The Make Believe Future

6 02 2020

Put simply, there is not enough Planet Earth left

for us to grow our way to sustainability

Another brilliant post from Tim at Consciousness of Sheep…

US President John F. Kennedy began the political fad of setting targets for the future US President John F. Kennedy began the political fad of setting targets for the future when, on 25 May 1961, he persuaded the Congress to agree to the goal of landing men on the moon by the end of the decade. On 12 September 1962 he made his more famous public speech at Rice University:

“We choose to go to the moon. We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win…”

Notice that Kennedy referred to going to the moon as hard; not once did he use the word “impossible.” Even in 1962, all of the technologies required already existed. For sure they needed refining and developing. Certainly there would be hardships – including several tragic deaths – along the way. But success largely depended upon the political, organisational and economic requirements of the project rather than the creation of novel technologies.

Although largely a Cold War project, the moon landings were widely viewed at the time as a stepping stone on humanity’s journey of discovery to the stars. In hindsight, the years 1969-72 marked the apex of human progress. The oil shocks and economic crises of the 1970s removed the optimism of the previous two decades. Humans were never again to venture out beyond a low Earth orbit. The new space technologies and energy sources that might have bridged the enormous distances between us and our nearest celestial neighbours failed to put in an appearance. Closer to home, other “leading edge” technologies such as commercial supersonic flight were also being mothballed – only the Concorde, heavily subsidised by British and French taxpayers, continued to ferry the rich and famous across the Atlantic.

We have been on a downward trajectory ever since. During the boom years 1953-73, as the economies of the developed and developing states made the switch from coal to oil, energy per capita rose exponentially alongside oil production. Had it not been for the 1973 OPEC embargo, global oil production might have managed a couple more years of exponential growth before the inevitable slowdown began. As it was, 1973 – the year after the final moon landing – marks the point at which energy per capita across the developed economies went into reverse. This sounds technical, but the consequence was that productivity (essentially using more energy or using energy more efficiently to generate more economic value) began to slow. And since productivity growth is what allows wage growth, wages began to fall too. The wage-price inflationary spiral of the 1970s – exacerbated by state currency-printing and capital control policies – was the result of a battle between capital and organised labour over the relative shares of falling productivity growth.

John Michael Greer described the practical consequences when he pointed to the difference in living standards between a semi-skilled manual worker in the 1970s and a semi-skilled worker of today. In those days, a single worker on the average semi-skilled wage could afford to buy a house, support a family, run a car and enjoy annual holidays. Today a single semi-skilled worker would be lucky to avoid homelessness. The consequence of our now falling energy per capita is that productivity has ceased entirely. We now face a series of linked crises in the economy, environment and energy which severely limit our scope for action. Wages in the developed economies have been stagnant since the financial crash in 2008. Wages in the emerging market economies are now also slowing. Outside a handful of niche industries like tech and pharmaceuticals – which survive on the back of huge state subsidies – investment has switched away from technology into a series of derivative financial instruments that have no practical value and add nothing to economic development.

Even things that were once hard, but possible – like landing people on the moon – are now beyond us. But John F. Kennedy’s words continue to echo down the decades to reach the ears of contemporary politicians who mistakenly believe that we only need to set a goal and smart people somewhere else will make it happen. So it is that our political leaders have committed to decarbonising the economy by 2050 despite – unlike the Apollo Project – several of the required technologies and the resources to construct them only existing in the pages of science fiction novels.

More recently, the Prime Minister of the (increasingly un-) United Kingdom – a man who studied classics and, apparently is clueless about climate change – has decided to bring forward to 2035 the ban on new internal combustion engine cars and vans. Worse still, and to the horror of motoring organisations, vehicle manufacturers and grid engineers, he has decided to include hybrid vehicles in the ban. On the same day – and also in response to government climate commitments – the UK air industry announced plans to become “net zero carbon” by 2050. This, apparently, is to be achieved using yet-to-be-invented lean-burn engines which use yet-to-be-invented artificial hydrocarbon fuels manufactured by combining hydrogen with carbon dioxide sucked out of the air.

At least electric cars actually exist. The infrastructure required to make the switch is an altogether different matter. As Will Bedingfield at Wired warned last month:

“[A] spectre is haunting the UK’s emissions targets – the spectre of nuclear retirement… By the early 2030s, just one of the UK’s seven nuclear power stations will be operational. Over the last few years, plans to construct three new power stations – Hitachi’s Wylfa Newydd nuclear plants on Anglesey in Wales and Oldbury in Gloucestershire, and Toshiba’s Moorside project in Cumbria – which together could have met 15 per cent of the UK’s future electricity demands, have been scrapped.”

Meanwhile, efforts to fill the gap with non-renewable renewable energy-harvesting technologies have stalled, as Phillip Inman at the Guardian explains:

“Britain’s green economy has shrunk since 2014, heightening concerns that the government will miss targets to cut greenhouse gas emissions by the middle of the decade.

“The number of people employed in the “low carbon and renewable energy economy” declined by more than 11,000 to 235,900 between 2014 and 2018, according to the Office for National Statistics (ONS). Green businesses fared little better, seeing their numbers drop from an estimated 93,500 to 88,500 over the same four-year period.”

There are some big offshore wind projects still to come online, but without government subsidies, these may be the last of their kind. In any case, they provide nothing like the generating capacity which will be lost as coal and nuclear plants are decommissioned.

The absolute numbers also hide the technical issues around intermittency and grid frequency which resulted in a nationwide blackout in August last year. National Grid had been relying on combined cycle gas turbine plants, which can rapidly increase and decrease production, to iron out the intermittent generation from wind and solar. However, as the percentage of renewable energy fed into the grid passes two-thirds, it appears that this solution is no longer sufficient. The temporary – and probably unsustainable – fix for this is to pay for gas power plants just to keep the turbines spinning even if the electricity generated is not needed. As Nina Chestney and Noor Zainab Hussain at Reuters report:

“National Grid’s said on Wednesday it had agreed contracts with five parties worth 328 million pounds ($431 million) over a six-year period for services to manage the stability of its electricity system in Britain…

“The key service to be provided is what is known as ‘inertia’ on the grid, which helps to keep the electricity system running at the right frequency… Under the new approach, National Grid said inertia will be achieved without having to provide electricity. This will allow more renewable generation to operate and ensure system stability at lower costs.”

