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

Imagine You Are a Smart Leader

Note: I make a distinction between being wise and smart. I wrote about wise leaders and citizens here. Today I am talking about smart leaders of citizens in denial.

Imagine you are a smart leader with a good understanding of science and engineering, like many Chinese leaders, and unlike our idiot Western economists and lawyers.

You know cheap money policies have created the largest bubble in history.

You know there is not enough affordable energy left to grow out of the problem.

You know that austerity policies will cause a depression, at best, and will cause you to lose your job.

You know that thermodynamics and mathematics guarantees an economic reset in the not too distant future.

You know that there will be much less energy and other critical resources like food available after the reset.

You know that there will be much less credit available to purchase anything with after the reset.

You know that you will not be able to feed your people, and keep your job, without access to energy, food, and other critical resources.

You know that you cannot afford a massive military build-up to forcibly secure resources, and even if you could, the future shortage of energy to power it makes a big military an unwise investment.

You know that a few cheap nuclear weapons are probably sufficient to prevent someone with a bigger military from taking your resources.

You know that fiat currencies, like those every country uses, have value because they are a claim on energy that is expected to be burned in the future.

You know that there will not be enough energy in the future to fulfill claims made by fiat currencies, and therefore they will lose most of their value after the reset and will not be useful for purchasing resources.

You know that gold’s value comes from the energy that was burned in the past to produce it, and therefore other countries may exchange energy and food for gold after the reset.

What would you do?

You would print money to purchase gold from other countries with leaders that are too stupid and/or too deeply in denial to understand what is going on.

By Steve St. Angelo: CLOSE TO NEW GOLD STANDARD? Australia Exports Record Amount Of Gold To China

australia-us-gold-mine-suppy-vs-exports

Australia and the U.S. continue to export the majority of its gold to Hong Kong and China. For example, Australia and the United States exported 121 mt of gold to Hong Kong and China during the first quarter of 2017. Australia exported 57.4 mt, while the U.S. exported 63.3 mt. Thus, Hong Kong and China received 55% of all Australian and U.S. gold exports Q1 2017.

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

By Alice Friedemann: Big Fight: 21 top scientists show why Jacobson and Delucchi’s renewable scheme is a delusional fantasy

This summary by Alice Friedemann of a dispute in the scientific community over the viability of renewable energy is excellent and worth reading in its entirety.

What really stands out for me is that the 21 scientists that criticized the absurdly optimistic renewable energy plan of Jacobson and Delucchi completely missed the most important points that require criticism.

It is amazing that otherwise intelligent experts frequently ignore THE most important things they should understand.

Other examples include:

  • economists who ignore debt and the relationship between energy and wealth;
  • climate scientists who ignore the relationship between CO2 and wealth;
  • dietary health experts who ignore the link between sugar and obesity;
  • environmentalists who ignore over-population;
  • citizens who believe in life after death and deny other unpleasant facts.

This denial behavior is so common and so powerful that it requires an explanation like Varki’s Mind Over Reality theory.

http://energyskeptic.com/2017/big-fight-21-top-scientists-show-why-jacobson-and-delucchis-renewable-scheme-is-a-delusional-fantasy/

Many authors have been writing for years about why Jacobson and Delucchi’s (J & D) plans for a 100% low-cost renewable energy is a cloud cuckoo-land fantasy (references below).  But never so many, so loudly, and in such a prestigious journal (Clack 2017).

The 21 authors of the PNAS article felt compelled to write this because J & D’s irresponsible fairy tales are starting to influence actual policy and waste money.  If cities and states set renewable goals of 100% and try to achieve them with the J & D plan, their spending will be wasted because the J & D plan leaves out biofuels, grid-scale battery storage, nuclear, and coal energy with CCS.

The most important problems with achieving a 100% renewable system are not even mentioned (Friedemann 2015c).

Renewable contraptions cannot outlast finite fossil fuels, because they are utterly dependent on fossil fuels from birth to death to mine, crush, and smelt the ore, deliver the ore to a blast furnace, fabricate 8,000 wind turbine parts at hundreds of manufacturing plants all over the world, and deliver the parts to the assembly plant.  For each turbine, dozens of trucks are needed to prepare the wind turbine site so that dozens of cement trucks can pour tons of concrete and steel rebar for the platform, deliver pieces of the huge parts of the turbine, and diesel powered cranes to lift the parts hundreds of feet into the air.

In their 2011 paper, the J & D 100% renewable system would be accomplished with 3.8 million 5-MW wind turbines (50% of power), 49,000 solar thermal plants (20%), 40,000 solar PV plants (14%), 1.7 billion rooftop PV systems (6%), 5350 geothermal plants (4%), 900 hydroelectric power plants (4%), and marine hydrokinetic devices (2%).   Their 2015 paper has somewhat different but equally unrealistic numbers.

