More Peak Oil bad news…..

15 06 2017

There have been no end of new articles on the demise of the oil industry lately. I’ve been so busy building that it’s only now I can catch up with some blogging, so here’s your lot for the time being.

From the website comes this unbelievable analysis…:

While the Mainstream media continues to put out hype that technology will bring on abundant energy supplies for the foreseeable future, the global oil and gas industry is actually cannibalizing itself just to stay alive.   Increased finance costs, falling capital expenditures and the downgrade of oil reserves are the factors, like flesh-eating bacteria, that are decimating the once great oil and gas industry.

This is all due to the falling EROI – Energy Returned On Investment in oil and gas industry.  Unfortunately, most of the public and energy analysts still don’t understand how the Falling EROI is gutting the entire system.  They don’t see it because the world has become so complex, they are unable to connect-the-dots.  However, if we look past all the over-specialized data and analysis, we can see how bad things are getting in the global oil and gas industry.

Let me start by republishing this chart from my article, Future World Economic Growth In Big Trouble As Oil Discoveries Fall To Historic Lows:

The global oil industry only found 2.4 billion barrels of conventional oil in 2016, less than 10% of what it consumed (25.1 billion barrels).  Conventional oil is the highly profitable, high EROI oil that should not be confused with low quality “unconventional” oil sources such as OIL SANDS or SHALE OIL.  There is a good reason why we have just recently tapped in to oil sands and shale oil…. it wasn’t profitable for the past 100 years to extract it.  Basically, it’s all we have left…. the bottom of the barrel, so to speak.

Now, to put the above chart into perspective, here are the annual global conventional oil discoveries since 1947:

You will notice the amount of new oil discoveries (2.4 billion barrels) for 2016 is just a mere smudge when we compare it to the precious years.  Furthermore, the world has been consuming about an average of 70 million barrels per day of conventional oil production since 2000 (the total liquid production is higher, but includes oil sands, deep water, shale oil, natural gas liquids, biofuels and etc).  Conventional oil production has averaged about 25 billion barrels per year.

As we can see in the chart above… we haven’t been replacing what we have been consuming for quite a long time.  Except for the large orange bar in 2000 of approximately 35 billion barrels, all the years after were lower than 25 billion barrels.  Thus, the global oil industry has been surviving on its past discoveries.

That being said, if we include ALL liquid oil reserves, the situation is even more alarming.

Global Oil Liquid Reserves Fall In 2015 & 2016

According to the newest data put out by the U.S. EIA, Energy Information Agency, total global oil liquid reserves fell for the past two years.  The majority of negative oil reserve revisions came from the Canadian oil sands sector:

Of the 68 public traded energy companies used in this graph, total liquid oil reserves fell from 116 billion barrels in 2014 to 100 billion barrels in 2016.  That’s a 14% decline in liquid oil reserves in just two years.  So, not only are conventional oil discoveries falling the lowest since 1947, companies are now forced to downgrade their total liquid oil reserves due to lower oil prices.

This can be seen more clearly in the EIA chart below:

The “net proved reserves change” is shown as the black line in the chart.  It takes the difference between the additions-revisions, (BLUE) and the production (BROWN).  These 68 public companies have been producing between 8-9 billion barrels of oil per year.

Because of the downward revisions in 2015 and 2016, net oil reserves have fallen approximately 16 billion barrels, or nearly two years worth of these 68 companies total liquid oil production.  If these oil companies don’t suffer anymore reserve downgrades, they have approximately 12 years worth of oil reserves remaining.

But… what happens if the oil price continues to decline as the global economy starts to really contract from the massive amount of debt over-hanging the system?  Thus, the oil industry could likely cut more reserves, which means… the 12 years worth of reserves will fall below 10, or even lower.  My intuition tells me that global liquid oil reserves will fall even lower due to the next two charts in the following section.

The Coming Energy Debt Wall & Surging Finance Cost In The Energy Industry

Over the next several years, the amount of debt that comes due in the U.S. oil industry literally skyrockets higher.  In my article, THE GREAT U.S. ENERGY DEBT WALL: It’s Going To Get Very Ugly…., I posted the following chart:

The amount of debt (as outstanding bonds) that comes due in the U.S. energy industry jumps from $27 billion in 2016 to $110 billion in 2018.  Furthermore, this continues higher to $260 billion in 2022.  The reason the amount of debt has increased so much in the U.S. oil and gas industry is due to the HIGH COST of producing Shale oil and gas.  While many companies are bragging that they can produce oil in the new Permian Region for $30-$40 a barrel, they forget to include the massive amount of debt they now have on their balance sheets.

This is quite hilarious because a lot of this debt was added when the price of oil was over $100 from 2011 to mid 2014.  So, these companies actually believe they can be sustainable at $30 or $40 a barrel?  This is pure nonsense.  Again… most energy analysts are just looking at how a company could producing a barrel of oil that year, without regard of all other external costs and debts.

Moreover, to give the ILLUSION that shale oil and gas production is a commercially viable enterprise, these energy companies have to pay its bond (debt) holders dearly.  How much?  I will show you all that in a minute, however, this is called their DEBT FINANCING.  Some of us may be familiar with this concept when we have maxed out our credit cards and are paying a minimum interest payment just to keep the bankers happy.  And happy they are as they are making a monthly income on money that we created out of thin air… LOL.

According to the EIA, these 68 public energy companies are now spending 75% of their operating cash flow to service their debt compared to 25% just a few years ago:

We must remember, debt financing does not mean PAYING DOWN DEBT, it just means the companies are now spending 75% of their operating cash flow (as of Q3 2016) just to pay the interest on the debt.  I would imagine as the oil price increased in the fourth quarter of 2016 and first quarter of 2017, this 75% debt servicing ratio has declined a bit.  However, people who believe the Fed will raise interest rates, do not realize that this would totally destroy the economic and financial system that NEEDS SUPER-LOW INTEREST RATES just to service the massive amount of debt they have on the balance sheets.

As an example of rising debt service, here is a table showing Continental Resources Interest expense:

Continental Resources is one of the larger energy players in the Bakken oil shale field in North Dakota.  Before tapping into that supposed “high-quality” Bakken shale oil, Continental Resources was only paying $13 million a year to finance its debt, which was only $165 million.  However, we can plainly see that producing this shale oil came at a big cost.  As of December 2016, Continental Resources paid $321 million that year to finance its debt…. which ballooned to $6.5 billion.  In relative terms, that is one hell of a huge credit card interest payment.

The folks that are receiving a nice 4.8% interest payment (again… just a simple average) for providing Continental Resources with funds to produce this oil at a very small profit or loss… would like to receive their initial investment back at some point.  However….. THERE LIES THE RUB.

With that ENERGY DEBT WALL to reach $260 billion by 2022, I highly doubt many of these energy companies will be able to repay that majority of that debt.  Thus, interest rates CANNOT RISE, and will likely continue to fall or the entire financial system would collapse.

Lastly…. the global oil and gas industry is now cannibalizing itself just to stay alive.  It has added a massive amount of debt to produce very low-quality Shale Oil-Gas and Oil Sands just to keep the world economies from collapsing.  The falling oil price, due to a consumer unable to afford higher energy costs, is gutting the liquid oil reserves of many of the publicly trading energy companies.

At some point… the massive amount of debt will take down this system, and with it, the global oil industry.  This will have an extremely negative impact on the values of most STOCKS, BONDS & REAL ESTATE.  If you have well balanced portfolio in these three asset classes, then you are in serious financial trouble in the future.

Then…….  on ABC TV’s lateline (I’m rarely up late enough to watch it, so this was an omen…) this interview came up. I have to say, I found the whole Qatar thing rather bizarre, but this commentator thinks that Saudi Arabia is already in trouble

And now Zero Hedge has this to say as well….

Oil Prices Suffer First ‘Death Cross’ Since 2014 Collapse

For the first time since September 2014, after which oil prices collapsed almost 75%, Brent and WTI Crude futures both just flashed a ‘death cross’ signal as the 50-day moving-average crossed below the 200-day moving-average.

The crossover is typically seen a loss of short-term momentum and last occurred in the second half of 2014, when prices collapsed due to oversupply amid surging U.S. shale oil production.


As Bloomberg notes, OPEC and its partners will be hoping their efforts to curb output will be enough to support prices and counteract any fears of growing downside risk.


However, this morning’s news of “real” OPEC production may raise more doubts about the cartel’s commitment (and going forward, the Qatar debacle won’t help).

Book review of Failing states, collapsing systems biophysical triggers of political violence by Nafeez Ahmed

6 06 2017

I have written at length about the collapse of Egypt over the years, and Syria too. I’ve also discussed Nafeez Ahmed’s views on the unraveling now happening in the Middle East, and my most recent item here from the Doomstead Diner has attracted a lot of attention….. including from Alice Friedemann who pointed out to me that she has published an extensive review of Ahmed’s new book “Failing states, collapsing systems biophysical triggers of political violence”. It’s a long read (the references alone are almost as long as the article and would keep you busy for weeks!), but I was totally riveted by it and felt the compulsion to republish it here as it needs to be read as widely as possible. In fact, this review is so good, you may not need to buy the book……. as I’ve been saying for a very long time now, 2020 is when things start to get really ugly, all the way to 2030, by which time it’s likely the state of the world will be unrecognisable.

The overview of biophysical factors table below is alone really telling……

If after reading this latest piece you are not convinced collapse is indeed underway, then there’s no hope for you….!


alice_friedemann[ In this post I summarize the sections of Nafeez’s book about the biophysical factors that bring nations down (i.e. climate change drought & water scarcity, declining revenues after peak oil, etc.) The Media tend to focus exclusively on economic and political factors.

My book review is divided into 3 parts: 

  • Why states collapse for reasons other than economic and political
  • How BioPhysical factors contribute to systemic collapse in Syria, Yemen, Iraq, Saudi Arabia Egypt, Nigeria
  • Predictions of when collapse will begin in Middle East, India, China, Europe, Russia, North America

In my opinion, war is inevitable in the Middle East where over half of oil reserves exist.  Oil is life itself.  If war happens,  collapse of the Middle East, India, and China could happen well before 2030.  If nuclear weapons are used, most nations collapse from the nuclear winter and ozone depletion that would follow.   Indonesia blew up their oil refineries to keep Japan from getting oil in WWII. If Middle Eastern governments or terrorists do the same after they’re attacked, that brings on the energy crisis sooner.  Although this would leave some high EROI oil in the ground, the energy to rebuild refineries, pipelines, oil rigs, roads, and other infrastructure would lower the EROI considerably.

Alice Friedemann  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts: Practical Prepping, KunstlerCast 253, KunstlerCast278, Peak Prosperity , XX2 report ]

Ahmed, Nafeez. 2017. Failing States, Collapsing Systems BioPhysical Triggers of Political Violence. Springer.

1) Why states collapse for reasons other than economic and political

Since the 2008 financial crash, there’s been an unprecedented outbreak of social protest: Occupy in the US and Western Europe, the Arab Spring, and civil unrest from Greece to Ukraine, China to Thailand, Brazil to Turkey, and elsewhere. Sometimes civil unrest has resulted in government collapse or even wars, as in Iraq-Syria and Ukraine- Crimea. The media and experts blame it on poor government, usually ignoring the real reasons because all they know is politics and economics.

In the Middle East, experts should also talk about geology.  Oil-producing nations like Syria, Yemen, Egypt, Nigeria, and Iraq have all reached peak oil and declining government revenues after that force rulers to raise the prices of food and oil.  This region was already short on water, and now climate change (from fossil fuels) is making matters much worse with drought and heat waves causing even greater water scarcity, which in turn lowers agricultural production.  Many of these nations have some of the highest rates of population growth on earth at a time when resources essential to life itself are declining.

The few nations still producing much of the oil – Russia, Saudi Arabia, and the U.S. are about to join the club and stop exporting oil so they can provide for their domestic population.

