OPEC agreed on Thursday to cut oil output by an extra 1.5 million barrels per day (bpd) in the second quarter of 2020 to support prices that have been hit by the coronavirus outbreak, but made its action conditional on Russia and others joining in.
Notice that this and pretty much every other news report you read never explains the thermodynamic implications of what they report, because they are ignorant of, and/or deny, the relationships between wealth creation, credit availability, and fossil energy consumption.
Oil producers today cut production by about 1.5%.
Why? Because demand for oil is falling and the world has limited storage capacity. Oil must be burned at about the same rate it is produced. If they don’t curtail production prices will fall below the cost of production and everyone will lose money, except of course shale oil producers who have always lost money.
Why is oil demand falling? Because the oil powered machines that produce and deliver almost all of the things we use and eat are slowing down, which means economic growth is slowing or possibly declining.
What happens if economic growth stops or declines? Our banking system becomes fragile because the design of our debt backed fractional reserve monetary system requires growth to function.
Put more simply, money and debt retain value, and credit remains plentiful, only in the presence of economic growth.
Why are credit and debt important? Because our standard of living depends on them. For example, today you can save 5% of the price of a house, get credit for 95% in the form of a mortgage, and immediately enjoy 100% of the house. Your mortgage, in turn, funds someone else’s retirement portfolio. Without plentiful credit, most people will not enjoy their own home, or car, or iPhone, and most people will not be able to retire.
I explained the importance of growth and why we can’t have it forever in more detail here.
How have our leaders responded? Canada announced an emergency interest rate cut yesterday in the hope of stimulating economic growth. Our prime minister is planning to spend more printed money to stimulate growth.
Will it work? Does providing alcohol to an alcoholic work? Yes, for a while, unless he’s already too drunk, but doing so makes his bottom more painful.
How do you know when an alcoholic is too drunk? You offer him free liquor and he does not drink.
How do you know when an alcoholic has not yet bottomed out? He kills his hangover the next day with a drink.
How do you know when it’s too late to save an alcoholic? He dies from an overdose.
How do you know when an alcoholic is clean? He decides to promote and vote for a birth lottery.
<Edit Mar 8>
I’m going to go out on a limb and say the correction has begun that those of us with defective denial genes have anticipated since the rocket scientists that lead us “fixed” the too much debt crisis in 2008 with more debt. They’ll try again this time but I suspect the alcoholic is too drunk to drink. I don’t know if the drunk will respond if they try extreme measures like intravenous white lightning. Assuming he doesn’t, my guess is 20-50% of paper wealth will vaporize in this step down. There are more steps to follow in coming years until the alcoholic bottoms out when his preferred drink, oil, is gone. There’d be much less pain for all if he’d sober up now.
More evidence that intelligence and education do not reduce reality denial, and that the strength of denial is proportional to the unpleasantness of the reality, as Varki’s Mind Over Reality Transition theory predicts.
Two hundred scientists were recently surveyed on their perceptions of global risks.
Top risks by likelihood:
1. Extreme weather
2. Biodiversity loss
3. Water crises
4. Climate change
5. Urban planning
6. Man-made disasters
7. Involuntary migration
8. Food crises
9. Asset bubbles
10. Illicit trade
Top risks by impact:
1. Extreme weather
2. Climate change
3. Water crises
4. Biodiversity loss
5. Food crises
6. Man-made disasters
7. Urban planning
8. Natural disasters
9. Involuntary migration
10. Interstate conflict
Notice that depletion of affordable fossil energy does not make their list.
Notice also that fossil energy scarcity will worsen every single one of the risks they are worried about, except maybe climate change, and a good argument can be made that oil scarcity will in fact worsen climate change because we will probably burn anything and everything to survive.
Notice also that all actions (except rapid population reduction) to mitigate any of the risks the scientists are worried about requires surplus wealth that only abundant affordable fossil energy can generate.
Notice also that depletion of affordable fossil energy is a problem today for every country in the world, not a vague future risk, nor a risk for future generations, nor a risk that effects only a subset of less fortunate countries. Affordable fossil energy depletion is at the core of global social unrest caused by growing wealth inequality and falling standards of living, unsustainable runaway government debt that threatens monetary stability, and a dangerous asset bubble that threatens a collapse rather than a decline.
