By JT Roberts: On Resources and How the World Really Works

I don’t know who JT Roberts is but he is very bright and is an excellent writer. I stumbled on some comments she made in a recent post by Tim Morgan and I thought they were so good I’ve copied them here.

https://surplusenergyeconomics.wordpress.com/2017/10/27/111-a-spike-to-puncture-the-bubble/

In the 70s just as US domestic oil production peaked Nixon made some unusual but very interesting moves.

  • Opened China for trade
  • Established the EPA
  • Created a Petro-Dollar deal with Saudi’s
  • Took the Dollar off Gold

I have a very difficult time believing that he, or his cabinet, or congress had any clue of the significance of those particular moves. I think that in particular they would not have understood the Limits to Growth reality, since they decided not to give ear to the findings by Meadows and Forester. US wealth had been built on abundant easily accessible energy and mineral resources. The US was the manufacturer to the world up until 1970 not because of innovation but because the world couldn’t compete on price. ( The Battle of Somme was the effective killing machine it was because of the cheap steel rails that had been supplied by the US, these latter became the light gauge system in the UK ) No other country had the combination of resources at the volumes that the US had. As these became depleted it hampered growth because of affordability. Had it only been a matter of raising the price to meet increased cost of production why didn’t that happen? Affordability is the real driver of growth not supply and demand.

By opening China it gave the US access to offshore its energy intensive industries like steel production, and mining. As well as labor intensive industries like clothing. ( A population living on rice is far less costly in energy terms then one living on hamburgers) Establishing the EPA created additional pressure to move manufacturing elsewhere. The suspension of Dollar-Gold convertibility was a necessity as there wasn’t enough gold to cover the dollars in circulation. It also hampered the ability to create currency. The risk was that dollar demand would collapse but that was countered with the Petro-Dollar arraignment effectively giving the currency a place to go rather than returning to the US to be inflated away. That move calmed the markets, because they felt that at least their dollars could now be converted to oil, which is of higher value than Gold.

Saddam Hussein, and Qaddafi threatened the stability of that system. Saddam had boycotted sales of crude to the US in 2002 and started selling his oil in Euros. For 30 days he stopped all exports in a show of force that he had control of their national petroleum system. What he didn’t understand was he was threatening to limit access to what the US needs most, energy and resources. The war was the answer to that threat. Now Iraqi oil is safely in the control of the international oil majors. Qaddafi had made a similar error since his interest wasn’t to allow the state owned system to be controlled by the oil majors. He also threatened the the Petro-Dollar by creating a competing gold currency that was being used in Africa. The French were particularly at risk as it was replacing the Franc still in use in there former colonies.

If we look closely at NAFTA we see that much of it revolves around access to resources. In exchange for easier economic trade with the US, both Canada and Mexico have agreed to unlimited access to their oil and other resources. When the USSR fell we saw the same pattern. Anglo-US corporations rushed in to gain access to whatever resources they could. Putin the patriot didn’t play ball like Yeltsin. So now he is vilified. Canada and Mexico have peaked in oil production, and now NAFTA is at risk. The UK joined the EU just as it had oil to sell and promptly left when it didn’t.

What we see is a common pattern that is larger then any political system.

Capitalism is a dissipative system out of equilibrium, as all dissipative system are. Like hurricanes Capitalism requires energy input to exist, anything that threatens that will collapse the system. It must grow or die. Within the structure, like hurricanes, there can be self organized subsystems. Tornado’s, Micro-bursts, and other elements that feed off the core. With Capitalism these are corporations and governments. In order for the core to survive the entire system must grow in aggregate. As the net energy driving the system declines the structure weakens, like a hurricane on land or cold water.

Not only is it impossible to return to a local agricultural existence. It is also impossible to decouple the elements of the system. We see that with Trump. His platform was isolation, and now its war. He has no choice he’ll make similar moves as Nixon did, but it can’t work because there is no more sweet spots to exploit.

Just as the shale play is a high cost desperate act of a dying industry. (Shale was well know in the 70s but as uneconomical as it remains today) The US will attempt to turn back time with it’s military machine as it has in the past. The problem is they can’t return affordability so the system will simply grind to a halt.