The “lower costs” refers to the difference between this approach and paying for expensive storage. Paying someone to provide additional inertia is not cheaper than not having to do it at all. Even so, inertia balancing is just one of a plethora of the headaches currently stressing grid managers and engineers. As James Sillars at Sky reports:

“The UK’s electricity network needs urgent investment to prepare for an electric vehicle future or risk blackouts, a report for the government has warned.

“The Electric Vehicles Energy Task Force, commissioned by ministers, urges a ‘smart charging’ approach – utilising times of weak demand – along with a power network able to adapt to shifts in electricity use.”

Nor, apparently, is electric vehicle infrastructure easily constructed by energy engineering companies tasked with keeping an increasingly old and frail grid infrastructure operating. When it comes to public charging facilities, delays of several years are not uncommon. As Peter Campbell and Nathalie Thomas at the Financial Times reported last month:

“Britain’s electricity network is ‘not fit for purpose’ and is stifling the rollout of electric vehicle chargers along key trunk roads in the UK, say motorway services operators.

“Electric vehicles currently account for only about 2 per cent of sales in the UK, but a steep rise is expected during the next two years as carmakers strive to meet new stringent CO2 targets and as the country gears up to hit its target of net zero carbon emissions by 2050.

“Motorway service areas are preparing to increase their charging provisions to meet the jump in demand. But Simon Turl, chairman of operator RoadChef, said his company’s attempts to add charging services have been held up by distribution network operators (DNOs), which own local electricity grids and demand millions of pounds and waits of up to three years, to install new power lines.”

Electric vehicles are, of course, merely one component of the fantasy zero-carbon future. The wider task is truly staggering, as another Sky News report explains:

“A mass recruitment drive involving hundreds of thousands of people is needed by the energy sector if the UK’s 2050 target for zero net emissions is to be met, a new report claims.

“The National Grid says 400,000 skilled tradespeople, engineers and other specialists are required across the industry, with at least 117,000 of them needed in the next 10 years.

“However the report says the sector is facing stiff competition for staff from other areas such as tech and finance, while a looming retirement crunch and not enough young people choosing to study science, technology, engineering and maths, are making matters worse.”

As I pointed out last month:

“An energy transition which requires this number of new skilled workers is simply not going to happen. Nor is the UK in a position to easily afford the £3.75bn per year additional wage bill for the 117,000 new workers in the 2020s; still less the £12.8bn annual wage bill in the 2030s and 2040s. In the event that government continues adding the cost of upgrading the energy grid onto household bills, this amounts to an annual increase of £667 for every household in the UK. At a time when household purchasing power – still lower in real terms than in 2008 – has fallen to the point that tens of thousands of retail jobs are being lost, it is doubtful that the economy can afford the additional cost without being plunged into recession.”

This is where our tendency to believe that since economists are on a par with astrologers and homeopaths, the economy itself doesn’t matter. However – as Henry Ford discovered in the early days of oil-powered vehicles – unless the workers can afford the technologies, the energy revolution simply isn’t going to happen. And at present, American cities have joined the third world while urban British workers shiver in the dark, as a new report from The Prince’s Trust explains:

“The research suggests that young people are skipping meals, selling items that are important to them and not putting the heating on to save money. The research reveals a gap between the confidence levels of the UK’s most and least disadvantaged young people, with those from disadvantaged backgrounds feeling less hopeful about their future prospects…

“The research shows that one in three young people aged 18 and over with an overdraft facility are regularly using it, and one in five (18 per cent) go further into their overdraft each month. Over a fifth (22 per cent) of young people in rented accommodation struggle to pay their rent. Borrowing from family and friends has also been a necessity for some, with one in four young people (26 per cent) admitting they have done this in the past year. However, six in ten young people (62 per cent) are embarrassed to ask others for financial support.”

When John F. Kennedy sold the Apollo Project to the American people, he had the luxury of an expanding economy in which all but the very poorest were experiencing rising standards of living. The energy, materials, technology and the surplus value needed for the moon shot were all available in abundance. None of those prerequisites is true of the proposed energy transition today. The energy cost of energy has risen beyond the point that developed economies can continue to grow; and is fast reaching the point at which the emerging economies which have provided at least some growth for the past decade are beginning to stall. Whereas the 1960s USA had access to the raw resources of a largely untapped planet, today we are squeezing the last accessible dregs out of our exhausted Earth. As a recent letter from scientists at the Natural History Museum warned:

“To replace all UK-based vehicles today with electric vehicles (not including the LGV and HGV fleets), assuming they use the most resource-frugal next-generation NMC 811 batteries, would take 207,900 tonnes cobalt, 264,600 tonnes of lithium carbonate (LCE), at least 7,200 tonnes of neodymium and dysprosium, in addition to 2,362,500 tonnes copper. This represents, just under two times the total annual world cobalt production, nearly the entire world production of neodymium, three quarters the world’s lithium production and at least half of the world’s copper production during 2018. Even ensuring the annual supply of electric vehicles only, from 2035 as pledged, will require the UK to annually import the equivalent of the entire annual cobalt needs of European industry…

“There are serious implications for the electrical power generation in the UK needed to recharge these vehicles. Using figures published for current EVs (Nissan Leaf, Renault Zoe), driving 252.5 billion miles uses at least 63 TWh of power. This will demand a 20% increase in UK generated electricity.

“Challenges of using ‘green energy’ to power electric cars: If wind farms are chosen to generate the power for the projected two billion cars at UK average usage, this requires the equivalent of a further years’ worth of total global copper supply and 10 years’ worth of global neodymium and dysprosium production to build the windfarms.

“Solar power is also problematic – it is also resource hungry; all the photovoltaic systems currently on the market are reliant on one or more raw materials classed as “critical” or “near critical” by the EU and/ or US Department of Energy (high purity silicon, indium, tellurium, gallium) because of their natural scarcity or their recovery as minor-by-products of other commodities. With a capacity factor of only ~10%, the UK would require ~72GW of photovoltaic input to fuel the EV fleet; over five times the current installed capacity. If CdTe-type photovoltaic power is used, that would consume over thirty years of current annual tellurium supply.

