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Gail Tverberg: Have We Already Passed World Peak Oil and World Peak Coal?

General Ideas

Most people expect that our signal of an impending reduction in world oil or coal production will be high prices. Looking at historical data (for example, this post and this post), this is precisely the opposite of the correct price signal. Oil and coal supplies decline because prices fall too low for producers. These producers make voluntary cutbacks because the prices they receive fall below their cost of production. There often are supply gluts at the same time.

This strange situation arises because prices must be high enough for the producers at the same time that goods and services made by oil (and other energy products) are inexpensive enough for consumers to afford. There is a two way battle taking place:

(1) Prices producers require tend to rise over time, because of depletion. The easiest to extract portion of any resource (such as oil, coal, copper, or lithium) tends to be removed first. What is left tends to be deeper, lower quality, or otherwise more difficult to extract cheaply.

(2) Prices consumers can afford for discretionary goods (such as cell phones and automobiles) tend to fall for a combination of reasons:

  • Wages of many workers fall because of competition from lower cost labor in other countries.
  • Some jobs are eliminated through the use of computers or robots.
  • Young people are increasingly being required to pay for higher education (beyond that which is provided free), leaving many with loans to repay, reducing their discretionary income.
  • Changes to US healthcare law (mostly starting January 1, 2014) lead to required health insurance premiums. While some citizens find cost savings in this approach, healthy young people often experience cutbacks in discretionary income as a result.
  • Rents and home prices keep rising faster than incomes.

When the discretionary income of the many non-elite workers of the world falls, they buy fewer finished goods and services. Finished goods and services are manufactured using commodities of many kinds, including oil, coal, copper, iron ore, and fresh water. When discretionary demand falls, commodity prices tend to fall. This is the problem we are encountering now. It tends to cause the prices of many commodities to fall below the cost of production. Eventually, producers decide to quit because production is no longer profitable. This is the issue that leads to peak oil, coal or copper.

Figure 1. Illustration showing why falling affordability creates a conflict between supply and demand.

If the Affordability Price Clash Mostly Affects Non-Elite Workers, Does it Matter?

When I talk about non-elite workers, I am talking about workers who are in the bottom 90% of the wage distribution. Elite workers will always have enough income for the necessities of life. There are so many non-elite workers in the world that they, indeed, do make a difference.

Also, the forces that adversely affect non-elite workers tend to have several effects:

  1. They tend to send a larger share of wages to elite workers, as the economy becomes more complex and more specialized.
  2. They tend to send more unearned income to elite workers, through capital appreciation, because elite workers can afford to buy shares of stock and expensive homes.
  3. The wealthy tend to spend their income differently from non-elite workers. Non-elite workers tend spend the bulk of their discretionary income on devices made using commodities, such as cell phones and automobiles. The wealthy are likely to spend their discretionary income in less energy intensive ways, such as investing in shares of stock and buying services such as private college education for their children.

History shows that economies tend to collapse when wage and wealth disparity becomes too great. Collapse can take various forms including revolutions by the disgruntled underclass, increased susceptibility to epidemics, or the financial collapse of governments. Wars become more likely, as one country tries to aid its citizens at the expense of citizens of other countries.

The world today seems to be approaching a crisis point with respect to wage and wealth disparity. Young people in particular are adversely affected. Figure 2 shows a chart indicating that wage disparity seems to be back to the level it was at the time of the Great Depression of the 1930s. This was also a time of low commodity prices and gluts of food and oil.

Figure 2. U. S. Income Shares of Top 1% and Top 0.1%, Wikipedia exhibit by Piketty and Saez.

Gluts tend to occur because commodity prices rise to a level where devices made with these commodities (such as cell phones and automobiles) become too expensive for non-elite workers to afford. Elite workers can still afford the devices, but there are not enough elite workers to make up for the shortfall in non-elite buyers of these devices, so industrial output per capita tends to fall.

Figure 3 shows the important role that the wages of non-elite workers play in generating adequate demand. If their wages are high enough, they can buy enough goods and services made with commodities to keep commodity prices high. With sufficiently high commodity prices, production can continue.

Figure 3: Chart showing the important role that the wages of non-elite workers play in maintaining energy demand. With adequate demand, prices can remain high enough for production to continue.

Why the Peak in World Oil Production Likely Occurred in 2018 

If we look at recent oil data, we see a pattern of growing gluts of supply, as indicated by the red bars in Figure 4. Even in the most recent week, the week ended February 15, 2019, after all of the cuts begun by OPEC and other oil exporters, US crude oil stocks continue to build. This is not the impact a person would expect, if the production cuts are truly effective!

