It’s simple. If we can’t change our economic system, our number’s up

30 04 2017

I occasionally publish articles by George monbiot. At times I have labelled them ‘Monbiot at his best’, even if I disagreed with bits of it….. but this time, he utterly nails it. There’s very little regulars to this site will learn from this, but it is a good piece of writing, and it needs to be shared far and wide, because we truly need this revolution. It’s two years old, but even more relevant now than when he wrote it.

Found on the Guardian’s website…..

'The mother narrative to all this is carbon-fuelled expansion. Our ideologies are mere subplots.'
‘The mother narrative to all this is carbon-fuelled expansion. Our ideologies are mere subplots.’ Photograph: Alamy

Let us imagine that in 3030BC the total possessions of the people of Egypt filled one cubic metre. Let us propose that these possessions grew by 4.5% a year. How big would that stash have been by the Battle of Actium in 30BC? This is the calculation performed by the investment banker Jeremy Grantham.

Go on, take a guess. Ten times the size of the pyramids? All the sand in the Sahara? The Atlantic ocean? The volume of the planet? A little more? It’s 2.5 billion billion solar systems. It does not take you long, pondering this outcome, to reach the paradoxical position that salvation lies in collapse.

To succeed is to destroy ourselves. To fail is to destroy ourselves. That is the bind we have created. Ignore if you must climate change, biodiversity collapse, the depletion of water, soil, minerals, oil; even if all these issues miraculously vanished, the mathematics of compound growth make continuity impossible.

Economic growth is an artefact of the use of fossil fuels. Before large amounts of coal were extracted, every upswing in industrial production would be met with a downswing in agricultural production, as the charcoal or horse power required by industry reduced the land available for growing food. Every prior industrial revolution collapsed, as growth could not be sustained. But coal broke this cycle and enabled – for a few hundred years – the phenomenon we now call sustained growth.

It was neither capitalism nor communism that made possible the progress and pathologies (total war, the unprecedented concentration of global wealth, planetary destruction) of the modern age. It was coal, followed by oil and gas. The meta-trend, the mother narrative, is carbon-fuelled expansion. Our ideologies are mere subplots. Now, with the accessible reserves exhausted, we must ransack the hidden corners of the planet to sustain our impossible proposition.

On Friday, a few days after scientists announced that the collapse of the west Antarctic ice sheet is now inevitable, the Ecuadorean government decided toallow oil drilling in the heart of the Yasuni national park. It had made an offer to other governments: if they gave it half the value of the oil in that part of the park, it would leave the stuff in the ground. You could see this as either blackmail or fair trade. Ecuador is poor, its oil deposits are rich. Why, the government argued, should it leave them untouched without compensation when everyone else is drilling down to the inner circle of hell? It asked for $3.6bn and received $13m. The result is that Petroamazonas, a company with a colourful record of destruction and spills, will now enter one of the most biodiverse places on the planet, in which a hectare of rainforest is said to contain more species than exist in the entire continent of North America.

Almost 45% of the Yasuni national park is overlapped by oil concessions.
Yasuni national park. Murray Cooper/Minden Pictures/Corbis

The UK oil firm Soco is now hoping to penetrate Africa’s oldest national park, Virunga, in the Democratic Republic of Congo; one of the last strongholds of the mountain gorilla and the okapi, of chimpanzees and forest elephants. In Britain, where a possible 4.4 billion barrels of shale oil has just been identified in the south-east, the government fantasises about turning the leafy suburbs into a new Niger delta. To this end it’s changing the trespass laws to enable drilling without consent and offering lavish bribes to local people. These new reserves solve nothing. They do not end our hunger for resources; they exacerbate it.

Look at the lives of the super-rich, who set the pace for global consumption. Are their yachts getting smaller? Their houses? Their artworks? Their purchase of rare woods, rare fish, rare stone? Those with the means buy ever bigger houses to store the growing stash of stuff they will not live long enough to use. By unremarked accretions, ever more of the surface of the planet is used to extract, manufacture and store things we don’t need. Perhaps it’s unsurprising that fantasies about colonising space – which tell us we can export our problems instead of solving them – have resurfaced.

As the philosopher Michael Rowan points out, the inevitabilities of compound growth mean that if last year’s predicted global growth rate for 2014 (3.1%) is sustained, even if we miraculously reduced the consumption of raw materials by 90%, we delay the inevitable by just 75 years. Efficiency solves nothing while growth continues.

