Why Malthus Got His Forecast Wrong

Most of us have heard that Thomas Malthus made a forecast in 1798 that the world would run short of food. He expected that this would happen because in a world with limited agricultural land, food supply would fail to rise as rapidly as population. In fact, at the time of his writing, he believed that population was already in danger of outstripping food supply. As a result, he expected that a great famine would ensue.

Most of us don’t understand why he was wrong. A common misbelief is that the reason he was wrong is that he failed to anticipate improved technology. My analysis suggests that there were really two underlying factors which enabled the development and widespread use of technology. These were (1) the beginning of fossil fuel use, which ramped up immediately after his writing, and (2) a ramp up in non-governmental debt after World War II, which enabled the rapid uptake of new technology such the sale of cars and trucks. Without fossil fuels, availability of materials such as metal and glass (needed for most types of technology) would have been severely restricted. Without increased debt, common people would not have been able to afford the new types of high-tech products that businesses were able to produce.

This issue of why Malthus’s forecast was wrong is relevant today, as we grapple with the issues of world hunger and of oil consumption that is not growing as rapidly as consumers would like–certainly it is not keeping oil prices down at historic levels.

What Malthus Didn’t Anticipate

Malthus was writing immediately before fossil fuel use started to ramp up.


Figure 1. World Energy Consumption by Source, Based on Vaclav Smil estimates from Energy Transitions: History, Requirements and Prospects and together with BP Statistical Data on 1965 and subsequent

The availability of coal allowed more and better metal products (such as metal plows, barbed wire fences, and trains for long distance transport). These and other inventions allowed the number of farmers to decrease at the same time the amount of food produced (per farmer and in total) rose. On a per capita basis, energy consumption rose (Figure 2) allowing farmers and others more efficient ways of growing crops and manufacturing goods.


Figure 2. Per capita world energy consumption, calculated by dividing world energy consumption (based on Vaclav Smil estimates from Energy Transitions: History, Requirements and Prospects together with BP Statistical Data for 1965 and subsequent) by population estimates, based on Angus Maddison data.

If it hadn’t been for the fossil fuel ramp up, starting first with coal, Malthus might in fact have been right. As it was, population was able to ramp up quickly after the addition of fossil fuels.


Figure 3. World Population, based on Angus Maddison estimates, interpolated where necessary.

A person can see that there was a particularly steep rise in population, right after World War II, in the 1950s and 1960s (Figure 3). This is when oil consumption mushroomed (Figure 2, above), and when oil enabled better transport of crops to market, use of tractors and other farm equipment, and medical advances such as antibiotics. The Green Revolution allowed agricultural production to expand greatly during this period. It used fossil fuels (particularly oil and natural gas) to enable the synthetic fertilizers, irrigation, hybrid seed, herbicides and pesticides, allowing increased food production.

It is likely that increased consumer and business debt following World War II (Figure 4) also played a role in the post-World War II ramp up.


Figure 4. US Debt excluding Federal Debt as Ratio to GDP, based on Z1 Debt data of the Federal Reserve and GDP from the US Bureau of Economic Analysis.

The reason I say that debt likely played a role in this ramp is because at the end of World War II, people were, on average, pretty poor. The United States had recently been through the Depression. Many were soldiers coming back from war, without jobs. Without a ramp up in factory work and related employment, many would be unemployed. A ramp up in debt fixed several problems at once:

  • Allowed low-paid workers funds to buy new products, such as cars, that used oil
  • Allowed entrepreneurs funds to set up factories
  • Allowed pipelines to be built, and other support for ramped up oil extraction
  • Provided jobs for many coming home from the war effort

The debt ramp up, and the resulting increase in oil production, raised living standards. Figure 2 shows that the increase in per capita energy consumption was far greater in the 1950 to 1970 period when oil production was ramped up than in the coal ramp-up between 1840 and 1920. The long coal ramp-up period does not appear to have been accompanied by such a big ramp-up in non-governmental debt.

Tentative Conclusion

A tentative conclusion might be that as long as we can keep ramping up availability of energy products and debt, Malthus’s views are not very relevant.

Of course, things aren’t looking as benign today. World oil production has been close to flat since about 2005 (Figure 5).


Figure 5. World crude oil production (including condensate) based primarily on US Energy Information Administration data, with trend lines fitted by the author.

The world has been able to increase production of other fuels to compensate so far. Unfortunately, the big increase is in coal (Figures 1 and 2). This mostly relates to growth in the economies of Asian countries, which are large users of coal.

The cost of oil has more than tripled in the last ten years. The higher cost of oil is a problem, because it leads to recession, unemployment, and governmental debt problems in oil-importing countries. See my posts High-Priced Fuel Syndrome, Understanding Our Oil-Related Fiscal Cliff, and The Close Tie Between Energy Consumption, Employment, and Recession.

Continued increase in debt now seems to be running into limits. Federal government debt is in the news every day, and non-government debt seems to be contracting relative to GDP, based on Figure 4.

Looking Ahead

I am not sure that we can conclude that we are headed for catastrophe the day after tomorrow, but the graphs give a person reason to pause to think about the situation.

The reason I write posts is to try to pull together the big picture. If we only look at the latest new item forecasting huge increases in tight oil production or talking about 200 years of natural gas, it is easy to reach the conclusion that all of our problems are past. If we look at the big picture, they clearly are not.

Debt problems are closely related to high oil prices in recent years. Debt problems are today’s issue, and they are not being considered in the huge oil and gas forecasts we see everywhere. The new tight oil and the new shale gas resources likely will need to be financed by increasing amounts of debt, so there is a direct connection with debt. There is also an indirect connection, through governmental debt problems, higher taxes, and the likely resulting recession (leading to lower oil prices, perhaps too low to sustain the high cost of extraction).

Also, it is interesting that the supposedly huge increases in US oil supply don’t really translate to any discernible bump in world oil supply in Figure 5.

We know that the world is finite, and that in some way, at some point in the future, easily extractable supplies of many types of resources will run short. We also know that pollution (at least the way humans define pollution) can be expected to become an increasing problem, as an increasing number of humans inhabit the earth, and as we pull increasingly “dilute” resources from the ground.

Based on earth’s long-term history, and on the experience of other finite systems, it is clear that at some point, perhaps hundreds or thousands of years from now, the earth will cycle to a new state–a new climate with different dominant species. It may turn out that these new species are plants, rather than animals. The new dominant species will likely ones that can benefit from our waste. Humans would of course like to push this possibility back as long as we can.

At this point, my goal is to pull together a view of the big picture, in a way that other analysts usually miss. The picture may not be pretty, but we at least need to understand what the issues are. Is the shift in the cycle very close at hand? If so, what should our response be?

This article originally appeared on Our Finite World here.

Greetings TOD'ers ... I presume Malthus is wrong about "when" we run out of food ? ... is it not elementary to say that we must eventually exceed the capacity to feed everyone ? Will we not reach a limit to sustain the growing population ? Why was Malthus wrong is my question. curlyq3

The way the system works is more complicated than "running out food". What happens is that the financial system is affected, and this ultimately brings down the system. I write about this, based on the research work of Peter Turkin and Sergey Nevedov in Secular Cycles, in my latest Our Finite World post, 2013: Beginning of Long Term Recession.

What Malthus got wrong was the timing, because of changing world events.

It seems the human population will stop growing at 9-10 billion. There should be no major problem feeding that many sustainably using modern techniques. Of course, the human population might start growing again, since evolution should trump culture eventually. Then, at some point, we might need to limit the number of children. But that's more science fiction than anything.

We are destroying the world just trying to feed 7 billion. The long term carrying capacity of the earth, even with modern agriculture and plenty of fossil fuel is likely less than 3 billion. To ignore what is happening to the world and say, "but 80 percent of the world's population of human beings are well fed" is more than a little absurd, it is unconscionable. Any person making such a statement is implying that nothing matters except that most humans have a full stomach.

Ron P.

Of course, I don't agree at all. Agriculture and food production is not that big a problem, sustainability-wise. Also, we can and will improve by more GMO and more tech to use less land and resources for substantially more output.

Geeze, I don't think there has ever been a point further missed in the history of the internet. I said:

Any person making such a statement is implying that nothing matters except that most humans have a full stomach.

And that is exactly what you are implying.

I was referring to the destruction of rest of the world's flora and fauna while only Homo sapiens survive. And you are only concerned with the survival of Homo sapiens.

I think you will be very surprised to find out that we cannot survive if we destroy the rest of the world, as we are quite obviously doing.

Ron P.

Thought I covered that in my "sustainability"-remark.

Ron, Jeppen is a guy who believes we have a "star trek" future. http://www.theoildrum.com/node/9419/914786 Enough said.

It was not to be taken literally. I have no idea if it ever will be feasible to travel among the stars or if we'll ever make contact with aliens. But I do think we have a human golden age in front of us. And that, I think, given the progress we have had until now, is a respectable viewpoint, at least in the fairly large world that exists outside of TOD.

And that, I think, given the progress we have had until now, is a respectable viewpoint, at least in the fairly large world that exists outside of TOD.

Respectable? By whom? The main stream media? The "guy" in the street? The ag school scientists whose paycheck depends on funding by ag giants? So I guess "reality" is determined by consensus.

The nice thing about living in a very rural community in South Central Illinois is I see how food, and I use that term lightly, is produced. The amount of chemicals, nitrogen, and minerals that are used to make land productive for agriculture are astounding. Much of the land is marginal, but is pressed into production out of greed. Most of the micronutrients have been depleted long ago. No amount of artificial genetic modification will make up for this. There is no free lunch.

Respectable by anyone who has had a look at the stats.

I kind of trust the ecological footprint numbers for lack of better sources (if anything, I'd expect them to be pessimistic). And my perception of food production in my Sweden is not the same as yours (of course, "greed" and "astounding amounts" are not very measurable). So I'll guess we have to agree to disagree.

And the very source you cherry picked your graph from provides a very doomerish report from the world wildlife fund, which includes the graph you posted (warning! very large pdf file) http://www.footprintnetwork.org/images/uploads/LPR_2012.pdf Very depressing.

Greed is very measurable. It is measurable in the acres taken out of fallow to capitalize on high commodity prices. In the acres of forest are cut down to make more fields for agriculture. In the tons of fish mined from the seas. In the species that are killed to provide "parts" desired for mythical qualities. Of course, some of the Ayn Rand mindset might call this virtue. Interesting that the above report states agriculture is responsible for 20% of carbon emissions.

Cherry-picked? It's not like there are multiple alternative datasets for this, or? I searched for global footprint data and this graph displays it. That the report is doomerish a given. Again, we are deep into overshoot but sans carbon, we are not, and the trend is not bad either (sans carbon). Thus, if you're optimistic about carbon, as I am (long term), then you should be fairly optimistic about the total footprint.

And yes, I would call it virtue. Not the rare-species-killed-for-virility thing, of course, but for doing more agriculture to meet increasing demand.

Sorry, but the carbon is already baked ito the cake, and will be with us a long time. How did I know you would call it virtue? Because I used to be you.

Yes, the carbon will be with us, and we will have to live with the consequences. How bad it will be, we'll just have to see. But I think we will, eventually and by choice - not by die-off or similar, come down in carbon levels and undershoot the carrying capacity of the Earth.

What if an ordinary bloke is raised in Christianity, and then get atheist friends and decides to not be Christian anymore? Is it reasonable for him to tell the pope that "I used to be you"? Ok, you might not be ordinary, and I'm not the pope. But I do know I'm fairly sophisticated and I kinda doubt you have ever been me.

Jeppen,

First, the thought of our "Minnesotans for Global Warming" group came to mind when I saw you were posting from Sweden. :) In your country's position, it would be pretty easy to think that another few degrees upward wouldn't be a bad thing. The thing most people don't realize is that cold oceans are generally far more productive than warm oceans because of nutrient mixing due to upwelling. So even a few degrees could cause a huge loss of ocean productivity.

I would like to share your optimism, and I think there is a small chance we could pull it off, but I think a massive cultural change to a caretaker attitude will need to happen first.

But I do know I'm fairly sophisticated

And modest too!

But I think we will, eventually and by choice - not by die-off or similar, come down in carbon levels and undershoot the carrying capacity of the Earth.

What evidence do you have of this? I think you greatly over rate rationality.

There are many reasons:

1. Environmental regulations seems to get tighter all the time. Even ignoring AGW, gasoline, diesel, coal and biomass won't burn clean whatever you do with them, and so cause cancers and other diseases that we'd like to get rid of.

2. The world is soon democratic overall - this common ground will make it easier to agree.

3. The world is becoming ever-more prosperous - this makes sacrifices easier to bear.

4. People are becoming smarter and more scientifically inclined. This improves prospects for AGW action.

5. The heat will go up, literally. That will make it easier to agree.

6. Tech progress will make it easier to use alternatives to fossils for a wide range of applications. For instance, EVs have better performance and comfort in every way but range. The range issue will slowly improve.

7. Carbon taxes are appealing to politicians in most countries. They get some environmental cred and some revenue to play with.

1. In the US environmental regulations are at a standstill due to governmental stalemate. Read the stories about pollution in china today. If the economy doesn’t improve, look at this trend to continue.
2. Democracy doesn't always result in agreement, in fact, Jared Diamond, in the book Collapse, shows that it more often leads to inaction. A “philosopher king” is often the better arrangement. Want to apply for the job?
3. And most conservative thinkers would say that regulations would destroy that prosperity. Look at the resistance for the wealthy to share a greater burden. The trend is more like "I got mine and keep your hands off it!".
4. Sorry, but my experience in dealing with working class people every day at my employment indicate that the larger segment of the population is getting dumber, and it is this segment of the population politicians cater to. As Adlai Stevenson stated long ago in response that he was going to get the thinking person’s vote, “"That's not enough, madam, we need a majority!". More true today. Add fundamentalist religion to the mix and it really looks dire.
5. The heat goes up, and so does the denial. By the time the symptoms manifest themselves, like cancer, it is probably too late.
6. EV's are nice, unfortunately many people cannot afford one. Ever look at the average age of the auto fleet in the US lately? It’s going way up. Auto loans are impossible to get if your credit rating is destroyed. I’m driving a 15 year old vehicle.
7. Carbon taxes are being resisted by the conservatives.

The truth is humans are an irrational creature. I suggest you look at Reg Morrison’s “Spirit of the Gene” or Craig Dilworth’s “Too Smart For Our Own Good” (a professor from Sweden).

In the US environmental regulations are at a standstill due to governmental stalemate.

Ok - I don't follow US politics that well. But I thought natgas was only part of the reason coal has declined - I've read the Obama administration's regulation can take part of the credit. Is that untrue?

Democracy doesn't always result in agreement, in fact, Jared Diamond, in the book Collapse, shows that it more often leads to inaction. A “philosopher king” is often the better arrangement. Want to apply for the job?

Absolutely, it would be so good! And I can relate to the inaction thing in intra-state politics (just look at nuclear power). However, in inter-state politics, I think common ground make things easier.

And most conservative thinkers would say that regulations would destroy that prosperity.

Well, internalization as a tool for optimization of outcome is not embraced by everybody, but perhaps by most, especially among economists. It is not that difficult to make the case. Also, I think conservatism will tend to give way to libertarianism over time.

Sorry, but my experience in dealing with working class people every day at my employment indicate that the larger segment of the population is getting dumber

I can't really accept that anecdote. The Flynn effect is quite universally accepted.

By the time the symptoms manifest themselves, like cancer, it is probably too late.

Perhaps, we'll see. If not, it will be part of what enables us to get off fossil in this century.

EV's are nice, unfortunately many people cannot afford one.

While many can. This is always the case with new tech.

Carbon taxes are being resisted by the conservatives.

OTOH, some change happen eventually, when the balance of power has shifted temporarily, and then is fairly irreversible and quickly accepted. I do recognize that the US is especially paralyzed in matters like this. But while your comment is very US-centric, the US is actually getting increasingly irrelevant in global matters. More and more progress is lead by other countries such as China.

...given the progress we have had until now ~ jeppen

What is your definition of 'progress' or 'golden age', or even 'we'?

If unlimited technological progress is possible, then there should be clear evidence of technologically advanced species in the cosmos; there is no such evidence; therefore unlimited technological progress is impossible. Crashingly unpopular though this latter idea may be, I suggest that it is correct - and a close examination of the issues involved casts a useful light on the present crisis of industrial civilization.
~ John Michael Greer

Using evidence from epidemiology, anthropology, and archaeology, Cohen provides fascinating evidence about the actual effects of civilization on health, suggesting that some aspects of civilization create as many health problems as they prevent or cure.
~ book description for 'Health and the Rise of Civilization', by Mark Nathan Cohen

The shift from hunting-gathering to farming created a number of negative health effects. First, rates of infection increased, reflected by the periosteal reactions on skeletal remains. Evidence of iron deficiency, evidenced by porotic hyperostosis and cribra orbitalia, also increased, as agriculturalists relied heavily on a single iron-deficient crop as their source of food. Linear enamel hypoplasias and microdefects of tooth enamel were more frequent in farmers, due to malnutrition, disease, or other sources of stress. In addition, the teeth displayed greater rates of dental caries following the transition to farming, as the diet focused on high carbohydrate consumption.

Finally, with the transition to agriculture, the accumulative effects of nutrition, disease, and other sources of stress were reflected in the reduced skeletal growth and development in children and in the reduced adult height.
~ Clark Larsen

As the number and size of agricultural societies increased, they expanded into lands traditionally used by hunter-gatherers. This process of agriculture-driven expansion led to the development of the first forms of government in agricultural centers such as the Fertile Crescent, Ancient India, Ancient China, Olmec, Sub-Saharan Africa and Norte Chico.
~ Wikipedia

What is your definition of 'progress' or 'golden age', or even 'we'?

The progress we have had is less wars and violence, better nutrition, lower levels of poverty, better tech, a long list of decreased pollution levels and improved environmental regulation, freedom for women and gays, increased IQ and health stats, better longevity, education.

The golden age would be more of the same, an end to armed conflict, democracy for all, much less religion and superstition, stopped population growth, a decrease in global footprint.

"We" would be humanity.

If unlimited technological progress is possible, then there should be clear evidence of technologically advanced species in the cosmos

I think this statement is non sequitur, among other things.

1. I convinced there are limits somewhere.
2. Any very advanced species should be able and might be willing to cover up its tracks.
3. We might be first tech civilisation in the observable universe. Or at least, the light from other tech civilisations might not have reached us yet.

some aspects of civilization create as many health problems as they prevent or cure.

I think there might be a Kuznets curve to that. The 17:th century Europe might have been fairly bad, and hunter-gatherer life might have been good to native Americans. But now, modern life is even better and will continue to become better. Also, even if hunter-gatherer life was better than modern life will ever be, which I doubt, that's irrelevant. We won't go back voluntarily.

We won't go back voluntarily. ~ jeppen

*ding ding* "We have a winner!"

(Perhaps especially insofar as some of us have a thing for myths and misconceptions, etc....)

One of my faves:
Civilization! - *Some Restrictions Apply
(I imagine people will appreciate the depictions of "freedom" therein, including women and gays of course.)

Feeling a little studious?...

"The pupil is thereby 'schooled' to confuse teaching with learning, grade advancement with education, a diploma with competence, and fluency with the ability to say something new. His imagination is 'schooled' to accept service in place of value. Medical treatment is mistaken for health care, social work for the improvement of community life, police protection for safety, military poise for national security, the rat race for productive work. Health, learning, dignity, independence, and creative endeavour are defined as little more than the performance of the institutions which claim to serve these ends, and their improvement is made to depend on allocating more resources to the management of hospitals, schools, and other agencies in question."
~ Ivan Illich, Deschooling Society

Get your 'modern nutritional progress' right here:
The Seven Myths of Agriculture

"Modern industrial civilization has developed within a certain system of convenient myths. The driving force of modern industrial civilization has been individual material gain, which is accepted as legitimate, even praiseworthy, on the grounds that private vices yield public benefits, in the classic formulation. Now, it has long been understood, very well, that a society that is based on this principle will destroy itself in time. It can only persist, with whatever suffering and injustice that it entails, as long as it is possible to pretend that the destructive forces that humans create are limited, that the world is an infinite resource, and that the world is an infinite garbage can. At this stage of history either one of two things is possible. Either the general population will take control of its own destiny and will concern itself with community interests, guided by values of solidarity, sympathy and concern for others, or alternatively there will be no destiny for anyone to control...In this possibly terminal phase of human existence, democracy and freedom are more than values to be treasured, they may well be essential to survival."
~ Noam Chomsky, 'Manufacturing Consent'

Zerzan's theories draw on Theodor Adorno's concept of negative dialectics to construct a theory of civilization as the cumulative construction of alienation... Zerzan uses anthropological studies... as the basis for a wide-ranging critique of aspects of modern life. He portrays contemporary society as a world of misery built on the psychological production of a sense of scarcity and lack. The history of civilization is the history of renunciation; what stands against this is not progress but rather the Utopia which arises from its negation.
~ Wikipedia

There's your golden age right there in bold, jeppen.