Figure 4. Brent average quarterly oil price (in January 2019$), with an indication of quarters when world crude oil inventories are building. Oil prices are Brent spot oil prices, adjusted using the CPI-Urban to January 2019 prices levels. World inventory build quarters are based on indications shown in US Short Term Energy Outlook reports of various publication dates.

This is precisely the kind of signal we would expect, if products made with oil (and using oil in their operation) are becoming increasingly unaffordable by the non-elite workers of the world. Note that these bars are becoming more frequent and are occurring at lower prices. This is the expected outcome of a clash between the falling discretionary income of non-elite workers and the rising costs of oil producers.

When prices fall too low, producers cut back production. OPEC reports its view of the effect of recent production cutbacks in Figure 5.

Figure 5. OPEC and world oil supply, in chart from OPEC Monthly Oil Market Report for February 2019.

Given the problems we are seeing around the world with falling affordability of goods by non-elite workers, we should not be surprised if the peaks in oil production in October and November 2018 ultimately prove to be the maximum production ever recorded. In fact, it seems quite likely that the year 2018 will prove to be the year with the highest-ever oil production.

The cutback in production will appear to be voluntary. Once cutbacks start, they will tend to feed upon themselves. Unless oil prices really spike following the cutbacks (say, to $90 per barrel), the exporting countries will find themselves worse off after the cutbacks, for a combination of reasons:

    • The cutback in production will reduce the number of workers directly and indirectly used by the oil industry. Their reduced spending will lead to a greater need for government programs.
    • Housing prices will fall in oil exporting countries. This is likely to ultimately lead to debt defaults.
    • Tax revenue that governments of oil exporters can collect on the smaller amount of oil will be lower, even though the needs of the economy will be greater.

Ultimately, it seems likely that at least some governments of oil exporting countries will be overthrown, depressing oil production further. If the breakeven price for most OPEC members, including necessary tax revenue, was over $100 per barrel in 2014, it is hard to see how exporters can get along with much less today.

World Coal Production: Following a Similar Pattern to Oil?

One thing that most people don’t realize is that coal prices follow a very similar pattern to those of oil.

Figure 6. Sample world coal prices, based on information from 2018 BP Statistical Review of World Energy.

In Figure 6, coal prices experience a major peak in 2008, followed by a lower peak in the 2011 period, which peters out by 2013. Prices recently are much lower than in the 2008 period, or in the 2011 to 2013 period. This pattern is very similar to the recent pattern in oil prices.

The similarity in the patterns of coal prices and oil prices makes perfect sense if prices of both oil and coal are based primarily on affordability, and this affordability depends heavily on the wages of non-elite workers. When countries, such as China, ramp up their debt, more non-elite workers can be hired at higher wages. These workers can make more computers, automobiles, steel ingots, and many other goods. They can also afford to buy more output of the world economy. This ramped up demand tends to raise the prices of both coal and oil.

For many commodities, China’s demand represents close to half of the world demand. China has become the world’s number one manufacturer of goods. China needs growing energy consumption to maintain its growth of manufactured goods because it takes energy to operate machines, even computers. It even takes energy to keep the lights on.

Unfortunately, with the recent lower prices for coal and oil, China is experiencing lower production of both coal and oil (Figure 7). Without growing energy supplies, China cannot meet the world’s growing need for manufactured goods.

Figure 7. China energy production by fuel, based on 2018 BP Statistical Review of World Energy data.

The reason why China has recently reduced production of both coal and oil is the usual one: the rising cost of production conflicts with the low prices available in the marketplace, making production unprofitable for a growing share of producers.

How about China’s total energy consumption? Do imports make up for China’s lack of local production?

Figure 8. China energy production by fuel, with a line added to indicated it total energy consumption, including imports. Based on BP Statistical Review of World Energy 2018 data.

Not really. China is the world’s largest importer of coal, oil and natural gas. It is also the number one user of wind and solar (included in the tiny orange “Other Renewables” portion of the chart). Even with these huge additions to China’s energy production, its annual growth in the quantity of energy it consumes (including imports) has plummeted (Figure 9).

Figure 9. China annual growth in total energy consumption. Based on 2018 BP Statistical Review of World Energy data.

China reports that its real GDP growth rate is still very high (over 6%, net of inflation), but many observers are skeptical of this claim. Certainly, going forward, its coal and oil production cannot continue to decline, or the economy will encounter huge problems. The amount of goods China will be able to manufacture will fall, as will the number of new homes it can build. Without continued growth, China is likely to run into debt default problems. China is such a large country that its problems can be expected to adversely affect the world economy as a whole.

Figure 10 shows that China produces nearly half of the world’s total coal. If China’s coal production declines, world production is also likely to decline.

Figure 10. World coal production, divided into China and Non-China, based on 2018 BP Statistical Review of World Energy data.