The inescapable failure of a society built upon growth and its destruction of the Earth’s living systems are the overwhelming facts of our existence. As a result, they are mentioned almost nowhere. They are the 21st century’s great taboo, the subjects guaranteed to alienate your friends and neighbours. We live as if trapped inside a Sunday supplement: obsessed with fame, fashion and the three dreary staples of middle-class conversation: recipes, renovations and resorts. Anything but the topic that demands our attention.

Statements of the bleeding obvious, the outcomes of basic arithmetic, are treated as exotic and unpardonable distractions, while the impossible proposition by which we live is regarded as so sane and normal and unremarkable that it isn’t worthy of mention. That’s how you measure the depth of this problem: by our inability even to discuss it.

Some reflections on the Twilight of the Oil Age (Part II)

17 07 2016

Guest Post by Louis Arnoux, republished from Ugo Bardi’s Cassandra’s Legacy blog…..

(Part I here)

Part 2 – Enquiring into the appropriateness of the question

Let’s acknowledge it, the situation we are in, as depicted summarily in Part 1, is complex.  As many commentators like to state, there is still plenty of oil, coal, and gas left “in the ground”.  Since 2014, debates have been raging, concerning the assumed “oil glut”, concerning how low oil prices may go down, how high prices may rebound as demand possibly picks up and the “glut” vanishes, and, in the face of all this, what may or may not happen regarding “renewables”.  However, in my view, the situation is not impossible to analyse rigorously, away from what may appear as common sense but that may not withstand scrutiny.  For example, Part 1 data have indicated,that most of what’s left in terms of fossil fuels is likely to stay where it is, underground, without this requiring the implementation of  difficult to agree upon resource management policies, simply because this is what thermodynamics dictates.

We can now venture a little bit further if we keep firmly in mind that the globalised industrial world (GIW), and by extension all of us, do not “live” on fossil resources but on net energy delivered by the global energy system; and if we also keep in mind that, in this matter, oil-derived transport fuels are the key since, without them, none of the other fossil and nuclear resources can be mobilised and the GIW itself can’t function.

In my experience, most often, when faced with such a broad spectrum of conflicting views, especially involving matters pertaining to physics and the social sciences, the lack of agreement is indicative that the core questions are not well formulated.  Physicist David Bohm liked to stress: “In scientific enquiries, a crucial step is to ask the right question. Indeed each question contains presuppositions, largely implicit.  If these presuppositions are wrong or confused, the question itself is wrong, in the sense that to try to answer it has no meaning.  One has thus to enquire into the appropriateness of the question.”

Here it is important, in terms of system analysis, to differentiate between the global energy industry (say, GEI) and the GIW. The GEI bears the brunt of thermodynamics directly, and within the GEI, the oil industry (OI) is key since, as seen in Part 1, it is the first to reach the thermodynamics limit of resource extraction and, since it conditions the viability of the GEI’s other components – in their present state and within the remaining timeframe, they can’t survive the OI’s eventual collapse.  On the other hand, the GIW is impacted by thermodynamic decline with a lag, in the main because it is buffered by debt – so that by the time the impact of the thermodynamic collapse of the OI becomes undeniable it’s too late to do much about it.

At the micro level, debt can be “good” – e.g. a company borrows to expand and then reimburses its debt, etc…  At the macro level, it can be, and has now become, lethal, as the global debt can no longer be reimbursed (I estimate the energy equivalent of current global debt, from states, businesses, and households to be in the order of some 10,700EJ, while current world energy use is in the order of 554EJ; it is no longer doable to “mind the gap”). [ED: for some forty years, debt has been growing exponentially four times as fast as the GDP. Source: Chris Martenson]

Crude oil prices are dropping to the floor


Figure 4 – The radar signal for an Oil Pearl Harbor

In brief, the GIW has been living on ever growing total debt since around the time net energy from oil per head peaked in the early 1970s.  The 2007-08 crisis was a warning shot.  Since 2012, we have entered the last stage of this sad saga – when the OI began to use more energy (one should talk in fact of exergy) within its own productions chains than what it delivers to the GIW.  From this point onwards retrieving the present financial fiat system is no longer doable.

This 2012 point marked a radical shift in price drivers.[1]  Figure 4 combines the analyses of TGH (The Hills Group) and mine. In late 2014 I saw the beginning of the oil price crash as a signal of a radar screen.  Being well aware that EROIs for oil and gas combined had already passed below the minimum threshold of 10:1, I understood that this crash was different from previous ones: prices were on their way right down to the floor.  I then realised what TGH had anticipated this trend months earlier, that their analysis was robust and was being corroborated by the market there and then.

