Energy

Responding to Collapse, Part 5: finding a small town

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Published on The Easiest Person to Fool on December 28, 2018

 

 

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In my last post I started talking about moving from the city to a small town as a way to make adapting to collapse easier, and I listed a number of criteria for choosing a small town. Today we'll be looking at some of those criteria in greater detail.

As before, credit goes to Don Hayward, Joe Clarkson from the comment section of this blog, and, new this time, to Category 5, from the Dark Green Mountain blog and the Doomstead Diner.

Looking back on the criteria I laid out last time, I can see that I should have divided them into two sections— picking a town where you can live while BAU is still working and then picking a town that will also be livable after BAU is no longer capable of supporting us. For the next while we will find ourselves living in two worlds—trying to make enough of a success of life in BAU so that we can afford to disentangle ourselves from BAU and get something started to replace it.

So, to get started, just exactly how far from the city do you need to be? I am very much a "shades of gray" guy, so my answer will be in terms of a spectrum rather than a single hard number. Here in rural Canada we tend to talk about distances in terms of driving time. I would guess that an hour amounts to around 50 miles. I live about three hours from Toronto, around two hours from many other cities to the south and east of here, and about an hour and a quarter from the small city to the northeast. I am not considering a move to get farther away, so if pressed for a definite answer I would say somewhere between an hour and two hours is a sufficient minimum distance. To be cautious, err on the long end of that range, and of course I'm not saying you shouldn't be more than 2 hours from a city. On the other hand, you may find you need to be close to a city for a while yet and accordingly place yourself at the lower end of the range, while remaining aware of the greater risk that probably entails.

Many cities are quite close together and there are whole areas where there is nowhere far enough from a city to meet my distance criteria. Moving away from your current city but toward another one clearly won't help.

By the time collapse has progressed far enough for this distance to be a real concern, transportation fuels will be in short supply, either because of genuine shortages, market malfunctions or supply chain breakdowns. Initially they will be "rationed by price" to the point where they are not affordable for most of us, or they will be outright rationed by the authorities. Then there will be intermittent interruptions in the supply. And at some point beyond that these fuels will not be available at any price. So the distance from the city would have to be covered on foot or bicycle, making it, in effect, considerably longer. That two hour drive would be a multi-day walk for most people, if they could manage to do it at all.

There are several reasons for wanting to be this far away:

  • in the city there are limited opportunities for adaptation in the face of infrastructure and supply chain failures—the resources you need are just not available locally. You need to be far enough away from population centres that the local resources can support the local population
  • there will be social unrest and civil disobedience (much of it justified) in many cities—violence that you don't want to get caught up in
  • as conditions worsen in the cities, there will occasionally be waves of refugees fleeing from them. I think the aim of people in small towns like mine should to help those refugees, but if there are too many we won't be able to help them and things will go badly for both them and us. So, we want to be far enough away that the distance acts as a filter and reduces their numbers to something manageable.
  • it seems likely that there will epidemics from time to time, especially as public health systems start to fall apart. It would be good to have some distance between you and any city that is being ravaged by an epidemic. A sort of geographical quarantine.

But the main reason you're moving to a small town is for what's there, not what you are trying to get away from.

What size of small town you should be looking for?

Zero is the wrong answer. As Douglas Ruskhoff says, "being human is a team sport." You can't accomplish much, especially in the long term, as an isolated individual or family. Even a group of a few families will find themselves struggling just to survive. In my opinion, remote, isolated survivalist compounds or even lifeboat eco-villages have little future. More people means a greater range of skills and talents and more redundancy in the support systems you need to set up.

I don't think there is much hope of retreating to the wilderness and surviving by hunting and gathering, either. There is very little wilderness left and what is left is not so completely untouched as it once was. The effect of this is to make hunting and gathering more difficult and it is, in any case, a skilled and demanding lifestyle, especially if you weren't born to it. Learning those skills, when you aren't living in a group where most people already have them, would be very challenging.

What you really need is a community that is viable now, as part of "Business as Usual", and which can adapt as collapse progresses and then still be viable under post collapse conditions.

Now I will agree that for some activities a lone individual is best, and for others 2 to 5 people is ideal. But these are specific, short duration jobs within a larger context.

At this point some of you are probably thinking of "Dunbar's number"—"the cognitive limit to the number of people with whom one can maintain stable social relationships—relationships in which an individual knows who each person is and how each person relates to every other person." That number is somewhere between 100 and 250 people, and there is definitely something to the idea. But I would say that this is more like the lower limit on size for a viable community. Larger communities are made up of smaller, overlapping circles of people who know each other in the "Dunbar" sense.

The upper limit on the size of a viable community is determined by how many people the surrounding geography can support without fossil fuel powered agriculture and shipping. Typically that would be a few thousand people, possibly as many as 10 to 20 thousand in ideal circumstances. A counter example would be Edo (now Tokyo) during the days of the shoguns, which grew to over one million people without the benefit of fossil fuels or modern technology. But these days climate change is reducing the carrying capacity of almost every area, and you must remember that the size of small towns will increase first as former locals return from the city and then again as refugees arrive. Set your upper limit around ten thousand to begin with.

So, distance and size will help narrow things down somewhat, as will the climate change based criteria I mentioned previously. But still, which town to pick?

Probably the most important consideration is connections in the community. If you grew up in a small town, if you still have family there, or even close friends, then that town has to be very high on your list of places to consider. If you have limited resources, those connections may prove vital in making your move possible.

Next, I think you have to be looking for a place where you can find accommodations and earn a living in the short run while "BAU" is still in operation. As Category 5 suggests, once you have found a likely looking small town, it would be a good idea to live there in rental accommodation for a year or two in order to get to know the place better. It takes more than a few brief visits to really size a place up and figure out how to fit in. And for those with limited resources, renting on an ongoing basis may in any case be a better alternative than taking on a mortgage you can't really cope with. In today's uncertain market, it's wise let your landlord take the risk of investing in real estate.

Financial considerations also have to be very high on your list of priorities. Eddie at the Doomstead Diner has written an excellent article entitled "Some Inconvenient Truths About Collapse Economics". He challenges the idea, common among kollapsniks, that the only things worth investing in are preparations, gold, silver and farmland. At some point in the future that may be true, but you have to have a plan for surviving in the meantime, and that will likely involve taking part in an economy that you know has a limited shelf life—even putting some of you money into conventional BAU style investments in the short term.

I'll be going into more detail on this in a future post, but some degree of preparation is a very good idea and you should spend some money on it, but not every cent you have. It is also good to have some ordinary cash on hand, and even some actual physical gold and/or silver carefully hidden where you can get at it if you need it. Farm land, while it is tempting, is currently very expensive per acre and since it comes in large chunks, likely to be out of reach for most people. Remote farms may cost less, but leave you too isolated.

When I talk about "collapse progressing", it may sound like I am envisaging a uniform run downhill, but my regular readers will know this is not the case. Collapse progresses unevenly, unsteadily and unequally. This is good news if you are thinking of moving, because there is likely some place where things are better than where you are now, especially if you are flexible and willing to adapt to a new situation. There are "eddies" in the stream of collapse, places where things occasionally stand still or even improve somewhat for a while.

I think this is very true of both real estate and employment considerations.

A great many cities are experiencing real estate bubbles today. Accommodation costs a lot to buy or rent there and the situation is only getting worse. This is less about the demand for housing and more about malfunctioning markets and people with money trying to find somewhere to invest it at a good rate of return. But since there is no real demand to justify those real estate prices they will eventually decline, and decline precipitously. The trick is to get out with your assets intact before that bubble bursts.

Aside from high prices caused by investment bubbles, there is also often a clear relationship between distance from good employment opportunities and the cost of housing. Housing in small towns away from big employment centers (which are almost always in cities) is very likely to be less expensive. So if you don't mind a longer commute, if you can telecommute, or if you can make the big leap of finding work away from the city, you will likely find housing that costs less.

But I've read that in the United States towns with more affordable housing also offer jobs that pay less, so moving there may not solve your problems. It seems to me that this will be determined by what level the minimum wage is pegged at, if there is one. So states (provinces here in Canada) with a decent minimum wage would be a good place to look for work.

Handymen and skilled tradesmen are most always in demand, as are skilled professionals. Even small towns have a few relatively unskilled jobs in service industries and there will be seasonal work in agriculture and tourism. One of the few justifiable reasons for delaying this move is to find a job to support you in your new location. Just don't make this an excuse for not moving.

I live in a small town that is in an economic eddy, being a bedroom community for a nearby nuclear plant which employs several thousand people. (It's one of the largest nuclear generating developments in the world.) This is "energy sprawl", where lower EROEI energy sources require a lot more infrastructure, and just happen to create jobs building, operating and maintaining that infrastructure in the process. So such opportunities do exist.

How you approach these opportunities will largely depend on your own personal circumstances—your socioeconomic class, in particular.

The Upper Class

If you are a member of the upper class—the "one percent"—you can do as you please, at least for the moment. But in a really serious financial crash, your wealth is likely to evaporate, and you probably don't have the sort of skills that will be needed in the aftermath. For all I care, you can jump out a fortieth floor window and end it all quickly. But if you hope to survive, you'd better be prepared to fit in and keep a low profile, among people who are likely to be resentful of the rich, who they see (correctly) as responsible for the mess the world is in.

No doubt though, you will be focusing on ways of keeping BAU rolling along and maintaining your status within it. Good luck with that.

The Middle Class

Indeed, a willingness to let go of BAU should probably be seen as the distinguishing difference between the middle and upper classes. Though currently, especially in the U.S., many middle class folk mistakenly think that if they support policies that benefit the upper class they will themselves eventually be able to ascend into that class. Of course, the upper class does everything they can to encourage that attitude, with no intention at all of benefitting anyone but themselves.

There are two traps here: one is thinking that you have much chance of joining the upper class and the other is thinking that it would do you any good if you did. If you're currently in the middle class, you likely have enough resources to respond to collapse in a fairly effective fashion. Don't miss the opportunity.

If you already own a home or at least have quite a bit of equity in it, you may well be able to sell it, buy a house in a small town and still have enough cash left over to retire early and invest in preparations. You should do this soon, before the real estate bubble bursts. If you are already retired, you can probably do the same thing and end up in better financial shape than if you'd stayed in the city.

If you are middle class but younger, you are likely working at a job that is keeping you in that class, and this will make the proposition of leaving the city much harder to consider seriously. But perhaps you can commute or even telecommute from a small town. Or find a small town with a local industry that needs people with your skills. If you are renting or have only recently bought a home and don't yet have much equity built up in it, then renting in a small town may cost you substantially less than your current rent or mortgage payments. Don't make the mistake of believing that real estate prices will keep going up forever.

All middle class people should look ahead to days of further economic contraction and consider taking a "deliberate descent" approach to life. That is, learn to live with less, so that when that is all you have left, it won't be so much of a shock. As John Michael Greer has said, "collapse now and avoid the rush." And of course, living frugally will make your resources last longer.

The Lower Class

It can be difficult to see where the line should be drawn between the middle and lower classes, so I am going to simplify things and lump everyone who has a somewhat decent, secure job with benefits, and who owns a home or is renting while saving with a reasonable expectation of being able to buy a home in the foreseeable future, into the middle class. We'll leave other assets and debts as an issue for another day.

Below that is the lower class which for the purposes of this discussion includes, at the upper end, those who have a job and can afford accommodation and a vehicle to drive to work, down through those who have to choose between accommodation and a vehicle, and may end up working but living in a vehicle, through to those who are jobless and homeless. The majority of these people, if they have a job, are members of the "precariat". That is, their job is not in any way secure and does not pay enough to make the rest of their lives secure either. If you are a member of the precariat, you don't need to be told about "deliberate descent"—you're already living it, though I would guess not willingly.

No doubt it is somewhat presumptuous on my part, as a relatively "fat cat" middle class guy, to offer advice to lower class people. Though I did grow up on a small family farm in a family that was just barely middle class at best. And my kids have certainly spent their share (and more) of time in the precariat. But I don't really have a lot of experience at being poor and when I have problems, I am accustomed to using money to solve them. For people in the lower class that’s rarely an option.

Nonetheless, I have a few things to say that I hope may be of help. Lower class people are, I think, farther along the collapse road than the rest of us, and may well be less bothered as things fall further apart—it will all just be more of the same shit to them. Psychologically they are quite resilient but, materially speaking, they have very limited resources to deal with specific problems as they arise, and in that sense they will be harder hit. So, for lower class people, the need to get out of the cities is no less, but the challenge of doing so may be greater.

Many of the problems faced by people in the lower class come from the degree of isolation in which they find themselves. I think there are great possibilities for small groups of disadvantaged people to get together and share housing, food, transportation and so forth. Sadly, we have largely forgotten the skills for getting along in such circumstances, or have been convinced by those who are in power that such skills are worthless. The neo-liberal approach of using money to mediate all relationships between people leaves us at the mercy of those who control the money and that of course is exactly what they want. I think there is a lot of potential in various sorts of co-operative ventures to break out of this trap.

I've been doing a bit of reading at Sharable, a website that "aims to empower people to share for a more resilient, equitable, and joyful world". This is essentially what I am talking about here. It would certainly be a move in the direction of the adaptations we'll have to make down the road in order to succeed in small isolated communities.

Well, I think that's enough for now. Next time we'll continue with this, looking closer at criteria for choosing a small town as place to live as BAU goes further downhill and we can no longer rely on it completely for the necessities of life

Responding to collapse, Part 3: Declining Surplus Energy

 

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Published on The Easiest Person to Fool on October 26, 2018

 
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In my last post I talked about responding to changes in our "natural" environment caused by climate change. Today I'll be talking about responding to changes in the human part of our environment, the part that we have created, both the "built" physical environment and the social environment.

We are social animals and also technological (tool using) animals. For the last few million years our ancestors evolved to live in groups and use technology. In one way of looking at it, our techniques for working together in groups are an organizational technology that greatly amplifies what we could do alone.

At any rate, for a long time now we have been dependent on technology—we certainly aren't much good alone, naked and empty handed. Technology needs energy to make it work and for most of our history that energy has come from food via muscles (human or animal), biomass (mainly firewood), and to a lesser extent wind, moving water and the sun. But over the last couple of centuries we've added cheap and abundant fossil fuels to that mix of energy sources. We've gradually become dependent on a global network of complex technology powered by those fuels for the very necessities of life.

This is a cause for concern—what if energy were to become more expensive and/or less abundant? As it certainly seems likely to do in the near future. Well, in short, the way we live would have to change, becoming less energy intensive, and it seems very likely that the planet would no longer be able to support so very many of us. It can barely support the number of us that are alive today, so this would mean a significant dieoff of the human population. And the climate change related problems we talked about last time will only make this worse.

Of course this is nothing new. I've discussed the ideas of carrying capacity, overshoot and dieoff many times over the years on this blog. But the devil, as they say, is in the details and if we are to discuss strategies for living through collapse, we need to look closely at those details.

The economy is a major and critically important part of the modern human environment and one that is fueled by energy, so I see depletion of fossil fuel energy resources (often referred to as Peak Oil) as the major challenge as far as the human built environment goes. To really understand that challenge, it is important to understand a bit about "biophysical" or "surplus energy" economics. Have a look at those links for more detail, but I'll try to explain in brief.

First, why is energy so critical to the functioning of the economy? Modern industrial processes are significantly more productive than the cottage industry of just a few hundred years ago, and it requires a lot of energy to make them work. The energy that drives these processes is worth far more in terms of the goods it produces than the price that industry pays for it. As such, energy is far more than just another commodity. And it must be abundant and cheap, if industry is to be profitable and the economy is to continue growing.

Second, why are fossil fuels such an important source of energy? Basically because they have been abundant, cheap and convenient to use. When I say cheap, I am not just talking about the cost in dollars, but in the amount of energy it takes to access fossil fuel energy. This is defined as the "Energy Returned on Energy Invested" (EROEI). Early in the twentieth century, when oil came into prominence as an energy source, it took just one barrel of oil to get 100 barrels of oil out of the ground—the EROEI was 100. The "surplus energy" was over 99% and this was a tremendous stimulus for economic growth.

Since we have developed fossil fuel resources on a "lowest hanging fruit" basis, the easiest to access, highest quality sources have gradually been used up. Modern oil discoveries rarely have an EROEI better than 10. Unconventional sources of oil, such as fracking and tar sands, have even lower EROEIs. And sadly, the renewable energy sources that are being considered to replace fossil fuels also have very low EROEIs. Even lower if you add in the energy storage required if intermittent sources like wind and solar are to be put into practical use.

The important thing to understand here is that there is a very clear link between the average EROEI of a country's energy sources and the strength of its economy. As that average EROEI goes down, industry starts to become less and less profitable. Below 15 this gets very serious—it becomes difficult to raise capital to start new endeavours and existing businesses find it hard to stay profitable. As the average EROEI decreases further, infrastructure replacement and even routine maintenance of infrastructure becomes difficult to fund. Industrial civilization starts to crumble and the kinds of heroic efforts it would take to save it are beyond its capabilities.

Conventional economists are blind to this and assume that as one energy source runs out, demand will successfully fuel efforts to find a substitute. Without a clear understanding of EROEI, evaluating the merits of such substitutes can be very difficult. Already we are seeing "energy sprawl" as wind turbines and solar panels are springing up everywhere, but with such low EROEIs that they are actually lowering the average EROEIs of the systems they are being added to.

Some people argue that there are huge reserves of unconventional fossil fuels, enough to last for centuries, "so where's the problem?" The problem is that these unconventional hydrocarbons have such low EROEIs that they are not a solution—pursuing them just makes things worse.

The same is true of nuclear fission—lots of fuel, but such a low EROEI (around 9) that it's no help. If at some point we manage to design practical fusion reactors, it is pretty clear that they will be so complex that their EROEI will be even lower than fission reactors, making the abundance of fusion fuel a moot point.

The essence of our situation here in the early twenty first century is that the problem of declining surplus energy doesn't have a solution. Of course, in addition to that underlying and insoluble problem, there are lots of things wrong with our social/governmental/economic systems that make the situation even worse. Definitely it would help to fix these problems, but it is important to keep in mind that, even if they were all fixed, everything wouldn't suddenly be OK—the main problem would still exist. And because of declining surplus energy, it's going to get harder and harder to fix anything.

So, what to do? Well, we just have to adapt to these new realities. Here I am going to borrow some ideas from Prof. Jem Bendell's essay "Deep Adaptation", particularly his three Rs.

Bendell is mainly concerned with climate change and after doing a review of the current findings of climate science, he concludes that "collapse is inevitable, catastrophe is likely and extinction is possible". Considering declining surplus energy and the resulting economic contraction as well as climate change leads me to the same conclusions, maybe more so. Even without any catastrophic events, the slow collapse of industrial civilization, brought on by the falling EROEI of its energy sources, is surely an inevitability. And we should be planning our response to such a slow and tedious collapse, which will require a great deal of adaptation to our new circumstances.

There are many forms of denial that people fall into when faced with the certainly of collapse. Not surprisingly, most people see their continued livelihood and their feelings of self-worth as being dependent on the possibility of ongoing material progress. This is the "religion of progress" which is so central to our modern society. Collapse, of course, means the end of material of progress, and immersion in a complex predicament beyond our control. Admitting this is even possible has, at least initially, a crushing effect on most people.

But, for those who have overcome their denial, Bendell's three Rs hold the key to successful adaptation.

First comes "Resilience". This means having the personal resources—emotional toughness to keep going in the face of collapse and the willingness to adapt to conditions that we have been taught are simply unacceptable (involving a significant reduction in our level of comfort and convenience). I am currently reading Resilience, by Rick Hanson, which gives an abundance of advice on achieving a greater degree of personal, internal resilience.

The alternative is to continue with denial, or having accepted the reality of the situation, give up and abandon any attempt to adapt. To do so is a great pity, since the situation is potentially survivable. Not to minimize the rigors of collapse, especially of the kind of dieoff we will eventually be facing, but there is good reason to think that some of us will survive, find a livelihood and maintain a sense of self worth even with drastically reduced consumption of energy and material goods.

In order to be among those who survive, resilience also involves having accumulated some physical and social resources which will tide us through when the system that currently supports us falls apart, allowing us to hang in there long enough so that we have a chance to adapt. These are the things we will decide we do really need to keep in order to meet our basic needs—safety, satisfaction and connection. Our ancestors did this for millions of years without the help of industrial civilization, so I think there is some chance we can do so as well.

Next comes "Relinquishment". This means deciding what we need to let go of in order to not make matters worse. Clearly, many aspects of modern industrial society cannot be sustained and will have to be abandoned.

Lastly comes "Restoration". This means deciding what can we bring back to help us with the coming difficulties and tragedies. In building our modern world there is much that we have set aside, old things that can brought back and put to good use in our low energy future.

I could spend one or more posts looking at the details of these three Rs, and it is likely that I will. I think there are many different approaches that should be tried, and of those, quite a few that will be successful to some degree. The main thing is that people actually give it a try.

So, we started out to have a closer look at the details of collapse in order to gain a better perspective on strategies for living through collapse and after it. I think an understanding of surplus energy's role in economics and the three Rs outlined above is a good start. But to delve deeper into this, I think we need to take a look at mankind's disturbing tendency to group together in ever large settlements. We tend to focus on the advantages of living in cities and to ignore what it takes to make a city work, how it can stop and what might happen when it does.

Cities rely on long supply lines and extensive infrastructure to supply their inhabitants. Our failure to maintain that infrastructure and its resulting decay is already leading to intermittent outages of services for which there is no local alternative. At some point the line between outage and catastrophe blurs and not long after that it becomes unavoidably clear that collapse is really happening.

Now I am a country boy, so perhaps I am biased, but it is my contention that cities are going to be very hard hit by collapse, even the sort of slow collapse that I am talking about. I think that escaping to a more rural area before collapse progresses much further would be a good idea.

The key question, though, is why do I think things will be any better in rural areas?

There is no doubt in my mind that the crises related to supplies of energy, water and food (the basic necessities), which will no doubt occur as industrial civilization crumbles, will effect rural areas just as much as urban ones. People in rural areas are just as much a part of "Business As Usual" as people in the city, just as dependent on long supply chains and complex systems. And when there are disasters, relief efforts are likely to be focused on large population centres, ignoring the rural areas just on the basis of what will help the most people with the least effort.

But we are already seeing the US federal government tapering back on relief efforts in response to hurricanes and passing the responsibility off to the private sector. There is little reason to believe they will do any better. And not far down the road local communities, be they urban or rural, will find themselves essentially on their own when the going gets tough.

