#157. Trending down


Unless you’ve been stranded on a desert island, cut off from all sources of information, you’ll know that the global economy is deteriorating markedly, whilst risk continues to increase. Even the most perennially optimistic observers now concede that the ultra-loose policies which I call ‘monetary adventurism’, introduced in response to the 2008 global financial crisis (GFC), haven’t worked. Popular unrest is increasing around the world, even in places hitherto generally regarded as stable, with worsening hardship a central cause.

As regular readers know, we’ve seen this coming, and have never been fobbed off by official numbers, or believed that financial gimmickry could ‘fix’ adverse fundamental trends in the economy. Ultimately, the economy isn’t, as the established interpretation would have us believe, a financial system at all. Rather, it’s an energy system, driven by the relationship between (a) the amount of energy to which we have access, and (b) the proportion of that energy, known here as ECoE (the Energy Cost of Energy), that is consumed in the access process.

Properly understood, money acts simply as a ‘claim’ on the output of the energy economy, and driving up the aggregate of monetary claims only increases the scope for their elimination in a process of value destruction.

We’ve been here before, most recently in 2008, and still haven’t learned the brutal consequences of creating financial claims far in excess of what a deteriorating economy can deliver.

The next wave of value destruction – likely to include collapses in the prices of stocks, bonds and property, and a cascade of defaults – cannot much longer be delayed.

What, though, is happening to the real, energy-driven economy? My energy-based economic model, the Surplus Energy Economics Data System (SEEDS), is showing a worsening deterioration, and now points to a huge and widening gap between where the economy really is and the narrative being told about it from the increasingly unreal perspective of conventional measurement.

The latest iteration, SEEDS 20, highlights the spread of falling prosperity, with the average person now getting poorer in 25 of the 30 countries covered by the system, and most of the others within a very few years of joining them..

To understand why this is happening, there are two fundamental points that need to be grasped.

First, the spending of borrowed money doesn’t boost underlying economic output, but simply massages reported GDP into apparent conformity with the narrative of “perpetual growth”.

Second, conventional economics ignores the all-important ECoE dimension of the energy dynamic that really drives the economy.

Overstated output – GDP and borrowing

Ireland is an interesting (if extreme) example of the way in which the spending of borrowed money, combined in this case with changes of methodology dubbed “leprechaun economics”, has driven recorded GDP to levels far above a realistic appraisal of economic output.

According to official statistics, the Irish economy has grown by an implausible 62% since 2008, adding €124bn to GDP, and, incidentally, giving the average Irish citizen a per capita GDP of €66,300, far higher than that of France (€36,360), Germany (€40,340) or the Netherlands (€45,050).

What these stats don’t tell you is that, over a period in which Irish GDP has increased by €124bn, debt has risen by €316bn. It’s an interesting reflection that, stated at constant 2018 values, Irish debt is 85% higher now (at €963bn) than it was on the eve of the GFC in 2007 (€521bn).

When confronted with this sort of mix of GDP and debt data, two questions need to be asked.

First, where would growth be if net increases in indebtedness were to cease?

Second, where would GDP have been now if the country hadn’t joined in the worldwide debt binge in the first place?

Where Ireland is concerned, the answers are that trend growth would fall to just 0.4%, and that underlying, ‘clean’ GDP (C-GDP) would be €212bn, far below the €324bn recorded last year.

In passing, it’s worth noting that this 53% overstatement of economic output has dramatic implications for risk, driving Ireland’s debt/GDP ratio up from 297% to 454%, and increasing an already-ludicrous ratio of financial assets to output up from 1900% to a mind-boggling 2890%.

These ratios are rendered even more dangerous by a sharp rise in ECoE, but we can conclude, for now, that the narrative of Irish economic rehabilitation from the traumas of 2008 is eyewash. Indeed, the risk module incorporated into SEEDS in the latest iteration rates the country as one of the riskiest on the planet.

Though few countries run Ireland close when it comes to the overstatement of economic output, China goes one further, with GDP (of RMB 88.4tn) overstating C-GDP (RMB 51.1tn) by a remarkable 73%. Comparing 2018 with 2008, Chinese growth (of RMB 47.2tn, or 115%) has happened on the back of a massive (RMB 170tn, or 290%) escalation in debt. SEEDS calculations put Chinese trend growth at 3.1% – and still falling – versus a recorded 6.6% last year, and put C-GDP at RMB 51tn, 42% below the official RMB 88.4tn. Essentially, 62% (RMB 29tn) of all Chinese “growth” (RMB 47tn) since 2008 has been the product of pouring huge sums of new liquidity into the system.

