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Gail: Energy Supply, Population, and the Economy

General discussions of the systemic, societal and civilisational effects of depletion.

Gail: Energy Supply, Population, and the Economy

Unread postby Pops » Tue 04 Sep 2012, 13:39:35

The Long-Term Tie Between Energy Supply, Population, and the Economy

The tie between energy supply, population, and the economy goes back to the hunter-gatherer period. Hunter-gatherers managed to multiply their population at least 4-fold, and perhaps by as much as 25-fold, by using energy techniques which allowed them to expand their territory from central Africa to virtually the whole world, including the Americas and Australia.
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Gail Goes Over The Cliff!

Unread postby Pops » Fri 31 Jan 2014, 17:40:35

Let me post just the one picture then you all can go read:

Image

A Forecast of Our Energy Future; Why Common Solutions Don’t Work
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Re: Gail Goes Over The Cliff!

Unread postby dolanbaker » Fri 31 Jan 2014, 18:15:18

At a glance, it appears that she is referring to the fact that the quality (not the quantity) of the fuel extracted is declining rapidly. Most posters here are mainly looking at the volume of oil produced rather than the energy value of it.

What I find hard to understand is how she had predicted such a sharp decline in the energy available from the total extracted fuel & renewables as well.
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Re: Gail Goes Over The Cliff!

Unread postby Pops » Fri 31 Jan 2014, 18:21:37

Dolan I think her main point is that the financial world is on the precipice and without the great amounts of surplus "work" provided by cheap oil, everything else that is built on that foundation will fall.

Kind of taking the Peak Investment = Peak Oil argument to it's conclusion.
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
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Re: Gail Goes Over The Cliff!

Unread postby dolanbaker » Fri 31 Jan 2014, 18:36:33

Pops wrote:Dolan I think her main point is that the financial world is on the precipice and without the great amounts of surplus "work" provided by cheap oil, everything else that is built on that foundation will fall.

Kind of taking the Peak Investment = Peak Oil argument to it's conclusion.

Yes, I agree, but the sharpness of the downturn after 2015 is very hard to comprehend without a(nother) global financial meltdown or widespread civil unrest.

I think that we'll just see a continuation of improved efficiency coupled with erosion of quality of life for some people as they are "persuaded" to abandon certain elements of their lifestyles that are expensive in oil to maintain.
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Re: Gail Goes Over The Cliff!

Unread postby Plantagenet » Fri 31 Jan 2014, 18:56:21

Gail's figures are generated by some kind of simple computer model. The model is primarily based on economic factors, not geologic factors.

Gail has introduced some factor into her model that simultaneously causes EVERY kind of energy production to start decreasing in 2015.

This is highly unlikely. High oil prices would cause shifts into wind, solar, nuclear, hydro coal etc. etc. rather then all simultaneously dropping off together.

Her model isn't predicting peak oil----its predicting some kind of global economic collapse that causes all economic activity to simultaneously start trending downward.

Since Gail doesn't describe her model in any detail, its hard to know what factors she has programed into it to generate this curious output. 8)
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Re: Gail Goes Over The Cliff!

Unread postby sparky » Fri 31 Jan 2014, 19:38:55

.
I'm not so sure about a shift to solar and wind , alternatives are subventioned by the others energy sources .
hydro is limited by suitable sites , it also require very high investment up front
nuclear is better , it also is high investment but can be build pretty much anywhere if enough cooling water is available
the greens objections would , of course , be politely brushed aside , reducing the costs
the case for a decrease in coal is not obvious ,
coal is a precursor energy , there is quite large quantities readily available
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Re: Gail Goes Over The Cliff!

Unread postby Loki » Fri 31 Jan 2014, 20:29:06

That's a pretty grim forecast. Seems worst-case scenario to me, I agree with Dolan and Plant, that kind of precipitous decline would require a massive global economic collapse.
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Re: Gail Goes Over The Cliff!