Ahmed points out that “because these and other factors are so nested and interconnected, even small perturbations and random occurrences in one can amplify effects on other parts of the system, sometimes in a feedback process that continues.  If thresholds are reached, these tipping points can re-order the whole system”.  These ecological and geological factors result in social disorder, which makes it even harder for government to do anything, such as putting more money into water and food production infrastructure, which accelerates climate change and energy decline impacts, which leads to even more violence at an accelerating rate until state failure.

2) How BioPhysical factors contribute to systemic collapse in Syria, Yemen, Iraq, Saudi Arabia Egypt, Nigeria


Table 1. Overview of biophysical factors (water scarcity, peak oil, population) for nations Ahmed discusses in this book

The UN defines a region as not having water scarcity above 1700 cubic meters per capita (green).  Water stressed nations have 1000 to 1700 cubic meters per capita (yellow).  Water scarcity is 500-1000 per capita (orange) and absolute water scarcity 0-500 (red).  Countries already experiencing water stress or far worse include Egypt, Jordan, Turkey, Iraq, Israel, Syria, Yemen, India, China, and parts of the United States. Many, though not all, of these countries are experiencing protracted conflicts or civil unrest (Patrick 2015).


The media portray warfare in Syria as due to the extreme repression of President Bashar al-Assad and the support he receives from Russia.  Although there has been awareness that climate change drought played a role in causing conflict, there is no recognition that peak oil was one of the main factors.

Here’s a quick summary of how peak oil and consequent declining revenues from oil production, rising energy and food prices, drought, water scarcity, and population growth led to social unrest, violence, terrorism and war.

It shouldn’t be surprising that peak oil in 1996 triggered the tragic events we see today.  After all, the main source of Syrian revenue came from their production of 610,000 barrels per day (bpd).  By 2010 oil production had declined by half. Falling revenues caused Syria to seek help from the IMF by 2001, and the onerous market reform policies required resulted in higher unemployment and poverty, especially in rural Sunni regions, while at the same time enriching and corrupting ruling minority Alawite private and military elites.

In 2008 the government had to triple oil prices resulting in higher food prices. Food prices rose even more due to the global price of wheat doubling in 2010-2011. On top of that, the 2007-2010 drought was the worst on record, causing widespread crop failures. This forced mass migrations of farming families to cities (Agrimoney 2012; Kelley et al. 2015). The drought wouldn’t have been so bad if half the water hadn’t been wasted and overused previously from 2002 to 2008 (Worth 2010). All of these violence-creating events were worsened by one of the highest birth rates growth on earth, 2.4%.  Most of the additional 80,000 people added in 2011 were born in the hardest-hit drought areas (Sands 2011).

Rinse and repeat.  Social unrest and violence led to war, oil production dropped further, so there is even less money to end unrest with subsidized food and energy or more employment, aid farmers, and build desalination plants.

Syria, once able to feed its people, now depends on 4 million tonnes of grain imports at a time when revenues continue to drop.  Syrian oil production didn’t really take off until 1968 when there were 6.4 million people.  Since oil revenues allowed their population to explode, another 13.6 million have been born.


Like Syria, Iraq’s agricultural production has been reduced by heat, drought, heavy rain, water scarcity, rapid population growth, and the inability of government to import food and provide goods and services as oil revenues decline.  ISIS has worsened matters and filled in the gaps of state-level failure.  Peak oil is likely by 2025.  Or sooner given the ongoing war, lack of investment to keep existing production flowing, and low oil prices (Dipaola 2016).


Like Syria, Iraq, and Iran, Yemen has long faced serious water scarcity issues. The country is consuming water far faster than it is being replenished, an issue that has been identified by numerous experts as playing a key background role in driving local inter-tribal and sectarian conflicts (Patrick 2015).

Yemen is one of the most water-scarce countries in the world. In 2012, the average Yemeni had access to just 140 cubic meters of water a year for all uses and just three years later a catastrophic 86 m3, far below the 1000 m3 level minimum requirement standards.    Cities often only have sporadic access to running water— every other week or so.  Sanaa could become the first capital in the world to run out of water (IRIN 2012).

Yemen reached peak oil production in 2001, declining from 450,000 barrels per day (bpd) to 100,000 bpd in 2014, and will be zero by 2017 (Boucek 2009).   This has led to a drastic decline in Yemen’s oil exports, which has eaten into government revenues, 75% of which had depended on oil exports. Oil revenues also account for 90% of the government’s foreign exchange reserves. The decline in post-peak Yemen state revenues has reduced the government’s capacity to sustain even basic social investments. When the oil runs out … the capacity to sustain a viable state-structure will completely collapse.

Yemen has 25 million people and an exorbitantly high growth rate and predicted to double by 2050. In 2014 experts warned that within the next decade, these demographic trends would demolish the government’s ability to meet the population’s basic needs in education, health and other essential public services. This is already happening to over 15 million people (Qaed 2014).  Over half the Yemeni population lives below the poverty line, and unemployment is at 40% (60% of young people).

To cope, too many people have turned to growing qat (a mild narcotic) on 40% of Yemen’s irrigated land, increasing water use to 3.9 billion cubic meters (bcm), but the renewable water supply is just 2.5 bcm. The 1.4 bcm shortfall is made up by pumping water from underground water reserves that are starting to run dry.

Energy, overpopulation, drought, water scarcity, poverty, and a government unable to do much of anything without oil revenue is in a downward loop of social tensions, local conflicts and even mass displacements.  This in turn adds to the dynamics of the wider sectarian and political conflicts between the government, the Houthis, southern separatists and al-Qaeda affiliated militants.

Violence undermines food security, feeding back into the downward spiraling loop.  Making matters worse is that rain-fed agriculture has dropped by about 30% since 1970, making Yemen ever more food import dependent at a time when revenues are shrinking. The country now imports over 85% of its food, including 90% of its wheat and all of its rice (World Bank 2014). Most Yemenis are hungry because they can’t afford to buy food, which also rises in price when global prices rise.  The rate of chronic malnutrition as high as 58%, second only to Afghanistan (Arashi 2013).

Epidemic levels of government corruption, mismanagement and incompetence, have meant that what little revenue the government receives ends up in Swiss bank accounts.  With revenues plummeting in the wake of the collapse of its oil industry, the government has been forced to slash subsidies while cranking up fuel and diesel prices. This has, in turn, cranked up prices of water, meat, fruits, vegetables and spices, leading to fuel and food riots (Mawry 2015).

Is Saudi Arabia Next?

Summary: Within the next decade, Saudi Arabia will become especially vulnerable to the downward feedback loop of peak oil.  The most likely date for peak oil is 2028 (Ebrahimi 2015). But because the Saudi exports have been going down since 2005 at 1.4% a year as their own population rises and consumes more and more, world exports could end as soon as 2031 (Brown and Foucher 2008).

Saudi revenues will decline to zero, so the Saudis will be less able to buy their way out of food shortages.  Their own food production will drop as well from drought and water scarcity — the kingdom is one of the most water scarce in the world, at 98 m³ per inhabitant per year.

Most water comes from groundwater, 57% of which is non-renewable, and 88% of it goes to agriculture. Desalination plants produce 70% of the kingdom’s domestic water supplies. But desalination is very energy intensive, accounting for more than half of domestic oil consumption. As oil exports run down, along with state revenues, while domestic consumption increases, the kingdom’s ability to use desalination to meet its water needs will decrease (Patrick 2015; Odhiambo 2016).

According to the Export Land Model (ELM) created by Texas petroleum geologist Jeffrey J Brown and Dr. Sam Foucher, the key issue is the timing of when there will be no more exports because the domestic population of oil producing nations is using it all for domestic consumption.   Brown and Foucher showed that the tipping point to watch out for is when an oil producer can no longer increase the quantity of oil sales abroad because of the need to meet rising domestic energy demand.

Saudi Arabia is the region’s largest energy consumer. Domestic demand has increased 7.5% over the last 5 years, mainly due to population growth. Saudi population may grow from 29 million people now to 37 million by 2030, using ever more oil and therefore less available for export.

Declining Saudi peak oil exports will affect every nation on earth that imports Saudi oil, especially top customers China, Japan, the United States, South Korea, and India.  As Saudi oil declines, there will be few other places oil for importing nations to turn to, since other exporting nations will also be using their oil domestically.

A report by Citigroup predicted net exports would plummet to zero in the next 15 years. This means that 80% of money from oil sales the Saudi state depends on are trending downward, eventually terminally (Daya 2016). In this case, the peak oil production date could happen well before 2028, as well as violent social unrest, since so far, Saudi Arabia’s oil wealth, and its unique ability to maintain generous subsidies for oil, housing, food and other consumer items, has kept civil unrest at bay. Energy subsidies alone make up about a fifth of Saudi’s gross domestic product. But as revenues are increasingly strained by decreasing exports after peak oil, the kingdom will need to slash subsidies (Peel 2013).  Even now a quarter of the Saudi’s live in poverty, and unemployment is 12%, especially young people who have a 30% unemployment level. [Saudi Arabia recently started taxing fuel at the bowsers]

Saudi Arabia is experiencing climate change as temperatures rise in the interior and far less rainfall occurs in the north.  By 2040, local average temperatures are expected to increase by as much as 4 °C at the same time rain levels are falling, resulting in more extreme weather events like the 2010 Jeddah flooding when a year of rain fell in 4 hours.  The combination could dramatically impact agricultural productivity, which is already facing challenges from overgrazing and unsustainable industrial agricultural practices leading to accelerated desertification (Chowdhury 2013).

80% of Saudi Arabia’s food requirements are purchased through heavily subsidized imports.  Without the protection of oil revenue subsidies, and potential rises in the global prices of food (Taha 2014), the Saudi population would be heavily impacted. But with net oil revenues declining to zero—potentially within just 15 years—Saudi Arabia’s capacity to finance continued food imports will be in question.


Like Syria, Egypt has had increasing problems paying for food, goods, and services after peak oil in 1993 while at the same time population keeps growing.   Worse yet, there are no oil revenues at all, because since 2010 the population has been using more oil than what is produced and has had to import oil, with no oil revenues to pay for food, goods, and services.  Two-thirds of Egypt’s oil reserves have likely been depleted and oil produced now is declining at 3.4% a year.

Nor are there revenues coming from natural gas sales made up for the loss of oil revenues.  Over the past decade domestic use nearly doubled to consumption of nearly all the production (Kirkpatrick 2013a).

The Egyptian population since 2000 has grown 21% to 88 million people and isn’t slowing down, with 20 million more expected over the next 10 years.  A quarter are children half of them living in poverty and unemployed  (EI 2012) at the same time the elites have grown wealthier from IMF and World Bank policies.

In the 1960s there were 2800 cubic meters of water per capita, now just 660 – well below the international standard of water poverty of 1000 per person (Sarant 2013).   Water scarcity and population growth lave led to tens of thousands of hectares of farmland to be abandoned.  There is some water that can be obtained, but most farmers can’t afford the price of diesel fuel to power pumps  (Kirkpatrick 2013b)

Egypt was self-sufficient in food production in the 1960s but now imports 70% of its food (Saleh 2013). One of the many reasons Mubarak fell was the doubling of wheat prices in 2011 since half of Egypt’s people depend on food rations.  But the democratically-elected Muslim Brotherhood party and their leader Morsi couldn’t alleviate declining government revenues due to the biophysical realities of food, water, and energy shortages either.  Morsi desperately tried to get a $4.8 billion IMF loan by slashing energy subsidies and raising sales taxes, but the economic crisis made it hard to make the payments and wheat imports dropped to a third of what was imported a year ago.

This led to Morsi being ousted by army chief Abdul Fateh el-Sisi in a coup.  Like his predecessors, El-Sisi has also been unable to meet IMF demands for increased hydrocarbon production and has resorted to unprecedented levels of brutal force to crush protests. He has also rationed electricity, which led to key industries cutting production, leading to further economic losses, declining exports and foreign reserves.  Without more money, energy companies can’t be paid, so energy production continues to drop, and debt goes up, reducing the value of Egyptian currency and higher costs for imports and shortages of energy for industrial production. Egypt’s energy and economy find themselves caught in an amplifying feedback loop (Barron 2016).

How Boko Haram arose in Nigeria

Nigeria’s climate change has led to water and land shortages from desertification, which in turn has led to illness, hunger, and unemployment followed by conflict (Sayne 2011).