It is questionable whether there’s enough material on earth to build all these contraptions and continue to do so every 20 years (wind) to 30 years (solar).  Fossil fuels will grow more and more scarce, which means cement, steel, rare (earth) metals, and so on will decline as well.  Keep in mind that a 2 MW turbine uses 900 tons of material: 1300 tons concrete, 295 tons steel, 48 tons iron, 24 tons fiberglass, 4 tons copper, .4 tons neodymium, .065 tons dysprosium (Guezuraga, USGS).  The enormous demand for materials would likely drive prices up, and the use of recycled metals cannot be assumed, since downcycling degrades steel, perhaps to less strength than required.

The PNAS authors propose grid-scale batteries, but the only kind of battery for which there are enough materials on earth are Sodium-sulfur NaS batteries (Barnhart 2013).  To store just one day of U.S. electricity generation (and at least 6 to 8 weeks would be needed to cope with the seasonal nature of wind and solar), you would need a 923 square mile, 450 million ton, $40.77 trillion dollar NaS battery that needs replacement every 15 years (DOE/EPRI 2013).  Lead-acid: $8.3 trillion, 271.5 square miles, 15.8 million tons.  Li-ion $11.9 trillion, 345 square miles, 74 million tons.

There are dozens of reasons why wind power will not outlast fossil fuels (Friedemann 2015b), including the scale required, the need to increase installation rates 37-fold in 13 years (Radford 2016), population increasing faster than wind turbines to provide for their needs can be built, wind is seasonal – very little in the entire U.S. in the summer, no commercial wind year round in the South East, a national grid, no commercial energy storage at utility scale in sight, plus a financial crisis or war will likely break the supply chains as companies go out of business.

Okay, drum roll.  The biggest problem is that electricity does not matter. This is a liquid transportation fuels crisis. Trucks can’t run on electricity ( http://energyskeptic.com/category/fastcrash/electric-trucks-impossible/  ).

The Achilles heel of civilization is our dependency on trucks that run on diesel because it is so energy dense. This is why diesel engines are far more powerful than steam, gasoline, electric, battery-driven or any other motive power on earth (Smil 2010).  Billions of trucks and equipment worth trillions of dollars are required to keep the supply chains going over tens of millions of miles of roads, rail, and waterways that every person and business on earth depends on.  Equally if not more important are off-road mining, agriculture, construction, logging, and other trucks.  They not only need to travel on rough ground, but meanwhile push, lift, dig and perform other tasks far from the electric grid or non-oil distribution system.

Trucks must eventually be electrified, because biomass doesn’t scale up and has negative or break-even energy return, coal and natural gas are finite, and hydrogen /hydrogen fuel cells are dependent on a non-existent distribution system and far from commercial. In my book, I show why trucks can’t run on electricity, as well as why a 100% renewable grid is impossible. 

The authors briefly point out that one way to counter wind and solar intermittency is an energy source that can be dispatched when needed.  But they neglected to mention that natural gas plays most of this role now.  But natural gas is finite, and has equally important uses of making fertilizer, feedstock and energy source to make hundreds of millions of chemicals, heating homes and buildings, and so on.  All of these roles will have to be taken on by biomass after fossils are gone, yet another reason why biomass doesn’t scale up.

J & D propose a month of hydrogen storage to power transportation.  But hydrogen boils off within a week since it is the smallest element and can escape through atomic scale imperfections. It is not an energy source, it’s an energy sink from start to finish.  First it takes a tremendous amount of energy to split hydrogen from oxygen.  That’s why 96% of hydrogen comes from finite natural gas.  And a tremendous amount more energy to compress or liquefy it to -423 F and keep it chilled.  It is so destructive of metal that expensive alloys are needed for the steel pipelines and storage containers, making a distribution system too expensive.  A $1.3 million dollar hydrogen fuel cell truck would require a very heavy and inefficient fuel cell with an overall efficiency of just 24.7%: 84% NG upstream and liquefaction * 67% H2 on-board reforming * 54% fuel cell efficiency * 84% electric motor and drivetrain efficiency * 97% aero & rolling resistance efficiency, and even less than that without an expensive 25 kWh li-ion battery to capture regenerative braking (DOE 2011, Friedemann 2016). And far less than 24.7% efficient if the hydrogen were made from water with electrolysis.

J & D propose thermal energy storage in the ground.  The only renewable that has storage are concentrated solar plants, but CSP plants provide just 0.06% of U.S. energy because each plant costs about a billion dollars each, and scaled up, would need to use stone, which is much cheaper than molten salt. A 100 MW facility would need 5.1 million tons of rock taking up 2 million cubic meters (Welle 2010). Since stone is a poor heat conductor, the thick insulating walls required might make this unaffordable (IEA 2011b). J & D never mention insulating walls, let alone the energy and cost of building them.  The PNAS paper also says that phase-change material energy storage is far from commercial and still has serious problems to solve such as poor thermal conductivity, corrosion, material degradation, thermal stress durability, and cost-effective mass production methods.