We won't go back voluntarily. ~ jeppen

Worth repeating. ;)

In response to Zerzan's theories, it's important to remember that anarchism is simply unworkable without a fundamental rewiring of humanity's psyche. Any society that embraces anarchy will be at the mercy of any nation state willing to exert itself to conquer the anarchic society. While we may be able to learn from hunter-gatherer societies to improve our modern relationships and habits, the notion that anarchy will triumph over nations is as realistic as assuming that multi-cellular lifeforms will lose out to their single-celled ancestors. I'm not discounting his ideas, and I think that there is compelling evidence for the idea that agriculture may have resulted in an impoverished existence for the average human. However, agricultural societies dominated the globe for a reason - agriculture resulted in more energy available for consumption, and thus agricultural societies were more powerful.

I also enjoy Illich's work, but the critique you bring up is entirely negative. As an engineering scientist working in health care, there is much in institutionalized education that is valuable, and there is a growing emphasis in healthcare on actual health care and preventive medicine. I am surrounded by people, products of our educational system, working to produce new therapies. Modern medicine's ability to deal with cardiac disease and cancer are evidence of our successes. Additionally, the health care system is beginning to emphasize preventative care and lifestyle choices. My sister is working on a research project that involves community outreach in an attempt to teach healthy habits to prevent diabetes in at-risk populations. What's especially interesting is that the modern health care system is now attempting to engineer populations to effect a permanently altered set of habits in order to achieve a higher quality of life. Perhaps this shifting emphasis came about in response to criticism by people like Illich.

Much of modern society does seem to be an unnecessary rat race, and there are large inefficiencies in many (if not all) of our cultural systems. It also seems clear that we are headed for an age of adversity and resource scarcity during which society must adapt to become more efficient. Some societies will be unable to adapt and thus will fail, just as many species became extinct during previous global cataclysms. However, looking back at previous great global extinctions that nevertheless led to systems of increasing complexity, I can't help but think that the process will continue.

"No enemies have ever entered Ankh-Morpork.

This is not entirely true. Technically they have, quite frequently; the city welcomes free-spending barbarian invaders, but somehow the puzzled raiders always find, after a few days, that they don't own their horses any more, and within a couple of months they're just another minority group with its own graffiti and food shops."

While we may be able to learn from hunter-gatherer societies to improve our modern relationships and habits, the notion that anarchy will triumph over nations is as realistic as assuming that multi-cellular lifeforms will lose out to their single-celled ancestors.

I think that the probability of singled celled life forms inheriting this planet from multi-cellular creatures is actually quite high given what we know about the history of life on this planet. Nature doesn't seem to share our biased thinking that more complex is always more fit for long term survival.

The history of life on this planet has resulted in ever-increasing complexity, eventually resulting in humanity and the rise of culture and cultural evolution. All previous mass extinction events failed to eliminate complex life, and they also failed to reduce its complexity in the long run. Perhaps a graph of complexity (which is itself a fuzzy concept) versus time would look sawtooths ramping upwards, with extinction events temporarily knocking back complexity, but science has yet to describe an event which wiped out multicellular lifeforms. Perhaps such an event took place very early on, before multicellular lifeforms were widespread.

It is somewhat plausible that all societies completely collapse, but it is far less plausible that all of humanity is completely wiped out. It is even less plausible that all multicellular lifeforms are wiped out. I'm a little surprised that you'd propose such a scenario.

It's amusing that, in all our complexity, we end up as cogs-- cells or specialized organs-- in a machine without a brain. I'm being a little poetic here, but just a little...

So that, instead of Gail the Human Being, we have Gail the Actuary. Humans do more than actuaries. Actuaries-- jobs, careers, professions-- are glorified obsessive compulsive disorders, relatively-speaking.

"Hi, I'm asinine, the lower-bowel."

Amusing, certainly, but it fits within the framework of increasing complexity. We don't generally think about the violence involved in the taming of the mitochondria, or the fact that the development of multicellular life did not entail purely cooperative relationships. There is certainly of violence against the individual human inherent in societal structure, and it will require much time before human and societal evolution converge such that we can create a society through purely voluntary interactions. Consider the human individual from the point of view of the cancer: why should this body restrict my right to grow and thrive? The cancer results from a change in its basic operating system that causes it to ignore outside control. We view it as something to be eliminated because it does not mesh with our desires. Similarly, there are many cultural elements we view as destructive or unnecessary and we are actively working to eliminate them.

Why should we be more than actuaries? The vast majority of human desire is bestial in nature. I do not accept for granted that we should set the individual as the ultimate goal.

And here I was under the impression that you'd care more about other claims like:

I agree, the nuclear numbers are also fairly happy.
Agriculture and food production is not that big a problem, sustainability-wise.
It seems the human population will stop growing at 9-10 billion. There should be no major problem feeding that many sustainably using modern techniques.

Given your past postings I'm shocked you didn't respond to:

When necessary, agriculture can produce its own energy and hydrocarbon feedstock from its biomass.

Here's a gent stating that organic production should be converted into chemicals VS your past position of organics -> compost and you didn't bat an eyelash.

And to claim:
fortified or replaced with energy and hydrogen from nuclear

The regular TOD reader, upon seeing 'if the organics come up short - use fission power to make up the difference' and comparing to your past statements Tribe, its like you don't really belief what you've argued for so passionately in the past.

I didn't read the whole thread.

But as we both know, with each new generation, the knowledge reset button is pressed, never mind the headache of "reality", itself, (and the ongoing programming) which follows us to the grave.

Nevertheless, it's important to keep in mind that jeppen is 'fairly sophisticated'. (Hugz and lingonberries. :)

"...Another hope feeds another dream
Another truth installed by the machine
A secret wish the marrying of lies
Today comes true what common sense denies..."
~ Propaganda

If you take your last paragraph and aim it back toward your first two, you may consider that it shoots them up, maybe like a bad old western movie gunfight.

(Tribal/Band) Anarchy appears the undercurrent that runs us, asinine, and the state is, itself, in its own anarchy anyway, apparently. Like a toppling tree-fractal. Trees fall; seeds are dispersed...

Does the social or collective fight with the individual or does it get along? Utopia says it gets along; dystopia that it doesn't. We seem to be flirting with the latter. Take a look around. If you can't see it, then try taking a few steps back from the pointillism.

However, looking back at previous great global extinctions that nevertheless led to systems of increasing complexity, I can't help but think that the process will continue. ~ asinine

Read my previous comment. See also.

We're being played. ;)

Agriculture and food production is not that big a problem, sustainability-wise. Also, we can and will improve by more GMO and more tech to use less land and resources for substantially more output.

Jeppen, you can't possibly be serious! No matter how much you may think you can improve food production through GMO technology, at some point you are still going to be faced with insurmountable physical and chemical limits. Not to mention all the inherent risks of basing our survival on a very few GM monocultures in a world that has been ecologically devastated. Anyone who thinks BAU with 9+ billion humans on this planet is sustainable or desirable has simply been ignoring reality.

Might I suggest a primer in basic ecosystem thermodynamics.

http://www.uni-kiel.de/ecology/users/fmueller/salzau2006/ea_presentation...

Have you hugged your bag of NPK today?!

I'm very serious.

at some point you are still going to be faced with insurmountable physical and chemical limits

If we look at the ecological footprints graph, we see that everything but the carbon part is almost flat since 1960 even though the population has exploded, and everything but carbon emissions fits very well within the carrying capacity of the Earth. This fact is due to the amazing revolution of modern agriculture, and this revolution is far from done. GMO and modern agricultural practices has yet to improve large parts of the world's agriculture.

Anyone who thinks BAU with 9+ billion humans on this planet is sustainable or desirable has simply been ignoring reality.

I think the footprints graph prove you wrong. If we solve the carbon problem, we're basically in the clear and can even shrink the rest of the footprint with better tech. Yes, we still have to manage different kinds of pollutants, and we would benefit from reverting to sustainable fishing and so on. (I.e. we would get larger catches if we weren't overfishing.) But these are manageable problems.

Might I suggest a primer in basic ecosystem thermodynamics.

You may, but it doesn't help and your link basically said nothing at all, as is usually the case when thermodynamics is invoked in the context of sustainability or peak whatever. I don't know what it is with thermodynamics that make people think they have a profound understanding of everything after reading a little about it. It isn't more relevant than, for instance, quantum dynamics. Even though they are both fundamental principles that govern all things, they are the wrong levels of abstraction here and says nothing of our limits.

GMO and modern agricultural practices has yet to improve large parts of the world's agriculture.

Perhaps because GMOs don't result in yield improvement - just profit improvement for the vendors.

TRUTH: GM crops do not increase yield potential – and in many cases decrease it

You will have a field day with this one, but still, I'll be lazy and cite the evil ones themselves, i.e. Monsanto's rebuttal.

Again, if one were a bit lazy, one could have a look at the rest of the "myths" claimed in your link, apply some critical thinking, and quickly deduce that either we have an epic conspiracy on our hands, or the people you link to just cling to every little straw of bad science and nutty pseudo-science they can find to discredit GMO.

Btw, Mark Lynas recently apologized for being anti-GMO.

GMO, meet biochar, biochar, GMO. My god, we really have our work cut out for us as a species.

I'll take a slice of Mad Max meets Bladerunner, please, with a dollop of Soylent Green and a splotch of Eraserhead. And another for my... kid... whose playing in The Matrix...

..."What was that honey? ...Oh yes of course, you may accept blue candy from gentleman in nice suit with crisp white shirt and sunglasses... Don't forget to say thank you..."

So you don't have actual data supporting your position - just rebuttal when you are challenged?

Mark Lynas recently apologized for being anti-GMO.

Is this some kind of appeal to authority argument? Why should anyone one care about Mr. Lynas when Mr. Lynas was anti-GMO VS now?

I agree. Farmers do GMO because they are tricked or coerced by Monsanto. And the fairly common piracy of GMO crops, of course, is even more of a folly since GMO lowers yield and increase the need for inputs. The lower price of GMO products doesn't say anything either, as price says nothing about yield or inputs.

Ordinary breeding can be positive, but the increased speed, precision and freedom with which to combine specific genes of organisms using GM is just confusing to the poor scientists. They don't have a clue what they are doing and cannot possibly improve on the work of Mother Nature.

Reminds me of a Watchtower paper a Jehovas Witness gave me. It claimed GMO is like stirring the insides of a broken radio with a stick. "This doesn't make it better." Complete with a picture of an open radio apparatus with a stick in it. (Yes, I know this is called "guilt by association".)

Right! Everything I've read says that the apparent increase in yield is because the plants can make use of increased inputs, not an increase of output with no additional input. More fertilizer and nutrients needed to get more out. Your article shows the so-called increased output comes at a cost of less what I'd call "efficiency".

I've read says that the apparent increase in yield is because the plants can make use of increased inputs, not an increase of output with no additional input.

And I'm sure our resident expert will show exactly how GMOs and only the GMOed things have this yield increase and how with his expert study he'll have seperated it from other variables.

Next up on the techno-fix bandwagon to boost yield will be hooking up the plants to electrodes to make 'em grow better no doubt.

Try reading this:

http://ec.europa.eu/food/plant/gmo/reports_studies/docs/economic_perform...

"Assessment of the economic performance of GM crops worldwide", by the Univ of Reading and the Swiss Federal Inst of Technology-Zurich, 29 March 2011.

Excerpt: "Due to the strong variations between regions and the additional varying factors found in the analysis that influence results on the economic performance of GM crops (see above), any generalised conclusions on the economic performance of GM crops for the whole world would inevitably be misleading. However, positive economic effects have been observed for a number of countries, which is in line with other review studies (e.g. Carpenter, 2010, Gouse et al., 2009, Bennett et al., 2004a, Frernandez-Cornejo et al., 2005, and Qaim, 2009) and explains the high adoption rates of GM crops in these countries."

Cheers.

Concerning the graph, the amount of cropland in use being approximately constant over the last 50 years indicates little about the total land that could be cropland and how much has been degraded.

The Future Prospects for Global Arable Land, Future Direction International, 19 May 2011

According to the Global Land Assessment of Degradation published by the United Nations’ Food and Agricultural Organization (FAO), nearly two billion hectares worldwide has been degraded since the 1950s. These two billion hectares represent 22 per cent of the world’s cropland, pastures, forests and woodlands.

There remains some 2.7 billion hectares of land with potential for crop production.

At that linear rate of degradation humans have about 65 years before using all the available arable land at which time the "cropland" wedge in the graph will begin contracting. The Limits to Growth model warns this ruining of arable land is not sustainable.

I don't understand your 65 years. 22% has been degraded over ~65 years. According to your link, 1.5 billion hectares are currently used for crops, and 2.7 billion hectares has the potential. More than 65 years should pass before we're down to 1.5, right?

You guys understand that much cropland is not likely farmed by you, or even a traditional/local farmer, right? That it's likely farmed by some entity you don't know, and in which you have little say with regard to how things operate? And you have some understanding behind some of the implications behind the model/system under which those crops are farmed?

If 2 billion hectares were ruined in 50 years (one could pick 60 years because it stated 1950's, not 1950), then an average of 40 million hectares are ruined per year. At that rate 2.7 billion hectares would be ruined in 67.5 years using up the currently unused arable land. I rounded down to 65 years because the data was published in 2011.

If 2 billion hectares were ruined in 60 years, then 81 years is needed to ruin 2.7 billion hectares.

But you're then comparing apples and pears. The ruined area included more land. Again, look at the 22% figure.

I don't know what it is with thermodynamics that make people think they have a profound understanding of everything after reading a little about it.

Note that I was talking specifically about how thermodynamics applies within the context of ecosystems and not as some abstract general principal. Even Agro industrial production of GM monocultures are still subject to increasing entropy so while you seem to disagree about the relevance it is actually highly relevant in the context of limits.

http://www.ibiblio.org/london/agriculture/forums/sustainable-agriculture...

THERMODYNAMICS AND THE SUSTAINABILITY OF FOOD PRODUCTION
by Jay Hanson -- revised 11/19/96

Sustainable systems are "circular" (outputs become inputs)
-- all linear physical systems must eventually end. Modern
agriculture is increasing entropy in both its sources (e.g.,
energy, soil, and ground water) and its sinks (e.g., water and
soil). Thus, modern agriculture is not circular -- it can not
be sustained.

Consider the most important limiting variable -- energy.[2]

There is NO substitute for energy. Although the economy
treats energy just like any other resource, it is NOT like
any other resource. Energy is the precondition for ALL other
resources and oil is the most important form of energy we
use, making up about 38 percent of the world energy supply.

NO other energy source equals oil's intrinsic qualities of
extractablility, transpotability, versatility and cost. These
are the qualities that enabled oil to take over from coal as
the front-line energy source in the industrialized world in the
middle of this century, and they are as relevant today as they
were then.

Two things:
1. That something isn't done sustainably does not mean it can't be done sustainably. It's not very strange that you do it unsustainably for a while until you hit limits, and then you adapt as necessary. Every time I eat dessert, for instance, I do something unsustainable to my body. So after a while I get full and react to that by stopping and reverting to eating nothing (which is also unsustainable, so after a while ...).

2. Agriculture can be sustained energy-wise by renewables. Water can be had by desalination, also powered by renewables. Soil can be improved by rotating crops, letting the fields rest and by adding dung, for instance. And if all else fails, nuclear power can provide the energy until the Sun goes red giant.

Hi Jeppen,

Two quick points. I too try to be optimistic (though not quite at your level of optimism), but I try to maintain some level of realism.

First, the graph you posted (which you will claim is not correct in any case) only shows data through 2006, carbon emissions have continue to increase by 2.5 % per year through 2012.

Second, you assume the carbon problem will be "solved". This is by no means clear. It might be "solved" by running out of fossil fuels, but such a "solution", is likely to lead to 4 C warming above pre-industrial (lets say 18th century mean) temperatures, possibly more. You might argue that such temperature increases would be beneficial, I would argue the reverse and believe that a majority of scientists, (particularly biological and ecological scientists (who would know best) would agree with me.

DC

When I say that CO2 emissions will be "solved", I mean that yearly emissions will go down to sustainable levels within a hundred years or so due to depletion and political action. However, the cumulative emissions before this happens will be (is) triggering a catastrophe of a fairly large scale. I hope it won't be as big as undoing our civilisation.

Are they serious with almost flat fishing footprint since 1961?
And with such a methodology - are they serious with the rest?

And is that fishing somehow "sustainable" cuz it is under that "1 Earth" line?

There should be no major problem feeding that many sustainably using modern techniques.

Do you have proof of this, or just faith?

Please have a look at the global footprint graph I posted.

Is that your "proof"?

I wouldn't call it proof, but isn't it the best we have? I'm sure the footprints calculations will be revised and improved in the years to come, but I don't expect them to ever be exact or rigorously proving anything.

If you have anything better (quantitatively, not hand-waving, please), I'm willing to listen.

I wouldn't call it proof,

So then your statement is one made on faith.

but isn't it the best we have?

No. Until terms are defined and assumptions agreed to as "what is modern agriculture" the end result will be like the Fission is safe discussion with one position of 'fission plants are safe because no one dies in them' and when data gets posted that is in opposition to your position it will be called "nutty pseudo-science" even when the link says:

A US Department of Agriculture report confirmed the poor yield performance of GM crops,

(silly USDA and their nutty pseudo-science).

Right off the bat there are "issues with terms"

Lets re-look at the pull-quote: feeding that many sustainably using modern techniques.

If 'modern techniques' are the use of petroleum derived herbicides and pesticides, how do those chemicals fit with the definition of 'sustainably' as commonly used?

I'm willing to listen.

I'm going to state that here I think you are lying and being disingenuous,

I was wondering if your claim was based on actual data or just faith or perhaps a word salad and I have my answer.

So then your statement is one made on faith.

Yes, I do have some faith in the ecological footprint calculations. I'm sorry you feel they are hogwash, but since you can't come up with anything better, we are stuck with you hating everything that can be interpreted in a positive way and me trying to point to what data we have available.

(silly USDA and their nutty pseudo-science)

That you linked to a crazy-house featuring a non-referenced claim about USDA is worth very little. Anyone can make such a claim. It need not be true, or it can be twisted, exaggerated and taken out of context.

If 'modern techniques' are the use of petroleum derived herbicides and pesticides, how do those chemicals fit with the definition of 'sustainably' as commonly used?

Quite well. When necessary, agriculture can produce its own energy and hydrocarbon feedstock from its biomass. (Preferably, for the environments sake, fortified or replaced with energy and hydrogen from nuclear and so on.)

I'm going to state that here I think you are lying and being disingenuous,

That's part of your pathology, I think. I don't think you are lying and being disingenuous. I just think you have some kind of deficiency (I'll abstain from speculating on the exact nature of it) that make you especially subjective and unreasonable. I've seen it before from you in several contexts and regarding several topics. You choose your truths based on what fits your shallow world view and then that's that. I think you're being completely honest, though.

That you linked to a crazy-house featuring a non-referenced claim about USDA is worth very little.

From the web page cited:
http://earthopensource.org/index.php/5-gm-crops-impacts-on-the-farm-and-...

A US Department of Agriculture report confirmed the poor yield performance of GM crops, saying, “GE [genetically engineered] crops available for commercial use do not increase the yield potential of a variety. In fact, yield may even decrease.... Perhaps the biggest issue raised by these results is how to explain the rapid adoption of GE crops when farm financial impacts appear to be mixed or even negative.”6

See the 6? That indicates an actual reference.

Now at the bottom of the page there is a link to this:
http://earthopensource.org/index.php/5-gm-crops-impacts-on-the-farm-and-...
(For references, please click here. is the text where one can find the link.)

And from the references:

6. Fernandez-Cornejo J, McBride WD. The adoption of bioengineered crops. Agricultural Economic Report No. 810. Washington, DC. US Department of Agriculture. 2002. http://www.ers.usda.gov/publications/aer810/aer810.pdf

My mistake, missed the reference links to the right.

However, you still referenced a crazy-house site, and the quotes you refer to are taken out of context from the original report and pasted together with a "..." in-between to make a completely false impression.

The first part continues: "In fact, yield may even decrease if the varieties used to carry the herbicidetolerant or insect-resistant genes are not the highestyielding cultivars. However, by protecting the plant from certain pests, GE crops can prevent yield losses compared with non-GE varieties, particularly when infestation of susceptible pests occurs. This effect is particularly important in Bt crops."

The second part continues: "Both herbicide-tolerant cotton and Bt cotton showed positive economic results, so rapid growth in adoption is not surprising in these cases. However, since adoption of herbicide-tolerant corn appears to improve farm financial performance among specialized corn farms, why is its adoption relatively low?"

And in the conclusion section of the reference report, it is stated that: "All in all, we conclude that there are tangible benefits to farmers adopting first-generation GE crops."

So that was that.

Yair . . .there are lots of numbers about land degradation being tossed back and forth and to some degree I believe it's a lot of cobblers.

You blokes are looking at the Agro-business big picture and when the SHTF that will all be irrelivent.

I'm on the east coast of Australia and I can tell you there is enough land and water to produce all the seasonal vegetable produce needed within a hundred kilometer radius of all our major towns and cities.
. . .take that out to one hundred and fifty kays and you can include some grains

The proviso it has to be small scale farming. It can be done with solar or mains powered equipment such as our "Circle Worker" concept . . .but as with all simple things that could be done it will probably take a while for the population to realise small scale farming is a good, satisfying and honourable profession and doesn't have to be that hard.

Cheers.

