is iffy.

        • Let me explain it perhaps a bit better, there have been cheaper lithium (e.g. “iron”) batteries of great quality for ~two decades vs the cobalt ones, but they had the cold weather and perhaps some form of fast charging performance issues, which is hard to overcome in small sized cars as opposed to bigger form factors. And there are many other types of batteries in mass production already anyway. The fixation on cobalt is [bogus topic] as of now..

          I simply posit lets not discuss uninformed articles again and again in circular logic.

          Otherwise your argument stands, but the technology and market keeps evolving. Specifically, the mass production of hybrids for long years meant that the design and manuf costs dropped by huge leaps, the only issue remaining is battery size. You have got ordinary combustion cars, hybrids, plugin hybrids and full EVs. In terms of designs most of the big manufs are now popping out carz based on universal platform which enable all 4 modes described. So for example Benz and Toyota are now offering plugins ~18kWh batt with decent range, but the rest of Europeans and Koreans had to stick only to ~13kWh sized packs, which is bordering on impractical, too short-local range. Full EVs are now mostly ~40-60-80kWh and upper segments sized above that..

          • Lidia17 says:

            worldof, any regime that somehow attempts to base itself on personal mobility yielding a net economic gain is not realistic in any way.

            Go back to the drawing board; do not pass “Go”, etc.

        • Robert Firth says:

          Gail, I find this ongoing (and in part circular) discussion of electric cars fascinating. Because the Egyptians found the only viable answer over five thousand years ago: don’t carry the motive power with you; take it from the environment as you move along.

          The (UK) trams and (US) streetcars did exactly that; obtained their power from rails below or wires above, fed by a static power source. As do many electric trains today, especially underground trains where carrying a power source is not feasible.

          Could we do the same with roads, using perhaps magnetic induction from energy carriers buried underneath them? I’m not sure, but it seems a far better solution than endless types of battery whose production seems to be very environmentally unfriendly, as we;; as mostly using third world slave labour.

          • Kowalainen says:


            Why invent the wheel twice?

            The “road” is called rail. No need for any fancy AI’s when following tracks instrumented with simple logics and sensors/switches.

            It wouldn’t surprise me if a modern mobile phone could run the entire US rail network and still have some CPU cycles left for checking out OFW.

            • Robert Firth says:

              Agreed completely. Though I would not trust a mobile phone to control a party in a brewery.

              Singapore built a mass transit system based on elecrtomechanical technology, and then added some clever AI. The result: two trains crashed. “No human error”, said the manager, conveniently forgetting that he was the human who had introduced the unreliable technology.

            • Kowalainen says:

              Robert, right.

              The risk and hazard assessment in conjunction with a SIL 4 classification would put it into another leauge of SW/HW paradigm.

              The “happy path” is the easy one. The tricky stuff is to figure out if something is going south and how to act/react on the hazard/malfunction without disaster.

            • Karl says:

              I think one of the most productive uses of our remaining oil supplies would be rebuilding railroads and canals. Steam locomotives could burn coal or wood. Donkeys can pull barges along canals. If the spent fuel doesnt get us, some of us will survive, and a world of barges and steam locomotives is a hell of a lot more appetizing than hunter gathering. Domestic oil production could be used to maintain agriculture, military, and police/fire. Getting from here to there will likely require some heavy handed government, and result in a new feudalism, but given the alternative…..

            • Self-organizing systems seem to build up from “below,” rather than be something that we can decide to do, taking elements of what we have now and elements of what might be available in the future. I expect that as energy consumption declines, our ability to get fossil fuels out will decline. Partly, the price won’t rise high enough.

              People now cannot conceptualize what an overall system would have to look like, and be able to work, in the future. There has to be a system in place to train workers, for example. The system would be mostly rural.

          • Yes, discussed numerous times already.
            Hop on and off tram / streetcar / subway / rail, arrange the compartments in a way where you can take your ebicycle as well and not bump into walking / sitting passengers only.

            That’s like cutting fossil fuel needs for personal transportation by major %% at almost negligible costs. Elderly and not fit for whatever reason only % – dealt by other means, e.g. fleet of autonomous EVs.

