What Would Net Zero Emissions by 2025 Look Like?

16 11 2019

Another guest post by Dave Pollard…. and it’s a doozy.


graph by Our World in Data

The latest IPCC report says that in order to prevent catastrophic climate change global net CO2 emissions will have to reach net zero by 2050, from their current levels of 33-38B tons rising by nearly 2%/year. The IPCC’s past reports have been almost laughably conservative and optimistic, which is just one of the reasons Extinction Rebellion have set a net-zero deadline of 2025, just 6 years from now.

It should be noted that total greenhouse gases will continue to rise for at least another 15-20 years after net zero CO2 is achieved, due to the ongoing run-on effects of other greenhouse gases, notably methane, that have been unleashed ‘naturally’ as a result of the damage we have already done to the atmosphere. And it is at best a long shot that even if we were to achieve net zero CO2 by 2025, it isn’t already too late to prevent climate collapse. Our knowledge of the science remains abysmal and every new report paints a bleaker picture. Expect a fierce anti-science, anti-reality backlash as more and more climate scientists concur that runaway, civilization-ending climate change is inevitable no matter what we do, or don’t do.

So what would be required to reduce the course of the hockey-stick trajectory shown in the chart above and achieve net zero CO2 in just 6 years, for a population that will at current rates be 7% (at least 1/2 billion people) greater than it is now?

I think the reason that, while parliaments and political parties and scientists will readily accept XR’s first demand of proclaiming a climate emergency “and communicating the urgency for change”, for most the second demand of achieving net zero greenhouse gas emissions and biodiversity loss to zero by 2025 is simply absurd. Western economies have merely shifted production to Asia; their accelerating consumption of CO2-produced goods continues unabated. Our global economy depends utterly on cheap hydrocarbon energy. It’s completely preposterous to think a short-term shift is even vaguely possible. Renewables won’t help us; as the chart below shows, new solar energy isn’t even keeping up with the annual increases in demand, let alone cutting into the still-accelerating need for hydrocarbon energy:

graph by Pedro Prieto, cited by Bill Rees

So let’s be preposterous. What would have to happen, at a minimum, to achieve this valiant goal? Based on what I’ve read and on my understanding of complex systems, here’s just a few of the things that I think would have to happen:

  1. An immediate, complete and permanent grounding of all air traffic. That means no executive jets, no flying for diplomatic or business meetings or emergency family reasons — or military adventures. Achieving meaningful carbon reductions is simply impossible as long as planes are flying.
  2. Immediate rationing of liquid/gas hydrocarbons for essential and community purposes only. To get all the hydrocarbon-fuelled cars and trucks off the road in six years no more travel in personal hydrocarbon-burning vehicles could be permitted. And we’d have to work hard to convert all public buses, trains and ships to non-CO2 producing vehicles in that time. If you look at supply/demand curves for gasoline, we’d be looking at carbon taxes in the area of 1000% to ‘incent’ such conversions. My guess is that most shipping and much ‘privatized’ public transit would not be able to stay in business with these constraints. So say goodbye to most imported goods.
  3. All hydrocarbons in the ground would have to stay there, all over the world, effective immediately. We’d have to make do with existing reserves for a few years until everything had been converted to renewable resources.
  4. Industrial manufacturing based on fossil fuel use would have to convert in equal steps over the six year timeframe, and any plants failing to do so would have to be shuttered.
  5. Construction of new buildings and facilities would have to stop entirely. Existing buildings would have to phase out use of fossil fuels over the six years through rationing and cut-offs for non-compliance, and they would have to be remodelled to meet stringent net-zero energy standards and to accommodate all new building needs.
  6. Trillions of trees would have to be planted, and all forestry and forest clearing stopped entirely. Likewise, production of other new high-energy-use building materials (especially concrete) would have to cease. We’d have to quickly learn to re-use the wood and other building materials we have now.
  7. All this centralized, ‘unprofitable’ activity (and enforcement of the restrictions) would need to be funded through taxes. As during the great depression, the rich could expect tax rates north of 90% on income. And a very large wealth tax would be needed to quickly redistribute wealth so that the poor didn’t overwhelmingly suffer from the new restrictions.
  8. The consequences of the above would be an immediate and total collapse of stock and real estate markets and the flow of capital. The 90% of the world’s wealth that is purely financial and not real (stocks, bonds, pensions etc) would quickly become substantially worthless in a ‘negative-growth’ economy, adding a complete economic collapse to the crises the governments trying to administer the transition to net-zero were trying to manage. In such an economic collapse, many governments would simply fail, leaving communities in their jurisdictions to fend for themselves, and making it likely that much of the world would abandon the constraints of net-zero transition because they wouldn’t have the power or resources to even begin to enforce them.

Of course, none of this will happen. Even if governments had the power and wisdom to understand what was really required to make the net-zero transition, it would be political suicide for them to implement it. It won’t happen by 2025. It won’t happen by 2050. It won’t and wouldn’t happen by 2100 even if we had that long, which we do not.

The message of all this is that we cannot save our globalized civilization from the imminent end of stable climate, affordable energy, and the industrial economy — all of which are interdependent. No one (and no group) has the power to shift these massive global systems to a radically new trajectory, without which (and perhaps even with which) our world and its human civilization are soon going to look very different.

No one knows how and how quickly this will all play out, and the scenarios under which collapse will occur vary from humane, collaborative and relatively free from suffering, to the very dystopian. There is therefore no point dwelling on them, or even trying to plan for them. As always, we will continue to do our best, each of us, with the situation that presents itself each day, and our love for our planet and its wondrous diversity will play into that. Our best will not be enough, but we will do it anyway.





Unpacking Extinction Rebellion — Part II: Goals and Tactics

27 09 2019

Kim Hill

Kim Hill, Sep 19 · 16 min read

In Part I, the rebellion’s goal of transitioning to net-zero emissions was exposed as a campaign to save the capitalist economy and the fossil fuel industry. In Part II, we look into Extinction Rebellion’s demands for truth from government and a Citizens’ Assembly, their tactics, and the proposed solutions to the climate and ecological crisis.

Demand 1: that the government tell the truth about the climate crisis

What is the truth about the climate crisis? There are so many theories, debates and agendas regarding the significance of climate change, what caused it, and where it could lead, that it isn’t possible for anyone to make any claim to truth. Demanding truth from any government about such an abstract issue could lead to a propaganda campaign presenting only one side of the story, and the shutting down of debates and discussions that don’t align with the government’s version of the truth.

Governments don’t exist to serve the people and tell the truth. They exist to serve those in power, and lie. If elected representatives genuinely represented the people, the conditions that led to this point would never have happened, and there would be no need to make demands.

XR makes no demand to tell the truth about the causes of climate change and ecological collapse: endless economic growth, industrial agriculture, empire, wars, the extraction and burning of fossil fuels. It’s as though climate is a completely separate issue, which can be solved with some truth-telling and new technology that will allow all these industries to continue unabated.

Demanding “tell the truth by declaring a climate and ecological emergency” doesn’t make sense. Simply stating there is an emergency going on doesn’t lead to a spontaneous outburst of truth. More likely the opposite is the case: giving governments emergency powers leads to repression, and the silencing of inconvenient questions and truths.

This demand was changed in April, to include declaring a climate emergency, at around the same time the declaration was made in the UK. This suggests that the demands are fluid and can be adapted according to outside circumstances, and are being influenced by government policies. The core goals are not clear.

“Communicate the urgency for change” doesn’t specify what change. Again, the demand is vague and can easily be re-directed to mean anything at all. If the demand is to stop extracting fossil fuels, and stop land clearing, then it needs to say that. Communicating the urgency of reaching an unspecified goal sounds like an invitation for governments (and the corporate lobbyists in ‘the media’ and ‘other institutions’) to manufacture a crisis, create a state of panic in the populace, and take advantage of the chaos for profit. A well-documented tactic known as disaster capitalism, or the shock doctrine. As we’ve seen in Part I, this is exactly what has happened. The question of enabling the shock doctrine is raised, but not adequately addressed, on XR’s FAQ page. (The FAQ page has since been updated, with this question removed. The earlier version can be accessed at archive.org and some of the questions included, and the less-than-reassuring responses given, are quite revealing as to the true nature of the rebellion).

In a political environment where telling the truth about the government, or the ecological crisis, can get you thrown in jail, tortured or killed, demanding truth from government is naïve at best.

My main concern with this demand is that it is directed at the government. Is this really who we want to put our faith in as the authority on truth? This worldview, that we need to trust the government, rather than our own direct experience, leads to learned helplessness, disempowerment, total dependence on some higher authority. Given the lengths that governments are willing to go to hold on to power — violent repression of protests, unnecessary wars as a show of force — surely we’d be better off finding our own truths, through inquiry and discussion, rather than depend on any government to guide us.

There’s something Orwellian about this, it’s like a demand for a Ministry of Truth, that can give a government such power over our beliefs about ourselves and the world that we can really be convinced that Big Brother loves us, that net-zero emissions will save the planet, and that 2+2=5.

Virtue ethics

XR’s FAQ states: “Ultimately though, we are doing this because it is the right thing to do, in part we remain unattached to outcomes, meaning that although we hope we can save something of life on earth we try to stay motivated by action being the right thing to do (virtue ethics) rather than taking action because we think it will work (utilitarian ethics).”

So there is no goal, and no belief that the actions will be effective. Basically a way for people to feel like they’ve expressed their concerns, without actually changing anything. Compare the above quote to this one from Stratfor, a consultancy firm that advises governments on how to quell social movements: “Most authorities will tolerate a certain amount of activism because it is seen as a way to let off steam. They appease the protesters by letting them think that they are making a difference — as long as the protesters do not pose a threat. But as protest movements grow, authorities will act more aggressively to neutralize the organizers.” XR’s leaders have studied social movements, so should be well aware of this strategy. It’s almost as if the rebellion has been intentionally designed to be ineffective.

The decision to hold the largest protests, supposedly intended to disrupt business as usual in London, over Easter weekend, when absolutely no government business was taking place, further demonstrates the virtuousness of creating a spectacle rather than engaging in targeted and decisive actions.

Check out this grab from a live interview with XR founder Gail Bradbrook, on Sky News during the Easter weekend protests:

Bradbrook: “…the politicians, behind the scenes, including this current government, tell us that they need a social movement like ours to get social permission to do the necessary… We need people to focus on this emergency, and we need really big action.”

Interviewer: “Let’s be clear, you say that government politicians are saying to you, we need you to come to London [to protest]? You’ve got government ministers telling you that’s what they want?”

Bradbrook: “…I’ve met a couple of people who’ve talked with Theresa May’s advisors, and they’ve said, they do know how bad it is, and they need you guys to help. So, basically, we’re doing the job…”

So we have the government making demands that the rebels make demands of the government. The government leading a rebellion against itself. Is this a rebellion, or a government propaganda campaign? Who’s pulling the strings here?

Lack of goals might be virtuous, but it leaves the movement wide open to be used for the goals of whoever has the most power.

Proposed solutions

XR’s website offers a number of possible solutions to the ecological crisis. Let’s unpack what they each entail.