Until 2012, the determining price driver was the total energy cost incurred by the OI.  Until then the GIW could more or less happily sustain the translation of these costs into high oil prices, around or above $100/bbl.  This is no longer the case.  Since 2012, the determining oil price driver is what the GIW can afford to pay in order to still be able to generate residual GDP growth (on borrowed time) under the sway of a Red Queen that is running out of thermodynamic “breath”. I call the process we are in an “Oil Pearl Harbour”, taking place in a kind of eerie slow motion. This is no longer retrievable.  Within roughly ten years the oil industry as we know it will have disintegrated.  The GIW is presently defenceless in the face of this threat.

The Oil Fizzle Dragon-King


Figure 5 – The “Energy Hand”

To illustrate how the GEI works I often compare its energy flows to the five fingers of the one hand: all are necessary and all are linked (Figure 5). Under the Red Queen, the GEI is progressively loosing its “knuckles” one by one like a kind of unseen leprosy – unseen yet because of the debt “veil” that hides the progressive losses and more fundamentally because of what I refer to at the bottom of Figure 5, namely were are in what I call Oil Fizzle Dragon-King.

A Dragon-King (DK) is a statistical concept developed by Didier Sornette of the Swiss Federal Institute of Technology, Zurich, and a few others to differentiate high probability and high impact processes and events from Black Swans, i.e. events that are of low probability and high impact.  I call it the Oil Fizzle because what is triggering it is the very rapidfizzling out of net energy per barrel.  It is a DK, i.e. a high probability, high impact unexpected process, purely because almost none of the decision-making elites is familiar with the thermodynamics of complex systems operating far from equilibrium; nor are they familiar with the actual social workings of the societies they live in.  Researchers have been warning about the high likelihood of something like this at least since the works of the Meadows in the early 1970s.[2]

The Oil Fizzle DK is the result of the interaction between this net energy fizzling out, climate change, debt and the full spectrum of ecological and social issues that have been mounting since the early 1970s – as I noted on Figure 1, the Oil Fizzle DK is in the process of whipping up a “Perfect Storm” strong enough to bring the GIW to its knees.  The Oil Pearl Harbour marks the Oil Fizzle DK getting into full swing.

To explain this further, with reference to Figure 5, oil represents some 33% of global primary energy use (BP data). Fossil fuels represented some 86% of total primary energy in 2014.  However, coal, oil, and gas are not like three boxes neatly set side by side from which energy is supplied magically, as most economists would have it.

In the real world (i.e. outside the world economists live in), energy supply chains form networks, rather complex ones.  For example, it takes electricity to produce many products derived from oil, coal, and gas, while electricity is generated substantially from coal and gas, and so on.  More to the point, as noted earlier, because 94% of all transport is oil-based, oil stands at the root of the entire, complex, globalised set of energy networks.  Coal mining, transport, processing, and use depend substantially on oil-derived transport fuels; ditto for gas.[3]   The same applies to nuclear plants.  So the thermodynamic collapse of the oil industry, that is now underway, not only is likely to be completed within some 10 years but is also in the process of triggering a falling domino effect (aka an avalanche, or in systemic terms, a self-organising criticality, a SOC).

Presently, and for the foreseeable future, we do not have substitutes for oil derived transport fuels that can be deployed within the required time frame and that would be affordable to the GIW.  In other words, the GIW is falling into a thermodynamic trap, right now. As B. W. Hill recently noted, “The world is now spending $2.3 trillion per year more to produce oil than what is received when it is sold. The world is now losing a great deal of money to maintain its dependence on oil.”

The Tooth Fairy Syndrome

To come back to David Bohm’s “question about the question”, in my view, we are in this situation fundamentally because of what I call the “Tooth Fairy Syndrome”, after a pointed remark by B.W. Hill in an Internet debate early last year: “It is interesting that not one analyst has yet come to the very obvious conclusion that it requires oil to produce oil. Perhaps they think it is delivered by the Tooth Fairy?”  This remark vividly characterised for me the prevalence of a fair amount of magical thinking at the heart of decision-making within both the GEI and the GIW, aka economics as a perpetual motion machine fantasy.  Unquestioned delusional beliefs lead to wrong conclusions.