The only way to prop up coal production, for either China or the rest of the world, is higher prices, indirectly coming from higher demand from non-elite workers. Businesses can perhaps use rising debt to hire these non-elite workers but, if there is not a sufficient supply of buyers who can afford the additional goods and services made by these workers, the final outcome will be debt defaults.

The Fundamental Problem Is a Physics Problem

The fundamental problem is that the economy grows for the same reason that hurricanes, ecosystems, stars, and plants and animals grow. They are dissipative structures that grow in the presence of energy flows. In the case of hurricanes, the energy comes from the heat in the warm ocean. In the case of the economy, the energy flows are of many different types, including (among others), human energy, energy of draft animals, solar energy, fossil fuels, and wind energy.

One key characteristic of dissipative structures is that they are not permanent. Permanent growth in a finite system is not possible. The laws of physics sets up the system in such a way that dissipative structures grow and eventually collapse. Over time, new dissipative structures form, each varying in a random way from previous dissipative structures. Those best adapted to the ever-changing circumstances tend to last the longest. This is the way that the evolution of economies takes place, just as the evolution of plants and animals takes place.

One characteristic of economies is that physics determines how much energy is needed to manufacture and transport a particular product. It also determines how much the mix of buyers can afford to pay for finished products using this energy. Thus, physics determines the potential profitability of a particular manufacturing process, with lower energy costs tending to make production more profitable. As energy costs rise because of diminishing returns, the system eventually reaches a point where it must collapse. The cost of production rises so high, relative to wages, that many non-elite workers cannot afford the finished goods and services made by the system.

The laws of physics also determine what wage distributions must look like, given the availability of energy and other resources. In general, if there are not enough resources to go around, some members of the economy tend to get “frozen out” by low wages. In addition, in a low-energy per capita situation, the energy that is available tends to rise to the top, to the high-earners of the economy, somewhat like heating water transforms it to its gas phase (steam), which rises to the top. With this structure, even with a severe energy shortfall, some members of the economy can be survivors.

With today’s worldwide economy, the survivors might be some humans and businesses within the world economy. The system would need to start over, building up smaller economies from pieces that managed to stay intact, but the system, as a whole, would not die out, unless the energy shortfall was severe.

Modeling the World Economy

One issue with academic research today is that it tends to be divided into many academic “silos.” Researchers tend to know more and more about their own field, but less and less about other fields that might be peripherally related. For example, economists tend not to keep up with the physics of self-organizing networked systems. Geophysicists understand the physics that governs the extraction of fuels, but they have no insight into the fact that the laws of physics might also affect prices and wage distributions.

Without understanding the forces that are causing the results that are being observed, it is very easy to create a model that is more misleading than helpful. For example, a simple model of the earth is the one each of us can see as we look around us.

Figure 11. Source: Edrawsoft.com

The model shown in Figure 11 is a flat map. This is a perfectly good representation of what the earth looks like, if a person is not concerned about what happens at a distance. Of course, to extend the map out, a person really needs to convert the model to a globe. A globe is a very different model.

Economic researchers tend to have some of the same modeling issues as illustrated by the flat map model. Economists favor fitting curves to past data to forecast the future patterns. Curve fitting tends not to be good for determining turning points. When we are dealing with energy and other resources, we are really interested in when a turning point will happen, forcing production of energy products and resources of many kinds downward.

Another model favored by economists is the standard two-dimensional supply and demand model (Figure 12). This model ignores the special role that energy products play because of the operation of the laws of physics. Energy products, as they work through the networked economy, affect both the supply and demand of finished goods and services, making the two dimensional model shown inappropriate.

Figure 12. This standard model does not consider the special role energy plays in the economy under the laws of physics, so is not appropriate for energy products.

With neither curve fitting or nor the standard supply and demand model sounding an alarm with respect to energy prices not being able to rise forever, economists have tended to overlook this issue.

Figure 13. Economic models tend to give a false sense of security because they forecast that the future will be a continuation of the past.

Of course, policymakers are happy to hear happily-ever-after endings. Few policymakers question the reasonableness of the models. They do not consider the possibility that the falling discretionary income of non-elite workers around the world might choke off demand for goods made with energy products.

Even geophysicists who have looked at the problem tend to get the story only half right. They understand underground physics, but they tend not to understand that prices cannot rise indefinitely. This is a different, related issue, also associated with the physics of the situation.

“Climate Change Is our Biggest Problem” Is a Corollary to Bad Modeling

If a person truly believes that energy prices can and will rise forever, then it is an easy corollary to assume that all fossil fuels that we can identify within the earth’s crust will eventually become extractable. There are no limits except for the limits imposed by climate change.