            Again, humanoids not interested, pedal to the metal craziness instead for as long as possible in BAU..

            • If there are many very communicable diseases around, shared transportation easily becomes a way of passing around germs, however. Our predecessors were hunter gatherers from many years, for a reason. It takes a lot of complexity to fight all of the mutating viruses and bacteria.

      • Harry McGibbs says:

        That may be so, WoH. I just tend to warm to articles that point out that these Green New Deals are not actually green, if that term has any meaning at all.

        “Øystein Rushfeldt, CEO of Nussir mining company, said “all mining has negative consequences for the environment; use of land and other effects, and it doesn’t matter if the tailings are placed on land or in sea, it is always consequences.”

        “A 2017-report by the World Bank about the global need for metals for a low carbon future said demand for copper is expected to jump by as much as 50 percent over the next 20 years alone.

        “Electric vehicles, increased renewable energy sources and energy efficiency all require significant amounts of copper to function.”

      • Erdles says:

        UN talked last year of needing to increase world output of cobalt 400% by 2030 to support EV batteries. 70% of cobalt is however mined in East Africa which tends to be in constant civil war.

      • Dennis L. says:


        I am not really current on this issue, but the only small scale battery systems I see working are small, cottage industries taking apart various computer/tool batteries, testing the voltages, discarding the bad and wiring together the good into banks.

        YouTube as usual has a number of sites on this, it is becoming quite a cottage industry and most likely the cost of used batteries will increase.

        Cheapest batteries/charge/discharge cycle seem to be lead acid lift truck batteries, ride and tire weight are not an issue here but most lift trucks seem to be propane.

        NiFe are probably the most durable, but they self discharge, need to be shipped in from China, very expensive.

        world there don’t seem to be any good solutions. I looked at using a harvistore as a water pressure storage unit, this would store wind energy, but I gave up on small scale windmills, tough to maintain.

        In the end, this is very costly in time and money, time is what one runs out of, maintenance is a real problem large scale, small scale.

        Look around and see all the abandoned hydro sites, the dam exists but it was too expensive to maintain the electrical generation portion. There is a dam close to my farm, it is not huge but substantial, not in service, understand it produced perhaps 5 horsepower. If it made money it would be in service today.

        Got 100K miles on my Camry Hybrid, batteries failed, $4K to replace, looked at the mileage and it was a wash. I don’t think it really works.

        In the Villages they use golf carts, most are gasoline, range and cost of batteries are the main issue. This is a community of over 100K with mild weather.

        Dennis L.

        • I didn’t realize that some golf carts use gasoline, or that most at the Villages are gasoline. I thought they all had batteries. I’m not a golfer, as you might guess. I learn something new every day. If battery operated were really much better, I would expect the majority to be battery operated.

        • Artleads says:

          Where I grew up, the source of electricity was a car battery (or two?) charged by something I only knew of as a “Delco Plant” generator. So I imagine you could use car batteries in ICEs as generators? What I never questioned and don’t know is how you connect a cable from the battery to the electric devices needed to be activated. If you can tell me could you make it as simple and descriptive as possible?

          • Perhaps, you can start with the general “solar offgrid setup how-tos”, the literature and examples are plentiful, from homesteaders to caravan people.

            The best approach though is firstly making this mental categorization, what you want to power in terms of size and priority of that electric device-appliance to your needs.

            So, for example to categorize:

            Small and lower voltage (backup) setup only for lights and charging up electronics (12-24vdc), few batteries. You could make it compatible with your ICE car..

            Mid sized system for 24/365 home living, fridge, ventilation: higher voltage, batteries in kWh.

            The largest one (equal to grid) for freezer, and elevated amperage: well pump, shop power tools, etc.. Battery storage in dozens of kWh..

            The necessary components would differ for each category (type not only size!) and the price be more or less exponential to suggested demand curve of each category (as you step up)..

        • Again, ~small hydro was profitable / surplus providing on the conditions / when:

          – early dayz of the grid 100+ yrs before
          – and or in local grid mode (~offgrid) only

          => forget about grid connection (as rabbit hole of pricing schemes and other disadvantages) it makes no sense, and when it sort of works it’s based on gov subsidies for small sized producers (I gather not available in NA anyways)..