I guess Adam Smith was right about an Invisible Hand.

 

Without energy to drive real growth all you have left is moving money around. I think most mistake the symptom for the cause. The lax regulations are needed to increase debt which increases money supply. So strangely the corruption is part of the system.

For example it has been documented that the primary money laundering economies are US and U.K. So for all their show as the bastions of freedom and democracy the reality is they benefit from corrupt dictators that stuff their ill gotten gains in the western banking and real estate system.

With Trump it’s just irrelevant he’s neither good or bad. He is no different then any other elected president. He is limited to the resources at his disposal and won’t accomplish anything beyond that. Basically a symptom not a cause.

The Appolo success if we so call it really needs to be considered in context. If you compare the energy production of the US with the USSR it becomes clear that technology wasn’t the key to the space race. In actuality the Soviet rocket engines were 20% more efficient and more powerful. They dared to pipe oxygen rich exhaust from the turbos into the primary engine. But it was done because of necessity they couldn’t afford to waste the fuel. It also constrained their ability to test run the engines. Instead they choose to test them at launch.

The arrow all points in the same direction. Without the resources that the US had access to the USSR could not compete. But it had nothing to do with technology because they were winners with technology.

AK 47 is another example.

I sum it up this way. If you have wood you cook with wood. If you have coal you cook with coal. If you have oil you cook with oil. If you have gas you cook with gas. If you have a lot of it you have trains, planes, and automobiles. I might add rockets. With a little of it you cook.

Technology is a function of abundance not the cause of it.

It’s interesting to note the Roman Empire grew in wealth through military conquest. Then it started developing schools of higher learning in imitation of the Greeks.

Education has never preceded empire. So the thought that education or technology are the source of wealth is false. It has always been resources. It will always be. So in that regard it is no coincidence that the US military is larger then the next 10 militaries combined. So the military industrial complex was also a necessity.

Ironically the competitive economic system, communism thought that they could only find success within a highly educated society. Lenin targeted Germany for that reason. But educated people make poor soldiers. Ignorant religious zealots make far better soldiers. Which system promoted religious freedom and zealotry? For God and Country. God save the Queen. In God we trust. One nation under God.

So in many places Americans are hated because of their ignorance. But perhaps their ignorance has been their strength all along. In this regard we might want to watch closely the current US administration.

War is Peace
Freedom is Slavery
Ignorance is Strength

By Richard Heinberg: Energy and Authoritarianism

Arab Spring, Greece, Brexit, Trump, Venezuela, and many more to follow.

Pay attention to what our leaders and experts say. Not one has a clue what is going on.

Hidden from view = No Clue = Denial

 

It is highly likely that, as events unfold, the causal criticality of energy decline will be hidden from the view of most observers, whose attention will be fixed instead on shocking but comparatively superficial and secondary political and social events. A more widespread understanding of the role of energy in society, and of the likely limits to future energy supplies, could be extremely beneficial in helping the general populace adapt to scarcity and avoid needless scapegoating and violence. Perhaps this essay can help in some small way to deepen that understanding.

 

One important wild card is the role of debt: it enables us to consume now while promising to pay later. Debt can therefore push consumption forward in time and (for a while, at least) make up for declining energy productivity. It would appear that the “fracking” boom of the past decade, which probably delayed the world oil production peak by about a decade, depended on the power of debt. But when debt defaults cascade, an economy may decline much faster than would otherwise be the case (default-led financial crashes have occurred repeatedly in modern history). And debt defaults can cripple the financial and thus the economic system of a nation with plenty of energy resources (as happened in the U.S. in the 1930s).

 

http://www.resilience.org/stories/2017-09-26/energy-and-authoritarianism/

By Vaclav Smil: Energy Revolution? More like a Crawl

Vaclav Smil is an intelligent, wise, and knowledgeable expert on a wide range of scientific and social topics related to energy. He is Distinguished Professor Emeritus at the University of Manitoba in Winnipeg, Canada, and is a respected author of many books.