Of course, if we are really hitting price limits here and now, the situation is likely to be very different. These price limits will cause a very near-term decline in energy supply, which we essentially have no control over. Financial systems are likely to collapse; international trade will be scaled way back; world population is likely to fall. CO2 levels will, in time, adjust to the radically changed world.

I showed earlier (in How the Peak Oil story could be “close,” but not quite right) that the models used to “prove” that wind and solar can be helpful to the system greatly overstate their benefit to the system. As a result, we don’t really have evidence that wind and solar are even helpful to the system.

Consequently, we really have two false models working together to give an illusion that we have a huge problem which is fixable, if we just exert enough effort. Physics puts a cap on our efforts, however. The physics of the system makes the system collapse before policymakers can hope to even make a small fix.

Figure 14. Two false models work together to give the illusion that climate change is the greatest problem that humans have and that we can fix the problem with fixes to the fuel system.

The unfortunate problem is that policymakers are not really in charge: the laws of physics are in charge. Energy and other resources are no longer inexpensive enough to extract to allow the system to work. The proposed solutions (wind and solar) are not cheap enough to save the system either. We can temporarily hide the problem with more debt (indirect promises of future energy) at lower interest rates, but this does not fix the system.

Conclusion

Many of the problems the world economy is facing today seem to be the result of reaching limits of energy extraction. Very few researchers understand how a self-organized networked economy really operates. As a result, the symptoms of economic health and economic illness have been confused. It looks quite possible that we have reached both Peak Oil and Peak Coal, approximately simultaneously. This is a frightening situation, because it could be an indication of collapse in the next few years. This would likely be much worse than the Depression of the 1930s.

Of course, even with these observations, we do not know precisely what lies ahead. Somehow, multicellular animals have lived on this earth for a very long time. Amazing coincidences have happened and may continue to happen, allowing economies to flourish. We humans do not have as much control over the current situation as we would like to think that we have. Fortunately, we cannot rule out the possibility of more amazing coincidences, perhaps even caused by a literal Higher Power behind the energy flows. Thus, the result may be different from what our models seem to suggest.

 

Our Finite World



44 Comments on "Gail Tverberg: Have We Already Passed World Peak Oil and World Peak Coal?"

  1. Coffeeguyzz on Fri, 22nd Feb 2019 4:16 pm 

    Has this woman EVER written an article that was shorter than ‘War and Peace’?

  2. Anonymous on Fri, 22nd Feb 2019 4:42 pm 

    This woman could write a book about what is NOT in basic supply and demand. She is a joke. Second level intellect. Wouldn’t hire her at McKinsey or Goldman or Carlisle. Just lame, lame, lame.

  3. makati1 on Fri, 22nd Feb 2019 5:04 pm 

    Writing for $$$. Nothing else. When you are trapped in a career and the career is failing…

  4. Creedon Miller on Fri, 22nd Feb 2019 8:21 pm 

    I think she spells out the discontinuity between the prices needed by producers and the prices that non-elite workers can pay well.

  5. Sissyfuss on Fri, 22nd Feb 2019 8:54 pm 

    Gail writes that we wrongly believe we can solve Climate Change with price fixes. With a 10 year lag on consequences and a steady rise of the Keeling Curve we are too late to begin. Forget a fix, we are already in one. Mitigation is the goal and a heady one at that. If you look around you can observe a plethora of collapse in their sundry forms and incipience. I have no fixes, only laments that grow longer and louder in a world no longer familiar.

  6. makati1 on Fri, 22nd Feb 2019 9:55 pm 

    Well said, Sissyfuss. Well said.

  7. Cloggie on Fri, 22nd Feb 2019 10:34 pm 

    “Gail Tverberg: Have We Already Passed World Peak Oil and World Peak Coal?”

    Passed peak conventional oil: yes
    Passed peak conventional coal: no
    Passed peak fossil supply: not in thousands of years

    At Reddit there are sufficient geologists who can explain that to mobster. But he won’t put his lame theories to the test.

  8. Shortend on Sat, 23rd Feb 2019 1:22 am 

    Seems the breeders that pop out rug rats don’t agree. Went out and there are plenty of little brats in the arms of parents or dashing about. Walmart is loaded with them.
    When I see shelves empty there and the kids crying they are hungry…that will be time I can verify we are past peak.
    PS. In the 1970 s energy crisis the USA had a shortage of only 5% and the SHTF.

  9. Theedrich on Sat, 23rd Feb 2019 1:37 am 

    Excellent article by Gail.  Physics rules all.  The smoke, mirrors, and hallucinations outgassed by our political pontiffs and their puppets are now reaching a crescendo, what with tripe such as the so-called “Green New Deal” propagated by a clueless Spic hag from New York City.  Apparently, millions of equally clueless proletarians (politely termed “non-elites” in the article above) think she and Bernie Sanders (“BS” for short) will save the day.