In each of the last ten years, remarkably, Chinese net borrowing has averaged almost 26% of GDP, a calculation which surely puts the country’s much-vaunted +6% rates of “growth” into a sobering context. After all, GDP can be pretty much whatever you want it to be, for as long as you can keep fuelling additional ‘activity’ with soaring credit. Even second-placed Ireland has added debt at an annual average rate of ‘only’ 13.5% of GDP over the same period, with Canada third on this risk measure at 11.5%, and just three other countries (France, Chile and South Korea) exceeding 9%. China and Ireland are the countries where cosmetic “growth” is at its most extreme.

Fig. 1 sets out a list of the ten countries in which GDP is most overstated in relation to underlying C-GDP. The table also lists, for reference, these countries’ annual average borrowing as percentages of GDP over the past decade, though it’s the relationship between this number and recorded growth which links to the cumulative disparity between GDP and C-GDP.

Fig. 1


Of course, C-GDP is a concept unknown to ‘conventional’ economics, to governments or to businesses, which is one reason why so much “shock” will doubtless be expressed when the tide of credit-created “growth” goes dramatically into reverse.

Those of us familiar with C-GDP are likely to be unimpressed when we hear about an “unexpected” deterioration in, and a potential reversal of, “growth” of which most was never really there in the first place.

The energy dimension – ECoE and prosperity

Whilst seeing through the use of credit to inflate apparent economic output is one part of understanding how economies really function, the other is a recognition of the role of ECoE. The Energy Cost of Energy acts as a levy on economic output, earmarking part of it for the sustenance of the supply of energy upon which all future economic activity depends.

As we have discussed elsewhere, depletion has taken over from geographic reach and  economies of scale as the main driver of the ECoEs of oil, gas and coal. Because fossil fuels continue to account for four-fifths of the total supply of energy to the economy, the relentless rise in their ECoEs dominates the overall balance of the energy equation.

Renewable sources of energy, such as wind and solar power, are at an earlier, downwards point on the ECoE parabola, and their ECoEs are continuing to fall in response to the beneficial effects of reach and scale. The big difference between fossil fuels and renewables, though, is that the latter are most unlikely ever to attain ECoEs anywhere near those of fossil fuels in their prime.

Whereas the aggregated ECoEs of oil, gas and coal were less than 2% before the relentless effects of depletion kicked in, it’s most unlikely that the ECoEs of renewables can ever fall below 10%. One of the reasons for this is that constructing and managing renewables capacity continues to depend on inputs from fossil fuels. This makes renewable energy a derivative of energy sourced from oil, gas and coal. To believe otherwise is to place trust in technology to an extent which exceeds the physical capabilities of the resource envelope.

This, it must be stressed, is not intended to belittle the importance of renewables, which are our only prospect, not just of minimizing the economic impact of rising fossil fuel ECoEs, but of preventing catastrophic damage to the environment.

Rather, the error – often borne of sheer wishful thinking – lies in believing that renewables can ever be a like-for-like replacement for the economic value that has been provided by fossil fuels since we learned to harness them in the 1760s. The vast quantities of high-intensity energy contained in fossil formations gave us a one-off, albeit dramatic, economic impetus. As that impetus fades away, it would be foolhardy in the extreme to assume that the economy can, or even must, continue to behave as though that impetus can exist independently of its source.

For context, SEEDS studies show that the highly complex economies of the West become incapable of further growth in prosperity once their ECoEs enter a range between 3.5% and 5.5%.

As fig. 2 shows, the first major Western economy to experience a reversal of prior growth in prosperity per capita was Japan, whose deterioration began in 1997. This was followed by downturns in France (from 2000), the United Kingdom (2003), the United States (2005) and, finally, Germany, with the deterioration in the latter deferred to 2018, largely reflecting the benefits that Germany has derived from her membership of the Euro Area.

Fig. 2

#157 SEEDS ECoE prosp advanced

Less complex emerging economies have greater ECoE tolerance, and are able to continue to deliver growth, albeit at diminishing rates, until ECoEs are between 8% and 10%. These latter levels are now being reached, which is why prosperity deterioration now looms for these economies as well.

