2020: The Year Things Started Going Badly Wrong

How today’s energy problem is different from peak oil

Many people believe that the economy will start going badly wrong when we “run out of oil.” The problem we have today is indeed an energy problem, but it is a different energy problem. Let me explain it with an escalator analogy.

Figure 1. Holborn Tube Station Escalator. Photo by renaissancechambara, CC BY 2.0 https://creativecommons.org/licenses/by/2.0, via Wikimedia Commons.

The economy is like a down escalator that citizens of the world are trying to walk upward on. At first the downward motion of the escalator is almost imperceptible, but gradually it gets to be greater and greater. Eventually the downward motion becomes almost unbearable. Many citizens long to sit down and take a rest.

In fact, a break, like the pandemic, almost comes as a relief. There is suddenly a chance to take it easy; not drive to work; not visit relatives; not keep up appearances before friends. Government officials may not be unhappy either. There may have been demonstrations by groups asking for higher wages. Telling people to stay at home provides a convenient way to end these demonstrations and restore order.

But then, restarting doesn’t work. There are too many broken pieces of the economy. Too many bankrupt companies; too many unemployed people; too much debt that cannot be repaid. And, a virus that really doesn’t quite go away, leaving people worried and unwilling to attempt to resume normal activities.

Some might describe the energy story as a “diminishing returns” story, but it’s really broader than this. It’s a story of services that we expect to continue, but which cannot continue without much more energy investment. It is also a story of the loss of “economies of scale” that at one time helped propel the economy forward.

In this post, I will explain some of the issues I see affecting the economy today. They tend to push the economy down, like a down escalator. They also make economic growth more difficult.

[1] Many resources take an increasing amount of effort to obtain or extract, because we use the easiest to obtain first. Many people would call this a diminishing returns problem.

Let’s look at a few examples:

(a) Water. When there were just a relatively few humans on the earth, drinking water from a nearby stream was a reasonable approach. This is the approach used by animals; humans could use it as well. As the number of humans rose, we found we needed additional approaches to gather enough potable water: First shallow wells were dug. Then we found that we needed to dig deeper wells. We found that lake water could be used, but we needed to filter it and treat it first. In some places, now, we find that desalination is needed. In fact, after desalination, we need to put the correct minerals back into it and pump it to the destination where it is required.

All of these approaches can indeed be employed. In theory, we would never run out of water. The problem is that as we move up the chain of treatments, an increasing amount of energy of some kind needs to be used. At first, humans could use some of their spare time (and energy) to dig wells. As more advanced approaches were chosen, the need for supplemental energy besides human energy became greater. Each of us individually cannot produce the water we need; instead, we must directly, or indirectly, pay for this water. The fact that we have to pay for this water with part of our wages reduces the portion of our wages available for other goods.

(b) Metals. Whenever some group decides to mine a metal ore, the ore that is taken first tends to be easy to access ore of high quality, close to where it needs to be used. As the best mines get depleted, producers use lower-grade ores, transported over longer distances. The shift toward less optimal mines requires more energy. Some of this additional energy could be human energy, but some of the energy would be supplied by fossil fuels, operating machinery in order to supplement human labor. Supplemental energy needs become greater and greater as mines become increasingly depleted. As technology advances, energy needs become greater, because some of the high-tech devices require materials that can only be formed at very high temperatures.

(c) Wild Animals Including Fish. When pre-humans moved out of Africa, they killed off the largest game animals on every continent that they moved to. It was still possible to hunt wild game in these areas, but the animals were smaller. The return on the human labor invested was smaller. Now, most of the meat we eat is produced on farms. The same pattern exists in fishing. Most of the fish the world eats today is produced on fish farms. We now need entire industries to provide food that early humans could obtain themselves. These farms directly and indirectly consume fossil fuel energy. In fact, more energy is used as more animals/fish are produced.

(d) Fossil Fuels. We keep hearing about the possibility of “running out” of oil, but this is not really the issue with oil. In fact, it is not the issue with coal or natural gas, either. The issue is one of diminishing returns. There is (and always will be) what looks like plenty left. The problem is that the process of extraction consumes increasing amounts of resources as deeper, more complex oil or gas wells need to be drilled and as coal mines farther away from users of the coal are developed. Many people have jumped to the conclusion that this means that the price that buyers of fossil fuel will pay will rise. This isn’t really true. It means that the cost of production will rise, leading to lower profitability. The lower profitability is likely to be spread in many ways: lower taxes paid, cutbacks in wages and pension plans, and perhaps a sale to a new owner, at a lower price. Eventually, low energy prices will lead to production stopping. Without adequate fossil fuels, the whole economic system will be disrupted, and the result will be severe recession or depression. There are also likely to be many job losses.

In (a) through (d) above, we are seeing an increasing share of the output of the economy being used in inefficient ways: in creating deeper water wells and desalination plants; in drilling oil wells in more difficult locations; in extracting metal ores that are mostly waste products. The extent of this inefficiency tends to increase over time. This is what leads to the effect of an escalator descending faster and faster, just as we humans are trying to walk up it.

Humans work for wages, but they find that when they buy a box of corn flakes, very little of the price actually goes to the farmer growing the corn. Instead, all of the intermediate parts of the system are becoming overly large. The buyer cannot afford the end products, and the producer feels cheated by the low wholesale prices he is being paid. The system as a whole is pushed toward collapse.

[2] Increasing complexity can help maintain economic growth, but it too reaches diminishing returns.