Notice also that fossil energy depletion (and climate change) is the only risk that we can’t do anything about, except make do with less, and rapidly reduce our population.
Notice also that most scientists believe we can keep our lifestyles and reduce the threat of their top risk, climate change, by switching from fossil energy to renewable energy, which is a thermodynamic impossibility.
Notice also that fossil energy depletion is the only risk that has 100% certainty.
The only reality more certain and more unpleasant than fossil energy depletion is our mortality, which I’ve previously discussed.
P.S. This talk by engineer Jean-Marc Jancovici, which I posted a couple years ago here, is one of the best explanations of why everything I said above about the depletion of affordable fossil energy is true. In 90 minutes Jancovici demolishes pretty much everything the idiot professions of economics and central banking believe.
James, proprietor of the insightful Megacancer blog, is a rare individual who understands the energy flows that drive the issues that matter:
why we exist
why we behave as we do
why we are in deep trouble
why nothing will stop our demise
His year-end essay is brilliant and I have pasted it in full below.
I agree with everything James said but I thought I would add a few Christmas bobbles that help me to be less angry about our predicament.
When our leaders, scientists, friends, and family do not support the only actions that might reduce future suffering, namely rapid population reduction and a planned contraction of the economy, I know the reason as James explains, is that we, like yeast and all other life, evolved to maximize energy flows.
While true this is not, at least for me, a sufficient explanation because unlike yeast, we are highly intelligent and capable of impressive intellectual feats. How can such an intelligent creature not use its brain to at least try to do the right thing?
The answer, of course, was provided by Dr. Ajit Varki and his Mind Over Reality Transition (MORT) theory.
The smart ethical people we see doing the wrong thing each and every day, despite obvious science and evidence they are capable of understanding, do so because their brains evolved to deny unpleasant realities.
When I look with despair, for example, at COP25 where our best and brightest not only accomplished nothing (except burning a bunch of kerosene to fly there), they didn’t even honestly discuss the problem, we know that thermodynamics, as James explains, is driving the insanity, but we also know that it is evolved denial of reality that blocks their intelligence.
Denial makes our intelligence ineffective on every issue that matters, and thermodynamics, expressed through genetics, does not permit intelligence to exist without denial, so it is what it is, and there is no way out.
Humans are not evil, nor are they stupid, they just can’t see reality.
This holiday season I am grateful to be alive to witness and understand a rare event in the universe, and I’m thankful for good health, good food, a warm dry home, and caring friends and family.
“So this is Christmas, and what have you done? Another year over and a new one just begun…….. John Lennon
Undoubtedly you have struggled to consume some gradient and produce some entropy. Or maybe I should say “you all – plural” since its all of your cells that have created the shape-shifting and often grandiose “you “ within your brain to help your skin-enclosed system get around and get what it needs.
Hope your system is consuming much gradient this holiday season, your homeostasis is hunky-dory and your condition is one of great comfort and peace. I’m sure the new year will bring many surprises as you maneuver through the competitive landscape in search of new wealth-enhancing and energy-consuming opportunities. Provided below is a little commentary on our current predicament (also known as a rant).
The Universe as a single dense point of energy can be seen as the initial gradient. The Big Bang and inflation reduce the initial gradient as time and space expand according to the Second Law of Thermodynamics. Time and space are impossible without gradient dissipation. Gradient dissipation produces time and space and change. You can see this in a wrist watch which must dissipate gradient (battery/spring) to move and create a progression along a circular time line. The events of time can only occur because gradient can be dissipated and the heat can escape into the inflation of the Universe. Time is not possible without change (movement) or change in position which is inherent to the gradient dissipation process. Humans create time by burning energy gradient and dissipating it as heat. Like magnets aligning with the magnetic poles, all of life has evolved to align with the initial massive dissipation (Big Bang) as residual dissipating phenomena. There is no other way for life to behave than the way it does, consuming gradient. If species deviated from their role as reducers of gradients, they would simply disappear. They are constantly being realigned as gradient reducers in order to remain as dissipative structures and stand-out from the less active background. An individual’s “success” in life, in acquiring and consuming resources or having many offspring is the thermodynamic success of the Universe which uses and shapes humans and other life for its dissipative bidding. You think you are successful, but you have been used to further the apparent goals of an expanding Universe. It’s no accident that successful dissipation bolsters your self-image and gives you a good feeling as your homeostasis is maintained. More money, more food, more investments, more children, more dopamine, more………. it all feels good and that’s no accident. The Universe leads you through life in an endless quest for more free energy gradients and after each acquisition the happiness seems to fade until another is found.