As fig. 3 illustrates, two major emerging economies, Mexico and Brazil, have already experienced downturns, commencing in 2008 and 2013 respectively. Growth in prosperity per person is projected to go into reverse in China from 2021, with South Korean citizens continuing to become more prosperous until 2029. The latter projected date, however, may move forward if the Korean economy is impacted by worldwide deterioration to a greater extent than is currently anticipated by SEEDS.

Fig. 3

#157 SEEDS ECoE prosp emerging

Consequences – rocking and rolling

As we’ve seen, then – and for reasons simply not comprehended by ‘conventional’ interpretations of the economy – worldwide prosperity has turned down, a process that started with the more complex Western economies before spreading to more ECoE-tolerant emerging countries.

For reasons outlined above, no amount of financial tinkering can change this fundamental dynamic.

At least three major consequences can be expected to flow from this process. Though these lie outside the scope of this analysis, their broad outlines, at least, can be sketched here.

First, we should anticipate a major financial shock, far exceeding anything experienced in 2008 (or at any other time), as a direct result of the widening divergence between soaring financial ‘claims’ and the reality of an energy-driven economy tipping into decline. SEEDS 20 has a module which provides estimates of exposure to value destruction, though its indications cannot do more than suggest orders of magnitude. Current exposure is put at $320tn, far exceeding the figure of less than $70tn (at 2018 values) on the eve of the GFC at the end of 2007. This suggests that the values of equities, bonds and property are poised to fall very sharply indeed, something of a re-run of 2008, though with the critical caveat that, this time, no subsequent recovery is to be anticipated.

Second, we should anticipate a rolling process of contraction in the real economy of goods and services. This subject requires a dedicated analysis, but we are already witnessing two significant phenomena.

Demand for “stuff” – ranging across a gamut from cars and smartphones to chips and components – has started to fall, a trend likely to be followed by falling requirements for inputs.

Meanwhile, whole sectors of industry, including retailing and leisure, have experienced severe downturns in profitability. Utilization rates and interconnectedness are amongst the factors likely to drive a de-complexifying process that is a logical concomitant of deteriorating prosperity. This in turn suggests that a widening spectrum of sectors will be driven to and beyond the threshold of viability.

Finally, the political challenge of deteriorating prosperity is utterly different from anything of which we have prior experience, and it seems evident that this is already contributing to worsening unrest, and to a challenge to established leadership cadres. This process is likely to relegate non-economic agendas to the lower leagues of debate, and has particular implications for policy on redistribution, migration, taxation and the provision of public services.

My intention now is to use SEEDS to provide ongoing insights into some of the detail on issues discussed here. If we’re right about the economic direction of travel, what lies ahead lies quite outside the scope of past experience or current anticipation.   


117 thoughts on “#157. Trending down

  1. Reblogged this on Not The Grub Street Journal and commented:
    An interesting piece at first Blush Tim. It will be interesting to follow the comments.
    My initial response is that the analysis of the economy as an Energy Transformation machine and only an Energy Transformation machine is going too far the other way.
    What I mean by that is that the old Marxist notions of Labour and only Labour being the source of wealth in the economy leads to overreaching in that one direction by ignoring the other Inputs.
    In this case, Energy and its importance are stated but other inputs including Labour and raw materials other than energy inputs are also key. Your cursory dealing with renewables, for instance, fails to recognise the breeder renewable possibilities and also ignores circular economy notions of re-recycling and designing for both repair and maintenance and end of life reuse and recycling. In this sort of Circular economy accounting the embedded energy in material goods is accounted for and recycled, there is a stock inventory of converted energy in products in use which is not lost at the end of economic life, your analysis does not complete its promise by ignoring these aspects of Circular Economics.
    finally my old point that the Seeds basis should be on an energy equivalent basis, the existing currency accounting unit is broken beyond repair and unfit for purpose, as big an ask that is for people to get their heads around, without grasping that nettle Seeds’ is doomed to going into the cul-de-sac of financial mysticism wrapped up in the un-pin downable gobbly goop of the Economics priesthood.

    • First thought is that labour is a form of energy, as is the nutrition which makes it possible, whilst raw materials are accessible to us only courtesy of the energy we use to access them – at concentrations of 0.2%, how much copper would we get out of Bingham using picks, shovels and mules?

      The SEEDS system isn’t perfect – obviously – but compared to models which assume the economy is a financial system…….?

    • Tim, I only make my comment to make suggestions which Might improve what is a very good start in this area of Political Economy. Embodied Energy Accounting and Bills of materials in the production of all capital and consumer stocks of goods makes very good sense but the accounting Unit needs to be falsifiable, monetary debt-based units are not falsifiable they are ad hoc and variable, some better than others but all unfit for purpose.