Complexity takes many forms, including more hierarchical organization, more specialization, longer supply chains, and development of new technology. Complexity can indeed help maintain economic growth. For example, if water supply is intermittent, a country may choose to build a dam to control the flow of water and produce electricity. Complexity tends to reach diminishing returns, as noted by Joseph Tainter in The Collapse of Complex Societies. For example, economies build dams in the best locations first, and only later build them at less advantageous sites. These are a few other examples:

(a) Education. Teaching everyone to read and write has significant benefits because it allows the use of books and other written materials to disseminate information and knowledge. Teaching a few people advanced subjects has significant benefits as well. But after a certain point, the need for additional people to study a subject such as art history is low. A few people can teach the subject but doing more research on the subject probably won’t increase world GDP very much.

When we look at data from about 1970, we find that people with advanced education earned much higher incomes than those without advanced degrees. But as we add an increasing large share of people with these advanced degrees, jobs that really need these degrees are not as plentiful as the new graduates. Quite a few people with advanced degrees end up with low-paying jobs. The “return on investment” for higher education drops increasingly lower. Some students are not able to repay the debt that they took out in order to pay for their education.

(b) Medicines and Vaccines. Over the years, medicines and vaccines have been developed to treat many common illnesses and diseases. After a while, the easy-to-find medicines for the common unwanted conditions (such as diabetes, high blood pressure and inflammation) have already been found. There are medicines for rare diseases that haven’t been found, but these will never have very large total sales, discouraging investment. There are also conditions that are common in very poor countries. While expensive drugs could be developed for these conditions, it is likely that few people could afford these drugs, so this, too, becomes less attractive.

If research is to continue, it is important to keep expanding work on expensive new drugs, even if it means completely ignoring old inexpensive drugs that might work equally well. A cynical person might think that this is the reason why vitamin D and ivermectin are generally being ignored in the prevention and treatment of COVID-19. Without an expanding group of high-priced new drugs, it is hard to attract capital and young workers to the field.

(c) Automobile Efficiency. In the US, the big fuel efficiency change that took place was that which took place between 1975 and 1983, when a changeover was made to smaller, lighter vehicles, similar to ones that were already in use in Japan and Europe.

Figure 2. Estimated Real-World Fuel Economy, Horsepower, and Weight Since Model Year 1975, in a chart produced by the US Environmental Protection Agency. Source.

The increase in fuel efficiency between 2008 and 2019 (an 11 year period) was only 22%, compared to the 60% increase in fuel efficiency between 1975 and 1983 (an 8 year period). This is another example of diminishing returns to investment in complexity.

[3] Today’s citizens have never been told that many of the services we take for granted today, such as suppression of forest fires, are really services provided by fossil fuels.

In fact, the amount of energy required to provide these services rises each year. We expect these services to continue indefinitely, but we should be aware that they cannot continue very long, unless the energy available to the economy as a whole is rising very rapidly.

(a) Suppression of Forest Fires. Forest fires are part of nature. Many trees require fire for their seeds to germinate. Human neighbors of forests don’t like forest fires; they often encourage local authorities to put out any forest fire that starts. Such suppression allows an increasing amount of dry bush to build up. As a result, future fires spread more easily and grow larger.

At the same time, humans increasingly build homes in forested areas because of the pleasant scenery. As population expands and as fires spread more easily, forest fire suppression takes an increasing amount of resources, including fossil fuels to power helicopters used in the battles. If fossil fuels are not available, this type of service would need to stop. Trying to keep forest fires suppressed, assuming fossil fuels are available for this purpose, will take higher taxes, year after year. This is part of what makes it seem like we are trying to move our economy upward on a down escalator.

(b) Suppression of Illnesses. Illnesses are part of the cycle of nature; they disproportionately take out the old and the weak. Of course, we humans don’t really like this; the old and weak are our relatives and close friends. In fact, some of us may be old and weak.

In the last 100 years, researchers (using fossil fuels) have developed a large number of antibiotics, antivirals and vaccines to try to suppress illnesses. We find that microbes quickly mutate in new ways, defeating our attempts at suppression of illnesses. Thus, we have ever-more antibiotic resistant bacteria. The cost of today’s US healthcare system is very high, exceeding what many poor people can afford to pay. Introducing new vaccines results in an additional cost.

Closing down the system to try to stop a virus adds a huge new cost, which is disproportionately borne by the poor people of the world. If we throw more money/fossil fuels at the medical system, perhaps it can be made to work a little longer. No one tells us that disease suppression is a service of fossil fuels; if we have an increasing quantity of fossil fuels per capita, perhaps we can increase disease suppression services.

(c) Suppression of Weeds and Unwanted Insects. Researchers keep developing new chemical treatments (based on fossil fuels) to suppress weeds and unwanted insects. Unfortunately, the weeds and unwanted insects keep mutating in a way that makes the chemicals less effective. The easy solutions were found first; finding solutions that really work and don’t harm humans seems to be elusive. The early solutions were relatively cheap, but later ones have become increasingly expensive. This problem acts, in many ways, like diminishing returns.

(d) Recycling (and Indirectly, Return Transport of Empty Shipping Containers from Around the World). When oil prices are high, recycling of used items for their content makes sense, economically. When oil prices are low, recycling often requires a subsidy. This subsidy indirectly goes to pay for fossil fuels used to facilitate the recycling. Often this goes to pay for shipment to a country that will do the recycling.

When oil prices were high (prior to 2014), part of the revenue from recycling could be used to transport mixed waste products to China and India for recycling. With low oil prices, China and India have stopped accepting most recycling. Instead, it is necessary to find actual “goods” for the return voyage of a shipping container or, alternatively, pay to have the container sent back empty. Europe now seems to have a difficult time filling shipping containers for the return voyage to Asia. Because of this, the cost of obtaining shipping containers to ship goods to Europe seems to be escalating. This higher cost acts much like diminishing returns with respect to the transport of goods to Europe from Asia. This is yet another part of what is acting like a down escalator for the world economy.

