Author Archives: Gail Tverberg

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.

Is the debt bubble supporting the world economy in danger of collapsing?

With an ever-lower cost of debt, the economy has had a hidden tailwind pushing it long between 1981 to 2020. Now that interest rates are again rising, the danger is that a substantial portion of this debt bubble may collapse. My concern is that the economy may be headed for an incredibly hard landing because of the inter-relationship between interest rates and energy prices (Figure 2), and the important role energy plays in powering the economy. Continue reading

Posted in Energy policy, Financial Implications | Tagged , , | 1,189 Comments

The world has a major crude oil problem; expect conflict ahead

World crude oil production has been falling behind needed levels since 2019. This problem, by itself, encourages the world economy to contract in unexpected ways, including in the form of economic lockdowns and aggression between countries. This crude oil shortfall seems likely to become greater in the years ahead, pushing the world economy toward conflict and the elimination of inefficient players. Continue reading

Posted in Financial Implications, oil shortages | Tagged , , , | 4,255 Comments

No one will win in the Russia-Ukraine conflict

Russia is in some ways like a heavily armed, suicidal old man, who can no longer earn an adequate living. The economic system of Russia is no longer working as it should. Russia is incredibly well-armed. The situation reminds a person of the story of Samson, in his old age, taking down the temple of the Philistines and losing his own life at the same time. Russia has no reason to back down in response to sanctions. Continue reading

Posted in Energy policy, Financial Implications, News Related Post | Tagged , , , , | 4,785 Comments

Russia’s attack on Ukraine represents a demand for a new world order

Russia’s attack on Ukraine represents a demand for a new world order that, over the long term, will support higher prices for fossil fuels, especially oil. Such an economy would probably be centered on Russia and China. The rest of the world economy, to the extent that it continues to exist, will largely have to get along without fossil fuels, other than the fossil fuels that countries continue to produce for themselves. Population and living standards will fall in most of the world. Continue reading

Posted in Energy policy, Financial Implications, News Related Post | Tagged , , , , | 5,372 Comments

Limits to Green Energy Are Becoming Much Clearer

Wind and solar don’t replace “dispatchable” generation; they provide some temporary electricity supply, but they tend to make the overall electrical system more difficult to operate because of the variability introduced. Renewables are available only part of the time, so other types of electricity suppliers are still needed when supply temporarily isn’t available. In a sense, all they are replacing is part of the fuel required to make electricity. The fixed costs of backup electricity providers are not adequately compensated, nor are the costs of the added complexity introduced into the system. Continue reading

Posted in Administrative Issues, Energy policy | Tagged , , | 3,984 Comments