    • I appreciate this, Roger. I realise that there are numerous nuances that we could and perhaps should discuss, were things less pressing and less dangerous than they happen to be.

      My point right now, though, is that there’s a primary choice to be made between (a) energy interpretation of the economy and (b) the ‘conventional’, financial approach which is leading us in completely wrong directions.

    • The role of labor (human and animal) in creating wealth has been largely and increasingly overshadowed, in the past few centuries, by fossil fuels and automation. This will change; as fossil fuels become increasingly scarce/expensive, labor will resume its place as the key to creating value.

      Important to remember, also, that production of the majority of the nutrition that powers labor now is itself a function of fossil fuels, so that as fossil energy declines, so will the production and distribution of food. The prospect is not cheerful.

    • It will be cheerful for most other species IMHO. In massive overshoot, the plague species must shrink. The sooner it begins, the greater the carrying capacity the habitat will provide afterwards.

    • Philip:

      Indeed so. But the ECoEs of human and animal labour are extraordinarily high. The illustration of this in my book (since we don’t have data) is that the labour of 19 people could support 20, freeing the 20th for non-subsistence activities. Reverting to that now, with the scale of population that we have today, seems impossible.

      The nutrition position is indeed daunting. Apart from reliance on mechanization powered by fossil fuels, and inputs (such as nitrogen) similarly sourced, far too much land has become ‘addicted’ to monoculture, and stripped of nutrients.

    • SEEDS is indeed a diagnostic tool. Since it has data on series such as ‘clean’ rates of growth, ECoE and so on it can make what I’d call ‘informed projections’ for the future. That’s the most that any model can do.

      On SEEDS, I need to make three observations.

      First, it’s not perfect, and that’s not just obvious, but true of any model.

      Second, though, it is pretty good at what it does.

      Third, I would contend that SEEDS is superior to any purely financial model of the economy – a hurdle that’s pretty low, given the abject and systemic failure of financial models to handle what’s happening.

      I think we’re getting near to the point where things start to fall apart. That’s why I plan to provide SEEDS-based analysis here, hopefully with data downloads so you can look at things in more detail.

    • houtskool
      on November 5, 2019 at 10:08 pm said:

      I am aware of the Georgia Guidestones and of the Un Agendas 2030 and 2021.
      I am also aware of the source of a continuing influence through NGO’s of the Club of Rome and its Limits to Growth report.

      Separating corporate and state mass media narratives from serious objective scientific and academic work in the humanities and Psychology fields is not a trivial task.

      I see seeds as a Tool. I also see Materials accounting for embodied energy as a tool and also I see Money Tokens as a tool. My approach is Analytic, Mathematical and Logically based with Pragmatic and syncretic ethics to inform Values-based choices.

      This blog is not a forum upon which introducing new concepts and supporting evidence for those concepts has been welcomed and I have been critical of the strong ingroup Bias which to an outsider such as me appears to border upon smug superiority. Not our gracious host but the usual suspects, I fully appreciate that my own intentions and appearance has been interpreted as being less than benign and selfless.

      I have made the points I wish to make regarding Tims Post above and will follow the comments with interest, very little usually emerges from the comments past the first few days anymore which is a shame.

    • Are labour and work synonyms ? For physicists say energy and work are synonyms : That’s why 30 years ago, French pupils learned in high school to use the letter W for energy, in formulas like W = ½.m.v^2
      W comes from the English word “work”

    • Thanks. As I understand it, “labour” is one component of the broader concept of “work” – a machine does work, but doesn’t labour – whilst energy is the capacity for work.

    • Thanks for reply Roger. Point is imho, nothing works anymore with 7 billion people in a degrowth situation. Nothing. From organic gardening to otc derivatives, from EV’s to kindergarten.

      When this is over, Seeds won’t be useful anymore. We will live (or die) in a completely different world where we can skip all past and present models.

      We will have to reinvent ourselves.

      That was the reason for my comment. Until then, Seeds gives us a good look at our horizon. Imho, a very good tool that lays bare the difference between the monetary and the physical plane.

  2. Building on a Comment in Last Post
    This is a good post. But I would like to refer back to a comment I made on the last post. The gist of it was that relative value (ignoring deflation or inflation) is likely to rise for any process or company which can produce an energy surplus and fall for everything else. If that is a true statement, then it may provide some guidance in figuring out how to deploy one’s capital prior to the expected fireworks.