A more directed question ... Is Malthus wrong if six billion of the seven billion people on earth were to starve to death tomorrow ? ... curlyq3

And the final question is ... Is human extinction necessary for Malthus to be "Right" ? ... curlyq3

curly - valid points IMHO. I'm glad Gail is leading the discussion because I don't think I've seen her take on an aspect of supply/demand that has surfaced recently on TOD. If I'm looking at the world upside down she can straighten me out. LOL. One simple question: is it possible to ever "run out of" any commodity on this planet? One of the problems with such discussions IMHO is the use of such phrases. While it seems to imply much it doesn't really say anything. We will never run out of food, oil, fresh water, etc, etc. IOW demand will always be met by a sufficient amount of supply. That's true IF you accept the definition that demand is what one can afford to pay for...not what you want/need to acquire. Obviously price will moderate the balance. In the days of Malthus as well as today there were huge numbers of folks going hungry. And many dead as a direct result of malnutrition or its side effects. For these folks the world did, and has, "run out of food"...the world has run out of food they could afford to buy.

Just as there are millions who have run out of oil not just today but decades ago. If you live in NY, lost your job and can't buy heating oil the world has run out of oil from your perspective. And when the day comes when oil is $200/bbl and global production is half of what it is today but a person has access to and can afford to pay for his fuel oil delivery then the world hasn't run out of oil. And never will for those that can pay for it.

But there's other scenarios where a buyer has the funds to pay for oil but has no access to it. Some form of embargo would create such a situation. Another circumstance would be the result of a country, such as China, buying a number of the world's fields and removing them from the market place. Or having large supplies under long term contract. Or having the right of first refusal as part of a loan arrangement with an exporting country. But none of these possibilities represents the world running out of oil...at least from a Chinese perspective. OTOH from the perspective of a country that has no opportunity to buy oil the world has run out of oil. Thus back to why I consider such loose terms as "running out of X" to be rather meaningless. Why I've also come to the conclusion that the actual date of PO is also rather unimportant. Maybe we did reach PO in 2005. But every oil consumer in the world has all the oil available to them today that they can AFFORD. Excluding local distribution problems not one American has been denied an ounce of gasoline that they could AFFORD to pay for. For these citizens not only has the world not run out of gasoline but it's not even in short supply: they can buy as much as they want...as long as they can afford it. Equally unimportant if PO doesn't occur until 2030 for a consumer today who can't afford the current price of oil. From their perspective the world has not only reached PO but has gone far beyond...the world has run out of oil.

Howdy ROCKMAN ... I always look forward to your posts here ... my grandpa would tell us your as free as your money will take you in this world ... our comfort and survival is circumstantial ... curlyq3

But every oil consumer in the world has all the oil available to them today that they can AFFORD.

Photobucket

And the current unemployment rate in the US is about 8% if you don't count those who have given up trying to find a job...

This is my employment as a percentage of US population graph that I have posted in several Our Finite World posts, including Energy Leveraging - An Explanation for China's Success and the World's Unemployment.

The part I find disturbing is that the US employment percentage started decreasing very close to the same time that China's energy use started ramping up (which in turn was right after it entered the World Trade Organization in 2001).

"The part I find disturbing is that the US employment percentage started decreasing very close to the same time that China's energy use started ramping up (which in turn was right after it entered the World Trade Organization in 2001)."

There was a little somethin' which happened in September of that year...

The downturn starts before that...around the time of the "DotCom" bubble burst. IIRC that caused a real ripple through the economy and pulled a lot of investment capital out. Then we got the Bush Tax Cuts in 2001 and a redirection of government spending into the (low return on investment) War Machine.

Good points! The Bush Tax Cuts didn't really help the job situation much, did they? Of course, hiring a few more for the military "helped" in some sense.

The other thing happening here, I think, is job outsourcing to China, as stuff is made in China it isn't made elsewhere.

Gail,

A much better metric is the ratio of employment to working age population rather than employment/population.

See http://krugman.blogs.nytimes.com/2013/01/13/notes-on-japanese-numbers-bo...

DC

The part I find disturbing is that the US employment percentage started decreasing very close to the same time that China's energy use started ramping up

It has nothing to do with China.

The employment percentage fell in 2001 because a recession started in 2001. Look at the chart -- every recession results in a fall in the employment percentage.

The employment percentage has been in long-term decline due to simple demographics -- aging baby boomers -- as the BLS data clearly shows:
* Participation rates are highest for age 25-34 and 35-44, slightly lower from 45-54, and much lower from 55-65.[1]
* Population in the 25-44 age bracket fell from 2000 to 2010, but increased sharply in the 45-54 and especially 55-65 brackets.[2]

As a result of these two facts, it was inevitable that the US's labour force participation rate (and, hence, employment rate) was going to fall between 2000 and 2010, and will continue to fall from 2010 to 2020.

[1] http://www.bls.gov/emp/ep_table_303.htm
[2] http://www.bls.gov/emp/ep_table_302.htm

The employment percentage has been in long-term decline due to simple demographics -- aging baby boomers -- as the BLS data clearly shows:

But of course. Outsourcing manufacturing jobs to places that pay one tenth the US wage level has nothing to do with it. All those steel mills, all those cotton mills and every other kind of mill has moved overseas because the baby boomers have aged.

And all the time I thought it was because of the wage differential. Silly me.

Ron P.

The employment percentage has been in long-term decline due to simple demographics -- aging baby boomers -- as the BLS data clearly shows:

But of course. Outsourcing manufacturing jobs to places that pay one tenth the US wage level has nothing to do with it.

That's hyperbole, but it's almost true - the BLS data clearly shows that demographics is driving the decline in the employment ratio. I'll briefly summarize what that data shows:

  1. Old people are less likely to be employed than young people.
  2. An increasingly large fraction of the population is old people.
  3. Thus, the fraction of people employed is falling.

Labour force participation fell by 2.4% between 2000 and 2010. If we take the 2000 participation rates and the 2010 population mix, we still get a fall of about 1.3%; in other words, more than half of the difference is due to a shift in the demographic mix. The employment ratio always falls during a recession, as the original chart indicates, suggesting that most of the remaining 1.1% is likely due to comparing an economic peak (2000) to an economic trough (2010).

Please feel free to look at that data yourself if you don't believe me. It's simply a fact that the key here is an aging population.

Life cycle economics are helpful up to a point but I am not sure that demographics only explain what is going on in the US. It would be interesting to look at other areas like Japan and Europe with respect to employment. I know that in both of those regions the ration 19-65 vs the rest is declining but I haven't looked at employment rates.
Rgds
WeekendPeak

This issue is high oil price. This leads to higher food prices in addition. These higher prices "messes up" the financial system. People don't understand that what they should be looking for is a financial system problem, not a physical shortage of oil.

One article I wrote about this subject is Our Oil Related Fiscal Cliff. (I don't think I ever submitted this to TOD. )

Another issue that is important is the fact that the dollar is the world's reserve currency. If this should change, it would have huge ramifications, practically overnight. I have recently been reading about how the dollar becoming the world's reserve currency in 1944 helped enable greater world trade and also allowed the US to amass greater and greater debt at ridiculously low interest rates. (See this recent ASPO-USA post by Erik Townsend--very good, but long.) This timing also helped enable the growth of world oil use--something I didn't think about when writing the current post.

One problem we are running into now is that the US as the world's reserve currency is clearly unsustainable for the long run. For one thing, the US is amassing so much debt--in excess of 100% of GDP--that something has to give. For another, if the world ever becomes "oil independent", the Saudis (and others) will have not motive to price oil in dollars. In fact, the US is already becoming less and less dominant as a buyer of world oil.

At any rate, if the situation of the world as reserve currency should change, this could increase the US' interest ate for borrowing money to that that it really should be--I am guessing in the 5%+ range. The higher debt payments would mean that interest payments on debt would suddenly become a much larger ($500 billion to $1 trillion) larger source of outgo, and mean that the US budget deficit is a whole lot worse than currently advertised. US would be much less able to compete in world markets.

None of this would look like peak oil, but it really is.

Hi Gail,

Most US debt is held by US citizens. Higher interest payments would be payments to US citizens, the idea that most US debt is held by China is a fallacy. The US budget deficit is also much less of a problem than many think. See

http://krugman.blogs.nytimes.com/2013/01/10/the-mostly-solved-deficit-pr...

As far as unsustainable debt, consider Japan, see

http://krugman.blogs.nytimes.com/2013/01/11/is-japan-the-country-of-the-...

Japan is often held up as an example of the problem of a high debt/GDP ratio, but after about 20 years of high debt/GDP, we are still waiting for the catastrophe.

DC

We can see limits on many things. It is hard to see in advance exactly when those limits will kick actually kick in. The fact that the debt has continued to be repaid so far mostly means that adverse events (like high oil prices) haven't kicked in to a significant enough extent yet as to push countries over the "edge".

Reinhart and Rogoff's book, This Time is Different looks at actual debt experience of countries. They debunk the popular belief that internal debt doesn't matter. In the US, large debts are owed to the Social Security trust fund, to pay benefits. (Money that people paid in for Social Security benefits has already been spent on something else, leaving no real cushion when the baby boomers hit retirement!) Defaulting on these bonds will mean less income to Social Security recipients. Isn't this a problem?

Reinhart and Rogoff mention that 40% to 80% of GDP are normal debt to GDP ratios. I believe that they also say that above 90% is in the danger zone, or something like that--didn't see the exact reference now. According to the US Treasury, US Debt as of December 31, 2012 was about $16.4 trillion. We don't know what the GDP for the year will be yet, but based on data through September, $15.5 or $15.6 trillion would be a reasonable guess. If we use $15.6 trillion as the denominator, the US will be at a ratio of about 105% at December 31, 2012. (Sometimes people get confused by government debt that doesn't include amounts to that are not in publicly traded bonds, like debts to Social Security, and get the current US debt too low. Federal Reserve Z.1 data for example leaves out this debt.)

"In the US, large debts are owed to the Social Security trust fund, to pay benefits. (Money that people paid in for Social Security benefits has already been spent on something else, leaving no real cushion when the baby boomers hit retirement!)"

This is the real reason that all the politicians keep mentioning "entitlements" when talking about the debt. Though Social Security and Medicare are separately funded through their own tax, the "Trust Fund" has absolutely nothing in it. Can you imagine if Al Gore had been selected by the Supreme Court and gotten his Social Security "Lock Box?" (and two wars and likely 9/11 wouldn't have happened because Gore wouldn't have re-assigned the intelligence agencies to Iraq as top priority).

So what are politicians to do? Cut benefits to hide the fact that they've been stealing from Social Security for years and years. That's why they keep coming up in these discussions. If they raise the retirement age by 2 years they, on average, get to steal another $28,000 per person more before getting caught.

There is a partial excuse behind the "stealing from Social Security" problem. As much as we would like to be able to "prefund" retirement benefits, it doesn't really work well in practice, at least on any very large scale. The stock and bond markets of countries are not large enough to hold all the funds that would need to be invested. (Perhaps they could hold the planned prefunding to help smooth out the jump in benefits, caused by the boomers retirement, though.)

Behind this prefunding problem is an issue that many people may not have stopped to consider. In a given year, say 2020, retirees have to live on whatever food, clothing and other consumables are produced in that year. In fact, in 2020, the whole world's population will pretty much have to live on what consumables are produced in 2020. If the amount of those consumables is lower in 2020 than it is now, that is too bad--that is all we will have (adjusted for whatever carry over from prior years there is). If retirees get 1/3 of the consumables total, then the rest of society will get 2/3 of the total. The taxes on the rest of society will need to be high enough to pay for what the retirees get.

Our financial system has given us the impression that we can put away money and save for tomorrow. That is only true, if enough goods and services are being produced to cover these promises. High oil prices and low growth in oil supply tend to depress economic growth. The low economic growth in recent years makes it very hard for any kind of pension program or any kind of benefit such as Social Security to work as planned.

The US is already 5% with 25% of most everything already. That is 5% of the world population consuming 25% of the world's (name anything). I'm not sure how having Social Security funded would result in the problem you mention.

There is, however, a curious point which you've conjured...if the fund were actually pre-funded in total, set aside in the "lock box," then that would have the same economy-stagnating effect that the mill/billionaires and corporations/banks are having accumulating all of the capital and not spending it - since that money, too, is not available for circulation (money doing "work"). I'm thinking things would equalize after the initial "charging" phase of the "lock box" and the money would eventually go into circulation as people retired - but it would be distributed fairly equitably as everyone who retired would get it to spend.

At any rate, if the situation of the world as reserve currency should change, this could increase the US' interest ate for borrowing money to that that it really should be--I am guessing in the 5%+ range. The higher debt payments would mean that interest payments on debt would suddenly become a much larger ($500 billion to $1 trillion) larger source of outgo, and mean that the US budget deficit is a whole lot worse than currently advertised.

Gail, I too have worried about this. I don't think a lot of citizens have even thought about the issue.

There were a couple of folks who brought the US reserve currency issue at the ASPO-USA conference as well. Quite a few people know a bit about the subject, but not too much.

If/when China decides to float their currency there likely is going to be a significant impact on the status of the US dollar.
Rgds
WeekendPeak

Hi Rockman,

I also look forward to your posts.

Peak oil is simply that the current flow rate cannot be increased any further. How the produced oil is distributed is not really part of the equation. At least to my mind it is conceivable that at some point (my guess would be 25 years or less) that no matter how high oil prices rise that no higher level of production of petroleum liquids (C+C+NGL) per day (in barrels of oil equivalent=5.8 million BTU/barrel) can be reached. The price is just a convenient way to ration available supply and is better than a planned economy (Soviet style). IT MIGHT be nice if oil were free so that everyone could afford as much as they would like, but I am certain that not much oil would be produced if the price were zero.

I think that it is important for people to realize that we may reach PO as I have defined it and sooner than some (Yergin comes to mind) would think. It would be better to start to prepare 20 or more years in advance.

From your perspective as a geologist with far more knowledge than me of what is likely to be possible, do you think we will reach peak oil (as I defined it above) by 2020 even if real oil prices increase by 12 % per year (reaching $240/barrel in 2013 dollars by 2020)? This also assumes there is no worldwide economic collapse in the meantime. Thanks.

It occurs to me as I re-read my comment that I am missing your point. Are you implying that peak oil is likely to be reached because of a lack of demand as prices rise rather than the lack of ability of producers to supply oil at any price? If that was your point, I tend to agree. If one postulated one million dollars per barrel as the real price of oil, we would see a lot of oil produced, but not very much demand. My scenario above is based on $20/ barrel in 1998 rising to $100/barrel in 2012 (inflation adjusted dollars) which is a 12 %/year increase in price, which I extended out to 2020 to come up with $240/barrel. My optimistic assumption is that this price increase does not crash the world economy.

If we start at 2004 ($44/barrel) and prices increase by 11 % we get to $101/barrel in 2012 and $234 in 2020. World C+C increased from 72.5 to 75.5 MMb/d (EIA data, 2012 estimated) from 2004 to 2012 which is an increase of 0.5 % per year, if that trend continues we would reach 78.5 MMb/d in 2020. I think it likely we will be on an undulating plateau from 2015 to 2025 at 76 to 77 MMb/d, with high enough prices we might extend the plateau out to 2035 at most with decline thereafter at any reasonable price (lets say less than $2500 per barrel in 2012 dollars, note that the 11 % price rise gets us to $1100/ barrel by 2035). At one point a few years ago it seemed your position matched this scenario fairly closely, lately you seem more pessimistic.

DC

DC - " How the produced oil is distributed is not really part of the equation". I suppose that depends on what equation concerns you. What concerns you more: how much global oil is being produced in 2020 or what you'll have to pay for all your energy in 2020? Personally I don't care if we've reached PO 7 years ago or if it's another 15 years out. All I'm concerned about is my supply and what it will cost me. If I can outbid 99% of the rest of the consumers out there PO doesn't exist for me and never will. Conversely that's what I meant about affordability: in 1971 when oil peaked in the US if you couldn't afford to buy a tank of gasoline does it make any difference to you if the US is producing more oil than ever before?

"Are you implying that peak oil is likely to be reached because of a lack of demand as prices rise rather than the lack of ability of producers to supply oil at any price?" I haven't thought of it in that context but at first blush I like it. How would that work: higher oil prices lead to the development of more production but depletion still reduces the amount of the oil that was cheaper to develop. Along, of course, with the more expensive oil from recent production gains. So to prevent a peak even more of the expensive to develop oil needs to be brought on line but the higher oil prices create demand destruction which reduces the amount of oil that can be purchased and thus reduces production rates. Sorta like the old question about a tree falling in the forest: if there is no one there to buy the oil (or hear the tree fall) is there a PO (or the sound of a crashing tree)? If folks can't afford to buy oil does it matter whether we've reached or past PO?

But with the time lag factor balance is difficult to achieve on any one particular day. But in general some equilibrium should be reached. As you say it doesn't matter if oil prices rise to $BIG BUCKS per bbl if no one can afford to buy it? I'm sure we could bring more oil on line if the price goes to $200/bbl. But how much oil? More than we were producing but would even $200/bbl oil offset decline of existing fields indefinitely? Maybe not. There is a finite amount of oil that can be developed at $200/bbl. How much I wouldn't guess but it's probably fairly limited IMHO. And then what when those reserves are developed?

But back to your point: how much demand would there be in the US for $200 oil? Easy to guess not nearly as much as $100 oil. So companies only produce a limited amount of $200 oil. Maybe that's another concept to toy with: PO$X. IOW when did we reach the peak of $50/bbl oil? $100/bbl oil? Need to wrap my head around that for a bit. Back in 1986 or so when the KSA opened their valves and drove much oil down to $10/bbl the world was producing much less oil than now. Was that the date of PO$10? IOW if oil stayed at $10/bbl how much new oil production would be developed? I imagine very little if any. Global oil production had a short lived peaked when oil hit $35/bbl back in the late 70's or so. Was that PO$35?

From 2005 global oil production has been fairly flat compared to the long trend. Bent ranged from $40/bbl to $140/bbl during that time span. So was PO$140 in 2008 and PO$40 just 6 months later? Does the concept of PO production linked to a price even make sense? Again, dealing with the time lag and rapid changes in demand with price instability can any quantitative relationship be considered?

I just wrote this stuff and I'm not sure what I'm saying. You have a clue? LOL.

Rockman,

Thanks for the reply. I think I understand what your saying. But to be sure we are on the same page, let me clarify my thoughts here.

First, I brought prices into the concept of peak oil mainly because you often say that when we talk about how much oil can be produced price matters, more gets produced at $100/barrel than $30/barrel (for example in the Bakken and Eagle Ford plays).

When I think of peak oil, it is really independent of price. From a logical perspective the price level will not be infinite, it is unlikely to rise above $1500/ barrel in 2012 dollars by 2035 in my opinion. Let's assume there is enough demand for oil in 2035 that crude oil prices actually reach this $1500/barrel level, I contend that if peak oil has been reached that world oil output in 2035 will less than the highest annual level previously reached and that it will never surpass that previous high, no matter how high prices rise. (Note that I expect PO will be reached before 2035, I think it is remotely possible that a plateau is maintained from 2015 to 2035, suffice it to say we will be past the peak by 2035.) In fact a rise in price will simply ration available supplies amongst the highest bidders.

So by my reckoning there is not PO at $140 or PO at $240, there is just PO. Also it is not PO for you or PO for the guy behind the tree, it is PO for the world.

You often say you don't care when PO is, whether 2005 or 2035. It doesn't really matter I suppose, but if knowing that PO will arrive at some point causes the world to more aggressively move to alternatives, it would be useful.

Even if the mainstream media never accepts peak oil until it arrives, rising prices might lead to a move to alternatives, but it will be too little too late.

DC

DC - I think we see the world in a similar light. But a hypothetical, if you please. How would your actions going forward from today be if PO definately occured in 2005? And if you knew for a fact it would happen in 2025? The same? If different in what way?

And would you expect the world would act differently if they were completely convinced PO happened in 2005? And if they were convinced it wouldn't happen until 2025?

I would argue that you and the world wouldn't change their actions in either case. Our actions, or reactions if you please, are controlled by the POD...the Peak Oil Dynamic. We're creatures of the moment IMHO. And I postulate the POD is independent of the date of PO. And my proof: no one can offer definitive proof if global PO has occurred or not. And yet the POD exists today as it does. And the world's actions, as well as its lack of actions, are as they are.

Hi Rockman,

I think that awareness of peak oil does change behavior. I think many on this site have changed their behavior to varying degrees based on peak oil, global warming, and environmental degradation in general.

When the peak occurs is probably less important than society in general realizing that such a peak either is imminent or has already occured. Most people will not believe it until it occurs, so only in that sense does the timing matter, I am pretty sure the peak was not 2005, my guess is a plateau from 2015 to 2025, it may take until 2020 for people to believe the peak has arrived. Maybe prices in 2020 at $235/barrel (2012 $) will get people's attention. Can you define the peak oil dynamic, please?

DC

DC - Now I see how we differ: you have faith in human beings. HA! GOT YA!. LOL. To be consistent I don't tend to pay much attention to efforts to date PO. But I see folks present folks offer that we have reached global PO or at least on a global plateau that will have small up bumps. They may be correct or you're guess may be closer. But assume those other folks are correct and PO has occurred. Are we seeing any awareness of PO that changing behavior? Folks are fairly aware that smoking and drunk driving are fairly destructive habits yet that awareness doesn't seem to be changing behavior significantly. We can go on with that list adding more examples such as the awareness of eating too much leads to obesity.