In this September 2015 talk at McGill University he touches on many important topics including:

  • We are a fossil fuel civilization and will remain so for a long time.
  • Over the last 25 years we have reduced our dependence on fossil energy by only 3%.
  • Power density is critical when comparing energy alternatives.
  • Renewable energy is not renewable and does not have the density to replace fossil energy.
  • Green products are not green.
  • Nuclear energy is dead. What’s left is being developed in the wrong places.
  • CO2 capture is not a solution for climate change.
  • Developed countries do not use energy rationally. Canada (and the U.S.) are the worst offenders in the world.
  • Food and energy have never been cheaper and we should expect to pay a lot more in the future.
  • The solution to reducing waste and energy consumption is higher prices.
  • Innovation is an overvalued and exaggerated topic. All of the critical technologies civilization depends on were invented over 100 years ago.
  • There are more important issues to worry about than peak oil including water scarcity, money printing, low interest rates, and high youth unemployment.
  • Most big events in history were unexpected. We can expect surprises in the future.
  • Reasons for hope include the peaceful breakup of the Soviet Union, and the fact that we can have comfortable lives at a much lower level of consumption.

I agree with almost all of Smil’s points except:

  • Smil believes we are unable to accurately predict the effect of rising CO2 and therefore he is not worried about climate change. I’ve done enough reading of climate science to be confident we should be very worried.  While we are not able to precisely predict the outcome, the probable outcome of our current path ranges from dangerous to catastrophic.
  • Smil believes that with fracking and other technology improvements we will have plentiful oil for at least a hundred years. I think we will have energy shortages within 10 years. Our different views are probably rooted in different assumptions about the link between energy and the economy. Smil thinks any oil shortages will increase the price of oil thus enabling new and more expensive sources. I think rising oil prices will reduce worker productivity and incomes which will make more expensive oil unaffordable and therefore supply will reduce in an escalating feedback loop as inexpensive oil is depleted. I also think that oil depletion and consequent rising production costs are the main cause of rising debt, money printing, and low interest rates that Smil worries about.

This lecture is a must watch for people seeking to understand the issues that really matter to our experiment with civilization.

video review: Crude: The Incredible Journey of Oil by Richard Smith

crude-the-incredible-journey-of-oil

I’ve watched a lot of good documentaries but this one produced in 2007 by Richard Smith for the Australian Broadcasting Corporation is among the very best.

http://www.abc.net.au/science/crude/resources/

http://www.imdb.com/title/tt1551617/

Usually, the more important a non-fiction work is, the more scientific disciplines the author integrates into a coherent story. In this case, Richard Smith does a remarkable job of weaving geology, chemistry, biology, thermodynamics, climate, history, and economics into a fascinating story that follows a carbon atom as it moves about the planet over the last 200 million years.

I often marvel at, and wonder how we were blessed with such a large quantity of crude oil which we have used to build an amazing civilization. This documentary does a very nice job of explaining how crude oil was formed 160 million years ago on a hot greenhouse planet with near dead and toxic oceans. The photosynthetic bacteria that converted CO2 and sunlight into the carbohydrates that later became crude oil acted to remove CO2 from the atmosphere thus cooling the planet and returning it to a healthy environment for complex oxygen breathing life like ourselves.

Humans are now reversing this process by burning fossil carbon and returning the CO2 to the atmosphere which may return the planet to an environment incompatible with civilization. Unless, ironically, we run out of oil first, which will also cause our civilization to collapse.

What’s different this time is that humans are doing in a hundred years what took geology thousands or millions of years in the past. This speed makes the outcome more difficult to predict but common sense suggests it’s unlikely to be good.

Given that 10 years have elapsed since the documentary was produced it’s a credit to Richard Smith that it’s still relevant and accurate, although it’s a concern to see how far we have unraveled in 10 years with melting poles, record temperatures, stalled economic growth, zero interest rates, money printing, failing oil companies, and global social unrest.

It’s also a concern, but expected in light of Varki’s theory on denial, that we collectively have not yet acknowledged our predicament, let alone taken any steps to make the future less bad.