    I would add that some things which seem like they should be true turn out not to be true. For example, conventional corn and beans farmland or conventional low productivity grazing land would not be valuable because they are not producing an energy surplus. It would require energy investment to make them energy positive, and there may not be much energy available to spend.

    Likewise, a portfolio of shale leases would not be valuable, because they require to much energy to create useful products which can be sold in the market. E.g., turned into something such as plastic wrapping paper or transportation or process heat used to produce steel.

    Do you think the hypothesis has any merit? Or is it wrong-headed?

    Don Stewart

    • I agree. One of the points I’ve been musing on, and have mentioned here, is the reversal of prior trends towards ever greater complexity. This implies the rolling failure of whole sectors of the economy.

      For illustration, a society with falling surplus energy will still need farmers, but it won’t need (or be able to afford) ‘agricultural consultants’.

      There’s a rough gradation here between things that we need, and things we only want. Those sectors which provide the latter (“discretionary”) goods and services are exposed to the de-complexifying process. You or I will continue to need food, somewhere to live and a means of mobility. We won’t need gadgets, or advertising, or celebrity TV.

    • I do think that economic triage is going to be of central importance. What to keep ? What to part with ? I see a nexus of intersecting problems, and interesting paths ahead.

      There are several axis worth exploring in my opinion :

      Inequalities :

      In simple words : who gets to see their net energy allocation “degrow” ? I can see a scenario where the trend is reversed like FDR did in the US in his time, or an other where the high inequalities are maintained or increased under increasingly stratified socities (likely only democratic in name, like late Rome was a “Republic”).

      Energetic strategy :

      The choice here is choosing between Party Now ! and wake up with a headache in a ditch, or Mobilize ! work all nighters and wake up in a spartan room. Party Now ! is easy : let the rising ECOE train to hell, let the infrastructure rot and do not allocate net energy to RWE and supporting infrastructure. Ignore net energy investment into AGW adaptation. This would allow countries to keep on with a semblance of BAU for a while (a decade ? two ? three ?) then sink into failed state territory.

      Mobilize ! is going to be painfull. It means reducing net energy available for fancy stuff on top of ECOE. My back of the envelope estmation is something like investing north of 3% of net GDP per year into efficiency, RWE and so on. Ideal outcome is getting something like a quarter of today energy per capita with quite a bit of industrial triage. A very spartan society most likely. Definitly not anything like what the Green New Deal is advertising.

      AGW strategy :

      Either deal with it now, or “later”. Here physics wins. Debt will be paid and the repo men will kill you. It ties to the energy strategy as if most countries choose Party Now ! we get hell and high water. A point to make is that even if everyone Mobilize ! one the energy front, you will still likely have to deal with +2°C of warming. This will not be cheap in terms of net energy. I have no clue on how much % of net GDP that entails, but it will have to be paid or infrastructure will have to be triaged (not a bad choice for some of it).

      I can see three main alleys :

      A) High Inequalities, most places choose Party Now ! a few go down the Mobilize way. Once crap hit the fan, the elite from Party Now ! places seek shelter in the better prepared places. Do not deal with AGW, which will get to be deadly for most.

      B) Low inequalities, Party Now ! This is a nicer version of A). Thought the endpoint is bad, in the short term is the most comfortable one for the most people. Do not deal with AGW, which will get to be deadly.

      C) Low inequalties, Mobilize ! I can’t see mobilization without low inequalties given how much the net energy costs of such strategy are. Here things will be painfull for a rather long while, and then things will be spartan. Deal with AGW to keep it in the “Bad” territory.

  3. Clean GWP ought to correspond more closely to global energy consumption than reported GWP, because the “un-clean” GWP component corresponds to zero energy consumption.

    • Clean GWP will correspond to energy consumption, less ECoE, times the change in the overall efficiency of using that energy. Technological innovations improve efficiency, but resource depletion reduces it.

      Dr Morgan is using financial accounts as proxies for energy flows. Just looking at energy flows would be more accurate, but the complexity of those flows and lack of data make it very difficult to do.

    • Joe

      Quite right, and yes, these are proxies.

      Additionally, though, the pubic debate is conducted in financial language, and not just policymakers but the ‘ordinary’ person, too, understands being ‘better or worse off by $x, £x’ and so on. So, if we’re to influence the debate, money is the ‘vocabulary’ that we have to use.