          Your Camry Hybrid with faulty NiMh batt pack was out of warranty or second hand to begin with? What is your climate and parking-garage arrangement, did you park it on hot / freeze outside weather cycles for yrs or in tempered garage / shack?

          Why didn’t you just swap the pack from another one sourced from carbrakers at few dozen – low hundred bucks? 300k copies of hsd Camrys were sold and the same modules are in other hybrid models as well if I’m not mistaken..

  8. Erdles says:

    Gail (or indeed anyone else)

    On page 73 of the report linked below, Vestas claim an EROI for their V150-4.2MW turbine of 31 across the full life cycle. This seems extraordinarily high as I thought wind turbine EROI to be no more than 10. Is their figure reasonable? If not what is going on here?

    • Wind turbines generally do have high EROEIs. The problem is that wind, when added to the grid, is not of the dispatchable type needed. In fact, it is not even an even amount that can be counted upon. Instead, it is disruptive to the grid. Other electricity provider have to “fix” the mess it makes. A small amount of it can be worked around. Larger amounts are truly detrimental. It is not a stand-alone technology (same for solar). Also, they have a “Good energy in, poor energy out” problem. If you sit in an ivory tower, calculating EROEIs, they look great. If you actually have to use them, they don’t.

      In a post by Paul Frederik Bach, called “A Challenging summer for Nordic power systems,” (near the top on, he talks about the issues they are having in Scandinavia with added wind.

      The Swedish Wind Energy Association (SWEA) claims that the Swedish TSO (Svenska Kraftnät, SKN) has underestimated the development of wind power in Sweden [1]. The result is insufficient investments in reinforcements of the transmission system.

      The bizarre pricing caused by adding wind to the grid (yet another issue with wind) has been causing nuclear power (a low carbon form of electricity) to become unprofitable. Wind energy needs hugely more transmission than “regular” electricity, because much of the time the transmission lines remains empty (another thing not reflected in EROEI calculations). It is also very irregular. It became necessary to pay a nuclear power plant in Sweden to stay on line, even though it had decided to retire because of poor profitability, because the system could not be made to work without more stable power on the grid.

      EROEI doesn’t really tell you a whole lot, unfortunately. Wind has to be part of a very large system, and that very large system is not really examined in EROEI calculations. People have looked at a tiny piece of the system, and said that piece looks to be inexpensive (high EROEI).

      • Wind makes a lot of sense, but in different setting, locally dumping it into heat storage tanks, supplemented with other more convenient on demand forms of energy (natgas, nightly off peak grid, .. etc). Smaller wind machines also enable different designs based on recyclable metal blades and not that prevailing disposable fiber nonsense of today. But humanoids again just opted for the worst possible route..

        • Kowalainen says:

          Nothing wrong with reinforced (carbon/glass fiber) plastic blades.

          Just make the leading edges from ductile material (metal), or simply make them replaceable.

          I mean, we got military aircraft zipping through the air in Mach 3+, and we can’t build wind turbine blades that can handle some wind and hail?

          • Dennis L. says:

            Not an expert on commercial blades.

            Erosion on leading edges has been an issue, replacement/repair involves men hanging in bosun’s chair swinging around in the wind(yes, there is wind which is why the turbine is there and not someplace calm). I would guess workman’s comp is equal to the hourly wage or more.

            Aircraft are repaired on the ground, they are not moving, they can be moved into a hanger and it is still very expensive to repair.

            It is very tough for these men to even gain purchase points to work on the blade, work is discontinued on windy days, probably still have to pay the workman or lose him, then one has useless capital. A lift bucket would work, but tipping forces are an issue for outriggers, even more so when men are supported 100 plus feet above the ground, insurance for the truck is huge. Again, on a windy day one would not put men into the air, more idle capital.

            Keeping a turbine balanced dynamically is not trivial, balancing one already in place would be a real trick, add weight and while it may statically balance, dynamic balance is a different game – basically need a large tire balancing machine.

            I am not against it but if it really worked, subsidies would not be necessary.

            Dennis L.