Perhaps the Boko Haram wouldn’t have arisen, if the Maitatsine sect in northern Nigeria hadn’t been hit so hard by ecological disasters.  To survive they fanned out to search for food, water, shelter, and work (Sanders 2013).  Niger and Chad refugees from drought and floods also became Boko Haram foot soldiers, some 200,000 displaced farmers and herdsmen.

In northern Nigeria, where Boko Haram is from, about 70% of the population subsists on less than a dollar a day. As noted by David Francis, one of the first western reporters to cover Boko Haram: “Most of the foot soldiers of Boko Haram aren’t Muslim fanatics; they’re poor kids who were turned against their corrupt country by a charismatic leader” (Francis 2014)

The Nigerian military sees a correlation between regional climatic events, and an upsurge in extremist violence: “It has become a pattern; we saw it happen in 2006; it happened again in 2008 and in 2010. President Obasanjo had to deploy the military in 2006 to Yobe State, Borno State and Katsina State. These are some of the states bordering Niger Republic and today they are the hotbeds of the Boko Haram” (Mayah 201).

Drought caused desertification is decreasing food production, in turn leading to “economic decline; population displacement and disruption of legitimized authoritative institutions and social relations.” The net effect was an acceleration of the attractiveness of groups like “Boko Haram and other forms of Jihadi ideology,” resulting in escalating “herder-farmer clashes emanating from the north since 1980s” (Onyia 2015).

The rapid spread of Boko Haram also coincided with Lake Chad’s shrinking from 25,000 square km in 1963 to less than 2500 square km today, mainly due to climate change. At this rate, Lake Chad is will dry up in 20 years, and has already caused millions of people to lose their livelihoods.

The government has exacerbated problems by cutting fuel subsidies, which led to fuel shortages, angering the public who engaged in civil unrest  (Omisore 2014).

A senior Shell official said that crude oil production decline rates are as high as 15–20%.  But Nigeria doesn’t have the money to explore to find more oil to offset this high decline rate. Nigeria’s petroleum resources department said that Nigeria had reached a plateau of production in the Niger Delta and were already going down (Ahmed 2014).

About $15 billion of investment is required just to maintain current production levels and compensate for a natural decline in production of about 250,000 b/d each year. A 2011 study by two Nigerian scholars concluded that “there is an imminent decline in Nigeria’s oil reserve since peaking could have occurred or just about to occur (Akuru and Okoro 2011). A 2013 report backs this up, finding that Nigeria’s crude oil production has decreased since its peak in 2005, largely due to the impact of internal conflicts, leading to the withdrawal of oil companies and lack of investments. Since then production has fluctuated along a plateau. The UK Department for International Development report noted that new offshore fields might bring additional oil on-stream, surpassing the 2005 peak—but also noted that rising domestic demand “at some point in the future may cut into the amount of oil available for export” (Hall et al. 2014).

POPULATION. With Nigeria’s population expected to rise from 160 to 250 million by 2025 and oil accounting for some 96% of export revenue as well as 75% of government revenue, the state has resorted to harsh austerity measures. Sharp reductions in public spending, power cuts, fuel shortages and conditional new loans will probably widen economic inequalities and further stoke the grievances that feed groups like Boko Haram in the North. With domestic oil production decline undermining Nigeria’s oil export revenues and consequent fuel subsidy cuts, the public grows poorer and increases the number of young men more likely to join Islamist terrorist groups.

3) Predictions of when collapse will begin in Middle East, India, China, Europe, Russia, North America

When will  Middle-East oil producing nations fail?

Ahmed says that so far after peak oil production, Middle-Eastern economies have declined as revenues declined, leading to systemic state-failure in roughly 15 years, more or less, depending on how hard hit a nation was by additional (climate-change) factors such as drought, water scarcity, food prices, and overpopulation.

Saudi Arabia, and much of the rest of Arabian Gulf peninsula, may experience state-failure well within 10 to 20 years. If forecasts of Saudi oil depletion are remotely accurate, then by 2030 the country will simply not exist as we know it. Coupled with the accelerating impacts of climate-induced water scarcity, the Kingdom is bound to begin experiencing systemic state-failure at most within 20 years, and probably much earlier.

Marin Katusa, chief energy strategist at Casey Research, reports that “many Middle Eastern countries may stop exporting oil and gas altogether within the next few years, while some already have” (Katusa 2016). Oil analysts at Lux Research estimate that OPEC oil reserves may have been overstated by as much as 70%. True OPEC reserves could be as low as 429 billion barrels, which could mean a global net export crunch as early as 2020 (Lazenby 2016).

The period from 2020 to 2030 will see Middle East oil exporters experiencing a systemic convergence of energy and food crises.

When will India & China collapse?

India and China are widely assumed to be the next superpowers, but at this stage of energy and resource depletion, can’t possibly mimic the exponential growth of the Western world.

India, South Asia, and China face enormous ecological challenges Irregularities in the pattern of monsoon rains and drought are likely to lower food production and increase water scarcity, while higher temperatures will increase the range of vector-borne diseases such as malaria and become prevalent year-round (DCDC 2013). As sea levels rise, millions of people will be displaced permanently.

These impacts will unravel regional political and economic order well within 20 years and manifest at first as civil unrest.  Depending on how the Indian and Chinese states respond, it is likely that these outbreaks of domestic disorder will become more organized, and will eventually undermine state territorial integrity before 2030.  Near-term growth will further undermine environmental health and deplete resources, making these nations even more vulnerable to climate and food crises.

European and Russian collapse timeframe

Within Europe, resource depletion has meant that the European Union as a whole has become increasingly dependent on energy imports from Russia, the Middle East, Central Asia and Africa. Yet exports from these regions will become tighter as major oil producers approach production limits.

The geopolitical turmoil that has unfolded in Ukraine provides a compelling indication that such processes are rapidly moving from the periphery of the global system into the core. For the most part, the Euro-Atlantic core—traditionally representing the most powerful sections of the world system—has insulated itself from global crisis convergence impacts by diversifying energy supply sources. However, there is only so much that diversification can achieve when the total energetic and economic quality of global hydrocarbon resource production is declining.


Faced with these converging crises, the Euro-Atlantic core will continue to see the creation of cheap debt-money through quantitative easing as an immediate solution to generate emergency funds to stabilize the financial system and shore-up ailing industries. This will likely play out in one of these business-as-usual scenarios:

  1. The lower resource quality (EROI) of the global energy system may act as a fundamental geophysical ceiling on the capacity of the economy to grow. It may act as an invisible brake on growth in demand, so fossil fuel prices would remain at chronically low levels, endangering the profitability of the fossil fuel industries. This would lead to an acceleration of the demise of the fossil fuel industries, which could lead to debt-defaults across industries in the financial system. Declining hydrocarbon energy production would cause a self-reinforcing recessionary economic process. This would escalate vulnerability to water, food and energy crises and hugely strain the capacity of European and American states to deliver goods and services to even their own populations, and other nations dependent as much on importing food as they are oil.
  2. Scarcity of net exports on the world market may raise oil prices and provide some sectors of ailing fossil fuel industries to be profitable again. But previous slashing of investments and cutbacks in exploration will mean that only the most powerful sections of the industry would be able to capitalize on this, which means production is unlikely to return to former high levels. Price spikes would trigger economic recession, causing a drop in demand, while lower production levels would exacerbate the economy’s inability to grow substantially, if at all. In effect, the global economy would likely still experience a self-reinforcing recessionary economic process.

In both scenarios, escalating economic crises are likely to invite the Euro-Atlantic core to respond by using debt-money to shore-up as much of the existing core financial and energy industries as possible. Prices spikes and shortages in water, food and energy would be experienced by general populations as a dramatic lowering of purchasing power, leading to an overall decrease in quality of life, an increase in poverty, and a heightening of inequality. This would undermine their internal cohesion, giving rise to new divisive, nationalist and xenophobic movements, and lead states into a tightening spiral of militarization to police domestic order. As instability in the Middle East and elsewhere intensifies, manifesting in further unrest, political violence and terrorist activity, states will also be drawn increasingly into short- sighted military solutions. In particular, scarcity of net oil exports on the world market will heighten geopolitical and military competition to control and/or access the world’s remaining hydrocarbon energy resources. With the Middle East still holding the vast bulk of the world’s reserves, the region will remain a central flashpoint for such competition, even as major producers such as Saudi Arabia approach systemic state-failure due to reaching inevitable production declines.

It is difficult to avoid the conclusion that as we near 2045, the European and American projects will face escalating internal challenges to their internal territorial integrity, increasing the risk of systemic state-failure. Likewise, after 2030, Europe, India, China (and other Asian nations) will begin to experience symptoms of systemic state-failure.


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EROI explained and defended by Charles Hall, Pedro Prieto, and others

29 05 2017

Yes, another post on ERoEI……  why do I bang on about this all the time…?  Because it is the defining issue of our time, the issue that will precipitate Limits to Growth to the forefront, and eventually collapse civilisation as we know it.

There are two ways to collapse civilisation:
1) don’t end the burning of oil
2) end burning oil

And if that wasn’t enough, read this from 

While the U.S. oil and gas industry struggles to stay alive as it produces energy at low prices, there’s another huge problem just waiting around the corner.  Yes, it’s true… the worst is yet to come for an industry that was supposed to make the United States, energy independent.  So, grab your popcorn and watch as the U.S. oil and gas industry gets ready to hit the GREAT ENERGY DEBT WALL.

So, what is this “Debt Wall?”  It’s the ever-increasing amount of debt that the U.S. oil and gas industry will need to pay each year.  Unfortunately, many misguided Americans thought these energy companies were making money hand over fist when the price of oil was above $100 from 2011 to the middle of 2014.  They weren’t.  Instead, they racked up a great deal of debt as they spent more money drilling for oil than the cash they received from operations.


alice_friedemannAlice Friedemann  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts: Practical Prepping, KunstlerCast 253, KunstlerCast278, Peak Prosperity , XX2 report ]

Questions about EROI at 2015-2017

Khalid Abdulla, University of Melbourne asks:  Why is quality of life limited by EROI with renewable Energy? There are many articles explaining that the Energy Return on (Energy) Invested (EROI, or EROEI) of the sources of energy which a society uses sets an upper limit on the quality of life (or complexity of a society) which can be enjoyed (for example this one).  I understand the arguments made, however I fail to understand why any energy extraction process which has an external EROI greater than 1.0 cannot be “stacked” to enable greater effective EROI.  For example if EROI for solar PV is 3.0, surely one can get an effective EROI of 9.0 by feeding all output energy produced from one solar project as the input energy of a second? There is obviously an initial energy investment required, but provided the EROI figure includes all installation and decommissioning energy requirements I don’t understand why this wouldn’t work. Also I realise there are various material constraints which would come into play; but why does this not work from an energy point of view?

Charles A. S. Hall replies:  As the person who came up with the term  EROI in the 1970scharles-hall (but not the concept: that belongs to Leslie White, Fred Cotrell, Nicolas Georgescu Roegan and Howard Odum) let me add my two cents to the existing mostly good posts.  The problem with the “stacked” idea is that if you do that you do not deliver energy to society with the first (or second or third) investment — it all has to go to the “food chain” with only the final delivering energy to society.  So stack two EROI 2:1 technologies and you get 4:2, or the same ratio when you are done.

The second problem is that you do not need just 1.1:1 EROI to operate society.  We (Hall, Balogh and Murphy 2009) studied how much oil would need to be extracted to drive a truck including the energy to USE the energy.  So we added in the energy to get, refine and deliver the oil (about 10% at each step) and then the energy to build and maintain the roads, bridges, vehicles and so on.  We found you needed to extract 3 liters at the well head to use 1 liter in the gas tank to drive the truck, i.e. an EROI of 3:1 was needed.

But even this did not include the energy to put something in the truck (say grow some grain)  and also, although we had accounted for the energy for the depreciation of the truck and roads,  but not the depreciation of the truck driver, mechanic, street mender, farmer etc.: i.e. to pay for domestic needs, schooling, health care etc. of their replacement.    Pretty soon it looked like we needed an EROI of at least 10:1 to take care of the minimum requirements of society, and maybe 15:1 (numbers are very approximate) for a modern civilization. You can see that plus implications in Lambert 2014.