  4. Well written summary. Derivatives of degrowth on the horizon, masked by clouds of unconscious behaviour. My binocular shows a pirate flag though.

    Monetary and political propaganda frontrunning the pirate ship in their longboats, waving establishment flags, riding tsunamis of liquidity.

    They will come ashore. All of them. Crushing boulevards of thumbs up.

    Head for the hills, but watch the wolves. Wolves outrun humans. Don’t stay behind.

    • One of the things I’m concentrating on now is the process of degrowth, but I’m also aware of some of the issues you raise here.

      For instance, a shrinking economy means shrinking businesses with dwindling profits, and it’s easy to imagine some company leaderships being prepared to tear up the rule-books rather than accept that reality.

      Relevant to this is the likely crash in equity markets and the rolling tide in which some industries become extinct. These trends might counteract hubris, but we certainly cannot count on it.

      All we can really do, I believe, is keep reinforcing our awareness.

    • Pirates have been increasingly active this century, as well-being peaked in developed countries. Looting is one possible outcome, but now there is general venting as well. See from the BBC this am:
      “Firefighters in Scotland were attacked six times as they dealt with hundreds of incidents on Bonfire Night.
      Control rooms handled 882 calls from members of the public between 15:30 and 23:30 on Tuesday.
      The Scottish Fire and Rescue Service said its crews attended 665 incidents during the course of the night, including 359 bonfires.
      Assistant Chief Officer John Dickie condemned all attacks on emergency services as “completely unacceptable”.
      No-one was was injured during the six attacks on firefighters.”

    • This has, I believe, been a worsening phenomenon in the UK, and one that I’ve never understood.

      I simply cannot get my head around why people would attack, say, firefighters, who are tackling a blaze and perhaps trying to save lives. This is something on which I am totally baffled.

    • They could be associating the bonfire with fires you get in problem areas ( in the past Northern Ireland for example) and using it as an excuse to riot and cause harm.

    • In a month i will dump my financial assets portfolio. Do some investments in my house, add a bit of physical gold and reinforce some simple preps. And a family vacation, a short one. Soon i will be driving a company SUV due to a promotion….

      A crazy world we live in. Awareness indeed.

  5. We are living in interesting times and, perhaps, Brexit will be a side show – although many people may blame Brexit as the cause of the economic problems.

    • I agree Wally.
      To me, Brexit has always been a side show.
      The UK is on a downward path economically. With or without Brexit it will still end up in the same place. Much poorer and much more isolated. The Brexiteers will claim the malaise was caused by having remained in the EU for too long, the Remainers will say it was caused by leaving the EU.
      Both will be wrong of course.
      The UK will end up at the source of the Brown River with no means of propulsion, simply because as a society, it valued accountants and bankers more that it did Scientists and Engineers.
      Of course, add in increasing EcoE and Neoliberal politics and the final outcome was set long before the actors walked on stage. When you look at the numbers Dr. Tim has calculated, ( real tangible prosperity in the UK down by 15% since 2003 and we have not even been hit by GFC-II yet ! ), we need to ask at which point do the peasants pick up their pitch-forks and torches and march on the castle ?
      A rapid deterioration in prosperity can only bring the day of reckoning closer. I can foresee serious, violent trouble ahead on the streets of the UK, and I can imagine a complete breakdown of law and Order and the imposition of Martial Law.
      As the Chinese curse says, ” May you live in interesting times.”

    • I’ve called “Brexit” “the excuse that keeps on giving”. Whatever the eventual outcome, it’s been a huge and costly distraction.

      There’s plenty to like about the EU, and plenty of negatives too. These issues should, ideally, be weighed in practical rather than emotional terms.

      As I see it, the voters decided. Whether they were right or wrong is, for me, secondary to the principle of the democratic decision.

      The politicians then failed in the process of delivery. This failure, given their past record, is hardly surprising.

  6. Talking of monumental debt the ever indebted Deutsche Bank continues to wobble precariously: http://theeconomiccollapseblog.com/archives/the-deutsche-bank-death-watch-has-taken-a-very-interesting-turn
    All this unrepayable debt being thrown at the system in order to give the illusion that economic growth is still continuing. The centre cannot hold – there is simply too much debt weighing it down. When Deutsche Bank slips beneath the waves – well that will be the end of the Euro as we currently know it.