[4] Another, ever higher cost is pollution control. This higher cost also exerts a downward effect on the world economy, because it acts like another intermediate cost.

As we burn increasing amounts of fossil fuels, increasing amounts of particulate matter need to be captured and disposed of. Capturing this material is only part of the problem; some of the waste material may be radioactive or may include mercury. Once the material is captured, it needs to be “locked up” in some way, so it doesn’t pollute the water and air. Whatever approach is used requires energy products of various kinds. In fact, the more fossil fuels that are burned, the bigger the waste disposal problem tends to be.

Burning more fossil fuels also leads to more CO2. Unfortunately, we don’t have suitable alternatives. Nuclear is probably as good as any, and it has serious safety issues. In my opinion, the view that intermittent wind and solar are a suitable replacement for fossil fuels represents wishful thinking. Wind and solar, because of their intermittency, can only partially replace the coal or natural gas burned to generate electricity. They cannot be relied upon for 24/7/365 generation. The unsubsidized cost of producing intermittent wind and solar energy needs to be compared to the price of coal and natural gas, not to wholesale electricity prices. There are a lot of apples to oranges comparisons being made.

[5] Among other things, the growth of the economy depends on “economies of scale” as the number of participants in the economy gradually grows. The response to COVID-19 has been extremely detrimental to economies of scale.

The economies of many countries changed dramatically, with the initial spread of COVID-19. Unfortunately, we cannot expect these changes to be completely reversed anytime soon. Part of the reason is the new virus mutation from the UK that is now of concern. Another reason is that, even with the vaccine, no one really knows how long immunity will last. Until the virus is clearly gone, vestiges of the cutbacks are likely to remain in place.

In general, businesses do well financially as the number of buyers of the goods and services they provide rises. This happens because overhead costs, such as mortgage payments, can be spread over more buyers. The expertise of the business owners can also be used more widely.

One huge problem is the recent cutback in tourism, affecting almost every country in the world. This cutback affects both businesses directly related to tourism and businesses indirectly related to tourism, such as restaurants and hotels.

Another huge problem is social distancing rules that lead to office buildings and restaurants being used less intensively. Businesses find that they tend to have fewer customers, rather than more. Related businesses, such as taxis and dry cleaners, find that they also have fewer customers. Nursing homes and other care homes for the aged are seeing lower occupancy rates because no one wants to be locked up for months on end without being able to see other members of their family.

[6] With all of the difficulties listed in Items [1] though [5], debt based financing tends to work less and less well. Huge debt defaults can be expected to adversely affect banks, insurance companies and pension plans.

Many businesses are already near default on debt. These businesses cannot make a profit with a much reduced number of customers. If no change is possible, somehow this will need to flow through the system. Defaulting debt is likely to lead to failing banks and pension plans. In fact, governments that depend on taxes may also fail.

The shutdowns taken by economies earlier this year were very detrimental, both to businesses and to workers. A major solution to date has been to add more governmental debt to try to bail out citizens and businesses. This additional debt makes it even more difficult to maintain promised debt payments. This is yet another force making it difficult for economies to move up the growth escalator.

[7] The situation we are headed for looks much like the collapses of early civilizations.

With diminishing returns everywhere, and inadequate sources of very inexpensive energy to keep the system going, major parts of the world economic system appear headed for collapse. There doesn’t seem to be any way to keep the world economy growing rapidly enough to offset the down escalator effect.

Citizens have not been aware of how “close to the edge” we have been. Low energy prices have been deceptive, but this is what we should expect with collapse. (See, for example, Revelation 18: 11-13, telling about the lack of demand for goods of all kinds when ancient Babylon collapsed.) Low prices tend to keep fossil fuels in the ground. They also tend to discourage high-priced alternatives. Unfortunately, all the wishful thinking of the World Economic Forum and others advocating a Green New Deal does not change the reality of the situation.

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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2,805 Responses to 2020: The Year Things Started Going Badly Wrong

  1. Tim M. says:

    Like always, I look forward to Gail’s next report, but I also dread it. Virtual hugs Gail.

    • Thanks for the virtual hugs. I need to find something cheerier to write about. Right now, our bank accounts still have money that we can withdraw and grocery stores still have food. So most people reading my posts (if not the general public) are in fairly good shape. In the UK, I am not sure how long today’s conditions will last.

      • gpdawson2016 says:

        “ And, a virus that really doesn’t quite go away….” in fact most are still waiting for it to arrive! This is cheerier! I originally informed my daughters there was no need to be afraid of the flu but they really just wanted to fit in and be afraid like everyone else.

        • Maybe people need a proper mix of cheer and lack of cheer.

          The people who worry about the virus assume there are few other problems in the world. The vaccine will be their savior. The economy will bounce back and the stock market will rise even further. Staying home, with little activity for long periods, is viewed as perfectly OK.

          People who understand what is ahead view the virus as a minor bump in the road. We understand that good times aren’t necessarily ahead. We see that there seem to be virus solutions that are being overlooked, and that the virus is much less lethal than people assume. A major purpose of the vaccine seems to be to help the vaccine manufacturers.

          • Xabier says:

            True, Gail: those who think that lock-downs are fine are usually those who can work from home (mostly higher-paid anyway) or are retired and feel their stock portfolios and pensions are just fine.

            Oh, if they could see the looming monster ahead of us…..

      • all good here in UK

        OFW is like a main course, with all the comments as sides—some sweet, some savoury, some sour, some wet.

        we can live on that indefinitely–or until the power goes down.