The good news is that there are many rural areas where:

  • adequate energy can be had locally in the form of firewood which can be cut by hand
  • potable water can be accessed from already existing wells that can be converted to hand or wind driven pumps and surface water that can be used with fairly simple filtration or treatment
  • sufficient food for the local population can be grown on existing farmland within walking distance of town, without fossil fuel powered machinery

Sure, it will require some degree of advance preparation and a willingness to adapt our lifestyles, but it is all quite doable. This is not the case in the city, where local resources for self-sufficient living are simply not available.

When I speak of rural areas, let me make it clear that I am talking about small towns of a few hundred to a few thousand people, surrounded by farmland, not isolated farmsteads. It will take more than a single family or two to make this work. Indeed isolation is one of the most debilitating conditions that you can find yourself in as a human being.

During the last few decades neoliberalism, in its endless search for profit, has done its best to monetize every human relationship and to isolate individuals from each other. The declining economy is leading to increased under employment and unemployment, poverty and homelessness all of which stresses our communities and isolates their individual members. And civil unrest is growing as inequality between the upper and lower classes increases and the degree to which the lower classes are being abandoned becomes more obvious.

But many small towns are a long way behind cities on that curve and their communities are still intact enough that co-operation is possible when it becomes clear what is required. And during a slow collapse it will gradually become more clear what the situation really is. To enough people, at least, that those advance preparations will get made. Collapse aware people have an important role to play there.

For a long time now, young people have been moving from areas like the one where I live to the cities in order to get an education and find work. The day will come (as I understand it already has as conditions have worsened in Greece) when the situation in the cities will be so bad, they will start to come home to take advantage of the somewhat better situation in the country. They will be able to pitch in and help their families adapt to collapse.

So far I have been talking about adapting during a slow and steady collapse. But of course catastrophic events can by no means be ruled out. In particular, our financial systems are largely virtual and as such are subject to extremely fast collapse when they fail. They will be the first to go, and that will have a negative effect on everything else.

It appears to me that most real economic growth ended in the 1990s and since then growth has largely taken the form of financial bubbles, fueled by debt instead of energy. Those who have money are desperate to find somewhere to invest it at a good return, but profitable, growing businesses are becoming rare, so instead they invest in ever more speculative endeavours. That's fine as long as the price is going up, but every such bubble is looking for a pin to burst it. A few months ago I said that we can expect a financial crash of greater magnitude than 1929 or 2008, sometime in the next few years and nothing has happened since then to change my opinion.

Already we have had a minor spike in the price of oil, trouble for the currencies of emerging market countries, and some indication that the long running bull market may be coming to an end. We are in the middle of this and it isn't yet clear if this is the start of a recession, or if the economy will rally and put off the big crash for some months or years yet.

When that crash does happen, I think that even in cities most of the population will survive the initial days of a financial collapse, mainly because of heroic efforts on the part of individuals in shop floor and low level management positions in supply chain and infrastructure organizations. The people at the tops of those organizations will be largely paralyzed, or at worst doing exactly the wrong thing. But even a worldwide financial collapse will hit some areas harder than others and will proceed, as I have said before, unevenly, unsteadily and unequally. And that's a good thing, because it means when things get really bad locally, there may well be someplace to go where things are better.

I expect there will be some reduction in our population due to supply chain failures following financial crashes. But the big dieoff that lies ahead of us will happen when industrial scale agriculture (both conventional and organic) comes hard up against resource limits—mainly fossil fuels and mineral fertilizers.

Still, it is possible that in the wake of a financial crash the stereotype of a city full of people starving in the dark with no help in sight will occur occasionally. For the vast majority of the unprepared people in that city this will not a survivable scenario. For anyone who really has no other choice but to stay in the city for now, it might be best to have a few weeks of food, water, etc. on hand and plan to stay at home during such a situation, keeping a very low profile, until things settle down and only then head for the country.

But you and I, of course, will have long since moved to a small town at a safe distance from the city. The standard trope in discussions of collapse involves our little town being overrun with roving hordes of hungry people engaged in looting and other forms of violence. I think this is unlikely. The key is to be farther away from the city than most of its population can walk on empty stomachs, which is not that great a distance. Thirst and starvation are debilitating and most people will not think to head out until they are quite desperate.

A few people will no doubt make it through though. It is my opinion that it would be better for everyone involved to welcome them with food and medical assistance, rather than fight them off with guns. It will be a bit of a trick to be set up to do that and in my next post I will look at the practicalities of moving to a small town in the country and getting ready to cope as the pace of collapse increases.

 

Oil Glut: IT’S THE DEMAND, STUPID!

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Published on The Doomstead Diner on March 5, 2017

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I ran across a chart on Bloomberg which is perhaps the best demonstration to date that the Oil Economy is in Full On Collapse mode now.  The chart is of Oil Inventory in storage, and covers the last 35 years since 1982 of Oil Inventory in the FSoA, and is the Header Pic for this article.

Do you note the Hockey Stick nature of this graph?  For 35 years until 2014, Oil Inventories were kept within a very narrow range.  Supply & Demand were kept in balance by the folks in control of both the extraction of Oil and the production of money.  A more or less steady "growth" rate of the entire system was maintained, as oil output and population increased, the money supply increased in tandem with it, a couple of percentage points ahead which provided return on investment for those in charge of creating the money in the first place.  For everyone else, this appeared as Inflation as the cost of housing, food and just about everything else besides techological gizmos kept spiralling upward.

However, even through all the recessions through the 1980s to today, Oil Inventories always stayed inside this narrow range.  That includes the Great Recession following the 2008 Financial Crisis.  Something CHANGED in 2014 though, and my good friend Steve Ludlum of Economic Undertow pegged it to the month more than 2 years in advance with his "Triangle of Doom".  What changed at this time was that the cost of extracting oil went higher than the price the customers could afford to burn it at.  The price crashed, from over $100/bbl down to $40/bbl or so.

Charts by Steve Ludlum of Economic Undertow

August 2012 Prediction

April 2015 Reality

At this price, virtually nobody extracting oil makes a profit.  A few folks like the Saudis still have Legacy fields they can extract oil at a profit at $20/bbl, but across the whole of Saudi ARAMCO their costs are a good deal higher than that.  Here in Amerika, the Frackers may have got their extraction costs down to $60/bbl in some of their better fields, but they're still not making a profit at $50/bbl.  Just not bleeding money quite so fast,and if they are TBTF, then Wall Street keeps rolling over their loans to keep them floating another day.  This is better in the short term than having to write down $Billions$ in losses, which then would make the bank itself insolvent.

So what has occured here in the Oil Trading market since 2014?  Well, Oil Traders keep holding back selling until they can make a profit.  But in the $50 range they mostly can't, so the oil stays in a tank somewhere while they wait for the price to go back up, but it doesn't.  Meanwhile, the Extractors of Oil all around the world keep extracting, because they have to do that to pay their bills.  Crude keeps piling up because Konsumers refuse to burn the shit fast enough, because they can't AFFORD to burn it faster!

Until they lower the price DRASTICALLY, the glut will continue to accumulate.  Eventually here, they will run OUT of tanks to store this shit in, and it does cost money every day to keep the Oil you bought at one price stored in a tank somewhere to sell on another later date at the higher price you hope for.  NOBODY wants to "buy high, sell low"!  That's a recipe for Bankruptcy of course.  So they keep the oil in the tanks, and they keep filling up more and more.

http://mothership.sg/wp-content/uploads/bfi_thumb/singapore-oil-tankers-31i6wvxb4bmus6w8k6y496.jpg

Oil Tanker Parking Lot off Singapore

Inevitably, a LIQUIDATION SALE has to come here.  There is not endless room for storage of this stuff above ground, and besides that it's expensive to store all that oil. Whoever owns it is bleeding red ink as long as they hold onto it.

https://i.ytimg.com/vi/Jl31yVfJqW8/maxresdefault.jpg

Now, whenever you read any of the Oil pundits, they will tell you the reason for the glut is either OPEC members cheating on their quotas, Iranians bringing more Oil online or FSoA shale frackers drilling more wells.  But is the total global production really up all that much?  No, in fact it's been going down since it peaked in August of 2015.  So if it's not the supply going up, why the glut?

IT'S THE DEMAND, STUPID!

Because they massage the figures everywhere else in the economy to show "growth" and nobody wants to admit being in a recession, Oil inventory keeps growing.  This figure you can't massage (well not too much), because the stuff is a physical quantity that has to be stored in…something.  So they have to know where they are going to put it.

Oil is a Global Commodity, in which the FSoA is among the largest consumers but it's not the only consumer.  Europe as a whole consumes a lot, China consumes a lot also.  All the consumption is not Happy Motoring either, a lot of it is industrial consumption.  Globally in aggregate, if the economy was truly growing we would be consuming more Oil, not less.

Sometimes when I make the Demand Argument with respect to both the price and the glut, critics will tell me, "But RE, the traffic is just as bad as ever and everybody in my neighborhood is still driving gas guzzling SUVs!".  Well, that may be true in your neighborhood, but in somebody's neighborhood somewhere it's definitely NOT true.

My best guess is most of the reduction in demand is coming from southern Europe, where they have been in severe recession for years now.  This is probably also bleeding into the Chinese manufacturing sector with declining demand for their toys.  So then they use less Oil in the manufacturing process.

http://1.bp.blogspot.com/-NvN1KaOxdJ4/UuGKXYTpM1I/AAAAAAAAKB8/j009d-0L_2c/s1600/Italy_Oil_Gas.png

With a declining amount of total production, along with a Hockey Stick graph of skyrocketing inventory, the only answer can be declining global demand for Oil.  In order to get the demand up, they have to drop the price down.  But they're already losing money at the current price in the $50 range.  So the traders keep hanging on for the day the demand will magically rebound here and the consumers will step back up to the pump and pay the prices they need to make a profit.  There is however no reason at the moment to believe that the consumers will magically get more money to pay more for the oil, they already have trouble paying for it at the price it is selling for now.

http://www.artberman.com/wp-content/uploads/Chart_World-Con-Uncon-1.jpg

Unlike the magical world of Money where you can conjure as many digibits as you want out of thin air and which takes virtually no room to store inside a laptop, Oil is a physical commodity which must be burned to have value.  If it's not burned as fast as it is pumped, then it's going to lose value.  The traders don't want to recognize the loss of value though, because they will take a serious bath.  A bloodbath.  They don't have to take the write down though until they actually sell the stuff.  So they don't sell, they keep it stored on a tanker somewhere and pay the daily storage fees out of more borrowed money, which the banks keep lending them because they will go tits up when the traders they lent money to go tits up. No matter how much money they lend to keep storing the Oil though, eventually they're going to run out of room.  Then EVERYBODY will HAVE to stop pumping Oil until they work through the glut.  Given there is double the normal inventory, this could take a little while.  Can any Oil Producing nation go even a week without the revenue from their Oil?

This condition of extreme glut has to break, and the only way to break it is a major reduction in the price.  When that comes, there will be carnage all across the energy and banking industries.  I don't know how long before the last storage tank and VLCC tanker will be full up, but I can't imagine it is too far off.  The End Game Approaches.

http://archive.globalgamejam.org/sites/default/files/uploads/2011/9387/The%20End%20Game.png?1296396579

The First Law of Wealth

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Published on The Doomstead Diner on January 8, 2017

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The First Law of Thermodynamics:

Energy is neither created nor destroyed, only transformed from one form to another.

 

How is wealth created?  Is it created at all?  An important idea in capitalist epistemology is that the capitalist system creates wealth, and that those who become wealthy within the system do so by creating that wealth.  Do they really?

The issue here is the idea that some people are "Wealth Creators".  Bill Gates, Elon Musk, Mark Zuckerberg, they all got incredibly wealthy, right?  So they must have "created" wealth, right?  This concept depends a whole lot on whether you view the idea of "wealth" from the POV of the Individual or from the POV of the System as a whole.  Which lens you use on this microscope on makes a HUGE difference on how you view the distribution of wealth in the society at large.

In order to better elucidate my POV, I am going to use 3 different examples of biznesses that supposedly  "create wealth".  I will look at my own last bizness of the many I have been involved with first, the Gymnastics Bizness.  Then I will look at the Dental Bizness, which is my friend Eddie's type of biz.  Then I will look at Tesla, Elon Musk's really BIG bizness, currently creating tons of wealth for Elon. lol.

The Gymnastics Bizness

Now, in the case of the Gym Biz, what the Gym Owner does is to insert himself in between well to do parents of kids who can afford a pretty high price tag of around $400/mo to be on the Team and coaches who know how to teach gymnastics.  Then there are lots of recreational gymnasts who come for 1 class a week for around $100/mo.  The typical gym has between 500-1000 gymmies running through it at any given time.  Because it is such a pricy sport to be putting your kid into and it is an optional thing to do (you don't absolutely NEED to do gymnastics like you need to have your teeth drilled when you have a toothache), the clientele has a pretty high average income.  Poor people do not send their kids to a gymnastics school.  So I put the average income for the Victims here at around $100K.

Now, if out of the 1000 Gymmies you have 200 on Team, that is $400 X 200 =$80K/mo income, x12 = $960K/year.  Your 800 other Rec gymmies are paying $100/mo for another $80K/mo, another $960K/year.  Total gross income here around $2M for a well organized gymnastics school.

On the outflow end of this conduit, the gym owner has the cost of his facility, equipment, salaries for coaches and the taxes & insurance he has to pay.  Facility costs can vary tremendously from old warehouses to custom buildings.  Equipment also varies from old beat up stuff bought used to brand spanking new stuff from Spieth-Anderson or AAI.  Coaches are almost universally paid low wages, often teenage ex-gymnasts are used as coaches at Min Wage before they even go to college.  You gotta be a really first class coach to get out of this Min Wage level and actually make a living at coaching the sport.  Even so, you never get into 6 figures as a coach unless you own the gym and run the conduit scheme.

Depending on the market they insert themselves into, Gym Owners can both become exceedingly rich or they can fail miserably, I've known both types over the last 30 years.  In neither case though did anyone "create" any wealth.  All they did was sieve wealth from one end, the victims, on the way to it's other end downhill in this process.  The gym owners who got rich were the ones who were best at soaking their victims, but they never created any wealth here.

Where did that wealth come from?  Well, many of the parents here are professional, doctors, dentists, lawyers and so forth.  They in turn were using their own conduit schemes to sieve wealth from their victims.  They have nice big paychecks incoming, so they can afford to pitch $400/mo after tax income to keep gymmie happy.  In fact it costs a good deal more than that when you include all the meet fees, team leos and warmups, private lessons etc.

The Dental Racket

So now let us look at one of the Victims of the Gym Biz, the Dentist with his prized young daughter with this quite rare talent of extreme coordination, strength and flexibility  and also pychological qualities of fearlessness and a drive to succeed, who sees Simone Biles/Mary Lou Retton/Shannon Miller/Shawn Johnson/Nadia Comanice on TV at the Olympics and wants to make her a STAR!  How is he "creating wealth" to do this?

In order to analyze the Dental Biz in detail,, I made a new Infographic to examine how the Dental Conduit Scheme works!

There are 3 basic Nodes here, the Dental Victims, The Dentist and the higher level extractors taking profit from the Dentist, which makes him a second level Victim.

I used some average numbers here, giving the low level Victims an average take home salary of $50K (which is probably a high estimate) and the Dentist an average take home salary of $250K (which is probably a low estimate).  I put the tax bill for the Dentist at a 50% rate, so it costs also $250K in taxes for the dentist every year.

For the wage slaves working for the dentist answering the phones, filling out the medical records and dealing with regulations and insurance companies, I figured 8 employees each making around $60K average, for around a total of $500K.  A dental hygenist might make a bit more, a records clerk less.

The dentist also has to buy a lot of expensive stuff to run his bizness, those gold fillings don't come cheap these days you know!  Nor does the hardware for implants or aything else.  You also gotta upgrade all the time and buy those expensive new Digital X-Ray Cameras, and you gotta fly all the time all over the country to Utah and other spots for getting your continuing education credits to maintain your license.  Then there are the Malpractice Insurance bills.  ::)

So, in order to maintain a $250K/year income here in this Conduit Scheme, the Dentist needs a Gross Income of around $2M before expenses, taxes, insurance, materials etc etc etc.  All of that money has to come from the Victims of the Dentist, each making an average of $50K.

So one way to look at this is how many Victims the Dentist needs to cover $2M in costs, and how much they have to pay him each year?  If the Dentist has 100 Victims, then each Victim would need to pay the Dentist $20,000 every year to keep this conduit scheme going.  Obviously, people making $50K a year cannot afford to pay $20K of that to a Dentist!  So really the Dentist needs more like 1000 Victims to be successful with the conduit scheme.  Now you are down to $2000 per victim, which is a bit more affordable at a $50K salary.  BUT, can a single dentist really drill the teeth of 1000 different people every year? 

I Googled the cost of Dental Fillings in TX.  :icon_sunny:
 

Quote

On average, a silver filling costs between $50 and $150 for one or two dental surfaces. However, the price increases to the $120 to $300 range, if three or more surfaces require a filling. The good news is that dental insurance covers a majority of the cost since a filling is considered a necessary procedure.Sep 20, 2013

Mansfield, TX Dentist Explains the Cost of Dental Fillings | Mansfield, TX
mansfielddental.com/2013/09/the-cost-of-dental-fillings/

 


Call the average cost $200.  To work up a $2000 bill, each patient of the 1000 needs 10 fillings every year.  So the dentist needs to drill 10,000 teeth each year, in 250 working days.  That's 40 a day, 5/hr in an 8 hour day.  So he has to drill & fill a tooth every 10 minutes, with a 10 minute break every hour to check for Doom on the Diner. lol.

Another way to look at it is how much money the Dental Biz needs to bring in each day to cover those $2M in bills.  If you figure the dentist works 5 days a week 50 weeks out of the year, he has 250 days of extracting money from the Victims.  That means that every last day of that 250 days, he has to bring in $8000 from the Victims.  If he is working 8 hour days, that works out to $1000/hr!

Now, since I do not have PRECISE numbers on this to work with, these are all just estimates.  BUT, even if you knocked my numbers down by half, you can see why it is not sustainable.  The folks who pay the bills at the BOTTOM cannot retire the debt and costs that the Dentist has!  They just don't make enough money to do that!  Somebody somewhere is working up a nice debt bill.  No wealth has been created, just an ever increasing pile of debt!

The only way this shit gets paid for these days is through ever increasing debt, and the asset in this example goes on the side of the Dentist and the liability goes on the side of the Victim. That is straight economics.  You cannot make something from nothing.

Clearly here, the Dentist has created no wealth, all he has done is insert himself into a position where he can serve as a conduit between people who have dental pain or issues and those free of dental pain or issues.  Unlike the Gymnastics Biz, it is not optional to visit or not visit a Dentist when you have a bad enough toothache. You have no options here within the borders of the FSoA, you MUST pay whatever the Dentist will charge to relieve your pain.  Unless you cross the border into Mexico, you will bankrupt yourself if you make an average salary trying to pay off the dentists for fixing your teeth.  I have visited at least a dozen different dentists over the course of my life trying to repair teeth here in the FSoA that other dentists in Brazil ruined in my childhood and adolescence.  Every root canal and every cap cost me $thousands$ on a very average salary of median income for the time period. You are talking at least a dozen of these things over the time period.  In the end, all that money went to waste, every single one of those teeth had to be pulled out of my mouth by a Mexican Dentist, who did it at the Bargain Basement price of $25 a tooth, whereas a Dentist here in Alaska would have charged me $300 a tooth to do the same job.  It's a great racket here in the FSoA if you can get licensed to do it.  Every last Dentist that I ever visited owned a Mercedes and had a nice huge McMansion to live in.  I paid for that, along with all the other Dental Victims.

Why can dentists here in the FSoA charge such high prices for these tasks?  Because they run a gated profession with few Dental Schools relative to population size and they make it EXTREMELY difficult for a foreign trained dentist to get licensed to practice dentistry in the FSoA.  So there exist a LARGE pool of victims (basically everyone since everyone has some kind of dental problem at some point), and a relatively SMALL number of dentists licensed to do the job on your teeth that needs to be done.  So they can pretty much set the price as they please, the only constraint on this being what the other local dentist will charge, since most people will not cross the border into Mexico.  As a Dental Pain Sufferer, you are over a barrel if you cannot make the border crossing to Mexico, you MUST pay whatever the Dentist charges or else suffer agonizing pain until you figure out how to yank the offending tooth out of your mouth yourself.  This is called a contract under DURESS, and it is illegal in Tort Law.  In reality, you are not obligated to pay any of these charges by tort law.  In reality, all dental patients shoudl file a Class Action Lawuit against all Dentists and strip them of their criminally stolen money and property.

The Elon Musk Flim-Flam

OK, we have now moved through 2 types of Small Biz, the Gymnastics Biz and the Dental Biz.  To finish off for the day here, let us look at BIG BIZNESS, Elon Musk's Tesla, Gigafactory Battey facility and Rocket Ship Biz.

Not a single one of these biz makes any profit at all, but they have a Market Cap of $BILLIONS$  WTF did all the money come from so Elon could build his toys without making a dime of profit for YEARS?  Can you imagine going for years with a negative net income and still getting credit to keep going?

Like all of the really large corporations and big biz of our society, it is all run on CREDIT, and if you are well enough connected the credit has been quite endless.  The "money" flowing down through the society into all the small biz like Gymnastics Schools and Dental Offices actually begins with these very large corporations and their associated banking industry, they are all created through the massive issuance of debt in the form of corporate bonds.  The other big money creation mechanism is from Goobermint bonds, debt which the population is supposed to retire through paying their taxes.  The debt of corporate bonds is supposed to be retired by profits from the industry, again which the population at large is supposed to provide the money for by buying the products.  In reality, in neither case can the population ever make enough money to retire the debt either created by the corporations or by da goobermint.  This can be masked for a long time, but if you notice just about every large corporate entity eventually goes bankrupt.  The railroads all went bankrupt, the big automotive companies like GM and Chrysler went bankrupt, and the airlines like TWA and PanAm also went bankrupt.  Then new ones pop up with new issuance of debt and reorganizations, mergers and acquisitions, but they too will all go BK in the bye and bye.  No wealth was created here in any of these industries, only an ever increasing pile of debt along with a lot of landfill.