Focusing on energy how many folks in the US really believe we just spent $trillions and countless lives to "export democracy" to the ME and not for the sake of oil? And are we seeing any significant behavioral changes as a result? Where we seem to agree is that the only hope for a significant change in attitude is a reaction to very significant events. And IMHO those events will happen in the context of the Peak Oil Dynamic: all those various manifestations of a declining fossil fuel base which are primarily all the economic and political ramifications . It might be a tad late at that point but that's what it will take IMHO. If God descended and she told everyone PO would definitely happen on 21 June, 2025 I wouldn't expect any significant change in behavior. But that's just me and my lack of faith in man's rationality.

Rock,

The way you define the issue of 'running out' makes a lot of sense to me. But then it begs a new series of metrics that allows one to analyze the situation per your perspective. How do we construct that? Maybe Gail can think up some formulas for us to use as the effects would seem to be measurable to some degree of accuracy.

If we look at real costs of energy and the rise to the point that X% of the population is priced out of the market could we create a series of formulas that approximates the effect that would have on food supplies, population levels over a variety of terms; short, med long? And effects on GDP, trade levels, climate impacts, etc.

There would, of course, be a host of interesting discussions on what happens in localized areas (counties) based upon their starting levels of affluence and internal access to energy resources. And, since the world is currently committed to a high level of integration and complexity, how much degradation of the periphery has to occur before even the rich locations start to feel the effects of our creeping Malthusian fate.

Wyo

Wyo

Wyo - And this is where the Gails et al need to lead us. I understand my little piece of the puzzel fairly well. But IMHO the BIG PICTURE takes a very multidiscipline approach to flesh it out into some meaningful form.

A big piece of being "priced out of the oil market" occurs on the business side of things. What happens is that the number of jobs (that use oil, and that allow the job-holder to purchase oil related products) tends to decline. See my post The Close Tie Between Energy Consumption, Employment, and Recession and my earlier post The Oil Employment Link - Part 1.

I try to write about the Big Picture on Our Finite World. The Oil Drum tries to stick more to the oil situation. It doesn't have reviewers with broad enough areas of expertise to evaluate posts that are very multi-disciplinary.

Really?
Rgds
WP

Excluding local distribution problems not one American has been denied an ounce of gasoline that they could AFFORD to pay for.

ROCKMAN, good point.

I differ with one aspect of this thread, the idea that there will always be a supply of fuel to keep things going. You cannot exclude local distribution problems, especially when those can extend across the country. I feel that the kingpin will be when the distribution network for the fuel supplies breaks down, and as availability starts to pinch and prices rise, systemic failure will happen.

I am old enough to remember gas rationing during WWII. At times there were some without fuel, except when they could get it on the black market or borrow from a friend. I remember lines of cars waiting to fill their tanks in the 70s, when I ran out of time to stay in line. Looking ahead, I see the time when the authorities must start to prioritize who gets fuel in order to provide basic fire and safety services. More and more people will simply not be able to get the fuel they want, and eventually, the fuel they need to continue their lifestyle.

I have been a full-time RVer for the past fifteen years, and I have learned to expect there will be problems down the road. I keep my fuel and water tanks full because there will be a time when I cannot refill them. It is not a matter of AFFORDing to pay for the resource; it is truly a matter of availability.

Now if you extend this problem into the real world of today, there will be the time when the fuel simply is not available, even it someone's life depends on it. That problem will only get worse and worse.

Where does this leave Malthus? His thought was on target, but his timing was off because a White Swan came along. Unfortunately, that Swan is losing its feathers; they are regrowing black.

sam (prudentrver.com and Was A Time When)

The other point I'd make in support of your systemic failure leading to genuine shortages situation is this: A hundred years ago, oil was super easy to extract. All you had to do was poke a hole in the ground in the right place and it squirted out. Very little technology required.

We have since used up those easy deposits and today, to get more oil out, not only has EROEI dropped, but along with this, the complexity, difficulty, and time required of the technology to get more out has gone way up. Now in the oil sands you have to build huge complex facilities to cook the oil in the ground for months, then process the goo that comes out, and then further upgrade this into something resembling conventional oil.

If there is a social collapse then what chance do we have of being able to construct and operate these mammoth operations? The second Mad Max movie had it wrong when it depicted a little oasis of society clustered around an oil well, with everything outside being anarchy. The problem with that Mad Max scenario is that we won't have any more oil wells to cluster society around; we will instead only have the option of gigantic complex oil sands facilities. These by definition require a huge amount of support from manufacturers and suppliers all throughout the rest of society and the continent. If that society is falling apart, then how will the oil sands facilities be able to be supported and expanded?

I envision fossil fuel extraction more like a siphon. Initially it gushes out but the as the liquid is removed the head drops. This then reduces flow rate. Near the end, the siphon gurgles and sucks air, barely staying in motion. Soon the minimum momentum cannot be maintained and the siphon breaks completely.

There are gravity drained stripper wells producing 10 barrels of oil per day that will slowly decline to nothing over the next 100 years. The operator needs replacement parts for the pump jack and some electricity to keep oil flowing.

Do you have an idea of how much production all these stripper wells add up to?

U.S. Dept. of Energy: Stripper Well Revitalization states:

There are over 340,000 of these wells in the United States and together they produced 260 million of barrels of oil in 2008.

which makes it 710 kb/d in the U.S. in 2008.

More information: Tech Talk - American Stripper Well Production, Heading Out, May 22, 2011

Was a Time When ... intriguing, but doesn't appear to be a link?

This tale began in 2006 as the autobiography of my fictional great-grandson, Sam, yet-to-be-born in 2015.

Sam would live through the greatest cultural transition ever experienced by the human race. I encased his memoirs in a short story telling of an expedition of Neu-human archeologists from a thousand years in the future, 3100 A.D., who return to the Pacific Coast searching for their roots. They find Sam's recorded life story and hear a first-hand account of the “Great Collapse” of human society as they had come to call it.

Sam Hardy's life begins at the peak of the tremendous spurt of technology and social advance in the second decade of the 21st century, powered by what many still thought at the time would be an infinite supply of energy and a stable world of commerce and trade. Sam writes the history of humanity's course through the transitions that result from expected natural disasters, resource depletion, climate change, over-population, and economic and cultural failure as his family and tribe struggle to learn to live in a new world of limited resources and crashing dreams.

BTW, Sam, good to hear from you. Wish you'd drop in more often. The new site layout looks great! Still in SoCal?

I fixed the link for "Was a Time When"

I agree with you on systemic failure likely being a problem.

In Atlanta, we were very short on gasoline after both the 2005 and 2008 hurricanes. Part of the problem is temporary disruptions. At some point, it is going to be harder to repair these. If prices are held down, then supplies especially tend to run short.

http://youtu.be/b4r0uWvsopU

Happened all around the Southeast...having read TOD I managed to fill the tank when the hurricane hit and reports of damage started coming in that almost carried me through it. Had to wait in line one day for about 20 minutes to get 5 rationed gallons which (@ 40mpg) was enough to last me another two weeks. I was turning my engine off while in line and in the few places I could I was pushing the car (CRX - it's light)...all the while around me were pickup trucks idling which probably got 12 mpg on a good day with the wind behind them. A taste of what's to come, I imagine.

Sam - “…the idea that there will always be a supply of fuel to keep things going.” I didn’t notice anyone saying that. I know I didn’t. There has never been enough of anything to keep “everything going” as far as I know. My point was perhaps too simple: anyone will have enough of anything they desire if they can afford it. If oil goes to $200/bbl there will be an adequate supply to satisfy everyone that can afford to pay that price. Granted the only potential buyer at that price for the long term may be the DOD.

And distribution problems I’m referring to have nothing to do with supply/demand issues. You mentioned waiting in line for gasoline over 30 years ago. Despite all the MSM hype at the time the situation had nothing to do with a lack of imported oil. Years afterwards the facts were determined: there was no national shortage of gasoline. The country had just as much fuel as before the so called oil embargo. But the inventory shifted from the tank farms/gas stations to the fuel tanks in everyone’s autos. Folks panicked and began refueling before they dropped to half full instead of waiting till they got under ¼ full. Multiply those few gallons by all the vehicles in the country and BAM!...there’s all that missing inventory.

As far as keeping the water and fuel tanks on your RV full you’ll never have a problem filling them up assuming you don’t lose track and run out of fuel on the highway. But even then you just jump on your cell and order a delivery to your location. That is if you can afford the cost to do so. And if the price of fuel increases 10X you’ll have all you want…if you can pay for it. Short of the govt controlling distribution folks will have what the need IF they can afford to pay for it. Even during WWII folks bought all the fuel and tires they wanted despite rationing…they just bought want they needed off the black market…if they could afford it.

Isn't this view a bit too narrow? Generally, predictions like Malthus or Peak Oil or Economic Collapse fail because the authors don't recognize that there is stabilizing feedback (ngeative feedback). For example, higher food prices will lead to inventions that increase food supply (not mentioned by Gail: Liebig's discovery of the laws of fertilization, the development of genetics and its utilization for breeding plants and animals (that was approx. 1860 to 1940)), higher oil prices make bitumen and tight oil economically feasible, central banks take countermeasures against economic collapse. The doomsayers usually only see the destabilizing feedbacks (positive feedback) that lead to explosion or collapse.

Of course as far as truly limited resources are concerned, this means only a delay. But the delay can be hundreds of years.

With regards to population, the game has completely changed since contraceptives were introduced and most of the population lives in cities. Those two things together have made Malthus' prediction irrelavant: yes, the population will go down, but through contraception, not through starvation.

Biologist, you have got everything wrong. And that is truly shocking if you are really a biologist. Did you ever ask yourself why the population did not explode a thousand years ago, or two thousand years ago. Or better yet did you ever ask yourself why the human population curve follows, almost exactly, the fossil fuel use curve? Now just why would that happen? Curious isn't it?

What happened to Malthus was fossil fuel. Fossil fuel enabled massive amounts of food to be produced which enabled the population to explode. Of course there is more to it than that, fossil fuel also fueled the industrial revolution which enabled the new population to be employed.

Fossil fuel brought on times of plenty. Populations always explode in times of plenty whether they be human or other animal populations.

The total amount of suffering per year in the natural world is beyond all decent contemplation. During the minute it takes me to compose this sentence, thousands of animals are being eaten alive; others are running for their lives, whimpering with fear; others are being slowly devoured from within by rasping parasites; thousands of all kinds are dying of starvation, thirst and disease. It must be so. If there is ever a time of plenty this very fact will automatically lead to an increase in population until the natural state of starvation and misery is restored.
Richard Dawkins: River Out of Eden, page131-132.

Richard Dawkins, now there is a biologist.

Ron P.

Darwinian,

if you are really an evolutionary scientist, then you might actually apply the scientific method and ask yourself why the predictions on this site failed (the predictions from Hubbert linearization were that a decline in oil production, irreversible, precipitous, would come very soon, and that was approximately 2008, do you remember the graphs where all those lines went down), why all those cornucopian predictions were wrong as well (remember all those lines that go up, up and up) and also why the predictions of the Oil Drum "daughter cell" Automatic Earth failed (economic collapse will come very soon). What was wrong in these models? Also, why did Paul Krugman (no hyperinflation, no collapse, but also no quick economic recovery) get it right? Why did Nate Silver get it right when he predicted that Obama would win? This is all about quantitative models detailed enough to make a meaningful predictions, and constant adjustment of the parameters when a prediction goes wrong. A prediction is only right when it is on time. A timeless prediction is worthless: I could predict "you will all die" and be right in the end, but what would be gained with this prediction?

For starters I am not an evolutionary scientist and have never claimed that I was. But what on earth has evolutionary science got to do with the Hubbert linearization or the decline of oil production.

But in the seven or so years this list has been in existance there have been hundreds of predictions, some were correct, or very close to being correct and some were off and others were off a lot. But none of them had anything to do with evolutionary science.

However all that being said, no one to my knowledge has ever predicted just when the collapse would come and no one, to my knowledge anyway, predicted it would come as early as this date, January 2013.

There have been many arguments about the collapse on this site. Most I think, agree with Leanan and John Michael Greer, that the collapse will be very slow and in steps. A few agree with me that the collapse will be quite fast but the date cannot be determined... not yet anyway. I think I have said it will be within a decade or so, perhaps as soon as 2017. But that is just a wild ass guess.

And you go on and on about predictions. Nate Silver got it right because he believed the polls. The polls got it exactly right and Nate Silver just agreed with them, that's all. There is really nothing mysterious about that.

It is absolutely no mystery why Malthus was wrong, so far anyway. He will eventually be right but fossil fuels and the industrial revolution gave the world a long reprieve.

But for goodness sake, don't be like a couple of other folks on this list, don't get hung up on predictions. If you see something that is quite obviously going to happen, you don't necessarily have to pick the exact date that it will happen. Like we know that if the earth keeps getting warmer the Arctic ice cap will eventually completely disappear one summer. But it is not important that anyone predict the exact year that this will happen. For goodness sake man, the exact date is not the important thing. The very fact that it is obviously happening is what is important.

Anyway your post was just a way of not answering my question. Why is it that the population increase curve follows almost exactly the fossil fuel use curve? And what happens when that fossil fuel use curve drops over the cliff? What happens when the fossil fuel age is over?

My point is that fossil fuels enabled the population to explode. That is just what naturally happens when there is enough resources to allow it. And when those resources are gone, the population will decline. Check it out here: Energy and Human Evolution. It will take you about twenty minutes or less to read that essay. And if you do bother to read it, you will never see things in the same light again.

Ron P.

I am somewhere between you and Greer. I think it will come about as a series of large crashes, but not all at once. First we'll see the final financial collapse which will strip most of the middle class's perceived wealth, after which we will revert to serfdom like in the Middle Ages. I predict that this will happen this year or next, since the US's gold hoard is being drained quickly and when this is finished there will be no more reason to continue on with dollars as the world's reserve currency, so it will be allowed to collapse.

But we'll still have quite a lot of fossil fuels left, so gas production may increase for a few decades, and coal more decades still. So it's not like the world will be starving in the next few decades.

But then we will start running out of fossil fuels in a big way a few decades down the road (oil production will soon permanently tank after the imminent final financial collapse, however). I see it as unlikely that we will develop alternatives in time (but I could be wrong, and I hope so). I think that after the financial collapse people aren't going to be too concerned about analysing the underlying ecological reasons behind them losing all their apparent wealth, they'll be more concerned about getting a job and feeding their families, so I don't think we'll see too much of a push into renewables or any real effort to address the problems head-on.

Then we'll start seeing the real downward spiral begin, and that will likely lurch down in larger steps as wars are fought and one country after another literally collapses -- those that run out of fossil fuels and simply can no longer function. They will likely get taken over by larger countries that still do have energy resources.

I just can't follow biologist's argument that a timeless crash prediction is meaningless. All through the 2000's many were arguing that the economic bubble was unsustainable, that it was going to burst. Year after year they were ignored or ridiculed. But if the fundamentals show that a collapse will happen, then it will happen; well, it finally did happen, in 2008. And a look through history shows that financial changes tend to happen in quick rapid shifts, not gradual declines. The only reason the financial system is able to picks up after the crashes is because it's saved by further growth. We will no longer have that financial safety net in the future.

The underlying systemic problems in 2008 were not fixed. They are now even worse, although they've been shifted a bit from one entity to another. I am therefore hereby predicting that in the near future we will see a complete financial collapse as the first in a series of post-PO collapses. I think it will happen in the 2013-2014 time frame, but I could be wrong about the timing of that, but not by much. I am right about the collapse prediction, however, because the fundamentals undeniably point to it.

"I just can't follow biologist's argument that a timeless crash prediction is meaningless."

Biologist is right. There will be a drought is a useless prediction. There will be a drought this summer is an extremely valuable prediction. Knowing a hurricane will happen in the future means you lay in some amount of reserves of long-lead time or non-perishable items. But you don't board up the windows and stock up on the perishables (or cut and run, depending) until you have a firm date of the storm's arrival.

Biologist is wrong because we were not talking about the weather we were discussing collapse and peak oil. It is extremely important to realize that peak oil will happen even if you your date is off by a few years. Robert Hirsch says we need twenty years to prepare and he is predicting peak oil within one to four years. If he is right, even if he is off by a couple of years, his prediction is extremely important and should be taken seriously.

It is extremely foolish to say that a prediction of peak oil, or economic collapse is not important unless you can hit the exact year it will happen.

Ron P.

It is extremely important to realize that peak oil will happen even if you your date is off by a few years.

But we don't even know if anyone's prediction is off by merely 'a few years'. If you are off by 50 years, then few will care . . . they'll be dead.

Your reasoning is fundamentally flawed. Knowing that disasters will happen, and additionally knowing something about their nature, is incredibly useful information. "There will be an earthquake." Great, we can build earthquake resistant structures. "There will be a drought." In response, we can ensure a diversified food supply, irrigation sourced from multiple regions, and put in place measures to minimize land damage during the drought. "There will be a hurricane." Ok, that means we need to make take precautions to deal with high winds and storm surges.

You've selectively ignored a wide array of precautions that one can take well in advance of any particular disaster in order to criticize timeless predictions of said disasters. Are you the sort of person that ignores the 500 year flood line when buying a house in a flood plain, figuring that because you don't know exactly when a flood will hit, you may as well ignore the possibility?

Written by biologist:
... why the predictions on this site failed (the predictions from Hubbert linearization were that a decline in oil production, irreversible, precipitous, would come very soon, and that was approximately 2008, do you remember the graphs where all those lines went down)....

I remember Ace used a discovery model, Wiki Oil Megaprojects, that underestimates the discoveries and assumed Iraqi oil production would remain constant (a guess about geopolitics).

So far I am still correct in the warning I gave about sharp peaks in world crude oil production. Looking at the production from the North Sea I concluded it was plausible (and likely) that world crude oil production would remain near the peak for up to 10% of the width of the curve which is 200 to 300 years wide. Therefore we could be on a undulating plateau from about 2004 to 2024 or 2034.

I also warned that a system is more likely to break when it is subject to maximum stress. Maximum stress does not occur when crude oil production changes from exponentially increasing to roughly constant in the vicinity of the peak. Maximum stress occurs at the inflection point on the falling edge of the Hubbert curve when the amount of oil available decreases at the maximum rate. That inflection point is set to occur about when world natural gas production reaches its peak. The price response from reaching peak oil will already have increased efficiency and eliminated waste making it more difficult to cut back. That seems like a very stressful point to me and thus earns a higher likelihood of initiating collapse which could continue for decades.

As for collapse there is no requirement that all countries will collapse simultaneously. If one goes down (such as Greece) reducing its consumption, then it buys time for the remaining ones.

The Stair Step Descent model, which I picked as most likely, forecasts a series of oil price shocks beating the economy down. It has not been disproved yet. The first shock was in 2008.

The forecasts for the price of gold, silver and food are playing out. Shortages and supply disruptions have definitely increased since 2008 where I shop.

I predicted there would be a price response in U.S. crude oil plus condensate production. Instead of the production continuing to decline below 5 Mb/d, it would rise and stay between 5 Mb/d and 6 Mb/d for about 20 years, beginning in 2004 or 2005, after which it would resume its descent. The EIA reports it at about 7 Mb/d currently, so I underestimated the magnitude of the price response.

There have been warnings on this site that enhanced oil recovery shifts the peak production in oil fields beyond 50% depletion creating a shark fin curve and making Hubbert analysis underestimate the peak production and forecast it too soon. I have been forecasting that world crude oil production will peak when we have consumed 50% to 60% of the ultimately recovered resource. I also think production from the Bakken will peak when it is around 70% depleted. Thus, when applied to that field, I do not trust a Hubbert analysis. WebHubbleTelescope has been warning about fat tails for years.

You seem to have associated this site with near-term doomers and overlooked those who were thinking more along the lines of catabolic collapse. The Limits to Growth model and its variants which project collapse later in this century have also been presented at this site.

I suggest you read my new Our Finite World post, 2013:Beginning of a Long Recession. In it, I point out what research says about collapse cycles work in practice. There is an expansion phase, before food (and sometimes fuel and water) limits are reached, then a stagflation phase, next a crisis phase brought on by financial issues, and finally a Depression/Intercycle phase. Based on the historical record, the four cycles seem to average about 300 years in total.

The expansion phase is typically quite long(100 years+); the stagflation phase is typically 50 or 60 years; the crisis phase varies in length, but is typically 20+ years; and depression/intercycle is the remainder. I hypothesize that the US entered the expansion phase in about 1800, with the more widespread use of coal. It entered the stagflation phase in 1970, with the peaking of US oil supply. The financial problems the US is encountering now (see my article Understanding our oil-related fiscal cliff) seem to be precisely what would be expected of an economy that is entering the crisis phase.

I point out what research says about collapse cycles work in practice

Gail, that research is about the cycles for agricultural empires, during periods where there was essentially no change in technology or underlying economic productivity.

It really doesn't apply to contemporary economies - if you were to ask the author, he'd tell you this is a misapplication of his research.

"no change in technology or underlying economic productivity"
Not true. The cycle includes increasingly intensive agriculture. Shorter periods of letting fields lie fallow, etc. The intercycle last long enough for the surviving population to find a different place to practice agriculture and to move to that new place. I think the model that Gail describes does not fall by so simple a criticism as you have given. IMHO, it is a robust model.

As to what the author of the study thinks, it is well knowm that some authors are very critical of the work of other people. Many authors enjoy recognizing innovative applications of their work. Some do not. What you say is pure speculation. And correctly phrased as such.

