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Category Archives: Energy policy
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
The World Economy Is Becoming Unglued; Models Miss Real-World Behavior
A common belief is that if the world does not have adequate energy, the result will be high prices. These high prices will allow more fossil fuels to be extracted or will allow renewables to substitute for fossil fuels.
In my view, the real issue is quite different: Inadequate energy supply of the types the economy requires can be expected to affect the economy in a way that causes it to become “unglued.” The economy will gradually fall apart as infighting becomes more of a problem. Goods won’t necessarily be high-priced; many simply won’t be available at any price. Political parties will fragment. Conflict within countries, such as the recent Wagner conflict with the military leadership in Russia, will become more common. Continue reading
The economy is moving from a tailwind pushing it along to a headwind holding it back
When the Crisis Stage occurs, there are fewer goods and service per capita to go around, so some members of the world economy must come out behind. Conflict of all kinds becomes more likely. Political leaders, if they happen to discover the predicament the world economy is in, have little interest in making the predicament known to voters, since doing so would likely lead them to lose the next election.
Instead, the way the physics-based self-organizing economic system works is that alternative narratives that frame the situation in a less frightening way gain popularity. Political leaders may not even be aware of how dependent today’s economy is on fossil fuels. Researchers may not be aware that their “scientific” models are misleading because they look at too small a portion of the overall system and make unwarranted assumptions. Continue reading
Today’s Energy Crisis Is Very Different from the Energy Crisis of 2005
Back in 2005, the world economy was “humming along.” World growth in energy consumption per capita was rising at 2.3% per year in the 2001 to 2005 period. China had been added to the World Trade Organization in December 2001, … Continue reading
