By Charles Hugh Smith: The Inevitability of DeGrowth

While there are no new ideas in this essay, I decided to post it because it is a well written primer on the intersecting issues of wealth, energy, debt, and limits to growth.

https://www.peakprosperity.com/blog/109555/inevitability-degrowth

chs-degrowth-chart1

Even though we don’t know precisely how the future will unfold, we know a few things about it:

  1. Of the 7.5 billion humans on the planet, virtually every individual wants to enjoy a high-energy consumption “middle-class” lifestyle. As a generous estimate, 1.5 billion people enjoy a high-energy consumption lifestyle today; the remaining six billion are aspirants hungry for all the goodies enjoyed by the 1.5 billion—all goodies based on affordable, abundant energy.
  2. Our dependence on debt to fuel growth—more extraction of resources, more energy, more manufacturing, more consumption and more earned income to pay for all this expansion of debt and consumption—has built-in limits: debt accrues interest and principal payments, which reduce the remaining income available to spend on consumption.  Our dependence on fast-rising debt just to maintain low rates of growth eventually limits our ability to pay for more consumption/growth. When most income is devoted to servicing debt, there isn’t enough left to buy more stuff or support additional debt.
  3. The debt needed to move the growth needle is expanding at a much higher rate than the growth it generates. While growth is stagnant, debt is expanding by leaps and bounds to unprecedented levels. (Global Debt Hits A New Record High Of $217 Trillion; 327% Of GDP)
  4. Wages are stagnating for the bottom 90% of the workforce. We can quibble about the causes, but there is no plausible evidence to support a belief that this trend will magically reverse.
  5. The cost of the most valuable energy–high-density, easy to transport—will slowly but surely become more expensive as the cheap, easy-to-extract energy sources are depleted, notwithstanding the temporary boost provided by the fast-depleting wells of the fracking “miracle.”
  6. There are limits on our exploitation of resources such as fresh water and wild fisheries. Humans can print currency (money) but we can’t print fresh water, energy, wild fisheries, etc. If one unit of currency currently buys one liter of petrol, printing 10 more units of money doesn’t create 10 more liters of fuel.
  7. Creating currency out of thin air isn’t free in our system: all new currency is loaned into existence and accrues interest. As a result, all currency is a claim on future earnings. If we borrow enough from the future, and earnings remain flat or decline, eventually there’s not enough income left to support the debt service and the expanding consumption the status quo needs to keep itself glued together.

By Ugo Bardi: The Three Phases of the Reaction to Existential Threats: Action, Deception, and Desperation

Denial is so ubiquitous in our society that we are like fish that cannot see water.

Here we have an excellent essay on inherited denial of reality, without the author being aware of the main topic.

http://cassandralegacy.blogspot.ca/2017/07/the-three-phases-of-reaction-to.html

peakoiltrends

I have been always fascinated by how people’s consciousness of collective threats blurs and disappears as the threat gets closer. Look, here, at the concept of “peak oil” as it appears on “Google Trends.” You see how it dwindled to almost zero interest after having been popular at the beginning of the 21st century.

There are many more examples, a classic one is how the 1972 study “The Limits to Growth” was forgotten as the threat it described became closer in time. So, if you think about this, it is maddening: the earth is becoming more warm and people worry less about that?  The same about oil; the more we use, the less there is; how come that people worry less and less about the problem? Maddening, indeed.

By John Weber: Furnaces of Industry (Solar Energy is Not Renewable)

Solar panels require large quantities of glass. This excellent essay reviews the energy required to produce glass and shows that solar panels cannot be used to make more solar panels.

You need fossil energy to make solar energy.

This means solar energy is not renewable.

We are so accustomed to having access to affordable fossil energy that we forget how precious and magical our main source of energy is: oil is used to produce more oil, and unlike electricity, oil can be cheaply stored and transported.

All of the above also applies to the materials and equipment needed to produce, install, and maintain wind, hydro, geothermal, and nuclear energy.

http://sunweber.blogspot.ca/2017/07/furnaces-of-industry_14.html

furnaceglass

In the USA glass manufacturing accounted for 1% of total industrial energy use in EIA’s most recent survey of the manufacturing sector. Overall fuel use is dominated by natural gas (73%) and electricity (24%), with the remaining share (3%) from several other fuels. Natural gas use at glass manufacturing facilities in 2010 was 146 trillion Btu, about 143 billion cubic feet.

If we convert the natural gas to kWh, we get:

143 billion cubic feet Natural Gas = 41,909,163,034.63 kWh

By Ron Patterson: Africa in Peril

africa-1

http://peakoilbarrel.com/africa-in-peril/

The wildlife decline in most of the world is terrible, but in Africa it is catastrophic. By 2100 there will be no megafauna whatsoever in Africa. All elephants, giraffes, rhinoceroses, lions, gorillas, chimpanzees, and even zebras and wildebeest will be totally extinct. And the culprit in this huge animal extinction is Africa’s massive overpopulation problem. It is terrible today but is about to get a whole lot worse.

The population of Africa, in 2016, was 1.22 billion. The UN estimates that in 2100 the population of Africa will be about 4.45 billion. Notice that is an increase of about 300 million from their estimate just five years ago. But their 2100 population estimate has doubled since their 1998 estimate.

In 2100 one African country, Nigeria will have a larger population than all of Europe combined.

The reason for this Sub-Sahara African population explosion is the decline in infant mortality rates along with their very high fertility rate. With the exception of South Africa, Sub-Sahara African women have 5.5 children (average) during their life. This rate has been slowly decreasing but not enough to decrease the population growth significantly.