        Though I might find some out of date OFW articles at the doom bank if things get desperate

  2. Mike Roberts says:

    Nice. And it’s good that you kind of acknowledge the problem with CO2 emitted from burning fossil fuels. It’s true that there isn’t a suitable alternative if we want to continue doing what we’re doing which ensures that a lot of the reserves will be burned, leading to more likelihood of catastrophic climate change.

    • The big issue is that without fossil fuels, the vast majority of us are likely dead. We will freeze in winter, because we cannot heat our homes, among other things. People in warm climates will do better.

      • Curt Kurschus says:

        Without fossil fuels, thousands of millions around the world die of starvation, violence among the starving desperate billions fighting over food, and diseases previously treatable with pharmaceuticals that are no longer available.

      • Mirror on the wall says:

        An extra two degrees would be very welcome in northern climes. It is easy to virtue-signal about the climate when one and one’s significant ones are not freezing to death. I would not fancy going through a winter on Britain without fossil fuels.

        Quite possibly the mass migration would be southward like that out of Europe during the last glacial maximum. Frankly we are no longer adapted, let alone accustomed, to the hardier, colder way of pre-FF life. Likely a better adapted remnant will inhabit the north.

        And we had to go and cancel our EU passports – though I doubt that they will have much truck when the time comes. Likely peoples will be fighting their way to more hospitable areas. Someone should make a TV series to explore the various themes.

        • the last glacial maximum was pre and post dated by thousands of years.

          the total human population was maybe a million or two

          so as the climate got colder, the southward shift, as an average, could be measured in ‘yards per year’.
          Basically their motivation would have been following their mobile energy support systems, not retreating from the colder weather. (animals sense climate change better than we do)

          there was no mass migration south.

          They had no infrastructure to worry about
          Wealth on our terms did not exist

          This time it’s very different.

          CC has hit us in little more than century.

          There’s 8 billion of us. Our energy-support systems are now fixed, our cities are now fixed, we cannot support ourselves ‘outside’. our wealth is fixed.

          Our incursions into animal territory has released diseases we cannot control without those energy-support systems.

          an extra 2 degrees in the north would mean a swathe of fresh desert in southern Europe, let alone the Sahara—worth thinking about.
          the Sahara itself would be uninhabitable on any terms

          • JesseJames says:

            Norm, parts of the Sahara might become the new breadbasket of the world, as global rain patterns shift, heading into the new mini ice age. An enterprising OFW reader might encourage his or her children to move to and obtain citizenship in Morocco, and then buy a piece of now worthless desert land…..could pay off big time.

          • Mirror on the wall says:

            It was an analogy. The southward migration did not happen overnight and I did not say that it did. Be assured, no one is suggesting this will be identical to LGM. Thanks, though.

            I do not really need to ‘think about’ the Sahara too deeply as I do not live there and I have no control over what happens. Thanks, again.

        • Herbie R Ficklestein says:

          The late professor of geography at Yale University Ellsworth Huntington focused on the fact that many large countries in the past either prospered or perished depending on how advantageous or disadvantageous climate conditions were. Indeed, climate change was the cause of the prosperity or collapse of civilizations. For example, the Mesopotamia civilization, which is the first civilization in human history. As city states, such as Uruk founded by Sumer, began to emerge, a civilization was born and the region was unified by the Akkadian Empire. However, a severe drought continued for about 300 years from 2200 B.C. with the temperature dropping by two degrees Celsius. A drought and an average temperature drop of two degrees Celsius are critical to the growth of crops. Once its economy collapsed, the Akkadian Empire had no choice but to disappear into the mists of history.

          Perhaps it will and perhaps it won’t

          https://www.donga.com/en/article/all/20201219/2312113/1/Climate-change-causes-collapse-of-Angkor-civilization

          • If economies are already “at the edge,” climate change, or a spell of bad weather, or an epidemic can push them over the edge.

          • Mike Roberts says:

            With the rate of climate change currently, there is no comparison to be made with other eras in human civilisation.

            As per the responses from Gail and others in this thread, it’s clear that fossil fuel use is unlikely to decline because of voluntary demand drop. Consequently, climate change will continue to worsen and may even follow some of the model runs that Gail rails against, at least for long enough to ensure catastrophe. In the end, it doesn’t really matter what we want if we continue to pour greenhouse gases into the atmosphere; if we need fossil fuels to continue as we are we are assured of not meeting that goal at some point in the future, whether because of unaffordable energy, peak fossil fuels (and other resources) or catastrophic climate change and environmental degradation.

            This year might give us a hint as it could end up being the warmest year on record despite having a La Nina cooling the planet a little. Even if it’s not the warmest, it will cement the upward underlying trend with at least the second warmest on record.

            • Loss of airplane contrails and loss of dimming effect of coal smog no doubt helped make this last year extra warm. It didn’t help CO2 levels yet, because of the big lag.

        • InAlaska says:

          It is very warm here now. Much easier to live and farm here than it was 10 20 years ago

      • info says:

        That’s why a slow decline of fossil fuels would be a best scenario for us. If world oil supplies declined by 10-100 per day from its peak and maintains the same pace.

        Many more will have a chance of getting out alive.

        • It is hard to see how a slow decline in fossil fuels can take place. Of course, this is what Peak Oilers have imagined. Perhaps if which country (or countries) are ahead keeps changing, it can keep parts of the world economy going for quite a while, and avoid and overnight collapse in fossil fuel production.

      • MrRobato says:

        I have been playing with heating with photovoltaic s dumping their DC straight into a resistance load to heat with, There just isnt enough sun energy in nov dec jan feb. Insulation helps. Small spaces helps. I use about 2 million BTU a winter, Passive solar, small space, high R.