    Far more likely is the path which Gail indicates:  “Wars become more likely, as one country tries to aid its citizens at the expense of citizens of other countries.”  Our national demigods are even now preparing the masses for a “police action” against Venezuela.  This is the approach historically preferred by the home of the knave and the land of the freebie.

  10. JunaP on Sat, 23rd Feb 2019 2:32 am 

    Davyscumbag exceptionalist widdle pussy—

    I’m an American citizen, which means I qualify for the same federal benefits as Trump’s White deplorables in West Virginia, and, you bet, I will maximize my participation in each and every federal program for which I qualify. Thank YOU very much for paying my Supplemental Nutrition Benefits, Housing Choice rent subsidies, and Medicaid.

  11. makati1 on Sat, 23rd Feb 2019 2:35 am 

    Short, take away the 40,000,000 food stamp cards and watch the starving appear. It is hidden by government dole, which will disappear when the SHTF, if not sooner. Millions sleeping under bridges, but you don’t notice as there are no bridges in your neighborhood. Add in the suicide rates increasing exponentially. Ditto drug use and overdoses. Not signs of a booming economy.

    Denial doesn’t change things. It only makes them worse for the denier when the 2X4 of reality smacks them to their knees.

  12. makati1 on Sat, 23rd Feb 2019 2:43 am 

    JuanP, I keep thanking Davy for my SS payments every month. They have added up to about $200,000.00 since my retirement in 2007. Assuming I live another 10+ years, I will collect another $200,000.00 plus any inflation increases. That is, assuming that there is a US and they are still paying SS by then. I give the odds at 50:50.

  13. Free Speech Forum on Sat, 23rd Feb 2019 2:47 am 

    The whole world is a prison now. We’re being wiretapped and watched 24/7.

    The elites have turned everyone into criminals, liars, hypocrites, and cowards.

    Americans say that they love freedom, but they eagerly submit when the government forces them to give DNA samples, give fingerprints, get microchip implants, and be registered in a facial scan database. Even if your wife tells you did that right thing by cooperating, you will still feel like a pussy for just being another weak dullard.

    There is really no reason to work now that everything is illegal and the 1% will end up with everything through taxes, forfeiture, fines, inflation, tariffs, subsidies, and fees.

    If we’re being treated like criminals, we might as well act like it. When doing good and doing bad both are illegal and the government and illegal aliens don’t obey the law, why obey the law at all?

    The elites give the politicians campaign donations and cushy job promises to make decrees, the Gestapo enforces the laws, and the 99% obeys the laws. The only reason the system works now is because everyone still thinks it is legit. If no one obeyed, the whole rigged game would crumble.

    One way to protest if you have any artistic skills is to record songs, write books, and paint pictures promoting freedom and encouraging resistance.

    https://www.spanish-fiestas.com/history/civil-war/

    Now that the USA is a bankrupt warmongering police state, Americans must know how Germans felt like in 1932.

    Every country has the government it deserves.

  14. Davy on Sat, 23rd Feb 2019 4:35 am 

    Makato, do you think that was juanpee? “JunaP on Sat, 23rd Feb 2019 2:32 am”
    I am not sure but who knows these days with Mr mental illness

    “JuanP, I keep thanking Davy for my SS payments every month.”

    makato, really don’t care truthfully. Your $2000 a month or so isn’t shit. You are dependant on it so you should hope the US is not destroyed like you so passionately talk about twice daily

  15. Davy on Sat, 23rd Feb 2019 4:53 am 

    “Short, take away the 40,000,000 food stamp cards and watch the starving appear. It is hidden by government dole, which will disappear when the SHTF, if not sooner. Millions sleeping under bridges, but you don’t notice as there are no bridges in your neighborhood. Add in the suicide rates increasing exponentially. Ditto drug use and overdoses. Not signs of a booming economy.”

    Makato, food stamps don’t amount to much in regards to many recipients budget. It is a supplement not a difference from starvation like you dramatize. The number of homeless and suicides are not that great in relation to the total population. The economy is better in the states than China and Europe. There cleaned up that stink.

  16. Anonymouse on Sat, 23rd Feb 2019 4:59 am 

    LOL, the first two comments are from the same retard, Nony.

    While you spaced the comments more than say, two minutes apart nonytard, thus avoiding a common newbie sock puppet mistake, ‘coffeeguyzzzzzzz’ is still all you. Why can’t you just say Gail is full of it, under one handle? Does adding your sock puppets 2 cents really make all the difference to you?