Unread postby AndyA » Fri 31 Jan 2014, 22:44:15

OFW is always a great read, full of doom due to arrive 'any minute now.'
Sadly Gail has been forecasting this kind of event for years, it never gets old. I think she is too pessimistic, and has the opinion that there is nothing we can do to prevent this. In spite of the contrary evidence to date. She places far to much importance on the inability of debt to keep growing forever. Money is imaginary, and as such not subject to the laws of physics and geology. If I was in charge of keeping the monetary system going, I'd never give up and say 'oh well, fuck it, I tried' which is what would need to happen. The guys running the show are smart, have spent their lives devoted to this kind of thing. It's naïve to assume they know less about the situation then an armchair analyst. The future doesn't look 'roses and peaches' but neither is it a sharp sudden collapse starting any day now.
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Re: Gail Goes Over The Cliff!

Unread postby Pops » Sat 01 Feb 2014, 10:08:35

The whole peak investment = peak oil theme: peak oil as in peak profitable oil, is really the only truly calamitous fast crash scenario I've yet seen.

The "Tipping Points" paper and lots of others painted a scenario where geologic peak oil led to a cascading, systemic, self reinforcing failure of everything - the end of growth/capitalism/yadda yadda. That idea seemed pretty short sighted to me because everything wouldn't just stop because of a lower energy availability, it might seize up for a period as some debt was realized to be worthless but then it would "normalize" at the lower state supportable by the lower oil production, then repeat. Maybe that would be continuous or maybe punctuated but it didn't make sense that everyone would just fall over dead, LOL

The idea of peak oil profit is different. The economy can only pay a certain amount for energy at a given level of economic activity. The result of oil production costs higher than the economy can afford means there is no profitable investment in new production by for-profit entities. Governments would be forced into the energy business by subsidizing unprofitable extraction.

Of course that means that not only would the EROEI become negative but so would society's ROI as well and that would be a self reinforcing spiral. That's the thing about capitalism, you can only fool the bottom line for so long. Consider the amount of tight oil "reserves" the big IOCs gobbled up and now are choking on. Someone is bound to buy up those paper barrels when they are coughed up and maybe that buyer will get a little bump in their stock price. But what happens when the economy can't afford to pay the freight on those "technically" extractable reserves? Are they still technically reserves?


Gail's point is that input costs for all resources are reaching a critical phase after falling for years as technology offset increasing scarcity. Take a look at the chart of the metal Index, either the fix is in and financialization and commodity pirates have taken over and now control the markets - or - scarcity has begun to trump technology.

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The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
-- Abraham Lincoln, Fragment on Government (July 1, 1854)
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Re: Gail Goes Over The Cliff!

Unread postby Paulo1 » Sat 01 Feb 2014, 10:19:20

re: sudden drop off on graph

It seems quite stark, however, it may be realistic. Yes, she is looking at energy production, but such production is tied to much more than geology and physics as far as society is concerned.

No official or mainstream call for conservation of energy...(There is no crisis!!) ha
Nuclear discredited and unpalatable forcing more ff consumption
Tight oil's rapid decline...over promised and not a saviour
No real new discoveries of any significance in conventionals
Majors experiencing declining profits....pulling investment and participation
Export pathways for NA oil and gas for world consumption at world prices
Over producing manufacturing sector that does not employ enough people
Fiat currency upheavels and bubble economies
Increasing unrest and dissatisfaction all around the world
Weather swings and food supply implications

I have just finished reading a book on tiger hunting/protection in Siberia. It describes life after the collapse of USSR and how people currently make their living in this harsh world by poaching and illegal logging....whatever way possible. It is current and it scared the hell out of me. It portrays how a declining system gets by with crime and disparity, and how brutal life is with excess energy no longer available to provide any real comforts or luxuries. Needless to say, Russia is the biggest exporter we know. It isn't too big of leap to appreciate that when capital and expertise is no longer available and/or nurtured, the system disintegrates pretty rapidly.

I agree, Gail is probably assuming a very large role for economics disrupting energy production. I hope she is wrong for awhile. Regardless, the results loom large for us all, and if one thinks critically about what is going on her conclusions are not such a stretch. 2015 or 2020....does it really matter? 5 years is a simple blink of the eye and as I age it speeds up. Make those preps, folks, and enjoy the good life many of us have, each and every day. I know I will.

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Re: Gail Goes Over The Cliff!