All behavior and structure of life comes from and aligns with the Big Bang and expansion of the Universe which humans have logically described with the laws of thermodynamics and entropy. Humans and all other life are captives of these laws and struggle daily to acquire energy to create motion, structure and time with the hydrosphere, atmosphere and open space acting as willing heat sinks. Any organism that attempts to practice “freewill”, that somehow deviates from the program, will find itself realigned with reality or eliminated from existence. Freewill is bounded overall by the requirement of reducing gradients and humans have evolved to eliminate gradient as quickly and efficiently as possible (deriving profit) for reproduction or growth. These requirements can be summed-up in the Maximum Power Principle and/or Maximum Entropy Production principles. Faster, more powerful vehicles, faster computers, faster jets, more economies of scale, burn more faster, more profit, more growth, more gradient reduced and electromagnetic radiation sent into space. Humans have evolved to be such intense competitors for energy that they can’t seem to “just say no” to save themselves. It was never meant that they would be able to “just say no”. Extinction takes care of dissipative structures that run their course through extinction. It is only natural that capitalism should be the dominant economic system when the collapse occurs since it slavishly maximizes growth even making spurious promises of future gradient availability in exchange for burning gradient today and creating population overshoot conditions. Some people wonder what -ism comes next. I believe it will be a pervasive state of natural “terrorism”, the type observed in nature where all life forms are one mistake away from becoming someone else’ s meal.
To name itself “Homo sapiens” is only indicative of the hubris of humans as they slowly commit suicide by gradient reduction. “Smart” or “sapient” is defined by most humans as the ability to create tools to break open new gradients for dissipation while depriving other living organisms the same opportunity. Humans seem unable to imagine any other parameters of success besides consumption, growth and reproduction. No surprises there, it’s what complex dissipatives do. So, as the chimps fight in Washington, D.C. (mostly about power and money – dissipative matters) and the average family wonders how much money (gradient) they’ll have to spend to travel (motion) to Disney World and have a good (time), the biosphere degrades into a lifeless necrosphere similar to the slime found at the bottom of a yeast petri dish that has eaten itself into oblivion. Eventually only dust devils and their larger brethren, the hurricanes and typhoons will raise the formerly vital dust beyond its gravitational resting place as the Universe continues to expand without even tallying the insignificant contributions from the Earth’s extinct dissipative spinbots.
Humans should never think of themselves as smart or intelligent, they’re simply a thermodynamic event maintaining homeostasis through gradient reduction. Their entire mentality serves energy/wealth acquisition, consumption and reproduction. Being a social mammal (obtaining energy as a group) they are hierarchically organized and are constantly striving to improve their social standing by whatever means possible (if they haven’t yet seen the futility in such efforts). Those able to control the most money/energy are admired and envied by their sycophants while those with less success are regularly scorned and often deemed unworthy of reproduction or even living. Just as the human civilization will enslave, consume and/or deprive other species of their ability to live and reproduce, so too wealthy humans will enslave less avaricious humans and use them for self-enrichment.
Have you been transported to the nucleolus (school) for the last twelve-years to have your brain refined for information and tool use? You are an RNA destined for one of the the technological cells. Don’t be late. Did you get your college degree? Are you ready to function as an RNA “job” within a civilizational cancer for the rest of your life before you can retire to await the personal cancer your toxic “sapient” system has given you? I assure you that your local medical establishment and undertaker are ready to provide in your time of need and desperation if you can provide a life’s worth of savings in exchange (usually extracted in the form of monthly health insurance premiums the paying of which has put you into an early grave.) Are you satisfied that an oligarchy of bankers, government and corporations have initial claim upon society’s nutrients and thin the blood currency for the remainder of society which struggle to feed themselves, their cells and their vehicles? Is that the cost of survival vis-a-vis other equally exploitative nations? Perhaps if the thinning of the blood by inflation was not enough, the taxes and interest, fees and penalties are acceptable costs for enduring life as an expendable, productive molecule attached to an hedonically enhancing smart (not sapient) phone. And now that there’s not enough to share with the worker dissipatives, the electronic prison takes shape with various surveillance, monitoring, compliance, social credit, FICO scores, 5G and facial recognition.