The Climate Mobilization (TCM, based in the US) advocates “an emergency restructuring of a modern industrial economy, accomplished at rapid speed. It involves the vast majority of citizens, the utilization of a very high proportion of available resources, and impacts all areas of society. It is nothing less than a government-coordinated social and industrial revolution.” This is a plan to expand the industrial system and increase resource use, requiring the government to give money to private interests, and clearly not planning to shut down the industries that are causing extinction. There’s nothing here about protecting nature, reversing economic growth, defending human rights, reducing consumption, or breaking corporate dominance. Everything TCM advocates is the exact opposite of what’s needed.

This plan will likely require people to work longer hours for less pay, accept higher taxes, reduced services, and increased government control of citizens, leading to a greatly reduced quality of life. The level of austerity inherent in “the use of World War II–type policy instruments to transform the economy on an emergency basis, including a substantially increased federal government role in planning and steering industrial investment, providing jobs, allocating energy and materials, and managing demand” when a large part of the population are already suffering unbearable levels of poverty, trauma, ill-health, violence, repression, and soul-crushing bureaucracy, could lead to a complete collapse of the social order, to the point of civil war.

If I’m going to live through a revolution, I’d prefer one that overturned the entire political and economic system that the US empire stands for, and definitely not one that has the faceless bureaucracy of the US government leading it. I can’t imagine anything worse. This is the same government that is on track to achieve ‘full spectrum dominance’, meaning total military control of the entire planet — land, sea, air and space — in service to corporate profits, by 2020.

TCM’s report Leading the Public into Emergency Mode claims that “The climate crisis is, far and away, our top national security threat, top public health threat, and top threat to the global economy.” So the US military, one of the most environmentally destructive forces on the planet, which burns through more than 10 million gallons of oil every day, and $1.7million every minute, and the economy, which is the process of converting the living world into disposable commodities, are apparently under threat from the devastation they caused. The Climate Mobilization takes the side of the military and the economy, and advocates economic and military expansionas an appropriate response. Instead of acknowledging that industrial activity is damaging the natural environment, we’re redirected to believe that natural forces in the form of changing weather patterns are damaging the economy. Nature becomes the feared and hated enemy. This is the opposite of environmentalism.

The rhetoric seems to be calling for war, but war on who, or what? Clearly not on the industries that are burning the planet. And the changing condition of the atmosphere does not make for a tangible adversary. Given that the military and economy exist to maintain the power and control of the wealthy, at the expense of the poor and the natural world, this leaves the victims of imperial wars and the capitalist system, and the living world itself, as the enemies to be defeated. Analysis presented in the video Selling Extinction suggests that initiating wars to maintain the global economic dominance of the US is indeed the goal of TCM.

“We are calling on America to lead the world in heroic, world-saving action!” Given the history of what happens when the US claims to be heroically leading and saving the world, I’d really rather you didn’t.

The parallels between TCM’s rhetoric and this definition of fascism are alarming. “Fascism is a political philosophy, movement, or regime that exalts nation and often race above the individual and that stands for a centralized autocratic government headed by a dictatorial leader, severe economic and social regimentation, and forcible suppression of opposition.” (Merriam Webster)

Extinction Rebellion distributes a proportion of the money it receives in donations to The Climate Mobilization.

Beyond Zero Emissions claims that “all sectors of the Australian economy can decarbonise, repower and benefit from the transition to zero emissions.” Economic benefits again. No environmental benefits. Again.

“Manufacturers can replace fossil fuels with renewable electricity and eliminate up to 8% of Australian emissions,” which seems hardly worth the effort, given the emissions from manufacturing the new infrastructure required for the transition probably more than makes up for the reduction. Even if it was possible to eliminate emissions from the process entirely, the manufacturing of cement, plastics, chemicals, and all the other unnecessary toxic crap continues, and continues polluting and driving extinction.

A shift to 100% electric vehicles would eliminate at least 6% of Australia’s greenhouse emissions.” Or just stop making cars.

And also, why is a rebellion against the UK government that claims to be concerned about extinction, endorsing a think-tank associated with the Australian manufacturing industry? How is that even connected? Of course it’s not going to state the obvious solution to the problem, which is to stop manufacturing stuff.

Green New Deal Group lists as its first principle “A massive environmental transformation of the economy to tackle the triple crunch of the financial crisis, climate change and insecure energy supplies.” The primary concern here is saving the economy, and supplying more energy to industry. Not about protecting the natural world. Rapid Transition Alliance and One Million Climate Jobs also promote the economic growth agenda, and also have nothing to say about reversing the trend of environmental destruction.

The Breakthrough Institute is where the proposed solutions get even more disturbing. “The Breakthrough Institute is a global research center that identifies and promotes technological solutions to environmental and human development challenges.” It advocates for nuclear power, fracking, and increasing gas extraction (collectively referred to as ‘clean energy’), genetic modification, lab-grown food, “significantly higher levels of energy consumption,” urbanization, and economic growth. It promotes technology-dependent, large-scale industrial food systems, increased use of pesticides and synthetic fertilisers, and moving rural people off their land and into service and manufacturing jobs (where I guess they’d be making the chemicals to poison the land that’s been stolen from them). Basically severing humans from any relationship with the natural world. And accelerating the process of destroying every living being. And no I’m not making any of this up. It’s all listed on their website.

This is the future that Extinction Rebellion is envisioning. These are the solutions that millions of people around the world have been marching in the streets to demand of their governments. Not to cut back on fossil fuel use. Not to protect wild nature. Not to repair and regenerate the land. Not to do anything at all to address the causes of climate change and extinction. Instead to save the very system that continues to wreak havoc on the land, sea, and air, and kill us off at a rate of 200 species a day.

You might want to take a moment to let that sink in. I don’t know about you, but I’m feeling the need to go outside, and scream.

Not one of these proposed solutions contains any mention of the causes of extinction and climate change, or any plan to address these issues at all. The main drivers of extinction are war, forest destruction, pesticide use, toxic chemicals, plastics, mining, road building, synthetic fertilisers, broad-scale agriculture, industrial fishing, dams, and urban sprawl. In the plan for economic transformation, decarbonisation, and green growth, these processes are not just allowed to continue, but ramped up. There’s no mention of indigenous sovereignty, rights of nature, human or environmental health, resilience, autonomy, democracy, community. These concepts have no place in the New Climate Economy.

Something worth noting about these proposed solutions is that they are completely out of touch with the reality of the world we live in. None of them address any of the predicaments that are interconnected with the climate issue they claim to solve (and they’re not even addressing that one). Millions of refugees are fleeing conflict zones. Factory farming and animal testing enslave living beings. Propaganda, surveillance and censorship are instilling fear and unravelling our communities, our autonomy, and our ability to think. Addiction, violence, household debt, homelessness and chronic illness impact more and more people, disproportionately affecting women, people of colour and the poor. 45 million people are in slavery. Free trade agreements give corporations power over sovereign nations. Six men have as much wealth as half the world’s population. Indigenous people continue to be massacred and forced to leave their homelands. Many people in Western society are so severely traumatised by this culture that the resulting anxiety and depression leave them barely able to function.

Under XR’s proposed plan, all of this, all of us, the entirety of life on this planet, is nothing but carbon, nothing more than a business opportunity, a resource to be traded, and converted into money.

Demand 3: A Citizens’ Assembly

A citizens’ assembly. A way to bypass the democratic process so the net-zero plan can be enacted without deliberation by our elected representatives. Extinction Rebellion claims that we can’t trust the democratic process because it is corrupted by corporate influence. Yet they want to keep it in place, and allow the corporate corruption to continue.

A Citizens’ Assembly is no less corruptible than the current system. The assembled citizens are not a blank slate, open to all possibilities. They don’t have magic powers that can solve all the world’s problems. They have been exposed to as much propaganda and marketing as everyone else. And they definitely won’t be given the opportunity to discuss any possibilities that aren’t in keeping with the corporate-led plan that is already unfolding.

The experts advising the citizens will quite likely be the same people who have already been advising the government on the transition. They are engineers, energy industry experts, economists, and representatives of the fossil fuel and finance industries. Not conservationists, farmers, land defenders, community activists, or people who will be affected by the new industries. Definitely not anyone who speaks on behalf of nonhuman life and future generations. This is because the transition to net-zero is all about expanding the economy and the energy industry. It’s not about addressing ecological collapse. The assembly won’t be advised by experts in land regeneration, human ecology, indigenous lifeways, permaculture design, decolonisation, de-growth, mutual aid, alternative economic and political systems, autonomous development, or participatory democracy.

The plan on how the UK will achieve the transition to net-zero has already been set, and was discussed in Part I of this series. You can read all 277 pages of it here. It makes no mention of being thrown out so these decisions can instead be made by a bunch of randos. The Business, Energy, and Industrial Strategy Committee has suggested that this plan “is likely to form the basis of the Citizens’ Assembly discussions,” which doesn’t give the citizens any space to suggest anything outside of these parameters. And yes, the Citizens’ Assembly is led by the Business, Energy and Industrial Strategy (BEIS) Committee, because, yes, it’s all about business, energy and industry. Not climate. Not extinction.

“The BEIS Committee has recently held evidence sessions (on Tuesday 18 June and Wednesday 8 May) with witnesses including Extinction Rebellion, WWF, Committee on Climate Change and other stakeholders on the net zero target and actions needed to achieve net zero emissions. The hearings are part of the Committee’s ongoing work on the Clean Growth Strategy and complement its current inquiries on financing energy infrastructureand on energy efficiency. The Committee has also carried out inquiries on Carbon Capture Usage and Storage and on Electric Vehicles.”

In case you weren’t clear on what all this rebelling is for, it’s growth, finance, infrastructure, efficiency, carbon capture, and cars. The XR representatives are more than happy to be consulted and included in these plans. So much for ‘rebel for life’.

The only concerns expressed by XR leadership about this proposal are that it isn’t legally binding, and doesn’t let the citizens set the timeline for the transition. They have made no objections to what the plan actually involves.

It’s remarkable that XR’s website goes to great lengths to describe the sortition process, and their vision for how the assembly will be run, but says absolutely nothing about what net-zero means or how it might be achieved. What isn’t said tells you a whole lot more that what is.

A mass movement of this scale has the capacity to overthrow the existing system and create a genuinely equitable, sustainable and eco-centric society in its place. But it’s not doing that. It’s instead handing over more power to governments and corporations, with the small concession of giving citizens some limited say in how this happens.

An outcome of the Citizens’ Assembly will be general public acceptance of the decisions made. This will effectively shut down any further debate on the issue, or any consideration of alternative plans, as the citizen delegates represent all of us. Resistance is neutralised.

Demanding government leadership and co-ordination takes away power from communities to make their own decisions and plans. The rebels could, if they chose, hold their own Citizens’ Assembly, or many regional assemblies, with no input from the government, and implement their own plans. This would take back power from government and corporations, and put it in the hands of the people. Yet XR has made a statement actively discouraging regional assemblies, wanting to instead focus on the national assembly.

The rebels could be engaging in prefigurative politics and municipalism, and working towards secession for regional independence, building the local structures of participatory democracy, mutual aid and local economies that can take the place of the global capitalist system. The rebellion could join forces with Symbiosis, “a confederation of community organizations across North America, building a democratic and ecological society from the ground up.”