I think this and incipient “peak oil” (Hallock et al.)  is behind what is causing most Western economies to slow or stop  their energy and economic growth.   Low EROI means more expensive oil (etc) and lower net energy means growth is harder as there is less left over after necessary “maintenance metabolism”. This is explored in more depth in Hall and Klitgaard book  “Energy and the wealth of Nations” (Springer).

Khalid Abdulla asks: I’m still struggling a little bit with gaining an intuition of why it is not possible to stack/compound EROI. If I understand your response correctly part of the problem is that while society is waiting around for energy from one project to be fed into a second project (etc.) society needs to continue to operate (otherwise it’d all be a bit pointless!) and this has a high energy overhead.  I understand that with oil it is possible to achieve higher external EROI by using some of the oil as the main source of energy for extraction/processing. Obviously this means less oil is delivered to the outside world, but it is delivered at a higher EROI which is more useful. I don’t understand why a similar gearing is not possible with renewables.  Is it something to do with the timing of the input energy required VS the timing of the energy which the project will deliver over its life?

Charles A. S. Hall replies: Indeed if you update the QUALITY of the energy you can come out “ahead”.  My PhD adviser Howard Odum wrote a lot about that, and I am deeply engaged in a discussion about the general meaning of Maximum Power (a related concept) with several others.  So you can willingly turn more coal into less electricity because the product is more valuable.   Probably pretty soon (if we are not already) we will be using coal to make electricity to pump out ever more difficult oil wells….

I have also been thinking about EROI a lot lately and about what should the boundaries of analysis be.  One of my analyses is available in the book “Spain’s PV revolution: EROI and.. available from Springer or Amazon.

To me the issue of boundaries remains critical. I think it is proper to have very wide boundaries. Let’s say we run an economy just on a big PV plant. If the EROI is 8:1 (which you might get, or higher, from examining just the modules) then it seems like you could make your society work. But let’s look closer. If you add in security systems, roads, and financial services and the EROI drops to 3:1 then it seems more problematic. But if you add in labor (i.e. the energy it takes to make the food, housing etc that labor buys with its salaries, calculated from national mean energy intensities times salaries for all necessary workers) it might drop to 1:1. Now what this means is that the energy from the PV system will support all the purchases of the workers that are building/maintaining the PV system, let’s say 10% will be taken care of, BUT THERE WILL BE NO PRODUCTION OF GOODS AND SERVICES for the rest of the population. To me this is why we should include salaries of the entire energy delivery system (although I do not because it remains so controversial). I think this concept, and the flat oil production in most of the world, is why we need to think about ALL the resources necessary to deliver energy from a project/ technology/nation.”

Khalid Abdulla: My main interest is whether the relatively low EROI of renewable energy sources fundamentally limits the complexity of a society that can be fueled by them.

Charles A. S. Hall replies: Perhaps the easiest way to think about this is historical: certainly we had lots of sunshine and clever minds in the past.  But we did not have a society with many affluent people until the industrial revolution, based on millions of years of accumulated net energy from sunshine. An affluent king, living a life of affluence less than most people in industrial societies now, was supported by the labor of thousands or millions of serfs harvesting solar energy.  The way to get rich was to exploit the stored solar energy of other societies through war (see Plutarch or Tainter’s the collapse of complex societies).

But most renewable energy (good hydropower is an exception) are low EROI or else seriously constrained by intermittency. Look at all the stuff required to support “free” solar energy. We (and Palmer and Weisbach independently) found EROIs of about 3:1 at best when all costs are accounted for.

The lower the EROI the larger the investment needed for the next generation: that is why fossil fuels with EROIs of 30 or 50 to one have led to such wealth: the other 29 or 49 have been deliverable to society to do economic work or that can be invested in getting more fossil fuels.  If the EROI is 2:1 obviously half has to go into the next generation for the growth and much less is delivered to society.   One can speculate or fantasize about what one can do with some future technology but having been in the energy business for 50 years I have seen many come and go.  Meanwhile we still get about 75-80% of our energy from fossil fuels (with their attendant high EROI).

Obviously we could have some kind of culture with labor intensive, low energy input systems if people were willing to take a large drop in their life style.  I fear the problem might be that people would rather go to war than accept a decline in life style.

Lee’s assessment of the traditional  Kung hunter gatherer life style implies an EROI of 10:1 and lots of leisure (except during droughts–which is the bottleneck).  Past agricultural societies obviously had a positive EROI based on human labor input — otherwise they would have gone extinct.  But it required something like a hectare per person.  According to Jared Diamond cultures became more complex with agriculture vs hunter gatherer.

The best assessment I have about EROI and quality of life possible is in:  Lambert, Jessica, Charles A.S. Hall, Stephen Balogh, Ajay Gupta, Michelle Arnold 2014 Energy, EROI and quality of life. Energy Policy Volume 64:153-167 — It is open access.  Also our book:  Hall and Klitgaard, Energy and the wealth of nations.   Springer

At the moment the EROI of contemporary agriculture is 2:1 at the farm gate but much less, perhaps one returned for 5 invested  by the time the food is processed, distributed and prepared (Hamilton 2013).

As you can see from these studies to get numbers with any kind of reliability requires a great deal of work.

Sourabh Jain asks: Would it be possible to meet the EROI goal of, say for example 10:1, in order to maintain our current life style by mixing wind, solar and hydro? Can we have an energy system various renewable energy sources of different EROI to give a net EROI of 10:1?

Charles A. S. Hall replies:  Good question.  First of all I am not sure that we can maintain our current life style on an EROI of 10:1, but let’s assume we can (Hall 2014, Lambert 2014).  We would need liquid fuels of course for tractors , airplanes and ships — I cannot quite envision running those machines on electricity.

The problem with wind is that it tends to blow only 30% of the time, so we would need massive storage.  To the degree that we can meet intermittency with hydro that is good, although it is tough on the fish and insects below the dam.  The energy cost of that would be huge, prohibitive with respect to batteries, huge with respect to pumped storage, and what happens when the wind does not blow for two weeks, as is often the case?

Solar PV may or may not have an EROI of 10:1 (I assume you know of the three studies that came up with about 3:1: Prieto and Hall, Graham Palmer, Weisbach — but there are others higher and certainly the price and hence presumed energy cost is coming down –but you should also know that many structures are lasting only 12, not 25 years) — — this needs to be sorted out ).  But again the storage issue will be important.   (Palmer’s rooftop study included storage).

These are all important issues.  So I would say the answer seems to be no, although it might work well for let’s say half of our energy use.   As time goes on that percentage might increase (or decrease).

Jethro Betcke writes: Charles Hall: You make some statements that are somewhat inaccurate and could easily mislead the less well informed: Wind turbines produce electricity during 70 to 90% of the time. You seems to have confused capacity factor with relative time of operation.  Using a single number for the capacity factor is also not so accurate. Depending on the location and design choices the capacity factor can vary from 20% to over 50%.  With the lifetime of PV systems you seem to have confused the inverter with the system as a whole. The practice has shown that PV modules last much longer than the 25 years guaranteed by the manufacturer. In Oldenburg we have a system from 1976 that is still producing electricity and shows little degradation loss [1]. Inverters are the weak point of the system and sometimes need to be replaced. Of course, this would need to be considered in an EROEI calculation. But this is something different than what you state. [1]

Charles A. S. Hall replies: I resent your statement that I am misleading anyone.   I write as clearly, accurately and honestly as I can, almost entirely in peer reviewed publications, and always have. I include sensitivity analysis while acknowledging legitimate uncertainty (for example p. 115 in Prieto and Hall).  Some people do not like my conclusions. But no one has shown with explicit analysis that Prieto and Hall is in any important way incorrect.  At least three other peer reviewed papers) (Palmer 2013, 2014; Weisbach et al. 2012 and Ferroni and Hopkirk (2016) have come up with similar conclusions on solar PV.  I am working on the legitimate differences in technique with legitimate and credible solar analysts with whom I have some differences , e.g. Marco Raugei.  All of this will be detailed in a new book from Springer in January on EROI.

First I would like to say that the bountiful energy blog post is embarrassingly poor science and totally unacceptable. As one point the author does not back his (often erroneous) statements with references. The importance of peer review is obvious from this non peer-reviewed post.

Second I do not understand your statement about wind energy producing electricity 70-90 percent of the time.  In England, for example, it is less than 30 percent (Jefferson 2015).

Third your statement on the operational lifetime of actual operational PV systems is incorrect. Of course one can find PV systems still generating electricity after 30 years.  But actual operational systems requiring serious maintenance (and for which we do not yet have enough data) often do not last more than 18-20 years, For example Spain’s “Flagship ” PV plant (which was especially well maintained) is having all modules replaced and treated as “electronic trash” after 20 years :    Ferroni and Hopkirk found an 18 year lifespan in Switzerland.

Pedro Prieto replies: The production of electricity of wind turbines the 70-90% of time is a very inaccurate quote. Every wind turbine has a nominal capacity in MW. The important factor is not how many hours they move the blades at any working regime, but how many EQUIVALENT peak hours they work at the end of the year. That is, to know how much real energy they generate within one year. This is what the industry uses as a general and accurate measurement and it is the load factor or capacity factor.

Of course, this factor may change from the location or the design choices, but there is an incontrovertible figure: when we take the total world installed wind power in MW (435 Gw as of 2015) from January 2004 up to December 2015 and the total energy generated in Twh (841 Twh as of 2015) in the same period and calculate the averaged capacity factor, the resulting figure slightly varies around 15% AT WORLD LEVEL. This is REAL LIFE, much more than your unsupported theoretical figures of 20 to over 50% capacity factor in privileged wind fields for privileged wind turbines.

Interesting enough, some countries like the US, United Kingdom or Spain have capacity factors reaching 20% in the last years, but the world total installed capacity has not really improved so much in the last ten years, despite of theoretically much more efficient wind turbines (i.e. multipole with permanent magnets), very likely for the reasons that good wind fields in some countries were already used up. Other countries like China, India or France show, on the contrary very poor capacity factors even in 2015.


With respect to the lifetime of the PV systems, nor Charles Hall neither myself have confused the inverter lifetime with the solar PV system as a whole. The practice has not shown that modules have lasted more than 25 years in general over the world installed base. The fact that one single system is still working after more than 30 years of operation, if it was carefully manufactured with high quality materials, and was well cared, cleaned and free from environmental pollutants, like several modules we have also in Spain, does not mean AT ALL that the massive deployments (about 250 GW as of 2015) are going to last over 25 years.

I have to clarify also a common mistake: almost all main world manufacturers guarantee a maximum of 25 years (NOT 30) to the modules, but this is the “power” guarantee. This means that they “guarantee” (assuming they will be still alive as companies in 25 years from the sales period, something which is rather difficult for many of the manufacturers that went out of business in shorter periods of time than the guarantee of their modules. Of course, this guarantee is given with the subsequent module degradation specs over time, which in many cases has been proved be higher than specified.

But not only that. Most of the module manufacturers have a second guarantee: the “material’s guarantee”. And this is offered for between 5 and 10 years. This is the one by which the manufacturer guarantees the module replacement if it fails. Beyond that date, if the module fails, the buyer has to buy a new one (if still being manufactured, with the same specs power and size), because the second guarantee SUPERSEDES the first one.

Last but not least, there is already quite a large experience in Europe (Germany, France, Switzerland, Spain, Italy, etc.) of the number of faulty modules that have been decommissioned in the last years (i.e. period 2010-2015) as for instance, accounted by PV-Cycle, a company specialized in decommission and recycling modules in Europe. As the installed base is well known in volumes per year, it is relatively easy to calculate, in a very conservative (optimistic) mode the percentage over the total that failed and the number of years that lasted in this period and the average years for that sample that died before the theoretical 25-30 years lifetime and make the proportion on the total installed base.