Since the energy horizon is shrinking, those endowed with rights from which the rest have been alienated, will try to compensate for the loss of energy by introducing new “savings” to the system, a few low-cost behavioral and structural changes to hold society together for a while like a rationing of essentials and sharing. As the existing system is already strapped for metabolic energy and any major disruptions threaten collapse, a full conversion to “renewable energy” is not seen as workable, especially when we will likely need even more energy to heal wounds inflicted by an increasingly chaotic climate. We will eventually be overwhelmed by the inflicted damages and inherent contradictions of our “Black Friday” hyper-dissipative existence. Our slowly disintegrating arrangement will go extinct one way or another without a source of clean energy that meets current metabolic needs and provides enough net energy to re-stabilize the climate. The resource bill (if the technologies even existed) to accomplish this self-saving task will grow faster than the interest on the Federal debt and in any case the climate destabilization has likely already achieved positive-feedback, escape-velocity, well beyond any feasible means of addressing it. In the meantime those at the universities are earning their six-figure salaries arguing over political correctness as if being nice to each other and erasing or rewriting sordid chapters in human history is the challenge of the day.
And where will we find our CEOs, government officials and military when push comes to shove in the international competition for food and energy? With all the courage they can muster they will scurry into their fortified bunkers to wait-out the “winnable” nuclear war only to re-emerge when the stinkadelic cheese of next years’ appropriations comes wafting through their gold-standard air purification systems.
Let’s hope for a happy new year with smart algorithms, lightning fast trading computers, a massive pump-and-dump and lots of resources stripped away from those that can least afford it. I recommend working harder in the new year so we can eliminate the gradients and get to where we’re going faster.
I observe that people fighting for our species to acknowledge its predicament, like Extinction Rebellion, are as much in denial as the people they oppose.
In his last section, Watkins suggests that the environmental movement has a choice to make between two paths. This implies that they understand what is going on. Here I disagree. I think genetic reality denial blocks almost everyone, including environmentalists, from understanding what is going on, as Varki’s MORT theory predicts.
An an aside, there is a Canadian federal election in a few days. I read the platforms of all the parties. Not one has a clue what is going on. I refuse to vote for idiots in denial.
Firstly, there is no net zero because humans have failed to figure out a viable means of capturing and sequestering carbon dioxide for the several centuries that would be required after we ceased burning fossil fuels to restore the climate to something akin to conditions today. At this point, no doubt, some readers will object that trees and soils are natural carbon sinks; and so we might plant more trees and restore more soils. The question, however, is which trees and soils, and to what end? Few trees live beyond a century (especially when some idiot comes along and harvests them to use as “green” biofuel). And when a tree dies and falls to the floor, it dumps all of the carbon back into the atmosphere. Similar problems affect attempts at soil restoration since any further use will unlock the carbon stored there.
There is, you will be pleased to know, one natural process that can sequester and lock up all of the carbon that we have dumped into the atmosphere in the course of the last three centuries. It involves a warmer and wetter climate washing nutrients off the land and out to sea; where plankton and algae blooms can flourish and multiply; giving off noxious hydrogen sulphide – which causes “red tide events” – as a by-product. As these microscopic plants die, they sink to the ocean floor where, along with the carcasses of any marine creature that happened into the oxygen-starved red waters beneath the surface, they gradually decompose into a glutinous mud. Over time, layers and layers of this hydrocarbon-rich mud will pile up. And over centuries it will be subsumed beneath the Earth’s crust, where it will be heated and compressed beneath an impervious layer of rock that prevents it from leaking to the surface. With the carbon sequestered in this way, over millions of years the climate will cool once more.
My more alert readers will be aware that the process that I just described is the one in which the fossil fuels that we have been burning for the past 300 years were created in the first place. As far as I am aware, it is the only process currently known that can lock up large volumes of carbon dioxide for the geological time period required to repair the damage that we have already done.