This brings us to the aim of rebellion: to gain concessions from those in power, rather than to overthrow the entire system. A movement that aims to keep the economic system in place can never address the root cause of ecological collapse, because it is the economy itself that needs to go. A transition to a new structure, that allows business as usual to continue under a new banner of decarbonisation, has about as much effect as covering the industrial system in a layer of green paint and calling it eco-friendly.

Here’s a couple quotes from old dead dudes to help guide the rebels into doing something more useful.

“This country, with its institutions, belongs to the people who inhabit it. Whenever they shall grow weary of the existing Government, they can exercise their constitutional right of amending it or their revolutionary right to dismember or overthrow it.” — Abraham Lincoln

“We need a revolution every 200 years, because all governments become stale and corrupt after 200 years.” — Ben Franklin

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Part III will explore the history and corporate manipulation of the climate movement, and the endgame of climate action: The Fourth Industrial Revolution.





Rethinking Renewable Mandates

1 08 2019

Posted on July 31, 2019, another terrific post by Gail Tverberg

Powering the world’s economy with wind, water and solar, and perhaps a little wood sounds like a good idea until a person looks at the details. The economy can use small amounts of wind, water and solar, but adding these types of energy in large quantities is not necessarily beneficial to the system.

While a change to renewables may, in theory, help save world ecosystems, it will also tend to make the electric grid increasingly unstable. To prevent grid failure, electrical systems will need to pay substantial subsidies to fossil fuel and nuclear electricity providers that can offer backup generation when intermittent generation is not available. Modelers have tended to overlook these difficulties. As a result, the models they provide offer an unrealistically favorable view of the benefit (energy payback) of wind and solar.

If the approach of mandating wind, water, and solar were carried far enough, it might have the unfortunate effect of saving the world’s ecosystem by wiping out most of the people living within the ecosystem. It is almost certain that this was not the intended impact when legislators initially passed the mandates.

[1] History suggests that in the past, wind and water never provided a very large percentage of total energy supply.

Figure 1. Annual energy consumption per person (megajoules) in England and Wales 1561-70 to 1850-9 and in Italy 1861-70. Figure by Tony Wrigley, Cambridge University.

Figure 1 shows that before and during the Industrial Revolution, wind and water energy provided 1% to 3% of total energy consumption.

For an energy source to work well, it needs to be able to produce an adequate “return” for the effort that is put into gathering it and putting it to use. Wind and water seemed to produce an adequate return for a few specialized tasks that could be done intermittently and that didn’t require heat energy.

When I visited Holland a few years ago, I saw windmills from the 17th and 18th centuries. These windmills pumped water out of low areas in Holland, when needed. A family would live inside each windmill. The family would regulate the level of pumping desired by adding or removing cloths over the blades of the windmill. To earn much of their income, they would also till a nearby plot of land.

This overall arrangement seems to have provided adequate income for the family. We might conclude, from the inability of wind and water energy to spread farther than 1% -3% of total energy consumption, that the energy return from the windmills was not very high. It was adequate for the arrangement I described, but it didn’t provide enough extra energy to encourage greatly expanded use of the devices.

[2] At the time of the Industrial Revolution, coal worked vastly better for most tasks of the economy than did wind or water.

Economic historian Tony Wrigley, in his book Energy and the English Industrial Revolution, discusses the differences between an organic economy (one whose energy sources are human labor, energy from draft animals such as oxen and horses, and wind and water energy) and an energy-rich economy (one that also has the benefit of coal and perhaps other energy sources). Wrigley notes the following benefits of a coal-based energy-rich economy during the period shown in Figure 1:

  • Deforestation could be reduced. Before coal was added, there was huge demand for wood for heating homes and businesses, cooking food, and for making charcoal, with which metals could be smelted. When coal became available, it was inexpensive enough that it reduced the use of wood, benefiting the environment.
  • The quantity of metals and tools was greatly increased using coal. As long as the source of heat for making metals was charcoal from trees, the total quantity of metals that could be produced was capped at a very low level.
  • Roads to mines were greatly improved, to accommodate coal movement. These better roads benefitted the rest of the economy as well.
  • Farming became a much more productive endeavor. The crop yield from cereal crops, net of the amount fed to draft animals, nearly tripled between 1600 and 1800.
  • The Malthusian limit on population could be avoided. England’s population grew from 4.2 million to 16.7 million between 1600 and 1850. Without the addition of coal to make the economy energy-rich, the population would have been capped by the low food output from the organic economy.

[3] Today’s wind, water, and solar are not part of what Wrigley called the organic economy. Instead, they are utterly dependent on the fossil fuel system.

The name renewables reflects the fact that wind turbines, solar panels, and hydroelectric dams do not burn fossil fuels in their capture of energy from the environment.

Modern hydroelectric dams are constructed with concrete and steel. They are built and repaired using fossil fuels. Wind turbines and solar panels use somewhat different materials, but these too are available only thanks to the use of fossil fuels. If we have difficulty with the fossil fuel system, we will not be able to maintain and repair any of these devices or the electricity transmission system used for distributing the energy that they capture.

[4] With the 7.7 billion people in the world today, adequate energy supplies are an absolute requirement if we do not want population to fall to a very low level. 

There is a myth that the world can get along without fossil fuels. Wrigley writes that in a purely organic economy, the vast majority of roads were deeply rutted dirt roads that could not be traversed by wheeled vehicles. This made overland transport very difficult. Canals were used to provide water transport at that time, but we have virtually no canals available today that would serve the same purpose.

It is true that buildings for homes and businesses can be built with wood, but such buildings tend to burn down frequently. Buildings of stone or brick can also be used. But with only the use of human and animal labor, and having few roads that would accommodate wheeled carts, brick or stone homes tend to be very labor-intensive. So, except for the very wealthy, most homes will be made of wood or of other locally available materials such as sod.

Wrigley’s analysis shows that before coal was added to the economy, human labor productivity was very low. If, today, we were to try to operate the world economy using only human labor, draft animals, and wind and water energy, we likely could not grow food for very many people. World population in 1650 was only about 550 million, or about 7% of today’s population. It would not be possible to provide for the basic needs of today’s population with an organic economy as described by Wrigley.

(Note that organic here has a different meaning than in “organic agriculture.” Today’s organic agriculture is also powered by fossil fuel energy. Organic agriculture brings soil amendments by truck, irrigates land and makes “organic sprays” for fruit, all using fossil fuels.)

[5] Wind, water and solar only provided about 11% of the world’s total energy consumption for the year 2018. Trying to ramp up the 11% production to come anywhere close to 100% of total energy consumption seems like an impossible task.

Figure 2. World Energy Consumption by Fuel, based on data of 2019 BP Statistical Review of World Energy.

Let’s look at what it would take to ramp up the current renewables percentage from 11% to 100%. The average growth rate over the past five years of the combined group that might be considered renewable (Hydro + Biomass etc + Wind&Solar) has been 5.8%. Maintaining such a high growth rate in the future is likely to be difficult because new locations for hydroelectric dams are hard to find and because biomass supply is limited. Let’s suppose that despite these difficulties, this 5.8% growth rate can be maintained going forward.

To increase the quantity from 2018’s low level of renewable supply to the 2018 total energy supply at a 5.8% growth rate would take 39 years. If population grows between 2018 and 2057, even more energy supply would likely be required. Based on this analysis, increasing the use of renewables from a 11% base to close to a 100% level does not look like an approach that has any reasonable chance of fixing our energy problems in a timeframe shorter than “generations.”

The situation is not quite as bad if we look at the task of producing an amount of electricity equal to the world’s current total electricity generation with renewables (Hydro + Biomass etc + Wind&Solar); renewables in this case provided 26% of the world’s electricity supply in 2018.

Figure 3. World electricity production by type, based on data from 2019 BP Statistical Review of World Energy.

The catch with replacing electricity (Figure 3) but not energy supplies is the fact that electricity is only a portion of the world’s energy supply. Different calculations give different percentages, with electricity varying between 19% to 43% of total energy consumption.1 Either way, substituting wind, water and solar in electricity production alone does not seem to be sufficient to make the desired reduction in carbon emissions.

[6] A major drawback of wind and solar energy is its variability from hour-to-hour, day-to-day, and season-to-season. Water energy has season-to-season variability as well, with spring or wet seasons providing the most electricity.

Back when modelers first looked at the variability of electricity produced by wind, solar and water, they hoped that as an increasing quantity of these electricity sources were added, the variability would tend to offset. This happens a little, but not nearly as much as one would like. Instead, the variability becomes an increasing problem as more is added to the electric grid.

When an area first adds a small percentage of wind and/or solar electricity to the electric grid (perhaps 10%), the electrical system’s usual operating reserves are able to handle the variability. These were put in place to handle small fluctuations in supply or demand, such as a major coal plant needing to be taken off line for repairs, or a major industrial client reducing its demand.

But once the quantity of wind and/or solar increases materially, different strategies are needed. At times, production of wind and/or solar may need to be curtailed, to prevent overburdening the electric grid. Batteries are likely to be needed to help ease the abrupt transition that occurs when the sun goes down at the end of the day while electricity demand is still high. These same batteries can also help ease abrupt transitions in wind supply during wind storms.

Apart from brief intermittencies, there is an even more serious problem with seasonal fluctuations in supply that do not match up with seasonal fluctuations in demand. For example, in winter, electricity from solar panels is likely to be low. This may not be a problem in a warm country, but if a country is cold and using electricity for heat, it could be a major issue.

The only real way of handling seasonal intermittencies is by having fossil fuel or nuclear plants available for backup. (Battery backup does not seem to be feasible for such huge quantities for such long periods.) These back-up plants cannot sit idle all year to provide these services. They need trained staff who are willing and able to work all year. Unfortunately, the pricing system does not provide enough funds to adequately compensate these backup systems for those times when their services are not specifically required by the grid. Somehow, they need to be paid for the service of standing by, to offset the inevitable seasonal variability of wind, solar and water.

[7] The pricing system for electricity tends to produce rates that are too low for those electricity providers offering backup services to the electric grid.

As a little background, the economy is a self-organizing system that operates through the laws of physics. Under normal conditions (without mandates or subsidies) it sends signals through prices and profitability regarding which types of energy supply will “work” in the economy and which kinds will simply produce too much distortion or create problems for the system.

If legislators mandate that intermittent wind and solar will be allowed to “go first,” this mandate is by itself a substantial subsidy. Allowing wind and solar to go first tends to send prices too low for other producers because it tends to reduce prices below what those producers with high fixed costs require.2

If energy officials decide to add wind and solar to the electric grid when the grid does not really need these supplies, this action will also tend to push other suppliers off the grid through low rates. Nuclear power plants, which have already been built and are adding zero CO2 to the atmosphere, are particularly at risk because of the low rates. The Ohio legislature recently passed a $1.1 billion bailout for two nuclear power plants because of this issue.

If a mandate produces a market distortion, it is quite possible (in fact, likely) that the distortion will get worse and worse, as more wind and solar is added to the grid. With more mandated (inefficient) electricity, customers will find themselves needing to subsidize essentially all electricity providers if they want to continue to have electricity.

The physics-based economic system without mandates and subsidies provides incentives to efficient electricity providers and disincentives to inefficient electricity suppliers. But once legislators start tinkering with the system, they are likely to find a system dominated by very inefficient production. As the costs of handling intermittency explode and the pricing system gets increasingly distorted, customers are likely to become more and more unhappy.