        PVs DC straight into a water hearer for bathing makes more sense as the annual energy can be used. It is not without considerable drawbacks. PVs are current sources not voltage sources. This requires impedance matching. The resistance load has to be matched to the panels used or no power. Even when matched potential of the PVs is lost. AC switches blow up with DC. There are reasons why AC is used at the voltage it is at in a residence. It strikes a compromise in between being powerful enough to do some work without smoking switches. DC voltage has to be reduced by a factor of 10 to use the same control switches as AC. If the same power is needed current has to go up by a factor of ten. Current blows everything else up other than switches so thats a non starter. Basically all control switching ie thermostats with DC needs to be a solid state relay at higher than 30V two foot high disconnects aside.

        DC straight of the panels is not a game changer.

        THe panels and all the electronics and batteries are functions of fossil fuel.

        They dont have the RAW POWER that fossil fuels has to heat any way.

        Mike Roberts. We freeze without fossil fuels. There is no transportation without fossil fuels, There is no food without fossil fuels. There is no industrial civilization without fossil fuels.

        Respecting and feeling the planet is the best thing about being human. The truth is important. Referencing the problems with CO2 without mentioning our survival depending on them is not truthful.

        The truth is not pleasant.

        Non technical people say oh we will just work it out. Where there is a will there is a way. They are supported by supposed technical people who offer totally unfeasible solutions out of greed and power. Non technical people dismiss all things as solvable.

        As things fail. If we dont understand the truth we will be blind. We will be unable to take appropriate actions and will take inappropriate ones based on delusion. Its everyone’s choice. Our decisions are hard. Largely because there are none. The planet calls the shots and always has. WE do have decision however. Accept reality and base our actions on that to the best of our ability or live in delusion and base our actions on that.

        Best practices for cold climate inhabitants are small spaces, high r, and south facing glazings. These things come from fossil fuels. Your still going to freeze harder than a Popsicle without some BTUs in the winter.

        Check out the energy differences available from the sun in winter.

        The sun is everything.

        https://www.hindawi.com/journals/ijp/2017/7540250/

        • I am afraid you are right. “Your still going to freeze harder than a Popsicle without some BTUs in the winter.”

          My relatives keep sending me pictures of the blizzard they are experiencing up north. I can’t imagine that solar is helpful in such weather.

        • Thanks for the analysis. I find it very interesting and I look for these kind of information for my own project. If you have some other sources about energy solutions please share them. You will find my contact in presentation. Thank you.

  3. brucecodding says:

    Thank you Gail. Very thought provoking as usual. Your points serve as background for our personal portfolio investing, which includes the energy sector.

    • LWA says:

      I’m curious, how would a portfolio that incorporates the points made by Gail look like?

    • It looks like the US Dollar is falling, and the price of oil will be rising, in US dollars. This will hurt the US economy, but help Europe and the oil producers. It may keep oil producers from collapsing in the near term, which would be a plus.

  4. Isaac Pin says:

    This is your best post in a while Gail, I thought they were getting a bit repetitive. We are in need of smart people to look for new solutions, even if they will ultimately create more diminishing returns. Btw, how are things where you are, if you don’t mind me asking?

    • Fairly normal: restaurants, shops, gyms, beauty salons open. I expect bars are too, but I don’t visit bars. Most of the schools have in person classes. Enrollment at the university where my husband teaches is up (8% over fall of 2019?) because students want to go a university with in person classes. COVID cases are now up, but deaths are still comparatively low.

      • Xabier says:

        Ugo Bard wrote a good post about how disastrous online classes have been at his university in Florence – there seems to be no point in enrolling.

        The students here have mostly just looked miserable and stressed, and one can see them tear off their masks when they get out of the college precints where they are mandatory.

        Supplies of decent food to those forced to isolate in their tiny rooms has also been a problem.

        But as an elite university, the brand, as it were, still seems worth getting into debt for: for the time-being at least.

  5. Sheila chambers says:

    If so many people are angry at our current situation, just wait until the decline of resources bites!
    Prices will rise, but there are limits as to how much prices can rise & if they don’t rise high enough to cover the costs of the resources, then they will become less available. Growing poverty will exacerbate this problem as poor people consume less in products & services leading to even more unemployment & more poverty in a self reinforcing downward spiral.

    EVs, solar panels & wind turbines are just another way to keep hope alive & PROFITS coming in from BURNING EVEN MORE OIL, COAL & NATURAL GAS, that’s why CO2 emissions keep rising.
    Why don’t people get it? we cannot replace declining resources with a resource dependent technology?
    In my area, resteraunts are closed, again, meetings are cancled, only places where superstions are taught are still open for business, the’re also called “super spreader sites”, rather like the W.H. under Trump.
    In many other areas, students are expected to learn via a computer on the web but many families can’t afford a computer or the fast internet connection. The poor don’t matter anyhow.

    The homeless & unemployed population keeps growing & Biden want’s open borders, do we really need or want more poor, needy people?
    Why do our RULERS keep pushing for even MORE GROWTH when GROWTH is our biggest problem? How can we get our rulers to accept that de growth is what we need.

    What I see us doing is struggling to keep growing, more illegals crossing the border expecting us to care for them while denying care for those already here legally. As the situation continues to deteriorate, I expect to see more violence, more cop shootings, more poverty & our borders becoming a deadly war zone.
    When people finally realize that “renewables”cannot save our way of life, the streets will be full of angry protestors & that will keep our militarized cops “busy”.