Similarly, Da Goobermint never created any wealth either by issuing out its vast quantities of debt.  While certainly Goobermints have built many roads, bridges, tunnels, power plants, sports stadiums etc, the maintenance cost on all of it is always greater than the revenue brought iin through taxation to pay for it.  So the only way to keep going with it is to issue out still more debt. Which they do as long as they can, but eventually smaller countries like Greece get cut off from the bond market, at which time their economy immediately tanks.  Similarly, any large corporation cut of from the corporate bond market immediately goes BK.

The "wealth" Elon creates is simply a bigger pile of debt somewhere else, bur unlike the gym owner or dentist, he has inserted himself into the very TOP of the food chain, getting his debt money directly from the folks in charge of manufacturing money, the TBTF banks.  Elon hardly needs Victims to bilk at all selling Teslas, hell he's only sold around 150,000 of them since 2008!  In the end, he's really bilking the taxpayer, who will end up with all the bad debt he has created on their balance sheet.

Nobody in this whole chain of events ever creates wealth.  They only sieve wealth in various types of schemes and rackets on it's way down the thermodynamic hill.  So where then IS the wealth "created"?

It's not created, it's EXTRACTED.  The wealth is the resources of the earth, and all that debt money that is created are little tickets (or now digibits) which allow you to buy some of the resources, most particularly the energy resource of oil.  Those little tickets trickle down through the rest of the economy, and various types of biznesses and rackets insert themselves along the way as the energy moves its way down the thermodynamic hill.  Who gets the privilege of creating these little debt tickets?  The folks who control the energy of course, which is why the Energy Industry and Bankstering Biz are so closely related.  It's why the Rockefellers who controlled Standard Oil ALSO founded the Chase Manhattan Bank, now JP Morgan Chase.  They issue the credit to buy the Oil, and it gets burned up all the way down the line in various stages as it moves through all the rackets.  The BEST rackets are at the very top of the food chain here, like Elon Musk or Mark Suckerbug's rackets.  Neither one creates any wealth though.

By the time you get down to small time rackets like the Gym Biz and Dental Biz, you're getting close to the end of the line on the way down to the final stop, the end consumer of everything that happened above in the chain.  The end consumer DEFINITELY creates no wealth, but rather destroys what is left of it on its way to its final destination as waste in the landfill or CO2 in the atmosphere.

What wealth there was in the Earth was captured over billions of years by photosynthetic organisms collecting energy from the sun.  Animal life just extracts that energy from the plant, then eventually both die and sequester carbon, and then after that Homo Saps evolve to burn up all that energy, and develop an economic system which does that.  Very rapidly too!

How long does the game last?  Only as long as there is a big enough thermodynamic gradient to support a downhill flow of the energy.  It appears we are getting quite close to the point where no work can be done exploiting the energy flow left.  At least not on the scale globally we have been doing it anyhow.

Supporting Everything that Smells Bad

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Published on Cassandra's Legacy on December 15, 2016

cassandra_retouched

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Michael Klare has published an extensive comment on "Tomgram" about what appear to be the current policy choices by Donald Trump on energy and he correctly notes how contradictory they are. Basically,

 

The main thrust of his approach couldn’t be clearer: abolish all regulations and presidential directives that stand in the way of unrestrained fossil fuel extraction, including commitments made by President Obama in December 2015 under the Paris Climate Agreement.

In other words, Trump seems to be locked in a market-only vision of the problem, thinking that physical realities have no role in the extraction of fossil resources. On this, he is surely not alone, but the problem is that deregulation is not so important as Trump seems to think. It was not because the market was over-regulated that oil prices spiked up to $150 dollars/barrel in 2008 and kept hovering at around $100/barrel from 2011 up to late 2014. And it was not because oil production was suddenly deregulated that prices collapsed to below $40 in 2015. The oil market, as all markets, suffers from instabilities that may be, sometimes, cured by regulations. Eliminating all the regulations may well cause further price swings and wild oscillations, rather than increase production.

If oil companies are in trouble, right now, is because the oil prices are too low, not because oil extraction is over-regulated and Trump's policies – if they were to work – may damage the fossil fuel industry even more. That, in itself, would not be a bad thing – especially in terms of the effects on climate. The problem is that Trump's ideas to revitalize the fossil fuel industry may not be limited to deregulation, but could involve actively discouraging renewable energy, a policy that, for instance, the Italian government has been successfully applying during the past few years.

So, why does Trump want to do such a thing? Here, we can only imagine what passes in the mind of a 70-year old man who is not known to be especially expert in anything. Klare puts forward a possible explanation as:

 

To some degree, no doubt, it comes, at least in part, from the president-elect’s deep and abiding nostalgia for the fast-growing (and largely regulation-free) America of the 1950s. When Trump was growing up, the United States was on an extraordinary expansionist drive and its output of basic goods, including oil, coal, and steel, was swelling by the day. The country’s major industries were heavily unionized; the suburbs were booming; apartment buildings were going up all over the borough of Queens in New York City where Trump got his start; cars were rolling off the assembly lines in what was then anything but the “Rust Belt”; and refineries and coal plants were pouring out the massive amounts of energy needed to make it all happen.

And don’t forget one other factor: Trump’s vindictiveness — in this case, not just toward his Democratic opponent in the recent election campaign but toward those who voted against him. The Donald is well aware that most Americans who care about climate change and are in favor of a rapid transformation to a green energy America did not vote for him,

Given his well-known penchant for attacking anyone who frustrates his ambitions or speaks negatively of him, and his urge to punish greens by, among other things, obliterating every measure adopted by President Obama to speed the utilization of renewable energy, expect him to rip the EPA apart and do his best to shred any obstacles to fossil fuel exploitation. If that means hastening the incineration of the planet, so be it. He either doesn’t care (since at 70 he won’t live to see it happen), truly doesn’t believe in the science, or doesn’t think it will hurt his company’s business interests over the next few decades.

This interpretation by Michael Klare may or may not be correct but it underlies a basic problem: elections give power to people on the basis of their promises, but nobody really knows how they will behave once they have power in their hands. The world's history is full of leaders who had mental problems of all kinds or even just had a vision of the world that was completely out of touch with reality. The result was normally unmitigated disasters as leaders, in most cases, refuse to learn from their mistakes. And not just that, they tend to double down, worsening things.

About Donald Trump,as I discussed in a previous post, nobody can know what's going on inside his mind. All what I can say is that America may badly need God's blessing in the near future.

TUMBLING DOWN THE NET HUBBERT CLIFF

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Published on The Doomstead Diner on November 27, 2016

SenecaCliff

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I gave a mini presentation at a Griffith University “sustainable economy” seminar on 29 November 2016 https://drive.google.com/file/d/0B21KVqpkTSnrQ2haWFAwaU5MRjQ/view As the themes were slanted towards “business opportunities”, I chose this title for my talk: “Tiny House Communities: grassroots solutions for those with sufficient initiative to exit a collapsing industrial civilisation”. In my pre-conference paper/abstract submission to the GCSE, I made it clear I was going to talk about much more than just tiny houses. Ultimately I spent only 5 minutes talking about tiny house communities and 15 minutes talking about our collapsing industrial civilisation. I focused especially on the sudden global energy descent we will soon be facing and tried to explain the key concepts with my “post peak oil” slides http://www.doomsteaddiner.net/blog/2016/11/12/post-peak-oil-slides-for-diners/

I received the usual denialism response I have come to expect from one individual in particular, a person who in a previous session advocated that if only we use objective science to persuade the public, we can transform society and create a great future. That person also said we should not convey negative messages to the public because that would alienate them. I had neither the time nor inclination to engage with that person. I did not bother to point out the obvious contradiction in his position: that objective science unequivocally shows our future to be dire, which by necessity will convey a “negative” message to the public.

At a subsequent main session, Professor Susanne Becken, a highly acclaimed professor of “sustainable tourism”, spoke about Peak Oil and Aviation and projected this slide from the International Energy Agency on the screen:

tumblingdownthenethubbertcliff_html_m1e90c2e4

 

To her credit she couched those IEA future oil projections in cautionary terms and advised the audience NOT to invest in the aviation industry.

As an audience member at the Q&A session, I made this comment and posed this question to her (I paraphrase here. The event was recorded and my exact words may be audible if Griffith eventually post the session as a webcast):

I was amused to see the IEA slide you displayed, which included “oil yet to be found” and “oil yet to be developed” in the projection of future oil available, which made the future total oil curve look flat or even rising. Such wild speculation brings to mind the thought that if pigs had wings, pigs could fly and flying pigs will solve all our aviation problems. IEA are well known for always overestimating future oil availability, then having to revise those figures downward when reality proves them wrong. In terms of deceit they are second only to Daniel Yergin's CERA, a stooge of the fossil fuel industry. I am sure you know who I am talking about. I am sure you are familiar with David Murphy's Net Hubbert curve which takes into account energy returned over energy invested. I am sure you are familiar with Jeffrey Brown's export land model, which looks at future oil availability for oil importing countries. If you superimpose the ELM on the Net Hubbert curve, which you must do if you believe in basic physics and mathematics, you will realise that Australia will have no more conventional oil available to import within ten years. Do you not think such a graph is more accurate and appropriate to use?”

To her credit, the professor did not take offence at my “flying pigs” comment and acknowledged the validity of my points. She really had no choice, otherwise she would be denying basic physics and mathematics, which would make her look foolish. She accepted that proper assessment of actual oil availability should subtract the amount of oil needed to produce that oil. To her credit she stated that unconventional oils such as tar sands have such poor EROEI that in reality they are not worth pursuing. However with regard to the short term prospects for her particular fields of interest (aviation and tourism), she was sanguine. She expressed a “Realpolitik” view that when there are competing interests for diminishing oil supplies in the future, such as whether to allocate oil to produce food for the poor or to fuel the aviation industry, the business interests of aviation will win out and the poor will starve. She made a valid, if cynical point there. That view is not dissimilar to my own view about how the “five fingers” of net energy will be allocated in the future when we tumble even further down the net Hubbert cliff: Military activities will be given priority over everything else, thus promoting human die-off. Gotta love the human race.

My ongoing concern is that such “peak oil experts” continue to use fraudulent fantasy graphs based on cornucopian speculative projections in their presentations, which to a less critical audience will otherwise be accepted and go unchallenged. Here is one solution to this conundrum: make the audience less critical by getting rid of troublemakers.

Needless to say I do not expect to be invited back by that particular department of Griffith University in the future. And so it goes.

G. Chia Dec. 2016

 

 

 

Syria through Multiple Lenses

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Published on the Doomstead Diner on October 8, 2016

southpars

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Many commentators have sought explanations and solutions for the Syrian debacle. Only by accurately identifying the underlying cause(s) of a situation can we begin to craft workable solutions, if any solutions are possible at all.

To me, this is akin to making an accurate diagnosis when faced with a complex pathological condition, then trying to shape a management plan to achieve a cure (or at least to aim for symptomatic relief and palliation, if the situation is irredeemable). As I have stated before in my essay "How to cure Terrorism" 1 it is essential to identify not only the underlying cause(s) of a situation and any predisposing factors, but should also (in the case of sudden collapse), identify any proximate triggers.

How do we know a diagnosis is accurate? Because the correct paradigm bears all the hallmarks of Truth, viz:

  1. It is supported by the best evidence

  2. It is coherent (internally and externally consistent), with plausible underlying mechanisms operating within its framework

  3. It offers the best explanation for the situation

  4. It may have useful predictive value for future outcome(s) ie it can offer a prognosis

  5. The elimination/resolution of properly identified underlying cause(s), predisposing factors(s) and proximate trigger(s) will offer the best prospect of a cure.

Again, I have used these principles in past essays when outlining the epidemiological truth that smoking causes lung cancer (even though it is impossible to demonstrate a one-to-one cause and effect relationship in any individual lung cancer case). I also used these principles to prove that the US invasion of Iraq in 2003 had nothing to do with WMDs or the pursuit of "freedom" or "democracy" nor was it about deposing a tyrant "for the sake of the Iraqi people". The truth was that the invasion of Iraq was about OIL: specifically about the US pursuit of oil related economic, political and military global power. The ideology of US neoconartist global dominance mediated by the control over the flow of oil and the enforced continuity of the petrodollar scheme.

I cannot delve into the Syrian situation in detail here, which would require a lengthy Phd type thesis. Instead I will simply outline various useful lenses through which the Syrian situation may be viewed. Lenses are meant to help us see better. They may help us see clearly various portions of a jigsaw puzzle which make up our "big picture" of Truth. However some lenses may be fabricated for political purposes and cause complete distortion. They are contrived propaganda, crafted to serve the agenda of the angloeurozionist "GIMME" (Government, Industrial, Military, Media & Economic) establishment. Intellectual Kool Aid to keep the masses brain dead (to mix several metaphors).

 

Let us first cast aside a couple of blatantly bogus paradigms:

The Syrian situation is a revolution against tyranny by the common Syrians who are clamouring for democracy and freedom, which was what the "Arab Spring" was all about.

This utterly bullshit paradigm was best demolished by Tom Lewis with his inimitable wry manner in a podcast I have referenced in the past. 2

The Syrian situation is a religious civil war, mainly a domestic Sunni versus Alawite/Shi'ite conflict. As I mentioned in a previous essay, Bashar Al-Assad, nominally an Alawite, was a member of the Baathist secular party and he himself married a Sunni lady. There are NO clearcut religious lines here. Nor is it a particularly domestic dispute. The so-called Syrian Sunni rebel groups include among their numbers many foreign intruders. ISIS is a foreign invasion force. The most effective fighters against ISIS are the Kurds and most of those in Syria are indeed Syrian. Kurds are nominally Sunni and may be genuinely religious, but their outlook is fairly progressive and they take pride in their courageous female soldiers who do not wear headscarves. ISIS claim to be pious Sunni Muslims, which is a complete lie. ISIS are fake Muslims, they are primarily terrorists, rapists and gangsters who hide behind the bogus banner of a religion to legitimise their anti-human activities in pursuit of their unrestrained lust for power. This is identical to how the US corporate owned politicians hide behind the bogus banner of "freedom" or "democracy" to legitimise their anti-human agenda of global ecocide, in pursuit of their unrestrained lust for power. ISIS was in fact the creation of the US GIMME establishment. The "religious civil war in Syria" paradigm ignores the numerous external operators who are major players. The so-called "moderate" Sunni rebels in Syria are deeply intertwined with many Salafist extremists including the notorious Jabhat Al Nusra (who are Al Qaeda in Syria). US State Department spokesperson Elizabeth Trudeau admitted this fact at a press conference on 3 October, which was held to announce the breakdown of discussions between Russia and the US over Syria. Trudeau said the US had been unable to "demarble" (her word) the "moderate" Sunni rebels from entities such as Al Nusra, who she admits are Al Qaeda terrorists. Hence by their own admission, ongoing US support for these rebels represents support for terrorist criminals. I have provided other references for these facts in previous essays.

 

Evidence-based "lenses" with good explanatory power, which confer better understanding of the Syrian situation:

The events leading up to the collapse of Syria were manifestations of the Limits to Growth. In a previous essay I outlined the problem of declining Syrian petroleum production which intersected with their increased domestic oil consumption (Peak Oil combined with the ELM) which resulted in zero oil income and hence contributed to their economic demise. 3 A smaller Syrian population of the past could have been sustained by fewer resources, but the large population of 23 million by 2011 faced severe per capita shortfalls of everything. The worst drought in living memory from 2006 to 2010, which was aggravated by climate change, led to agricultural collapse, the mass migration of impoverished farmers to the cities, food shortages, conflicts and the breakdown of society.

The LtG re-ignited old tribal and sectarian conflicts which were greatly magnified by the post colonial legacy of egregious gerrymandering (Sykes-Picot "treaty") 3. Each sect is largely motivated by their own self interest, irrespective of whatever religious banner they may claim live under, whether they be the Sunni Muslim Brotherhood (who have a long history of striving to gain power in Syria), the Kurds (who are struggling for an independent homeland), the Alawites (who initially hoped to maintain control over Syria but are now engaged in an existential struggle for survival) and so forth.

southparszoom

Syria is a proxy war in the new Great Game. The US has more than 800 overseas military bases 4 around the world. In contrast, Syria is the last remaining foreign outpost of Russian military influence in the world, with the port of Tartus and the airfield at Latakia hosting Russian warships and planes. Since the end of the Cold War, the unbridled US hegemonic agenda of complete global dominance has been characterised by their mindless and destructive policy of foreign regime change to install puppet leaders under US control. This agenda was exemplified by the US / NATO covert regime change imposed on Ukraine with resultant civil war and the ongoing encirclement of Russia by US nuclear missles. Ukraine, formerly the bread basket of Europe, has now become the basket case of Europe. Let is not even delve into Iraq or Libya. In the case of Syria, the US have been trying to get rid of Russian ally Bashar Al-Assad and replace him with a US puppet. Why did Russia begin their foray into Syria by dramatically launching low flying, contour hugging "under the radar" cruise missiles from ships far, far away in the Caspian sea? Why not just use their bombers based in Latakia? ISIS may have copped the cruise missiles, but the Russians were primarily sending a message to Uncle Sam: your super expensive high tech US aircraft carrier fleets are now completely obsolete. Russia these days is able to deploy unstoppable massive conventional force from a distance which the US cannot possibly counter (the same capability is certainly true for China, who spend far more on their military than Russia). The USA is now railroading the entire world into a possible Hot War which can easily turn into a global thermonuclear war, for no reason other than their crazed hunger for power.

Apart from Russia and the US, there are other "lesser puppet masters" who have their own reasons for meddling in Syria. In the "Russian" camp there are Iran, Shi'ites from Iraq and Hezbollah. In the "US" camp there are Saudi Arabia and Qatar (and to a lesser extent other Gulf players such as Kuwait), who have also employed foreign mercenaries such as Chechens.

The schizophrenic involvement of a particular proxy player, Turkey: Turkey, as a NATO member, nominally claims to be on the US side and against ISIS. However under the wily maneuvering of the duplicitous Recep Tayyip Erdogan, the reality is much more complex. What Erdogan says and does are often contradictory and discordant. One fact is crystal clear however: Erdogan's actions are always in the service of his own self interest and in that sense he cannot be regarded as a true US puppet. Recent events in Turkey have been thoroughly fascinating and warrant detailed analysis far beyond the scope of this short essay. Some examples:

    1. Erdogan had been buying cheap oil illegally from ISIS, oil which had been stolen from Iraq. This oil entered Turkey via road trains through the (intentionally) porous Turkish-Syrian border. Erdogan was therefore in fact financing ISIS, his nominal enemy. This fact was patently obvious to the USA from satellite images, which America chose to ignore, which adds credence to the view that the US actually supports ISIS while pretending to oppose it. This illegal oil trade was abruptly terminated by Russian bombing, in response to which Erdogan petulantly shot down a Russian plane, a reckless act of despicable bastardry which could have triggered wider scale war if not for Russian restraint.

    2. Last year, Turkish media exposed the fact that the Erdogan government had been illegally supplying weapons to extremist insurgents across the (intentionally) porous Turkish-Syrian border. Such a domestic media expose will not happen again, not because Erdogan has changed his ways, but because he has now muzzled the Turkish media.

    3. Erdogan regards his primary enemy as the Kurds because the Turkish Kurds threaten to secede from his neo-Ottoman aspirational empire to form an independent Kurdistan in conjuction with the Syrian and Iraqi Kurds. Therefore he does not hesitate to use a secondary enemy, ISIS, as a tool against his primary enemy. This explains his partial support for ISIS, even as he fights against ISIS at other times and in other places that suit him. Note that the Turks, Kurds and ISIS are all supposedly Sunni, hence none of this has anything to do with religion.

    4. We do not know for sure who masterminded the recent "failed coup" in Turkey, but we do know who has benefited the most from it. Erdogan has since been able to cast aside any pretence of due process and has summarily purged more than a hundred thousand potential dissidents and opponents from all positions of influence in Turkey. He has thoroughly entrenched his power and is essentially now a totalitarian dictator. He embarrassed the US with the accusation that America was harbouring and supporting the purported coup organiser Fetullah Gulen. It is true that America will stand to gain by installing a more US compliant puppet leader in Turkey, hence this accusation is not one which can be easily dismissed by US propaganda, given America's well known repetitive policy of foreign regime change.

    5. Being irate (or pretending to be irate) with the US, Erdogan then decided to kiss and make up with Putin, who then allowed the resumption of Russian tourism into Turkey, an extremely valuable source of income for Ankara. That, as well as the future possibility of a Russian gas pipeline through Turkey to Europe, another money spinner.

    6. It is true that Turkey has taken on more than its fair share of Iraqi and Syrian refugees, now harbouring more than three million 5. On the other hand, Erdogan has cynically used the Syrian refugees as human bargaining chips to get what he wants from the EU. He has shown he is willing and able to open and close the floodgates of refugees from Turkey into Europe and thereby has been able to extort money from the EU and prise out freedom of movement privileges for Turks into the EU.

    7. By offering Turkish citizenship to more than 2 million Syrian Sunni Muslims, Erdogan will be able to increase his support and power base in Turkey, as he is aligned with the Sunni fundamentalists. Erdogan opposes and is opposed by secular Turks (especially those in the military who had traditionally been faithful to the secular principles of Mustafa Kemal Ataturk).

    8. The Machiavellian Erdogan has repeatedly demonstrated a nimble ability to have his cake and eat it (that is, until such future time when an jackal can find a way to penetrate his security detail and assassinate him). Any serious coup organiser worth their salt would have commenced their operation by assassinating the incumbent. The fact that Erdogan escaped such a fate indicates that either the coup planners were utterly incompetent or that it may indeed have been a false flag event engineered by Erdogan himself.

Syria is a proxy war over natural gas pipelines: In order to understand the geopolitical considerations about this proxy pipeline war, it is essential to understand the physical properties of natural gas, which render it a far inferior source of energy (and source of money) compared with petroleum. Nevertheless if sold in vast quantities to a vast market, the money to be made can be mind boggling. Key considerations:

  1. If a natural gas field straddles a political border and is "shared" by two parties, the party which extracts the gas first and fastest will be able to harvest most, if not all the wealth from that field, because the gas will rapidly move through the field towards the extraction point. Contrast that characteristic with viscous crude oil, which can only sluggishly migrate at a maximum rate of 6% per year through porous rock.

  2. Early gas extraction is of no value unless you have an immediate market to offload the gas. Natural gas is just too energy sparse to economically store above ground in significant quantities for any length of time.