    Guess it does, retard

  17. makati1 on Sat, 23rd Feb 2019 5:05 am 

    Davy, get educated. It means living and dying for most of those people. I means being able to pay the rent AND eat.

    You have no idea…or you are just being your usual asshole self. The latter, I think. Get a life loser!

    BTW: That SS is only ONE income stream. I moved my resources to the Ps and and out of the reach of the IRS and put them to use here. IF SS ended tomorrow, I would only miss being able to spend it on others and to buy more preps. You have NO idea what my resources are. None. Zip! Zero!

    You are the one reliant on Uncle Sam’s teat, or is it relying on your family? Nothing to do but Pavlov’s dog responses to every comment you missed while you were getting over the hangover…or drugs? Seems that way. Woof!

  18. makati1 on Sat, 23rd Feb 2019 5:09 am 

    BTW Davy, $2,000 per month is three times what it costs me to live here in a comfortable lifestyle. It’s called PPP. A lot left over for other things. Whereas, that is below poverty in your neighborhood. The land of the FEES. LOL

    PPP = Purchasing Power Parity.

  19. Davy on Sat, 23rd Feb 2019 5:31 am 

    “Davy, get educated. It means living and dying for most of those people. I means being able to pay the rent AND eat.”
    Makato, you are off in your cheap 3rd world club med while I live around poor people in the Ozarks. I think I am educated and you are full of shit.

    “You have no idea…or you are just being your usual asshole self. The latter, I think. Get a life loser!”
    Now you start with the childish putdowns when you know you are wrong

    “BTW: That SS is only ONE income stream. I moved my resources to the Ps and and out of the reach of the IRS and put them to use here. IF SS ended tomorrow, I would only miss being able to spend it on others and to buy more preps. You have NO idea what my resources are. None. Zip! Zero!”
    Wow, so defensive makato. You get that way when you have been cornered in your lies

    “You are the one reliant on Uncle Sam’s teat, or is it relying on your family? Nothing to do but Pavlov’s dog responses to every comment you missed while you were getting over the hangover…or drugs? Seems that way. Woof!”
    LOL, Pavlov’s dog again. Do you even think that fits stupid? AH, you have no clue about my situation stupid but you are on Social Security so your situation is obvious.

    “BTW Davy, $2,000 per month is three times what it costs me to live here in a comfortable lifestyle.”
    You still are living like a pauper in a little grandfather room in someone else’s home. You have no assets and your family is far away. I guess they will come get you someday once you can’t wipe your ass and the people throw you on the street.

    “It’s called PPP. A lot left over for other things. Whereas, that is below poverty in your neighborhood. The land of the FEES. LOL”
    OH, so now you are talking highly about the dollar. I thought you hated the dollar? I guess it depends on your agenda point of view

    “PPP = Purchasing Power Parity”
    No shit dumbass most adults here know what PPP means

  20. Davy on Sat, 23rd Feb 2019 5:34 am 

    “While you spaced the comments more than say, two minutes apart nonytard, thus avoiding a common newbie sock puppet mistake”

    LOL, the dumbass sock cop speaks. Tell us more about sock rules, anonouse the xboxer. Nony has more intelligence in is little finger than your whole brain idiot.

  21. Antius on Sat, 23rd Feb 2019 5:52 am 

    An excellent article from Gail.

    To cut a long story short; there is an energy intensity to GDP. Therefore, there is a maximum amount that society can afford to pay for the average kWh. Unfortunately, this is now beneath cost for many oil and coal producers. As inequality in consuming countries has risen; the affordability problem has grown worse. This is why most of the world’s fossil fuels will be left in the ground. All of the low grade coal and oil in the world will make no difference to the fate of humanity. The world economy needs cheap energy.

  22. Cloggie on Sat, 23rd Feb 2019 6:33 am 

    To cut a long story short; there is an energy intensity to GDP. Therefore, there is a maximum amount that society can afford to pay for the average kWh. Unfortunately, this is now beneath cost for many oil and coal producers. As inequality in consuming countries has risen; the affordability problem has grown worse. This is why most of the world’s fossil fuels will be left in the ground. All of the low grade coal and oil in the world will make no difference to the fate of humanity. The world economy needs cheap energy.

    Countries like Denmark, Germany and Scotland have proven that they can flourish, even with a large chunk of renewable energy generation under their belt and still be “on top”. Germany just scored a 58 billion euro government surplus, the largest in its history, with 40% renewable electricity and counting.

    One barrel of oil represents 1700 kWh. 1 kWh represents 1 day of very hard human labor. 1 man year is 46 weeks of 5 days = 230 workdays. Hence 1 barrel of oil represents 7.4 man-years of hard physical labor.

    Minimum wage in Holland is 20k euro. Think about 150,000 euro wage cost to replace 1 barrel of oil with human labor.

