Gail Tverberg on why we are having and energy crisis

mountainmoma's picture

I am linking to a recent article by Gail Tverberg on why we are having and energy crisis right now . Not sure if this is the right spot. She is an actuary, and is realy good and running the numbers. Dryer writing style than some, but has all the data.

" the economy has become increasingly complex, with less and less redundancy to provide stability. The energy price spike that is being experienced today is a warning that something is very, very wrong. As I see the situation, the trend toward complexity has gone too far; the economic system is starting to break down. Sharp changes appear to be ahead. The world economy is shifting into contraction mode, with more and more parts of the system failing.

In this post, I will discuss some of the issues involved. It turns out that energy modelers haven’t understood how detrimental intermittency really is.....

The real story is that the supply of oil, coal and natural gas is limited by the extent to which additional complexity can be added to the economy, to keep selling prices so that they are both:

High enough for producers of these products, so that they can both pay adequate taxes and make adequate reinvestment.
Low enough for consumers, especially for the many consumers around the world with very low wages.

Many people have missed the point that, at least since 2014, financial manipulations have not kept prices for fossil fuels high enough for producers. Low prices are driving them out of business. This is the case for oil, coal and natural gas. In fact, low prices caused by giving wind and solar priority on the electric grid are driving producers [out of business] ...
European economists should have told European citizens, “There is no way you can get along using renewables alone for many, many years. Treat the countries that are exporting fossil fuels to you very well. Sign long term contracts with them. If they want to use a new pipeline, raise no objection. Your bargaining power is very low.” Instead, European economists talked about saving the planet from carbon dioxide. It is an interesting idea, but the sad truth is that if Europe takes itself out of the contest for energy imports, it mostly leaves more fossil fuels for exporters to sell to others......
I could continue speculating on the changes ahead. The basic problem, as I see it, is that we have reached limits on oil, coal and natural gas extraction, pretty much simultaneously. The limits are really complexity limits. The renewables that we have today aren’t able to save us, regardless of what the models of Mark Jacobson and others might say.

In the next few years, I am afraid that we will find out how collapse actually proceeds in a very interconnected world economy.


David Trammel's picture

Great article thanks. I had not come across that website before. It looks like I've found something to do with a few hours this weekend.

I was struck on how she hits one of the big problems of the Collapse coming up, that availability of resources is going to become unreliable. Investors, government and corporations have modeled "intermittency" of the supply with renewables extensively but they haven't applied the same analysis to the rest of the economy. They just assume that because you had that thing all the time in the past, that it will always be there in the Future.

I'm reminded of the old prepper quote "One is None", that teaches that if you only have one way to do something, one tool or piece of equipment to heat your food or power your lights, then in a crisis you may well have none.

At the personal level we all need to consider what in our dependency list could go out, and how we could cope or replace that dependency.

On the society level though, I don't have much hope for the people supposedly in charge. They've grown so used to thinking of profit above all else, changing that mind set isn't an option for them.

add photo: 

I'm not a fan of the seneca cliff model she's using for societal collapse. The past societies whose collapse I've paid any attention to: Roman Empire, Late bronze age, post-heian(Ashkaga) Japan, Anasazi, post-Han China, all took decades to collapse. It's not something that happens in a few years, though some of the big stair steps down might take only a few years.

I think she's right that we're in the middle of a stair step down 2020-2022 or a few years longer. I think things will for the most part stabilize temporarily at a somewhat lower level after that, for a while. Then another stair step down. I'm basing this on JMG's catabolic collapse model and my own reading on history.

Another issue I'd like to bring up is that the list of increased complexity to extend energy supplies she gives include some things that aren't increased complexity. ie. switching to smaller cars that use less fuel doesn't increase complexity. All it does is use less fuel and materials per vehicle.

It's a good article. But I felt the need to poke those holes.