The top 15 fertility rates in the world are all in Africa. The Sub-Saharan population is increasing at the rate of 2.5 percent annually. This is double the rate of both Asia and Latin America.

By 2100 there will be no megafauna whatsoever left in Africa except for humans and their domestic animals. Elephants, giraffes, rhinos, and even zebras and wildebeest will all be gone. And of course, all the big cats like lions and cheetahs will be gone as well. Even the hyenas will disappear because there will be no prey for the prey animals to feed on. However, a few wild dogs may remain as there will likely still be a few small ground animals for them to feed on.

Many will say that Europe is even more overpopulated than Africa. And this is true at this point in time. But that will definitely not be the case in the future. And remember that the wildlife in Europe is already gone except for small animals like rabbits and squirrels and a few foxes that prey on them. The wild European megafauna disappeared decades or even centuries ago. Okay, a few mountain goats, lynx other such animals still thrive high in the Alps. But wherever in Europe it is possible for humans to settle and farm, the megafauna has been driven out, usually to extinction. And that will soon be the case for Africa as well. The last habitat for megafauna, in Africa, Asia, and the Americas, is disappearing fast. It will soon be gone.

Extinction is permanent! If civilization survives another million years the elephants, giraffes, lions and all the other megafauna will still be gone. If you don’t think this earth has a very serious human overpopulation problem, then you are stone blind to the peril of our wildlife.

By Raúl Ilargi Meijer: I read the news today, oh boy (On Zombies and Bubbles)

The price of money affects everything.

When you artificially suppress the price of money dangerous bubbles emerge.

No one notices or cares because of inherited denial of reality.

Until the bubbles pop and everyone is forced to care.

This time is different because of its magnitude and global nature.

And because there is no cheap energy left to push us out of a depression.

https://www.theautomaticearth.com/2017/07/i-read-the-news-today-oh-boy/

zhstockbuyers

Reading the news on America should scare everyone, and every day, but it doesn’t. We’re immune, largely.

What we’re witnessing is the demise of the American political system, in real time. We just don’t know it. Actually, we’re witnessing the downfall of the entire western system. And it turns out the media are an integral part of that system. The reason we’re seeing it happen now is that although the narratives and memes emanating from both politics and the press point to economic recovery and a future full of hope and technological solutions to all our problems, people are not buying the memes anymore. And the people are right.

Tyler Durden ran a Credit Suisse graph overnight that should give everyone a heart attack, or something in that order. It shows that nobody’s buying stocks anymore, other than the companies who issue them. They use ultra-cheap leveraged loans to make it look like they’re doing fine. Instead of using the money/credit to invest in, well, anything, really. You can be a successful US/European company these days just by purchasing your own shares. How long for, you ask?

Why this rush by companies to buyback their own stock, and in the process artificially boost their Earning per Share? There is one very simple reason: as Reuters explained some time ago, “Stock buybacks enrich the bosses even when business sags.”

In other words, the system doesn’t only keep zombies alive, making it impossible for anyone to see who’s healthy or not, no, the system itself has become a zombie.

By Ugo Bardi: When governments operate in “cheating mode”

Problems are frequently blamed on the other 50%, or immigrants, or Russia, rather than on pollution, resource depletion, and overshoot.

I often wonder if the elites are knowingly deceitful, or if they are in denial and believe what they tell us.

I suspect the latter.

It seems to be a general observation that, when facing a serious threat, the elites of a country can reason that the best strategy for them is to cheat the people and save themselves. In the present situation, the threat of global warming seems to be driving some elites to do exactly that. They deny the threat while at the same time maneuvering to save themselves by moving to higher grounds and equipping their mansions with air conditioning. For all they care, the rest of the people can drown or roast.

But, as the threat of climate change becomes clearer, the elites may discover that nobody can survive in an uninhabitable planet. Then, they may finally decide to try to do something to save the ecosystem from which we all depend. But it may well be too late.

http://cassandralegacy.blogspot.ca/2017/07/when-governments-operate-in-cheating.html

By Chris Martenson: The Looming Energy Shock

I have a lot of time for Chris Martenson. He’s well grounded in science and has a lot of integrity. My only criticism of late is his recent campaign to blame central banks which I suspect is a marketing strategy to increase subscriptions because blaming bankers sells better than blaming thermodynamics, overshoot, and inherited denial.

Chris is predicting that within 3 years we will either have an economic collapse that temporarily masks the underlying energy problem, or we will have oil shortages and a price shock that will trigger a credit crisis like 2008 but worse. He backs these predictions with the correct data, in my opinion.

I independently came to roughly the same conclusion, although I would add a 3rd possibility given rising stresses around the world: a major war.

I think the 3 possible outcomes are roughly equal in probability, although given the deceleration in credit growth apparent from the following graph, an economic collapse has the lead by a nose.

global-debt-2017-06-29_21-27-57

energy-and-economy-10-4-2016

oil-investments-global-2017-06-29

 

There will be an extremely painful oil supply shortfall sometime between 2018 and 2020. It will be highly disruptive to our over-leveraged global financial system, given how saddled it is with record debts and unfunded IOUs.

Due to a massive reduction in capital spending in the global oil business over 2014-2016 and continuing into 2017, the world will soon find less oil coming out of the ground beginning somewhere between 2018-2020.

Because oil is the lifeblood of today’s economy, if there’s less oil to go around, price shocks are inevitable. It’s very likely we’ll see prices climb back over $100 per barrel. Possibly well over.

The only way to avoid such a supply driven price-shock is if the world economy collapses first, dragging demand downwards.

Not exactly a great “solution” to hope for.

https://www.peakprosperity.com/blog/109505/looming-energy-shock