The study conducted by Ferroni and Hopkirk gives an approximate lifetime for the installed base of lower than 20 years. And this is Europe, where the maintenance is supposed to be much better made than in the rest of the developing world. And the figures of failed modules given by PV-Cycle did not include the many potential plants that did not deliver their failed modules to this company for recycling

What it seems impossible for some academic people is to recognize that perhaps the “standards” they adhered to (namely IEA PVPS Task 12 in this case) and through which they published a big number of papers, should be revisited, because they lacked some essential measurements that could help to understand why renewables are not replacing fossils at the required speed, despite having claimed for years that they reached grid parity or that their Levelized Cost of Electricity (LCOE) is cheaper than coal, nuclear or gas. 

I am afraid that peer reviewed authors are not immune to having preconceived ideas even more difficult to eradicate. Excessive pride, lack of humility, considerable distance between the academy (i.e. imagined solar production levels versus real data from actual solar PV plants and lack of a systemic vision due to an excess of specialization are the main hurdles. Of course in my humble opinion.


  • Hall, C.A.S., Balogh, S., Murphy, D.J.R. 2009. What is the Minimum EROI that a Sustainable Society Must Have? Energies, 2: 25-47.
  • Hall, Charles  A.S., Jessica G.Lambert, Stephen B. Balogh. 2014.  EROI of different fuels  and the implications for society Energy Policy Energy Policy. Energy Policy, Vol 64 141-52
  • Hallock Jr., John L., Wei Wu, Charles A.S. Hall, Michael Jefferson. 2014. Forecasting the limits to the availability and diversity of global conventional oil supply: Validation. Energy 64: 130-153. (here)
  • Hamilton A , Balogh SB, Maxwell A, Hall CAS. 2013. Efficiency of edible agriculture in Canada and the U.S. over the past 3 and 4 decades. Energies 6:1764-1793.
  • Lambert, Jessica, Charles A.S. Hall, et al.  Energy, EROI and quality of life.  Energy Policy

Blindspots and Superheroes

14 05 2017

I haven’t heard much from Nate Hagens in recent times, but when he does come out of the woodwork, his communications skills certainly come through….. We who follow the collapse of the world as we know it probably know most of what’s in this admirable presentation, but it is absolutely captivating, and you will learn something new, or see it in a different perspective. It’s an hour and twenty minutes long (I actually drove down town to use the library’s free wi-fi to download it, my mobile phone data allowance won’t stretch to a quarter Gig for one video!), so make yourself a cup of your favourite poison, and enjoy the show……

Nathan John Hagens is a former Wall Street analyst, turned college professor and systems-science advocate. Nate has an MBA with Honors from the University of Chicago and a PhD in Natural Resources/Energy from the University of Vermont. He is on the Boards of Post Carbon Institute, Institute for Integrated Economic Research, and Institute for the Study of Energy and our Future. He teaches a class at the University of Minnesota called “Reality 101 – A Survey of the Human Predicament”.

Nate, partnering with environmental strategist DJ White, has created the “Bottleneck Foundation”, a nonprofit initiative designed to help steer towards better human and ecological futures than would otherwise be attained. The “Bottlenecks” are the cultural, biological, and technological challenges which will arise as energy and terrestrial biomass begin their long fall back toward sustainable-flow baselines this century. The “Foundation” part of the name is a tip of the hat to Asimov’s “Foundation” series of novels, about an organization designed to mitigate the negative effects of societal simplification. BF is dedicated to making “synthesis science” accessible to a new generation of engaged people, through educational materials and projects which demonstrate that reality is a lot different from our culture currently thinks it is.

Why I am still anti Lithium and EV

13 04 2017

Originally published at Alice Friedemann’s excellent blog,

[This is by far the best paper explaining lithium reserves, lithium chemistry, recycling, political implications, and more. I’ve left out the charts, graphs, references, and much of the text, to see them go to the original paper in the link below.]


I personally don’t think that electric cars will ever be viable because battery development is too slow, and given that oil can be hundreds of times more energy dense than a battery of the same weight, the laws of physics will prevent them from ever achieving enough energy density — see my post at Who Killed the Electric Car. (and also my more-up-to-date version and utility-scale energy storage batteries in my book When Trains Stop Running: Energy and the Future of Transportation.  Some excerpts from my book about lithium and energy storage:

Li-ion energy storage batteries are more expensive than PbA or NaS, can be charged and discharged only a discrete number of times, can fail or lose capacity if overheated, and the cost of preventing overheating is expensive. Lithium does not grow on trees. The amount of lithium needed for utility-scale storage is likely to deplete known resources (Vazquez, S., et al. 2010. Energy storage systems for transport and grid applications. IEEE Transactions on Industrial Electronics 57(12): 3884).

To provide enough energy for 1 day of storage for the United states, li-ion batteries would cost $11.9 trillion dollars, take up 345 square miles and weigh 74 million tons (DOE/EPRI. 2013. Electricity storage handbook in collaboration with NRECA. USA: Sandia National Laboratories and Electric Power Research Institute) 

Barnhart et al. (2013) looked at how much materials and energy it would take to make batteries that could store up to 12 hours of average daily world power demand, 25.3 TWh. Eighteen months of world-wide primary energy production would be needed to mine and manufacture these batteries, and material production limits were reached for many minerals even when energy storage devices got all of the world’s production (with zinc, sodium, and sulfur being the exceptions). Annual production by mass would have to double for lead, triple for lithium, and go up by a factor of 10 or more for cobalt and vanadium, driving up prices. The best to worst in terms of material availability are: CAES, NaS, ZnBr, PbA, PHS, Li-ion, and VRB (Barnhart, C., et al. 2013. On the importance of reducing the energetic and material demands of electrical energy storage. Energy Environment Science 2013(6): 1083–1092). ]

Vikström, H., Davidsson, S., Höök, M. 2013. Lithium availability and future production outlooks. Applied Energy, 110(10): 252-266. 28 pages



Lithium is a highly interesting metal, in part due to the increasing interest in lithium-ion batteries. Several recent studies have used different methods to estimate whether the lithium production can meet an increasing demand, especially from the transport sector, where lithium-ion batteries are the most likely technology for electric cars. The reserve and resource estimates of lithium vary greatly between different studies and the question whether the annual production rates of lithium can meet a growing demand is seldom adequately explained. This study presents a review and compilation of recent estimates of quantities of lithium available for exploitation and discusses the uncertainty and differences between these estimates. Also, mathematical curve fitting models are used to estimate possible future annual production rates. This estimation of possible production rates are compared to a potential increased demand of lithium if the International Energy Agency’s Blue Map Scenarios are fulfilled regarding electrification of the car fleet. We find that the availability of lithium could in fact be a problem for fulfilling this scenario if lithium-ion batteries are to be used. This indicates that other battery technologies might have to be implemented for enabling an electrification of road transports.


  • Review of reserves, resources and key properties of 112 lithium deposits
  • Discussions of widely diverging results from recent lithium supply estimates
  • Forecasting future lithium production by resource-constrained models
  • Exploring implications for future deployment of electric cars


Global transportation mainly relies on one single fossil resource, namely petroleum, which supplies 95% of the total energy [1]. In fact, about 62% of all world oil consumption takes place in the transport sector [2]. Oil prices have oscillated dramatically over the last few years, and the price of oil reached $100 per barrel in January 2008, before skyrocketing to nearly $150/barrel in July 2008. A dramatic price collapse followed in late 2008, but oil prices have at present time returned to over $100/barrel. Also, peak oil concerns, resulting in imminent oil production limitations, have been voiced by various studies [3–6].

It has been found that continued oil dependence is environmentally, economically and socially unsustainable [7].

The price uncertainty and decreasing supply might result in severe challenges for different transporters. Nygren et al. [8] showed that even the most optimistic oil production forecasts implied pessimistic futures for the aviation industry. Curtis [9] found that globalization may be undermined by peak oil’s effect on transportation costs and reliability of freight.

Barely 2% of the world electricity is used by transportation [2], where most of this is made up by trains, trams, and trolley buses.

A high future demand of Li for battery applications may arise if society choses to employ Li-ion technologies for a decarbonization of the road transport sector.

Batteries are at present time the second most common use, but are increasing rapidly as the use of li-ion batteries for portable electronics [12], as well as electric and hybrid cars, are becoming more frequent. For example, the lithium consumption for batteries in the U.S increased with 194 % from 2005 to 2010 [12]. Relatively few academic studies have focused on the very abundance of raw materials needed to supply a potential increase in Li demand from transport sector [13]. Lithium demand is growing and it is important to investigate whether this could lead to a shortfall in the future.


[My comment: utility scale energy storage batteries in commercial production are lithium, and if this continues, this sector alone would quickly consume all available lithium supplies: see Barnhart, C., et al. 2013. On the importance of reducing the energetic and material demands of electrical energy storage. Energy Environment Science 2013(6): 1083–1092.]

Aim of this study

Recently, a number of studies have investigated future supply prospects for lithium [13–16]. However, these studies reach widely different results in terms of available quantities, possible production trajectories, as well as expected future demand. The most striking difference is perhaps the widely different estimates for available resources and reserves, where different numbers of deposits are included and different types of resources are assessed. It has been suggested that mineral resources will be a future constraint for society [17], but a great deal of this debate is often spent on the concept of geological availability, which can be presented as the size of the tank. What is frequently not reflected upon is that society can only use the quantities that can be extracted at a certain pace and be delivered to consumers by mining operations, which can be described as the tap. The key concept here is that the size of the tank and the size of the tap are two fundamentally different things.

This study attempts to present a comprehensive review of known lithium deposits and their estimated quantities of lithium available for exploitation and discuss the uncertainty and differences among published studies, in order to bring clarity to the subject. The estimated reserves are then used as a constraint in a model of possible future production of lithium and the results of the model are compared to possible future demand from an electrification of the car fleet. The forecasts are based on open, public data and should be used for estimating long term growth and trends. This is not a substitute for economical short-term prognoses, but rather a complementary vision.

Data sources

The United States Geological Survey (USGS) has been particularly useful for obtaining production data series, but also the Swedish Geological Survey (SGU) and the British Geological Survey (BGS) deserves honourable mention for providing useful material. Kushnir and Sandén [18], Tahil [19, 20] along with many other recent lithium works have also been useful. Kesler et al. [21] helped to provide a broad overview of general lithium geology.

Information on individual lithium deposits has been compiled from numerous sources, primarily building on the tables found in [13–16]. In addition, several specialized articles about individual deposits have been used, for instance [22–26]. Public industry reports and annual yearbooks from mining operators and lithium producers, such as SQM [27], Roskill [28] or Talison Lithium [29], also helped to create a holistic data base.

In this study, we collected information on global lithium deposits. Country of occurrence, deposit type, main mineral, and lithium content were gathered as well as published estimates for reserves and resources. Some deposits had detailed data available for all parameters, while others had very little information available. Widely diverging estimates for reserves and resources could sometimes be found for the same deposit, and in such cases the full interval between the minimum and maximum estimates is presented. Deposits without reserve or resource estimates are included in the data set, but do not contribute to the total. Only available data and information that could be found in the public and academic spheres were compiled in this study. It is likely that undisclosed and/or proprietary data could contribute to the world’s lithium volume but due to data availability no conclusions on to which extent could be made.

Geological overview

In order to properly estimate global lithium availability, and a feasible reserve estimate for modelling future production, this section presents an overview of lithium geology. Lithium is named after the Greek word “lithos” meaning “stone”, represented by the symbol Li and has the atomic number 3. Under standard conditions, lithium is the lightest metal and the least dense solid element. Lithium is a soft, silver-white metal that belongs to the alkali group of elements.

As all alkali elements, Li is highly reactive and flammable. For this reason, it never occurs freely in nature and only appears in compounds, usually ionic compounds. The nuclear properties of Li are peculiar since its nuclei verge on instability and two stable isotopes have among the lowest binding energies per nucleon of all stable nuclides. Due to this nuclear instability, lithium is less abundant in the solar system than 25 of the first 32 chemical elements [30].

Resources and reserves

An important frequent shortcoming in the discussion on availability of lithium is the lack of proper terminology and standardized concepts for assessing the available amounts of lithium. Published studies talk about “reserves”, “resources”, “recoverable resources”, “broad-based reserves”, “in-situ resources”, and “reserve base”.