  3. The optimal market for the gas is one close to the gas field. The further away the market, the more expensive it is to transport the gas and hence the lower the profit margin. Even if the market is thousands of kilometers away however, profit margins can still be good, so long as the gas can be transported by pipeline in gaseous form. Export to far distant locations (eg another continent) is only feasible by liquefaction to render it far more energy dense. Making energy dense liquid natural gas requires refrigeration down to about minus 163 degrees Celsius, cryogenic storage and transportation in highly insulated, massive, purpose built LNG tankers which require continuous refrigeration. Refrigeration energy requirements are particularly high when the tankers sail through the tropics. Any power failure will be catastrophic. The LNG trade requires special facilities at the importing port which can accept and process this tricky commodity. All those factors amount to huge energy expenditure, huge capex, custom construction of port facilities and tankers and also requires a cashed up customer with advanced infrastructure. If the market price for natural gas falls, the whole system collapses financially, hence LNG schemes can be likened to unconventional oil scams. LNG export in lifecycle analysis has very poor EROEI compared with piped gas export.

The above considerations form the foundation for an understanding of the Syrian pipeline proxy war. The South Pars / North Dome gas field is the largest conventional natural gas field in the world. It is mostly located under the seabed of the Persian Gulf and straddles the borders of Iran to the NorthEast and Qatar to the SouthWest who are bitter enemies. Even though it has been in production for more than a decade, the party who accelerates their extraction will effectively steal most of that remaining resource away from the other party. However that gas cannot be quickly harvested without first ensuring there is a big market for it. A big market cannot be assured unless there are pipelines in place to supply that market. Qatar does export LNG (mainly to East Asia), but this is subject to the substantial constraints outlined above, with limited profit margins. The most prized gas market from the view of both Qatar and Iran, is Western Europe. The party that can establish a pipeline to Europe first will win that prize. The critical territory the pipeline must cross, determined by geography, is Syria. In 2009 Qatar, a Sunni client state of the US, approached Bashar Al Assad proposing such a pipeline through Aleppo province. Not surprisingly, Assad knocked back Qatar's proposal because it ran counter to his political alliances. A Qatari pipeline would undermine the price of Russian gas exported to Western Europe and would scuttle Iran's chance of benefiting from South Pars. When Iran subsequently approached Assad about such a pipeline, economic circumstances in Syria had by then greatly deteriorated. This new pipeline proposal from Iran, a Shi'ite state and ally of both Syria and Russia, came with the promise they would turn Syria into an energy processing, money making hub. Assad was therefore ready to proceed with Iran's deal. Shortly thereafter, the "civil war" in Syria broke out, instigated by so-called "Syrian" rebel groups which actually consisted of many foreign mercenaries funded largely by Qatar and Saudi Arabia.

At the time of writing of this essay in early October, Aleppo city is on the verge of being recaptured from ISIS by Syrian government forces with the help of Russia. That did not stop Turkey from moving troops into Aleppo province last month under operation "Euphrates shield", Turkey's proposal being to create and occupy a "neutral" buffer zone. Of course, it is nonsensical to regard such a zone in Northern Syria as neutral: if defacto occupied by Turkey, it is defacto neo-Ottoman empire annexed territory. Perhaps we should rename Erdogan's country "Vulture" rather than "Turkey", or perhaps Turkey Vulture. Of course such an occupation will also mean that Turkey Vulture may benefit financially in future by renting a gas pipeline corridor in Aleppo province to the highest bidder. No mention about that lucrative prospect from Turkey Vulture though, whose motives, so we are told, are purely altruistic, as is true for all Vultures.

Enter another player, Israel, into this sorry saga of greed. In December 2010 a gas field off the Levantine coast was discovered so massive that Israel called it "Leviathan". Whereas there is little risk of another country tapping into that field, there is a risk that either Qatari or Iranian gas piped through Syria to Europe will seriously undermine the price of gas exported to Western Europe. And what will be the natural market for gas from the Leviathan field? Why Western Europe of course. It is obvious that Israel will stand to benefit from ongoing chaos in Syria, chaos which will ensure that both Qatar and Iran cannot establish a pipeline to Europe, thus allowing Israel to develop its own Leviathan field for export to Europe at a premium price (expected start of production is 2017). America's failed agenda of "regime change" in Syria has resulted in nothing but chaos, however Israel is more than happy to support and maintain that chaos. Let us recall Netanyahu's squealing insistence that the US should bomb the crap out of Syria during his rabid rant to an insane Republican audience at the US congress in March last year. Who gives a shit about 23 million Syrian lives anyway if there is gas money to be made.

The gas story does not quite end there however. Get ready for an anticlimax. Only last year, an even larger offshore gas field, much bigger than Leviathan, possibly even larger than South Pars, was discovered off the coast of Egypt, the Zohr field 6. Due to Egypt's greater experience with the fossil fuel and gas industries, they have good prospects of fast tracking the gas production which will offer stiff competition with Israel's fledgling gas industry and severely blunt Israel's expected economic windfall. Oy vey, enough already!

 

CONCLUSION:

Any astronomer will tell you that to properly study the true nature of a star, it is necessary to examine it using all the different electromagnetic spectra available to us, whether radiowave, microwave, infrared, visible light, UV, Xrays or gamma rays. That is the best way for us to build up a comprehensive and accurate overall picture of that star. Furthermore it is necessary to eliminate or compensate for other factors which may distort or falsify our interpretation, such as atmospheric interference or doppler shifts or gravity distortions by dense bodies (eg black holes) which may bend the incoming electromagnetic beams.

Similarly in order to properly understand Syria, we must view the situation through all evidenced based lenses available to us, while simultaneously discarding bent and bogus paradigms fabricated by the Murdoch/mainstream media and their fee-for-opinion prostitute talking heads, even though they may hold "impeccable" ivy league "qualifications".

US and Australian rightwing nuts will undoubtedly accuse me of being a greenie commie freedom hating eco-terrorist. Anyone who has read my articles will know I strongly support open, liberal democratic processes which must be guided by evidence, reason and fairness with particular emphasis on transparency and accountability. I strongly support responsible free speech based on facts and reason. I strongly oppose irresponsible deceitful speech based on blatant lies such as Holocaust denial or global warming denial. Opposing and suppressing such deceitful Neonazi or Orwellian speech does NOT contradict the principle of free speech, it removes noise and promotes the process of constructive dialogue and the transmission of useful information. I strongly support the original stated ideals of America; the ideals of Abraham Lincoln, of Franklin Roosevelt and of Martin Luther King. I view Americans (or Australians or any other nationality) with similar values as my natural allies, my friends. The America of Lincoln, FDR and MLK that I admired, with all the promise it held, no longer exists. It has been replaced by a perverse mockery of what might have been. The beacon on the hill has been extinguished, not from without, but from within.

The voices of ordinary Syrian people have been drowned out in all these proceedings. We can only imagine what they must want, be they Sunni, Alawite, Christian, Druze, Yazidi or any other group. Is it so difficult to imagine that they simply want peace, security, shelter, food, clean water, education for their children, health care? That they simply want what we, in more stable societies take for granted? Simple human requirements that the so-called "leaders of the free world", through their despicable foreign policy, have deprived them of? The best thing the USA can do, to allow any prospect of any beneficial outcome for the Syrian people, is for the USA and its client states to fuck off.

G. Chia, October 2016

FOOTNOTES:

  1. http://www.doomsteaddiner.net/blog/2015/12/07/how-to-cure-terrorism/

  2. http://www.dailyimpact.net/2014/09/08/fareed-at-last-the-middle-east-explained-totally/

  3. http://www.doomsteaddiner.net/blog/2015/08/08/how-the-world-works-part-i/

  4. https://www.thenation.com/article/the-united-states-probably-has-more-foreign-military-bases-than-any-other-people-nation-or-empire-in-history/

  5. http://ec.europa.eu/echo/files/aid/countries/factsheets/turkey_syrian_crisis_en.pdf

  6. http://www.businessinsider.com/largest-ever-natural-gas-field-found-2015-8?IR=T

Standing like a Sioux

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Published on Peak Surfer on September 24, 2016

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"“There is a bottleneck right here … and today I am directing my administration to cut through the red tape, break through the bureaucratic hurdles, and make this project a priority.”— Barack Obama, March 22, 2012."
 

 

 

  On April 1, in the last phase of istawicayazan wi, the moon of sore eyes, acting with love and fierce determination, the youth of the Standing Rock reservation stood together in prayer at the place called Sacred Stone. At the close of their prayer, they remained. Figuratively, they drove stakes into the ground and tied their legs to them. They might be killed there, but they would not leave.

Facing them were the arrayed forces of the U.S. Army Corps of Engineers, the White House, four state governments, and the corporations and banks that form Energy Transfer Partners. ETP (NYSE:ETP) owns and operates Panhandle Eastern Pipe Line Company, successor to Southern Union Company, and Lone Star NGL. ETP also owns 67.1 million common units of Sunoco Logistics Partners (NYSE:SXL) a company that hopes to see the United States become an oil-exporting nation once more.

The Dakota Access Pipeline (DAPL) is a 1,172-mile, 30-inch diameter steel pipe that will connect the million-barrel-per-day Bakken and Three Forks fracked oilfields of North Dakota to a bigger pipeline in Illinois for transportation to Louisiana and Texas SXL crude oil terminal facilities and there to be loaded onto ocean-going tankers.

DAPL will carry 570,000 barrels per day. Unless one of those supertankers sinks, one hundred percent of that will go to the atmosphere as deadly, human-extinction-intending, greenhouse gases. So will the oil and gas flowing through the other 71,000 miles of pipelines owned by ETP.

It will cost more to build capacity, produce, refine and burn that oil than to provide the same energy from clean, solar power sources.

 
 

On March 12, 2012, two years and three months after successfully derailing the Copenhagen climate agreement, President Obama issued a presidential memorandum ordering federal agencies to expedite the licensing of new oil and gas projects.

Two months before the Standing Rock youth assembled, the US Army Corps of Engineers, acting for the Obama Administration, gave DAPL an allotment of NWP “fast track” permits. These permits are usually reserved for powerlines or other utility right-of-ways that do not threaten water supplies. NWP approval meant that ETP could legally bypass public notice and regulatory review under the National Environmental Policy Act and the Clean Water Act.

 


Sierra Club, National Wildlife Federation, several 350.org local chapters, the Center for Biological Diversity, WildEarth Guardians, Corporate Ethics International, and others used the comment process on the KXL/Transcanada pipeline to detail the flow of abuses to environmental and native sovereign rights that issued from the White House “all of the above” policy.

Both the Clinton and Trump campaigns count ETP and its allies as major funders. Harold Hamm, founder and CEO of fracking giant Continental Resources, is an energy aide to the Trump campaign and potential future U.S. Secretary of Energy. Hillary Clinton has remained studiously silent on the Dakota pipeline protests but openly supports the Obama fast track policy.

 


On September 3, only a day after the Standing Rock Sioux filed action in court identifying their sacred sites, ETP brought in bulldozers to raze the land named in that complaint and affidavits and render the issue moot. To prevent that, entire families left their homes on the reservation and went onto the sacred sites in an attempt to block the bulldozers. Pipeline security workers responded by letting loose dogs and pepper spray.

It recalls Christopher Columbus feeding Taino babies to his armored war dogs for the sport of his officers.

There have been at least 58 arrests thus far at the #NoDAPL protests, with arrest warrants pending against both journalist Amy Goodman, who filmed the dog attacks and was charged with trespass, and Green Party presidential candidate Jill Stein, who spray-painted a bulldozer blade and was charged with vandalism.

When a federal judge denied a tribal motion to halt pipeline construction, the Obama administration stepped in to ask that ETP voluntarily cease other construction than in the area in controversy. Most news media, including ourselves, mistook this for meaning the White House was coming to the aid of the Sioux. In fact, it was exactly the opposite, and anyway the ETP voluntarily chose not to stop.

Construction continues. ETP just purchased the ranch where the Sacred Stone Camp is located and where additional native burial grounds and sacred sites have just been identified.

The tactics chosen by the Standing Rock Sioux could have come straight from the rules for satyagraha by Mohandas Gandhi. The Nation followed the letter of the law in making its timely public comments and administrative interventions, in filing for an injunction, and in opposing this assault on its safety and sovereignty by physically standing in the way. Its protests are peaceful and nonviolent. It invited the whole world to watch as military blockades re-routed traffic and kept away the press, the National Guard was brought up to support the corporate goons and then praying children were uprooted with attack dogs, their mouths filmed dripping with the blood of those children.

When individuals are betrayed by a government, they can sue or protest. When the treaty protections of an occupied nation are betrayed by their occupier, their recourse must be to the international legal system. This week, Standing Rock Chairman Dave Archambault II addressed the 49-member United Nations Human Rights Council in Geneva Switzerland. He invoked the memory of Sitting Bull:
 

Sitting Bull came from Standing Rock and one the most famous quotes that he has is, “Let’s put our minds together and see what we can build for our children.” So today as this is the topic, something that guides us in our decision-making as leaders: We are putting our minds together so that the kids, the ones not yet born, have something better than what we have today.

 


Were you born too late to be a suffragette or freedom rider? To march across the Edmund Pettis Bridge in Selma? To encircle the Pentagon with the Yippies and try to levitate it? To sail with Albert Bigelow on Golden Rule and later Earle Reynolds aboard Phoenix, and still later Peter Willcox on Rainbow Warrior or David McTaggert on Vega, into the Pacific test zone to block the H-bombs?

Climate change is coming to the plains. Mother Nature doesn’t care how many dogs the oil barons have.

This is our moment. We are this season’s people. Its a good day to die.

Oil Company Carnage Continues

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Published on The Daily Impact on September 12, 2016

deepwater-horizon

When an oil well like Deepwater Horizon explodes, the images are unforgettable. When the entire industry starts to collapse, it’s hard to see and to remember.

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deepwater-horizon

 

 

 

When an oil well like Deepwater Horizon explodes, the images are unforgettable. When the entire industry starts to collapse, it’s hard to see and to remember.

In a recent essay I proposed the existence of a new human subspecies – homo sapiens ephemera — that is smart (thus sapiens) but severely afflicted by attention deficit disorder and long-term memory loss. Thus ephemera may understand, for example, the connection between a burning fuse at his feet and an imminent explosion, but almost immediately forgets it, goes on to something else, and is surprised by the blast. Nowhere is this behavior more evident than in the U.S. oil patch, whose collapse, predicted here and elsewhere for years, is now described by none other than Moody’s Investors Service, quoted in Bloomberg News as “catastrophic” and perhaps “the worst bust of any industry this century.”

 

Does anybody remember the Savings and Loan debacle? The Enron (“smartest guys in the room”) implosion? The Dot-Com collapse? And the Sub-Prime Mortgages that Ate the World? After each of these episodes, Ephemera slapped his slanted forehead and said, “Boy, that was dumb. But nobody could have seen it coming.” Put on your protective headgear, because it’s happening again.

When they came to you, Ephemera, and asked you to invest gazillions of dollars up front in the New American Oil Revolution, they talked about energy independence! and America, Number One! and everything back the way it was in 1950! But the burning fuse at your feet was about fracking wells that cost ten times that of a conventional oil well and play out nearly ten times faster, about exploding trains and polluted water and earthquakes, in a market that would soon devalue the product by 50%.

Of course you gave them the money. You bought their stock, you bought their bonds, you bought their junk bonds. You lent them money, and when they couldn’t pay it back you lent them more to roll over the debt, which almost immediately became enormous because every one of those expensive wells had to be replaced every three years. You let them convert your secured debt to unsecured debt, or to watered down stock, or to fairy dust. Now, according to Moody’s, there has finally been an explosion. Who could have seen that coming?     

Moody’s reports that twice as many oil and gas companies have gone bankrupt so far this year than did so in all of last year. Investors affected by these failures have seen an average 21 percent return. No, that’s not return on their investment, it’s return of their investment; they lost 80 per cent of their money. And those were secured lenders; junk-bond holders got back 6 cents for every dollar they invested.

Yet the fuse burns on. In the Bakken fracking field in North Dakota, for example, where no oil company has made any money, even when oil was priced at over $100 a barrel, where the total accumulated debt of the players is north of $30 billion, where production has been declining for over a year with oil prices below $50 and well below the cost of production — the zombie companies, almost all of them technically insolvent, continue to borrow operating money through such creative pitches as “distressed exchanges.”

The fuse burns faster, smokes even more, and doesn’t have much farther to go. What’s that? Hillary sneezed? Tell me more…..

An asteroid called “Peak Oil”

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Published on Cassandra's Legacy on September 13, 2016

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– the real cause of the growing social inequality in the US

 

In a recent article on the Huffington Post, Stan Sorscher reports the graph above and asks the question of what could have happened in the early 1970s that changed everything. Impressive, but what caused this "something" that happened in the early 1970s? According to Sorscher,

X marks the spot. In this case, “X” is our choice of national values. We abandoned traditional American values that built a great and prosperous nation.  

Unfortunately, this is a classic case of an explanation that doesn't explain anything. Why did the American people decide to abandon traditional American values just at that specific moment in time?
 

In reality, the turning point of that time has been known for a long time. The first to notice it were Harry Bluestone and Bennet Harrison with their 1988 book "The Great U-turn: Corporate Restructuring And The Polarizing Of America." They noted that a lot of economic parameters had completely reversed their historical trends in the early 1970s, including the overall inequality measured in terms of the Gini coefficient. For nearly a century, the US society had been moving toward a higher degree of equality. From the early 1970s, the trend changed direction, bringing the US to an inequality level similar to that of the average South-American countries.

So, what was that "something" that changed everything in the early 1970s? Nobody really knows for sure, but at least there was a major measurable change that took place in 1970: peak oil in the US. (image below, from Wikipedia).
 

It was a true asteroid that hit the US economy and that changed a lot of things. Possibly the most important change was that the US ceased to be an oil exporter and became an oil importer. That change was "user transparent," in the sense that the Americans who were filling up the tanks of their cars didn't know where the oil that had produced their gasoline was coming from (and mostly didn't even care). But the change implied a major transfer of capital from the US to foreign producers, while a large part of it returned to the US in the form of investments. It was the "petrodollar recycling" phenomenon that mainly affected the financial system; all that money never really trickled down to the poorer sections of the US society. That may well explain the increasing inequality trend that started in the early 1970s.

But, if the oil peak of 1970 explains the inequality trends, shouldn't the new reversal of the trend – the "shale oil revolution" change everything again? Perhaps surprisingly, there is some evidence that this may be the case
 

 

 

 

The data from the World Bank indicate that the Gini coefficient for the US has peaked in 2006 and has remained constant, or slightly declining, ever since. Again, that makes some sense; one wouldn't have expected a return to the low inequality values of the 1960s since the great shale oil boom didn't transform the US into an oil exporter. At present, with the recent peaking of the Bakken field, it looks like that the good times of half a century ago will never return.

All this would require a lot of work to be better quantified and proven. But it is not a surprise that our life depends so much and so deeply on the production of that vital black liquid that we call "crude oil". And with the probable downturn of the US production that seems to be starting right now, we are going to see more, and more radical, changes in our society. What these changes will be, we have to see, but it is hard to think that they will be for better equality. 

 

Peak oil by any other name is still peak oil

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Published on Cassandra's Legacy on September 8, 2016

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One of the most compelling charts I have ever seen is the “Growing Gap” chart that used to appear in every ASPO Newsletter. This is the one from the last ASPO Newsletter, written by Colin Campbell and published in April 2009.
 
 
Since then, more than seven years have passed, and peak oil has disappeared from the mainstream press headlines–almost. On August 29, Bloomberg published a story alerting to the fact that conventional oil discovery has reached a 70-year low. It published a very interesting chart, using data provided by Wood Mackenzie, the oil consulting firm, to show that fact. Unlike the ASPO chart, Bloomberg's chart only goes back to 1947, the year before Ghawar was discovered.
 
 

 

 

 

I thought I would reproduce the “Growing Gap” chart using Wood Mackenzie's data.

 

Neither Wood Mackenzie nor Bloomberg make public the data behind the chart, but I used a digitization program, WebPlotDigitizer, to extract data from the chart. The results are not perfect, of course, but give a good enough estimate. One must keep in mind that discovery data are not precise and may have a significant margin of error.

 

In order to obtain conventional oil production, I subtracted US tight oil production and Canadian tar sands production from the EIA's global crude plus condensate number. I know I must also subtract the extra-heavy production from the Orinoco Belt, but it is hard to find data for it. In any case, this is a very good estimate. According to data gathered by Jean Laherrère, the Orinoco extra-heavy production is only around 1 Mb/d today.
 
The following chart shows the digitized Wood Mackenzie conventional discovery data and the production data described above. According to the data, since 1980, when the gap between production and discovery began to appear, humanity has extracted about 47 percent more conventional oil than it has discovered.
 
 
And the following chart shows a three-year moving average of discovery, to replicate the ASPO chart. Notice that discovered volumes are generally larger than Campbell's data, but the drop since 2011 is more precipitous than he anticipated.
 
 
 
 
According to the Bloomberg story, this shortfall in discovery will be felt 10 years from now, when it begins to “hinder production.”

Peak oil by any other name is still peak oil.

Open Letter to The Zeitgeist Movement

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Published on the Doomstead Diner on August 25, 2016

 

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This open letter to The Zeitgeist Movement replaces an essay I originally promised to Diners, "Peak Oil Revisited Part 2: Why business as usual guarantees that global industrial collapse will be complete by 2030". I have not had the time to elucidate all aspects of my argument in detail and Dr Louis Arnoux is probably doing a better job with his articles on this topic anyway. He is a true energy expert, I am merely a lay person trying to interpret the thoughts of the experts for the general public.

The other "Peak Oil Revisited" essay I promised, "Part 1b: Is an International Standardised Energy Dollar feasible?" has proved to be much more complicated than originally envisioned and is the lowest of my priorities at the moment. Even if an ISED is feasible it is unlikely to ever see the light of day for political reasons.

Graph1 TheELM   Graph2 ELM over NetEnergy   Graph3 net energy cliff

Graph 1                                                        Graph 2                                                        Graph 3

OPEN LETTER TO TZM:

by G. Chia, August 2016

Dear L and C (Queensland TZM organisers),

As you know I ran sustainability meetings for doctors and scientists from 2006 to 2013. I note your Zeitgeist group is holding a meeting on sustainability on 10 September 2016. As a starting point for your discussion you may wish to display on your projection screen the letter I wrote earlier this year to "Doctors for the Environment Australia" (see attached pdf). When I subsequently met with the Queensland DEA representative, Dr David King, he could not offer any factual or logical objections against my letter. His only comments were that although my views were consistent with those of many scientists, he felt he had to give DEA members "hope". DEA are operating on the false hope they can fix rampant global warming which has now spiralled out of control. They have completely ignored more immediate energy and economic issues.