    If you realize that, you know that regardless of how high the oil price will be… currently $60 or $140 like in 2008 or perhaps $400… you know in advance it will be paid, if there is no alternative. Sure consumption patterns will change if oil costs $400. Fanatical energy saving will be all the rage, but it will be paid.

    Only… there IS an alternative: renewable energy, currently at a break even with $60 dollar oil. Price tendency: declining as the technology matures.

    In the future very sunny countries like the Maghreb, Arabia, Africa and Australia will be able to deliver hydrogen-stored renewable energy against affordable prices, based on 2 cent/kWh raw solar electricity.

    Cheap energy will be provided for.

  23. Davy on Sat, 23rd Feb 2019 6:46 am 

    “Countries like Denmark, Germany and Scotland have proven that they can flourish, even with a large chunk of renewable energy generation under their belt and still be “on top”. Germany just scored a 58 billion euro government surplus, the largest in its history, with 40% renewable electricity and counting.”

    BS, they are still very much supported by neighboring fossil fuel and NUK energy sources AND Russian gas,

    Read this again clogged:

    #147: Primed to detonate
    Posted on February 18, 2019
    https://tinyurl.com/y4cw9u64

    This shows that Europe is not “ON TOP” AS YOU WANT TO BELIEVE.

  24. Cloggie on Sat, 23rd Feb 2019 7:09 am 

    “Cloggmeister, sur, they are still very much supported by neighboring fossil fuel and NUK energy sources AND Russian gas,”

    Sure, but that will be history by 2050, when we have a 90-100% renewable energy base.

    The only one who is destined to collapse first is the US, with a public deficit of some 900 billion. They are attempting to maintain a lavish lifestyle they can’t afford, like spending almost half the world’s defense budget, and still get their asses kicked in Syria.

    Don’t believe me, believe your media allies in Germany:

    https://deepresource.wordpress.com/2012/12/11/the-real-state-of-western-finances/

    The US, that’s Greece without the Germans standing by to intervene.

    Europe is relatively on top, regardless what a Tim Morgan, a hand-picked Anglo with an opinion you like, has to say.

  25. marmico on Sat, 23rd Feb 2019 7:55 am 

    Has this woman EVER written an article that was shorter than ‘War and Peace’?

    Tverberg baffles her sect with the monthly blathering bloviating sermon and hopes like hellfire and damnation that the sect forgets her prior sermons, specifically 5 years ago.

    https://ourfiniteworld.com/2014/01/29/a-forecast-of-our-energy-future-why-common-solutions-dont-work/

    She is a nutter.

  26. shortonoil on Sat, 23rd Feb 2019 8:15 am 

    As we have been mentioning for the last several months, the legacy decline rate of existing production is greater than what new oil can be brought on line to replace it. In other words the world has Peaked. This will be a milestone event in the history of humanity that will rival the fall of the Roman Empire! The world has no back up, or plan B. After 159 years of powering our civilization on oil we are still staggering along, and waiting for a miracle. With our primary energy source depleting out at 36 Gb per year, one good solar storm and we will be competing with the coach roaches.
    http://www.thehillsgroup.org/

  27. Davy on Sat, 23rd Feb 2019 8:23 am 

    “Sure, but that will be history by 2050, when we have a 90-100% renewable energy base.”
    WTF, euroland may be no more by 2050.

    “The only one who is destined to collapse first is the US, with a public deficit of some 900 billion.”
    Europe is in worse shape with debt delusional PMB fool.

    “They are attempting to maintain a lavish lifestyle they can’t afford, like spending almost half the world’s defense budget, and still get their asses kicked in Syria.”
    We protect your incompetent lazy cheese eating Eurotards.

    “Europe is relatively on top”
    Europe is a rump behind the US and China even Russia tells you what to do.

  28. Davy on Sat, 23rd Feb 2019 8:24 am 

    “This will be a milestone event in the history of humanity that will rival the fall of the Roman Empire!”

    Sure short but it is more complicated than just oil AND it is a timing issue. How long until this happens? Oil peaking is not going to determine that alone.

  29. The Jewish Light on Sat, 23rd Feb 2019 8:43 am 

    Davy,

    Take it from an old Jew…….. what you required was for your bubbeh to give you a good potch on the tuchas!!!!! See what happens to a person otherwise? You turn into a classic noodge-nudnik.

  30. Sissyfuss on Sat, 23rd Feb 2019 9:11 am 

    We are arriving at the almighty bottleneck accompanyed by climate disruption and depleting resources. And still the population grows unabated. Cancer gonna cancer.

  31. juanpee sock puppet on Sat, 23rd Feb 2019 10:40 am 

    The Jewish Light on Sat, 23rd Feb 2019 8:43 am

    This handle is from mr. mental illness, juanpee.