A wide range of reporting systems minerals exist, such as NI 43-101, USGS, Crirsco, SAMREC and the JORC code, and further discussion and references concerning this can be found in Vikström [31]. Definitions and classifications used are often similar, but not always consistent, adding to the confusion when aggregating data. Consistent definitions may be used in individual studies, but frequently figures from different methodologies are combined as there is no universal and standardized framework. In essence, published literature is a jumble of inconsistent figures. If one does not know what the numbers really mean, they are not simply useless – they are worse, since they tend to mislead.

Broadly speaking, resources are generally defined as the geologically assured quantity that is available for exploitation, while reserves are the quantity that is exploitable with current technical and socioeconomic conditions. The reserves are what are important for production, while resources are largely an academic figure with little relevance for real supply. For example, usually less than one tenth of the coal resources are considered economically recoverable [32, 33]. Kesler et al. [21] stress that available resources needs to be converted into reserves before they can be produced and used by society. Still, some analysts seemingly use the terms ‘resources’ and ‘reserves’ synonymously.

It should be noted that the actual reserves are dynamic and vary depending on many factors such as the available technology, economic demand, political issues and social factors. Technological improvements may increase reserves by opening new deposit types for exploitation or by lowering production costs. Deposits that have been mined for some time can increase or decrease their reserves due to difficulties with determining the ore grade and tonnage in advance [34]. Depletion and decreasing concentrations may increase recovery costs, thus lowering reserves. Declining demand and prices may also reduce reserves, while rising prices or demand may increase them. Political decisions, legal issues or environmental policies may prohibit exploitation of certain deposits, despite the fact significant resources may be available.

For lithium, resource/reserve classifications were typically developed for solid ore deposits. However, brine – presently the main lithium source – is a fluid and commonly used definitions can be difficult to apply due to pumping complications and varying concentrations.

Houston et al. [35] describes the problem in detail and suggest a change in NI 43-101 to account for these problems. If better standards were available for brines then estimations could be more reliable and accurate, as discussed in Kushnir and Sandén [18].

Environmental aspects and policy changes can also significantly influence recoverability. Introduction of clean air requirements and public resistance to surface mining in the USA played a major role in the decreasing coal reserves [33].

It is entirely possible that public outcries against surface mining or concerns for the environment in lithium producing will lead to restrictions that affect the reserves. As an example, the water consumption of brine production is very high and Tahil [19] estimates that brine operations consume 65% of the fresh water in the Salar de Atacama region. [ The Atacama only gets 0.6 inches of rain a year ]

Regarding future developments of recoverability, Fasel and Tran [36] monotonously assumes that increasing lithium demand will result in more reserves being found as prices rise. So called cumulative availability curves are sometimes used to estimate how reserves will change with changing prices, displaying the estimated amount of resource against the average unit cost ranked from lowest to highest cost. This method is used by Yaksic and Tilton [14] to address lithium availability. This concept has its merits for describing theoretical availability, but the fact that the concept is based on average cost, not marginal cost, has been described as a major weakness, making cumulative availability curves disregard the real cost structure and has little – if any – relevance for future price and production rate [37].

Production and occurrence of lithium

The high reactivity of lithium makes it geochemistry complex and interesting. Lithium-minerals are generally formed in magmatic processes. The small ionic size makes it difficult for lithium to be included in early stages of mineral crystallization, and resultantly lithium remains in the molten parts where it gets enriched until it can be solidified in the final stages [38].

At present, over 120 lithium-containing minerals are known, but few of them contain high concentrations or are frequently occurring. Lithium can also be found in naturally occurring salt solutions as brines in dry salt lake environments. Compared to the fairly large number of lithium mineral and brine deposits, few of them are of actual or potential commercial value. Many are very small, while others are too low in grade [39]. This chapter will briefly review the properties of those deposits and present a compilation of the known deposits.

Lithium mineral deposits

Lithium extraction from minerals is primarily done with minerals occurring in pegmatite formations. However, pegmatite is rather challenging to exploit due to its hardness in conjunction with generally problematic access to the belt-like deposits they usually occur in. Table 1 describes some typical lithium-bearing minerals and their characteristics. Australia is currently the world’s largest producer of lithium from minerals, mainly from spodumene [39]. Petalite is commonly used for glass manufacture due to its high iron content, while lepidolite was earlier used as a lithium source but presently has lost its importance due to high fluorine content. Exploitation must generally be tailor-made for a certain mineral as they differ quite significantly in chemical composition, hardness and other properties[13]. Table 2 presents some mineral deposits and their properties.

Recovery rates for mining typically range from 60 to 70%, although significant treatment is required for transforming the produced Li into a marketable form. For example, [40, 41] describe how lithium are produced from spodumene. The costs of acid, soda ash, and energy are a very significant part of the total production cost but may be partially alleviated by the market demand for the sodium sulphate by-products.

Lithium brine deposits

Lithium can also be found in salt lake brines that have high concentrations of mineral salts. Such brines can be reachable directly from the surface or deep underground in saline expanses located in very dry regions that allow salts to persist. High concentration lithium brine is mainly found in high altitude locations such as the Andes and south-western China. Chile, the world largest lithium producer, derives most of the production from brines located at the large salt flat of Salar de Atacama.

Lithium has similar ionic properties as magnesium since their ionic size is nearly identical; making is difficult to separate lithium from magnesium. A low Mg/Li ratio in brine means that it is easier, and therefore more economical to extract lithium.

Lithium Market Research SISThe ratio differs significant at currently producing brine deposits and range from less than 1 to over 30 [14]. The lithium concentration in known brine deposits is usually quite low and range from 0.017–0.15% with significant variability among the known deposits in the world (Table 3).

Exploitation of lithium brines starts with the brine being pumped from the ground into evaporation ponds. The actual evaporation is enabled by incoming solar radiation, so it is desirable for the operation to be located in sunny areas with low annual precipitation rate. The net evaporation rate determines the area of the required ponds [42].

It can easily take between one and two years before the final product is ready to be used, and even longer in cold and rainy areas.

The long timescales required for production can make brine deposits ill fit for sudden changes in demand. Table 3. Properties of known brine deposits in the world.

Lithium from sea water

The world’s oceans contain a wide number of metals, such as gold, lithium or uranium, dispersed at low concentrations. The mass of the world’s oceans is approximately 1.35*1012 Mt [47], making vast amounts of theoretical resources seemingly available. Eckhardt [48] and Fasel and Tran [36] announce that more than 2,000,000 Mt lithium is available from the seas, essentially making it an “unlimited” source given its geological abundance. Tahil [20] also notes that oceans have been proclaimed as an unlimited Li-source since the 1970s.

The world’s oceans and some highly saline lakes do in fact contain very large quantities of lithium, but if it will become practical and economical to produce lithium from this source is highly questionable.

For example, consider gold in sea water – in total nearly 7,000,000 Mt. This is an enormous amount compared to the cumulative world production of 0.17 Mt accumulated since the dawn of civilization [49]. There are also several technical options available for gold extraction. However, the average gold concentration range from <0.001 to 0.005 ppb [50]. This means that one km3 of sea water would give only 5.5 kg of gold. The gold is simply too dilute to be viable for commercial extraction and it is not surprising that all attempts to achieve success – including those of the Nobel laureate Fritz Haber – has failed to date.

Average lithium concentration in the oceans has been estimated to 0.17 ppm [14, 36]. Kushnir and Sandén [18] argue that it is theoretically possible to use a wide range of advanced technologies to extract lithium from seawater – just like the case for gold. However, no convincing methods have been demonstrated this far. A small scale Japanese experiment managed to produce 750 g of lithium metal from processing 4,200 m3 water with a recovery efficiency of 19.7% [36]. This approach has been described in more detail by others [51–53].

Grosjean et al. [13] points to the fact that even after decades of improvement, recovery from seawater is still more than 10–30 times more costly than production from pegmatites and brines. It is evident that huge quantities of water would have to be processed to produce any significant amounts of lithium. Bardi [54] presents theoretical calculations on this, stating that a production volume of lithium comparable to present world production (~25 kt annually) would require 1.5*103 TWh of electrical energy for pumping through separation membranes in addition to colossal volumes of seawater. Furthermore, Tahil [20] estimated that a seawater processing flow equivalent to the average discharge of the River Nile – 300,000,000 m3/day or over 22 times the global petroleum industry flow of 85 million barrels per day – would only give 62 tons of lithium per day or roughly 20 kt per year. Furthermore, a significant amount of fresh water and hydrochloric acid will be required to flush out unwanted minerals (Mg, K, etc.) and extract lithium from the adsorption columns [20].

In summary, extraction from seawater appears not feasible and not something that should be considered viable in practice, at least not in the near future.

Estimated lithium availability

From data compilation and analysis of 112 deposits, this study concludes that 15 Mt areImage result for lithium reasonable as a reference case for the global reserves in the near and medium term. 30 Mt is seen as a high case estimate for available lithium reserves and this number is also found in the upper range in literature. These two estimates are used as constraints in the models of future production in this study.

Estimates on world reserves and resources vary significantly among published studies. One main reason for this is likely the fact that different deposits, as well as different number of deposits, are aggregated in different studies. Many studies, such as the ones presented by the USGS, do not give explicitly state the number of deposits included and just presents aggregated figures on a national level. Even when the number and which deposits that have been used are specified, analysts can arrive to wide different estimates (Table 5). It should be noted that a trend towards increasing reserves and resources with time can generally be found, in particularly in USGS assessments. Early reports, such as Evans [56] or USGS [59], excluded several countries from the reserve estimates due to a lack of available information. This was mitigated in USGS [73] when reserves estimates for Argentina, Australia, and Chile have been revised based on new information from governmental and industry sources. However, there are still relatively few assessments on reserves, in particular for Russia, and it is concluded that much future work is required to handle this shortcoming. Gruber et al. [16] noted that 83% of global lithium resources can be found in six brine, two pegmatite and two sedimentary deposits. From our compilation, it can also be found that the distribution of global lithium reserves and resources are very uneven.

Three quarters of everything can typically be found in the ten largest deposits (Figure 1 and 2). USGS [12] pinpoint that 85% of the global reserves are situated in Chile and China (Figure 3) and that Chile and Australia accounted for 70 % of the world production of 28,100 tonnes in 2011 [12]. From Table 2 and 3, one can note a significant spread in estimated reserves and resources for the deposits. This divergence is much smaller for minerals (5.6–8.2 Mt) than for brines (6.5– 29.4 Mt), probably resulting from the difficulty associated with estimating brine accumulations consistently. Evans [75] also points to the problem of using these frameworks on brine deposits, which are fundamentally different from solid ores. Table 5. Comparison of published lithium assessments.


One thing that may or may not have a large implication for future production is recycling. The projections presented in the production model of this study describe production of lithium from virgin materials. The total production of lithium could potentially increase significantly if high rates of recycling were implemented of the used lithium, which is mentioned in many studies.

USGS [12] state that recycling of lithium has been insignificant historically, but that it is increasing as the use of lithium for batteries are growing. However, the recycling of lithium from batteries is still more or less non-existent, with a collection rate of used Li-ion batteries of only about 3% [93]. When the Li-ion batteries are in fact recycled, it is usually not the lithium that is recycled, but other more precious metals such as cobalt [18].

If this will change in the future is uncertain and highly dependent on future metal prices, but it is still commonly argued for and assumed that the recycling of lithium will grow significantly, very soon. Goonan [94] claims that recycling rates will increase from vehicle batteries in vehicles since such recycling systems already exist for lead-acid batteries. Kushnir and Sandén [18] argue that large automotive batteries will be technically easier to recycle than smaller batteries and also claims that economies of scale will emerge when the use for batteries for vehicles increase. According to the IEA [95], full recycling systems are projected to be in place sometime between 2020 and 2030. Similar assumptions are made by more or less all studies dealing with future lithium production and use for electric vehicles and Kushnir and Sandén [18] state that it is commonly assumed that recycling will take place, enabling recycled lithium to make up for a big part of the demand but also conclude that the future recycling rate is highly uncertain.