“Both these wind turbine and solar generation options for the added electrical power generation capacity have substantial demands for steel, aluminium, cement and glass.”

Put simply, there is not enough Planet Earth left for us to grow our way to sustainability. And even if there was, the environmental damage of constructing an entirely new infrastructure would likely destroy what remains of the human habitat anyway. In any case, without further economic growth and in the absence of a radical redistribution of wealth of a kind that would have made Lenin blush, it is hard to imagine increasingly impoverished populations voting for ever more expensive energy bills. There is a reason why Luddites like Trump and Morrison are currently getting away with dismantling environmental laws and regulations – and they are the relatively benign face of a nationalist populism that will get a lot worse if current levels of inequality continue to grow.

The challenge of a zero-carbon civilisation only appears realistic when one of its elements is viewed in isolation. Once it is seen in its complete energetic, material, technological, environmental, economic and political dimensions it is an obvious fiction. There is simply no way in which we get to continue with business as usual simply by swapping one energy technology for another. And attempts at channelling the ghost of John F. Kennedy will not change this.





Why Climate Change Isn’t Our Biggest Environmental Problem, and Why Technology Won’t Save Us

27 11 2019

Richard Heinberg

August 17, 2017


Our core ecological problem is not climate change. It is overshoot, of which global warming is a symptom. Overshoot is a systemic issue. Over the past century-and-a-half, enormous amounts of cheap energy from fossil fuels enabled the rapid growth of resource extraction, manufacturing, and consumption; and these in turn led to population increase, pollution, and loss of natural habitat and hence biodiversity. The human system expanded dramatically, overshooting Earth’s long-term carrying capacity for humans while upsetting the ecological systems we depend on for our survival. Until we understand and address this systemic imbalance, symptomatic treatment (doing what we can to reverse pollution dilemmas like climate change, trying to save threatened species, and hoping to feed a burgeoning population with genetically modified crops) will constitute an endlessly frustrating round of stopgap measures that are ultimately destined to fail.

The ecology movement in the 1970s benefitted from a strong infusion of systems thinking, which was in vogue at the time (ecology—the study of the relationships between organisms and their environments—is an inherently systemic discipline, as opposed to studies like chemistry that focus on reducing complex phenomena to their components). As a result, many of the best environmental writers of the era framed the modern human predicament in terms that revealed the deep linkages between environmental symptoms and the way human society operates. Limits to Growth (1972), an outgrowth of the systems research of Jay Forrester, investigated the interactions between population growth, industrial production, food production, resource depletion, and pollution. Overshoot (1982), by William Catton, named our systemic problem and described its origins and development in a style any literate person could appreciate. Many more excellent books from the era could be cited.

However, in recent decades, as climate change has come to dominate environmental concerns, there has been a significant shift in the discussion. Today, most environmental reporting is focused laser-like on climate change, and systemic links between it and other worsening ecological dilemmas (such as overpopulation, species extinctions, water and air pollution, and loss of topsoil and fresh water) are seldom highlighted. It’s not that climate change isn’t a big deal. As a symptom, it’s a real doozy. There’s never been anything quite like it, and climate scientists and climate-response advocacy groups are right to ring the loudest of alarm bells. But our failure to see climate change in context may be our undoing.

Why have environmental writers and advocacy organizations succumbed to tunnel vision? Perhaps it’s simply that they assume systems thinking is beyond the capacity of policy makers. It’s true: if climate scientists were to approach world leaders with the message, “We have to change everything, including our entire economic system—and fast,” they might be shown the door rather rudely. A more acceptable message is, “We have identified a serious pollution problem, for which there are technical solutions.” Perhaps many of the scientists who did recognize the systemic nature of our ecological crisis concluded that if we can successfully address this one make-or-break environmental crisis, we’ll be able to buy time to deal with others waiting in the wings (overpopulation, species extinctions, resource depletion, and on and on).

If climate change can be framed as an isolated problem for which there is a technological solution, the minds of economists and policy makers can continue to graze in familiar pastures. Technology—in this case, solar, wind, and nuclear power generators, as well as batteries, electric cars, heat pumps, and, if all else fails, solar radiation management via atmospheric aerosols—centers our thinking on subjects like financial investment and industrial production. Discussion participants don’t have to develop the ability to think systemically, nor do they need to understand the Earth system and how human systems fit into it. All they need trouble themselves with is the prospect of shifting some investments, setting tasks for engineers, and managing the resulting industrial-economic transformation so as to ensure that new jobs in green industries compensate for jobs lost in coal mines.

The strategy of buying time with a techno-fix presumes either that we will be able to institute systemic change at some unspecified point in the future even though we can’t do it just now (a weak argument on its face), or that climate change and all of our other symptomatic crises will in fact be amenable to technological fixes. The latter thought-path is again a comfortable one for managers and investors. After all, everybody loves technology. It already does nearly everything for us. During the last century it solved a host of problems: it cured diseases, expanded food production, sped up transportation, and provided us with information and entertainment in quantities and varieties no one could previously have imagined. Why shouldn’t it be able to solve climate change and all the rest of our problems?

Of course, ignoring the systemic nature of our dilemma just means that as soon as we get one symptom corralled, another is likely to break loose. But, crucially, is climate change, taken as an isolated problem, fully treatable with technology? Color me doubtful. I say this having spent many months poring over the relevant data with David Fridley of the energy analysis program at Lawrence Berkeley National Laboratory. Our resulting book, Our Renewable Future, concluded that nuclear power is too expensive and risky; meanwhile, solar and wind power both suffer from intermittency, which (once these sources begin to provide a large percentage of total electrical power) will require a combination of three strategies on a grand scale: energy storage, redundant production capacity, and demand adaptation. At the same time, we in industrial nations will have to adapt most of our current energy usage (which occurs in industrial processes, building heating, and transportation) to electricity. Altogether, the energy transition promises to be an enormous undertaking, unprecedented in its requirements for investment and substitution. When David and I stepped back to assess the enormity of the task, we could see no way to maintain current quantities of global energy production during the transition, much less to increase energy supplies so as to power ongoing economic growth. The biggest transitional hurdle is scale: the world uses an enormous amount of energy currently; only if that quantity can be reduced significantly, especially in industrial nations, could we imagine a credible pathway toward a post-carbon future.