        • Dennis L. says:


          Looked into building a wind turbine on the farm, 15-18m as I recall, blades are wood or carbon fiber, never saw metal blades. Efficiency cubes with diameter, small turbines are worthless, below a cut in value essentially the work of turning the turbine is equal to the input energy. The things are tough to maintain, elements corrode the magnets, ice accumulates on the blades, is shed asymmetrically, need to furl in high winds, etc. Many things to go wrong, a site “Otherpower” was for a while fairly active, fell off.

          Humanoids didn’t opt for the worst possible route, maintenance was too large a problem, building a structure that didn’t blow down was not trivial, raising and lowering these structures with jib poles was dangerous to say the least and sometimes the blades literally flew off, that made for some interesting photos, many times sort of a guy thing trying show the worst outcome, “my failure is bigger than yours.”

          It was a bad idea, wasted time in the abstract, biggest regret was not climbing the 100′ tower at MREA in Stevens Point when they offered that learning experience. Guy thing, no need to do it, do it to show one is not afraid of risks, chicks dig that sort of thing; self organization again.

          Dennis L.

          • Again, small turbines are not worthless.
            Perhaps you have not looked into other designs, also abandon the idea of selling to the already oversupplied grid, but as hinted dump it as heat instead into storage and only smaller % as offgrid electricity.

            • Back in my Oil Drum days, Kris de Decker did an evaluation of small wind turbines. They were, in fact, pretty much worthless.


            • Gail, we are talking pass each other. Again, we are mixing up grid tied and offgrid, and types of storage etc. where small wind makes sense.

              That older 2008/10 dutch study tried to compare [grid tied] tech with very crazy scale-spread of energy generation ~.150-2.5MWh per year from these various contraptions. So, only from that metrics it was very confused or misleading in aim what to study.

              Moreover, the effort to link it with average (elevated because of cheap grid) household electric consumption is also weird. It’s basically double down on the failed grid tied topology.. No wonder then these small units seemingly doesn’t make sense in their (& yours) conclusion.

              Nevertheless thank you for your past efforts documenting it as lot of these older links vanished.

      • Lidia17 says:

        Gail, does that EROEI include decommissioning? We’ve recently heard about the first wave of turbines coming off line and the problems with handling the vast tonnage of non-recyclable industrial waste.

        • I am pretty sure the EROEI does not include decommissioning. I am not certain how much is included. I have seen guidelines for solar panel energy return, and I am pretty sure they do not include decommissioning.

          I think that there may be a belief that there will be enough “salvage value” at the end of their lives to offset any decommissioning expense.

      • Robert Firth says:

        Gail, I agree that EROEI is not a good measure for wind. I once did the math, and concluded that if you add the cost of manufacture, transport to site, erection on site, robust grid connection, online backup power,… An then add ongoing maintenance (very expensive because wind turbines are put up in remote areas; Denmark’s collapsing ocean based turbines are costing $1 million each to repair). And then add the cost of decommissioning and disposal (still largely unknown). Bottom line: wind is overall an energy sink, not an energy source.

        It looks good on paper because much of their production is outsourced to cheaper countries, the immense pollution involved in that production, and the eventual cost of decommissioning, are all treated as “externalities”, as is the damage they do to the environment while they are running.

      • Nehemiah says:

        The wind turbine EROI is usually see is 18, but I will be very surprised if it is accurate. There are a LOT of costs involved with wind turbines, and some of the starting assumptions are optimistic.

        • Wind turbines need lots of replacement parts. Wind turbines tend to be operated based on what kind of subsidies are available. If the subsidies stop, or are only available based on “repowering,” wind operators will make the appropriate changes. So it is hard to model how the system will really behave.

          The fact that the power wind turbines produce is intermittent electricity tends to make wind power a replacement for coal or natural gas, rather than a replacement for dispatch able electricity. It doesn’t sell for much in the wholesale electricity market. This should give people an idea of the real value of wind electricity. Wind power also needs a lot more transmission lines than dispatch able electricity (3 x as much), because often the transmission lines are often empty.

    • Kowalainen says:

      Vestas sells wind turbines. Enough said.

      Without sufficient dispatchable service they are hopium.

      Best case scenario of wind is to act in conjunction with hydro power to save water in the reservoir. However, hydro plants can be built willy nilly. At least gotta have a river.