[8] Modelers of how the system might work did not understand how a system with significant wind and solar would work. Instead, they modeled the most benign initial situation, in which the operating reserves would handle variability, and curtailment of supply would not be an issue. 

Various modelers attempted to figure out whether the return from wind and solar would be adequate, to justify all of the costs of supporting it. Their models were very simple: Energy Out compared to Energy In, over the lifetime of a device. Or, they would calculate Energy Payback Periods. But the situation they modeled did not correspond well to the real world. They tended to model a situation that was close to the best possible situation, one in which variability, batteries and backup electricity providers were not considerations. Thus, these models tended to give a far too optimistic estimates of the expected benefit of intermittent wind and solar devices.

Furthermore, another type of model, the Levelized Cost of Electricity model, also provides distorted results because it does not consider the subsidies needed for backup providers if the system is to work. The modelers likely also leave out the need for backup batteries.

In the engineering world, I am told that computer models of expected costs and income are not considered to be nearly enough. Real-world tests of proposed new designs are first tested on a small scale and then at progressively larger scales, to see whether they will work in practice. The idea of pushing “renewables” sounded so good that no one thought about the idea of testing the plan before it was put into practice.

Unfortunately, the real-world tests that Germany and other countries have tried have shown that intermittent renewables are a very expensive way to produce electricity when all costs are considered. Neighboring countries become unhappy when excess electricity is simply dumped on the grid. Total CO2 emissions don’t necessarily go down either.

[9] Long distance transmission lines are part of the problem, not part of the solution. 

Early models suggested that long-distance transmission lines might be used to smooth out variability, but this has not worked well in practice. This happens partly because wind conditions tend to be similar over wide areas, and partly because a broad East-West mixture is needed to even-out the rapid ramp-down problem in the evening, when families are still cooking dinner and the sun goes down.

Also, long distance transmission lines tend to take many years to permit and install, partly because many landowners do not want them crossing their property. In some cases, the lines need to be buried underground. Reports indicate that an underground 230 kV line costs 10 to 15 times what a comparable overhead line costs. The life expectancy of underground cables seems to be shorter, as well.

Once long-distance transmission lines are in place, maintenance is very fossil fuel dependent. If storms are in the area, repairs are often needed. If roads are not available in the area, helicopters may need to be used to help make the repairs.

An issue that most people are not aware of is the fact that above ground long-distance transmission lines often cause fires, especially when they pass through hot, dry areas. The Northern California utility PG&E filed for bankruptcy because of fires caused by its transmission lines. Furthermore, at least one of Venezuela’s major outages seems to have been related to sparks from transmission lines from its largest hydroelectric plant causing fires. These fire costs should also be part of any analysis of whether a transition to renewables makes sense, either in terms of cost or of energy returns.

[10] If wind turbines and solar panels are truly providing a major net benefit to the economy, they should not need subsidies, even the subsidy of going first.

To make wind and solar electricity producers able to compete with other electricity providers without the subsidy of going first, these providers need a substantial amount of battery backup. For example, wind turbines and solar panels might be required to provide enough backup batteries (perhaps 8 to 12 hours’ worth) so that they can compete with other grid members, without the subsidy of going first. If it really makes sense to use such intermittent energy, these providers should be able to still make a profit even with battery usage. They should also be able to pay taxes on the income they receive, to pay for the government services that they are receiving and hopefully pay some extra taxes to help out the rest of the system.

In Item [2] above, I mentioned that when coal mines were added in England, roads to the mines were substantially improved, befitting the economy as a whole. A true source of energy (one whose investment cost is not too high relative to it output) is supposed to be generating “surplus energy” that assists the economy as a whole. We can observe an impact of this type in the improved roads that benefited England’s economy as a whole. Any so-called energy provider that cannot even pay its own fair share of taxes acts more like a leech, sucking energy and resources from others, than a provider of surplus energy to the rest of the economy.

Recommendations

In my opinion, it is time to eliminate renewable energy mandates. There will be some instances where renewable energy will make sense, but this will be obvious to everyone involved. For example, an island with its electricity generation from oil may want to use some wind or solar generation to try to reduce its total costs. This cost saving occurs because of the high price of oil as fuel to make electricity.

Regulators, in locations where substantial wind and/or solar has already been installed, need to be aware of the likely need to provide subsidies to backup providers, in order to keep the electrical system operating. Otherwise, the grid will likely fail from lack of adequate backup electricity supply.

Intermittent electricity, because of its tendency to drive other providers to bankruptcy, will tend to make the grid fail more quickly than it would otherwise. The big danger ahead seems to be bankruptcy of electricity providers and of fossil fuel producers, rather than running out of a fuel such as oil or natural gas. For this reason, I see little reason for the belief by many that electricity will “last longer” than oil. It is a question of which group is most affected by bankruptcies first.

I do not see any real reason to use subsidies to encourage the use of electric cars. The problem we have today with oil prices is that they are too low for oil producers. If we want to keep oil production from collapsing, we need to keep oil demand up. We do this by encouraging the production of cars that are as inexpensive as possible. Generally, this will mean producing cars that operate using petroleum products.

(I recognize that my view is the opposite one from what many Peak Oilers have. But I see the limit ahead as being one of too low prices for producers, rather than too high prices for consumers. The CO2 issue tends to disappear as parts of the system collapse.)

Notes:

[1] BP bases its count on the equivalent fossil fuel energy needed to create the electricity; IEA counts the heat energy of the resulting electrical output. Using BP’s way of counting electricity, electricity worldwide amounts to 43% of total energy consumption. Using the International Energy Agency’s approach to counting electricity, electricity worldwide amounts to only about 19% of world energy consumption.

[2] In some locations, “utility pricing” is used. In these cases, pricing is set in a way needed to provide a fair return to all providers. With utility pricing, intermittent renewables would not be expected to cause low prices for backup producers.





Eight essential steps to transform our economy

30 07 2019

We’re running out of time. There’s spreading awareness of the institutional failure that is driving humans toward self-extinction, and related calls for a deep transformation of our economy. This is happening in every quarter, from college campuses to the Vatican to the U.S. presidential debates. Everywhere we hear calls for an economy that serves the well-being of people and Earth.

David Korten wrote this opinion piece for YES! Magazine as part of his series of biweekly columns on “A Living Earth Economy.” David is co-founder and board chair of YES! Magazine and president of the Living Economies Forum. Follow him on Twitter @dkorten and on Facebook. As do all YES! columnists he writes here in his personal voice.

Pope Francis has spoken of the social and environmental failures of an economy devoted to the idolatry of moneyWorkers and their unions are joining in with the wrenching observation that, “There are no good jobs on a dead planet.”

There is a related rising awareness of the need for a serious update to how we study and think about economics and prepare our future leaders. With few exceptions, economics, as it’s taught in universities, relies on the same badly flawed theories and ethical principles that bear major responsibility for the unfolding crisis. It values life only for its market price; uses GDP growth as the defining measure of economic performance; assures students that maximizing personal financial return benefits society; recommends policies that prioritize corporate profits over human and planetary well-being; and ignores the natural limits of a finite planet.

Here are eight guiding principles for a reformed economic theory to guide our path to a new economy for the 21st century.

Principle 1: Evaluate the economy’s performance by indicators of the well-being of people and planet; not the growth of GDP.

Growing GDP serves well if our goal is only to increase the financial assets of the rich so they can claim an ever-growing share of the remaining real wealth of a dying Earth. If our priority is to meet the essential needs for food, water, shelter, and other basics for all the world’s people, then we must measure for those results so that we can get the outcomes we really want.

Principle 2: Seek only that which benefits life; not that which harms life.

We should seek to eliminate war, financial speculation, consumption of harmful or unnecessary products, and industrial agriculture that pollutes the soil, air, and water and produces food of questionable nutritional value. We can eliminate most driving by designing infrastructure to support people living close to where they work, shop, and play. We can eliminate most global movement of people and goods by keeping production and consumption local, using recycled materials, and substituting electronic communication for global business travel.

The labor and resources thus freed up can be redirected to raising and educating our children, caring for the elderly, restoring the health and vitality of Earth’s regenerative systems, rebuilding the social infrastructure of community, and rebuilding physical infrastructure in ways that reduce dependence on fossil fuels and simultaneously strengthen our beneficial connections with one another and nature.

Principle 3: Honor and reward all who provide beneficial labor, including nature; not those who exploit it to get rich.

Life depends on the labor of nature and people. Too often, the current economic system rewards those claiming ownership rather than those performing useful labor. Instead we should follow the model set by traditional societies, in which we earn our share in the surplus of the commons through our labor in service of it. Much of the current economy’s dysfunction can be overcome by eliminating the division of society between owners and workers—a problem corrected throughworker ownership combined with an ethical frame that recognizes our well-being depends on much more than just financial return.

Principle 4: Create society’s money supply through a transparent public process to advance the common good; not through proprietary processes that grow the profits of for-profit banks.

In a modern society, those who control the creation and allocation of money control the lives of everyone. It defies reason to assume that society benefits from giving this power to global for-profit banks dedicated to maximizing profits for the already richest among us. The system of money creation and allocation must be public, transparent, and accountable to the people. It must reside in democratic governments and be administered by public banks supplemented by individual community-owned, cooperative banks whose lending supports local home and business ownership.

Principle 5: Educate for a lifetime of learning in service to life-seeking communities; not for service to for-profit corporations.

Most university economics courses currently promote societal psychopathology as a human ideal and give legitimacy to institutions that serve only to make money, without regard for the common good. We must prepare youth for future leadership that builds on a moral foundation that recognizes our responsibility for one another and Earth, favors cooperation over competition, and prioritizes life over money and community well-being over corporate profits.

No one knows how to get where we now must go, and education cannot provide us with answers we do not have. Education can, however, prepare us to be lifelong learners, skilled in asking the right questions and in working together to find and share answers.

Principle 6: Create and apply technology only to serve life; not to displace or destroy it.

Technology must be life’s servant. Deciding how to apply technology based solely on what will produce the greatest short-term financial return is madness. Humans have the right and the means to assure that technology is used only to serve humanity as a whole, such as by eliminating destructive environmental impacts, restoring the regenerative capacity of Earth systems, facilitating global understanding, and advancing social justice, cooperation, and learning.

Principle 7: Organize as cooperative, inclusive, self-reliant, regenerative communities that share knowledge and technology to serve life; not as incorporated pools of money competing to grow by exploiting life.

We can meet our needs through constant cyclical flows of resources. That was our standard way of living until less than 100 years ago. We can do it again. Urban and rural dwellers can rediscover their interdependence as cities source food, timber, fiber, pulp, and recreational opportunities from nearby rural areas and rural areas regenerate their soils with biowastes from nearby urban areas and enjoy the benefits of urban culture. Suburbs can convert to urban or rural habitats.

Principle 8: Seek a mutually beneficial population balance between humans and Earth’s other species; not the dominance of humans over all others.

The health of any natural ecosystem depends on its ability to balance the populations of its varied species. This means maintaining free access to reproductive health care options and removing barriers to women in education and the workplace. Only starting from this point can we both maintain a free society and manage our population size.

The basic frame of 21st century economics contrasts sharply with that of the 20th century economics it must now displace. The new frame is far more complex and nuanced. Yet most people can readily grasp it because it is logical, consistent with foundational ethical principles, and reflects the reality that most people are kind, honest, find pleasure in helping others, and recognize that we all depend on the health of our Mother Earth.