Energy analyst Dr Louis Arnoux has informed me that world average1 EROI (energy return over invested, or to use the proper mathematical description for this ratio, energy return divided by energy invested) for petroleum fell below 10:1 a few years ago. Dr David Murphy's figure for world average EROI of 17:1 for 2013 was an overestimate because Murphy himself wrote in his paper (published by the Royal Society) that his figure did not account for the energy costs of fuel refinement and transportation2.

According to other EROI luminaries, Drs Hall and Lambert3, a ratio of 10:1 is the minimum required for a complex industrial economy to function properly.

Some parts of the industrial world can continue to function at present because they have captured4 the few remaining high EROI (>10:1) sources for themselves. Others areas eg Southern Europe are losing or have lost access to such high net energy sources ("Hi-NES")5, hence they are now deindustrialising and collapsing. The rest of the world will never industrialise. We have no significant liquid hydrocarbon replacements for conventional petroleum. Unconventional petroleum, with its woeful EROI of 3:1 or less, is an environmentally devastating scam and a stock market Ponzi scheme.

Decline in Hi-NES is the primary reason for the current global economic contraction6, a fact that conventional economists are too venal or too stupid to acknowledge. The present low price of oil is deeply misleading and is hiding the fact that oil has become less affordable/available for most people around the world due to demand destruction and deflation, temporarily freeing up more oil for "lucky" countries such as Australia.

Dr Jeffrey Brown's export land model (ELM) shows that oil availability for oil importing countries will eventually fall off a cliff (see graph 1 from postpeakliving.com in which I have corrected a caption: the red line shows GROSS world oil production, which does NOT take into account the energy invested in that oil production. Hence the yellow circle is an overestimate of when zero oil will be available to oil importing countries). A more accurate curve on which to superimpose the ELM should be downslope of the Net Hubbert curve as shown in graph 2. Prior to me doing this, I do not believe anyone else has combined ELM and EROI concepts and it is high time someone did so.

A most vital concept to understanding why global industral societies will soon suddenly and catastrophically collapse, just as a teetering Jenga tower suddenly collapses, is the mathematical fact that the net energy available (= energy return minus energy invested) falls off a cliff when EROI declines to 5:1 (see graph 3).

Sudden catastrophic collapse is consistent with the view of Dr Ugo Bardi, one of the original "Limits to Growth" scientists, who calls this phenomenon the "Seneca cliff". Dr Bardi is an incredibly smart scientist whose dire warnings over many years have been blithely ignored by all the stupid sheeple around him, hence he titled his blog "Cassandra's Legacy".

In human terms, plummeting EROI in the absence of any plan to transition to a post carbon lifestyle, will mean social breakdown, war, starvation7 and mass die off on a monumental scale. No part of the world which depends on petroleum will be spared.

We can understand why TPTB promote false hopes for the future to the clueless sheeple, using extravagant bread and circuses like the Olympics. Such theatrics keep the herd distracted and subdued. Be assured that once the masses revolt, the drones will be deployed.

On the other hand, offering intelligent people false hope for the future is in my view deeply inappropriate, especially if useful measures can be taken right now to mitigate impending hardships. Unfortunately the window of opportunity is closing fast. What is your transition plan?

You may vehemently reject my warnings and choose to ignore this letter because everything seems "fine" to you now, however denial will not make a looming catastrophe magically disappear.

One of your previous speakers promoted manned space travel to Mars. How useful, do you think, is that sort of meeting?

Regards

Geoffrey Chia, August 2016

 

Footnotes:

  1. Global "average" EROI of below 10:1 at present means that most oil fields now yield EROI below 10:1 (eg perhaps only 8:1 or 6:1). However there are a few oil fields which continue to yield a high EROI (eg perhaps 20:1), oil fields which the vultures are now circling.

  2. Murphy DJ. 2014 The implications of the declining energy return on investment of oil production. Phil. Trans. R. Soc. A 372: 20130126.

  3. Lambert, Jessica G., Hall Charles A. S. et al. 2014. Energy, EROI and quality of life. Energy Policy 64:153–167 "There is evidence…that once payments for energy rise above a certain threshold at the national level (e.g. approximately 10 percent in the United States) that economic recessions follow. "

  4. Such capture can be accomplished by fair means (eg providing useful products to the oil vendors in exchange for their oil), or foul (eg the criminal protection racket known as the Petrodollar).

  5. Being starved of credit

  6. In China, intolerable pollution has been a major factor for their economic slowdown, as well as the marked reduction in overseas demand for their industrial output

  7. Mass agriculture is crucially dependent on petroleum (also natural gas)

Dark Dynamics

gc2smFrom the keyboard of James Howard Kunstler
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Originally Published on Clusterfuck Nation  August 22, 2016

 


What the world is witnessing, without actually paying much attention, is the death of our debt-based economy — that is, borrowing the means to thrive in the now from a future that can’t really furnish it anymore. The illusion that the future would always provide was a legacy of the cheap energy era. That era ended in 2005. The basic promise is broken and with it the premise for living as we had been. The energy available today, especially oil, is no longer cheap enough to run the industrial economies designed to run on it. Any way that you look at the dynamic, Modernity loses.

With oil under $50 a barrel, and gasoline under $3 a gallon (back east), the public apparently thinks that the Peak Oil story is dead and gone. But when it costs $75 a barrel to pull the stuff out of the ground, and the stuff only sells for $47 a barrel, the oil companies’ business model doesn’t really work. The shale oil companies especially have been gaming the system by issuing bonds that pay relatively high interest rates in an investment climate where almost nothing else offers enough yield to live on, especially for pension funds and insurance companies. Two little upward bumps this year in the price of oil toward the $50 range prompted a wish that the good old days of high-priced oil were coming back, that the oil business would be profitable again.

The trouble is that high oil prices — say, over $100 a barrel, as it was in 2014 — crush advanced economies, so that demand for oil crashes, and with it productive activity. Without productivity, the debts issued by companies (and even governments) don’t get repaid. There really is no “sweet spot” in this energy cost equation.

A lot of wishful thinkers would like to believe that you can run contemporary life on something beside oil. But the usual “solutions,” solar and wind energy, don’t pencil out, especially when you consider that the hardware for running them — the photovoltaics, charge controllers, batteries, turbines, and blades, can’t be mass-produced and distributed without the very fossil fuels they are supposed to replace.

These matters add up to the essential quandary of our time. It has expressed itself in falling standards of living for what used to be the middle class, most particularly in the USA. European countries have tried to work around this problem with their rigid bureaucracies for keeping those already employed from losing their jobs. In France, Spain, and Italy, this has only made it much harder for people under 30 to get a job. The jobs picture for millennials in the USA is not much better, though there’s no structural job-protection for their elders who are still working here. They live in abject fear of termination by the HR ghouls of the big corporations.

Sooner or later the younger generation will explode in rage at the system and there is no telling what the result will be. We’re already seeing it in the black ghettos, where decades of accrued social dysfunction make the anomie and purposelessness — of young men especially — much worse. The newer loser class of people who once had good jobs and now have poor prospects of ever getting them back gets swept up in the mania for their incoherent champion, Trump, who shows no sign of understanding the essential quandary of our time. The tragedy of Trumpism is that the man so poorly represents a large group of Americans with genuine woes and grievances. And the larger tragedy of our country these days is that events did not prompt better leaders to step forward.

The explanation may be that people who actually understand the dark dynamics spinning out are rather pessimistic about the our ability to carry on under the familiar disposition of things. Hillary represents the forces in our national life that want to pretend that nothing is wrong, that all the splendid rackets of the day — Federal Reserve interventions, corporate debt-fueled stock buybacks, military log-rolling, medical racketeering, the college loan Ponzi, pension fund levitation, primary dealer bank interest rate arbitrage, agribiz Frankenfood proliferation — can just grind along like some old riverboat banger engine keeping the garbage barge of American life afloat. Thus, Hillary is shaping up to be the patsy of the century, likely to preside, if elected, over the biggest blowup of established arrangements that world has ever seen.

The debt problem alone is absolutely certain to express itself in at least three major ways: the crash of equity markets, the collapse of the bond markets, and the loss of faith in the value and meaning of whatever money you’re using. Any of those events would turn the economic life of the linked advanced economies upside down. Any of them could occur during the 2016 US election season.

 


James Howard Kunstler is the author of many books including (non-fiction) The Geography of Nowhere, The City in Mind: Notes on the Urban Condition, Home from Nowhere, The Long Emergency, and Too Much Magic: Wishful Thinking, Technology and the Fate of the Nation. His novels include World Made By Hand, The Witch of Hebron, Maggie Darling — A Modern Romance, The Halloween Ball, an Embarrassment of Riches, and many others. He has published three novellas with Water Street Press: Manhattan Gothic, A Christmas Orphan, and The Flight of Mehetabel.

The Ongoing Collapse of Turkey’s Secular Democ­racy and… the Backstory to the Attempted Turkish Coup (part 2/3)

Off the keyboard of Allan Stromfeldt Christensen

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Published on From Filmers to Farmers on August 19th, 2016

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Mustafa Kemal Atatürk (photo courtesy of rene de paula jr)

So where did I leave off in part 1? Oh yeah. Erdoğan and Putin are now BFF-FAW (Best Friends Forever For A While), Erdoğan’s Turkey has quite possibly been helping ISIS unload its oil, the United States / Europe / NATO has purportedly been turning a blind eye to it all, and Turkey is trying to avoid joining its western neighbour for as long as it can before embarking on its journey to the endarkenment. But before I continue from where I left off and address whether or not a local supply of fossil fuels from the north could be enough to sway Erdoğan “from the bad guys to the bad guys,” a little bit of Turkish history is in order. And fortunately, having introduced my Turkish confidant to the Turkish (falafel) joint I frequent, in return I was introduced by him to the work of Turkish writer Efe Aydal, whose writings went a long way in clearing things up for me.

As Aydal explained it in May of 2016, when the AKP first came into power “The American media was calling Erdoğan ‘second Atatürk.'” Mustafa Kemal Atatürk, in case you aren’t aware, is sometimes described as Turkey’s George Washington. In the 1920s he became the first president of the country, and upon putting through various political, economic and cultural reforms meant to transform Turkey’s religiously-oriented Ottoman caliphate into a secular, democratic, and modern nation-state, he also went out of his way to make sure that the military would not be answerable to the government. The purpose behind the latter move was to ensure that above all else the military would uphold its mandate of protecting Turkey’s new constitutional principles of secularism. This is why Turkey has had six coups/attempted coups since 1960, the military moving in when it believes that civilian governments are violating its secular principles (although it’s possible that outside interests played some roles in those coups).

On top of that, Atatürk had thousands of new schools built, primary education was made free, taxation on peasants was reduced, the use of Western attire was promoted, and women were given equal civil and political rights. And contrary to what I initially thought, none of this is to say that Atatürk was some kind of Western stooge. Unbeknownst to me, and as my Turkish confidant filled me in, the ANZAC holiday which many Australians and Kiwis celebrate every year was originally in reference to Australia’s and New Zealand’s failed invasion of Constantinople (in what is now Turkey) back in World War I – and which Kiwi mates of mine see as a ridiculous thing to celebrate since ANZAC Day is essentially about glorifying the (attempted) invasion of another country and of sending our young men to needlessly fight and die in a banker’s war. But regardless of all that, it just so happens that the commander of the Turkish army that held back the Aussie and Kiwi minions of British bankers was none other than Mustafa Kemal Atatürk.

It’s been nearly a century since Atatürk’s time though, and while Atatürk’s image is currently being paraded around Turkey by the AKP – even though it’s been talking about abandoning the constitution’s tenet of secularism, and so is likely just jumping on the bandwagon because it now needs the support of the secularists after having split with the Gülenists – “democracy” also seems to have become a mostly-empty buzzword as well.


Where the world’s finest go to shine (photo by United Nations Photo)

First off there’s the president, Recep Tayyip Erdoğan, who after supporters he was addressing outside his Istanbul residence began chanting for the death penalty to be restored, summarily stated that “We cannot ignore this demand… In democracies whatever the people say has to happen.” Or in other words, mob rules.

(As an aside to that, if Turkey reinstates the death penalty, which it scrapped in 2004 as a condition for eventually gaining admittance to the European Union, its chances for gaining passage onto the Titanic drop to zero. Furthermore, even if Turkey could squeeze its way in onto the lower decks of the EU, admittance to the club pales in comparison to the allure of a new imperial Turkey that could dominate the region. Granted, the EU is Turkey’s biggest trade partner, but with possibility of membership in the Moscow-led Eurasian Economic Union [EEU – a two-year-old, five-member free trade zone], and with the BRICS consortium a possible trading partner as well, a turn away from the EU may not actually be as bad as it sounds – as far as these things go, that is.)

Moving on in this darlings-of-democracy showcase (which is certainly giving the United States’ Democratic Party a run for its money – to the bottom), next in line is Fethullah Gülen, the Muslim cleric living in self-imposed exile in Pennsylvania who the mainstream media likes to portray as a “staunch advocate of democracy,” who is then said to have “left Turkey in 1999 just ahead of a treason charge,” but from what I’ve strangely noticed hardly ever seems to get explained any further.

But according to an old BBC article I came across, it turns out that shortly after Gülen left to the United States in 1999 for what he claimed were medical reasons, Turkish television channels broadcast recordings of comments by Gülen “in which he urges his followers in the judiciary and public service to work patiently to take control of the state.” Gülen dismissed the allegations (from the United States) and said his comments were taken out of context. He was tried in absentia in 2000 by Turkey’s then-secular courts, but ultimately cleared in 2008 by Erdoğan’s more Islamic-leaning courts, his acquittal possibly a gesture of gratitude for his support of Erdoğan’s election to prime minister in 2003. Nonetheless, Gülen has remained in self-imposed exile ever since his initial departure.


Apparently not everyone is a fan of Fethullah Gülen
(photo courtesy of SHOTbySUSAN)

To make things even murkier, United States immigration authorities had planned to expel Gülen in 2006, but plans for such were rescinded following a letter of recommendation written to the FBI and the United States Department of Homeland Security by former Vice Chairman of the CIA’s National Intelligence Council, Graham Fuller (who openly admits to this, and which is part of the public record anyhow).

As it turns out, and as Aydal also states,

In Turkey, the governments come and go, the one thing which doesn’t change is every government had to get the approval of Fethullah Gülen until now. Because he had so much vote potential, if he didn’t approve a party, that party wouldn’t be able to win. When AKP came to lead [in 2003], it was made possible by the Gülen power again.

However, and as Aydal also states, “Something I never expected happened” (which an article in Foreign Policy delved into):

[In 2013] AKP and the Fethullah cult started fighting. And everything you see today in Turkey is the result of that. AKP has the government advantage, but Fethullah has the advantage that it’s backed by USA.

Moreover, and as Aydal put it a couple of months before the attempted coup shenanigans,

[I]n the future AKP will eventually lose. Because ever since they broke the bonds with USA based Fethullah cult, they’re not useful for USA anymore. And they will be replaced by one which is useful. That’s why in recent months the foreign press started attacking him [Erdoğan] and calling him a dictator, whereas they used to hail and love him.

“Love him”? And refer to him as the “second Atatürk”? Well sure, if – and contrary to the wishes of most of the world’s global Muslim population – you sign up as a full supporter of the 2003 Anglo-American invasion of Iraq, and even pen an article for the Wall Street Journal, you’re the United States’ latest BFF-FAW. (Just don’t get too uppity, lest you want to end up like the United States’ former BFF-FAW, Saddam Hussein.)

Regardless, that’s pretty much all changed now. For as Aydal concludes,

You guys have to understand, for Turkey this is HISTORY. It’s the day when USA lost total control over Turkey. I was always wondering how long can Erdoğan resist the Gülen cult, but he actually waged straight-up war. And every party who’s against Gülen is supporting Erdoğan in this.

And not just every party, but many – most – run-of-the-mill Turks. Although Erdoğan is generally a divisive figure, his recent purges of Gülenitsts from judiciaries, police forces, and other government sectors is being praised by Turks of all political stripes, even those who normally oppose him. Post coup, his approval ratings have shot up to 68% from 47% prior to the coup, and a recent rally saw more than two million Turks, of various political persuasions, join together in solidarity. As one attendee put it, “We came together to save our nation from outside forces, so we are here for the love of our country and flag.”

While the west generally sees Erdoğan’s purges as a witch hunt and Erdoğan as little more than an authoritarian, many Turks are frustrated that the West isn’t taking the Gülen network (FETO) seriously. As an article in the Intercept put it, for years Gülentists have been using “clandestine methods to sneak into the military schools” as well as recruit in the police, judicial, and other government agencies. (According to the article’s informant, military pilots who could fly the American-made F-16 fighter jets were the most prized of all.) Anybody who spoke up about what was going on was swiftly punished. And while it was (secular) Kemalists that were the first targets of the Gülen network due to their sought after positions in public offices, Erdoğan’s AKP became the most recent target after the fallout in 2012.

Granted, prior to 2012 the AKP had actually assisted the Gülenist take-over of the judiciary, and so in return had any laws it wanted passed done so. Likewise, the government also turned a blind eye to the Gülenist infiltration of the army. That being so, even though (secular) Kemalists are generally supportive of the purges, they are nonetheless concerned that after Erdoğan is finished with the Gülenists he will set his sights on them and it will be back to the old divisive ways, if not worse. As someone by the name of “actual turk” stated in the comment section of part 1 in this Turkey series, “Erdogan is no angel – he is a scumbag – but this purge is getting rid of an islamic cancer far worse than Erdogan.”

Having said all that, the West has not been all to happy with the outcome of the attempted coup. As the not-conspiracy-oriented Oil Price put it, “European leaders were not too enthusiastic when the attempted coup failed, despite official declarations in support of Erdogan’s government.” Taking it a bit further, others have even stated that “Only when it became clear the coup was in fact smashed President Obama and the ‘NATO allies’ officially proclaimed their ‘support for the democratically elected government’.” The Unites States’ government obviously denies this, and while some simply dismiss the United Statesian government’s retort as “damage control,” it’s perhaps not too hard to imagine who the United States was likely rooting for.

In the meantime, the Erdoğan/AKP government has been vehemently calling for the United States to extradite Gülen back to Turkey so he can face charges of treason (since they see him as the mastermind of the failed coup), but the United States is having no part in this. Following that, Western media sources have repeatedly reported that the United States’ government is demanding evidence of Gülen’s involvement before any judicial process can begin, full stop. But look outside the bubble, and you’ll see it stated that

According to Erdogan, “Documents have been sent to the U.S.” establishing Gulen’s guilt. But the Obama administration remains unmoved, even though Turkey has handed over terrorists to the US in the past without evidence.

And as Erdoğan has also apparently stated (and which I’ve never seen quoted in any Western mainstream media source),

Now I ask, does the West give support to terror or not? Is the West on the side of democracy or on the side of coups and terror? Unfortunately, the West gives support to terror and stands on the side of coups… We have not received the support we were expecting from our friends, neither during nor after the coup attempt.

Like the saying goes, “better the devil you know than the devil you don’t,” which is perhaps useful when you know which one of them you know better than the other.


Nearly everybody likes a good Ponzi scheme

Anyhow, what has now emerged following Erdoğan’s displeasure with the United States is an ultimatum over the delayed visa-free access for Turks to the European Union. That is, in return for Turkey stemming the flow of illegal migrants to Europe, Turks were to receive a free pass to the land of not-exactly-plenty. But despite Turkey working on its end of the bargain (five of seventy-two demands are still to be met), the visa-free access still eludes Turks, and the recent post-coup crackdowns have added a bit of a sore-spot to the whole thing. But as Turkey’s foreign minister Mevlüt Çavuşoğlu recently stated, Turkey could renege on its efforts to hold back said migrants. As Reuters put it,

Asked whether hundreds of thousands of refugees in Turkey would head to Europe if the EU did not grant Turks visa freedom from October, Çavuşoğlu told Bild: “I don’t want to talk about the worst case scenario – talks with the EU are continuing but it’s clear that we either apply all treaties at the same time or we put them all aside… It can’t be that we implement everything that is good for the EU but that Turkey gets nothing in return.”

To drive the point home even further, Çavuşoğlu has also stated that

We worked very hard to have good relations with Europe for 15 years. If the West one day loses Turkey – whatever our relations with Russia and China – it will be its own fault.”

Working off of a few things I mentioned in part 1, if Turkey’s demands aren’t met, this may very well mean Turkey will turn a blind eye to Syrians and other refugees flooding into Europe, some of which may very well be jihadi-wannabes from neighbouring countries. On the other hand, if Turkey does somehow get its way and its citizens are granted visa-free access to the European Union, the 2.7 million Syrians that Erdoğan plans on granting citizenship to may very well gain a form of access to Europe anyhow – and some of which, again, may be jihadi-wannabes from other countries. So the solution is…?

In other words, the story in Turkey is a whole lot messier than what those of us in the West are being led to believe. And when penultimate control of energy supplies is the hidden agenda, the devil you know is apt to partake in actions contrary to what might be expected. I’ll finish off the story in part 3.

EDIT 29/08/2016: Upon completion of the last part of this Turkish trilogy a few changes were made to better clarify things and improve its overall structure. In part 2 the only significant change was the addition of three paragraphs describing the rather favourable reaction Turks have had to Erdoğan’s purges, why that is so, and what some fear could transpire following said purges.

Reflections on the Twilight of the Age of Oil (Part II)

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Published on Cassandra's Legacy on July 15, 2016

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Part 2 – Enquiring into the appropriateness of the question

 
Let’s acknowledge it, the situation we are in, as depicted summarily in Part 1, is complex.  As many commentators like to state, there is still plenty of oil, coal, and gas left "in the ground".  Since 2014, debates have been raging, concerning the assumed “oil glut”, concerning how low oil prices may go down, how high prices may rebound as demand possibly picks up and the “glut” vanishes, and, in the face of all this, what may or may not happen regarding “renewables”.  However, in my view, the situation is not impossible to analyse rigorously, away from what may appear as common sense but that may not withstand scrutiny.  For example, Part 1 data have indicated,that most of what’s left in terms of fossil fuels is likely to stay where it is, underground, without this requiring the implementation of  difficult to agree upon resource management policies, simply because this is what thermodynamics dictates.
 