    • Herbie R Ficklestein says:

      The poor and Downtrodden are mostly forgotten…
      Greyhound said it’s operating less than half its normal bus routes during the pandemic, while revenues have fallen nearly 60 percent.
      “Greyhound has been immensely impacted by the effects of COVID-19,” the company said in a statement. “From temporary and permanent closures of routes to sudden workforce reductions, our ability to provide critical service to communities—especially those that are underserved and/or rural—has been reduced.”
      Industrywide, the service cuts are even deeper.
      “We see the industry operating at about 10 percent capacity,” said Peter Pantuso, president of the American Bus Association.
      …..Pantuso estimates that 85 percent of the 100,000 people who work in the bus industry have been laid off or furloughed — in most cases since March.
      It’s not just long-haul services like Greyhound that are limping. Traffic on commuter lines that ordinarily ferry workers to and from the suburbs has also dried up, since many people are working from home.
      Charter buses and specialty services are struggling as well.
      The Labor Department reported an 18 percent jump in intercity bus fares last month, even as overall inflation was tame.
      While bus travel is still cheaper than other options, the extra cost can be a hardship for many riders.
      “This is a mode of travel that caters to people often who can’t afford cars — that need to go at the least possible cost from point A to point B,” said Joe Schwieterman, a transportation expert who directs the Chaddick Institute for Metropolitan Development at DePaul University. “If prices jump, it might be out of reach.”
      But while Congress has offered billions of dollars in financial aid to airlines and Amtrak, bus companies have been overlooked.
      New emergency aid passed by Congress this week provides help for airlines, though bus companies were largely overlooked.
      https://www.mprnews.org/amp/story/2020/12/23/npr-wheels-come-off-for-bus-companies-closing-down-travel-options-for-poorer-america

      Because Politicians rarely, if ever, use a public bus

    • Mirror on the wall says:

      “Prices will rise, but there are limits as to how much prices can rise & if they don’t rise high enough to cover the costs of the resources, then they will become less available.”

      Likely there will have to be a socialisation of production and distribution to countervail the falling profitability of the essentials.

      We will all be adamant ‘socialists’ when we cannot personally afford what we need.

      It all depends how fast the decline takes place and how much time we have to reorganise things on the way ‘down’.

      If it is slower, then our ‘liberal democratic’ societies may have the ‘pleasure’ of making decisions about how to ‘manage’ population decline.

      “The homeless & unemployed population keeps growing & Biden want’s open borders, do we really need or want more poor, needy people?”

      Immigration to USA has settled at around 1.1 million legal entrants per year and around 100,000 illegal entrants per year, regardless of whether DP, RP or Trump is in power. It was actually lower under Obama both times than under GW Bush or Trump.

      Illegal immigration to USA fell from 850,000 in 2006 to under 100,000 by 2014, after which it flatlined – before Trump. There has been a net outflow of illegal migrants from the USA since 2008. The two parties ‘moral posture’ over migration to set their ‘brand’ image and to split the votes between them.

    • Dana says:

      More “growth” means more demand. Landlords love demand. So do govts that rely on taxation.

      • not possible to pay increased rent if tenants do not have the necessary energy inputs to support it

        so house prices and rents must decline

        • huffnpuff says:

          Low house prices need inventory. If banks foreclose and don’t liquidate no inventory hits the market. All capital requirements suspended. Zero incentive for banks to take short sales. Massive incentive to keep on books at full price.

          There are no tenants. There are no mortgage holders. This about loose and easy capital and has been for a long time. There is zero faith in the organic economy. Organic economy is as real as Santa Klaus.

          Loose and east capital stopped paying attention to Santa Klaus a long time ago.

          Whats that pension fund going to do buy CDs?

          • Interesting point! If no one sells, then “extend the loan and pretend repayment can occur” can continue.

          • Xabier says:

            Oh but Santa Klaus Schwab has lots of presents for his friends this year: the digitalised Re-set is well underway and authoritarian and repressive restrictions are in place everywhere.

          • As in Klaus Schwab, who wants to seize everyone’s properties?

            • Bei Dawei says:

              Whatever happened to the Trilateral Commission? I miss them.

            • Kowalainen says:

              Stalin? The CCP?

              Gee, I wonder what the owners must think of getting their and their buddies properties seized by Commie Klaus.

              The MIC must be especially happy with a Calhounian world Soylent GND guvmint. Perpetual peace, stagnation and ultimately inevitable decadence.

              And the artisanry, yes, indeed, they for sure would like to slave away and watch the pretentious faces and lies of and from sanctimony seize their meager assets, so that they can perpetually wine and dine, cheat and steal assets they don’t deserve.

              My guess is that the holy trinity of IC wouldn’t be too pleased about being the errand boys of Commie Klaus and cronies.

          • Kowalainen says:

            Yup, the useless infrastructure (housing, roads, etc) will be left to rot, with a make believe value associated to them. It is the NINJA loans of tomorrow. Garbage digits and representations of wealth that floats around in the system to please rapacious primates confusing numbers with prosperity.

  6. Maxine Rogers says:

    Great article Gail,
    I just wish I could convince my family in the city to get out of Dodge while there is still time to adapt to country life. We are hoping to be in a little, forgotten backwater and escape notice.

    A lot of people think they are going to be able to finish their lives in the next 40 years without any inconvenience. I doubt they are correct. On the good side, we are seeing a lot of gardening of vegetables and people learning to bake their own bread.
    Maxine

    • Adapting to country life is not necessarily easy. We don’t have animals now to help work the fields. We don’t have the variety of seeds that were available years ago, so that something would come up, regardless of the weather. We don’t have the knowledge level for doing subsistence farming.

      • Xabier says:

        In fact, most innovation in agriculture seems aimed at making money for the tech sector and Big Ag, not at a wise adaptation to declining energy.

      • roger says:

        Many city and urban dwellers have a very romanticised view of self sufficient country life; “off the grid”. The truth is that the work is backbreaking and extremely unforgiving, involving long hours in the open. The life also requires skills and attitudes that are unknown to most urbanites. Add to that it is mind numbingly boring.
        No thank you, I want to make the cities work, I like my reliable electricity, pure water from the faucet, unseen waste treatment, take-outs, theaters, etc. I wouldn’t last a week at the life my Father in law had in rural Ireland in the 40s and 50s.