This article was first published in YES! Magazine.





Germany’s renewable energy program, Energiewende, is a big, expensive failure

21 07 2019

Another post about why renewables cannot keep complex civilisation running. Analyses like these are coming thick and fast these days, this one from Alice’s great blog……. you may also want to read a previous post here about The Lesson from Energiewend is that Germany consumes too much energy…….

After reading this post, or better yet the original 44-page document, you’ll understand why the Green New Deal is a bad idea.  This is a cautionary tale worth paying attention to.

The goal of Energiewende was to make Germany independent of fossil fuels.  But it hasn’t worked out.  The 29,000 wind turbines and 1.6 million PV systems provide only 3.1% of Germany’s energy needs and have cost well over 100 billion Euros so far and likely another 450 billion Euros over the next two decades.  And much more than that when you add in the extra cost of maintaining fossil generation systems to back up the lack of wind and sunshine from seconds to weeks.

Because of their extremely low energy density and need for a great deal of space, forests are being cut down, pits dug, and filled with hundreds of tons of reinforced concrete for wind turbines to stand on, 5 acres per turbine. With the forest no longer protecting the soil, it is now vulnerable to wind and rain erosion.

Because wind and solar farms get a guaranteed price for 20 years, they have no need to innovate, do research, or please customers, who paid them 176 billion euros for electricity with a market value of just 5 billion euros from 2000-2016.  This is money that taxpayers could have used to build bridges, energy efficient buildings, or renovate schools, which would create even more jobs than the wind and solar industry claims so they can tout themselves as good for society, perhaps they aren’t so great when you look at other ways and jobs that could have been created with all the subsidies (Vernunftkraft 2018).

Germany’s electricity rates have skyrocketed to the highest levels in the EU because of the Energiewende debacle.

Other news about Energiewende:

  • Germany’s Federal Audit Office has accused the federal government of having largely failed to manage the transformation of Germany’s energy systems (Energiewende  program), and will miss its targets for reducing greenhouse gas emissions, energy consumption and the share of renewable energy in transport.
  • At the same time, policy makers had burdened the nation with enormous costs. The audit further concluded that the program is a monumental bureaucratic nightmare.
  • The build-up of renewables benefited from more than $800 billion in subsidies. 
  • The country has not just been burning coal; it has been burning lignite, one of the dirtiest fuels on the planet. In fact, in 2016, seven of the 10 worst polluting facilities in Europe were German lignite plants.
  • When it’s windy and bright, the grid is so flooded with power that prices in the wholesale market sometimes drop below zero.
  • Transport consumes 30 percent and mining & manufacturing 29% of Germany’s power, but for each, only 4 percent of its energy comes from renewables. Households use 26% of power, but only 13% of it comes from renewables, and Trade, commerce and services 15% but just 7% renewables.  
  • Germany’s carbon emissions have stagnated at roughly their 2009 level. The country remains Europe’s largest producer and burner of coal, which generates more than one-third of Germany’s power supply. Moreover, emissions in the transportation sector have shot up by 20 percent since 1995 and are rising with no end in sight

Alice Friedemann   www.energyskeptic.com  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts: Practical PreppingKunstlerCast 253KunstlerCast278Peak Prosperity , XX2 report

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Vernunftkraft. 2018. Germanys Energiewende – where we really stand.  Bundesinitiative für vernünftige Energiepolitik, Vernunftkraft.

The Energiewende has the goal of making Germany independent of fossil fuels in the long term. Coal, oil and gas were to be phased out, allowing drastic reductions in carbon dioxide emissions. However, these goals have not even begun to be achieved.

The idea of meeting our country’s energy needs with wind power and solar energy has proven to be an illusion. At present, around 29,000 wind turbines and 1.6 million photovoltaic systems together account for just 3.1 % of our energy requirements.   There were hardly any successes in the heating/cooling and transport sectors.

Well over a hundred billion euros have been spent on the expansion of solar and wind energy over the same period. The financial obligations undertaken in the process will continue to burden taxpayers for another two decades and will end up costing German consumers a total sum of around 550 billion euros.

To compensate for the lack of reliability of wind and sun and to be able to actually replace conventional power generation, gigantic amounts of electricity storage would be required. The replacement of controllable power generation with a fluctuating power supply is impossible without storage and unaffordable with it.

A reliable supply of electricity around the clock is taken for granted by citizens of the Federal Republic of Germany. But only those who have taken a closer look will appreciate the importance of a reliable power supply for our highly complex, high-tech society. It is not just about comfort and convenience. It is not only a matter of maintaining an essential input for important manufacturing processes; it is about nothing less than the functioning of civilized community life.

A fundamental characteristic of electrical current must be taken into account when answering this question: it must be produced, to the millisecond, at the moment of consumption, giving an exact balance between power supply and demand. Stable power grids are based on this principle.

At the end of September 2017, more than 27,000 wind turbines with a rated output of 53,374 MW were installed in Germany. Nominal power is defined as the highest power that can be provided permanently under optimum operating conditions (strong to stormy wind conditions). In Figure 2, the dark blue areas represent the delivered power from the German wind turbine fleet during September 2017. A total of 6,380 GWh (1 GWh = 1 million kWh) was sent to the grid, corresponding to just 16.6 % of what was theoretically possible.  

For approximately half of September 2017, the power delivered by the wind fleet was less than 10 % of the nominal capacity. Values above 50 % were reached only 5.3 % of the time, in essence only on 8 and 13–15 September.

Electricity consumption in September 2017 was 39,000 GWh. Wind turbines delivered for 6400 GWh of this and PV systems another 3100 GWh. The minimum power input by all of the PV and wind energy systems was below 0.6 GW, representing less than 1% of the installed capacity of 96 GW.

Since wind and solar are often absent, conventional power plants are needed to ensure grid stability at all times – often over long periods.  Consumers pay for the costs of maintaining two parallel generation systems.

There is no discernable smoothing effect from the size and geographical spread of the wind fleet: the argument that the wind is always blowing somewhere is not true. Even a Europe-wide wind power expansion in conjunction with a perfectly developed electricity grid would not solve the problem of the fluctuating wind energy generation. It is quite possible for there to be no wind anywhere in Europe.

Anyone who studies the feed-in characteristics of electricity generation from wind power and PV systems thoroughly must realize that sun and wind usually supply either far too little or far too much – and that one cannot rely on anything but chance.

Despite the increased capacity and the increasing peaks, the guaranteed output of all 27,000 wind turbines and the 400 million m² of PV systems remains close to zero because of their weather-dependency. This is a particular problem in the winter months, when electricity consumption is high.

Even the ‘dumping’ of electricity abroad to reduce the surplus energy will become increasingly difficult, since neighboring countries are closing themselves off with electricity barriers in order to protect their own grids.

There is no sunshine at night and electricity cannot be stored in bags

The wind energy statistics reveal the absurdity of wanting to tackle the problem of intermittency through construction of additional power lines and extensive wind power expansion.

So even with a European electricity grid based on wind turbines, a 100 % replacement system would always have to be available to ensure the security of electricity supply.

With PV systems, the lack any smoothing of electricity over the diurnal and seasonal cycles is even more evident. It is obvious that the generation peaks in Germany occur at the same time as the peaks in the other European countries. This is due to the size of the low pressure areas, which results in a positive correlation of wind power generation levels across the continent: if too much electricity is produced in Germany, most of our neighbors will be over-producing too. This calls into question the sense of network expansion a priori.

German energy consumption is particularly high in the winter months, especially during inversion weather conditions, when PV systems barely supply any electricity due to clouds and wind turbines are usually at a standstill. The weather-dependency of electricity generation would thus have direct and fatal effects on the transport sector. It would not be possible to heat electrically either. In other words, renewable energy can’t keep transportation or heating going.

Climate protection: a bad joke with deadly undertones

No discussion about the construction of wind turbines and no energy policy document of the last federal government can avoid the suggestion that the Energiewende might help avert the dangers of climate change. This is why the last German government continually described the EEG as a central instrument of climate protection. The thesis – often presented in a shrill, moralizing tone – is that the expansion of ‘renewable energies’ is a human obligation in view of the impending global warming apocalypse. Particularly perfidious forms of this thesis even suggest that not expanding wind power plants in Germany would mean that we would soon be dealing with ‘billions of climate refugees’.

At least one hectare of forest is cleared per wind turbine and is thus permanently destroyed. Afforestation elsewhere cannot make up for this, since old trees are in every respect much more valuable than new plantations. The negative effects of global warming predicted for Germany are more frequent floods and droughts, but forest is the best form of protection against soil erosion, cleaning soil and storing water.

Whether it is forest destruction, cultivation of maize for biogas plants, the destruction of habitats or the direct killing of birds and bats – the massive expansion of ‘renewable energies’ has appalling consequences, the result of their low energy density and the resulting requirement for vast areas of land.

Besides intermittency, the core problem of wind and solar energy is that it is generated in a very diffuse form. Anyone who has ridden a bike against the wind will understand: a headwind of 3m/s makes clothes flutter a little, but hardly makes it difficult to pedal. Water, on the other hand, flowing towards us at the same speed, will wash us away. This is because the power of water is comparatively concentrated, while the power of the wind is much more diffuse. In the case of hydropower, ‘collecting from the surface’ is done by a wide system of ditches, brooks, rivers and streams. If you want to ‘capture’ the power of the wind, you have to do the tedious work of concentrating the energy yourself – requiring a multitude of collection stations and power lines to connect them. Instead of ditches, streams, and rivers wind power required 200-m-high industrial installations, pylons and wires. Inevitably, natural areas become industrialized and opportunities for retreat in nature are gradually destroyed.

A few years ago, a wind turbine invasion of the many forests that have been managed for decades in accordance with the principle of sustainability was still unimaginable. But huge pits are now being dug and filled with thousands of tons of reinforced concrete, with considerable effects on the ecosystem. The effects on wildlife, soils and water as well as on the aesthetics and natural harmony of hilltop landscapes are catastrophic.

The direct cost drivers of electricity prices are the feed-in tariffs set out in the legislation: operators of wind farms, PV and biomass plants will receive a guaranteed price per kilowatt hour, fixed for 20 years after commissioning. This is set at a level that is many times higher than the market price. The difference is passed on to (almost) all consumers via the electricity price. In addition, producers are guaranteed to be able to sell electricity into the grid at that price, regardless of whether there is a need for it or not.

In the period 2000–2016, 176 billion euros were paid by electricity consumers to renewables companies, for electricity with a market value of just 5 billion euros.

What else could have been done with this money?  This is known in economic terms as the ‘opportunity cost’.  For example, the St Gotthard tunnel opened in 2016 at a cost of 3.4 billion euros; the Hamburg Elbe Philharmonic Hall cost 0.8 billion euros. The refurbishment needs of all German schools are estimated to total just 34 billion euros.

The fact that electricity from wind and sun is randomly produced puts the power supply system under considerable and increasing stress. The task of transmission system operators to maintain a constant 50Hz alternating voltage becomes more difficult with each additional weather-dependent and privileged feeding system. In order to cope with increasing volatility, the generation output must be repeatedly intervened in order to protect line sections from overload.