There is enough carbon dioxide in the atmosphere already to raise the temperature above 3 degrees over pre-industrial levels; so that even if we ceased burning fossil fuels today, it is highly unlikely that the global economy and a population approaching 8 billion can survive the devastation. Indeed, those at the more pessimistic end of the spectrum argue that we will be lucky if there are any humans at all on Earth by 2030. But even knowing that the current debate is between those who think things are about to get very, very bad and those who think they are about to become fatal will not be enough to prevent humanity from continuing to pump greenhouse gases into the atmosphere.
The reason is simple, the only way in which we can support a global population that is at least eight times the sustainable level; is to use fossil-powered industrial agriculture on a global scale. And while switching the diet to lower the volume of cow belches will make an insignificant difference, the fact remains that fossil-powered global plant farming is still a major source of greenhouse gases. Nor do we dare dispense with the fossil-powered global supply chains that have saved the largest part of humanity from the kind of famines that were commonplace just a few decades ago. Growing excess food in favourable regions and transporting it to less favourable ones has always been the means by which humans combatted famine. The only difference today is that we do it on a global scale; meaning that disruption in any one supply chain can rapidly undermine the entire system.
At this point, of course, the techo-utopian journalists, politicians and protestors will complain that I am ignoring renewable energy and the fourth industrial revolution. Once again, the reason for this objection is largely a product of an education system that is not fit for purpose. In a recent article on the Peak Prosperity website, scientist Chris Martenson refers to the sheer scale of the task that would be involved just in substituting (i.e. ignoring all of the technical engineering challenges involved) the quantity of energy we get from fossil fuels with renewable energy:
“Suppose we agree on the goal to entirely replace fossil fuel energy by 2050. (We’re going to have to do it by some point, because oil, coal and natural gas are all depleting finite resources.)
“With 2050 as a starting point we can run some simple math.
“We start by converting the three main fossil fuels – coal, oil and natural gas – into a common unit: the “millions of tons of oil equivalent” or Mtoe.
“A million tons of oil = 1 Mtoe, obviously. And there’s an amount of coal, if burned that has the same energy as 1 Mtoe. Ditto for natural gas. If we add up all of the fossil fuels burned in a given year, then we can express that as a single number in the many thousands of Mtoe.
“Roger Pilke has run the math for us in his recent article in Forbes:
‘In 2018 the world consumed 11,743 Mtoe in the form of coal, natural gas and petroleum. The combustion of these fossil fuels resulted in 33.7 billion tonnes of carbon dioxide emissions. In order for those emissions to reach net-zero, we will have to replace about 12,000 Mtoe of energy consumption expected for 2019’…
“So, what would it take to replace those 12,000 Mtoe with alternative fuels by 2050?
“Pilke answers that for us:
Another useful number to know is that there are 11,051 days left until January 1, 2050.
To achieve net-zero carbon dioxide emissions globally by 2050 thus requires the deployment of >1 Mtoe of carbon-free energy consumption (~12,000 Mtoe/11,051 days) every day, starting tomorrow and continuing for the next 30+ years…
“But that’s only half of the story.
“We’d also have to decommission and retire an equivalent 1 Mtoe amount of still-functioning fossil fuel property, plant and equipment. Do you have any idea how much money and embedded capital is contained in all the world’s current energy infrastructure — including our cars and homes — that’s built around fossil fuel use?
“Somehow, the world would have to replace the equivalent of the energy contained within 2.4 Ultra Massive crude ships. Every. Single. Day. For 11,000 days straight, without missing a single day. A 7,000 mile long cargo train of ultra massive ships retired at the rate of 2.4 per day for the next 30 years…
“What would that take? Again from Pilke:
So the math here is simple: to achieve net-zero carbon dioxide emissions by 2050, the world would need to deploy 3 [brand new] nuclear plants worth of carbon-free energy every two days, starting tomorrow and continuing to 2050. At the same time, a nuclear plant’s worth of fossil fuels would need to be decommissioned every day, starting tomorrow and continuing to 2050.
I’ve found that some people don’t like the use of a nuclear power plant as a measuring stick. So we can substitute wind energy as a measuring stick. Net-zero carbon dioxide by 2050 would require the deployment of ~1500 wind turbines (2.5 MW) over ~300 square miles, every day starting tomorrow and continuing to 2050.”