  7. David Holmgren on Energy Descent
    I suggest this video interview with David Holmgren as a companion to Dr. Morgan’s writings over the coming weeks because Holmgren deals with the notion that we are going to have declining net energy which will require a change in economic and social organization. David has been working this subject for 50 years, and has thought a lot about it. For example, he put together four scenarios involving slow energy descent, fast energy descent, slow climate change, and fast climate change. So, for example, a world of slow energy descent but rapid climate change due to tipping points would require a certain set of adaptive actions on the part of humans. I think you will find that David’s thoughts, when combined with Dr. Morgan’s, will stimulate your own ideas.
    Don Stewart

    • Just a reminder to all that the past 50 years (his study period) includes a doubling of human numbers. I note that nearly all “solutions” and scenarios avoid this like the plague. Reason goes only so far, and then raw emotion and wiring to breed and expand niches rises above it. I’ve posted the link to a good explanation of ” The Maximum Power Principle – Ecosystem Theory” before. Search for it.

  8. Why did you go and ruin a perfectly good paper by including this?

    ‘This, it must be stressed, is not intended to belittle the importance of renewables, which are our only prospect, not just of minimizing the economic impact of rising fossil fuel ECoEs, but of preventing catastrophic damage to the environment’

    Renewable energy is not renewable NOR is it clean! Consider all the solar panels that end up in the dumpster leaching toxic chemicals. Consider all the Tesla 500kg batteries that get tossed in with the panels. Consider the worn our windmills.

    Consider all the energy and chemicals that go into manufacturing these moronic devices.

    I could go on and on and on. But I won’t

    • I agree with you – as you’ll find in previous articles – that much of the praise heaped on renewables is untrue, that some of the related expectations are ridiculous, and that some of this is a combination of denial and wishful thinking – for instance, wholesale conversion to EVs makes no sense at all, when compared with smaller and, above all, fewer cars.

      But what would you do instead? Carry on with FFs as their rising ECoEs strangle the economy, and their side effects (including pollution) inflict yet more environmental and ecological damage?

    • RWE is not clean, and can’t be scaled to FF levels in the imparted time, and likely can’t from ressource contraints (that is unless one finds a way to replace copper with “something else” and a whole lot of other minerals with “something else”.

      On the other hand, staying on FF will be a complete disaster down the line. It will fail us (due to raising ECOE) at the time where we’ll need a stable net energy supply the most, and leave us with +4°C or more (likely leading to a full blown disaster like the permian extinction or something of that extent).

      Pick your poison carefully 🙂

      I think that staying on FF will kill us in the long run, and that a full blown RWE utopia is impossible. However a RWE based spartan society might just be possible.

    • Does it have to be that spartan if done correctly? Could electric trains still take us places and grow food, sure, but it would require a great deal of single minded focus. I still think we could celebrate a declining population as long as food, shelter and sex without consequences (children) result. I do not expect that outcome as no society has declined successfully without huge trauma, like long pig on the menu, but we really need to try.

    • I understand that the population of the Western Roman Empire fell by 95%, an event linked persuasively to severe deterioration in surplus energy…..

    • The 95% figure is for Rome itself. Note that a lot of the population likely fled the city to farm. Nonetheless, the population decline in the Western part of the empire was stark.

      Rome was extreme as it required to concentrate the energy surplus (harvest) of a rather huge empire. The sobering way to see it is : the energy surplus of a huge and well organized agrarian mediteranean empire allowed to sustain one city of 1M people.

      I somehow very much doubt that a return to such an agrarian society could even remotely work in an orderly manner.

      In other words : we’ll need to find a way to keep ourselves going below an EROI of 10 or so.

  9. Thanks for your new post Tim.
    Obviously you have read about the continuing High street woe with Marks and Spencers announcing poor profits which is exactly what you have been forecasting

    Plus we have and have had major Government contractors in serious financial trouble.

    However our current politicians will or cannot see the obvious

    So as of 2019 how ‘poor’ are we compared to say 1970? And how should we measure poverty anyway.

    I would say the ability of families / individuals to afford the following.

    Decent accomodation
    Bring able to afford heating – clothes food and some form of transportation – public or private.

    Now currently we have food banks – many horrible properties which are not fit for human habitation and families having to chose between food clothes or heat.

    I know 1970 had similar problems but was the wealth divide as great as it is now.

    • Poverty tends to be measured in one of two ways. The favoured measure nowadays is hardship relative to the circumstances of the average person. The other, less favoured measure is the numbers lacking the basics (accommodation, nutrition and so on).