If a bottleneck threatens at a certain point in the grid, power plants on this side of the bottleneck are instructed to reduce their feed-in, while plants beyond the bottleneck must increase their output. The need for re-dispatching  will continue to increase.  Together with the expansion of wind power, the costs of these re-dispatching measures rose continuously. By 2015, grid operators had to spend a billion euros to protect the power grid from the blackout. Since this billion did not ‘fall from the sky’, the unreliability of EEG electricity is reflected in higher electricity prices.

But that’s not all: In order to protect themselves from unwanted erratic electricity inflows and to prevent their grids from being endangered, our neighbors in the Czech Republic and Poland were forced to install phase shifters, i.e. to erect ‘electrical current barriers’. The costs of these self-defense measures are also borne by German consumers.

The ‘energy revolution’ is often referred to as a modernization and innovation program. Germany will become a global leader in technology development, is the slogan. In green-inspired literature, ‘wind and solar’ should be celebrated as the ‘winners’. However, the real world is only partially impressed by this case: those technologies that prove to be economic will win, not those that bureaucrats and officials favor. Long-term economic gains can only be made through competition. However, with renewables, the competitive mechanism is switched off: prices and quantities are determined in a political process, the outcome of which is ultimately determined by the producers of renewable energy themselves.

If post-war governments had adopted the same approach for the automobile industry, it might have demanded that by the year 2000 every German must have a car. The Volkswagen Beetle – at the time, one of the most technically advanced cars in the world – would have been declared an industry standard and a purchase price that would deliver `cars for all’ would have been determined in a biennial consultation process between government and manufacturers. As a result, we would still have vehicles of the technical standard of the VW Beetle, innovation would be irrelevant, and the German industry would never have achieved its position of global leadership.

The plight of the German photovoltaic industry, which rapidly lost international market share and had to cope with many insolvencies, is an example of this. The availability of easy money – subsidies – was the main rea son for the sector’s loss of competitiveness.  It is a harbinger of what can be expected in other artificially nurtured segments of the renewables sector.

Subsidies, however, take away their incentive to innovate. German PV companies invested only 2–3 % of their sales in research and development. In the highly competitive automobile industry, the equivalent figure is 6%; in the pharmaceutical industry it is even higher, at around 9 %. Subsidies make businesses sluggish.

Green jobs? On large posters and in advertisements in autumn 2015, the Energiewende congratulated itself for the creation of ‘230,000 sustainable jobs’. This myth of a ‘job creating’ energy transition is regularly disseminated. Of course, the energy transition is shifting purchasing power from traditional consumer and capital goods industries to industries that produce wind turbines, solar panels and other equipment. This shift generates gross jobs in the those sectors: wind turbines, solar parks and biogas plants must be built. The components have to be produced, delivered and assembled; the finished systems have to be maintained. The investments require financing and credit agreements. This creates employment in banks and law firms. Subsidies must be regulated and monitored, which leads to even employment in the bureaucracy and, once again, lawyers’ offices.  

It should also be noted that were the money not spent on ‘renewable energies’, investments could have been made in other areas that would also have created employment. If, for example, the 178 billion euros mentioned above had been used to renovate schools, the order books of countless businesses would have remained full for many years to come.

If one wants to focus not only on short-term economic effects, but also on long-term growth, one has to ask not only about the scope, but also about the type of investments made. Otherwise you run the risk of losing to ‘Broken Window’ fallacy. According to this, a large stone would have to be thrown through the nearest window as powerfully as possible as an immediate measure of economic policy. This would ultimately give the glazier a large order and thus income, of which he would spend a portion on the confectioner, for example, and thus generate income again. An income that he in turn would spend partly on the butcher, resulting in a virtuous circle that would ultimately benefit everyone and increase national wealth…

Anyone who produces electricity will be remunerated at a guaranteed rate far above the market price for a period of 20 years. EEG beneficiaries do not need to worry about the needs of customers, the offerings of competitors, technical progress or other such ‘banalities’. The search for profitable locations is made easier for wind power producers insofar as the fixed prices per kWh are in essence higher at ‘bad’ locations than at ‘good’ ones. This principle – of incentivizing the use of bad locations – can intuitively be recognized as foolish, but was nevertheless adopted in the tendering procedures of the 2017 revision of the EEG. This absurdity was justified with a claim the fact that an expansion of the area covered in windfarms would lead to a reduction in the volatility of the electricity supplied – a fundamentally wrong idea

Tax consultant Daldorf, analyzed over 1600 annual financial statements of wind energy projects between 2005 and 2013. They found that the vast majority of wind farms in Germany operate at a loss. With many local wind farms, investors are lucky to get their original investment back at all. Daldorf gives the following reasons for the poor performance of windfarms:

  • poor wind assessments or no one-year wind measurements on site
  • erroneous wind indexes as a basis for planning
  • overly low margins of error in wind forecasts
  • underestimates of plant downtime for maintenance and repairs
  • ’planning optimism’ of the project promoters as a strategy for maximizing profits

The operators and investors bear the full risk. Before they can make a profit, the following costs must be covered from the sales achieved:

  • lease costs
  • insurance premiums, fees
  • maintenance costs
  • repairs, reserves for dismantling costs
  • management costs
  • administrative and other costs
  • interest-costs
  • taxes

The cubic relationship between wind force and power generation is decisive for the frequent red numbers: a doubling or halving of the wind speed changes the generation by a factor of eight. The smallest deviations from the expected wind input are reflected in sharp deviations in power generation and thus in revenues. Measurements on wind masts are the most accurate method, but even here the typical error range is 2–8 %. The uncertainty of measurement alone causes an uncertainty of the expected yield of up to 16 %. Measurements with optical methods (LIDAR) or even wind assessments are even less accurate. Anyone who evaluates such measurements will find that the operation of wind farms entails considerable economic risks. These risks apply in particular to wind assessments, whose error rate is in the order of 20 %.

The profit is almost solely determined by the annual electricity yield. No matter how clever the marketing may be, it cannot influence profitability, which depends on the whims of the weather.

Investment in wind turbines on the basis of wind assessments is close to gambling. Anyone who does so is responsible for their own downfall. However, anyone who lives in a community whose elected representatives fall for the promises of windfarm promoters is virtually forced to the roulette table.

The cardinal problems – weather-dependence and low energy density – are unsolved or unsolvable.

My note: there are even more reasons in this document than I have listed above for why Energiewende is a failure. And also see:





Why stimulus can’t fix our energy problems

11 07 2019

If EVER you needed proof there is no energy transition happening, and that growth in fossil fuels consumption is increasing, or that without de-industrialization there is no way known we’ll avoid catastrophic climate change, then this article by Gail Tverberg is it……..

The years during which the quantities of material resources cease to grow correspond almost precisely to recessionary years.

Furthermore, Gail’s “2% lag” mentioned below proves the global economy is in serious trouble. Here in Australia for instance, car sales have been dropping for fourteen months straight……

Posted on July 10, 2019 by Gail Tverberg

Economists tell us that within the economy there is a lot of substitutability, and they are correct. However, there are a couple of not-so-minor details that they overlook:

  • There is no substitute for energy. It is possible to harness energy from another source, or to make a particular object run more efficiently, but the laws of physics prevent us from substituting something else for energy. Energy is required whenever physical changes are made, such as when an object is moved, or a material is heated, or electricity is produced.
  • Supplemental energy leverages human energy. The reason why the human population is as high as it is today is because pre-humans long ago started learning how to leverage their human energy (available from digesting food) with energy from other sources. Energy from burning biomass was first used over one million years ago. Other types of energy, such as harnessing the energy of animals and capturing wind energy with sails of boats, began to be used later. If we cut back on our total energy consumption in any material way, humans will lose their advantage over other species. Population will likely plummet because of epidemics and fighting over scarce resources.

Many people appear to believe that stimulus programs by governments and central banks can substitute for growth in energy consumption. Others are convinced that efficiency gains can substitute for growing energy consumption. My analysis indicates that workarounds, in the aggregate, don’t keep energy prices high enough for energy producers. Oil prices are at risk, but so are coal and natural gas prices. We end up with a different energy problem than most have expected: energy prices that remain too low for producers. Such a problem can have severe consequences.

Let’s look at a few of the issues involved:

[1] Despite all of the progress being made in reducing birth rates around the globe, the world’s population continues to grow, year after year.

Figure 1. 2019 World Population Estimates of the United Nations. Source: https://population.un.org/wpp/Download/Standard/Population/

Advanced economies in particular have been reducing birth rates for many years. But despite these lower birthrates, world population continues to rise because of the offsetting impact of increasing life expectancy. The UN estimates that in 2018, world population grew by 1.1%.

[2] This growing world population leads to a growing use of natural resources of every kind.

There are three reasons we might expect growing use of material resources:

(a) The growing world population in Figure 1 needs food, clothing, homes, schools, roads and other goods and services. All of these needs lead to the use of more resources of many different types.

(b) The world economy needs to work around the problems of an increasingly resource-constrained world. Deeper wells and more desalination are required to handle the water needs of a rising population. More intensive agriculture (with more irrigation, fertilization, and pest control) is needed to harvest more food from essentially the same number of arable acres. Metal ores are increasingly depleted, requiring more soil to be moved to extract the ore needed to maintain the use of metals and other minerals. All of these workarounds to accommodate a higher population relative to base resources are likely to add to the economy’s material resource requirements.

(c) Energy products themselves are also subject to limits. Greater energy use is required to extract, process, and transport energy products, leading to higher costs and lower net available quantities.

Somewhat offsetting these rising resource requirements is the inventiveness of humans and the resulting gradual improvements in technology over time.

What does actual resource use look like? UN data summarized by MaterialFlows.net shows that extraction of world material resources does indeed increase most years.

Figure 2. World total extraction of physical materials used by the world economy, calculated using  weight in metric tons. Chart is by MaterialFlows.net. Amounts shown are based on the Global Material Flows Database of the UN International Resource Panel. Non-metallic minerals include many types of materials including sand, gravel and stone, as well as minerals such as salt, gypsum and lithium.

[3] The years during which the quantities of material resources cease to grow correspond almost precisely to recessionary years.  

If we examine Figure 2, we see flat periods or periods of actual decline at the following points: 1974-75, 1980-1982, 1991, and 2008-2009. These points match up almost exactly with US recessionary periods since 1970:

Figure 3. Dates of US recessions since 1970, as graphed by the Federal Reserve of St. Louis.

The one recessionary period that is missed by the Figure 2 flat periods is the brief recession that occurred about 2001.

[4] World energy consumption (Figure 4) follows a very similar pattern to world resource extraction (Figure 2).

Figure 4. World Energy Consumption by fuel through 2018, based on 2019 BP Statistical Review of World Energy. Quantities are measured in energy equivalence. “Other Renew” includes a number of kinds of renewables, including wind, solar, geothermal, and sawdust burned to provide electricity. Biofuels such as ethanol are included in “Oil.”

Note that the flat periods are almost identical to the flat periods in the extraction of material resources in Figure 2. This is what we would expect, if it takes material resources to make goods and services, and the laws of physics require that energy consumption be used to enable the physical transformations required for these goods and services.

[5] The world economy seems to need an annual growth in world energy consumption of at least 2% per year, to stay away from recession.