Highly recommended!

If you’d like a higher quality version than what’s available on YouTube it has been recently ripped in HD and available as a torrent here.

 

 

By Kurt Andersen: How America Lost Its Mind (On the History of Denial)

This is an interesting (and lengthy) article on the recent history of denial of reality.

In summary, we’ve always denied reality, but lately it’s getting much worse.

I observe that the author does not understand the genetic basis of denial and therefore is like a fish explaining the history of swimming without being aware of water.

And, of course, after pages of facts showing the trend and likely outcomes are very bad, the author supports Varki’s theory by ending on an optimistic note that everything will work out ok in the end.

https://www.theatlantic.com/magazine/archive/2017/09/how-america-lost-its-mind/534231/

lead_960

 

Each of us is on a spectrum somewhere between the poles of rational and irrational. We all have hunches we can’t prove and superstitions that make no sense. Some of my best friends are very religious, and others believe in dubious conspiracy theories. What’s problematic is going overboard—letting the subjective entirely override the objective; thinking and acting as if opinions and feelings are just as true as facts. The American experiment, the original embodiment of the great Enlightenment idea of intellectual freedom, whereby every individual is welcome to believe anything she wishes, has metastasized out of control. From the start, our ultra-individualism was attached to epic dreams, sometimes epic fantasies—every American one of God’s chosen people building a custom-made utopia, all of us free to reinvent ourselves by imagination and will. In America nowadays, those more exciting parts of the Enlightenment idea have swamped the sober, rational, empirical parts. Little by little for centuries, then more and more and faster and faster during the past half century, we Americans have given ourselves over to all kinds of magical thinking, anything-goes relativism, and belief in fanciful explanation—small and large fantasies that console or thrill or terrify us. And most of us haven’t realized how far-reaching our strange new normal has become.

 

Much more than the other billion or so people in the developed world, we Americans believe—really believe—in the supernatural and the miraculous, in Satan on Earth, in reports of recent trips to and from heaven, and in a story of life’s instantaneous creation several thousand years ago.

We believe that the government and its co-conspirators are hiding all sorts of monstrous and shocking truths from us, concerning assassinations, extraterrestrials, the genesis of aids, the 9/11 attacks, the dangers of vaccines, and so much more.

And this was all true before we became familiar with the terms post-factual and post-truth, before we elected a president with an astoundingly open mind about conspiracy theories, what’s true and what’s false, the nature of reality.

We have passed through the looking glass and down the rabbit hole. America has mutated into Fantasyland.

 

How widespread is this promiscuous devotion to the untrue? How many Americans now inhabit alternate realities? Any given survey of beliefs is only a sketch of what people in general really think. But reams of survey research from the past 20 years reveal a rough, useful census of American credulity and delusion. By my reckoning, the solidly reality-based are a minority, maybe a third of us but almost certainly fewer than half. Only a third of us, for instance, don’t believe that the tale of creation in Genesis is the word of God. Only a third strongly disbelieve in telepathy and ghosts. Two-thirds of Americans believe that “angels and demons are active in the world.” More than half say they’re absolutely certain heaven exists, and just as many are sure of the existence of a personal God—not a vague force or universal spirit or higher power, but some guy. A third of us believe not only that global warming is no big deal but that it’s a hoax perpetrated by scientists, the government, and journalists. A third believe that our earliest ancestors were humans just like us; that the government has, in league with the pharmaceutical industry, hidden evidence of natural cancer cures; that extraterrestrials have visited or are visiting Earth. Almost a quarter believe that vaccines cause autism, and that Donald Trump won the popular vote in 2016. A quarter believe that our previous president maybe or definitely was (or is?) the anti-Christ. According to a survey by Public Policy Polling, 15 percent believe that the “media or the government adds secret mind-controlling technology to television broadcast signals,” and another 15 percent think that’s possible. A quarter of Americans believe in witches. Remarkably, the same fraction, or maybe less, believes that the Bible consists mainly of legends and fables—the same proportion that believes U.S. officials were complicit in the 9/11 attacks.