There are several reasons to question the probability of high recycling shares for Li-ion batteries. Kushnir and Sandén [18] state that lithium recycling economy is currently not good and claims that the economic conditions could decrease even more in the future. Sullivan and Gaines [96] argue that the Li-ion battery chemistry is complex and still evolving, thus making it difficult for the industry to develop profitable pathways. Georgi-Maschler [93] highlight that two established recycling processes exist for recycling Li-ion batteries, but one of them lose most of the lithium in the process of recovering the other valuable metals. Ziemann et al. [97] states that lithium recovery from rechargeable batteries is not efficient at present time, mainly due to the low lithium content of around 2% and the rather low price of lithium.

In this study we choose not to include recycling in the projected future supply for several reasons. In a short perspective, looking towards 2015-2020, it cannot be considered likely that any considerable amount of lithium will be recycled from batteries since it is currently not economical to do so and no proven methods to do it on a large scale industrial level appear to exist. If it becomes economical to recycle lithium from batteries it will take time to build the capacity for the recycling to take place. Also, the battery lifetime is often projected to be 10 years or more, and to expect any significant amounts of lithium to be recycled within this period of time is simply not realistic for that reason either.

The recycling capacity is expected to be far from reaching significant levels before 2025 according to Wanger [92]. It is also important to separate the recycling rates of products to the recycled content in new products. Even if a percentage of the product is recycled at the end of the life cycle, this is no guarantee that the use of recycled content in new products will be as high. The use of Li-ion batteries is projected to grow fast. If the growth happens linearly, and high recycling rates are accomplished, recycling could start constituting a large part of the lithium demand, but if the growth happens exponentially, recycling can never keep up with the growth that has occurred during the 10 years lag during the battery lifetime. In a longer time perspective, the inclusion of recycling could be argued for with expected technological refinement, but certainties regarding technology development are highly uncertain. Still, most studies include recycling as a major part of future lithium production, which can have very large implications on the results and conclusions drawn. Kushnir and Sandén [18] suggest that an 80% lithium recovery rate is achievable over a medium time frame. The scenarios in Gruber et al. [16], assumes recycling participation rates of 90 %, 96% and 100%. In their scenario using the highest assumed recycling, the quantities of lithium needed to be mined are decreased to only about 37% of the demand. Wanger [92] looks at a shorter time perspective and estimates that a 40% or 100% recycling rate would reduce the lithium consumption with 10% or 25% respectively by 2030. Mohr et al. [15] assume that the recycling rate starts at 0%, approaching a limit of 80%, resulting in recycled lithium making up significant parts of production, but only several decades into the future. IEA [95] projects that full recycling systems will be in place around 2020–2030.

The impact of assumed recycling rates can indeed be very significant, and the use of this should be handled with care and be well motivated.

Future demand for lithium

To estimate whether the projected future production levels will be sufficient, it isImage result for lithiuminteresting to compare possible production levels with potential future demand. The use of lithium is currently dominated by use for ceramics and glass closely followed by batteries. The current lithium demand for different markets can be seen in Figure 7. USGS [12] state that the lithium use in batteries have grown significantly in recent years as the use of lithium batteries in portable electronics have become increasingly common. Figure 7 (Ceramics and glass 29%, Batteries 27%, Other uses 16%, Lubrication greases 12%, Continuous casting 5%, Air treatment 4%, Polymers 3%, Primary aluminum production 2%, Pharmaceuticals 2%).

Global lithium demand for different end-use markets. Source: USGS [12] USGS [12] state that the total lithium consumption in 2011 was between 22,500 and 24,500 tonnes. This is often projected to grow, especially as the use of Li-ion batteries for electric cars could potentially increase demand significantly. This study presents a simple example of possible future demand of lithium, assuming a constant demand for other uses and demand for electric cars to grow according to a scenario of future sales of

electric cars. The current car fleet consists of about 600 million passenger cars. The sale of new passenger cars in 2011 was about 60 million cars [98]. This existing vehicle park is almost entirely dependent on fossil fuels, primarily gasoline and diesel, but also natural gas to a smaller extent. Increasing oil prices, concerns about a possible peak in oil production and problems with anthropogenic global warming makes it desirable to move away from fossil energy dependence. As a mitigation and pathway to a fossil-fuel free mobility, cars running partially or totally on electrical energy are commonly proposed. This includes electric vehicles (EVs), hybrid vehicles (HEVs) and PHEVs (plug-in hybrid vehicles), all on the verge of large-scale commercialization and implementation. IEA [99] concluded that a total of 1.5 million hybrid and electric vehicles had been sold worldwide between the year 2000 and 2010.

Both the expected number of cars as well as the amount of lithium required per vehicle is important. As can be seen from Table 9, the estimates of lithium demand for PEHV and EVs differ significantly between studies. Also, some studies do not differentiate between different technical options and only gives a single Li-consumption estimate for an “electric vehicle”, for instance the 3 kg/car found by Mohr et al. [15]. The mean values from Table 9 are found to be 4.9 kg for an EV and 1.9 kg for a PHEV.

As the battery size determines the vehicles range, it is likely that the range will continue to increase in the future, which could increase the lithium demand. On the other hand, it is also reasonable to assume that the technology will improve, thus reducing the lithium requirements. In this study a lithium demand of 160 g Li/kWh is assumed, an assumption discussed in detail by Kushnir and Sandén [18]. It is then assumed that typical batteries capacities will be 9 kWh in a PHEV and 25 kWh in an EV. This gives a resulting lithium requirement of 1.4 kg for a PHEV and 4 kg for an EV, which is used as an estimate in this study. Many current electrified cars have a lower capacity than 24 kWh, but to become more attractive to consumers the range of the vehicles will likely have to increase, creating a need for larger batteries [104]. It should be added that the values used are at the lower end compared to other assessments (Table 9) and should most likely not be seen as overestimates future lithium requirements.

Figure 8 shows the span of the different production forecasts up until 2050 made in this study, together with an estimated demand based on the demand staying constant on the high estimate of 2010– 2011, adding an estimated demand created by the electric car projections done by IEA [101]. This is a very simplistic estimation future demand, but compared to the production projections it indicates that lithium availability should not be automatically disregarded as a potential issue for future electric car production. The amount of electric cars could very well be smaller or larger that this scenario, but the scenario used does not assume a complete electrification of the car fleet by 2050 and such scenarios would mean even larger demand of lithium. It is likely that lithium demand for other uses will also grow in the coming decades, why total demand might increase more that indicated here. This study does not attempt to estimate the evolution of demand for other uses, and the demand estimate for other uses can be considered a conservative one. Figure 8. The total lithium demand of a constant current lithium demand combined with growth of electric vehicles according to IEA’s blue map scenario [101] assuming a demand for 1.4 kg of lithium per PHEV and 4.0 kg per EV. The span of forecasted production levels range from the base case Gompertz model

Concluding discussion

Potential future production of lithium was modeled with three different production curves. In a short perspective, until 2015–2020, the three models do not differ much, but in the longer perspective the Richards and Logistic curves show a growth at a vastly higher pace than the Gompertz curve. The Richards model gives the best fit to the historic data, and lies in between the other two and might be the most likely development. A faster growth than the logistic model cannot be ruled out, but should be considered unlikely, since it usually mimics plausible free market exploitation [89]. Other factors, such as decreased lithium concentration in mined material, economics, political and environmental problems could also limit production.

It can be debated whether this kind of forecasting should be used for short term projections, and the actual production in coming years can very well differ from our models, but it does at least indicate that lithium availability could be a potential problem in the coming decades. In a longer time perspective up to 2050, the projected lithium demand for alternative vehicles far exceeds our most optimistic production prognoses.

If 100 million alternative vehicles, as projected in IEA [101] are produced annually using lithium battery technology, the lithium reserves would be exhausted in just a few years, even if the production could be cranked up faster than the models in this study. This indicates that it is important that other battery technologies should be investigated as well.

It should be added that these projections do not consider potential recycling of the lithium, which is discussed further earlier in this paper. On the other hand, it appears it is highly unlikely that recycling will become common as soon as 2020, while total demand appears to potentially rise over maximum production around that date. If, when, and to what extent recycling will take place is hard to predict, although it appears more likely that high recycling rates will take place in electric cars than other uses.

Much could change before 2050. The spread between the different production curves are much larger and it is hard to estimate what happens with technology over such a long time frame. However, the Blue Map Scenario would in fact create a demand of lithium that is higher than the peak production of the logistic curve for the standard case, and close to the peak production in the high URR case.

Improved efficiency can decrease the lithium demand in the batteries, but as Kushnir and Sandén [18] point out, there is a minimum amount of lithium required tied to the cell voltage and chemistry of the battery.

IEA [95] acknowledges that technologies that are not available today must be developed to reach the Blue Map scenarios and that technology development is uncertain. This does not quite coincide with other studies claiming that lithium availability will not be a problem for production of electric cars in the future.

It is also possible that other uses will raise the demand for lithium even further. One industry that in a longer time perspective could potentially increase the demand for lithium is fusion, where lithium is used to breed tritium in the reactors. If fusion were commercialized, which currently seems highly uncertain, it would demand large volumes of lithium [36].

Further problems with the lithium industry are that the production and reserves are situated in a few countries (USGS [12] in Mt: Chile 7.5, China 3.5, Australia 0.97, Argentina 0.85, Other 0.135]. One can also note that most of the lithium is concentrated to a fairly small amount of deposits, nearly 50% of both reserves and resources can be found in Salar de Atacama alone. Kesler et al. [21] note that Argentina, Bolivia, Chile and China hold 70% of the brine deposits. Grosjean et al. [13] even points to the ABC triangle (i.e. Argentina, Bolivia and Chile) and its control of well over 40% of the world resources and raises concern for resource nationalism and monopolistic behavior. Even though Bolivia has large resources, there are many political and technical problems, such as transportation and limited amount of available fresh water, in need of solutions [18].

Regardless of global resource size, the high concentration of reserves and production to very few countries is not something that bode well for future supplies. The world is currently largely dependent on OPEC for oil, and that creates possibilities of political conflicts. The lithium reserves are situated in mainly two countries. It could be considered problematic for countries like the US to be dependent on Bolivia, Chile and Argentina for political reasons [105]. Abell and Oppenheimer [105] discuss the absurdity in switching from dependence to dependence since resources are finite. Also, Kushnir and Sandén [18] discusses the problems with being dependent on a few producers, if a problem unexpectedly occurs at the production site it may not be possible to continue the production and the demand cannot be satisfied.

Final remarks

Although there are quite a few uncertainties with the projected production of lithium and demand for lithium for electric vehicles, this study indicates that the possible lithium production could be a limiting factor for the number of electric vehicles that can be produced, and how fast they can be produced. If large parts of the car fleet will run on electricity and rely on lithium based batteries in the coming decades, it is possible, and maybe even likely, that lithium availability will be a limiting factor.

To decrease the impact of this, as much lithium as possible must be recycled and possibly other battery technologies not relying on lithium needs to be developed. It is not certain how big the recoverable reserves of lithium are in the world and estimations in different studies differ significantly. Especially the estimations for brine need to be further investigated. Some estimates include production from seawater, making the reserves more or less infinitely large. We suggest that it is very unlikely that seawater or lakes will become a practical and economic source of lithium, mainly due to the high Mg/Li ratio and low concentrations if lithium, meaning that large quantities of water would have to be processed. Until otherwise is proved lithium reserves from seawater and lakes should not be included in the reserve estimations. Although the reserve estimates differ, this appears to have marginal impact on resulting projections of production, especially in a shorter time perspective. What are limiting are not the estimated reserves, but likely maximum annual production, which is often missed in similar studies.