We can now venture a little bit further if we keep firmly in mind that the globalised industrial world (GIW), and by extension all of us, do not “live” on fossil resources but on net energy delivered by the global energy system; and if we also keep in mind that, in this matter, oil-derived transport fuels are the key since, without them, none of the other fossil and nuclear resources can be mobilised and the GIW itself can’t function.
 
In my experience, most often, when faced with such a broad spectrum of conflicting views, especially involving matters pertaining to physics and the social sciences, the lack of agreement is indicative that the core questions are not well formulated.  Physicist David Bohm liked to stress: “In scientific enquiries, a crucial step is to ask the right question.  Indeed each question contains presuppositions, largely implicit.  If these presuppositions are wrong or confused, the question itself is wrong, in the sense that to try to answer it has no meaning.  One has thus to enquire into the appropriateness of the question.”
 
Here it is important, in terms of system analysis, to differentiate between the global energy industry (say, GEI) and the GIW. The GEI bears the brunt of thermodynamics directly, and within the GEI, the oil industry (OI) is key since, as seen in Part 1, it is the first to reach the thermodynamics limit of resource extraction and, since it conditions the viability of the GEI’s other components – in their present state and within the remaining timeframe, they can’t survive the OI’s eventual collapse.  On the other hand, the GIW is impacted by thermodynamic decline with a lag, in the main because it is buffered by debt – so that by the time the impact of the thermodynamic collapse of the OI becomes undeniable it’s too late to do much about it.
 
At the micro level, debt can be "good" – e.g. a company borrows to expand and then reimburses its debt, etc…  At the macro level, it can be, and has now become, lethal, as the global debt can no longer be reimbursed (I estimate the energy equivalent of current global debt, from states, businesses, and households to be in the order of some 10,700EJ, while current world energy use is in the order of 554EJ; it is no longer doable to “mind the gap”).
 

Crude oil prices are dropping to the floor

 
Figure 4 – The radar signal for an Oil Pearl Harbor
 
 
In brief, the GIW has been living on ever growing total debt since around the time net energy from oil per head peaked in the early 1970s.  The 2007-08 crisis was a warning shot.  Since 2012, we have entered the last stage of this sad saga – when the OI began to use more energy (one should talk in fact of exergy) within its own productions chains than what it delivers to the GIW.  From this point onwards retrieving the present financial fiat system is no longer doable.
 
This 2012 point marked a radical shift in price drivers.[1]  Figure 4 combines the analyses of TGH (The Hills Group) and mine. In late 2014 I saw the beginning of the oil price crash as a signal of a radar screen.  Being well aware that EROIs for oil and gas combined had already passed below the minimum threshold of 10:1, I understood that this crash was different from previous ones: prices were on their way right down to the floor.  I then realised what TGH had anticipated this trend months earlier, that their analysis was robust and was being corroborated by the market there and then.
 
Until 2012, the determining price driver was the total energy cost incurred by the OI.  Until then the GIW could more or less happily sustain the translation of these costs into high oil prices, around or above $100/bbl.  This is no longer the case.  Since 2012, the determining oil price driver is what the GIW can afford to pay in order to still be able to generate residual GDP growth (on borrowed time) under the sway of a Red Queen that is running out of thermodynamic “breath”.  I call the process we are in an “Oil Pearl Harbour", taking place in a kind of eerie slow motion. This is no longer retrievable.  Within roughly ten years the oil industry as we know it will have disintegrated.  The GIW is presently defenceless in the face of this threat.
 

The Oil Fizzle Dragon-King

 
Figure 5 – The “Energy Hand”
 
 
To illustrate how the GEI works I often compare its energy flows to the five fingers of the one hand: all are necessary and all are linked (Figure 5). Under the Red Queen, the GEI is progressively loosing its “knuckles” one by one like a kind of unseen leprosy – unseen yet because of the debt “veil” that hides the progressive losses and more fundamentally because of what I refer to at the bottom of Figure 5, namely were are in what I call Oil Fizzle Dragon-King. 
 
A Dragon-King (DK) is a statistical concept developed by Didier Sornette of the Swiss Federal Institute of Technology, Zurich, and a few others to differentiate high probability and high impact processes and events from Black Swans, i.e. events that are of low probability and high impact.  I call it the Oil Fizzle because what is triggering it is the very rapid fizzling out of net energy per barrel.  It is a DK, i.e. a high probability, high impact unexpected process, purely because almost none of the decision-making elites is familiar with the thermodynamics of complex systems operating far from equilibrium; nor are they familiar with the actual social workings of the societies they live in.  Researchers have been warning about the high likelihood of something like this at least since the works of the Meadows in the early 1970s.[2] 
 
The Oil Fizzle DK is the result of the interaction between this net energy fizzling out, climate change, debt and the full spectrum of ecological and social issues that have been mounting since the early 1970s – as I noted on Figure 1, the Oil Fizzle DK is in the process of whipping up a “Perfect Storm” strong enough to bring the GIW to its knees.  The Oil Pearl Harbour marks the Oil Fizzle DK getting into full swing. 
 
To explain this further, with reference to Figure 5, oil represents some 33% of global primary energy use (BP data). Fossil fuels represented some 86% of total primary energy in 2014.  However, coal, oil, and gas are not like three boxes neatly set side by side from which energy is supplied magically, as most economists would have it.
 
In the real world (i.e. outside the world economists live in), energy supply chains form networks, rather complex ones.  For example, it takes electricity to produce many products derived from oil, coal, and gas, while electricity is generated substantially from coal and gas, and so on.  More to the point, as noted earlier, because 94% of all transport is oil-based, oil stands at the root of the entire, complex, globalised set of energy networks.  Coal mining, transport, processing, and use depend substantially on oil-derived transport fuels; ditto for gas.[3]   The same applies to nuclear plants.  So the thermodynamic collapse of the oil industry, that is now underway, not only is likely to be completed within some 10 years but is also in the process of triggering a falling domino effect (aka an avalanche, or in systemic terms, a self-organising criticality, a SOC). 
 
Presently, and for the foreseeable future, we do not have substitutes for oil derived transport fuels that can be deployed within the required time frame and that would be affordable to the GIW.  In other words, the GIW is falling into a thermodynamic trap, right now. As B. W. Hill recently noted, “The world is now spending $2.3 trillion per year more to produce oil than what is received when it is sold. The world is now losing a great deal of money to maintain its dependence on oil.”
 

The Tooth Fairy Syndrome

 
To come back to David Bohm’s “question about the question”, in my view, we are in this situation fundamentally because of what I call the “Tooth Fairy Syndrome”, after a pointed remark by B.W. Hill in an Internet debate early last year: “It is interesting that not one analyst has yet come to the very obvious conclusion that it requires oil to produce oil.  Perhaps they think it is delivered by the Tooth Fairy?”  This remark vividly characterised for me the prevalence of a fair amount of magical thinking at the heart of decision-making within both the GEI and the GIW, aka economics as a perpetual motion machine fantasy.  Unquestioned delusional beliefs lead to wrong conclusions.
 
This is not new.  Here are a few words of explanation.  In 1981, I met US anthropologist Laura Nader at the Australia New Zealand Association of the Advancement of Science (ANZAAS) Congress held that year at University of Queensland in Brisbane.  We were both guest speakers at seminars focusing on Energy and Equity, and in particular on how societies actually deal with energy matters, energy crises and decide about courses of action.  The title of her paper was “Energy and Equity, Magic, Science, and Religion Revisited”.
 
In recent years, Nader had become part of US bodies overseeing responses to the first and second oil shocks and the US nuclear energy industry (she was a member of the National Academy of Science's Committee on Nuclear and Alternative Energy Systems, CONAES). As an anthropologist, she was initially taken aback by what she observed and proceeded to apply her anthropological skills to try and understand the weird “tribes” she had landed into.  The title of her paper was a wink at Malinowski’s famous work on the Trobriands in 1925.  
 
Malinowski had pointed out that: “There are no people, however primitive without religion or magic.  Nor are there… any savage races [sic] lacking either in the scientific attitude or in science though this lack has been frequently attributed to them.”  
 
Nader had observed that prevailing decision-making in the industrialised world she was living in was also the outcome of a weird mix of “Magic, Science, and Religion” with magical and mythical, quasi religious, thinking predominating among people who were viewed and who viewed themselves as rational and making scientifically grounded decisions.  At the time I was engaged in very similar research, had observed exactly the same kind of phenomena in my own Australasian fieldwork and had reached similar conclusions.
 
In my observations, since the 1970s the prevalence of this syndrome has considerably worsened. This is what I seek to encapsulate as the Tooth Fairy Syndrome.  With the Oil Peal harbour, the unquestioned sway of the Tooth Fairy is coming to an end.  However, the imprint of Tooth Fairy thinking remains so strong that most discussions and analyses remain highly confused, even within scientific circles still taking economic notions for granted. 
 
In the longer run, the end effect of the Oil Fizzle DK is likely to be an abrupt decline of GHG emissions.  However, the danger I see is that meanwhile the GEI, and most notably the OI, is not going to just “curl up and die”.  I think we are in a “die hard” situation.  Since 2012, we are already seeing what I call a Big Mad Scramble (BMS) by a wide range of GEI actors that try to keep going while they still can, flying blind into the ground.  The eventual outcome is hard to avoid with a GEI operating with only about 12% energy efficiency, i.e. some 88% wasteful current primary energy use.  The GIW’s agony is likely to result in a big burst of GHG emissions while net energy fizzles out.  The high danger is that the old quip will eventuate on a planetary scale: “the operation was successful but the patient died”…  Hence my call for “enquiring into the appropriateness of the question” and for systemic thinking.  We are in deep trouble.  We can’t afford to get this wrong.
 
Next: Part 3 – Standing slightly past the edge of the cliff

 

 
 

 

Bio: Dr Louis Arnoux is a scientist, engineer, and entrepreneur committed to the development of sustainable ways of living and doing business.  His profile is available on Google+  at: https://plus.google.com/u/0/115895160299982053493/about/p/pub

 

 


 

 

 

[1] As THG have conclusively clarified, see http://www.thehillsgroup.org/depletion2_022.htm.

 

 

[2] The Meadows’ original work has been amply corroborated over the ensuing decades.  See for example, Donella Meadows, Jorgen Randers, and Dennis Meadows, 2004, A Synopsis: Limits to Growth: The 30-Year Update, The Donella Meadows Institute; Turner, Graham, 2008, A Comparison of the Limits to Growth with Thirty Years of Reality, Socio-Economics and the Environment in Discussion, CSIRO Working Paper Series 2008-09; Hall, Charles A. S. and Day, John W, Jr, 2009, “Revisiting the Limits to Growth After Peak Oil” in American Scientist, May-June; Vuuren, D.P. van and Faber, Albert, 2009, Growing within Limits, A Report to the Global Assembly 2009 of the Club of Rome, Netherlands Environmental Assessment Agency; and Turner, Graham, M., 2014, Is Global Collapse Imminent? An Updated Comparison of The Limits to Growth with Historical Data, MSSI Research Paper No. 4, Melbourne Sustainable Society Institute, The University of Melbourne.

 

 

[3] Although there is a drive to use more and more liquefied natural gas for gas tankers and ordinary ship fuel bunkering

 

 

Reflections on the Twilight of the Age of Oil – part I

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Published on Cassandra's Legacy on July 12, 2016

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This three-part post was inspired by Ugo’s recent post concerning Will Renewables Ever ReplaceFossils? and recent discussions within Ugo’s discussion group on how is it that “Economists still don't get it”?  It integrates also numerous discussion and exchanges I have had with colleagues and business partners over the last three years.
 

Introduction

 
Since at least the end of 2014 there has been increasing confusions about oil prices, whether so-called “Peal Oil” has already happened, or will happen in the future and when, matters of EROI (or EROEI) values for current energy sources and for alternatives, climate change and the phantasmatic 2oC warming limit, and concerning the feasibility of shifting rapidly to renewables or sustainable sources of energy supply.  Overall, it matters a great deal whether a reasonable time horizon to act is say 50 years, i.e. in the main the troubles that we are contemplating are taking place way past 2050, or if we are already in deep trouble and the timeframe to try and extricate ourselves is some 10 years. Answering this kind of question requires paying close attention to system boundary definitions and scrutinising all matters taken for granted.
 

 

It took over 50 years for climatologists to be heard and for politicians to reach the Paris Agreement re climate change (CC) at the close of the COP21, late last year.  As you no doubt can gather from the title, I am of the view that we do not have 50 years to agonise about oil.  In the three sections of this post I will first briefly take stock of where we are oil wise; I will then consider how this situation calls upon us to do our utter best to extricate ourselves from the current prevailing confusion and think straight about our predicament; and in the third part I will offer a few considerations concerning the near term, the next ten years – how to approach it, what cannot work and what may work, and the urgency to act, without delay.
 

Part 1 – Alice looking down the end of the barrel

 
In his recent post, Ugo contrasted the views of the Doomstead Diner's readers  with that of energy experts regarding the feasibility of replacing fossil fuels within a reasonable timeframe.  In my view, the Doomstead’s guests had a much better sense of the situation than the “experts” in Ugo’s survey.  To be blunt, along current prevailing lines we are not going to make it.  I am not just referring here to “business-as-usual” (BAU) parties holding for dear life onto fossil fuels and nukes.  I also include all current efforts at implementing alternatives and combating CC.  Here is why.   
 

The energy cost of system replacement

 
What a great number of energy technology specialists miss are the challenges of whole system replacement – moving from fossil-based to 100% sustainable over a given period of time.  Of course, the prior question concerns the necessity or otherwise of whole system replacement.  For those of us who have already concluded that this is an urgent necessity, if only due to CC, no need to discuss this matter here.  For those who maybe are not yet clear on this point, hopefully, the matter will become a lot clearer a few paragraphs down.
 
So coming back for now to whole system replacement, the first challenge most remain blind to is the huge energy cost of whole system replacement in terms of both the 1st principle of thermodynamics (i.e. how much net energy is required to develop and deploy a whole alternative system, while the old one has to be kept going and be progressively replaced) and also concerning the 2nd principle (i.e. the waste heat involved in the whole system substitution process).  The implied issues are to figure out first how much total fossil primary energy is required by such a shift, in addition to what is required for ongoing BAU business and until such a time when any sustainable alternative has managed to become self-sustaining, and second to ascertain where this additional fossil energy may come from. 
 

The end of the Oil Age is now


If we had a whole century ahead of us to transition, it would be comparatively easy.  Unfortunately, we no longer have that leisure since the second key challenge is the remaining timeframe for whole system replacement.  What most people miss is that the rapid end of the Oil Age began in 2012 and will be over within some 10 years.  To the best of my knowledge, the most advanced material in this matter is the thermodynamic analysis of the oil industry taken as a whole system (OI) produced by The Hill's Group (THG) over the last two years or so (http://www.thehillsgroup.org). 
 
THG are seasoned US oil industry engineers led by B.W. Hill.  I find its analysis elegant and rock hard.  For example, one of its outputs concerns oil prices.  Over a 56 year time period, its correlation factor with historical data is 0.995.  In consequence, they began to warn in 2013 about the oil price crash that began late 2014 (see: http://www.thehillsgroup.org/depletion2_022.htm).  In what follows I rely on THG’s report and my own work.
 
Three figures summarise the situation we are in rather well, in my view.
 
Figure 1 – End Game
 
 
For purely thermodynamic reasons net energy delivered to the globalised industrial world (GIW) per barrel by the oil industry (OI) is rapidly trending to zero.  By net energy we mean here what the OI delivers to the GIW, essentially in the form of transport fuels, after the energy used by the OI for exploration, production, transport, refining and end products delivery have been deducted. 
However, things break down well before reaching “ground zero”; i.e. within 10 years the OI as we know it will have disintegrated. Actually, a number of analysts from entities like Deloitte or Chatham House, reading financial tealeaves, are progressively reaching the same kind of conclusions.[1]
 
The Oil Age is finishing now, not in a slow, smooth, long slide down from “Peak Oil”, but in a rapid fizzling out of net energy.  This is now combining with things like climate change and the global debt issues to generate what I call a “Perfect Storm” big enough to bring the GIW to its knees.
 

In an Alice world


At present, under the prevailing paradigm, there is no known way to exit from the Perfect Storm within the emerging time constraint (available time has shrunk by one order of magnitude, from 100 to 10 years).  This is where I think that Doomstead Diner's readers are guessing right.  Many readers are no doubt familiar with the so-called “Read Queen” effect illustrated in Figure 2 – to have to run fast to stay put, and even faster to be able to move forward.  The OI is fully caught in it.
 
Figure 2 – Stuck on a one track to nowhere
 
 
The top part of Figure 2 highlights that, due to declining net energy per barrel, the OI has to keep running faster and faster (i.e. pumping oil) to keep supplying the GIW with the net energy it requires.  What most people miss is that due to that same rapid decline of net energy/barrel towards nil, the OI can't keep “running” for much more than a few years – e.g. B.W. Hill considers that within 10 years the number of petrol stations in the US will have shrunk by 75%…  
 
What people also neglect, depicted in the bottom part of Figure 2, is what I call the inverse Red Queen effect (1/RQ).  Building an alternative whole system takes energy that to a large extent initially has to come from the present fossil-fuelled system.  If the shift takes place too rapidly, the net energy drain literally kills the existing BAU system.[2] The shorter the transition time the harder is the 1/RQ.  

 

 

 

 

I estimate the limit growth rate for the alternative whole system at 7% growth per year.  

In other words, current growth rates for solar and wind, well above 20% and in some cases over 60%, are not viable globally.  However, the kind of growth rates, in the order of 35%, that are required for a very short transition under the Perfect Storm time frame are even less viable – if “we” stick to the prevailing paradigm, that is.  As the last part of Figure 2 suggests, there is a way out by focusing on current huge energy waste, but presently this is the road not taken.
 

On the way to Olduvai


In my view, given that nearly everything within the GIW requires transport and that said transport is still about 94% dependent on oil-derived fuels, the rapid fizzling out of net energy from oil must be considered as the defining event of the 21st century – it governs the operation of all other energy sources, as well as that of the entire GIW.  In this respect, the critical parameter to consider is not that absolute amount of oil mined (as even “peakoilers” do), such as Million barrels produced per year, but net energy from oil per head of global population, since when this gets too close to nil we must expect complete social breakdown, globally. 
 
The overall picture, as depicted ion Figure 3, is that of the “Mother of all Senecas” (to use Ugo’s expression).   It presents net energy from oil per head of global population.[3]  The Olduvai Gorge as a backdrop is a wink to Dr. Richard Duncan’s scenario (he used barrels of oil equivalent which was a mistake) and to stress the dire consequences if we do reach the “bottom of the Gorge” – a kind of “postmodern hunter-gatherer” fate.
 
Oil has been in use for thousands of year, in limited fashion at locations where it seeped naturally or where small well could be dug out by hand.  Oil sands began to be mined industrially in 1745 at Merkwiller-Pechelbronn in north east France (the birthplace of Schlumberger).  From such very modest beginnings to a peak in the early 1970s, the climb took over 220 years.  The fall back to nil will have taken about 50 years.
 
The amazing economic growth in the three post WWII decades was actually fuelled by a 321% growth in net energy/head.  The peak of 18GJ/head in around 1973, was actually in the order of some 40GJ/head for those who actually has access to oil at the time, i.e. the industrialised fraction of the global population.
 
 
Figure 3 – The “Mother of all Senecas”
 
 

In 2012 the OI began to use more energy per barrel in its own processes (from oil exploration to transport fuel deliveries at the petrol stations) than what it delivers net to the GIW.  We are now down below 4GJ/head and dropping fast.
 
This is what is now actually driving the oil prices: since 2014, through millions of trade transactions (functioning as the “invisible hand” of the markets), the reality is progressively filtering that the GIW can only afford oil prices in proportion to the amount of GDP growth that can be generated by a rapidly shrinking net energy delivered per barrel, which is no longer much.  Soon it will be nil. So oil prices are actually on a downtrend towards nil. 
 
To cope, the OI has been cannibalising itself since 2012.  This trend is accelerating but cannot continue for very long.  Even mainstream analysts have begun to recognise that the OI is no longer replenishing its reserves.  We have entered fire-sale times (as shown by the recent announcements by Saudi Arabia (whose main field, Ghawar, is probably over 90% depleted) to sell part of Aramco and make a rapid shift out of a near 100% dependence on oil and towards “solar”.
 
Given what Figure 1 to 3 depict, it should be obvious that resuming growth along BAU lines is no longer doable, that addressing CC as envisaged at the COP21 in Paris last year is not doable either, and that incurring ever more debt that can never be reimbursed is no longer a solution, not even short-term.  
 
Time to “pull up” and this requires a paradigm change capable of avoiding both the RQ and 1/RQ constraints.  After some 45 years of research, my colleagues and I think this is still doable.  Short of this, no, we are not going to make it, in terms of replacing fossil resources with renewable ones within the remaining timeframe, or in terms of the GIW’s survival.
 
 
Next: 
 

Part 2 – Enquiring into the appropriateness of the question

Part 3 – Standing slightly past the edge of the cliff

 
 

 

 

 

 


 

 

 

 

 

[1] See for example, Stevens, Paul, 2016, International Oil Companies: The Death of the Old Business Model, Energy, Research Paper, Energy, Environment and Resources, Chatham House; England, John W., 2016, Short of capital? Risk of underinvestment in oil and gas is amplified by competing cash priorities, Deloitte Center for Energy Solutions, Deloitte LLP.  The Bank of England recently commented: “The embattled crude oil and natural gas industry worldwide has slashed capital spending to a point below the minimum required levels to replace reserves — replacement of proved reserves in the past constituted about 80 percent of the industry’s spending; however, the industry has slashed its capital spending by a total of about 50 percent in 2015 and 2016. According to Deloitte’s new study {referred to above], this underinvestment will quickly deplete the future availability of reserves and production.”
 

 

 

 

 

[2] This effect is also referred to as “cannibalising”.  See for example, J. M. Pearce, 2009, Optimising Greenhouse Gas Mitigation Strategies to Suppress Energy Cannibalism, 2nd Climate Change Technology Conference, May 12-15, Hamilton, Ontario, Canada.  However, in the oil industry and more generally the mining industry, cannibalism usually refers to what companies do when there are reaching the end of exploitable reserves and cut down on maintenance, sell assets at a discount or acquires some from companies gone bankrupt, in order to try and survive a bit longer.  Presently there is much asset disposal going on in the Shale Oil and Gas patches, ditto among majors, Lukoil, BP, Shell, Chevron, etc….  Between spending cuts and assets disposal amounts involved are in the $1 to $2 trillions.
 