 

People see our shocking Trump moment—this post-truth, “alternative facts” moment—as some inexplicable and crazy new American phenomenon. But what’s happening is just the ultimate extrapolation and expression of mind-sets that have made America exceptional for its entire history.

 

The Christian takeover happened gradually, but then quickly in the end, like a phase change from liquid to gas. In 2008, three-quarters of the major GOP presidential candidates said they believed in evolution, but in 2012 it was down to a third, and then in 2016, just one did. That one, Jeb Bush, was careful to say that evolutionary biology was only his truth, that “it does not need to be in the curriculum” of public schools, and that if it is, it could be accompanied by creationist teaching. A two-to-one majority of Republicans say they “support establishing Christianity as the national religion,” according to Public Policy Polling.

 

Trump doesn’t like experts, because they interfere with his right as an American to believe or pretend that fictions are facts.

 

Not all lies are fantasies and not all fantasies are lies; people who believe untrue things can pass lie-detector tests. For instance, Trump probably really believed that “the murder rate in our country is the highest it’s been in 47 years,” the total falsehood he told leaders of the National Sheriffs’ Association at the White House in early February. The fact-checking website PolitiFact looked at more than 400 of his statements as a candidate and as president and found that almost 50 percent were false and another 20 percent were mostly false.

By Nate Hagens: Blindspots and Superheroes

Here is this year’s Earth Day talk by Nate Hagens.

I used to preface Nate’s talks by saying he provides the best big picture view of our predicament available anywhere.

While still true, I think Nate may now be the only person discussing these issues in public forums.

Everyone else seems to have retired to their bunkers and gone quiet.

If you only have an hour this year to devote to understanding the human predicament and what needs to be done, this may be the best way to spend it.

You know you are in trouble when…

Bizarro.com Our Extended Forecast

 

Examples of denial are both profound and unacknowledged.

The short-term solution to our problems is the long-term cause of our problems: economic growth

The long-term solution to our problems is the short-term cause of our problems: reduced consumption

All political parties in all countries and almost all citizens, including the few citizens that understand our predicament, reject our best course of action: austerity

Most citizens have no idea how fortunate they are to be alive at this point in history: Blindspots and Superheroes

Despite wildly different beliefs about our predicament, there is one thing that almost everyone agrees on: I don’t want to change my behavior

The only problems society does not acknowledge, or discuss, or act on, are the only problems that matter: species extinction, limits to growth, debt, peak oil, overshoot, resource depletion, climate change, sea level rise, fisheries collapse & ocean acidification, nitrogen imbalance & tree decline 

Every country has similar economic problems and not one leader anywhere in the world connects the dots and publicly acknowledges the root cause, even after they leave office: declining energy surplus a.k.a. energy extraction cost + debt

Citizens believe the exact opposite of reality: technology creates wealth and energy rather than energy creates wealth and technology

Citizens misunderstand the root cause of social unrest and wars because the media presents these conflicts as political or economic problems and ignores their underlying forces: biophysical constraints

There is evidence that feedback loops are taking over and causing some problems to go exponential: climate change, CO2 emissions, ice loss, sea level rise, debt

The previous year’s worst case predictions are tending to become this year’s most likely prediction: sea level rise

Actions that improve the long-term worsen the short-term: air pollution masks 0.5C of warming, austerity and debt reduction, renewable energy, population reduction 

The only possible permanent solution is rejected by the belief systems of 90+% of citizens: population reduction

The only possible permanent solution is too slow to avoid the worst problems: population reduction laws

Countries fortunate to have a low birth rate often cancel their good fortune with immigration: Canada

The few people who understand the severity of our problems do not set good examples in their personal lives: leaders, climate scientists, environmentalists

History suggests that the consequence of not voluntarily contracting our economies as non-renewable resources deplete is an unthinkable war, so we don’t think about it: nuclear weapons

The quality of our leaders is declining because those people with high intelligence, wisdom, and integrity do not want to be in charge of our predicament, and because citizens are feeling the impact of overshoot, do not understand what is going on, and are angry: Trump