There are really two parts to projecting how much energy consumption is needed:

  1. How much growth in energy consumption is required to keep up with growing population?
  2. How much growth in energy consumption is required to keep up with the other needs of a growing economy?

Regarding the first item, if the population growth rate continues at a rate similar to the recent past (or slightly lower), about 1% growth in energy consumption is needed to match population growth.

To estimate how much growth in energy supply is needed to keep up with the other needs of a growing economy, we can look at per capita historical relationships:

Figure 5. Three-year average growth rates of energy consumption and GDP. Energy consumption growth per capita uses amounts provided in BP 2019 Statistical Review of World Energy. World per capita GDP amounts are from the World Bank, using GDP on a 2010 US$ basis.

The average world per capita energy consumption growth rate in non-recessionary periods varies as follows:

  • All years: 1.5% per year
  • 1970 to present: 1.3% per year
  • 1983 to present: 1.0% per year

Let’s take 1.0% per year as the minimum growth in energy consumption per capita required to keep the economy functioning normally.

If we add this 1% to the 1% per year expected to support continued population growth, the total growth in energy consumption required to keep the economy growing normally is about 2% per year.

Actual reported GDP growth would be expected to be higher than 2%. This occurs because the red line (GDP) is higher than the blue line (energy consumption) on Figure 5. We might estimate the difference to be about 1%. Adding this 1% to the 2% above, total reported world GDP would be expected to be about 3% in a non-recessionary environment.

There are several reasons why reported GDP might be higher than energy consumption growth in Figure 5:

  • A shift to more of a service economy, using less energy in proportion to GDP growth
  • Efficiency gains, based on technological changes
  • Possible intentional overstatement of reported GDP amounts by some countries to help their countries qualify for loans or to otherwise enhance their status
  • Intentional or unintentional understatement of inflation rates by reporting countries

[6] In the years subsequent to 2011, growth in world energy consumption has fallen behind the 2% per year growth rate required to avoid recession.

Figure 7 shows the extent to which energy consumption growth has fallen behind a target growth rate of 2% since 2011.

Figure 6. Indicated amounts to provide 2% annual growth in energy consumption, as well as actual increases in world energy consumption since 2011. Deficit is calculated as Actual minus Required at 2%. Historical amounts from BP 2019 Statistical Review of World Energy.

[7] The growth rates of oil, coal and nuclear have all slowed to below 2% per year since 2011. While the consumption of natural gas, hydroelectric and other renewables is still growing faster than 2% per year, their surplus growth is less than the deficit of oil, coal and nuclear.  

Oil, coal, and nuclear are the types of energy whose growth has lagged below 2% since 2011.

Figure 7. Oil, coal, and nuclear growth rates have lagged behind the target 2% growth rate. Amounts based on data from BP’s 2019 Statistical Review of World Energy.

The situations behind these lagging growth rates vary:

  • Oil. The slowdown in world oil consumption began in 2005, when the price of oil spiked to the equivalent of $70 per barrel (in 2018$). The relatively higher cost of oil compared with other fuels since 2005 has encouraged conservation and the switching to other fuels.
  • Coal. China, especially, has experienced lagging coal production since 2012. Production costs have risen because of depleted mines and more distant sources, but coal prices have not risen to match these higher costs. Worldwide, coal has pollution issues, encouraging a switch to other fuels.
  • Nuclear. Growth has been low or negative since the Fukushima accident in 2011.

Figure 8 shows the types of world energy consumption that have been growing more rapidly than 2% per year since 2011.

Figure 8. Natural gas, hydroelectric, and other renewables (including wind and solar) have been growing more rapidly than 2% since 2011. Amounts based on data from BP’s 2019 Statistical Review of World Energy.

While these types of energy produce some surplus relative to an overall 2% growth rate, their total quantity is not high enough to offset the significant deficit generated by oil, coal, and nuclear.

Also, it is not certain how long the high growth rates for natural gas, hydroelectric, and other renewables can persist. The growth in natural gas may slow because transport costs are high, and consumers are not willing/able to pay for the high delivered cost of natural gas, when distant sources are used. Hydroelectric encounters limits because most of the good sites for dams are already taken. Other renewables also encounter limits, partly because many of the best sites are already taken, and partly because batteries are needed for wind and solar, and there is a limit to how fast battery makers can expand production.

Putting the two groupings together, we obtain the same deficit found in Figure 6.

Figure 9. Comparison of extra energy over targeted 2% growth from natural gas, hydroelectric and other renewables with energy growth deficit from oil, coal and nuclear combined. Amounts based on data from BP’s 2019 Statistical Review of World Energy.

Based on the above discussion, it seems likely that energy consumption growth will tend to lag behind 2% per year for the foreseeable future.

[8] The economy needs to produce its own “demand” for energy products, in order to keep prices high enough for producers. When energy consumption growth is below 2% per year, the danger is that energy prices will fall below the level needed by energy producers.

Workers play a double role in the economy:

  • They earn wages, based on their jobs, and
  • They are the purchasers of goods and services.

In fact, low-wage workers (the workers that I sometimes call “non-elite workers”) are especially important, because of their large numbers and their role in buying many items that use significant amounts of energy. If these workers aren’t earning enough, they tend to cut back on their discretionary buying of homes, cars, air conditioners, and even meat. All of these require considerable energy in their production and in their use.

High-wage workers tend to spend their money differently. Most of them have already purchased as many homes and vehicles as they can use. They tend to spend their extra money differently–on services such as private education for their children, or on investments such as shares of stock.

An economy can be configured with “increased complexity” in order to save energy consumption and costs. Such increased complexity can be expected to include larger companies, more specialization and more globalization. Such increased complexity is especially likely if energy prices rise, increasing the benefit of substitution away from the energy products. Increased complexity is also likely if stimulus programs provide inexpensive funds that can be used to buy out other firms and for the purchase of new equipment to replace workers.

The catch is that increased complexity tends to reduce demand for energy products because the new way the economy is configured tends to increase wage disparity. An increasing share of workers are replaced by machines or find themselves needing to compete with workers in low-wage countries, lowering their wages. These lower wages tend to lower the demand of non-elite workers.

If there is no increase in complexity, then the wages of non-elite workers can stay high. The use of growing energy supplies can lead to the use of more and better machines to help non-elite workers, and the benefit of those machines can flow back to non-elite workers in the form of higher wages, reflecting “higher worker productivity.” With the benefit of higher wages, non-elite workers can buy the energy-consuming items that they prefer. Demand stays high for finished goods and services. Indirectly, it also stays high for commodities used in the process of making these finished goods and services. Thus, prices of energy products can be as high as needed, so as to encourage production.

In fact, if we look at average annual inflation-adjusted oil prices, we find that 2011 (the base year in Sections [6] and [7]) had the single highest average price for oil.1 This is what we would expect, if energy consumption growth had been adequate immediately preceding 2011.

Figure 10. Historical inflation-adjusted Brent-equivalent oil prices based on data from 2019 BP Statistical Review of World Energy.

If we think about the situation, it not surprising that the peak in average annual oil prices took place in 2011, and the decline in oil prices has coincided with the growing net deficit shown in Figures 6 and 9. There was really a double loss of demand, as growth in energy use slowed (reducing direct demand for energy products) and as complexity increased (shifting more of the demand to high-wage earners and away from the non-elite workers).

What is even more surprising is that fact that the prices of fuels in general tend to follow a similar pattern (Figure 11). This strongly suggests that demand is an important part of price setting for energy products of all kinds. People cannot buy more goods and services (made and transported with energy products) than they can afford over the long term.

Figure 11. Comparison of changes in oil prices with changes in other energy prices, based on time series of historical energy prices shown in BP’s 2019 Statistical Review of World Energy. The prices in this chart are not inflation-adjusted.

If a person looks at all of these charts (deficits in Figures 6 and 9 and oil and energy prices in general from Figures 10 and 11) for the period 2011 onward, there is a very distinct pattern. There is at first a slow slide down, then a fast slide down, followed (at the end) by an uptick. This is what we should expect, if low energy growth is leading to low prices for energy products in general.

[9] There are two different ways that oil and other energy prices can damage the economy: (a) by rising too high for consumers or (b) by falling too low for producers to have funds for reinvestment, taxes and other needs. The danger at this point is from (b), energy prices falling too low for producers.  

Many people believe that the only energy problem that an economy can have is prices that are too high for consumers. In fact, energy prices seemed to be very high in the lead-ups to the 1974-1975 recession, the 1980-1982 recession, and the 2008-2009 recession. Figure 5 shows that the worldwide growth in energy consumption was very high in the lead-up to all three of these recessions. In the two earlier time periods, the US, Europe, and the Soviet Union were all growing their economies, leading to high demand. Preceding the 2008-2009 Great Recession, China was growing its economy very rapidly at the same time the US was providing low-interest rate rates for home purchases, some of them to subprime borrowers. Thus, demand was very high at that time.

The 1974-75 recession and the 1980-1982 recession were fixed by raising interest rates. The world economy was overheating with all of the increased leveraging of human energy with energy products. Higher short-term interest rates helped bring growth in energy prices (as well as food prices, which are very dependent on energy consumption) down to a more manageable level.

Figure 12. Three-month and ten-year interest rates through May 2019, in chart by Federal Reserve of St. Louis.

There was really a two-way interest rate fix related to the Great Recession of 2008-2009. First, when oil and other energy prices started to spike, the US Federal Reserve raised short term interest rates in the mid 2000s. This, by itself, was almost enough to cause recession. When recession started to set in, short-term interest rates were brought back down. Also, in late 2008, when oil prices were very low, the US began using Quantitative Easing to bring longer-term interest rates down, and the price of oil back up.

Figure 13. Monthly Brent oil prices with dates of US beginning and ending Quantitative Easing.

There is one recession that seems to have been the result of low oil prices, perhaps combined with other factors. That is the recession that was associated with the collapse of the central government of the Soviet Union in 1991.

[10] The recession that comes closest to the situation we seem to be heading into is the one that affected the world economy in 1991 and shortly thereafter.

If we look at Figures 2 and 5, we can see that the recession that occurred in 1991 had a moderately severe effect on the world economy. Looking back at what happened, this situation occurred when the central government of the Soviet Union collapsed after 10 years of low oil prices (1982-1991). With these low prices, the Soviet Union had not been earning enough to reinvest in new oil fields. Also, communism had proven to be a fairly inefficient method of operating the economy. The world’s self-organizing economy produced a situation in which the central government of the Soviet Union collapsed. The effect on resource consumption was very severe for the countries most involved with this collapse.

Figure 14. Total extraction of physical materials Eastern Europe, Caucasus and Central Asia, in chart by MaterialFlows.net. Amounts shown are based on the Global Material Flows Database of the UN International Resource Panel.

World oil prices have been falling too low, at least since 2012. The biggest decreases in prices have come since 2014. With energy prices already very low compared to what producers need, there is a need right now for some type of stimulus. With interest rates as low as they are today, it will be very difficult to lower interest rates much further.

Also, as we have seen, debt-related stimulus is not very effective at raising energy prices unless it actually raises energy consumption. What works much better is energy supply that is cheap and abundant enough that supply can be ramped up at a rate well in excess of 2% per year, to help support the growth of the economy. Suitable energy supply should be inexpensive enough to produce that it can be taxed heavily, in order to help support the rest of the economy.