        • There needs to be a community of other people providing goods such as clothes/shoes and garden implements. It would help to have some limited medical care as well. A family cannot really exist based on their own efforts. Specialization works too well. Also, resources are not available locally. Any minor loss of production means the family would starve (or freeze).

        • Xabier says:

          Well, there is ‘ My Off-grid Tiny House’ Youtube fantasy land, where it is mostly about gathering a few sticks – spiritually, of course – in the woods to make a fire for one’s big mug of coffee and a vegan dinner, with a book to read afterwards, and the real thing.

          I watched a wonderful series of interviews with old people who had lived the real peasant life in the Pyrenees: sitting by a nice fire in a modern apartment, their faces fell when asked ‘What were the old times like?’ and they usually replied ‘Hard, very hard!’ or ‘Terrible!’

          Regular semi-starvation, typhus, TB, etc, were very common then,too. And getting shot by border police when smuggling from France to get some extra money…

          And now the people who have hung on in the villages have been screwed as their main markets, the restaurants in the city, have collapsed with the COVID lock-downs.

      • Herbie R Ficklestein says:

        The Automatic Earth just recently posted an article on this very topic of the constraints we now face in going back to a rural life…
        https://www.theautomaticearth.com/2020/12/cows-and-acres-and-1840/

        Excerpt from the it…
        A modest 1-story house. Picture 2 semis packed tight, +4 semis loose hay. For only three months. Weather and yield vary wildly by area and year but let’s say hay fields produce 3 tons per acre, so10 acres guarded hay in addition to 10 acres fenced summer pasture. What do we get for it? Hard to figure exactly but +2 gal/day/cow for these hardier breeds which varies wildly with shelter, season, and diet. 2 gallons milk = 2 pounds of cheese. It takes 1 year to raise beef, so 7,500lbs of hay = 1,200lb cow = 750lb beef.

        While you need 20 acres for the feed alone, you’ll also need crop rotation, a barn, a springhouse, a dairy, an implement shed, a repair garage, a human house and cellar, and because of humans on site to support the cows: a chicken coop, pigs to eat the leftover dairy, a smokehouse, a garden and orchard, as well as wood for heat. That’s 1 acre / face cord, so let’s say 20 acres for cows, 10 acres for crop rotation, 10 acres for wood, and 10 acres for the homestead, garden, and buildings. What is the common size of American farms from Cape Cod to Iowa? 50 acres. 20 hectares. How many people? 4-10/farm. 1-2 humans/acre.

        Why do I bring this up? It gives you a rough sense of transforming a suburban housing development back into the farm it came from. First: there’s no longer any forest. That means no boards, no firewood. We have new materials and oil too, so let’s not dwell on this. There is an enormous surplus of existing buildings. How many acres per house? Presently, it’s 1/5 acre. How many people per house? There are unimaginable difficulties answering this, but let’s say 2 people/house. That’s 10 people per acre.

        Good 🤠 reading…the simple life ain’t so simple

      • Minority Of One says:

        >>We don’t have the variety of seeds that were available years ago

        Here in the UK, there are agricultural charities whose aim is to keep old varieties of fruit and veg alive. You can buy the seeds. When we had our own allotment (community food growing area), that was the only type of seeds I bought. I am still hoping we can buy a small-holding in Aberdeenshire. Getting a bit late though.

        • Christopher says:

          I agree, the seeds are still available. Hardy animal races are probably much harder to find. For instance, some (maybe even all) cattle races used to have to endure starvation in the end of the winter quite often. I’ve read accounts where farmers, after a long winter, had to drag the animals out from the barn to help them reach the fresh grass of the spring. This was usually enough to get the animals revigorated.

          Letting animals starve is illegal today. The selection on cattle has been highly biased for fossile fuels…

  7. Dennis L. says:

    Interesting idea, even the job of street sweeper will change.

    Link to a robotic street sweeper, Trombia Free, doesn’t look like your father’s street sweeper.

    https://trombia.com/free/?gclid=CjwKCAiA8ov_BRAoEiwAOZogwarbFQiSj5-VQXKNGtTNHbr6p5oj2INb-IW2iazJQw-jtp0Vi07JsBoCVlgQAvD_BwE

    Gates is supporting work on molten batteries, the elites probably have a very good understanding of what is happening and access to the best experts in evaluating scenarios.

    Dennis L>

    • Sounds like an excellent idea, except solar batteries can’t fuel such devices

    • Lidia17 says:

      Street sweepers used to be able to collect the horse poop.

      When I lived in Italy (as recently as 8 years ago), the street sweepers still used hand-made brooms of twigs that looked like something out of a Grimm’s fairy tale. Probably the public unions kept them employed.

      I can’t imagine a city-sized Roomba as being anything particularly helpful going forward.

    • JMS says:

      Amaizing. It’s all we need to obtain, at last!, the clean new world we deserve.
      But to be really awesome and perfect the vehicle should be color of lettuce.
      Grey doesn’t do it IMHO

  8. MG says:

    When the human population grows, it releases CO2 like bacteria in the fermentation process. That is why the uncontrolled growth of the human population works on the same principle as cancer.

    As the cancer cells have deformed mitochondria, they get energy in a different way than the healthy ones. The mitochondria of the human population produce CO2 in the process of burning, i.e. oxidation.

    When the human population starts to use energy that is not based on the oxidation process, it stops growing.

    That is why the prediction of the population growth after the collapse in the Limits to Growth was faulty: the production of pollution in the form of the CO2 is a byproduct of population growth. It is not possible to decouple these two items and predict the simultaneous fall of the pollution (CO2) and the growth of the human population.