      Thus the hydro power generation capacity for the existing stations need to be built out with larger inlets, turbines, generators and outlets if it is to be replacing nukes and fossil burners.

      You can see wind as wind + hydro. Yup, more complications and investments needed than just propellers in the wind.

      For residential areas, it could perhaps work with hydrated/molten salt as energy storage, but for larger energy consumers, forget about it.

  9. Dennis L. says:

    We spend so much time looking at what cannot be done we miss what can be done and is being done.

    This link looks at vertical integration of software companies into hardware along with the barriers to entry.

    Basically what is happening is software is consuming so much processing power large software companies are designing and manufacturing their own chips, Google will apparently put their TPU unit in the cloud and essentially rent it – this is the IBM of old where computers were leased and not sold.

    The barriers to entry are huge and only a very few can play, $500m is not what it used to be.

    Most here are skeptical about my idea of putting manufacturing on the moon and yet we see articles about the ecological cost of mining on earth – the earth cannot take any more pollution, dirt or energy. The guys at FANG are very smart, no doubt they realize this earth is the only one we will have. Musk built a spacecraft and it docked at the ISS, private companies are now so large they can do things only governments could accomplish previously.

    We are going to go forward, it is really tough staying in the game.

    Dennis L.

    • Kowalainen says:

      Not so fast there Dennis.

      The tools evolve together with the tech they enable.

      For sure, running a profitable state of the art SW/HW vertical isn’t cheap ‘an easy.

      Apple isn’t manufacturing their semiconductors in-house, rather fabs it at TSMC and Samsung.

      Free CPU core IP’s will be all the rage within a few years, if this clunker doesn’t fail catastrophically.

      “OpenSPARC T1 is the open source version of the UltraSPARC T1 processor, a multi-core, 64-bit multiprocessor. The UltraSPARC T1 processor with CoolThreads technology was the highest-throughput and most eco-responsible processor ever created when it became available in the UltraSPARC T1 system.”

      • Dennis L. says:

        Thanks, that is nice to know.

        Obviously I am an outsider, look for trends.

        So Apple is doing the R&D and outsourcing the fab?

        Free CPU core IP’s? Open source hardware?

        What I picked up as the fab manufactures lacked sufficient profit margin to do the heavy lifting R&D. The article I read claims these companies spend more money on R&D than Intel. The referenced article goes on to state with with the capital intensity of fab plants those monopolies at the leading edge will get to operate in the advanced world alone with better margins. I take this to mean the intellectual property is the prize and moat.

        So far, software companies seem to make the best margins.


        Dennis L.

        • Kowalainen says:

          Yes, manufacturing semiconductors/network gear is the backbone of IC (yes, floating on the FF CO2 plumes).

          It is extremely capital intensive to slap down a state of the art semi factory. And not even then is success guaranteed. Gotta know how to get yields up and solve mfg problems. Fast. TSMC and Samsung are surely making a killing selling chips to the verticals, such as Apple.

          Myself, I have been working “fabless” for some time now. Do the drawings in the various CAD/CAM tool chains and send off the drawings to machinists/electronics manufacturers.

          Most larger verticals have their own machine shops for rapid prototyping. 3D printers in conjunction with CNC machinery.

          Yes, software is the forward path of the intangibles shift and semiconductors the (invisible wizardry) tangible feedback path.

          Yup, I’m expecting the older semiconductor process nodes and EDA tools soon becoming accessible for hobbyist crowd, making their own verticals using open source CPU/GPU/FPGA/ASIC designs.

          Eventually all the organizational complications of IC will be encoded in software and network topologies.

          It is why democracies is a ridiculous concept in an ant hive structure of society. The queen lays “eggs” and the workers service the matriarch and her youth while scavenging for knowledge and energy. The queen does not employ shackles and slavery for her workers to contribute. It is innate in the ants.

          Then of course, gotta plan for the next ant hive somewhere else. 😳

          Ideology and hope is for suckers It is all inevitable process.


      • Robert Firth says:

        Um. I am reminded of what I once said at a conference, during my days as an IT person: “The ability of software engineers to degrade far exceeds the ability of hardware engineers to enhance”. Look no further that the American Megasloth.

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