Unfortunately, we cannot just walk away from economic growth because we have an economy that needs to continue to expand. One part of this need is related to the world’s population, which continues to grow. Another part of this need relates to the large amount of debt that needs to be repaid with interest. We know from recent history (as well as common sense) that when economic growth slows too much, repayment of debt with interest becomes a problem, especially for the most vulnerable borrowers. Economic growth is also needed if businesses are to receive the benefit of economies of scale. Ultimately, an expanding economy can be expected to benefit the price of a company’s stock.

Observations and Conclusions

Perhaps the best way of summing up how my model of the world economy differs from other ones is to compare it to popular other models.

The Peak Oil model says that our energy problem will be an oil supply problem. Some people believe that oil demand will rise endlessly, allowing prices to rise in a pattern following the ever-rising cost of extraction. In the view of Peak Oilers, a particular point of interest is the date when the supply of oil “peaks” and starts to decline. In the view of many, the price of oil will start to skyrocket at that point because of inadequate supply.

To their credit, Peak Oilers did understand that there was an energy bottleneck ahead, but they didn’t understand how it would work. While oil supply is an important issue, and in fact, the first issue that starts affecting the economy, total energy supply is an even more important issue. The turning point that is important is when energy consumption stops growing rapidly enough–that is, greater than the 2% per year needed to support adequate economic growth.

The growth in oil consumption first fell below the 2% level in 2005, which is the year some that some observers have claimed that “conventional” (that is, free flowing, low-cost) oil production peaked. If we look at all types of energy consumption combined, growth fell below the critical 2% level in 2012. Both of these issues have made the world economy more vulnerable to recession. We experienced a recession based on prices that were too high for consumers in 2008-2009. It appears that the next bottleneck may be caused by energy prices that are too low for producers.

Recessions that are based on prices that are too low for the producer are the more severe type. For one thing, such recessions cannot be fixed by a simple interest rate fix. For another, the timing is unpredictable because a problem with low prices for the producer can linger for quite a few years before it actually leads to a major collapse. In fact, individual countries affected by low energy prices, such as Venezuela, can collapse before the overall system collapses.

While the Peak Oil model got some things right and some things wrong, the models used by most conventional economists, including those included in the various IPCC reports, are far more deficient. They assume that energy resources that seem to be in the ground can actually be extracted. They see no limitations caused by prices that are too high for consumers or too low for producers. They do not realize that affordable energy prices can actually fall over time, as the economy weakens.

Conventional economists assume that it is possible for politicians to direct the economy along lines that they prefer, even if doing so contradicts the laws of physics. In particular, they assume that the economy can be made to operate with much less energy consumption than is used today. They assume that we collectively can decide to move away from coal consumption, without having another fuel available that can adequately replace coal in quantity and uses.

History shows that the collapse of economies is very common. Collectively, we have closed our eyes to this possibility ever happening to the world economy in the modern era. If the issue with collapsing demand causing ever-lower energy prices is as severe as my analysis indicates, perhaps we should be examining this scenario more closely.

Note:

[1] There was a higher spike in oil prices in 2008, but averaged over the whole year, the 2008 price was lower than the continued high prices of 2011.





The Greening of The West Leaves Other Countries a Devastated, Toxic Mess

8 07 2019

While the West receives shiny new products with the promise of saving the planet, places like Mongolia and Chile are suffering greatly. From ACH News.

I was driving yesterday and found myself amazed at how many hybrid cars there are now, remembering the “wait list” when the Prius first came out. It’s a booming business just getting started. Solar technology is everywhere. There are “solar farms” to enable entire cities to run off of solar panels. Wind turbines dot landscapes across the country. As climate change is a hot topic now (no pun intended), the West is doing its part by “greening” its energy usage and converting to alternative energy sources, like solar or wind power. Cars are traded in for the newest hybrid. It’s all being done because it’s “renewable” and “carbon neutral”.

As a culture, we are myopic. We only see what we want to see. We only see what the culture wants us to see and in this case, the culture wants us to see how amazing it is to buy a solar panel/hybrid car/wind turbine and do our part to curb global warming. We do it and feel great giving the culture our money, knowing, when we go to bed, we did this incredible, Earth-saving venture.

But what if we were really informed? What if we were given all the information on the creation of this “green” product? What if our “greening” was really, at the core, just more destruction?

Let’s visit a couple of places where minerals are mined for the production of our “alternative, save-the-Earth, green technology”.

Baotou, China, Inner Mongolia
Baotou, China: A toxic lake of mine and refinery tailings stretches for over 3.5 miles from Baogang Iron and Steel Corporation. One ton of rare earth produces 75 ton of acidic waste water, a cocktail of acids, heavy metals, carcinogens and radioactive material at three times background radiation. Photo: Toby Smith/Unknown Fields

Most people have never heard of Baotou, China. The same people probably could not (or would not) want to imagine life without it.

Baotou is one of the world’s largest suppliers of “rare earth” minerals. These are elements that are used in the manufacturing of tech gadgets (smart phones) and also our “green alternative energy”: magnets for wind turbines and parts for electric car motors. China produced 95% of the entire world’s supply of rare earth elements. Minerals are mined at the Bayan Obo Mine, just north of Baotou and processed at Baogang Steel and Rare Earth Complex. The rare earth minerals which come from this plant, primarily neodymium and cerium, are actually not so rare and can be found dispersed all over the planet. The problem lies in the extraction. In an article from BBC Future reporter, Tim Maughan (led by the group, Unknown Fields) says so eloquently,

Rare earth discharge, Baotou, China

The intriguing thing about both neodymium and cerium is that while they’re called rare earth minerals, they’re actually fairly common. Neodymium is no rarer than copper or nickel and quite evenly distributed throughout the world’s crust. While China produces 90% of the global market’s neodymium, only 30% of the world’s deposits are located there. Arguably, what makes it, and cerium, scarce enough to be profitable are the hugely hazardous and toxic process needed to extract them from ore and to refine them into usable products. For example, cerium is extracted by crushing mineral mixtures and dissolving them in sulphuric and nitric acid, and this has to be done on a huge industrial scale, resulting in a vast amount of poisonous waste as a byproduct. It could be argued that China’s dominance of the rare earth market is less about geology and far more about the country’s willingness to take an environmental hit that other nations shy away from.

Google Earth shows us the size of this lake that supports no life.

In a place that was once filled with farms as far as the eye could see, now lies a lake (which are called “tailing ponds), visible from Google Earth, filled with radioactive toxic sludge. The water is so contaminated that not even algae will grow. Maughan describes the chill he felt when he saw the lake: “It’s a truly alien environment, dystopian and horrifying”. Because the reservoir was not properly lined when it was built, waste leaked into the groundwater, killing off livestock, making residents sick and destroyed any chance of farming. In reality, though, farmers have long been displaced by factories. The people that remain are experiencing diabetes, osteoporosis and chest problems. Residents of what is now known as the “rare-earth capital of the world” are inhaling solvent vapors, particularly sulphuric acid (used for extraction), as well as coal dust. But hey, we need wind turbines to save the planet. And the electric car is definitely going to reduce carbon emissions.

I’m sorry to say that there is no amount of “greening” that going to remove this toxic sludge from the lives of those who live in Baotou. We are stealing the Earth from others. Our logic that solar/wind/the electric car is going to save the planet, instead of the most logical action of using far less, is destroying faraway lands and lives. It’s easy for us to sweep it all under the rug since we are not the ones directly affected by this lust for more energy consumption. We are simply sold on the latest and greatest technology that will save the planet and make our insatiable energy consumption a little bit easier to digest.

The public must be made aware of this catastrophe.

We must be willing to change or face the fact that people and earth and animals are dying for our inability to change.

Salar de Atacama, Atacama Desert, Chile

The International Energy Agency forecasts that the number of electric vehicles on the road around the world will hit 125 million by 2030. Right now, the number sits around 3.1 million. In order to support this growth, a lot of lithium is needed for the batteries to run this fleet. It is this lithium extraction that is destroying northern Chile’s Atacama Desert.

Lithium separation ponds, Atacama, Chile

Lithium is found in the brine of the salt flats, located in Chile. To extract the lithium from Salar de Atacama, holes are drilled into the flats to pump the brine to the surface. This allows lithium carbonate to be extracted through a chemical process. The whole process requires a lot of water. So much water in fact that the once life-supporting oasis is now a barren wasteland.

In an interview with Bloomberg, Sara Plaza tells the story heard time and time again: “No one comes here anymore, because there’s not enough grass for the animals,” Plaza says. “But when I was a kid, there was so much water you could mistake this whole area for the sea.” She recalls walking with her family’s sheep along an ancient Inca trail that flowed between wells and pastures. Now, an engine pumps fresh water from beneath the mostly dry Tilopozo meadow. “Now mining companies are taking the water,” she says.

The race for lithium extraction is viewed as a noble one. Electric cars are sold as a ticket to salvation from Climate Change. Electric auto makers want to make it easier and cheaper for drivers to convert to “clean”, battery-powered replacements for “dirty” combustion engines. Rather, they want more money and will sell us the “green” theory.

Extracting Atacama’s lithium means pumping large amounts of water and churning up salty mud known as brine. In Salar de Atacama, the heroic mission of saving the planet through electric cars is leaving another Indigenous community devastated.

If this was really about saving the planet, there would be regulations on single drivers in cars. Public transportation would be at the forefront, not affordable priced electric cars that EVERYBODY can own. Let’s be real here. The people that are poised to benefit the most from “green” energy are companies such as  Albemarle Corp. and Soc. Quimica & Minera de Chile SA, who are responsible for mining most of Chile’s lithium.

Sergio Cubillos, president of Atacama People’s Council, stands on an empty water tank at the village of Peine. Photo: Cristobal Olivares/Bloomberg

The locals, whose families have lived here for thousands of years, are not benefiting.

From Bloomberg: “The falling water levels are felt by local people. Peine, the village closest to the mining, has a license to pump 1.5 liters of water per second to supply 400 residents and a transient population of mine workers that can rise as high as 600. BHP’s Escondida copper mine has a license to pump 1,400 liters per second. Albemarle and SQM, the big lithium miners, have licenses to pump around 2,000 liters per second of brine.”

“We’re fooling ourselves if we call this sustainable and green mining,” says Cristina Dorador, a Chilean biologist who studies microbial life in the Atacama desert. 

Which begs the question: What is “green technology“?

The Earth is green technology. The blade of grass that grows towards the light is green technology. The breath of fresh air that is given to us by the plants on land and the plants in the ocean is green technology. The spring water that rises from the depths, mysteriously and miraculously, is green technology. This fragile environment that surrounds us, the unexplainable, intricately woven web of life that holds us, the environment that is degrading rapidly from our greedy lust for more and more, that is green technology. What we are being sold today from companies who are leading the rat-race of civilization is not green. This green technology that they speak of is actually dark red, almost black, stained with the radioactive, desecrated blood of people and earth.

In closing, from Derrick Jensen:

“There is no free lunch. Actions have consequences, and when you steal from others, the others no longer have what you stole from them. This is as true when this theft is from nonhumans as it is when it’s from humans.

But, as Upton Sinclair said, “It’s hard to make a man understand something when his job depends on him not understanding it.” It’s even harder to make people understand something when their whole way of life depends on them not understanding it.”