The cycle includes increasingly intensive agriculture. Shorter periods of letting fields lie fallow, etc.

Is that a sustainable increase in ag productivity? I understand the author is arguing that these empires were trying to grow in a zero-sum world. If so, then it's not an applicable model, as economic productivity has been growing for quite a while (starting well before the age of FF).

Now, perhaps the problem is that Gail is arguing that current economic productivity isn't sustainable - she seems to assume that PO will cause a dramatic decrease in economic productivity.

And, she doesn't really have good evidence for that - the fact that oil shocks contribute to recessions really isn't evidence that oil (or FF) is magically essential for modern civilization, and that it's absence will cause economic output to fall to that of Roman times. The author she cites would be quite astonished by that proposition.

Fossil fuel doesn't turn into usable energy by itself, or else the Romans would have used it. No, that requires technology. Technology can harness energy from a wide variety of sources, including the incredibly hiqh quality, abundant solar energy that is all around us, in both direct and indirect forms (plus non-solar, of course: nuclear, tidal, geothermal, etc).

Biologist,

In addition to Darwinian's comments I think you need to consider some additional points.

While higher prices may result in increased production from marginal resources that does not override the constantly decreasing EROEI of those marginal resources. Economics does not trump physics. There is an unavoidable point where prices no longer are relevant and we cannot leave that out of the analysis.

Other points to keep in mind are that technological improvements in agriculture production over the last 40 years have shown a decreasing improvement in yields and one could make a strong argument that we are approaching limits on that account as well. There is a pretty strong argument out there that almost all of the 'stabilizing' influences you mention have been misanalysed by the economics profession and are actually based upon wide access to cheap energy and that such feedbacks will not be maintainable given likely future circumstances.

Wyo

In science, theories derived from observations and testable hypotheses yield useful predictions. Peak oil is not a theory. It is a set of observations about the pattern of production of oil fields. There is a great temptation to make predictions without having a scientific foundation. Malthus was right given his assumptions, but his assumptions about the world were inaccurate which led to predictions which were not at all useful as unforeseen variables came into play (fossil fuel).One can have a very good scientific theory and still make erroneous predictions because of a change in conditions and variables. Inaccurate predictions can result from many kinds of error. Web Hubble Telescope spent much time speaking to this in this forum about the very limited value of Hubbert Linearizations. A theory is an attempt to describe the way the world works and why. Hubbert Linearizations are a description of observed patterns which shed no understanding on why the observed pattern exists. There isn't a foundation from which to make predictions because using a linearization is in essence saying, it will turn out this way because it has happened this way before. Newton and Einstein had theories, Hubbert, not so much. That is not to say that Hubbert did not make a significant contribution because the observation is important, but it is a starting point, not an endpoint.

The basic premise that world production will rise and fall in a fashion similar to the production of individual fields and geographic areas is logical and appears self-evident. However, we don't have much of a basis to make a prediction. Making precise predictions when you have no basis to do so, is not at all useful because the only way you make an accurate prediction is by chance. Science is about developing theories that give you basis to make predictions which turn out to be accurate by a much better than chance occurrence.

Those who study peak oil and are very cavalier about making precise predictions about when peak oil will occur damage the credibility of the idea. It is better to say, "I can't predict precisely when this will occur. There are too many unknown variables, we have incomplete data, and we don't have an adequate theory to explain our observations." Here are the reasons to believe that oil will peak in the near term. Here are the reasons to believe that oil may peak at some later time.

The argument that peak oil critics make is that Malthus was wrong, so peak oil adherents are making the same errors. The critics also have no theory and no basis for making the predictions of expanding oil production for 60 years to come. They could be right, but also mostly by chance. Climate change however has generated useful scientific theories. Climate scientists have developed models about how the climate system works and how introducing additional CO2 has affected the climate systems; there are testable hypotheses which have yielded an incredible body of data. Not all predictions have been accurate which leads to revising the theory and adding new hypothesis about what governs climate change.

There are fewer scientists working on the peak oil problem, there has been less accumulation of data, testing of hypotheses, and so fewer accurate predictions are made. We don't have good models yet of oil depletion. I am quite convinced that peak oil is a problem and that peak is likely sometime within the next 30 years. Given the observations of plateauing world production and rising prices, it is likely that sooner rather than later fits the bill. But I don't know that anyone has a basis for making a precise prediction.

It is sane then, given the problems of climate change and oil depletion to expend substantial effort to find different ways of supplying energy and ways of using much less energy to power societies even if we have limited predictive power. We have no infinite sources of energy, and all of them seem to have externalities.

An empirical theory is still a theory.

There is a loose relationship between the amount of oil in the ground and how fast humans can extract the oil. For example, if it takes 5 years to develop an oil field, then one can not extract the oil at a rate that would deplete the field in less than 5 years. Because the world is finite, this principle applies to the world too.

This is why the long term growth rate in the fossil fuel era was roughly 2%, not 20% or 200%. Coal can be used to power the extraction of coal, but it takes time to set it up and deal with the arguments about who is going to get the benefits.

While higher prices may result in increased production from marginal resources that does not override the constantly decreasing EROEI of those marginal resources. Economics does not trump physics. There is an unavoidable point where prices no longer are relevant and we cannot leave that out of the analysis.

In a way. But EROEI is quite overhyped and it really doesn't tell us much of relevance. Whereas price includes what we need to know, including effects of changing EROEI. So prices are always relevant and EROEI is of academic interest.

You seem to forget that energy has a financial cost for both capital and operations. Low EROEI means high production cost which requires higher selling price. Don't believe this is relevant? Just go ask the folks producing in the Bakken and Three Forks where EROEI is lower than other oil producing regions. So as costs climb by 20% or more per year for the driller & fracture operators (diesel cost $4.40 per gallon in western ND versus $3.50 here in Missouri), the margins drop. Then production levels off or declines, just like appears to be happening now. See today's Drumbeat.

Sure, but still, it is all about cost. And the effect of EROEI is often exaggerated. For instance, EROEI 5 requires only 17% more extraction for the same net energy than does EROEI 15.

the population will go down, but through contraception, not through starvation.

Malthus, did discuss that the only way out (of the Malthusian trap) was for mankind to find a way to limit population by means "other than by deprivation". So he did state his assumptions. Yes pop growth rates in most of the world are falling -in many cases faster than projected, so a pop turnaround not produced by starvation is seen as possible/probable. Although whether it will come soon enough is an important issue.

Based upon everything I know, I think we are looking at a 50-100 year timeframe for the collapse to complete and reach nadir. I am particularly informed by the Limits to Growth models.

So it's longer than many might expect, but not quite hundreds of years.

I think the actual decline depends very much on what connections "break". We now have a system built on international trade, just-in-time delivery, and use of the Internet and cellular phones (among other things). There are a lot of pieces to this system. One of them is the reserve currency system, in which the US dollar is the world's reserve currency. (See, for example, ASPO-USA's recent post Why Peak Oil Threatens the International Monetary System. If we can't keep the international monetary system together, international trade will drop way back, and we will have trouble on many fronts, including both oil and electricity.

Malthus wasn't so much wrong as that his timing was off. Much research in population dynamics has confirmed his observation that resources determine the size of populations.

The observation that energy has been one of the factors that has enabled the human population to grow well beyond anything Malthus imagined possible is almost certainly correct. That the US(non-gov't)debt/GDP debt ratio has had a similar effect on global population is more difficult to accept.

Whatever the details, the fundamental escape from Malthus' prediction has been economic growth. And the indicators that such growth is in trouble are confirmation that Malthus was correct all along. But in the past two centuries the norm of growth and that Malthus was wrong have become firmly embedded in society's thinking. A more fundamental question is therefore posed: do we need to change this growth norm?

Malthus had no way of predicting our collective ability to cheat natural systems to create a surplus. Those areas that haven't or couldn't implement these schemes have been growing their populations by importing the surpluses of areas that have been able to implement surplus based growth in production. We see what happens when, for many reasons, these surpluses become unavailable - Africa comes to mind, Pakistan, Myanmar...

While much of this surplus was initially the result of techniques Gail mentions, we, collectively, have moved well beyond that, in that we now create 'fiat surpluses' involving credit/debt and depletion of finite resources, none of which will be available indefinitely at the rates required to support our current requirements. I see us entering the crisis phase, and what we'll see is Malthus II, or Malthus on steroids. A very complex set of circumstances have allowed humans to dramatically overshoot Malthus' predictions. As with all things, this system will simplify itself and return to its baseline much faster than it developed. Timing this process may be a fool's game, as is denying its inevitability. A conjunction of hard limits is all that we can be sure of.

I agree with you that Malthus wasn't so much wrong, but had his timing off. By way of explanation as to why population growth is such a problem, this is what I have recently figured out:

The way the natural order works, each species having far more offspring than are needed to survive. Humans are intelligent. (As far as I can tell, greater human intelligence is the result of gaining control of fire over 1 million years ago. With the ability to control fire, humans could cook food, and as a result did not need to spend as much time (47% of the day by some estimates) and physical energy on chewing food. The energy that was not spent on big teeth, jaws and gut could go into making a bigger brain. See Humans Seem to Need External Energy.)

Humans, with their intelligence have been able to defeat natural selection. One way is through modern medicine. Another is by using fossil fuels to grow more food. Another is by overcoming natural instincts to keep population down through trade. The result is a steadily growing population, which is very hard to stop. This is a post explaining more of the issues: Human Population Overshoot: What Went Wrong.

The "human population overshoot" model lacks resolution. Human fertility is at or below reproduction level in all regions of the world except in Africa, the Middle East, and South Asia:
http://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&met_y=sp_dyn_tfrt_in&idim=country:SAU&dl=en&hl=en&q=fertility+rate+saudi+arabia#!ctype=l&strail=false&bcs=d&nselm=h&met_y=sp_dyn_tfrt_in&scale_y=lin&ind_y=false&rdim=region&idim=region:EAP:ECA:LAC:MNA:NAC:SAS:SSA&ifdim=region&hl=en_US&dl=en&ind=false

That means that the Middle East and its neighbors are in a world of trouble population-wise, but the rest of the world is getting better. Solutions for the problem need to be developed mainly with the Middle East in mind. Concentrate resources on environment and energy efficiency in the other regions.

The problem is not limited to areas with high fertility and growth rate.

In the "developed" world, we use debt to finance expensive health care systems to keep people alive well past their natural expiration date, and this fuels a certain type of population expansion in itself.

You can cheat the prediction IF you have abundant cheap energy, without it...not so much.

energy has been one of the factors that has enabled the human population to grow well beyond anything Malthus imagined

Energy is really the only factor that has enabled this growth. Sure, hygiene & other medical advances help, but really, if the energy weren't there, none of that would matter. Food is energy. All biological entities require energy for survival, and surplus energy for growth. Fossil fuels gave humanity a mega surplus of energy, hence the J-curve of growth over the last two centuries. We could've been clean as whistles and had all the dollars (debt or otherwise) we could ever have dreamed of, but if the energy surplus hadn't been there, none of that would've mattered. But now, there are so many of us that we are stripping the planet - taking 40-50% of biotic productivity for ourselves. At the same time, EROEI is dropping, so net energy is flat at best, and will drop sooner and more steeply than will gross energy extraction/production/call-it-what-you-will. As our energy surplus drops, so will our population. And you can take that to the bank... erm, you know what I mean.

Energy is really the only factor that has enabled this growth

I think communication and the coordination of effort that communication allows have been the other major factor. That allows more to be accomplished with less labor and energy. This does come at the price of increased specialization and complexity, but that is the way systems typically evolve anyway.

Regardless, I agree that we are still using too much of the biotic productivity of the planet.

Hi Gail,

Excellent post, thank you.

Although crude output growth has slowed, overall energy per capita has continued to increase after a pause in the period from roughly 1970-2000. I would think that in 25+/-5 years we may see a decline in energy per capita (this depends on both future development of alternative energy and efficiency in the use of energy as well as the future trend of population growth.)

Often people assume that higher energy prices must lead to less economic activity. What is missed, in my opinion, is that one person's spending is another person's income (the seller). I agree that it can be quite disruptive when the price of a product (such as crude oil and the products produced from it) rises rapidly (from $20 to $100/barrel in 10 years).

The rise in real oil prices (EIA imported crude cost) from 1998 to 2008 was about 17 % per year based on average annual prices. If we assume the trend should be drawn from 1998 to 2012(prices have remained at about $100 per barrel, but I think they will rise over the long term), the price rise is 12 % per year. If that trend continues real oil prices would reach $240/barrel by 2020, assuming the world economy can recover.

It is possible that rising oil prices could lead to more replacement of low fuel economy vehicles, replacement of oil based heating equipment with more efficient natural gas, propane, or heat pumps, as well as renovations to improve insulation, windows, and general tightness of existing homes and commercial real estate. It might even lead to people demanding more public transit (trains and light rail) from their elected officials. All of this activity results in greater economic activity and would tend to counteract any depressing effect that higher crude costs might cause.

Finally we come to debt. Your chart that excludes federal debt is interesting, but a second chart which includes both public and private debt back to 1900 would paint a slightly different picture, one that emphasizes bubbles and the ensuing severe financial crisis and depression.

Often one hears that rising energy prices caused the recent recession, but just as the major cause of the Great Depression was a stock market bubble, our lesser depression resulted mainly from the popping of a housing market bubble. In fact the rapid rise in private debt in the US coincides with the rapid rise in crude oil prices from 1998 to 2008. Which is the cause and which is the effect?

Note that from 1986 to 2003 the average real price of imported crude (EIA annual data) was $30/barrel with prices ranging from $30 in 1986 to $40 in 1990 down to $17 in 1998 and back to $35 in 2003. If one would like to claim that rising private debt is mostly due to rising energy prices, then one would also want to explain the rise in private debt beginning in 1996 while energy prices were relatively flat up to 2003.

I would consider a more plausible explanation is that looser banking rules enacted during the Clinton administration lead to out of control lending which pushed up energy costs as people bought bigger cars, bigger homes, and went on more vacations. We also had the dot com bubble over the 1996-2000 period where many people thought they were rich and tended to overspend(also pushing up energy costs).

It was excessive private (and public) debt and the resulting excessive demand that in part explains higher energy prices. The other piece is of course the relatively small increase in energy output in response to the higher prices, which is due to geological and technological constraints.

DC

I am not sure I can answer all of your issues here. I probably need to write another post or two.

There is a common belief that one person's spending is another person's income (the seller's), and this results in a close to status quo situation when viewed across importers and exporters combined. The thing that people miss is the way the economy is structured. Our basic needs come first. These would include food and basic energy. In the day of hunter-gatherers and in early agricultural economies, these were almost 100% of the economy. As more higher quality energy sources were added, it was possible to create an economy where only, say 50% of the economy (in terms of labor, capital needs) were devoted to food and basic energy. This freed up more people to work on other goods and services, and the economy to expand. Civilizations were able to add more roads, and schools, and hospitals. People were freed up to work on inventing new "stuff". Eventually, we got to a situation in the US, where only a very small proportion of the population were needed to provide food and basic energy.

The problem with high priced energy is that it represents (in some sense) low EROEI energy. More of the population must spend their time producing energy, so fewer can spend time on producing other things. More of the world's investment dollars must go into oil, so less can go into other things. The economy has less "energy surplus" to spend on the "nice to haves," so a much larger share must be spent on the basics. The run up from $20 barrel oil to $100 barrel oil came so fast, that we have in no way absorbed it yet--we have just papered it over with deficit spending. What we are, in effect, trying to do, is move back to a simpler society, one which does not require as much high priced oil to, say fix its roads, and maintain its hospitals. Our society must "shrink back" in some sense, so that fewer people are inventing, and fewer people are working as bankers and lawyers. More efficient cars may be a step in the right direction, but the higher prices consumers pay for those cars (together with higher prices for food, and for goods that are shipped) will leave them with less discretionary income. Discretionary sectors of all types must shrink--health care, bankers, lawyers, restaurants, etc. This is what leads to a drag on GDP growth.

Another issue that people miss is that a run up in oil prices makes countries that use a lot of oil in their mix of fuels makes these economies non-competitive on world markets, setting them up for losses to economies that mostly use cheaper energy sources, such as China and India. See my post Energy Leveraging: An explanation for China's success and the world's unemployment.

The reason why I talk about non-government debt is because the debt has to get back to businesses and to individuals, in order to further the uptake of fossil fuels into society. Governments buying guns and boats with debt have a temporary positive impact on the economy, as their investment leads to more jobs for soldiers and gun and boat makers. To get a truly long-benefit effect back to society, it seems to me that it is necessary to move the impact into the private sector, and perhaps to the local government sector, with more roads, and cars and trucks for citizens. Suddenly, many economic activities become much more possible, if the infrastructure for them to take place has been built.

On the level of money, one persons spending is anothers income is true (a tautology in fact). A lot depends upon how that higher price is distributed -between rents, and wages. If it is rents -those who have legal claim to the oil (or whatever) accrue a windfall -which presumably is spent -recyling the funds into the economy. If it is wages -especially via hiring more labor (you could think of higher wages as a sort of rent extraction, with the poroceeds going to labour rather than capital), then people whose work was presumably contributing to other parts of the economy, are now being diverted to energy extraction. So the faction of the workforce outside of energy extraction goes down, i.e. per capita there are fewer workers producing non-energy good.

This statement may be a tautology, but it doesn't really get at the dynamics involved. If more people work in extracting oil, fewer do other needed jobs. There are actually fewer (oil-based) jobs in total, because of less investment outside of oil, because more investment is needed for oil (with no more output).

I thought thats what I said, that if more people are required to produce X, there are less left over to produce Y. But, maybe that was hard to discertain, since I tried to exclude the case that higher prices could in part or whole be because owners are simply getting a higher price.

"If more people work in extracting oil, fewer do other needed jobs."

That line of thought is missing the effects of automation. You can produce the same amount with fewer workers, especially with the routine jobs.

Certainly true, but the workforce in oil cannot be a very large part of the total. What could be the average extraction price of oil? $30? Times 90 Mb/d times 365 days a year. Only $1 trillion/year, or some 1.4% of global GDP (and workforce alike). If all oil extraction becomes really difficult at $100, then we are at 5%. That's a lot, but it still isn't very dramatic.

What matters to the economy is the extraction cost of new oil, which is not $30. Closer to $60 or $70/barrel if you look at where that comes from: Bakken, GOM, Texas (Eagle Ford & permian Basin), and enhansed oil recovery in many areas of US. Same scenario in places like Brazil, Asia (offshore like South China Sea) and Arctic seas. Regardless of where oil comes from, either old wells that were drilled in 1980 or new tar sand sourced oil, it will sell for near world market price, less a discount based on local factors.

The problem comes with higher extraction costs coupled with short term oil price stagnation or decline, which leads to lower oil production. Which then leads to higher oil prices without much immediate increase in production. These short term oil price spikes are what damages a normally stable economy. Something like what has happenned in the last 5 years, IMO.

We talked about employment here. Average costs (or rather total costs) matter then, not marginal costs.

Just some personal observations and a more detailed breakdown. The exploration effort has multiple cost components. Manpower costs of the exploration process are very low compared to what it was when I started. I can interpret as much seismic data in a week that it would have taken 5 geophysicists months to do in 1980. And not just faster but producing a much higher quality product that increases the probability of success significantly. The number of drillable prospects generated is directly related to the output speed.

But this efficiency has come at a price: the cost of 3d seismic is a great deal greater than the old 2d data. OTOH this is where it gets difficult to characterize the cost of efficiency. The high cost 3d seismic data has also greatly reduced the number of dry holes. So a $40 million 3d seis shoot may prevent you from drilling $80 million of dry holes while leading you to discover $100 million of oil/NG. OTOH maybe that 3d seis shoot generates only enough successful wells that produce $30 million of production.

Now the manpower costs related to the actual drilling/production costs. In the late 70’s the drill rig count was more than double what it is today. Thus the manpower costs, adjusted for inflation, are lower now. OTOH the productivity of modern wells is much less than wells drilled 40 years ago as evidenced by the fact US oil production peaked in the early 70’s. OTOOH the history of NG production is different because as less oil was left to hunt for we still had huge NG potential especially when NG prices rose dramatically in the 70’s. OTOOOH reserves from newer NG discoveries in the US have tended to be smaller. So again difficult to quantify all these varying components into some sense of efficiency and relate it to productivity costs.

On the production cost side of the equation the per well manpower expense hasn’t changed a great deal. You still need about the same number of bodies in the field monitoring the systems. But again not so clear cut. Over the decades the average rate of the oil wells has decreased significantly to where we are now: less than 10 bopd. So even while we were slipping well past our PO it took an increasing number of wells to sustain the lower rate. So more wells meant more manpower. Also stripper wells tend to require not only more boots on the ground but they also have a higher LOE (Lease Operating Expense). A well flowing 100% oil on its own costs much less (and takes less manpower) to produce than a well producing 10X as much salt water that needs to have pumps running of the electric grid.

How does the shale boom fit into the plan? Some are supported by expensive 3d seis and some are not. But once the geology is evaluated a large number of drilling locations can be generated very quickly. This process requires much less manpower input. We call such plays “cookie cutters”: just keep punching them out as fast as possible. OTOH the boom time atmosphere runs the leasing costs up greatly. Eagle Ford Shale leases that could be had for $150/ac five years ago were costing up to $10,000/ac a year ago. Thus the cost of a 160 drilling unit rose from around $25,000 to more than $1.5 million. Multiply that lease cost by thousands of wells and you’re taking big bucks. Horizontal wells have higher flow rates than vertical wells. But also cost a lot more. Frac’ng a well can greatly increase productivity. OTOH some frac jobs are costing more than what was spent to drill the well in the first place. So again difficult to model the cost/results process in a quantitative fashion.