 

 

 

 

[3] This graph is based on THG’s net energy data, BP oil production data and UN demographic data.

 

 

 

 

Energy limits: Why we see rising wealth disparity and low prices

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Published on the Our Finite World on July 6, 2016

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Last week, I gave a fairly wide-ranging presentation at the 2016 Biophysical Economics Conference called Complexity: The Connection Between Fossil Fuel EROI, Human Energy EROI, and Debt (pdf). In this post, I discuss the portion of the talk that explains several key issues:

  1. Why we are right now seeing so many problems with respect to wealth disparity and low commodity prices (Answer: World per capita energy consumption is already falling, and the energy/economy system needs to reflect this problem somehow.)
  2. Why the quest for growing technology leads to growing wealth disparity (Answer: The economy must be configured in more of a hierarchical pattern to support growing “complexity.” Growing complexity is the precursor to growing technology.)
  3. Why rising debt is an integral part of the energy/economy system (Answer: We could not pay workers for making long-lasting goods and services without using debt to “pull forward” the hoped-for benefit of these goods and services to the present, using debt and other equivalent approaches.)
  4. Why commodity prices can suddenly fall below the cost of production for a wide range of products (Answer: Prices of commodities depend to a significant extent on debt levels. A major problem is that when commodity prices rise, wages do not rise in a corresponding manner. Rising debt levels can mask the growing lack of affordability for a while, but eventually, debt levels cannot be raised sufficiently, and commodity prices fall too low.)
  5. The Brexit vote may be related to falling energy per capita in the UK. Given that this problem occurs in many countries, it may be increasingly difficult to keep the Eurozone and other similar international organizations together.
  6. My talk also touches on the topic of why a steady state economy is not possible, unless we can live like chimpanzees.

My analysis has as its premise that the economy behaves like other physical systems. It needs energy–and, in fact, growing energy–to operate. If the system does not get the energy it needs, it “rebalances” in a way that may not be to our liking. See my article, “The Physics of Energy and the Economy.”

An outline of my talk is shown as Slide 2, below. I will omit the EROI and Hubbert model portions of the presentation.  

Slide 2

 

Slide 2

Peak World Coal Seems To Be Happening, Right Now

In the view of most of the researchers I was talking to at this conference, oil is likely to be the first problem, not coal. And the issue is likely to be high prices, not low. So peak coal now, as shown in Slide 3, doesn’t seem to make sense. Yet, my analysis of recent data strongly suggests that peak coal is exactly what is happening, right now.

Slide 3. World and China appear to be reaching peak coal.

 

Slide 3. World and China appear to be reaching peak coal.

I will show later in this presentation why peaking coal production does seem to make sense–price levels of all fossil fuels seem to vary together. The extent to which debt levels are growing seems to be a major factor in price levels. When the debt level is not growing rapidly enough, “demand” is not high enough, and prices for all fossil fuels tend to fall simultaneously. A related issue is the extent to which the world economy is growing; if world economic growth is too slow, this will also tend to hold down demand, and thus energy prices.

China’s rate of growth in coal production started falling back in 2012, which is when coal prices started falling. This is before China’s new leadership took over in March 2013. We know that coal production in China is likely to continue falling, because China’s energy bureau is reporting that China plans to close over 1000 coal mines in 2016, because of a “price-sapping supply glut.” See my article, “China: Is peak coal part of its problem?” for additional information.

World Per Capita Energy Consumption Seems To Have Already Started Falling

Slide 4. World per capita energy consumption may have reached a peak

 

Slide 4. World per capita energy consumption may have reached a peak

The reason why I say that world per capita energy consumption may have reached a peak in 2013 is partly because coal consumption appears to have peaked. If coal has peaked, it will be hard to make up the shortfall using other fuels, such as renewables, or even natural gas. Furthermore, recent world figures (shown above) already show a small drop in per capita energy consumption. If world coal production continues to drop, we can expect world per capita energy consumption to continue to drop.

Energy Consumption Trends for a Few Countries

The figure below is not actually in the presentation–I thought I would add it now, to show energy consumption varies for a few economies. The upper chart in the Supplemental Slide shows the trend in per capita energy consumption in UK, Japan, Spain, and Greece. We know that Japan, Spain, and Greece have been experiencing economic problems for several years, something that perhaps should not be too surprising, given their falling energy consumption per capita. The UK shows a similar pattern to these three countries. Such a pattern is likely to lead to rising wage disparities, for reasons we will discuss later in this presentation, when we talk about “complexity.”

Supplemental information showing how trend in per capita energy consumption seems to reflect health of economies

 

Supplemental slide. Per capita energy consumption trends for four advanced economies and for China, based on BP 2016 Statistical Review of World Energy and 2015 UN population data.

China’s energy consumption shows a contrasting pattern. China experienced rapid growth in energy consumption after it joined the World Trade Organization in 2001. Recently, China’s growth in energy consumption has been slowing, suggesting slowing growth in the economy–perhaps even more than reported in official GDP reports.

Why Peak Per Capita Energy Matters

In Slide 5, I give an overview of why peak energy per capita matters. My view is the second one shown on this slide. It is not that every segment of the economy will necessarily have problems. Instead, un-favored segments are likely to be first to have problems. Most conference attendees came with the first view.

Slide 5. Two views of peak energy per capita.

 

Slide 5. Two views of peak energy per capita.

How the Economy Is Affected by Growing Complexity

Joseph Tainter in the Collapse of Complex Societies tells us that the way economies that are in danger of reaching limits can sometimes solve their problems is through increased complexity.

Slide 6. Complexity introduction

 

Slide 6. Complexity introduction

Economists today seem to believe that technology will solve our problems. I see complexity and technology as being related, with complexity being a precursor to technology. Economies that hope to adopt higher levels of technology need to take steps in the direction of growing complexity, to achieve this goal.

When I thought about what makes up complexity, this is the list of elements I came up with:

Slide 7. Basic Elements of Complexity

 

Slide 7. Basic Elements of Complexity

Regarding concentration of energy, the use of concentrated energy seems to be what sets humans apart from other animals.

Slide 8. Early use of concentration of energy

 

Slide 8. Early use of concentration of energy

If we want a steady-state economy, “all” we need to do is set aside our use of concentrated energy, and live like chimpanzees. I am not sure how we keep our bigger brains adequately nourished. A couple of slides related to this are Slides 9 and 10.

Another type of concentration of energy is capital goods. Capital goods are all of the goods that we expect to last for a fairly long time–things like homes, vehicles, and factories. The big issue is how to pay for capital goods.

Slide 11. Capital goods-- more recent examples of concentrations of energy

 

Slide 11. Capital goods– more recent examples of concentrations of energy

The problem is that we need to pay workers now, but the benefit of these capital goods is spread over many years in the future. Somehow, the future benefit of these capital goods must be “pulled back” to today. The obvious answer to this predicament is the use of debt (or debt-like instruments) to fund capital goods. We will get back to the issue of debt later.

The next few slides (12 to 14) show other ways that concentrations of energy can be developed. One way is through the creation of businesses. Even larger concentrations of energy can be formed by creating bigger businesses, including international businesses. Governments can also be used to concentrate the use of energy resources, because of government’s ability to build roads, schools, and many other projects. International organizations can also act to concentrate wealth, by easing trade among members (Eurozone and World Trade Organization) and by lending money to member countries (International Monetary Fund and World Bank). All of these organizations can benefit from the use of debt to fund their growing organizations.

We said that concentration of energy was the first element of complexity (see outline at top). The second element of complexity is pure elements and compounds. In many ways, this requirement is similar to concentrations of energy, in the way it allows technology to work.

Slide 15. Why pure elements and compounds are needed for complexity

 

Slide 15. Why pure elements and compounds are needed for complexity

The third element of complexity (see outline at top) is leveraging of human energy through hierarchical organization. In many ways, this is the idea of concentrated energy, as applied to humans.

16. Leveraging of human energy through hierarchical organization.

 

16. Leveraging of human energy through hierarchical organization.

Historically, the big problem has been populations that grew too large for their resource bases. In a way, we are reaching a similar predicament. Not too surprisingly, when this happens, it is the people at the bottom of the hierarchy who tend not to receive enough.

Slide 17. People at the bottom of a hierarchy are most vulnerable.

 

Slide 17. People at the bottom of a hierarchy are most vulnerable.

Why Debt Is Required

Slide 18 - Why add debt?

 

Slide 18 – Why add debt?

One of the fundamental benefits of debt is time shifting.

Slide 19. How debt allows time shifting.

 

Slide 19. How debt allows time shifting.

Of course, the value of these capital goods is speculative, when debt is used to price them in advance. As long as capital goods, and other uses of debt, provide sufficient benefits to the economy so that debt can be repaid with interest, the system tends to work as planned.

Slide 20. Debt makes the economic system work more smoothly.

 

Slide 20. Debt makes the economic system work more smoothly.

One key aspect of debt is its ability to determine demand, and thus prices, of commodities such as oil and natural gas. The reason why debt has almost magical power is because if a potential buyer is given a loan for any kind of capital good, say a house, or car, or factory, the potential buyer can purchase the capital good far sooner than if he or she needed to save up for it. Each of these capital goods requires commodities of various kinds, such as steel, copper, oil, coal, and natural gas. Thus, we would expect rising debt levels to raise the prices of a broad range of commodity prices, simultaneously.

21. Debt helps determine prices of commodities

 

21. Debt helps determine prices of commodities

We can think of the situation as follows: An economy that keeps growing is (in energy terms) an out-of-balance system. Rising debt levels help maintain this out-of-balance condition by providing ever-higher commodity prices. These higher prices encourage greater extraction of energy products, even when the cost of extraction is rising because of diminishing returns. Even if extraction costs keep rising, the situation of ever-rising commodity prices cannot go on endlessly. At some point, prices become too high for workers to afford. Demand tends to fall at some point because workers at the bottom of the hierarchy find themselves “priced out” of buying goods such as houses and cars that would help maintain commodity demand.

What causes debt levels to stop rising? One reason why debt levels stop rising is that debt reaches absurd levels, making it difficult to repay debt with interest. Several examples of absurd debt levels are given in Slide 21. An additional example is excessive use of student loans. If incomes after student loans are not high enough, student debt may create a huge burden, preventing former students from buying homes and cars and starting families. The problem is that incomes after the educational experience are not sufficiently high to both pay back debt with interest and leave adequate funds for other needs.

Growing wage disparity can also lead directly to falling energy prices:

Slide 22. Growing wage disparity tends to lead to falling energy prices.

 

Slide 22. Growing wage disparity tends to lead to falling energy prices.

Both growing wage disparity and lack of growth in debt are signs that an economy is not growing very fast–in some sense, that the economy is not hot enough. Some of the would-be workers tend to drop out of the system, because wages are not high enough to cover commuting and childcare expenses. In some sense, they “condense out,” similar to the way that water turns to ice when there is not enough heat in the system.

The situation with prices of fossil fuels is similar; low prices are a sign that the economy is not growing fast enough. The system is forcing a reduction in the production of many kinds of commodities, including fossil fuels, by reducing prices below the cost of production for quite a few producers. This situation can be thought of as some of the production “condensing out,” because the energy products consumed are not causing the world economy to grow fast enough to maintain a “hot” demand level.

More Thoughts on Energy Prices and Debt Levels

Slide 24. Use of debt permits two different valuations of worth of commodities.

 

Slide 24. Use of debt permits two different valuations of worth of commodities.

The thing that is confusing is that for many years, energy and commodity costs were very similar to energy and other commodity prices. It has been only very recently–when prices rose too high for consumers to afford–that the difference has appeared.

Slide 25. Possibility of different price compared to production cost appears very late.

 

Slide 25. Possibility of different price compared to production cost appears very late.

Looking at historical data in Slide 26, we can see two recent sharp drops in oil prices. Both occurred when debt levels were no longer rising.

Slide 26. Connection of debt with oil prices is shown by two sharp declines.

 

Slide 26. Connection of debt with oil prices is shown by two sharp declines.

In fact, prices of oil, coal, and natural gas tend to rise and fall together–just as we would expect, if they are all responding to the same changes in debt levels, and indirectly, the same changes in world economic growth rates.

Slide 27. Prices of oil, call and natural gas tend to rise and fall together.

 

Slide 27. Prices of oil, call and natural gas tend to rise and fall together.

If energy prices are based on debt levels, our concern should be that all fossil fuels will peak within a few years of each other. The cause of the peak will be low prices, not “running out” of energy products.

Slide 28. Concerns if energy prices are based on debt levels

 

Slide 28. Concerns if energy prices are based on debt levels

In fact, the problems of the economy may be quite different from “running out.”

Slide 31. Candidates for what really brings the system down.

 

Slide 31. Candidates for what really brings the system down.

Supplemental Information on Income Disparity

A few slides giving additional information on income disparity are shown as slides 38-40. Please check the end of my presentation for these.

Conclusion

One topic I did not specifically discuss in this presentation is the possibility of slowing world economic growth. If we are seeing falling world energy consumption per capita, it should not be surprising if world GDP growth per capita is falling as well. I have talked about the link between energy consumption and GDP growth many times, including in my paper, Oil Supply Limits and the Continuing Financial Crisis.

It was not until I sat down to write up this presentation that I realized how closely the timing of the recent sharp drop of world oil prices corresponds with the decrease in world per capita energy consumption shown on Slide 4. World per capita energy consumption hit a peak in 2013, and dropped slightly in 2014, with a greater change in 2015. Mid-2014 is when oil prices began their major slide, so the timing of the two events matches up almost precisely. Thus, the drop in coal consumption may be resulting in low world economic growth, which in turn is holding down both oil and natural gas prices.

The apparent coincidence in timing may simply reflect the fact that the same forces that cause falling commodity prices are also causing low economic growth. Growing wage disparity and lack of growth in debt seem to be factors in causing both. If workers at the bottom of the hierarchy could better afford the output of the world economy, with or without additional debt, the world economy would have a better chance of growing.

I don’t see much hope for fixing a world whose economy is moving in the direction of shrinkage. Instead, the situation is likely to get worse, until the financial system collapses, or one of the issues shown on Slide 31 starts to become too great a problem.

I see the big push for renewables to be mostly a waste of time and resources. The major exception is perhaps hydroelectric, in parts of the world with good locations for new installations. EROI analyses are often used to justify renewables, but in my view (shown in the part of the presentation not discussed), EROI is too “blunt” a tool to properly evaluate resources that differ greatly in quality of output and in debt requirements. A major goal needs to be to maintain the functionality of the electric grid; evaluations of intermittent renewables should consider real-life experiences of other countries. For example, current pricing approaches seem to exacerbate the problem of falling wholesale electricity prices, and thus falling fossil fuel prices. (See this or this article.)

A major impediment to getting a rational discussion of the issues is the inability of a large share of the population to deal with what appears to be a potentially dire outcome. Textbook and journal editors recognize this issue, and gear their editorial guidelines accordingly. I was reminded of this again, when the question came up (again) of whether I would consider writing a book for a particular academic book publisher. The main thing I would need to do to make the book acceptable would be find a way of sidestepping any unpleasant outcome–or, better yet, I should come up with a “happily ever after” ending.

Book Review: The Oracle of Oil

Off the keyboard of Allan Stromfeldt Christensen

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Published on From Filmers to Farmers on June 21, 2016

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Living in highly technological civilizations that generally place the greatest importance and value upon the material gadgetry and inventiveness of our societies, it should come as little surprise that the luminaries and household names that we can readily conjure and associate with are those related to the technological aspects of our lives. For example, when one mentions the telephone, the light bulb, the automobile, the airplane, or nuclear bombs, it's likely that many a grade-schooler can rhyme off the names Alexander Graham Bell, Thomas Edison, Henry Ford, the Wright brothers, and, perhaps, Albert Einstein.

But segue into more ecological matters and the fathers and mothers of these vocations are certainly not household names the way the aforementioned are. For what comes to mind when we think of organic farming, climate change, the environmental movement, or limits to growth? For most of those who flick light switches on and off as much as they eat food and depend on stable planetary ecological balances, the answers are probably little more than a shrug. While children can quite easily conjure up the aforementioned names, you'd be hard pressed to find even an adult who could easily slip off of their tongues the names Sir Albert Howard, Svante Arrhenius, Rachel Carson, and the team of Donella Meadows, Dennis Meadows, and Jørgen Randers.

But while the topics of organic farming, climate change, and the environmental movement can certainly elicit recognition in the average citizen, the reality of peak oil quite often does not, with even less of a recognition expected in reference to the person that initially brought it to our attention. That largely unknown individual would be M. King Hubbert, the subject of Mason Inman's timely new biography, The Oracle of Oil: A Maverick Geologist's Quest for a Sustainable Future.

As Inman describes it, after having spent his early formative years on a farm in the Hill Country of Central Texas, and gone through two years of community college, a young Hubbert ended up making his way through various hardscrabble jobs on his way to the University of Chicago. It was there that the mathematically inclined Hubbert got exposed to a variety of disciplines that would aid him in his future endeavours, those ranging from geology to physics to math.

It was while still an undergrad that the first inklings of Hubbert's future interest can be seen, that moment when he first glimpsed a chart depicting the exponential growth of coal extraction rates. After a following lecture on petroleum extraction, Hubbert apparently couldn't help but muse to himself, "How long will it last?" For now, as he put it, it was "Difficult to estimate reserves."

By no means though was Hubbert afflicted with a one-track kind of mind, for as Inman astutely weaves within his story, Hubbert, and at only 26-years-of-age, accepted a job offer to teach geophysics at Columbia University in New York City, the place where he became an original member of what would become the second focus of his life – the nascent movement soon to be known as Technocracy. In short, Technocracy was a not-quite totalitarian system whereby government-owned industries were envisioned as being managed by scientists, engineers and technicians. In fact, all of North America, even all the way down to Venezuela (because it had oil?) would be under the "continental control" of a united government, known as a "Technate." Technocracy also disdained "the price system" in favour of "energy certificates," a highly relevant notion that Inman fortunately repeatedly returns to.

In the meantime, Hubbert was all the while dissatisfied with the supposedly common sense notion that the extraction of a given mineral increases exponentially until one day, poof!, there's nothing left. As he understood it, extraction and depletion rates could be related to the so-called S-curve that can be seen in an isolated pair of breeding fruit flies: their population soars and eventually tapers off at a plateau (or a flattened peak). And as Hubbert was in the minority with his belief that there were limits to growth, he similarly saw various facets of industrial society as fitting on this S-curve.

Being one of the leading proponents of Technocracy and an ardent writer on its workings, it was in Technocracy publications that Hubbert dabbled in writing about peaks and declines of resources. Come 1938, Hubbert came up with his first, but somewhat unsubstantiated (and rather off), estimate of the year that US oil extraction rates would peak: 1950. But having moved from academia to the government in the early 40s, it wasn't until he then took a job at the US branch of Royal Dutch Shell in 1943 (eventually becoming the top geologist in a new lab it created) that Hubbert would have the resources and access to information that would allow him to formulate a more detailed analysis which led to his ground-breaking predictions.

For it was on March 8th, 1956, that Hubbert gave his talk "Nuclear Energy and the Fossil Fuels," his revelatory paper that laid out his thoroughly analysed prediction that US oil extraction rates would peak sometime between 1965 and 1970 (to go along with a global peak in 2000). I won't spoil things with a recitation of the rather humorous tensions, but I will point out that Hubbert was in fact correct, and that US oil extraction rates peaked in 1970. Furthermore, while much derision of Hubbert's findings resulted both before and after 1970 (to go along with a smattering of praise), what may come as surprising to those thoroughly familiar with peak oil but too young to have been around back then (such as I, who was busy being born while President Jimmy Carter was wearing cardigans and having solar panels placed on the White House) is the amount of media attention given to estimates of US oil supplies, including both before and after Hubbert's famous paper.

For while peak oil is nowadays generally dismissed – and more commonly ignored – by the mainstream media in lieu of financial abracadabra and/or dreams of a 100% replacement of fossil fuel energy with renewable ("renewable") energy, the amount of serious talk that domestic US oil supplies garnered in the mid to late-mid 20th century is comparatively astounding. Inman's surprising historical account relays the fact that the topic made the front pages of the New York Times and the Washington Post on more than one occasion, while the New York Times even visited Hubbert at his home to interview him! And even more absurd is Inman's account of the US administration's – all the way up to President Jimmy Carter's – interest in Hubbert's work, President Carter even making a quasi-reference to Hubbert's work in one of his talks.

The question(s) that these shocking revelations (shocking to me at least) that Inman conveys is, What happened? Why were oil supplies and extraction rates such a big issue a few decades ago, when today the talk, if anything, is all about energy prices?

As Inman points out, one of the ordeals that began to drown out talk of oil extraction rates was the Watergate scandal of 1973. Following that, the "doom and gloom" of President Jimmy Carter (Carter's sources called for worldwide oil extraction rates to peak in the mid-1980s [!?], while Hubbert's calculations saw 2000 as the peak year) was no match for the sunny optimism of Ronald Reagan in the 1980 election, resulting in a new President and the removal of the White House's interloping solar panels.

Jump ahead a few decades, and from what I can tell, not only does it seem that this Reagan-esque sunny optimism continues to reign supreme, but that it has imbued itself into the thinking of many progressives and environmentalists today, through the optimistic attitude of the "clean and green" notion that "renewables" can provide a 100% substitution for fossil fuels. As far as I can see it, it is this techno-optimist attitude of technology-as-saviour, to go along with another round of obeisance to financialization as itinerant saviour, that has convinced many people that energy supplies, and thus peak oil, need not be an issue (anymore, supposing that they ever really were).

But as Inman's account also explains, Hubbert wasn't quite averse to the techno-optimist way of thinking either. Although he did eventually do away with his staunch support for nuclear power, Hubbert ended up trading a reliance on nuclear power for a rather oversized belief in solar power. That is, Hubbert envisioned deserts covered in solar panels that would generate electricity of which could be converted into methanol or to generate hydrogen, and that such ventures could power high-energy societies (New York City!) for thousands of years. It was thus Hubbert's belief that

with our technology and with adequate supplies of energy, we ought to have a lot of leisure. And the proper use of this leisure can bring us an intellectual renaissance.