Downsizing the world’s energy supplies would, effectively, also downsize industrial processes of resource extraction, manufacturing, transportation, and waste management. That’s a systemic intervention, of exactly the kind called for by the ecologists of the 1970s who coined the mantra, “Reduce, reuse, and recycle.” It gets to the heart of the overshoot dilemma—as does population stabilization and reduction, another necessary strategy. But it’s also a notion to which technocrats, industrialists, and investors are virulently allergic.

The ecological argument is, at its core, a moral one—as I explain in more detail in a just-released manifesto replete with sidebars and graphics (“There’s No App for That: Technology and Morality in the Age of Climate Change, Overpopulation, and Biodiversity Loss”).  Any systems thinker who understands overshoot and prescribes powerdown as a treatment is effectively engaging in an intervention with an addictive behavior. Society is addicted to growth, and that’s having terrible consequences for the planet and, increasingly, for us as well. We have to change our collective and individual behavior and give up something we depend on—power over our environment. We must restrain ourselves, like an alcoholic foreswearing booze. That requires honesty and soul-searching.

In its early years the environmental movement made that moral argument, and it worked up to a point. Concern over rapid population growth led to family planning efforts around the world. Concern over biodiversity declines led to habitat protection. Concern over air and water pollution led to a slew of regulations. These efforts weren’t sufficient, but they showed that framing our systemic problem in moral terms could get at least some traction.

Why didn’t the environmental movement fully succeed? Some theorists now calling themselves “bright greens” or “eco-modernists” have abandoned the moral fight altogether. Their justification for doing so is that people want a vision of the future that’s cheery and that doesn’t require sacrifice. Now, they say, only a technological fix offers any hope. The essential point of this essay (and my manifesto) is simply that, even if the moral argument fails, a techno-fix won’t work either. A gargantuan investment in technology (whether next-generation nuclear power or solar radiation geo-engineering) is being billed as our last hope. But in reality it’s no hope at all.

The reason for the failure thus far of the environmental movement wasn’t that it appealed to humanity’s moral sentiments—that was in fact the movement’s great strength. The effort fell short because it wasn’t able to alter industrial society’s central organizing principle, which is also its fatal flaw: its dogged pursuit of growth at all cost. Now we’re at the point where we must finally either succeed in overcoming growthism or face the failure not just of the environmental movement, but of civilization itself.

The good news is that systemic change is fractal in nature: it implies, indeed it requires, action at every level of society. We can start with our own individual choices and behavior; we can work within our communities. We needn’t wait for a cathartic global or national sea change. And even if our efforts cannot “save” consumerist industrial civilization, they could still succeed in planting the seeds of a regenerative human culture worthy of survival.

There’s more good news: once we humans choose to restrain our numbers and our rates of consumption, technology can assist our efforts. Machines can help us monitor our progress, and there are relatively simple technologies that can help deliver needed services with less energy usage and environmental damage. Some ways of deploying technology could even help us clean up the atmosphere and restore ecosystems.

But machines won’t make the key choices that will set us on a sustainable path. Systemic change driven by moral awakening: it’s not just our last hope; it’s the only real hope we’ve ever had.





Unpacking Extinction Rebellion — Part I: Net-zero Emissions

17 09 2019

Kim Hill

Sep 13 · Originally published by Medium, a very important article needed to be read very widely……..

The Extinction Rebellion (XR) movement has taken off around the world, with millions of people taking to the streets to demand that governments take action on climate change and the broader ecological crisis. The scale of the movement means it has the potential to have an enormous impact on the course of history, by bringing about massive changes to the structure of our societies and economic systems.

The exact nature of the demanded action is not made clear, and warrants a close examination. There is a long history of powerful government and corporate interests throwing their support behind social movements, only to redirect the course of action to suit their own ends, and Extinction Rebellion is no exception.

With the entirety of life on this planet at stake, any course of action needs to be considered extremely carefully. Actions have consequences, and at this late stage, one mis-step can be catastrophic. The feeling that these issues have been discussed long enough and it is now time for immediate action is understandable. However, without clear goals and a plan on how to achieve them, the actions taken are likely to do more harm than good.

Extinction and climate change are among the many disastrous effects of an industrial society. While the desire to take action to stop the extinction of the natural world is admirable, rebelling against the effects without directly confronting the economic and political systems that are the root cause is like treating the symptoms of an illness without investigating or diagnosing it first. It won’t work. Addressing only one aspect of the global system, without taking into account the interconnected industries and governance structures, will only lead to worse problems.

Demand 2: net-zero emissions

The rebellion’s goals are expressed in three demands, under the headings Tell the Truth, Act Now and Beyond Politics. I’m starting with the second demand because net-zero is the core goal of the rebellion, and the one that will have enormous political, economic and social impact.

What does net-zero emissions mean? In the words of Catherine Abreau, executive director of the Climate Action Network: “In short, it means the amount of emissions being put into the atmosphere is equal to the amount being captured.” The term carbon-neutral is interchangeable with net-zero.

Net-zero emissions is Not a Thing. There is no way to un-burn fossil fuels. This demand is not for the extraction and burning to stop, but for the oil and gas industry to continue, while powering some non-existent technology that makes it all okay. XR doesn’t specify how they plan to reach the goal.

Proponents of net-zero emissions advocate for the trading of carbon offsets, so industries can pay to have their emissions captured elsewhere, without reducing any on their part. This approach creates a whole new industry of selling carbon credits. Wind turbines, hydro-electric dams, biofuels, solar panels, energy efficiency projects, and carbon capture are commonly traded carbon offsets. None of these actually reduce carbon emissions in practice, and are themselves contributing to greenhouse gas emissions, so make the problem worse. Using this approach, a supposedly carbon-neutral economy leads to increased extraction and burning, and generates massive profits for corporations in the process. Head of environmental markets at Barclays Capital, Louis Redshaw, predicted in 2007 “carbon will be the world’s biggest commodity market, and it could become the world’s biggest market overall.”