As a practical matter I think we're going to have a hard time dealing with climate change, but I think we should be clear on what the theoretical problems are, and are not.

The most important refutation of Malthus is on the population side: world population as a whole has clearly stopped growing exponentially (or geometrically, if you like), due to the demographic transition (it's roughly arithmetic at the moment). This is a key point: in many ways, growth is generally self-limited, and follows a logistic (or sigmoid curve), generally referred to as an S-curve. For instance, US car sales peaked about 35 years ago, and the US has a clear over-supply of vehicles, due to increasing vehicle longevity.

In fact, in most of the world population growth is on a long-term negative path, due to fertility rates well below replacement, including Western Europe, Russia, China, and the US (excluding immigration). Japan and Italy are the poster children for this - both are starting to show absolute declines in population. This is detailed at the UN site below, where we see that the growth rate was as high as 2.19% back in 1963. The total population peak is currently expected to be at about 9 billion around 2075 and population is expected to drop after that.

See especially Figure 3, page 6: http://www.un.org/esa/population/publications/longrange2/WorldPop2300fin...

http://www.un.org/esa/population/publications/longrange2/WorldPop2300fin...

Let's explore a couple of key concepts: the difference between arithmetic and exponential growth, and the difference between high fertility and "bottom line" growth.

Consider the following series of numbers: 10, 11, 12, 13, 14. There is growth of 7.7% at the end, but this is arithmetic growth: the change from number to number is constant, not growing with the base. Malthus assumed exponential growth for population, and arithmetic growth for agriculture. At the moment overall world population is increasing, at about 72M per year, IIRC. However, that number is stable at the moment, and very likely to decrease soon. What we see, then, is that exponential growth for population has ended.

Growth varies enormously by country - in Japan, for instance, absolute growth will be negative next year. Italy and Russia will follow soon after. These alone are sufficient to refute Malthus's general rule in a simple, clear fashion.

For many more countries, the fertility rate is below replacement. If every couple has less than about 2.1 children (the definition of the replacement fertility rate), the population is very young, and the death rate is low, there can be a lot of children and "bottom line" growth in the population, but in the long run the population will stabilize and decline, as every generation is smaller than the one before. So, if we clearly have fertility rates below replacement, we clearly have in the long run stable or declining population growth.

Now, are there still parts of the world growing pretty quickly? Sure, but they're in the minority. Just as importantly, the parts of the world that aren't growing clearly refute Malthus's idea that population always grows until it hits a resource limit - he couldn't conceive of voluntary birth control.

Do we still have huge, basic sustainability problems? Sure, but it's important to know that the broad, simple framework that Malthus proposed is just plain wrong.

This kind of logic also applies to energy. Like population, US car sales, and many other examples, energy markets (at least renewable ones, like those for wind and solar electricity - so no, I'm not talking about oil) will naturally mature and flatten out long before we reach theoretical limits.

For far too long we've been talking about a false dichotomy between "infinite exponential growth" and collapse. In fact, with a little luck, growth in resource consumption will gradually come to a stop, while humanity switches it's desire for improvement to what are generally known as "services": health, education, art, etc.

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Just for the value of good trivia, let's note that Malthus believed that population growth would continue forever because he believed that contraception was morally wrong, not that it couldn't work.

Further, some argue that Malthus’s argument was principally a class one, designed to rationalize why the poor must remain poor, and why the class relations in nineteenth-century Britain should remain as they were.

His greatest fear was that due to excessive population growth combined with egalitarian notions “the middle classes of society would . . . be blended with the poor.” Indeed, as Malthus acknowledged in An Essay on Population, “The principal argument of this Essay only goes to prove the necessity of a class of proprietors, and a class of labourers.” The workers and the poor through their excessive consumption, abetted by sheer numbers, would eat away the house and home (and the sumptuous dinner tables) of the middle and upper classes.

He made it clear that the real issue was who was to be allowed to join the banquet at the top of society.

I don't believe that the slowing of population growth is necessarily a refutation of Malthus. I think it is very much in line with what I am writing about in my most recent post, 2013: Beginning of Long-Term Recession?

In that post, I write about a different theory of how limits apply, one that is based on empirical evidence. In that theory, civilizations progress through four phases: expansion, stagflation, crisis, depression/intercycle. As I see it, the United States was in the expansion phase between 1800 and 1970, when US peak oil hit. It was in stagflation (with lower growth, higher oil prices, more wage disparity, more debt) during 1970 to 2012. The financial problems that the US is hitting now appear to be typical of what other economies have hit in the crisis stage.

Gail,

Your theories, even if correct, would not prove Malthus correct. Out of control (perpetual and exponential) population growth was central to his theory, and that's not we're seeing.

Malthus argued that the decline in population would be linked to a lack of food. Nothing could be further from the truth - just look up the old pictures from the Great Depression and current pictures of low income and compare the body shapes. The Great Depression was about starving, the Great Recession is about not getting a cell phone. This shows that Malthus was wrong: population growth is slowing while there is still an oversupply of calories.

This kind of logic also applies to energy. Like population, US car sales, and many other examples, energy markets (at least renewable ones, like those for wind and solar electricity - so no, I'm not talking about oil) will naturally mature and flatten out long before we reach theoretical limits.

Could you provide some numbers to support that assertion? What kinds of time frames are we talking about here? We'll hit practical limits before we hit theoretical limits, so can you expand on that?

World energy consumption is on the order of 10 terawatts, while world solar insolation is on the order of 100,000 terawatts. We are bathed in vast quantities of high-quality energy, which is only limited by our technology for capturing it. (Of course, there are and should be other sources besides direct solar...)

Re time frames: our problem is too much FF,
not too little. Will we reduce CO2 quickly enough? We may, but current trends are bad.

I'm aware of how much energy strikes the earth, I was asking for data more along the lines of how much of that solar energy manages to penetrate and power our economic energy systems.

At the moment I think wind is about 3% of US electricity. Wind power is half the cost of solar, still, so it makes more sense as the primary source of renewable power. That will probably be the case for very, very roughly 10 more years.

Wind can supply at least a terawatt (that's average, not peak, and the max is probably much more), so it can be the primary source of new renewable power for quite a while.

I'll take a look for solar stats for the US and other countries. OTOH, I'm not sure what you're asking, really. Solar power has hit grid parity in just the last several years, so current installation levels don't really tell us what the real, practical potential is.

Here's one from the US's NREL: existing renewable technologies could supply 80% of US electricity demand by 2050, from an engineering point of view. Detailed modeling including an open database of technology cost and performance assumptions used in scenario analysis are included.

http://www.nrel.gov/analysis/re_futures/

Whether the political and economic steps required to create such a renewable future will happen is a whole different question, not addressed in the report.

Germany plans to have wind and solar provide all of it's power in the long run. You could take a look at their studies, which conclude, that a power supply from 100% renewables is possible and on the long run cheaper than a conventional supply. Here's one: http://www.umweltdaten.de/publikationen/fpdf-l/3997.pdf

One example is a study from the independent Environmental Council (in English: "Pathways towards a 100 % renewable electricity system"), which calculated 3 scenarios: A national self-supply scenario, a scenario with renewables distributed in a power network all over European and a German-Scandinavian scenario (taking advantage the huge pumped storage capacities of Norway).

http://www.umweltrat.de/EN/TheGermanAdvisoryCouncilOnTheEnvironment/theg...

Here's a study from the German Federal Environmental Agency, which until now only calculated a national self-sufficiency scenario, which expects that the power storage problem is mainly solved storing methane created by electrolysis from excess electricity. The agency announced further studies with scenarios on an European and on a local level.

http://www.umweltbundesamt.de/uba-info-presse-e/2010/pe10-039_energy_goa...

Watching Germany is like watching a train wreck happen in slow motion.

First, they are devoting $55 billion to grid investments until 2030 to support about 25 percentage points additional renewables. Please note that this is likely to be happy numbers, and the real costs will come in higher. The same money could buy them 10 large reactors supplying 15% of their electricity.

The German production figures for 2012 are in. 1.6% additional renewables, 1.7% less nuclear. No gain in terms of fossils.

German consumers had to pay €20 billion for renewables in 2012 alone and they have very little to show for it. They have also committed to to keep paying almost the same amounts every year for up to 20 years in FiTs on their current installed base, so unfortunately, this is NOT investment costs but rather only the "rent" for the investments.

At the same time, Germany's neighbors are moving to disconnect themselves from the German grid, since it threatens their grid stabilities when excess German power is dumped onto them.

Also, within Germany itself, the industry scrambles to protect themselves as fluctuations in the power grid are causing major damage to equipment as well as costly interruptions in production.

And, of course, the German environment minister and also many self-portrayed "environmentalist" actually defend Germany's decision to renew their fleet of lignite and gas plants to provide balancing power to intermittent renewables.

This is an ongoing and completely unsustainable large-scale fiasco that does nothing to protect the climate. But it is certainly accompanied by thunderous applause and wide-eyed admiration.

We have to note that Germany has decided to spend quite a lot of money to do two things:

1st, eliminate their nuclear power. Unfortunately, that seems to be a higher priority than reducing CO2 emissions.

And, 2nd, invest enough money in what were immature technologies (wind to some extent, but especially solar) to make them mature. That's an expensive gift to the rest of the world.

We can second guess these decisions, but that's what they want, and they're willing to pay for it. The fact that these choices are expensive doesn't tell us much about the long-term sustainability of their move to renewables.

Absolutely, but we can question for how long the Germans are willing to keep up a strategy that is very, very costly and does nothing for the environment.

Compare what Japan is paying and will continue paying for Fukushima. The amount Germany is paying isn't actually all that much.

Germany has a surplus of production over demand and its Greece thats suffering because it couldn't find a way to make good use of surplus German cash, not Germany.

Fossil fuel power companies are having trouble competing with renewables in Germany and this is BAD? The whole point of the exercise is to put them out of business. What is happening in Germany is a demonstration that its possible to put fossil fuel energy out of business, and not particularly expensive even if you ignore the external costs coal, oil etc. inflict on society.

You can go broke trying to run a Porsche if you are poor, but not if you are rich. A country can go broke putting a man on the moon if its poor, but not if its rich. Is German spending on renewables a sign that its poor and about to go bust, or that its rich and is looking to demonstrate status?

Compare what Japan is paying and will continue paying for Fukushima.

Japan has been saying that the total cost will amount to some €80 billion (and then most of that is due to Japanese politicians having to overdo cleanup and radiation safety). Still, that's only 3-4 years of German renewables subsidies. There can be no doubt whatsoever that Germany's policy is economic madness.

Fossil fuel power companies are having trouble competing with renewables in Germany and this is BAD?

What are you talking about? Fossil fuels are alive and well in Germany. The have no trouble competing. It's nuclear that's being pushed out, and not for economic reasons but for reasons of irrational fear.

The whole point of the exercise is to put them out of business.

No, on the contrary it is a secondary goal. The primary goal is to phase out nuclear until 2022. And when nuclear has been phased out, fossils will remain and they will find that the political will to spend more money to integrate more renewables will be missing.

What is happening in Germany is a demonstration that its possible to put fossil fuel energy out of business

Well, France had 75% nuclear in 1992, after only two decades of real effort. That's a resounding success, and a much better proof (and two decades earlier). Germany, so far, is a big time failure. They've been at it for much longer, with much higher costs, and has gone almost nowhere.

Is German spending on renewables a sign that its poor and about to go bust, or that its rich and is looking to demonstrate status?

It isn't that simple. It's now paying €20B/year, which is some €250/capita, so a family of four is paying €1000/year in fairly direct subsidies (plus costs related to grid improvements, worse industrial competitiveness and higher electricity prices). This is for a tenth of the Porsche. Will they accept paying €10,000/year? Perhaps. They are rich enough to do it, I agree. But I think they will balk eventually and decide that the status isn't worth the cost.

Jeppen,

I'd say those numbers overstate the costs. 1st, the €20B/year won't recur - the FIT was sharply reduced, as solar costs fell sharply.

2nd, the FIT is a transfer between Germans, not a real cost. The real cost was the investment in solar during the period when the FIT was high. That's a sunk cost, and it was actually somewhat less than expected because the FIT worked better and faster than expected at lowering solar's costs. Of course, the fact that the FIT was too high for a while means that some recipients of the old too-high FIT are making out like bandits...

I agree that it is given that future per-kWh renewables prices will be lower than they have been. OTOH, grid costs and efficiency losses will start piling up as Germany tries to squeeze in more renewables.

It seems they think that they are fairly done with on-shore wind and new renewable generation will mostly be solar and off-shore wind. I would assume those to cost €0.15/kWh or so. Multiply with 600e9 kWh/year and you get €90 billion/year. Then you need to add the multiplicator effects for the lost competitiveness of German industry, grid costs, costs for standby plants and pumped hydro, overbuilding, DSM overhead costs and so on. It'll easily amount to the €200 billion/year I talked about.

"2nd, the FIT is a transfer between Germans, not a real cost."

The FiTs are the sum of the real cost and the profits to the operators. I think the profits of the operators are the small part. Sometimes, greenies boast of the enormous amount of green jobs that renewables has provided Germany with. Of course, this is a bad thing and a major problem, actually, but they don't realize that. People at TOD, with the Olduvai story fresh in mind, know better.

solar and off-shore wind. I would assume those to cost €0.15/kWh or so.

That would seem to be about right for current solar costs ($2/Wp) - I wonder what Germany is hoping/planning for?

Does anyone have the latest on off-shore wind?

I gotta say, Germany is paying a high price by demanding domestic production - Spain probably has twice the capacity factors for both solar and on-shore wind.

It'll easily amount to the €200 billion/year I talked about.

hmm. I think we need to see the calculations, and then do them for the status quo.

The FiTs are the sum of the real cost and the profits to the operators.

hmmm. Perhaps I need to know more about FiTs. What is the "real cost"? I would have thought that the operating cost of installed solar would be almost zero.

Off-shore wind is fetching a FiT of 15 eurocents/kWh for the first 12 years, with extensions for deep-water or remote locations. Since not much is built, I assume this is close to or even lower than actual costs.

I gotta say, Germany is paying a high price by demanding domestic production

Oh yes.

Spain probably has twice the capacity factors for both solar and on-shore wind.

We'll see how they do in the future. I read that Italy has more solar than Germany now, percentage-wise, btw. We live in interesting times, as the Chinese curse goes.

What is the "real cost"?

The levelized energy cost is the real cost to me. Operating costs are moderate - dominated by inverter breakdowns I guess.

The levelized energy cost is the real cost to me.

I'm thinking of the difference between price and cost. A lot of Germans are getting FiT payments based on a price that was much higher than their actual installation cost. That means that much of the FiT is a transfer (aka "rent"), not a reimbursement for real costs.

Jeppen, you should first do your homework instead of posting such nonsense:

1) The diffrential cost (caused by reneables) are around 14 billion EUR per year (2012) and will increase to 20 billion EUR per year within the next 5 years. The projection in academic papers is that around 2025-2030 the differential costs will become negative.

2) The whole transition will cost UNTIL 2050 more than 250 billion, your numbers are nonsense. The costs for imported fuel are allready 90 billion EUR per year and will exceed 120 billion EUR in a few years. The operation of a reneable system is not more expensive, again there are studies you should read. The transition costs, the operation is a clear gain.

3) Nuclear has received 180 billion EUR (30 electricity maximum), coal 360 billion EUR (60% electricity maximum), reneables will cost 250-300 billion EUR (80-100% electricity). EE is not cheap but not more expensive than the alternatives in the past.

4) Efficiency losses of reneables: the difference between gross and net electricity production in Germany are 10% (=60 TWh per year), these losses are caused by conventional power plants and are to 80% avoided by renewables until now.

5) Your numbers for offshore and onshore wind are crap. Onshore is growing and expected to deliver in most scenarios around 50% of the German electricity demand (between 550 TWh and 700 TWh), think simply about 30.000-35.000 turbines each with 3 MW and 2500-3000 FLH. Production costs in northern Germany with modern turbines are allredy below 7 cents, the FITs depend on avarage wind speed, better sites get the FIT for a shorter span of time. kWh price of electricity from NG is allready at 8 cents. You fight against wind mills.

6) You simply ignore that the last generation of reactors are too expensive, what is the kWh price of the last Finisch nuclear power plant? Really an alternative?

The diffrential cost (caused by reneables) are around 14 billion EUR per year (2012)

Wrong. Please have a look at the numbers and the link I posted. There the costs are detailed. "Expenditures in 2012 amounted to EUR 20,066,710,323.50 in total, with feed-in tariffs in the amount of EUR 16,621,170,295.30 being the biggest item, followed by EUR 2,922,692,993.12 in support of renewable energy that is directly marketed (Regarding the direct marketing premium which includes a management premium, please see here). These two positions result in payments of EUR 19,543,863,288.42 to renewable power plant operators. The other expenditure items in connection with the sale of the energy and the payment of the feed-in tariffs add up to EUR 522,847,035.09."

2) The whole transition will cost UNTIL 2050 more than 250 billion, your numbers are nonsense.

That's a nice dream you have there. You need some 70 GW average power, which is more like 350 GW peak power with renewables, and you'll supply this at a cost of 250e9/350e9 = €0.7/W including all losses, integration costs, backup costs, overbuilding costs and so on? Good luck!

The costs for imported fuel are allready 90 billion EUR per year

Not for electricity, right?

3) Nuclear has received 180 billion EUR (30 electricity maximum), coal 360 billion EUR (60% electricity maximum), reneables will cost 250-300 billion EUR (80-100% electricity). EE is not cheap but not more expensive than the alternatives in the past.

I would assume your figures are all wrong, but please provide references.

4) Efficiency losses of reneables: the difference between gross and net electricity production in Germany are 10% (=60 TWh per year)

This is nothing like what you will see when you try to cram 80% intermittent sources into a grid.

5) Your numbers for offshore and onshore wind are crap. Onshore is growing and expected to deliver in most scenarios around 50% of the German electricity demand

Ok, that's not what I heard, but seems more realistic than the more expensive off-shore and solar. However, Germany seems to have bad wind resources and has really lousy capacity figures, like below 20%. I don't think you get below 7 cents, as Swedish producers are more like 9 cents according to themselves in spite of much better capacity figures.

6) You simply ignore that the last generation of reactors are too expensive, what is the kWh price of the last Finisch nuclear power plant? Really an alternative?

Let's agree the EPR-1600 isn't a success just yet. I think you're jumping to conclusions based on the first builds of that particular model. Asia and Russia is building at low costs, and we have done in the past too. It's more a matter of choice than anything. If you want it to be expensive, then it is.

Written by jeppen:
You need some 70 GW average power, which is more like 350 GW peak power with renewables, and you'll supply this at a cost of 250e9/350e9 = €0.7/W including all losses, integration costs, backup costs, overbuilding costs and so on?

Wiki: Renewable energy in Germany lists the German goals as:

In September 2010 the German government announced the following new ambitious energy targets:[9]

Renewable electricity - 35% by 2020, 50% by 2030, 65% by 2040, and 80% by 2050

Renewable energy - 18% by 2020, 30% by 2030, and 60% by 2050

Energy efficiency - Cutting the total energy consumption by 20% from 2008 by 2020 and 50% less by 2050

Total electricity consumption - 10% below 2008 level by 2020 and 25% less by 2050

The German Government reports that in 2010 renewable energy (mainly wind turbines and biomass plants) generated more than 100 TWh (billion kilowatt-hours) of electricity, providing nearly 17% of the 600 TWh of electricity supplied.

Germany plans to reduce electricity consumption. 600 TWh/year = 68.4 GW. They plan to reduce it to 51 GW by 2050 and only 80% of that will come from renewable sources making the amount 40 GW = 360 TWh/year. There are other renewable energy sources besides wind and photovoltaic. They need to multiply what they did in 2010 by 3.6. That is on the order of 130 GW of wind capacity and 42 GW rated capacity of PV. At the rate they are installing PV systems I think they will exceed 42 GW rated within 3 years.

Wind in 2010: 38 TWh
biomass in 2010: 29 TWh
hydroelectric in 2010: 21 TWh
PV in 2010: 11.7 TWh
biogenic share of waste in 2010: 4.8 TWh

Because hydroelectric has been roughly constant for several years, it may not increase much in the future. The main contenders are wind, biomass and PV. They have to ramp up to 334 TWh/year. If biomass provides 100 TWh/year, then 224 TWh/year needs to be provided by wind and PV, 4.5 times more than in 2010.

wind installed capacity in 2010: 27 GW
PV installed capacity in 2010: ~12 GW (?)

So Germany needs:
27 GW * 4.5 = 122 GW wind capacity
12 GW * 4.5 = 54 GW PV capacity
total: 176 GW

If Germany spends 250 billion euros on wind and PV over 40 years and the systems last 40 years, then the cost per rated watt is 1.42 euros/(rated watt) or .028 euros/kWh. If the equipment lasts 20 years, then .71 euros/(rated watt) is needed.