The authors suggest bioenergy, but this is not feasible. Trucks can’t burn ethanol, diesohol, or even gasoline.  Biofuels (and industrial agriculture) destroy topsoil, which in the past was a major or main reason why all past civilizations failed.  It also depletes aquifers that won’t be recharged until after the next ice age.   And biomass simply doesn’t scale up.  Burning it is far more energy efficient than the dozens of steps needed to make biofuels, each step taking energy. Yet even if we burned every plant plus and their roots in America, the energy produced would be less than the fossil fuel energy consumed that year, and we’d all have to pretend we liked living on Mars for many years after our little experiment. Friedemann (2015a) has many other examples of the scaling up issues, ecological, energy, and other issues with biofuels.

Nuclear is not an option due to peak uranium, and the findings of the National Academy of Sciences about lessons learned from Fukushima. It’s also too expensive, with 37 plants likely to shut down (Cooper 2013).  And leaving thousands of sites with nuclear waste lasting hundreds of thousands of years for our descendants to deal with after fossil fuels are gone in an industrially poisoned world is simply the most evil of all the horrible things we’re doing to the planet (Alley 2013).

The book “Our renewable future” (Heinberg & Fridley 2016) was written to show those who believe in Jacobson and Delucchi’s fairy tales how difficult, if not impossible it would be to make this happen. Though I fear many of their major points were probably ignored or forgotten, with readers deciding that 100% renewables were possible, even if difficult, since the book was too gentle and abstract. For example, they mention that there are no ways to make cement and steel with electricity, because these industries depend on huge blast furnaces that run for 4 to 10 years non-stop because any interruption would cause the brick lining to cool down and damage it.  It is not likely a 100% wind and solar electricity system to be up 24 x 7 x 365.  That’s a real  showstopper.  But the average person believes in infinite human ingenuity that can overcome the laws of physics and doesn’t worry…

J & D include wave and tidal devices, but these are far from being commercial and unlikely to ever be due to salt corrosion, storm waves, and dozens of other problems (NRC 2013).

I’m not as concerned about the incorrect J & D calculations for GHG emissions, because we are at or near peak oil and coal, and natural gas.  Many scientists have published peer-reviewed papers that based on realistic reserves of fossil fuels, rather than the unlimited amounts of fossils the IPCC assumes, there is a consensus that the worst case scenario likely to be reached is RPC 4.5 (Brecha 2008, Capellan-Perez 2016, Chiari 2011, Dale 2012, Doose 2004, Hook 2010, Hook 2013, and 10+ more).  Also, coal is finite, and carbon capture and storage technology so far from being commercial, and uses up 30 to 40% of the energy contained in the coal, that it’s unlikely to be used when blackouts start to happen more and more often (http://energyskeptic.com/category/energy/coal/carbonstorage/).

We’re running out of time.  Conventional oil peaked in 2005. That’s where 90% of our oil comes from at a Niagra Falls rate.  Tar sands and other non-conventional oil simply can’t be produced at such a high rate.  So it doesn’t matter how much there is, Niagra Falls will slow to a trickle, far less than what we use today.  And since energy is the basis of growth, not money, it is questionable if our credit/debit system can survive, since once peak oil is acknowledged, creditors will know they can’t be repaid.

Also, oil is the master resource that makes all other resources available. We don’t have enough time to  replace billions of diesel engines with something else.  There is nothing else. And 12 years after peak the public is still buying gas guzzlers.

By James Hansen: March 2017 Address to Young People

James Hansen is a great man.

In this wide-ranging talk he addresses young people saying they need to lead a peaceful revolution to create a new political party that will support science and reason, a carbon tax, and renewed investment in nuclear energy.

He argues that we are at a historic low point of leadership. All parties, left and right, are clueless and ineffective. Hansen has hope for political change because he has seen young people influence elections, and because he has seen in his younger years good leaders that did the right thing, even in the absence of popular support.

Hansen sadly concludes by saying to young people, “sorry to leave you such a friggin’ mess”, but unfortunately it’s up to you to fix it.

Hansen struggles a little in the talk, perhaps because he is tired, or perhaps because despite having worked hard to warn citizens about the dangers of climate change since 1981, every indicator and action by society continues to move in the wrong direction.

As an aside, I think Hansen makes a serious error by stating that a carbon tax will be effective without damaging the economy. A carbon tax will indeed reduce CO2 emissions, but it will also reduce our standard of living, as will any effective climate change policy. He should state this clearly to avoid a dangerous backlash when the truth emerges.

With regard to nuclear energy, it really is the only option that might maintain our modern technology, and I say might because it does not replace our vital diesel. I personally think the risks are unacceptably high that nuclear can be kept safe with proper maintenance and governance as civilization becomes simpler, poorer, and chaotic due to overshoot, the depletion of affordable oil, and the end of growth. But reasonable people could disagree on this, especially people who think modern technology should be retained as a top priority.

I wrote more about Hansen here, and you can find more on the implications of a carbon tax here.