Creative Commons License
Creative Commons License
Author Archives: Gail Tverberg
Running Short of Tailwinds for the Economy
Strangely enough, the economy seems to move from tailwind to tailwind, as new resources are discovered, as population expands, and as central banks figure out new ways to fix the economy. In this post, I will describe some tailwinds affecting the economy. Many of these have recently lost their value or are likely to lose their value in the future. The long-term trend seems to be toward tailwinds becoming available to some parts of the world economy, but there may be major dips and shifts with respect to which segments of the world economy are favored. Continue reading
Posted in Financial Implications
Tagged debt to GDP ratio, oil prices, population growth
3,079 Comments
Today’s energy bottleneck may bring down major governments
In this post, I try to explain the energy bottleneck the world is facing because of an inadequate supply of diesel and jet fuel, and the effects such a bottleneck may have. The world’s self-organizing economy tends to squeeze out what it considers non-essential parts when bottlenecks are hit. Strangely, it appears to me that some central governments may be squeezed out. Continue reading
Posted in Financial Implications
Tagged diesel, dissipative structure, green energy, jet fuel
2,851 Comments
Can India come out ahead in an energy squeeze?
The slower the growth, the more sustainable an economy is over the moderately long term.
Energy consumption and the use of complexity tend to rise together.
Too much complexity can lead to collapse.
In general, the most “efficient” economies can be expected to do best.
Over the long term, all economies will collapse.
There have been shifts in which economies get a major share of available energy supplies. Shifting patterns are likely again in the future.
India may come out ahead in an energy squeeze because its warm climate and conservative culture allow its energy consumption per capita to remain low. Continue reading
Posted in Energy policy, Financial Implications
Tagged complexity, fossil fuels, limits to growth, sustainability
2,991 Comments
Fossil Fuel Imports Are Already Constrained
The big question for any fuel is, “Can consumers afford to pay a high enough price to cover all the costs involved in getting the fuel from endpoint to endpoint, at the time it is needed?”
Citizens become very unhappy if the cost of winter heat becomes extremely expensive. They demand subsidies and rebates from the government, in order to keep costs down. This is a sign that prices are too high for the consumer.
Both coal and natural gas are also heavily used in manufacturing. Their prices vary greatly from location to location and from time to time. If coal or natural gas prices rise in a particular location, the cost of manufactured goods from that location will also tend to rise. These higher prices will particularly hurt a manufacturing country, such as Germany, because its manufactured goods will become less competitive in the world marketplace. Continue reading
Posted in Energy policy, Financial Implications
Tagged limits to growth, natural gas prices, peak oil
3,123 Comments
Our Oil Predicament Explained: Heavy Oil and the Diesel Fuel it Provides Are Key
It has recently become clear to me that heavy oil, which is needed to produce diesel and jet fuel, plays a far more significant role in the world economy than most people understand. We need heavy oil that can be extracted, processed, and transported inexpensively to be able to provide the category of fuels sometimes referred to as Middle Distillates if our modern economy is to continue. A transition to electricity doesn’t work for most heavy equipment that is powered by diesel or jet fuel.
A major concern is that the physics of our self-organizing economy plays an important role in determining what actually happens. Leaders may think that they are in charge, but their power to change the way the overall system works, in the chosen direction, is quite limited. The physics of the system tends to keep oil prices lower than heavy oil producers would prefer. It tends to cause debt bubbles to collapse. It tends to squeeze out “inefficient” uses of oil from the system in ways we wouldn’t expect. In the future, the physics of the system may keep parts of the world economy operating while other inefficient pieces get squeezed out. Continue reading