Since this seems a bit low priced, I will check it the other way. If the wind and PV systems cost 1.6 euro/(rated watt), like the PV systems in Germany currently cost, then with an equipment lifetime of 20 years, the cost over 40 years will be 176 GW * 2 * 1.6 euro/(rated W) = 563 billion euros or .063 euros / kWh. However, I think the wind systems cost less than the PV systems, the price may continue decreasing over the next 40 years, and the systems may last longer than 20 years. If the cost of wind and PV systems decreases by more than 50% over the next 20 years, then Germany will come close.

Fair enough. And that's only the money for raw matching capacity. You then need to take into account that these are intermittent sources. Again, DSM costs, balancing costs, multiplier costs, instability costs, pumped hydro costs, reduced utilization and efficiency of fossil plants costs and so on will pile up.

1) The differential costs are lower, as imports or production of fossiul energy was avoided, no CO2 tax, domestic jobs... (see Fraunhofer)

2) not only for electricity, but the Energiewende includes heating with electricity and transport with EV when possible, so an infra structure that costs 120 billion EUR p.a. and offers jobs (tax income) and exportable products and services is from a macro economic point of view nice.

3) http://www.greenpeace-energy.de/uploads/media/Stromkostenstudie_Greenpea...

IMHO the costs for reneable are not usefull because they do not calculate the accumulated payments until 2030, here one should argue with at least 200 billion EUR. The data for coal are IIRC not disputed and the data for nuclear have not been refuted yet. We will see.

4) 2/3 of the losses come from consumption of the power plants, only 1/3 from tranmission! PV will have much lower losses, as most is consumes locally. Wind will have the same or slightly higher transmisiion losses.

5) The bread and butter turbine of 2011/12 had 2.5 MW and on avarage 2200 FLH. So the worst "worst case" scenario, which is unlikely, is for onshore with 30000 turbines: 165 TWh p.a.

The better available turbines (optimize for low wind speeds) have 3.0 MW and around 3000 FLH: 270 TWh p.a. (40% - 50% of the projected electricity demand, depends on scenario;: minimum 540 TWh, medium 600 TWh, maximum 700 TWh).

Hence,the worst case with onshore wind is that it will produce 40% of the German demand in a 700 TWh scenario, which is the upper end and offers many options. Maximum number of onshore wind sites: ~80.000. The current low avarage numbers for power and FLH per turbine come from the high number of old small turbines, these block good wind sites and will be replaced in the next years at high numbers. Germany has 23.000 turbines and a net increase of ~700 per year.

Off-shore is more tricky: The high costs of the transnmission net require relatively high initial investments and lead to the high FITs for the first 6 years. However, the next generation of turbines could use this infrastructure. I would prefer a slow build-up of off-shore capacity and first make sure that storage in Scandinavia works, i.e. I would wait until more UK wind farms are on-line.

The current experimental off-shore wind farms run with around 4000 FLH, so 40 GW off-shore would provide at least 160 TWh p.a. Maximum off-shore potential 80 GW.

6) But even with 30% improvements it will be hard to sell the reactor. OTOH there are military aspects which require a civilian nuclear infra structure, so I expect neither a German model in France and UK nor a 1:1 replacement of current capacity, on-shore wind is too attractive in France.

The differential costs are lower, as imports or production of fossiul energy was avoided, no CO2 tax, domestic jobs

I agree the tiny avoided nuclear (and later, fossil) costs should be deducted. CO2 tax, however, is just money moved around. Added domestic jobs is a NEGATIVE thing and a symptom of the higher cost, nothing else! So differential costs are not much lower.

www.greenpeace...

*beep* Sorry, Greenpeace cannot be quoted in a serious context. If they, to confuse, have mixed some truth into their web of lies by using some quality statistics, then you should follow the reference and quote the source instead.

4) 2/3 of the losses come from consumption of the power plants, only 1/3 from tranmission!

Sure, but when you do real high-penetration intermittent power, you will have:
1. stranded power
2. conversion losses in the storage you employ
3. efficiency losses due to fuel-based standby power having to ramp up and down and thus be unable to operate at good efficiency.
4. substantial investment costs related to storage and backup/standby power.

5) The bread and butter turbine

I'm not sure if I have some comments here. I do know German wind capacity factor figures are lousy. But what is the capacity factor during 2012 for turbines installed in 2011? I assume they are better, but how much better?

I would prefer a slow build-up of off-shore capacity and first make sure that storage in Scandinavia works

I assume you really hope that Sweden retains its nuclear power so that it has excess capacity for regulating German intermittent power? Many Swedes, unfortunately, would like to waste our hydro capacity to regulate domestic subsidised wind that is exported with an economic loss.

6) But even with 30% improvements it will be hard to sell the reactor.

No, not at all. Not a level playing field. Stop subsidies to renewables, have external cost of fossils internalized and allow nuclear power with a reasonably streamlined and positive regulatory framework. Then nuclear will soon dominate.

on-shore wind is too attractive in France.

Wind is a really, really bad match to nuclear. Thus wind is a really lousy choice in France.

Please note that this is likely to be happy numbers, and the real costs will come in higher.

Projects cost more than expected. Ok.

The same money could buy them 10 large reactors supplying 15% of their electricity.

Not only is this hand-waving with no data supporting it, does this hand-wave also cover the historic trait of Fission power projects to come in over budget?

I agree, the nuclear numbers are also fairly happy. Germany can surely botch the job by excessive red tape or other incompetence. However, 10 reactors are fairly many, so they should have time to learn and adapt if they are determined. (Of course, they should have a fleet of 50 or so big reactors, at least.)

Germany can surely botch the job by excessive red tape or other incompetence.

The problem with fission power is when things become "botched" by "incompetence" lives become shortened and parts of the biosphere become uninhabitable.

Eh, well, I was talking about delays and cost overruns, not meltdowns with full containment breaches. The latter is a topic for another day, I think.

Nick, population follows a Gaussian function which is an exponential curve (the derivative of the sigmoid function). A sigmoid function is also exponential making your attempt to separate it into exponential and linear curves nonsense. To follow a sigmoid curve population would begin as some relatively constant level, rise exponentially and then level off at some relatively constant higher level. You are saying that human population will rise to about 9 billion and then be maintained at that level for a long period of time (hundreds of years?). You are also implying that human population is not currently in overshoot at 7 billion people.

Either way, Malthus' postulate that population follows an exponential function is correct.

Because total human population has not leveled off, we are still in the growth phase.

Your observation that human population has leveled off (like a sigmoid curve) in some countries presumes that those population will be maintained long term. However, global resource limits have not been reached yet. Local resource limits have been approached or reached but the countries have been temporarily supported by importing resources from other countries. Japan is very dependent on external resources. Economic growth stalls and then fails when a country imports too much stuff. I think Malthus was thinking in terms of a country or a region because transportation was limited in his day while the use of fossil fuels has made the region global today.

Malthus' postulate that population follows an exponential function is correct.

No, it really isn't. Most of the world is at or below replacement level fertility due to voluntary choices and not due to poverty. In fact, fertility falls as people become less poor, which is completely oppposite to Malthus' theory.

Malthus' theory had little to do with non-renewable resource depletion or overshoot - it was population driven, and population demographics are behaving nothing like his theories.

Is it possible that humanity will pollute it's home so badly with GHGs as to cause widespread poverty in the future? Sure, but that's not Malthus' theory at all.

Written by Nick:
Most of the world is at or below replacement level fertility due to voluntary choices and not due to poverty.

Your assumption that "voluntary choices" are independent of resource constraints is incorrect. Analyze why people have fewer children. I have no children because houses are too expensive and jobs do not pay well enough in the U.S. Children would lower my standard of living. If one lives in a society where children are essentially slave labor (like farm hands or the parent's retirement plan), then there is an economic advantage to a large family. If one lives in a society where children are an expense (developed countries), then there is an economic disadvantage to having children. Resource consumption is substituted for children.

Massive poverty does exist in the U.S. On January 4, 2013, the total number of Americans receiving food stamps is 47.5 million or 15% of the population.


There is not a scarcity of food on the rising edge. Constraints begin having an effect on population as the peak is approached. Look at the trends in the global food supply and its necessary components.

1. How is wild game faring?
2. How is the fish population?
3. Does the world have ample food supply during times of drought?
4. How is the water supply doing?
5. How is fertilizer doing?
6. How are crop yields doing?
7. What is the rate of destruction of arable land?

I think you are misconstruing what is happening on the rising edge of the population curve as it approaches the peak.

Most of the world is at or below replacement level fertility due to voluntary choices and not due to poverty. - Your assumption that "voluntary choices" are independent of resource constraints is incorrect.

Those two statements are very, very different. I guess I wasn't clear enough. Malthus assumed that the poor would make no choices at all about their fertility, and that malnutrition would limit population growth - malnutrion reduced fertility, raised infant, child and adult mortality, etc.

So, the current situation is very, very different. Japanese women choosing to work (and avoid raising children with a tyrannical mother-in-law in a tiny Tokyo apartment, have the latest smart phone, etc) is very, very different from a seamstress in 1798, raising 7 children in a London tenement.

As far as food supply, probably we could feed 20B people with improved farming methods and the elimination of grain-fed livestock. PO won't affect that (I kind've hate to say that, because it opens up a very, very long discussion, but it's true). Even if it did, it wouldn't change the fact that the theory that made Malthus famous was flat wrong: people do voluntarily limit their fertility.

Malthus assumed that the poor would make no choices at all about their fertility, and that malnutrition would limit population growth - malnutrion reduced fertility, raised infant, child and adult mortality, etc.

Do you have the actual spots in the writings of Malthus where this was stated?

A whole lot of 'Malthus said this' going on but few quotes of what he actually said.

In 1798, Thomas Malthus published An Essay on the Principle of Population, in which he wrote:

The power of population is so superior to the power of the earth to produce subsistence for man, that premature death must in some shape or other visit the human race. The vices of mankind are active and able ministers of depopulation. They are the precursors in the great army of destruction, and often finish the dreadful work themselves. But should they fail in this war of extermination, sickly seasons, epidemics, pestilence, and plague advance in terrific array, and sweep off their thousands and tens of thousands. Should success be still incomplete, gigantic inevitable famine stalks in the rear, and with one mighty blow levels the population with the food of the world.
—Malthus T.R. 1798. An essay on the principle of population. Chapter VII, p61[1]

Notwithstanding the apocalyptic image conveyed by this particular paragraph, Malthus himself did not subscribe to the notion that mankind was fated for a "catastrophe" due to population overshooting resources. Rather, he believed that population growth was generally restricted by available resources:

The passion between the sexes has appeared in every age to be so nearly the same that it may always be considered, in algebraic language, as a given quantity. The great law of necessity which prevents population from increasing in any country beyond the food which it can either produce or acquire, is a law so open to our view...that we cannot for a moment doubt it. The different modes which nature takes to prevent or repress a redundant population do not appear, indeed, to us so certain and regular, but though we cannot always predict the mode we may with certainty predict the fact.
—Malthus, 1798, Chapter IV.

http://en.wikipedia.org/wiki/Malthusian_catastrophe

Was Malthus' "vices of mankind" restricted to war, or did they include things like deforestation (mismanagement of a limited resource) limiting firewood (energy) and timber (raw material)? If he had sufficient breadth, then he understood general resource constraints as limiting factors prior to the ultimate constraint of food supply. After all, the first big energy crisis (not enough firewood) occurred in Europe prior to his time.

An Early Energy Crisis and Its Consequences, Scientific American. John U. Nef, Nov. 1972, p.140-150

An Essay on the Principle of Population, Thomas Robert Malthus, 1798, Book IV, Chapter I, paragraph 2:

All the immediate checks to population, which have been observed to prevail in the same and different countries, seem to be resolvable into moral restraint, vice and misery; and if our choice be confined to these three, we cannot long hesitate in our decision respecting which it would be most eligible to encourage.

IV.I.10. When we contemplate the constant and severe toils of the greatest part of mankind, it is impossible not to be forcibly impressed with the reflection, that the sources of human happiness would be most cruelly diminished, if the prospect of a good meal, a warm house, and a comfortable fireside in the evening, were not incitements sufficiently vivid, to give interest and cheerfulness to the labours and privations of the day.

He seems to have understood that vital resources are necessary, but I am not sure if he understood that "a warm house and a comfortable fireside" are limited to available resources and could also limit human population. He seems to follow the logic that without sturdy warm houses people are in poverty which results in disease that limits population.

Was Malthus' "vices of mankind" restricted to war

I think he was referring to causes of mortality: disease (one imagines that especially included STDs, probably, given his rigid moralistic framework), murder, etc.

Yes, one of his examples of vise was persistent drunkenness resulting in a person dying without having children and another was poverty.

Population growth in 1798 London was by immigration from the countryside. London in 1798 was a pretty unhealthy place and the death rate exceeded the birth rate.

Women in England at that time (and for several centuries beforehand) did not marry until the engaged couple were wealthy enough to raise a family. Couples that married early and were able to have large families, did so because they considered themselves rich. A seamstress in a tenement with seven children isn't what London was like. The most likely place to find a women with a large family in 1798 England would have been married to a wealthy farmer.

Population growth was being controlled by the choice of the age that people married in Malthus' society and he didn't realise it.

"Population growth in 1798 London was by immigration from the countryside."
And the immigration was being forced by the process of enclosure of formerly common lands on the great estates. The immigrants had a pretty miserable life. Not at all comparable to what Malthus, himself, enjoyed, although he was far down the social ladder from the upper class who were doing the enclosures. And in France the Terror had been going on for several years when he published. He surely felt no need to spell out in detail the horror of human existence to his contemporary readers. The major 'vice' in his mind might have been the way the nobles treated the lower ranks of commoners in both France and England. Mentioning this 'vice' was repressed by the authorities in both countries. Malthus was not a fool.

Jane Austen is who you should be thinking of as typical of large English families at that time (she was the 7th child of a country vicar). England was an extremely wealthy place in 1798 and people moved because they were upwardly mobile, not because they were being pushed off the bottom of the heap. When they got to the city, most of them found it hard, but they moved out of ambition, not desperation. English peasants (unlike French) had a living standard well above subsistence.

All this discussion about population in different countries and very little data being presented.

I recommend folks wander over to the Population Trends databrowser and review the data. For instance, Nick said that Japan and Italy are "starting to show absolute declines in population". Why not also mention that substantial, absolute population declines have been seen for over a decade in every single eastern European ex-Warsaw pact member except Slovakia.

Here's the chart for a country that still has massive fossil fuel and other resources:

I don't think resource limits has anything to do with Russia's declining population.

Here are some of the other eastern European total population declines since 2000:

Bulgaria -8%
Ukraine -7%
Estonia -6%
Latvia -6%
etc.

Looking around you'll also see some very high growth rates in countries with very few resources. Is anyone really surprised that Mali's experiment with democracy was doomed to failure? Here is an impoverished nation where resource limits may have a lot to do with any future declines in population:

Explanations for changing growth rates are different for each country and involve a complex combination of culture, religion, development, war, health care, and resources. I think it would improve the discussion to move away from a one-size-fits-all theoretical approach and move toward a more "experimental" approach with data collection and analysis on a country by country basis.

The world is a complex and interesting place. Demographics, like the impact of expensive fossil fuels, will evolve differently and for different reasons in each nation. There are lots of different stories to tell and I am hopeful that the smart folks reading TOD can begin telling some of them.

For an interesting challenge, please explain the reasons for the different population trajectories in the following contiguous, Muslim nations:

  • Iran
  • Iraq
  • Pakistan
  • Turkey
  • Turkmenistan

Happy Exploring and Explaining!

Jon

Thanks for the good data. I agree - population dynamics vary a lot, and are very complex. For instance, who would have thought that TV soap operas would have a big impact on reducing fertility in S. America??

One thought about your question about the ME nations: Iran (which I believe has the lowest fertility in that group) would be unhappy about being grouped with Arab nations - they're very particular about their Persian culture/identity.

Look at the list again. Iraq is the only Arab nation on the list.

Wow - I took a quick look at Wikipedia - I learned something new - thought Pakistan and Turkey had a lot more Arabic presence than that.

Well, that's part of the fun of doing this...

Historically, the biggest factor is whether the father or the daughter chooses who to marry and when. Contraception shifts this towards whether the husband or wife makes the choice about contraception.

Women are much more concerned about living in the style to which they wish to become accustomed than their fathers (or husbands) are for them.

The more influence women have, the more economic factors come into play. Women that have choice and consider themselves relatively poor will have small families, and those that consider themselves rich or don't have choice, will have large families. Relatively poor men don't get mates, so when the male choice dominates, its always towards larger families.

The decline in the ex-communist countries is due to a dramatic shift in the economic aspirations of the population. They may or may not have become poorer by some absolute standard, but the standard they aspire to increased dramatically. The women have substantial choice in the matter and prefer to work towards those economic aspirations rather than raise families.

Indeed tragic. They lack food because they lack money. Plenty of food...

Something seems wrong with this argument. Basic economics would suggest that if there was indeed plenty of food then its value would drop to the point where everybody could afford it. To me it still seems like 'not enough food' (Malthusian catastrophe) rather than 'not enough money'.

OK, let me put it another way. Plenty of food (globally), but not enough purchasing power (locally). As ROCKMAN points out with oil, as the price rises, at some point you drop out of the market...

Why do they have insufficient local purchasing power? Maybe it is because their populations have risen beyond their local carrying capacities due to them importing surplus food from other countries.

Do they have enough resources locally to produce products to create the purchasing power?

Does internal or external politics suppress them?

Consider what is happening to those countries with approximately level well-fed populations (OECD countries) as one of those developing countries (China) develops. China is growing and gobbling up the resources globally as the other countries stagnate perhaps before their populations decline. The food supply in those well fed countries is dependent on importing things (energy, fertilizer and equipment) from other countries.

Food generally needs to be priced at or above the cost of production. If people have no money at all, they can't afford that, even if that cost is very low.

The US priced it's food well below the cost of production for quite some time, due to farm subsidies. That put quite a few local farmers out of business.

Recently the US has chosen to support farm incomes by raising the price to a point at or above production (mostly via ethanol blending requirements) rather than farm subsidies. So, prices have jumped recently. Even though prices are still well below where they were 40 years ago, the price rise is still coming as a shock. Many people don't have the money to pay them, simply due to local poverty, rather than food prices being "too high".

Great article. "Tragedy of the Commons" comes to mind. Food production can of course be developed, but there will eventually be a breaking point--regardless of the amount of money, oil and technology we have. This is when population will hit its ceiling. What's interesting is that in the midst of this overall trend, some developed/developing countries like Germany, France and Russia are offering incentives to raise birth rates.

Here is the crux of the problem. The global economy is almost fully (97%) dependent on burning biomass (complex carbon molecules) as its energy source. This is divided roughly evenly between biofuels (including food) and fossil fuels, which are just biomass having had the oxygen removed from the carbon molecules over millions of years underground, leaving behind hydrogen and carbon to yield “hydro”-“carbons”.

But the issue is that today’s biofuel (including food) production is fully dependent on inputs from hydrocarbons. They are complementary systems. 1/5th of global non-food energy use is dedicated to producing/processing food. This corresponds with a global average of 3 Calories of fossil fuel energy inputs being required to produce/process 1 Calorie of food energy. In industrialized countries, this ratio is higher.

And the complication is that all the wonderful advances achieved via the industrial and green revolutions have NOT increased the total amount of “food” produced by the planet – it’s actually gone down by about 10%, if you define “food” as being all plant matter. What the industrial and green revolutions have done is transform the kind of food production occurring on the planet from food that other animals like antelope, bison, and even fungi would have eaten, into food that humans now like to eat. Humans have dramatically increased their share of the global ecological pie, at the expense of everything else.

We currently “appropriate” ¼ of the planet’s productivity. ½ of this direct consumption, so we therefore harvest about 1/8th of the planet’s production.

If we “run out” of fossil fuels, without a renewable replacement for energy supply, then food production will necessarily drop. This means that total global productivity will drop. Therefore, in order to maintain previous levels of total food available to humanity, then we will have to increase our share of the global ecological pie from 1/8th to something like ½ or more. The problem is that this is not possible, because it gets increasingly harder to harvest an additional amount of ecological productivity once we have already harvested the easy sources (almost 1/2 of global productivity is plankton photosynthesis – we will never be able to harvest that, especially after we run out of fossil fuels and can’t even power boats anymore).

At this point the Malthusian Collapse begins, because there are way more people on the planet than can be supported by naked ecosystems, absent external energy inputs. This is where one needs to pull out the ecology texts and look at ecological carrying capacity. I am going to look into this in more detail at some point (unfortunately I have to work, otherwise I’d be spending all my time researching and blogging about this…), but it seems apparent that humanity will indeed “run out” of food, because the planet won’t be able to produce enough to keep 9 billion people alive. At this point we become no different than any other animal species undergoing cyclical population booms and crashes, fully dependent on the underlying ecological productivity supporting them. Then people will start starving. More likely, they will end up killing each other first in resource wars.

In this respect I partially disagree with ROCKMAN’s above statement that it’s not about “running out” of energy, instead it’s about running out of energy that everyone can afford, because if and when we reach a point where the EROEI of the remaining fossil fuel supplies is not enough to maintain society and therefore is unable to warrant further fossil fuel extraction, then we will indeed fall off a cliff. Society will collapse and the capital needed for further extraction activities targetting these increasingly complicated fossil fuel reserves will not be available.