It has taken a Herculean effort in the developed western states just to deploy a relatively small number of wind turbines and solar panels into our electricity generation mix. The idea that we are going to replace the far larger fossil fuel consumption in transport, building temperature control, industry and agriculture is no more than magic thinking.
This is where the charge of hypocrisy that is often levelled against Extinction Rebellion hits home. It is doubtful that more than a handful of the protestors is prepared to make even a fraction of the lifestyle changes that would be involved just to lower the rate at which we are dumping greenhouse gases into the atmosphere. Certainly some will be prepared to give up flying, stop eating meat, use a refillable water bottles and put on an extra layer rather than turn the heating up. Mobile phones are a different matter – even though the data centres on which they depend are among the most polluting buildings on Earth. Few, one suspects, will be prepared to take the radical actions such as giving up the right to have children in favour of the birth licensing system that a rapid shift to a zero-carbon economy implies.
In the end, Extinction Rebellion is facing the same dilemma that has plagued the environmental movement from the start:
Should it spell out the enormous effort and sacrifice involved in changing course – and thereby risk alienating the majority of those who need to be won over? Or;
Should it pretend – despite all the evidence to the contrary – that a few windmills and solar panels will allow us to continue growing our planet-destroying economy without even pausing to draw a breath.
My fear is that – like the various green parties around the world – this latest manifestation of environmentalism will take the second option so as not to scare the horses. And if those at the gloomier end of the spectrum are correct and that we only have 10 years left, this may not be such a bad thing; after all, they say that dying in your sleep is far preferable than consciously looking death in the face. Either way, one can count on one hand the number of protest movements that have achieved the change they wanted to bring about. The enormity of the predicament does not change this fact. The sad reality is that we are all prisoners of the very system that is killing us; dependent upon it for the food, water, clothing and shelter that sustain us even as it destroys the habitat we depend upon. We could end it tomorrow if only the majority of us chose to stop playing the game; but the sacrifice is too great… and few of us are prepared to take the hit while others continue to get a free pass.
And so, while I salute those who have taken to the streets this month (my son is among them and I am proud that he is standing up for what he believes in) I would also caution them that the changes that are coming are not the ones they want; still less the ones the leaders of their movement are pretending they can have. Our current civilisation can be compared to the last moments of the Titanic – holed below the waterline and destined to sink into a watery grave. Most of those who are protesting are merely akin to the frightened passengers begging a Captain and crew to respond to a situation that they have already lost control of. The sensible few among the protestors will look to those who are assembling the lifeboats. But the majority – whether they believe the emergency is real or not – will soon meet their tragic end. And protesting icebergs and reckless Captains will do nothing to save them – or us – now!
Tad begins by pointing out that a recently update climate model is predicting more than 1 degree of additional warming than the previous model for our current CO2 levels. That’s bad news but seems consistent with what we observe every day in the news.
Then Tad gets to his main point:
…since 2004, the annual increases of total electricity consumption in the world have outpaced all electricity production by all PV arrays in the world…
This means that the Green Queen is not only not keeping up, she’s not even in the race. Except for one year, 2009, when the economy crashed.
And we haven’t even begun to replace the other 84% of fossil energy that we use for non-electricity applications like heating, fertilizer, tractors, trucks, trains, ships, planes, mining, steel, cement, glass, etc..
Thus, there are no other paths but to shrink, shrink more and transit away from fossil fuels.
Once again I observe that facts don’t matter and denial defines our species.
A year ago I wrote an essay that tried to capture the depth and breadth of our predicament, and that offered a simple idea for increasing awareness, gratefulness, and temperance.
If you’re not an engineer the essay may be a painful read because my goal was to communicate maximum content with minimum words in a single sentence, and it thus reads like a computer program.
Nevertheless I like the essay because it touches on, and integrates, every topic that citizens should understand, but almost none do.
The essay did not get much traction when it was published, so I’m recycling it today for the pleasure and enlightenment of the millions of new readers that now follow this blog.
I make the bold claim that this essay holds the all-time world’s record for the highest number of important ideas in a single sentence, and the highest ratio of important ideas to words in any essay, with 86 important ideas and 1290 words it’s ratio is 6.6%.
I’m confident that readers will not be able to find another essay that unseats my world record, however if I’m proven wrong, I will publicly admit that I have the same denial genes as the rest of you monkeys.