  32. More Davy Sockpuppetry on Sat, 23rd Feb 2019 10:49 am 

    juanpee sock puppet on Sat, 23rd Feb 2019 10:40 am

  33. The Jewish Light on Sat, 23rd Feb 2019 11:20 am 

    Oh sure, honey Davy, every critical comment is by “JuanPee”, although I don’t see his name anywhere except when you mention it.

    I see now that I need to add meshuggeneh to your personality description.

  34. juanpee sock puppet on Sat, 23rd Feb 2019 12:26 pm 

    The Jewish Light on Sat, 23rd Feb 2019 11:20 am

  35. Anonymouse on Sat, 23rd Feb 2019 1:44 pm 

    Was I talking to you delusional dumbass? Is your name Nony? Oh, I see, you saw RETARD and must have though the message was meant for you. Sorry, wasnt directed at you, but I can see why that got you confused.

    Speaking of socks exceotionlaturd, why are you complaining about Juan’s alleged socking, but you have no problem at all, with Nonytards pointless, empty socking? Isn’t that just ‘noise’ dumbass? Or are you just another hypocrite with severe reading and compression problems?

    Sorry for all rhetorical questions, you already know the answers to, dumbass.

  36. Davy on Sat, 23rd Feb 2019 2:14 pm 

    I was talking to you prick and you obviously listened

  37. Davy on Sat, 23rd Feb 2019 4:42 pm 

    Keep it up prick and next time I’m gonna call you the ‘C’ word. That’s not just an idle threat. It’s a promise.

  38. Juanpee identity theft on Sat, 23rd Feb 2019 5:22 pm 

    Not Davy

    Davy on Sat, 23rd Feb 2019 4:42 pm

  39. Robert Inget on Sat, 23rd Feb 2019 5:30 pm 

    Mexico won’t be able meet domestic needs.

    MEXICO CITY (Reuters) – Mexico’s Pemex produced 1.62 million barrels of crude per day in January, less than any month in almost three decades, the state-owned oil company said on Friday, underscoring the challenges facing a government that vows to pump far more in a few years.

    The company’s crude output for the month was the lowest since at least 1990, when Pemex’s publicly available records begin.

    The firm’s crude oil output has declined for 14 consecutive years since hitting a peak of 3.4 million bpd in 2004, as Mexico’s most prolific fields have dried up and new ones to replace them have not been discovered.

    Pemex’s crude production averaged 1.81 million bpd in 2018.

    The company’s crude oil exports also fell in January to total 1.07 million bpd, down nearly 10 percent from 2018 average shipments of 1.18 million bpd.

    President Andres Manuel Lopez Obrador, who took office in December and ran on a promise of strengthening the ailing company, long a national treasure, has said he will grow its output to around 2.5 million bpd by the end of his six-year term in 2024. (30)

    Those ‘exports’ are really to refineries who return finished product.

  40. intellectual nematode Alert! on Sat, 23rd Feb 2019 6:33 pm 

    Juanpee identity theft on Sat, 23rd Feb 2019 5:22 pm

  41. JuanP on Sat, 23rd Feb 2019 6:45 pm 

    this is me

    intellectual nematode Alert! said Juanpee identity theft on Sat, 23rd Feb 2019 5:22…
    intellectual nematode Alert! said Davy on Sat, 23rd Feb 2019 6:07 pm

  42. intellectual nematode Alert! on Sat, 23rd Feb 2019 8:11 pm 

    As official the maintainers of the Intellectual Nematurd Alert Systems, or INASS for short, it is our hope and understanding, that the citizens we are alerting are well aware that “Juanpee identity theft”, is in fact, none other than Davy.

    INASS Administrator

    We hope this clears up any possible mis-understanding about the Alert systems messaging.

  43. Robert Inget on Sun, 24th Feb 2019 10:01 am 

    Unless posters here revert to on-topic posts instead of “Anonymouse” personal insults, who but bots will ever read these pages much less contribute.

    1) Use your own name if you have something
    useful to add.

  44. Cloggie on Sun, 24th Feb 2019 12:38 pm 

    NaBH4 could be the key to kick-start the hydrogen-economy.

    Here is a method of how the hydrogen carrier NABH4 could be recycled and close the fuel cycle:

    https://deepresource.wordpress.com/2019/02/24/regeneration-of-spent-nabh4-from-renewable-electricity/

    As a reminder what the fuss is all about, go to [1:25] to see the experimental setup to produce lots of hydrogen by simply releasing water onto a little bit of NaBH4 powder under ambient conditions:

    https://www.youtube.com/watch?v=xW5S0f_hBkM

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