The demand for net-zero emissions has been echoed by a group of more than 100 companies and lobby groups, who say in a letter to the UK government: “We see the threat that climate change poses to our businesses and to our investments, as well as the significant economic opportunities that come with being an early mover in the development of new low-carbon goods and services.” Included in this group are Shell, Nestle and Unilever. This is the same Shell that has caused thousands of oil spills and toxic leaks in Nigeria and around the world, executed protesters, owns 60 per cent of the Athabasca oil sands project in Alberta, and intends to continue extracting oil long into the future; the same Nestle that profits from contaminated water supplies by selling bottled water, while depleting the world’s aquifers; the same Unilever that is responsible for clearing rainforests for palm oil and paper, dumping tonnes of mercury in India, and making billions by marketing plastic-wrapped junk food and unnecessary consumer products to the world’s poorest people. All these companies advocate for free trade and privatization of the commons, and exploit workers and lax environmental laws in the third world. As their letter says, their motivation is to profit from the crisis, not to stop the destruction they are causing.

These are XR’s allies in the call for net-zero emissions.

The nuclear industry also sees the net-zero target as a cause for celebration, and even fracking is considered compatible with the goal.

Net-zero emissions in practice

Let’s look at some of the proposed approaches to achieve net-zero in more detail.

Renewable energy doesn’t reduce the amount of energy being generated by fossil fuels, and doesn’t do anything to reduce atmospheric carbon. Wind turbines and solar panels are made of metals, which are mined using fossil fuels. Any attempt to transition to 100% renewables would require more of some rare earth metals than exist on the planet, and rare earth mining is mostly done illegally in ecologically sensitive areas in China. There are plans to mine the deep sea to extract the minerals needed for solar panels, wind turbines and electric car batteries. Mining causes massive destruction and pollution of forests and rivers, leading to increased rates of extinction and climate change. And huge profits for mining and energy companies, who can claim government subsidies for powering the new climate economy. The amount of fossil fuels needed to power the mines, manufacturing, infrastructure and maintenance of renewables makes the goal of transitioning to clean energy completely meaningless. Wind and solar ‘farms’ are installed on land taken from actual farms, as well as deserts and forests. And the energy generated is not used to protect endangered species, but to power the industries that are driving us all extinct. Not a solution. Not even close. In the net-zero logic of offset trading, renewables are presented as not an alternative to fossil fuel extraction, but instead a way to buy a pass to burn even more oil. That’s a double shot of epic fail for renewables.

Improving efficiency of industrial processes leads to an increase in the amount of energy consumed, not a decrease, as more can be produced with the available energy, and more energy is made available for other uses. The industries that are converting the living world into disposable crap need to be stopped, not given money to destroy the planet more efficiently.

Reforestation would be a great way to start repairing the damage done to the world, but instead is being used to expand the timber industry, which uses terms like ‘forest carbon markets’ and ‘net-zero deforestation’ to legitimize destroying old-growth forests, evicting their inhabitants, and replacing them with plantations. Those seeking to profit from reforestation are promoting genetically engineered, pesticide-dependent monocrop plantations, to be planted by drones, and are anticipating an increase in demand for wood products in the new ‘bioeconomy’. Twelve million hectares of tropical rainforest were cleared in 2018, the equivalent of 30 football fields a minute. Land clearing at this rate has been going on for decades, with no sign of stopping. No carbon offsets or emissions trading can have any effect while forest destruction continues. And making an effort to repair past damage does not make it okay to continue causing harm long into the future. A necessary condition of regenerating the land is that all destructive activity needs to stop.

Carbon capture and storage (CCS) is promoted as a way to extract carbon dioxide from industrial emissions, and bury it deep underground. Large amounts of energy and fresh water are required to do this, and pollutants are released into the atmosphere in the process. The purpose of currently-operational carbon capture installations is not to store the carbon dioxide, but to use it in a process called Enhanced Oil Recovery (EOR), which involves injecting CO2 into near-depleted oil fields, to extract more fossil fuels than would otherwise be accessible. And with carbon trading, the business of extracting oil becomes more profitable, as it can sell offset credits. Again, the proposed solution leads to more fossil fuel use, not less. Stored carbon dioxide is highly likely to leak out into the atmosphere, causing earthquakes and asphyxiating any nearby living beings. This headline says all you need to know: “Best Carbon Capture Facility In World Emits 25 Times More CO2 Than Sequestered”. Carbon capture for underground storage is neither technically nor commercially viable, as it is risky and there is no financial incentive to store the carbon dioxide, so requires government investment and subsidies. And the subsidies lead to coal and gas becoming more financially viable, thus expanding the industry.

Bio-energy with carbon capture and storage (BECCS) is a psychopathic scheme to clear forests, and take over agricultural land to grow genetically modified fuel crops, burn the trees and crops as an energy source, and then bury the carbon dioxide underground (where it’s used to expand oil and gas production). It would require an amount of land almost the size of Australia, or up to 80% of current global cropland, masses of chemical fertilizers (made from fossil fuels), and lead to soil degradation (leading to more emissions), food shortages, water shortages, land theft, massive increase in the rate of extinction, and I can’t keep researching these effects it’s making me feel ill. Proponents of BECCS (i.e. fossil fuel companies) acknowledge that meeting the targets will require “three times the world’s total cereal production, twice the annual world use of water for agriculture, and twenty times the annual use of nutrients.” Of course this will mostly take place on land stolen from the poor, in Africa, South America and Asia. And the energy generated used to make more fighter jets, Hollywood movies, pointless gadgets and urban sprawl. Burning of forests for fuel is already happening in the US and UK, all in the name of clean energy. Attaching carbon capture to bioenergy means that 30% more trees or crops need to be burned to power the CCS facility, to sequester the emissions caused by burning them. And again, it’s an offset, so sold as a justification to keep the fossil fuel industry in business. The Intergovernmental Panel on Climate Change (in the three most likely of its four scenarios) recommends implementing BECCS on a large scale to keep warming below 2°C. Anyone who thinks this is a good idea can go burn in hell, where they can be put to good use as an energy source.