If electric vehicles with li-ion batteries will be used to a very high extent, there are other problems to account for. Instead of being dependent on oil we could become dependent on lithium if li-ion batteries, with lithium reserves mainly located in two countries. It is important to plan for this to avoid bottlenecks or unnecessarily high prices. Lithium is a finite resource and the production cannot be infinitely large due to geological, technical and economical restraints. The concentration of lithium metal appears to be decreasing, which could make it more expensive and difficult to extract the lithium in the future. To enable a transition towards a car fleet based on electrical energy, other types of batteries should also be considered and a continued development of battery types using less lithium and/or other metals are encouraged. High recycling rates should also be aimed for if possible and continued investigations of recoverable resources and possible production of lithium are called for. Acknowledgements We would like to thank Steve Mohr for helpful comments and ideas. Sergey Yachenkov has our sincerest appreciation for providing assistance with translation of Russian material.

Your Oil wake up call.

8 04 2017


Ted Trainer

My old mate Ted Trainer has for decades been a limits to growth advocate. Ted lectured in limits to growth and other subjects during a long teaching career at the University of New South Wales. He is author of a number of books on living in a simpler way, including the book that changed my life, Abandon Affluence…… here is his latest offering.

ALMOST NO ONE has the slightest grasp of the oil crunch that will hit them, probably within a decade. When it does it will literally mean the end of the world as we know it. Here is an outline of what recent publications are telling us. Nobody will, of course, take any notice.

It is gradually being understood that the amount of oil reserves and increases in them due to, for instance, fracking, is of little significance and that what matters is their EROI (Energy Return on Energy Invested). If you found a vast amount of oil, but to deliver a barrel of it you would need to use as much energy as there is in a barrel of oil, then there would be no point drilling the field.

When oil was first discovered the EROI in producing it was over 100/1. But Murphy (2013) estimates that by 2000 the global figure was about 30, and a decade later it was around 17. These approximate figures are widely quoted and accepted although not precise or settled.

Scarcer and difficult to produce

In other words, oil is rapidly getting scarcer and more difficult to find and produce. Thus, they are having to go to deep water sources (ER of 10 according to Murphy), and to develop unconventional sources such as tar sands (ER of 4 according to Ahmed), and shale (Murphy estimates an ER of 1.5, and Ahmed reports 2.8 for the oil and gas average.)

As a result, the capital expenditure on oil discovery, development and production is skyrocketing but achieving little or no increase in production. Heinberg and Fridley (2016) show that capital expenditure trebled in a decade, while production fell dramatically. This rapid acceleration in costs is widely noted, including by Johnson (2010) and Clarke (2017).

Why can’t we keep getting the quantities we want just by paying more for each barrel? Because the price of the oil in a barrel cannot be greater than the economic value the use of the barrel of oil creates.

Ahmed (2016) refers to a British government report that:

“…the decline in EROI has meant that an increasing amount of the energy we extract is having to be diverted back into getting new energy out, leaving less for other social investments … This means that the global economic slowdown is directly related to the declining resource quality of fossil fuels.”

Everything depends on how rapidly EROI is deteriorating. Various people, such as Hall, Ballogh and Murphy (2009), and Weisbach et al. (2013) do not think a modern society can tolerate an ER under 6 – 10. If this is so, how long have we got if the global figure has fallen from 30 to 18 in about a decade?

Several analysts claim that because of the deteriorating resource quality and rising production costs the companies must be paid $100 a barrel to survive. But oil is currently selling for c$50/barrel. Clarke details how the companies are carrying very large debt and many are going bankrupt: “The global oil industry is in deep trouble.”

Ignorance, debt bubble and catastrophic implosion

Why haven’t we noticed? Very likely for the same reason we haven’t noticed the other signs of terminal decay… because we don’t want to.

We have taken on astronomical levels of debt to keep the economy going. In 1994 the ratio of global debt to GDP was just over 2; it is now about 6, much higher than before the GFC (Global Financial Crisis), and it is continuing to climb.

Everybody knows this cannot go on for much longer. Debt is lending on the expectation that the loan will be repaid plus interest, but that can only be done if there is growth in the real economy, in the value of goods and services produced and sold …but the real economy (as distinct from the financial sector) has been stagnant or deteriorating for years.

The only way huge debt bubbles are resolved is via catastrophic implosion. A point comes where the financial sector realizes that its (recklessly speculative) loans are not going to be repaid, so they stop lending and call in bad debts … and the credit the real economy needs is cut, so the economy collapses, further reducing capacity to pay debts in a spiral of positive feedback that next time will deliver the mother of all GFCs.

There is now considerable effort going into working out the relationships between these factors, ie. deteriorating energy EROI, economic stagnation, and debt. The situation is not at all clear. Some see EROI as already being the direct and major cause of a terminal economic breakdown, others think at present more important causal factors are increasing inequality, ecological costs, aging populations and slowing productivity.

Whatever the actual causal mix is, it is difficult to avoid the conclusion that within at best a decade deteriorating EROI is going to be a major cause of enormous disruption.

Peaking oil production, national income and resource detorioration

But there is a far more worrying aspect of your oil situation than that to do with EROI. Nafeez Ahmed has just published an extremely important analysis of the desperate and alarming situation that the Middle East oil producing countries are in, entitled Failing States, Collapsing Systems, (2016). He confronts us with the following basic points:

  • in several countries oil production has peaked, and energy return on oil production is falling; thus their oil export income is being reduced
  • in recent decades populations have exploded, due primarily to decades of abundant income from oil exports; the 1960 – 2014 multiples for Yemen, Saudi Arabia, Iraq, Nigeria, Egypt, India and China have been 5.5, 4.6, 5.3, 4.2, 3.4, 3.0 and 2.1 respectively
  • there has been accelerating deterioration in land, water and food resources. If water use per capita is under 1700 m3 pa, there is water stress; the amounts for the above countries, (and the percentage fall since 1960), are Yemen 86 m3 (71% fall), Saudi Arabia 98 m3 (82% fall), Iraq 998 m3 (88% fall), Nigeria 1245 m3 (73% fall), Egypt 20 m3 (70% fall).

Climate change will make these numbers worse.

The consequences of these trends are:

  • more of the falling oil income now has to go into importing food
  • increasing amounts of oil are having to go into other domestic uses, reducing the amounts available for export to the big oil consuming countries.
  • in many of the big exporting countries these trends are likely to more or less eliminate oil exports in a decade or so, including Saudi Arabia.
  • these mostly desert countries have nothing else to earn export income from, except sand
  • falling oil income means that governments can provide less for their people, so they have to cut subsidies and raise food and energy prices
  • these conditions are producing increasing discontent with government as well as civil unrest and conflict between tribes over scarce water and land; religious and sectarian conflicts are fuelled; unemployed, desperate and hungry farmers and youth have little option but to join extremist groups such as ISIS, where at least they are fed; our media ignore the biophysical conditions generating conflicts, refugee and oppression by regimes, giving the impression that the troubles are only due to religious fanatics
  • the IMF makes the situation worse; failing states appeal for economic assistance and are confronted with the standard recipe — increased loans on top of already impossible debt, given on condition that they gear their economies to paying the loans back plus interest, imposing austerity, privatizing and selling off assets
  • local elite authoritarianism and corruption make things worse; rulers need to crack down on disruption and to force the belt tightening; the rich will not allow their privileges to be reduced in order to support reallocation of resources to mass need; the dominant capitalist ideology weighs against interfering with market forces, ie. with the freedom for the rich to develop what is most profitable to themselves.
  • thus there is a vicious positive feedback downward spiral from which it would seem there can be no escape because it is basically due to the oil running out in a context of too many people and too few land and water resources
  • there will at least be major knock-on effects on the global economy and the rich (oil consuming) countries, probably within a decade; it is quite likely that the global economy will collapse as the capacity to import oil will be greatly reduced; when the fragility of the global financial system is added (remember, debt now six times GDP), instantaneous chaotic breakdown is very likely
  • nothing can be done about this situation; it is the result of ignoring fifty years of warnings about the limits to growth.

A tightening noose

So, the noose tightens around the brainless, taken for granted ideology that drives consumer-capitalist society and that cannot be even thought about, let alone dealt with.

We are far beyond the levels of production and consumption that can be sustained or that all people could ever rise to. We haven’t noticed because the grossly unjust global economy delivers most of the world’s dwindling resource wealth to the few who live in rich countries. Well, the party is now getting close to being over.

You don’t much like this message? Have a go at proving that it’s mistaken. Nar, better to just ignore it as before.

A way out?

If the foregoing account is more or less right, then there is only one conceivable way out. That is to face up to transition to lifestyles and systems that enable a good quality of life for all on extremely low per capita resource use rates, with no interest in getting richer or pursuing economic growth.

There is no other way to defuse the problems now threatening to eliminate us, the resource depletion, the ecological destruction, the deprivation of several billion in the Third World, the resource wars and the deterioration in our quality of life.

Such a Simpler Way is easily designed, and built…if that’s what you want to do (see: Many in voluntary simplicity, ecovillage and Transition Towns movements have moved a long way towards it. Your chances of getting through to it are very poor, but the only sensible option is to join these movements.

Is the mainstream working on the problem? Is the mainstream worried about the problem? Does the mainstream even recognize the problem? I checked the Sydney Daily Telegraph yesterday and 20 percent of the space was given to sport.


Ahmed, N. M., (2016); We Could Be Witnessing the Death of the Fossil Fuel Industry — Will It Take the Rest of the Economy Down With It?, Resilience, April, 26.

Ahmed, N. M., (2017); Failing States, Collapsing Systems, Dordrecht, Springer. Alice Friedmann’s summary is at:

Clarke, T., (2017); The end of the Oilocene; The demise of the global oil industry and the end of the global economy as we know it, Resilience, 17th Jan.

Friedmann, A., (2017); Book review of Failing states, collapsing systems biophysical triggers of political violence by Nafeez Ahme, energyskeptic January 31:

Hall, C. A. S., Balogh, S. Murphy, D. J. R., (2009); What is the minimum EROI that a sustainable society must have? Energies, 2, 25–47.

Heinberg, R., and D. Fridley, (2016); Our Renewable Future, Santa Rosa, California, Post Carbon Institute.

Johnson, C., (2010); Oil exploration costs rocket as risks rise, Industries, London, February 11.

Murphy, D. J., (2013), The implications of the declining energy return on investment of oil production; Philosophical Transactions of the Royal Society, December 2013.DOI: 10.1098/rsta.2013.0126

The Simpler Way website:

Weisback, D., G. Ruprecht, A. Huke, K. Cserski, S. Gottlleib and A. Hussein, (2013);Energy intensities, EROIs and energy payback times of electricity generating power plants, Energy, 52, 210- 221.

An idiot’s guide to the ERoEI of tar sands

31 03 2017

I know about the environmental issues surrounding tar sands of course, but the rampant destruction producing crude from tar sands entails never ceases to blow me away.. I had little clue about the complete energy inefficiency of the process. If we include shale and oil/tar sands in our peak oil calculations, the notion that we’ve hit 50% of reserves becomes moot…… we’ve more likely hit something like 2.5% capacity. If we assume sweet crude ERoEI to be ~20, then tar sands is 3 at best…… The process for refining tar sands goes something like the following…:

Dig a pit around 100m deep, and you’ll hit tar sands, or as the Canadians like to call it, oil sands. Mix with water and separate the oil. There’s a lot of Sulfur in tar sands, and we don’t like Sulfur. So we take CH4, strip the carbon off, and bubble the hydrogen through the tar sand slop. This will form H2S. Precipitate the elemental sulfur in an ice bath, release the hydrogen into the atmosphere, waste natural gas and throw the Hydrogen away, and you get all of this goodness…….:

Sulfur Stockpile

No, I’m not kidding you, those huge yellow blocks are made of pretty well pure Sulfur…… and those dotty things, they’re cars and trucks….. Apparently there’s a glut of Sulfur in the market, so that it just sits there in all its inimitable yellowness, unwanted…….. Piles upon growing piles of Sulfur cakes.

The above process is of course over-simplified, but that doesn’t alter the fact that its completely insane. The size of the Athabascan tar sands hellhole is equivalent to Saudi Arabia’s oil field before it was pilfered. The government of Alberta thinks it can push production beyond 3 million barrels per day. Hard to imagine a world in which we’re not reliant on oil when we keep finding ever more idiotic ways to extract it. Oh except that stuff by now must surely be making an energy loss…….