This attitude gels with the stated Technocratic "embrace [of] the abundance created by machines," which for me is hard to equate with the notion that peak oil and diminishing energy supplies in general imply less energy to power those machines, unless you believe in the sunny optimism of solar-panel-covered-deserts (to go along with other "renewables") that can match the energetic output of fossil fuels (which the low EROEI levels of, say, solar panels, says isn't quite feasible).

Having said all that, Hubbert did fortunately have the all-too-rare understanding that

One of the most ubiquitous expressions in the language right now is growth – how to maintain our growth. If we could maintain it, it would destroy us.

So although, and from my understandings, Hubbert had the questionable belief that nuclear power, and then solar panels, could provide not quite infinite growth but (rather conveniently?) a kind of infinite steady state of what the current energetic usage happened to be at the time, he did nonetheless realize that none of this could do anything for the problems of overpopulation and diminishing water supplies.

Bringing things into the present, Inman conveys the fact that worldwide conventional oil extraction rates peaked (or perhaps hit their plateau) in 2006 at 70 million barrels per year, finally dropping down to 69 million barrels per year in 2014. As it is, the only thing keeping overall oil extraction rates increasing – and giving the last push to the economic growth which Hubbert so despised – are the unconventional oil supplies of tight oil (via fracking) and tar sands oil.

This brings us back to Technocracy's disdain for "the price system" (or as Hubbert put it, "the monetary culture"), which was the status quo and scarcity-based economics system that measures everything in dollars and cents, and which ignores physical limits. For as Technocracy conversely saw it, money would be abandoned for "energy certificates," allowing for everything to be paid in their energy equivalent.

Upon first coming across the name M. King Hubbert some ten years ago I happened to read about Hubbert's disagreement with our practice of fractional-reserve banking, of which I've never seen mentioned again until Inman's book (kind of, as Inman doesn't mention fractional-reserve banking directly). It is from this knowledge that I've come to understand the situation of diminishing energy supplies: since money is a proxy for energy, limits on energy supplies will imply limits to the continuance of our economic (Ponzi scheme) system, leading to an inability for sufficient payments to service even the interest payments on previous loans – which implies and will contribute to the collapse (implosion) of economies, be it slowly or quickly. As Hubbert put it, "exponential growth is about over. We're entering something new."

But not being much of a fan of a grandiose Technate myself (nor of the belief that there would ultimately be enough alternative energy supplies to maintain such a massive and centralized system anyway), we could still work off of Hubbert's disdain for "the monetary culture" towards something like the Ecological Economics of Herman Daly and Joshua Farley, a discipline which is also in favour of moving away from fractional-reserve banking and the notion of infinite growth. And since peak oil means growth is coming to an end, perhaps a look to biophysical economics (see Energy and the Wealth of Nations by Charles Hall and Kent Klitgaard, or the new journal BioPhysical Economics and Resource Quality, edited by Hall, Ugo Bardi, and Gaël Giraud) could help us to envision a worthy alternative to Technocracy's monetary substitution.

Regardless, there does seem to be merit for Hubbert's belief in perhaps a partially planned economy, supposing that that would even be politically possible. Market forces are quite obviously doing little to nothing to ween us away from the usage of fossil fuels (be they diminishing or not), and the primary effect that high oil prices (reaching $147 a few years back) had was to spur investment in the higher costing unconventionals.

In the meantime, supposing that conventional and unconventional oil supplies continue their slight overall increase for years to come, this also poses a problem in light of carbon dioxide levels contributing to climate change. Inman thus poses the ultimately unavoidable and extremely pertinent questions: Do we really think market forces will come to our rescue? And if not, are we going to impose limits on ourselves, or are we simply going to sit back and wait until nature imposes those limits for us?

So whether you're new to the notion of peaking oil supplies or rather familiar with it, I can certainly say that The Oracle of Oil has much new to shine on the story – and now history – of peak oil. With oil supplies being what they currently are, and with no off-planet supply to make up for what will this time not just be a US shortfall but a planetary shortfall, Inman's book could certainly do us a favour by helping us to familiarize ourselves with the reality of peak oil, and by helping us to make M. King Hubbert the household name it ought to be.

That is of course a lot to ask, and after the virtual silence on peak oil that occurred after the global peak of conventional oil extraction rates in 2006 (to go along with all that has ensued since), one couldn't be blamed for expecting little different upon the reaching of the global peak of conventional and unconventional oil extraction rates in the coming months or years (?). But one can always hope of course.

Godspeed the overall global peak?

China: Is peak coal part of its problem?

youtube-Logo-4gc2reddit-logoOff the keyboard of Gail Tverberg

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Published on the Our Finite World on June 20, 2016A coal train once supplied the city of Holland, Michigan with fuel for its electric generating plant. They converted the plant to natural gas. Their costs are down, their emissions are down, and coal is down for the count. (Photo by wsilver/Flickr)A coal train once supplied the city of Holland, Michigan with fuel for its electric generating plant. They converted the plant to natural gas. Their costs are down, their emissions are down, and coal is down for the count. (Photo by wsilver/Flickr)

Discuss this article at the Energy Table inside the Diner

The world’s coal resources are clearly huge. How could China, or the world in total, reach peak coal in a timeframe that makes a difference?

If we look at China’s coal production and consumption in BP’s 2016 Statistical Review of World Energy (SRWE), this is what we see:

Figure 1. China's production and consumption of coal based on BP 2016 SRWE.

 

 

 

Figure 1. China’s production and consumption of coal based on BP 2016 SRWE.

Figure 2 shows that the quantities of other fuels are increasing in a pattern similar to past patterns. None of them is large enough to make a real difference in offsetting the loss of coal consumption. Renewables (really “other renewables”) include wind, solar, geothermal, and wood burned to produce electricity. This category is still tiny in comparison to coal.

Figure 2. China's energy consumption by fuel, based on BP 2016 SRWE.

 

 

 

Figure 2. China’s energy consumption by fuel, based on BP 2016 SRWE.

Why would a country selectively decide to slow down the growth of the fuel that has made its current “boom” possible? Coal is generally cheaper than other fuels. The fact that China has a lot of low-cost coal, and can use it together with its cheap labor, has allowed China to manufacture goods very inexpensively, and thus be very competitive in world markets.

In my view, China really had no choice regarding the cutback in coal production–market forces were pushing for less production of goods, and this was playing out as lower commodity prices of many types, including coal, oil, and natural gas, plus many types of metals.

China is mostly self-sufficient in coal production, but it is a major importer of natural gas and oil. Lower oil and natural gas prices made imported fuels of these types more affordable, and thus encouraged more importing of these products. At the same time, lower coal prices made many of China’s mines unprofitable, leading to a need to cut back on production. Thus we see the rather bizarre result: consumption of the cheapest energy product (coal) is falling first. We will discuss this issue more later.

China’s Overall Historical Production of Energy Products

With the pattern of energy consumption shown in Figure 2, growth in China’s total fuel consumption has slowed, as shown in Figure 3.

Figure 3. China energy consumption by fuel, based on BP 2016 SRWE.

 

 

 

Figure 3. China energy consumption by fuel, based on BP 2016 SRWE.

The indicated increases in total fuel consumption in Figure 3 are as follows: 8.1% in 2011; 4.0% in 2012; 3.9% in 2013; 2.3% in 2014; 1.5% in 2015.

Unless there is a huge shift to a service economy, we would expect China’s GDP to decrease rather rapidly as well, perhaps staying 1% or 2% higher than the growth in fuel consumption. Such a relationship would suggest that China’s reported GDP for 2014 and 2015 may be overstated.

The Problem of Low Coal Prices

Most of us don’t pay attention to coal prices around the world, but according to BP data, coal prices have been following a similar pattern to those of oil and natural gas.

Figure 4. Coal prices since 1999 based on BP 2016 SRWE data.

 

 

 

Figure 4. Coal prices since 1999 based on BP 2016 SRWE data.

Oil prices tend to cluster more closely than those of coal and natural gas because there is more of a world market for oil than for the other fuels. Coal and natural gas have relatively high delivery costs, making it more expensive to trade these products internationally.

Figure 5. World oil prices since 1999 for various oil types, based on BP 2016 SRWE. (Prices not adjusted for inflation.)

 

 

 

Figure 5. World oil prices since 1999 for various oil types, based on BP 2016 SRWE. (Prices not adjusted for inflation.)

Figure 6. Historical prices for several types of natural gas, from BP 2016 SRWE.

 

 

 

Figure 6. Historical prices for several types of natural gas, from BP 2016 SRWE.

The one place where natural gas prices failed to follow the same pattern as oil and coal prices was in the United States. After 2008, shale producers extracted more natural gas for the US market than it could easily absorb. This overproduction, together with a lack of export capacity, led to falling US prices. By 2014 and 2015, prices were falling everywhere for oil, coal and natural gas.

Why Prices of Fossil Fuels Move Together

The reason why prices of fossil fuels tend to move together is because commodity prices reflect “demand” at a given time. This demand is determined by a combination of wage levels and debt levels. When wage levels are high and debt levels are increasing, consumers can afford more goods, such as new homes and new cars. Building these new homes and cars takes many different kinds of materials, so commodity prices of many kinds tend to rise together, to encourage production of these diverse materials.

Why Fossil Fuel Prices Don’t Necessarily Rise Indefinitely

Rising fossil fuel prices depend on rising demand. Wages are not really rising fast enough to increase fossil fuel prices to the levels shown in Figures 4, 5, and 6, so the world has had to depend on rising debt levels to fill the gap. Unfortunately, there are diminishing returns to adding debt. We can witness the poor impact that Japan’s rising debt level has had on raising its GDP.

Adding more debt is like using an elastic rubber band to increase the world output of goods and services. Adding debt works for a while, as the relatively elastic economy responds to growing debt. At some point, however, the amount of debt required becomes too high relative to the benefit obtained. The system tends to “snap back,” and prices fall for many commodities at the same time. This seems to be what happened recently in late 2008, and what has happened again recently. The challenge is to restore world economic growth, since it is really robust world economic growth that allows commodity prices to rise to high levels.

Some Historical Perspective on Rising Energy Prices and Rising Debt 

In “normal” times, a small increase in demand will increase production of fossil fuels by several percentage points–generally enough to handle the rising demand. Prices can then fall back again and there is no long-term rise in prices. This situation occurred for quite a long time prior to about 1970.

After about 1970, we found that it became more difficult to raise production levels of energy products, without permanently raising prices. US oil production began to decline in 1970. This started an energy crisis that has been simmering beneath the surface for 45 years. Various workarounds for our energy shortage problem were tried, such as adding nuclear, drilling for oil in new areas such as the North Sea, and building more energy efficient cars. Another approach used was reducing interest rates, to make high-priced homes, cars and factories more affordable.

By the late 1990s, even these workarounds were no longer providing the benefit needed. Another idea was tried: encourage more international trade. This would allow the world access to untapped energy sources, including coal, in the less developed parts of the world, such as China and India.

This too, worked for a while, but resource depletion tended to continue to raise the cost of energy extraction. Also, the competition with low-cost labor in India, China, and other countries tended to hold down the wages of the less-educated workers in the developed countries. Higher prices at the same time that wages for some of the workers were depressed is, of course, a bad mismatch.

One way of “fixing” the problem was with cheaper debt, and more debt, so that consumers could buy homes and cars with lower incomes.  This fix of more debt stopped working in 2008, as repayment on “subprime” debt faltered, and all fossil fuel prices collapsed.

Figure 7. World Oil Supply (production including biofuels, natural gas liquids) and Brent monthly average spot prices, based on EIA data.

 

 

 

Figure 7. World Oil Supply (production including biofuels, natural gas liquids) and Brent monthly average spot prices, based on EIA data.

To “re-inflate” the world economy, world leaders began to try to add even more debt. They did this by fixing interest rates even lower, starting in late 2008, using a program called Quantitative Easing (QE). This program was successful in raising commodity prices again, although its effect seemed to diminish with time. China’s huge growth in debt during this period helped as well.

Energy prices turned downward again in mid-2014, when the United States discontinued its QE program, and China (under new leadership), decided not to continue increasing debt as quickly as before. The result was a second sharp drop in commodity prices, without a corresponding drop in the cost of producing these fossil fuels. This shift was devastating from the point of view of energy supply producers.

Impact of Lower Prices on China’s Coal Producers

China has a lot of coal resources, but not all of these resources can be produced cheaply. Generally, the least expensive resources tend to be produced first. When prices are high, it may look like deeper, thinner seams can be extracted, in addition to the easier and cheaper to extract seams, but this is never certain. At some point, prices may fall and thus issue a “stop mining” instruction.

When coal prices drop, producers are likely to encounter debt problems, as loans related to coal operations become due. The reason why this happens is because loans taken out when coal prices were high are likely to reflect an optimistic view of how much can be extracted. Once prices drop, operators discover that they have committed themselves to paying back more in loans than their coal mines can actually produce. This seems to be happening now.

What Are the Implications for Future World Coal Production?

If we look at a chart showing world consumption of energy products by fuel, we see that world coal production has turned down in a similar manner to the downturn in Chinese coal production.

Figure 8. World energy consumption by fuel, separately by major groupings.

 

 

 

Figure 8. World energy consumption by fuel, separately by major groupings.

There are many large areas of the world that seem to be beyond their peak in coal production, including the United States, the Eurozone, the Former Soviet Union, and Canada. Note that the United States’ coal production “peaked” in 1998. This added to pressures for globalization.

Figure 9. Areas where coal production has peaked, based on BP 2016 SRWE.

 

 

 

Figure 9. Areas where coal production has peaked, based on BP 2016 SRWE. FSU means “Former Soviet Union.”

If we consider the rest of the world excluding the areas shown separately in Figure 9 as the “Non-Peaking Portion of the World,” we find that China’s current coal production far exceeds that of the Non-Peaking portion of world production.

Figure 9. Coal production in China compared to world production minus production shown in Figure 8.

 

 

 

Figure 10. Coal production in China compared to world production minus production shown in Figure 8.

Figure 10 indicates that even the non-peaking portion of the world is showing a downturn in production in 2015, no doubt relating to current low prices.

Another issue is that India’s coal production now falls far short of its consumption. Thus, India is becoming a major coal importer. In 2015, India’s consumption of coal slightly exceeded that of the United States, making it the second largest consumer of coal after China, and the largest coal importer. If China should decide to increase its coal consumption by adding imports, it would need to compete with India for supplies.

Figure 14. India's production and consumption of coal, based on BP 2016 SRWE.

 

 

 

Figure 11. India’s production and consumption of coal, based on BP 2016 SRWE.

India’s hope for continued economic growth is also tied to coal, even though it doesn’t produce enough itself. India’s use of natural gas is declining, because its own locally-produced natural gas supplies are declining, and imports are expensive.

Figure 11. India's energy consumption by fuel based on BP 2016 SRWE.

 

 

 

Figure 12. India’s energy consumption by fuel based on BP 2016 SRWE.

Imported coal is more expensive than locally produced coal, because of the transportation costs involved. Thus, adding an increasing portion of imported coal will eventually make India’s products less price competitive. India started from a lower wage level than China, so perhaps it can temporarily withstand a somewhat higher average coal price. At some point, however, it will reach limits on how much of its mix can be imported, before workers cannot afford its products made with this high-priced coal.

As noted above, India and China will be competing for the same exports, if they both expect to grow using imported coal. We can modify Figure 9 to show what the size pool producing imports might now look like, if the countries needing imports is “China + India,” and the part with perhaps extra coal to export is the Non-Peaking Areas from Figure 9, less India.

Figure 12. Coal production for China plus India, compared to production from non-peaking group used in Figure 9, minus India. Based on BP 2016 SRWE.

 

 

 

Figure 12. Coal production for China plus India, compared to production from non-peaking group used in Figure 9, minus India. Based on BP 2016 SRWE.

This comparison shows an even a worse mismatch between the peaking areas, and the current production of areas that might raise their supply.

Is Future Coal Production a Function of Resources Available, or of Prices?

Future coal production is clearly a function of both the amount of resources available and future prices. If there are no resources available, it is pretty clear that no resources can be extracted.

What most researchers have not understood is that future prices are important as well. We can’t expect that prices will rise indefinitely, because low-paid workers, especially, find themselves in a squeeze. They find homes and cars increasingly unaffordable, unless the government can somehow manipulate interest rates down to never heard of levels. Because of this lack of understanding of the role of prices, most of today’s models don’t consider the possibility that price levels may cut back production, at what seems to be an early date relative to the amount of resources in the ground.

Part of the confusion comes from the view economists have regarding prices, innovation, and substitution. Economists seem to be firmly convinced that prices will always rise to fix the problem of future shortages, but their models do not seem to take into account the major role that energy plays in the economy, and the lack of available substitutes. Certainly, the history of energy prices does not support this claim.

If I am correct in saying that prices cannot rise indefinitely, then all three of the fossil fuels are likely to peak, more or less simultaneously, when prices can no longer stay high enough to enable extraction. The downslope after the peak will be based on financial outcomes, such as the bankruptcies of coal operators, not on the exhaustion of reserves or resources in the ground. This dynamic can be expected to produce a much sharper downturn than modeled by the Hubbert Curve.

If analysts consider the possibility that prices will never again rise very high for very long, they realize such a low-price scenario would be a catastrophe. That is why we hear very little about this possibility.

Conclusion

It appears likely that China’s coal production has “peaked” and has begun to decline. This is especially likely if energy prices stay low, or never rise very high for very long.

If I am correct about energy prices not rising high enough in the future, all fossil fuels may reach peak production more or less simultaneously in the not too distant future. Widespread debt defaults seem likely if this happens.

If we are, in fact, reaching peak coal, even before peak oil, this is disconcerting for those who believe that the Hubbert Model is the only way of viewing the world. Maybe we are expecting too much from the model; maybe we need a model that considers prices, and how prices depend on wages and rising debt. Falling energy prices are especially bad for the system; they seem to lead to debt defaults.

Is a 100% Renewable Energy World Possible?

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Published on Cassandra's Legacy on May 19, 2016

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Discuss this article at the Energy Table inside the Diner

A poll among experts…and YOU TOO!

Take the Renewable Energy Survey HERE

 

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I am reporting here the results of a small survey that I carried out last week among the members of a discussion forum; mainly experts in renewable energy (*). It was a very informal poll; not meant to have statistical value. But some 70 people responded out of a total of 167 members; so I think these results have a certain value in telling us how the experts feel in this field. And I was surprised by the remarkable optimism that resulted from the poll.

This is what I asked the members of the list

The question is about  the possibility of a society not too different from ours (**) but 100% based on renewable energy sources, and on the possibility of obtaining it before it is too late to avoid the climate disaster. This said, what statement best describes your position?

1.  It is impossible for technical reasons. (Renewables have too low EROEIs, need too large amounts of natural resources, we'll run out of fossil fuels first, climate change will destroy us first, etc.)

2. It is technically possible but so expensive to be unthinkable.

3. It is technically possible and not so expensive to be beyond our means. However, it is still expensive enough that most likely people will not want to pay the costs of the transition before it will be too late to achieve it, unless we move to a global emergency status.

4. It is technically possible and inexpensive enough that it can be done smoothly, by means of targeted government intervention, such as a carbon tax.

5. It is technically possible and technological progress will soon make it so inexpensive that normal market mechanisms will bring us there nearly effortlessly.

As I said, it was a very informal poll and these questions could have been phrased differently, and probably in a better way. And, indeed, many people thought that their position was best described by something intermediate, some saying, for instance, "I am between 4 and 5". Because of this, it was rather difficult to make a precise counting of the results. But the trend was clear anyway.

Out of some 70 answers, the overwhelming majority was for option 4, that is, the transition is not only technologically possible, but within reach at a reasonable cost and fast enough to avoid major damage from climate change. The second best choice was option 3 (the transition is possible but very expensive). Only a few respondents say that the transition is technologically impossible without truly radical changes of society. Some opted for option 5, even suggesting an "option 6", something like "it will be faster than anyone expects".

I must confess that I was a little surprised by this diffuse optimism, being myself set on option 3. In part, it is because I tend to frequent "doomer" groups, but also on the basis of the quantitative calculations that I performed with some colleagues. But I think that these results are indicative of a trend that's developing among energy experts. It is an attitude that would have been unthinkable just a few years ago, but the experts are clearly perceiving the rapid strides forward of renewable technologies and reacting accordingly. They feel that there is a concrete chance to be able to create a cleaner world fast enough to avoid the worst.

I understand that this is the opinion of just a tiny group of experts, I understand that experts may well be wrong, I understand that there exist such things as the "bandwagon effect" and the "confirmation bias." I know all this. Yet, I believe that, in the difficult situation in which we find ourselves, we can't go anywhere if we keep telling people that we are doomed, no matter what we do. What we need in order to keep going and fight the climate crisis is a healthy dose of hope and of optimism. And these results show that there is hope, that there is reason for optimism. Whether the transition will turn out to be very difficult, or not so difficult, it seems to be within reach if we really want it.

(*) Note: the forum mentioned in this post is a private discussion group meant to be a tool for professionals in renewable energy. It is not a place to discuss whether renewable energy is a good thing or not, nor to discuss such thing as the incoming near term extinction of humankind and the like. Rather, the idea of the forum is to discuss how to make the renewable energy transition happen as fast as possible; hopefully fast enough to avoid a climate disaster. If you are interested in joining this forum, please write me privately at ugo.bardi(zingything)unifi.it telling me in a few lines who you are and why you would like to join. It is not necessary that you are a researcher or a professional. People of good will who think they have something to contribute to the discussion are welcome.

(**) The concept of a society "not too different from ours" is left purposefully vague, because it is, obviously subjected to many different interpretations.Personally, I would tend to define it in terms of what such a society would NOT be. A non-exhaustive list could be, in no particular order,
 

  • Not a Mayan style theocracy, complete with human sacrifices
  • Not a military dictatorship, Roman style, complete with a semi-divine imperial ruler
  • Not a proletarian paradise, complete with a secret police sending dissenters to very cold places
  • Not a hunting and gathering society, complete with hunting rituals and initiation rites
  • Not a society where you are hanged upside down if you tell a joke about the dear leader
  • Not a society where, if you can't afford health care, you are left to die in the street
  • Not a society where you are worried every day about whether you and your children will have something to eat
  • Not a society where slavery is legal and the obvious way things ought to be
  • Not a society where women are supposed to be the property of men
  • Not a society where most people spend most of their life tilling the fields
  • Not a society where you are burned at the stake if you belong to a different sect than the dominant one
 
Many other things are, I think, negotiable, such as having vacations in Hawai'i, owning an SUV, watering the lawn in summer, and more.

 

 

 

 

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