This is what a decarbonised economy looks like in practice. An enormous increase in fossil fuel extraction, land clearing, mining (up to nine times as much as current levels), pollution, resource wars, exploitation, and extinction. All the money XR is demanding that governments invest in decarbonisation is going straight to the oil, gas, coal and mining companies, to expand their industries and add to their profits. The Centre for International Environmental Law, in the report Fuel to the Fire, states “Overall, the US government has been funding CCS research since 1997, with over $5billion being appropriated since 2010.” Fossil fuel companies have been advocating net-zero for some years, as it is seen as a way to save a failing coal industry, and increase demand for oil and gas, because solar, wind, biofuels and carbon capture technologies are all dependent on fossil fuels for their operation.

Anyone claiming that a carbon-neutral economy is possible is not telling the truth. All of these strategies emit more greenhouse gases than they capture. The second demand directly contradicts the first.

These approaches are used to hide the problem, and dump the consequences on someone else: the poor, nonhuman life, the third world, and future generations, all in the service of profits in the present. The goal here is not to maintain a stable climate, or to protect endangered species, but to make money out of pretending to care.

Green growth, net-zero emissions and the Green New Deal (which explicitly states in its report that the purpose is to stimulate the economy, which includes plans to extract “remaining fossil fuel with carbon capture”) are fantasy stories sold to us by energy companies, a shiny advertisement sucking us in with their claims to make life better. In reality the product is useless, and draws us collectively into a debt that we’re already paying for by being killed off at a rate of 200 species a day. With exponential economic growth (a.k.a. exponential climate action) the rate of extinction will also grow exponentially. And the money to pay for it all comes directly from working people, in the form of pension funds, carbon taxes, and climate emergency levies.

The transition to net-zero

There are plans for thousands of carbon capture facilities to be built in the coming years, all requiring roads, pipelines, powerlines, shipping, land clearing, water extraction, pollution, noise, and the undermining of local economies for corporate profits, all for the purpose of extracting more oil. And all with the full support of the rebellion.



To get a sense of the scale of this economic transformation, a billion seconds is almost 32 years. If you were to line up a billion cars and run over them (or run them over) at a rate of one car per second, you’d be running for 32 years non-stop. That’s enough cars to stretch 100 times around the equator. You’d probably need to turn entire continents into a mine site to extract all the minerals required to make them. And even that wouldn’t be enough, as some of the rare earth metals required for batteries don’t exist in sufficient quantities. If all these cars are powered by renewables, you do the math on how much mining would be needed to make all the wind turbines and solar panels. Maybe several more continents. And then a few more covered in panels, turbines, powerlines, substations. And a few more to extract all the oil needed to power the mining and road building. Which all leaves no space for any life. And all for what? So we can spend our lives stuck in traffic? It’s ridiculous and apocalyptic, yet this is what the net-zero lobbyists, with the US and UK governments, and the European Union, have already begun implementing.

Shell’s thought leadership and government advisory schemes appear to be going great, with the US senate passing a number of bills in recent months to increase subsidies for oil companies using carbon capture, and a few more, to subsidise wind, solar, nuclear, coal, gas, research and development, and even more carbon capture, are scheduled to pass in the coming months.

The UK government, with guidance from the creepy-sounding nonprofit Energy and Climate Intelligence Unit, is implementing a transition to net-zero, involving carbon capture, nuclear, bioenergy, hydrogen, ammonia, wind, solar, oil, gas, electric cars, smart grids, offset trading, manufacturing and the obligatory economic growth. And offering ‘climate finance’ to third world countries, to impose this industrial horror on the entire planet. All led by their advisors from the fossil fuel and finance industries, with input from the CCS, oil, gas, bioenergy, renewables, chemical, manufacturing, hydrogen, nuclear, airline, automotive, mining, and agriculture industries.

The European Union, advised by the corporate-funded European Climate Foundation, are implementing a similar plan, aiming to remain competitive with the rest of the industrialised world. The EU intends to commit 25% of its budget to implementing so-called climate mitigation strategies. Other industrialised countries also have plans to transition to a decarbonised economy.

Net-zero emissions is also the goal of the councils that have declared a climate emergency, which now number close to 1000, covering more than 200 million citizens.

This is the plan the rebellion is uniting behind to demand from the world’s governments.





WHO wants change………??

14 08 2019

Hot on the heels of David Attenborough’s climate show, along comes this great article by Tim Watkins……..


Goldsmiths kebab

We learned yesterday that a British university had made a small contribution to addressing a climate emergency that its spokespeople argue is going to kill us all just 12 years from now.  As Katherine Sellgren at the BBC reports:

“A university is banning the sale of [beef] burgers to try to fight global warming.

“Goldsmiths, University of London, is removing all beef products from sale – and charging a 10p levy on bottled water and single-use plastic cups.

“It plans to install more solar panels across its New Cross campus, in south-east London, and switch to a 100% clean energy supplier as soon as possible.

“It will spend money on its allotment and identify other areas where planting could help to absorb carbon dioxide.”

Banning beef burgers and deploying a handful of solar panels (made in China in coal-powered factories and shipped to the UK on oil-powered ships; where their addition to the Grid will increase the risk of power cuts) is little more than a gesture which, in any case, involves no real sacrifice for those making the decision.  Indeed, this was called out by an interviewer on the BBC Radio4 Today programme, who pointed out that the meaningful changes suggested by the IPCC, such as refurbishing buildings to make them energy efficient would make a much bigger impact than a burger ban.  And so a Student Union representative was asked whether they would support such a major refurbishment… even if it meant that students at the college might have to pay additional tuition fees.  The predictable response was, “Oh no.  Students want free education.”