When does this happen? When we “run out” of fossil fuels, or more accurately, when EROEI drops below the critical threshold needed to hold society together. I don’t think it’s too far down the road, easily within in the realm of a century, possibly even decades. Definitely not millennia.

Null - I'll always settle for partial agreement. But here's a question: has there ever been a time when oil was cheap enough "for everyone to afford?" I'm willing to bet there never has been. So how would you define a period of adequate supplies: 80% of the pop can afford what they desire? 50%? Then again how does one determine how much a person wants if that amount varies with the price?

So today what % of the global pop can afford the current price of oil? The % of Greek pop? The % of US pop? I pose the questions not so much with an eye towards the past but towards the future.

Null, I think that society today has historical oil prices of, say $20 to $30 barrels "baked into the cake". In the last few years, we have had huge recession, and the government has tried as best as it could to paper over our problems with deficit spending and with artificially low interest rates, as the economy faced $100 oil with lower EROEI. The real problem did not go away, however. The problem is really one of a society which is not structured for low EROEI (high priced) oil.

If we are going to solve our deficit problem, we need to restructure society so that it can live on $100 oil. This will mean fewer jobs in total, especially in discretionary industries. It probably will mean less money for Social Security, Medicare, and and unemployment insurance. It may mean fewer paved roads (more in gravel), and fewer high paid jobs like lawyers and bankers. In this post, I say our problems are very much in the here and now: 2013: Beginning of Long-Term Recession?

we need to restructure society so that it can live on $100 oil. This will mean fewer jobs in total, especially in discretionary industries. It probably will mean less money for Social Security, Medicare, and and unemployment insurance.

Could you please explain the mechanism behind the "fewer jobs in total" idea? If the availability of one resource, such as oil, goes down, then why would you not compensate by increasing the use of other resources, such as labor? It isn't like the limited amount of money buys you less workers over the long haul - since the price of work adjusts to the available money.

Gail – Up above someone tossed out a familiar term: purchasing power. I think they offered the idea that folks couldn’t buy what the needed due to lack of planning and not resource availability. So, wise woman, how would you frame “purchasing power”? It doesn’t seem as simple at first blush IMHO. Is it primary lack of capital? Price competition with those with more capital? Priorities with those spending choices: i.e social service programs vs. subsidies for alt energy projects vs. military spending? Somehow it seems it should be connected to demand (that which you can afford to buy…not what you need to buy) and supply (not just the max you are able to produce but what you’re willing to produce at a certain price).

I’ll defer to your megaview.

I agree with your analysis.
I live in Japan.
Recently the government decided to go much farther with QE. I believe their actions were a response to a feeling that things were winding down, exports not selling, business activity slowing, etc. I work for a company that is highly sensitive to business activity pace, so I saw it too.

So there was an election, then a new push...."double our efforts to fight this"

OK, they will use money printing, like at an extreme level.

And the unintended consequences will be extreme inflation later.
What happens when your money is worth nothing?

Then you have been priced out of the oil markets.
Hey, too bad.
Sorry.
Gee, that's a shame there.
God, you guys, you poor things.

Yes, we can imagine the reactions of people around the world who still have some access to the oil markets.

Hope it doesn't happen to us too.

Well, but it will.
It is guaranteed to. With oil getting ever more expensive to withdraw from the ground, it is a given, at some point.

Abe, our new Prime Minister, also said he would like to see the population of Japan start to rise again. "We need growth!"
Actually, last year, the population dropped by 212,000. The year before that was 175,000, and in fact it has been dropping every year for five years and the decine is accelerating every year.

The situation is so hopeless and scary and way, way, way out of balance.

After all, you cannot eat cement, and that is what we have in Japan, billions and trillions of tons of cement, spread out throughout the land. No chance for food there.

But the worse things get, the more in denial the leaders get.

In a way, it's kind of interesting, funny, absurd and enjoyable. Like watching a beetle trying madly and hopelessly to escape from a glass jar.

Pi,

It is pretty easy for the central bank to decrease the money supply so QE is not a problem. Japan would love to see some inflation, but if it gets higher than 3-4 % (core inflation excluding volatile food and energy prices) it is pretty easy for the central bank tio raise interest rates and get the money supply down. When short term govt interest rates are very close to zero, the central bank has great difficulty raising the money supply.

In fact, increases in Japan's money supply might reduce the value of the Yen in other currencies, this would be terrible because it would cause inflation as oil and other imports would become more expensive. Can you think of any positive effects? How would this effect Japanese exports?

DC

I'm sure there would be some positive effects. There are always positive effects. High inflation and increased prices of food and fuel would force people to try to produce these things themselves more here.

That is something that everyone here really dislikes. Farmers, fishermen, woodcutters, etc. are all jobs considered "low class" and "horrible". Everyone wants a white collar and a car and a suit. Even if they can't afford to marry, they have to live with their parents, they have nothing else: a "white collar job" would get them self-respect and respect.

So this change could be very deep. Touch people very deeply. Kind of agonizing, actually.
A huge primal scream as people thinking about farming, fishing, etc, take a look around at all the airports, highways, hotels, skyscrapers, and banks.

"These things are giant monsters!"

I really don't know what will happen. I am in my mid 40s so I don't think there will be pensions of any reasonable amount in 20 years. Yet, people have always been clinging to the cold rock in the middle of nowhere (the Earth, not Japan, that is) and looking out for any chance, any at all.

From a trillion miles away, I'm sure that earthworms and humans, or ants and humans, don't look so different. Fragile, short-lived, mortal, dependent, contingent.

And central banks, for all their power here, are tiny specks from space.

I really wish the narrative would (to a far greater degree at least) include the system, itself, which according to many, 'is broken'-- and/but beyond it being just broken; like how to fix it and then discussing actual steps to do so. Right on here! Otherwise, we might as well call this the Intellectual M4sturb4ti0n Drum.

Discussing a hunt/food-prep with messed-up spears and dull stone-tools, respectively, etc., is all fine and nice, but how about (discussing) fixing/honing the things first?

My point is about the system/model. We are (too often) merely discussing this whole thing in the context of a mess-up system/model. Graphs here, statistics there.
Health care in a messed up model is not health care. Leanan, who seeks a car in part for protection, is not safe-- nor are those outside near her planet-wrecking coffin-on-wheels.

Ok, so species are dying, and the oceans are acidifying and the oil is slowly depleting and the economy is beginning to tank. We know. In a sense, who cares. Tell us something we don't know, and do it with some epiphany, creativity, revolution, self-/other-empowerment-- leveraging/transcending, in part, Drupal/this site's mechanism. You have some power at your command. Use it!

Like what happens when/if the model changes? How do we change it? Can we do more and differently?
(Those are some questions, and some of us are flopping on our posteriors with regard to it.)

I'll answer some:

By (first) talking (far more) about it and then how to fix it and some revolutionary steps and to schedule them in, etc.! I care little about a recipe('s EROEI) if the oven's crap and the mixing bowls are cracked, etc.. It's not 'professional', Gail the Actuary. What we are doing to our planet/ourselves/others is not professional.

If Malthus has us by the 'nads, it serves us right.

We have no faith in the ability of our culture to deliver the future. What could be more tragic than that? And this, too, of course, becomes another self-reinforcing negative feedback loop. The less confidence we have in the future, the less we construct a world that has the capacity to endure, or to reward us spiritually, and the more this erodes our faith in the future. . . and so on.
Now, as a technical matter, it’s important to understand that this system is not running by accident...
~ JH Kunstler

All economists of Malthus' era believed in limits to growth. They recognised that there had been substantial growth, but also felt that it couldn't continue and saw reasons why they reckoned it was drawing to a close. Malthus saw it it population projections, Adam Smith (he was a doomer too) saw it in trends in the yields of bonds. Growth was always temporary because land is finite and everything eventually comes back to land. Efficiency of land use might be improved, leading to a period of growth but land itself couldn't be multiplied and growth would come to an end.

The thing Malthus missed wasn't the arrival of fossil fuel burning. The growth of the English economy had been based on burning fossil fuels at least since the time of Elizabeth I. The Dutch economy likewise, and the slowdown Adam Smith detected in Holland was down to them running out.

The reason that the English growth didn't peter out, like the Dutch one was starting to and the Chinese one had many centuries earlier, was the invention of heat engines efficient enough to burn fossil fuel for power as well as for heat. Prior to that, fossil fuel based growth was still limited by muscle power, and the availability of land to provide food for the humans and animals that exerted it. After that, fossil fuel could be burnt to provide the energy for the work to extract more fuel, and the link to the land was broken ... until the fuel runs out and then we are back to the world of Malthus and Adam Smith, albeit with rather more efficient technology for extracting work from land and thus a reasonable expectation of supporting a larger and wealthier society than was possible 200 years ago.

While Malthus recognised the possibility of the preventative check, people deciding themselves to limit their offspring, he also missed the extent to which this was actually applied historically and was being applied in his own society. English society, at the time and in the centuries before Malthus, controlled its birthrate by requiring couples to accumulate sufficient funds to set up an independent household before they married. When times were hard, accumulating savings took longer, people married at a later age, and had less offspring.

For the detailed demographics in the context of energy use see
"Energy and the English Industrial Revolution" E.A. Wrigley
http://www.amazon.co.uk/Energy-English-Industrial-Revolution-ebook/dp/B0...

There are other factors other than energy. Once we start changing the distribution of plants, and breeding plants to provide human or animal food, the fraction of biomass that can be converted into food for humans and/or their associated animals can be increased. Look at the difference between a pine forest, and a wheatfield. The former cannot support very many humans, or even too much animal life, most of the biomass goes to fungi/bacteria, and even wildfire. For the wheatfield a nontrivial fraction goes to humans.

One important thing that was happening in Malthus's time, was improved crop plants were being increasingly used. The "discovery" of the new world meant that American plant innovations (corn, and potatoes especially) could be used by Europeans. Thus the Europeans got to suddenly take advantage of many hundreds of years of native American plant breeding. Whilst in Europe plant breeders were becoming increasing sophisticated. So even without one Joule of fossil fueled energy, the planets human carying capacity was going to undergo a significant increase. This is why, we can't simply take the pre-industrial human population of the planet, and state that anything above that is overshoot.

" Look at the difference between a pine forest, and a wheatfield. The former cannot support very many humans, or even too much animal life, most of the biomass goes to fungi/bacteria, and even wildfire. For the wheatfield a nontrivial fraction goes to humans."

I wouldn't be so sure about that. A pine forest and wheat field have about the same annual productivity. The difference is that the productivity from the wheat field can be repeatedly removed and eaten by people on an annual basis without doing major damage to next year's production. Not so with pine forests.

However, the only reason the wheat field can repeatedly provide this annual productivity harvest to be removed by us is because we replace the nutrients removed by us by instead throwing fertilizers and / or irrigation back on the land. Fertilizers come from energy, and specifically fossil fuels. Take away those inputs and the wheat field will revert to the long term productivity removal capacity of the pine forest -- in other words, very low.

Those are good points, too!

Do you suppose that when a certain French Lady suggested that cake be substituted for bread due to the complaint that there was no bread available that she was unaware that the real problem was affordability and not a supply issue ? ... it all went south for her very quickly from that point forward !

Thanks! Those are all very good points. There are many things that go hand in hand to make growth possible, and the invention of the heat engine played a significant role. I have written a little about Wrigley's work, but should learn more about it.

There are certainly a lot of countries with oil extraction to day, that are not economic powerhouses. Russia, Iraq, Iran, etc. It takes more than oil, or fossil fuels, to bring about long-term growth.

He's much more on the demographic side than the energy side. Lots of stuff about what occupations people were doing. Thats the book where he ties it into energy, but I am not sure there is more depth on energy elsewhere (though there is on the way the industrial revolution changed societies).

Is it not pertinent to ask the question if we have not missed something "equally Malthusian" in its ability to combat the threats posed by a decline in FF availability. Efficiency comes to mind.

I am going to go out on an enormous limb here and paint a future picture as alien to our minds as todays situation might be to Malthus;

"By 2228 most species of the Zygotium Empire had migrated to and existed within the life cube -an Earth based 1km wide Thorium powered memory cube using just 1 TerraWatt of power. By far the largest energy drain was by off-world resource collector engines that drifted throughout the solar system re-directing asteroids into collision courses so that their metals might more easily be tapped..."

OK, maybe not. Bring on the pig farm.

It would be easier for me to believe that efficiency will save the day, if there were not 7.1 billion people on the planet, most of whom use very little energy. If we make anything more efficient, we tend to make its use cheaper. Increased efficiency allows more people to have the use of the energy that is available, but doesn't really solve our total problem.

In the blog posted you said, inter alia, that:

[Debt]Allowed low-paid workers funds to buy new products, such as cars, that used oil.

Doesn’t it follow that as prices for food and fuel go up, availability of money to acquire goods and services diminishes?

Also, since fractional banking allows loans to exceed assets, all borrowing above stated capital would induce inflation, not just money “printed” by governments. In fact, I cannot see any difference in impact between printing money into existence and borrowing it into existence, other than the latter provides income for the wealthy, at the expense of the poor.

Can you give me a real reason that printing money to cover Federal expenses (debt and ongoing expense of running the government) would not be a better way?

Take a look at this graph.

http://images.search.yahoo.com/images/view;_ylt=A2KJkesXsPBQBzEAaieJzbkF...

It seems to parallel many other charts we see here. How much of the added supply comes from borrowing, and how much from ‘printing?’ And why all the hand wringing about printing it?

Craig

Can you give me a real reason that printing money to cover Federal expenses (debt and ongoing expense of running the government) would not be a better way?

They are. I believe about 1/3 of the government deficit is paid for by the Federal Reserve printing up new Treasuries.

[EDIT} ... because no one else will buy it.

And why all the hand wringing about printing it?

When someone who owes money turns around and says that they are going to pay back that debt by firing up the printing press, then that means that they are openly monetizing debt. The value of money will decrease (or in other words, inflation will increase) at the same rate that the debts are being monetized, all else being equal. Why would that entity (country) providing the loan continue to chalk up their money to fund further US indebtedness for a return of 3%, when the direct monetization of that debt results in inflation in the order of 10%? They would be losing 7% of their investment. It makes no sense. Those creditors would then have an incentive to dump their debt holdings and instead buy real world things of value. This causes an unstoppable spiral as everyone dumps Treasuries en masse.

Then the world will wake up to the fact that the US dollar is fundamentally completely worthless, it passed that threshold decades ago. Then oil will no longer be traded in dollars (why isn't oil traded in Thai Bhat? The dollar is more worthless than Bhat are), and no one would accept dollars as payment for real world goods anymore. Then the US oil trade deficit will collapse, and Americans will have to make do with less than half the oil they currently have. Furthermore, they won't have a currency anymore.

Doesn't fractional banking do exactly the same thing? It prints money, except that it pays bankers as a middle man! I think it is a lie to say that that printing money is worse than borrowing it into existence if it does not already exist!

The value of money is determined by the agreed value in human labor as a medium of exchange. If the government prints money to pay for the labor it purchases (either directly or as part of cost of goods and contracted services), what has been added corresponds with the value of labor. Or is only capital worth anything?

Craig

Malthus got a lot wrong but the basic principle remains true. Sure, he didn't get all the land of the new world being put into production, the fossil fuel revolution, nitrogen fertilizer from Fritz Haber, etc.

But the UK currently does not feed itself.

The rapid expansion of credit without producing inflation is possible if the credit expansion results in more energy flowing into the economy to give the expanded money supply real value. Isn't this what happened after WWII when the prolific Middle East oil fields were brought into production? Credit expansion was easily accomplished when fossil fuels, and especially oil, were abundant and had an extremely high EROEI. Now that EROEI ratios are much lower, it is not so easy to expand credit and simultaneously avoid inflation. Are not these real, physical limits one of the major factors that are constraining the world's banking system?

2ndlaw:

The rapid expansion of credit without producing inflation is possible if the credit expansion results in more energy flowing into the economy to give the expanded money supply real value. Isn't this what happened after WWII when the prolific Middle East oil fields were brought into production?

I am not sure that is correct. Average inflation during the 1940's was only exceeded by the 1970s and 1980s, and not since.

http://inflationdata.com/inflation/Inflation/DecadeInflation.asp

Since then, it seems to me that the cost of oil as a portion of the cost of goods and services may have dropped, and may have been an element in the lower inflation rates during that time. No doubt the money created was insufficient to cause a supply glut and inflation during some part of the 50s and 60s, as well as the 90s forward. I would opine that the credit crunch we are experiencing today is a significant causative element in deflationary pressures we see today.

Craig

You can reduce the impact of a larger money supply with VALUE ADDED, not just cheap energy. If you have the "next big thing" like computer chips made from sand, THAT is value added. Now you also need an equitable distribution of the wealth to the people who created it, not just the wealthiest.

It would be tragic if Malthus got his forecast right. But it has proven devastating that he got his forecast wrong. All the species on this planet are on a one way trip to extinction because Malthus keeps being proved wrong. When he is finally proved right, there will be everlasting peace, for there will be not one living, breathing organism left on this planet-made-barren.

That is a very extreme view. I understand how you feel; however, it is very difficult to exterminate all life on earth. Look at the history of the planet, and you will have to see that.

Not that those organisms that survive the debacle you see coming will have an easy time of it. However, and this is important, life will cling to the earth so long as there are a few pockets of water and a bit of heat.

Or do you think AGW will create Venusian conditions?

Craig

If life were to return to the level of algae and micro-organisms, or if the large or complex lifeforms have been exterminated, and if there are a few human survivors, I certainly would not want to be one of them. Life is not worth living if there is no richness of nature, no mystery and unending forays into new knowledge. Even now, despite efforts to save panda bears, orangutans, rhinos and other creatures which it is "profitable" to conserve, I do not feel life is worth living, simply because the invisible world of insects, fungi, microbes, and deep-sea-life is being thoroughly eradicated. By 2050 all the forests will be gone, the oceans will be acidified and all creatures in them will die off once the bottom of the food chain is wiped out.

Much is made about how humanity will survive peak oil and climate change. But I ask, Why bother to carry on this struggle for existence if life isn't even worth living?

This planet will probably not come to resemble Venus, but what a travesty it would be if all these hundreds of millions of years of evolution were to be reset to the very beginning.

Forgive me for any offense, but I deem it silly for a human being to take comfort and solace in the belief that, after all other life-forms have been exterminated by uninhabitable circumstances, at least algae will survive in a few pockets.

Malthus is like Peak Oil, it is not a matter of IF but WHEN.

...what should our response be? ~ Gail the Actuary

Love

Thanks again for your kind spirited and thought provoking articles Gail. I have certainly enjoyed the debate over this one.

IMHO Thomas Malthus arrived on the scene at the time when things were so cramped in London that old war ships were being used as jails (hulks in the Thames), where hunger stalked the land and people were locked up for stealing a scrap of bread, and where people were starting to be re-distributed to the colonies in large numbers (with various stages of coercion) and armies were marching to far off lands to rape their resources for European states. It was a time when religious minds were obsessed with censorship of information which didn't suit. A time when the Irish were obliged to grow beef for the English markets and all the Irish could afford was a little land to grow potatoes. The potato blight and famine was about to hit. Similar problems existed in Scotland.

Population pressure had the safety valve of colonialisation. Now we have Elon Musk thinking along similar lines for his Mars adventure.

The fact is that if global warming leads to rising sea levels in the near future, we will once again see a major re-distribution of people to those countries which are unaffected.

Poor Thomas Malthus was sadly used by historians in pretty much the same way that peak oil proponents are vilified by cornucopains today. Just as it was politically incorrect for Malthus to draw attention to the issue then, it is similarly frowned on to talk about population and the horrible term "eugenics" today.

The salient position is that the exponential population growth of the last two centuries is continuing despite questions about the adequacy topsoil, water, energy and many non-renewable resources.

To me, James Lovelock's conclusion that Gaia will severely limit humanity may well turn out to be pretty close to the mark.

How far have we come that the hard questions asked by Malthus (when global population was less than 1 billion) in the late 18th century cannot even be properly addressed by governments in the 21st century (when global population is 7 billion)?

http://articles.mercola.com/sites/articles/archive/2013/01/12/ge-crops-a...

A new German study3 by the Institute of Bacteriology and Mycology examined the effects of glyphosate, the active agent in Monsanto's herbicide Roundup, on the gut microbes of poultry. Some birds are heavily exposed to glyphosate when fed genetically engineered feed. The study's findings are quite alarming. Researchers found that highly pathogenic bacteria resisted glyphosate, whereas beneficial bacteria likely succumbed to it.
The world may be running out of usable topsoil, the layer that allows plants to grow. According to an article in Time World5, soil erosion and degradation rates suggest we have only about 60 remaining years of topsoil. Forty percent of the world's agricultural soil is now classified as either degraded or seriously degraded; the latter means that 70 percent of the topsoil is gone. Our soil is being lost at 10 to 40 times the rate it can be replenished, and our food production systems are to blame, which epitomizes the term "unsustainable." It takes decades or even centuries to regenerate significant levels of soil.

Agriculture accounts for 70 percent of our fresh water use. When the soil is unfit, water is wasted—it washes right through the soil and past the plant's root system. We already have a global water shortage that's projected to worsen over the next 20 to 30 years, so this is the last thing we need to compound it. Soil degradation is projected to cause 30 percent loss in food production over the next 20 to 50 years—while our global food demands are expected to increase by 50 percent over this span of time.