This is not new.  Here are a few words of explanation.  In 1981, I met US anthropologist Laura Nader at the Australia New Zealand Association of the Advancement of Science (ANZAAS) Congress held that year at University of Queensland in Brisbane.  We were both guest speakers at seminars focusing on Energy and Equity, and in particular on how societies actually deal with energy matters, energy crises and decide about courses of action.  The title of her paper was “Energy and Equity, Magic, Science, and Religion Revisited”.

In recent years, Nader had become part of US bodies overseeing responses to the first and second oil shocks and the US nuclear energy industry (she was a member of the National Academy of Science’s Committee on Nuclear and Alternative Energy Systems, CONAES). As an anthropologist, she was initially taken aback by what she observed and proceeded to apply her anthropological skills to try and understand the weird “tribes” she had landed into.  The title of her paper was a wink at Malinowski’s famous work on the Trobriands in 1925.

Malinowski had pointed out that: “There are no people, however primitive without religion or magic.  Nor are there… any savage races [sic] lacking either in the scientific attitude or in science though this lack has been frequently attributed to them.”

Nader had observed that prevailing decision-making in the industrialised world she was living in was also the outcome of a weird mix of “Magic, Science, and Religion” with magical and mythical, quasi religious, thinking predominating among people who were viewed and who viewed themselves as rational and making scientifically grounded decisions.  At the time I was engaged in very similar research, had observed exactly the same kind of phenomena in my own Australasian fieldwork and had reached similar conclusions.

In my observations, since the 1970s the prevalence of this syndrome has considerably worsened. This is what I seek to encapsulate as the Tooth Fairy Syndrome.  With the Oil Peal harbour, the unquestioned sway of the Tooth Fairy is coming to an end.  However, the imprint of Tooth Fairy thinking remains so strong that most discussions and analyses remain highly confused, even within scientific circles still taking economic notions for granted.

In the longer run, the end effect of the Oil Fizzle DK is likely to be an abrupt decline of GHG emissions.  However, the danger I see is that meanwhile the GEI, and most notably the OI, is not going to just “curl up and die”.  I think we are in a“die hard” situation.  Since 2012, we are already seeing what I call a Big Mad Scramble (BMS) by a wide range of GEI actors that try to keep going while they still can, flying blind into the ground.  The eventual outcome is hard to avoid with a GEI operating with only about 12% energy efficiency, i.e. some 88% wasteful current primary energy use.  The GIW’s agony is likely to result in a big burst of GHG emissions while net energy fizzles out.  The high danger is that the old quip will eventuate on a planetary scale: “the operation was successful but the patient died”…  Hence my call for “enquiring into the appropriateness of the question” and for systemic thinking.  We are in deep trouble.  We can’t afford to get this wrong.

Next: Part 3 – Standing slightly past the edge of the cliff


Bio: Dr Louis Arnoux is a scientist, engineer, and entrepreneur committed to the development of sustainable ways of living and doing business.  His profile is available on Google+  at:


15 03 2016

This is Simon Michaux’s follow up to his article on the Implications of Peak Energy

Simon Michaux


Dr Simon Michaux has a Bach App Sc in Physics and Geology and a PhD in mining engineering. He has worked in the mining industry for 18 years in various capacities. He has worked in industry funded mining research, coal exploration and in the commercial sector in an engineering company as a consultant. Areas of technical interest have been: Geometallurgy; mineral processing in comminution, flotation and leaching; blasting; mining geology; geophysics; feasibility studies; mining investment; and industrial sustainability.

There is a macro-scale pattern unfolding under all of us. Every non-renewable natural resource we depend upon is now depleting to the point of peak extraction, or will soon. Industrial systems that are heavily dependent on energy reserves and metal resources are now at serious risk of collapse as production of those raw materials will soon not be able to meet demand, since easy to access reserves will be exhausted, leaving low-grade stocks that are expensive or technically challenging to extract. All living systems on the planet are under stress and are also heavily degrading. Natural systems of all kinds are being depleted in the name of economic development, and the planet’s climate is also undergoing change.

Our culture’s fundamental belief that there are no limits and growth is good, is related to the belief that all resources are infinite. Humans, like all animals on the planet, are biologically driven to consume and expand – it’s a built-in survival mechanism. Yet, as this is a finite planet and our exploitation of these natural resources is exponential in form, there will come a point where severe volatility and resource scarcity will become a reality.

Energy is the rate determining step, which facilitates the continued application of technology with economies of scale. As studies have shown, total world fossil fuel supply is close to peak, driven by peak of oil production. What’s more, putting all energy sources together gives a snapshot of our industrial capability and suggests that peak total energy is projected to be approximately in the year 2017.

energy sources

The industrial systems vital for our society to function are supported by each of these energy sources in quite different ways, and they are not interchangeable easily. A compelling case can be made that that our society and its industrial sector energy supply faces a fundamental problem, that is systemic in nature.