The leader of the free world denies science and issues daily, jaw-dropping, cringe-inducing tweets: Trump

The one world leader that did understand the problem and spoke out was rejected by the citizens and no longer speaks out: Jimmy Carter

We do not acknowledge that the world’s economic problems began with the peaking of a key non-renewable resource: conventional oil

Low energy prices have led citizens to believe we have a glut of fossil energy when in fact: all types of energy have peaked

We do not discuss or act on economic history research that shows countries always get into serious trouble when they permit an important ratio to exceed a threshold we long passed: debt to GDP

Bankers, the creators of money, do not understand the one thing that creators of money should understand: thermodynamics of wealth

The professionals with the most influence on public policy use models that violate the most trusted laws of physics: economists

The scientific theory that explains the relationship between the economy, energy, and climate is ignored by everyone that should understand it: Tim Garrett

The people who deserve the most respect and admiration get the least: scientists

The people who deserve the least respect and admiration get the most: celebrities

All types of non-fossil energy do not provide a substitute for the only energy we can’t live without: diesel for trucks, trains, ships, tractors, and combines, and mining machines; plus natural gas for fertilizer

People who think the shale revolution will make America prosperous and energy independent ignore one thing: facts and more facts

Intelligent people who understand the climate change threats, like James Hansen and Bill Gates, and who want business as usual to continue, know that nuclear energy is the only option, but they ignore a problem: peak uranium

If climate deniers continue to win elections and try to maintain the existing electric grid they’ll find that strategy may not work for long: peak coal

A key component of our infrastructure appears durable but is not: reinforced concrete

Citizens most vulnerable to a fragile global supply chain with only a few days of inventory experience the strongest illusion of abundance and security: inhabitants of large cities

The “green” revolution, which increased food production to enable 7+ billion humans, was and is entirely dependent on fossil energy, and has long-term consequences that will make a return to traditional agriculture very difficult.

Most citizens are not even vaguely aware of the invention that enabled their existence and created about 50% of the nitrogen in their bodies: Haber-Bosch conversion of natural gas to fertilizer

Well meaning environmentalists demand that we stop subsidizing fossil energy companies without understanding the source of all that they cherish in modern civilization: fossil energy

Well meaning environmentalists demand that we stop subsidizing fossil energy companies without realizing that many fossil energy companies are going bankrupt: ExxonMobil

A solution frequently advocated makes things worse by accelerating growth and decreasing system resilience: efficiency

The best solution for removing CO2 from the atmosphere is being harmed by the same activity that creates CO2: planting more trees which are then injured or killed by ground level ozone

All climate science models that do not predict disaster now depend on an unproven technology that we probably can’t afford and other species definitely can’t afford: BECCS (bio-energy with carbon capture and storage)

We have not acted to prevent a predictable and very dangerous side effect of trying to maintain business-as-usual with low interest rates: increasing wealth gap

We still enjoy historically vast surplus wealth that could be deployed to improve our future lives but we are squandering it: military, airports, highways, new cars, high rises, etc.

Earth with its diverse complex life and a highly intelligent species is extraordinarily rare, precious, and worth fighting to protect, yet we dream of other barren homes: colonizing Mars

The tool that could be used to unite citizens in common purpose and useful action is instead being used to create tribes that reinforce preexisting beliefs: internet

Many people are hurting and lashing out in anger because they do not understand the cause of their pain: Brexit, Trump, Syria, Venezuela, etc.

The few sources of information that understand and communicate the truth are under threat: fake news

Few people study or heed the best predictor of the future: history

The majority of citizens share a common characteristic that makes the election of an intelligent and wise leader empowered to do the right thing unlikely: wacky beliefs

None of our schools teach skills useful and relevant to our future: growing food and other forms of lower complexity life skills

The thing that enabled the evolution of our high intelligence and its ability to understand and act on problems is the same thing that causes our problems and prevents us from acting on them: denial of reality

The theory that best explains our existence and our self-destructive behavior is ignored by everyone, including those people seeking to understand our problems: Varki and Brower’s mind over reality transition theory

Readers are encouraged to submit additions to the list.