    • MG says:

      But the population growth has got its limits. The humans simply need sunlight.

      That is why the dark and damp areas like tropical forests are not very well suited for the human beings. Also that is why the buildings that do not provide enough sunlight are abandoned when possible:

      150-Year-Old Advice on Sunshine Being Good at Killing Bacteria Just Turned Out to Be True

      “If you’ve got a relative or friend who tells you letting sunshine into a home kills off germs, it’s time to congratulate them on their scientific insight – because a new study shows that sunlight is indeed effective at blitzing bacteria.”

  9. Sergey says:

    Bacteria in vitro is a well-researched topic. Yes, this is a simplification, but the principle is very similar, there is input data – environment of existence, amount of food (energy) in this environment. And there are 4 stages of development, which are proven and reproducible, regardless of the type of bacteria.
    1) Lag phase, where adaptation to the environment take place. Optimization of energy consumption of the living environment.
    Humans had this phase, adapting to consume fossil fuels (before 1900 year)
    2) Exponential phase, where bacteries are growing exponentially, consuming all possible energy.
    Humans are at the end of this phase right now (1900 – 2020)
    3) Stationary phase. Where there is not much energy to grow. The total number of born & dead are equals. In the wild bacteria spend most of their lifetime in the stationary phase.
    I believe humans have yet to live in this phase.
    4) Death phase. Where there is not much energy to sustain current number of bacteria. So number of bacteria falls even below 1st (lag) phase.

    Gail predicts this 4th phase for humans, completely ignoring 3rd (stationary) phase. But mother nature tells us – it is exists. At least for bacteria, and it is proven.

    • Jason says:

      Humans are not bacteria. Civilization decoupled us from mother nature. We still rely on mother nature, but there is a layer in between. This is caused by our unusual brains. This layer gave us a big boost up, like a step ladder. Its existence relies on continuous growth of energy, like a hurricane. Take this growth away and the ladder dissolves, and we fall.

      • Sergey says:

        Indeed humans are not bacteria, but everybody should remember what bacteria is the far-parent for every mammal on this planet, include human. And we humans so decoupled with mother nature, so don’t care what happens outside our house. It’ll cost.

      • we haven’t been decoupled from Mother Nature

        • Jason says:

          That is why I stated that we rely on mother nature with a layer in between. Analogies help one to understand, but with it one loses some information and some truth. Heidegger explains this and mirror on the wall can further discuss his views on truth.

    • Jason says:

      Another analogy: Bacteria in a petri dish is like a balloon hooked up to an air source. The flow of air is controlled by the pressure in the balloon. The balloon can fill up nicely, but as the pressure gets close to the limit, the flow of air decreases until the loss of air from the balloon, since the balloon’s surface is slightly permeable in this example, matches the incoming flow. Now the air is not infinite, it comes from a tank, so as the tank runs out of gas, the balloon deflates until flat. Now what technology has done, is created small holes throughout the surface of the balloon. This allows the balloon to expand well past its normal bursting point, but also increases the escaping air quantity. This is not linear but exponential, so as it expands, we need exponentially more air incoming to keep it at a certain volume. Once the tank runs out of a certain amount it can no longer provide the inflow needed, and in fact because there was no feedback to slow the air flow, it runs out of air much quicker. Also, because of the holes in the balloon, the balloon deflates much faster than if it were a normal balloon, thus a much faster time to homeostasis, which is a flat balloon with lots of holes in it.

    • In the developed countries as well as the members of the former Soviet Union, population has plateaued. There still is a lot of growth in Africa and parts of Asia (Iraq, quite a few Moslem or oil countries).

  10. Mirror on the wall says:

    This year looks set to be remembered in UK also as the year of Boris’ deal. TP and EU are on the brink of rushing through a Brexit deal.

    After years of ‘deadlines’ and delays, as tactics, Boris now wants to give parliament a single day next week to ratify his as yet unknown 2000 page deal.

    Westminster and Brussels are to be recalled from their Christmas breaks. MEPs complain that they will be under pressure to endorse the deal without proper scrutiny either on a single day or else to ratify it next year if has already come into ‘provisional effect’.

    The plan was clearly to remove democratic scrutiny from the parliaments of a last minute deal by doing over Christmas with days to go.

    We cannot expect a confirmatory referendum on the deal but it would have been nice to at least have had some parliamentary scrutiny. LP is liable to abstain or to vote for any deal, for purely partisan reasons. Westminster has not functioned as proper parliamentary forum of scrutiny. This is government by an unchecked clique that has deliberately removed scrutiny from the process.

    https://www.dailymail.co.uk/news/article-9085263/UK-EU-haggling-fish-despite-deal-DONE.html

    • fish is important

      this is the queue today at the local fresh fish shop

      (https://twitter.com/twickerati/status/1342040307035156480?s=03)

      • Mirror on the wall says:

        Yes, I eat haddock or cod at breakfast most days and there never seems to have been any shortage.

        It is not clear that much will change at the fish shops either way.

        “The majority of fish eaten in the UK is imported. Some 83% of the cod consumed in the UK comes from abroad, alongside 58% of its haddock. The UK catch is 5% cod and 7% haddock, while the UK fleet catches a lot of herring, 93% of which is exported, mostly to Norway and the Netherlands.

        “Overall, the UK imports 70% of the fish it eats and exports 80% of what it catches. Under the CFP, the UK has most of the quotas for haddock and decent quotas for cod.”

        Most of the UK catch is licenced to foreign trawler companies anyway.

        • economyfirst says:

          Yum! Envious. Fish n chips every day. It pays to be a island dweller. Breakfast of champions.

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