Our industrial requirements will have to be met with a fundamentally different approach to anything we have achieved before. We need to stop depending on non-renewable natural resources and stop the material requirements of the human societal footprint growing exponentially. Mining will continue but according to a radically different business model, and with a very different mandate.


Network theory and systems thinking has some insights to what the required new system of industrialisation could look like. Our human society, its economic and social interactions could be modelled as a system, where each activity could be a connection, for example the transport of goods, or the consumption of electricity. Nodes are where many connections intersect. For example, most activities involve a finance transfer thus will engage the services of a bank. The bank is a node, where many connections are able to function through. Not all nodes are equal though in regard to the number of connections they facilitate. The node of a car manufacturing business, for instance, will have many fewer connections than, say, the European Union Bank.

Image: NASA / Flickr CC BY NC 2.0
Image: NASA / Flickr CC BY NC 2.0

If connections are broken due to circumstance (using a city example, heavy storms and flooding could temporarily interrupt power supply to an individual neighbourhood) then the network is smaller in size but it still functions (power is still being supplied to other parts of the power grid). But if that same storm causes the power station used for electricity generation (a node) to shut down, then every consumer attached to that power station will lose power. The whole grid will crash.

The complexity of a network is supported by and defined by the energy inputs that support it. Our current complex system is supported by cheap abundant high density energy – oil. Complex system networks are not made ‘in situ’, but are grown over time from simple system networks.

What does all this mean for the current industrial grid? Peak total energy means the node of energy supply is about to be disrupted. All links in the network system supported by energy will be logistically traumatized. As it stands, any replacement energy is less dense per unit volume than oil, and requires extensive infrastructure to be built. Think of the amount of energy invested in the creation of our current system over time – without plentiful, easy to access energy, the replacement network system will need to be less complex than the current one, once fully operational. It will also take time for the network to reach full complexity.

The old system cannot function because input energy is sourced from non-renewable natural resources, all of which are depleting or soon will. As energy is the master resource, it defines what happens with all other resource systems. Any replacement system that is a practical option will have to have certain signatures.


Due to energy constraints, all industrial output would have to be sourced from a geographically local area. This would affect everything from raw material consumption, water consumption to waste disposal. Product delivery to market would also be changed. All of this would have to become as close to net zero footprint in terms of source material and waste disposal. Industrial output would have to be simpler. Technology cannot be as complex as it is now. This implies that manufacturing goods will require more effort on our part, which means that we would have to value ‘stuff’ differently. All waste products will also require greater effort to dispose of, meaning that if they could be recycled, reused or repurposed, there would be less strain on the system to function. Maintaining QA/QC material standards and equipment maintenance would all have to be done within a relatively local geographic region. These challenging statements represent practical limits of a low energy future. As this represents quite a paradigm shift from our current state of exponential consumption based on whim, the most difficult but significant task in front of us is a revolution in perception and a restructuring of governance.

Political systems like capitalism, socialism, communism, fascism, etc. are all built in the context of unlimited natural resources. Whatever the new system looks like, it won’t be anything like what has been seen before. We can call it what we like. Planning will have to be projected over 50 to 60 years into the future but be flexible to evolve organically to its environs. The current system is very centralised, whereas the new system would have to be very decentralised due to energy constraints. The flow of information will become very important.

The Great Acceleration indicators, published by IGBP in collaboration with the Stockholm Resilience Centre
The Great Acceleration indicators, published by IGBP in collaboration with the Stockholm Resilience Centre

From a civilisation network systems footprint viewpoint, we must ask ourselves how we can develop an economy that offers enough for everyone, forever. Real world systems and their inputs must reflect this, and the familiar exponential curves of today’s economy must move to flat line or sinusoidal wave functions. We also need to ask what profile human civilisation has amongst the natural environment. Dynamic natural systems must be able to operate unhindered, where natural capital and biodiversity is allowed to recover. The new economic framework must appreciate that inputs and outputs to all systems must be stable over time.

There are two related conceptual ideas which could be a starting point to help us develop the above requirements: the circular economy and the steady state economy. In a future in which peak energy has dramatically changed the rules of the game, these concepts are required to maintain our industrial capacity. It is not a question of choice, as our natural resources are being depleted at an exponential rate. The timing is now. The next 100 years will be very different to the last 100 years.