This, of course, gets to the nub of the problem with addressing the growing environmental catastrophe.  Three-quarters of us (outside the USA) accept the science.  Two-thirds of us agree that “something must be done.”  Less than half of us are prepared to vote for anyone who promises to do something.  And less than ten percent of us are prepared to make meaningful sacrifices to lower our carbon footprints – and those who are, are seldom those who can most afford to do so.  As John Michael Greer points out:

“For years now, since that brief period when I was a very minor star in the peak oil movement, I’ve noted a curious dynamic in the climate change-centered end of environmentalism. Almost always, the people I met at peak oil events who were concerned about peak oil and the fate of industrial society more generally, rather than climate change or such other mediacentric causes as the plight of large cute animals, were ready and willing to make extensive changes in their own lives, in addition to whatever political activism they might engage in. Almost always, the people I met who were exclusively concerned with anthropogenic climate change were not.

“I can be even more precise. With vanishingly few exceptions, the people I met who were solely concerned with anthropogenic climate change insisted loudly that what needed to happen was that someone else, somewhere else, had to stop using so much carbon.”

The predictable result is that a host of climate change media stars with carbon footprints the size of small countries descend upon conferences around the planet – most recently the Google event on Sicily – to lecture the rest of us on why we must change our lifestyles to combat climate change; just before they leap back on board their carbon-belching private jets and luxury yachts to be whisked away to the next jolly.

The difference today, however, is that the people aren’t buying it any more.  In part, this is due to the hypocrisy of these media stars.  In large part, however, the people have wised up to the fact that while all of the costs of combatting climate change always seem to land on the shoulders of the poor; all of the benefits go to the same elite that the climate change media stars belong to.  As Greer notes:

“Some of what else is going on came to the surface a few years ago in Washington State when a group of environmental activists launched an initiative that would have slapped a fee on carbon. As such things go, it was a well-designed initiative, and one of the best things about it was that it was revenue-neutral:  that is, the money taken in by the carbon fee flowed right back out through direct payments to citizens, so that rising energy prices due to the carbon fee wouldn’t clobber the economy or hurt the poor.

“That, in turn, made it unacceptable to the Democratic Party in Washington State, and they refused to back the initiative, dooming it to defeat. Shortly thereafter they floated their own carbon fee initiative, which was anything but revenue neutral.  Rather, it was set up to funnel all the money from the carbon fee into a slush fund managed by a board the public wouldn’t get to elect, which would hand out the funds to support an assortment of social justice causes that were also helpfully sheltered from public oversight. Unsurprisingly, the second initiative also lost heavily—few Washington State voters were willing to trust their breathtakingly corrupt political establishment with yet another massive source of graft at public expense.”

This is the same phenomenon that caused what should have been a relatively simple increase in the tax on diesel fuel in France to erupt into widespread protest on a scale not seen since the heady days of 1968.  It is also why an Australian Labor Party manifesto that promised radical action on the environment, and that was apparently supported by the majority of Australians, resulted in a “miracle victory” for the pro-fossil fuel Liberal/National coalition at last May’s general election.

In the grossly unequal economies that we have spent the best part of forty years creating, unless the response to the environmental crisis begins at the very top, it isn’t going to begin at all.  And while this may cast ordinary people in the role of Luddites standing in the way of the progress that we supposedly need; the people may actually have a better understanding of the problem than the media celebrities. 

A new documentary Planet of the Humans by Michael Moore and Jeff Gibbs – hardly right-wing climate change deniers – set out to understand how fossil fuel lobbyists and corrupt politicians had thwarted the increasingly urgent transition to a carbon neutral future.  What they found, however – and what the documentary details – is an equally corrupt “green energy” lobby that has no real solutions to the predicament we are in.  As Michael Donnelly at Counterpunch explains:

“The basic conclusion is that we have been following corporate foundation-financed, Democratic Party-tied misleadership and that is why we are where we are.

“The bottom line is that there are: Too many Clever Apes; consuming too much; too rapidly. And ALL efforts on addressing the climate costs are reduced to illusions/delusions designed to keep our over-sized human footprint and out-of-control consumption chugging along without any consumer sacrifices or loss of consumption-based profits…

“Forget all you have heard about how ‘Renewable Energy’ is our salvation. It is all a myth that is very lucrative for some. Feel-good stuff like electric cars, etc. Such vehicles are actually powered by coal, natural gas… or dead salmon in the Northwest.”

Donnelly goes on to list some of the documentary’s “inconvenient truths” such as that the top beneficiaries of solar energy subsidies in the USA turn out to be every leftist’s favourite cartoon villains the Koch Brothers…

“None of these technologies existed, nor could they exist, without fossil fuels. The grid cannot even operate without fossil fuel-derived steam-generated baseloads – in the spring when hydro is surging, the Bonneville Power Administration (BPA) cuts off wind power (and still has to pay its providers after a lawsuit), yet has to keep the Boardman Coal plant (Oregon’s top carbon polluter) running in order to balance the baseload. Even eCon Musk’s famed battery plant in Nevada is powered by…fracked natural gas. The huge bird and desert-destroying Ivanpah Solar array in California also has fracked natural gas as an essential ingredient.”

Worse still, the documentary catches leading stars of the bright green movement admitting in Clintonesque fashion that they have one message for the plebs and an entirely different one for the people who matter:

Planet examines a range of policy influencers/professional environmentalists/opportunists, etc. and even lets them hang themselves. It not only takes on the obvious bad guys like the Kochs, it lets folks like McKibben, Al Gore, Richard Branson, Robert Kennedy, Jr, who are ostensibly on ‘our’ side, hang themselves by showing clips of them speaking to environmentalists and then clips of them speaking to industry about all the profits to be made.

“McKibben is shown twice praising Biomass (they gave him every chance to condemn it), interspersed with a scene of a mountaintop removal operation in his home state of Vermont – for a wind farm!

“Robert Kennedy, Jr. informs his fellow millionaires of all the profits to be made on ‘green’ energy. Al Gore basically admits it’s all about diversion and profits. Branson, like eCon Musk, of course, is solely in it for the money.

“Fellow billionaire Michael Bloomberg got down to it and basically bought the Sierra Club with tens of millions in donations tied to the Club promoting one of his cash cows, Fracked Natural Gas, as the ‘Bridge Fuel to a Green Energy future!’”