Unread postby rollin » Sat 01 Feb 2014, 11:34:14

Gail's graph of energy depletion in 20 years can be taken as the lower boundary value, if nuclear war does not occur or a major pandemic. The upper boundary would be viable sustainable substitutes for fossil energy will be brought on line and a more conservative lifestyle In the developed and developing world.

Most likely a middle ground of stepped descent will occur, modified by adaptation and mitigation.
Gail's prediction does have some likelihood though, as energy depletes, medicine and more importantly global watch on pandemic creation will dwindle. That could lead to uncontrolled widespread virulent disease, bringing down the population and further compromising the ability to function. That would bring demand for fossil fuels and the ability to obtain them to a halt in large regions.

The potential for a domino failure effect between interdependent systems in our global society is real. However there are ways to keep it from going out of control.
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Re: Gail Goes Over The Cliff!

Unread postby Pops » Sat 01 Feb 2014, 11:46:27

rollin wrote:Most likely a middle ground of stepped descent will occur, modified by adaptation and mitigation.


Why?


rollin wrote:The potential for a domino failure effect between interdependent systems in our global society is real. However there are ways to keep it from going out of control.


Such as?

-- Not being facetious, just wondering.
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
-- Abraham Lincoln, Fragment on Government (July 1, 1854)
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Re: Gail Goes Over The Cliff!

Unread postby kiwichick » Sat 01 Feb 2014, 15:34:58

@ pops

i'd suggest any sensible govt. wil declare a state of emergency and introduce rationing

WW2 is the obvious example

more recently in my home country , new zealand , the govt brought in a system called "Carless Days" to reduce oil consumption

not sure how successful it was, but it did lead to at least some car pooling
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Re: Gail Goes Over The Cliff!

Unread postby sparky » Sat 01 Feb 2014, 18:44:09

.
On the increased cost of resources ,
It's not the cost of extraction , it's the cost of development of NEW deposits
once production start it's only running costs
the exploration and setting up of a new mine or field are getting larger and require deeper pockets
but producing from those already set up are much lower
if prices are too low , nobody is going to spend to bring on line more of the stuff
they just slash their exploration and wait for a better prospect
it happened during the 90ies , big time
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Re: Gail Goes Over The Cliff!

Unread postby dolanbaker » Sat 01 Feb 2014, 18:55:44

it happened during the 90ies , big time

followed by an energy crunch a decade later, I suspect that the lag will be much shorter next time.
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Re: Gail Goes Over The Cliff!

Unread postby Sixstrings » Sat 01 Feb 2014, 19:55:51

Pops wrote:Let me post just the one picture then you all can go read:


Why is it that the peak on these cliff graphs keep moving up. So here we are in 2014 and now downward slope starts next year.

This forum is ten years old now, it started when the peak showed like back in 2004 no? And LATOC got going and peak oil was everywhere.

If that graph is right then obviously that's doomy. 8O But HOW can it be right? All this new oil, fracking shale and the huge shale fields in the US and also Siberia and China and all over, and natural gas, and Canadians and Russians are both ramping up to be all over that arctic like white on rice as soon as the ice melts -- so it's just all crashing starting in 2015?
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Re: Gail Goes Over The Cliff!

Unread postby Quinny » Sat 01 Feb 2014, 20:12:50

Am I the only one who ever reads links?
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Re: Gail Goes Over The Cliff!

Unread postby Loki » Sat 01 Feb 2014, 21:06:37

Pops wrote:
rollin wrote:Most likely a middle ground of stepped descent will occur, modified by adaptation and mitigation.


Why?

That's how it's played out so far. History is a poor guide for the future, but it's all we got.

Pops wrote:
rollin wrote:The potential for a domino failure effect between interdependent systems in our global society is real. However there are ways to keep it from going out of control.


Such as?

-- Not being facetious, just wondering.


Quantitative easing and tapping unconventional reserves come to mind. How we've "mitigated" debt deflation and peak conventional oil thus far.

More financial tricks can be pulled out of the hat if absolutely necessary, QE for the public, massive public works programs, debt jubilee, etc.

Energy demand can be managed via rationing. New sources of transportation fuels could come from coal-to-liquid, natural gas, etc.

None of these emergency measures and scraping the bottom of the energy barrel tactics will stop the Long Descent, of course, but they may very well slow it. Already have.
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