None of this comes as a surprise to those of us who regard climate change as merely one element of a broader three E’s – Energy, Environment, Economy – predicament that is itself driven by having roughly 6.5 billion too many humans on Planet Earth.  What is different, however, is that the realisation that the green techno-utopian celebrity crowd are con artists has begun to seep into the consciousness of the leftward end of the body politic in recent months.  As Donnelly notes, despite Moore and Gibbs fearing the reaction of people in the broader environmental movement:

“’Planet of the Humans’ premiered at the gloriously community-restored State Theatre July 31st at the 15th Traverse City, MI Film Festival with three sold-out/standing ovation showings followed by Q & A’s with the creators.”

Greer observes a similar shift at the leftward end of the US media:

“What sets this year’s conference apart from earlier examples of the same sorry type is that this time, the other end of the political spectrum has finally decided to start calling out absurd climate change hypocrisy for what it is. Here’s the redoubtable Rex Murphy of the National Post, for example, giving the Sicily conference and its brightly burnished celebrity attendees a good sound thrashing. You can find other examples easily enough if you step out of the airtight bubble of mainstream popular culture—and these days, the bubble is not quite as airtight as it once was and some of the criticism is starting to slip through.”

Ironically, the green energy snake oil salesmen have probably brought this reaction down upon their own heads.  By backing increasingly urgent messages about our imminent extinction to sell us billions of dollars’ worth of non-renewable renewable energy-harvesting devices; they have caused people to ask serious questions about why – if the emergency is so urgent – these people are not adopting lifestyles in line with their warnings; and why – if green energy technologies are the solution – governments around the planet have failed to adopt them in meaningful quantities.

The issue here is not with the seriousness of the crisis, but with the way just one solution is on offer; and it just happens to be the one that makes the rich even richer and the poor even poorer.  As Greer puts it:

“It’s as though your house was on fire and someone pounded on your door, insisting that you had to sign a contract giving him your property so he could fight the fire. You shouldn’t sign the contract, and the reasons he brandishes to try to talk you into signing it are bogus, but that doesn’t change the fact that your house really is on fire.”

The BBC too, seemingly, is beginning to grasp some of this cultural shift; and thus is prepared to kebab the “feel good” Goldsmiths story as little more than a futile gesture at someone else’s expense.  Gone are the joyous days of spring, when climate campaigners had the support of most of the media.  From here on in, even those outlets on “our” side are going to be casting a critical eye over environmental policies that will very likely be found wanting.

The stark reality, of course, is that as we slide ever further along the downslope of the industrial age, and as our ability to repair the damage wrought by the global weirding of our climate, higher education itself will be going away.  The lifestyles we are going to be living – whether we choose to adopt them ourselves or whether mother nature forces them upon us – are going to be far less consumptive, far more localised, and far more focused on the production of basic necessities… like food.  And in the near future, those Goldsmiths folk may well find themselves pining for one of those burgers they just banned.





Climate Change: the facts

13 08 2019

Last night, I watched “Climate Change: the facts” presented by David Attenborough

Image result for d"david attenborough" "climate change" the facts

https://iview.abc.net.au/show/climate-change-the-facts/video/ZW2018A001S00

That link won’t let me watch it in my Linux laptop, though it worked on my phone and the smart TV we watch in the house we currently rent to as we while away Winter as I try to get the house ready for Christmas…… I can’t in all honesty recommend it, it was just as disappointing as I expected. Most of my readers already know climate change is upon us, and will most likely realise it will be the demise of nature for millions of years, and our civilisation; watching this film will not make you change your mind….!

It presents why we have to act urgently, with well known talking heads like Michael Mann and James Hansen, though, for a British film, it left out Kevin Andersen…. It’s the heavily laid on hopium at the end that had had me writhing in my seat……

It also tells huge porkies. Like saying the UK generates 30% of its electricity from renewables while leaving out the fact all the wind turbines were idle for a week during a complete lull in the weather.

Then it presented electric vehicles, and hydrogen powered ones, as a fait accompli. But they really lost me when the BBC stated “the science is in, we have to stop eating meat”

As my friend Jacqueline recently wrote, “We need to change our entire agricultural system. ALL of it, not just the beef and dairy. We need local food production, agro-ecological, that means that it doesn’t damage the ‘environment’ in production, and that also means that the type of agriculture has to fit with the local ‘biome’. If we do that, we will have a healthy diet with small amounts of everything on healthy land, with healthy animals and healthy farmers and consumers. We’d be paying farmers directly and they wouldn’t be spending so much on pesticides, fertilisers and feed that only make the corporations rich.

As long as people say ‘get rid of cows’ instead of ‘change the entire industrial agricultural system’, we are still going to be destroying everything. 

Incidentally, cows kept under appropriate conditions (silvo-pasture for example) so they can graze and browse don’t drink millions of litres a year because they get their water from the grass. And believe it or not, there are good farmers who grow food appropriately and keep cattle in ways that actually improve soil health and sequester carbon.”

The problem with shows like this is that they only concentrate on one admittedly serious problem; as we know here, we’re heading into all sorts of trouble. I was recently asked on social media, which was worse: climate change, economic collapse, peak oil, or the 6th mass extinction? This is of course typical human compartmentalisation; it’s not a contest I replied, it’s a perfect storm…… To his credit, Attenborough did mention the 6th extinction, after all nature is his specialty.

The real problem with this show is that Attenborough’s credibility is right up there, especially when governments and politicians virtually have zero, and his opinion, even if shaped by the BBC, carries a whole lot of weight. After watching this, millions of people will believe “we’re onto it”, and the solutions are at hand. Except they are not….





Rethinking Renewable Mandates

1 08 2019

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Recommendations

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

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

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

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

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

Notes:

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

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





Why stimulus can’t fix our energy problems

11 07 2019

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

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

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

Posted on July 10, 2019 by Gail Tverberg

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The situations behind these lagging growth rates vary:

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

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

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

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

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

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

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

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

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

Workers play a double role in the economy:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Observations and Conclusions

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

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

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

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

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

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

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

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

Note:

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