      I look at it differently, concentrating on ‘security versus worry’. If somebody is on low wages, has no savings, is worried about utility bills or how to replace a broken washing machine, is heavily in debt, has insecurity at work or lacks a secure roof over his or her head, that person has a high level of worry. In this sense, being not in poverty equates to lack of worry (and/or high levels of security).

      Materially, then, the UK is much ‘richer’ than it was in, say, the 1970s,. even though prosperity is now trending downwards. But has it less poverty in the sense of less worry and more security? Are fewer people worried about their immediate futures now than then? I rather doubt it.

      The right objective for political leaders, then, might be the reduction of worry – this might have implications for homelessness, rights at work, and so on.

    • Some very good points Tim and you’ll know that the Government thought that cutting back on mental health care was a good idea ( to reduce the UK’s deficit) just when more and more people needed it.

      Investing in people’s well being will be essential as living standards slowly erode do they can adapt with less anxiety.

      In terms of the money the Government currently squanders providing adequate support wouldn’t amount to too much.

    • Thanks. The more I look at it, the more impossible it seems that current elites, in government and beyond, can adapt themselves to the sheer scale of the changes that are impending.

    • Well they seem to be adapting pretty well – in terms if their own well being – by spending billions renovating the Houses of Parliament

  10. Great stuff, until you got to the part about vital plant food damaging the environment.

    Please consider that spreading the Doomsday Cult propaganda throws the validity of your ECoE science into question.

    • yes Roger, co2 is one of the vital things plants need,
      in fact commercial greenhouse growers add co2 to the atmosphere in their greenhouses to promote growth,
      I’ve heard in Holland the tulip growers even get their co2 from Royal Dutch Shell,
      but these growers also understand Liebig’s Law


      that growth is dictated not by the total resources available, but by the scarecest resource,
      once you reach a limitation of say nitrogen, phosphorous, potassium, water, light or temperature, adding more co2 won’t make a difference,
      there is good evidence that the planet has become greener due to increased co2 emissions but mankind is emitting so much co2 the plants just can’t keep up,

      and co2 emissions keep rising, year on year,
      if the co2 concentration in the atmosphere keeps going up it’s obvious that we are releasing more co2 than the bio-sphere can absorb,

      co2 emissions are only one of multiple problems that mankind faces,

      population growth, soil erosion, deforestation, pollution, depletion of natural resources, collapsing fishery stocks, collapsing insect populations, rising sea levels, shifting weather systems, shifting ocean currents, a bottle neck in the expansion of energy supply required to power human civilisation and spiralling debt levels in the economic system,

      I’m not sure if calling it Doomsday Cult propaganda is appropriate,

      the more I examine the multiple crises that are currently converging the more obvious it becomes that we’ve hit the limits of growth,

      it only becomes a Doomsday Scenario if we ignore the warning signs and do nothing to avert a disaster that is entirely self inflicted,

      I wish it all wasn’t true but I’m rather afraid it is.

    • Well, since CO2 is increasing in the atmosphere at an increasing rate, soon the plants will push out homo sapiens. Too much of a good thing.

  11. Steven B. Kurtz
    claims that Holmgren’s study period only covers 50 years, and implies that Holmgren fails to study the effects of population. Neither statement is true. Holmgren has looked carefully at history from the Big Bang through the formation of the Earth, the rise of eukaryotes, and the hunter-gatherer way of achieving an energy surplus. He notes, in his talk, that we probably don’t have time enough to establish eco-villages which, as a community, have the ability to generate an energy surplus. And so he has formulated plans for typical Australian suburban housing. His homestead, Melliadora, was built to be largely self-supplied in terms of energy. And he built it to be fire-resistant, aware of the damaging potential of an Australian bush fire. He mentions Malthus very early in the interview.

    My point here is not to debate particular points or subtleties or what might happen if there is a ‘winner take all’ collapse into an Ik hell-on-Earth. But it is distressing that a serious topic such as the one Dr. Morgan proposes gets sidelined into a lot of stuff which is just distracting and wrong.

    What I come down to is pretty simple:
    Given X amount of money, would you put it into a one ten thousandth share of Donald Trump’s tower on Fifth Avenue, or purchase David Holmgren’s homestead?

    If your answer is that you would purchase the energy producing home rather than the energy hog tower, then investing a few bucks in David’s book on Retrofitting Suburbia might be a good allocation of time and money. If the electrical system and the communication system survive with a mix of fossil and nuclear and wind and solar, and we can somehow craft a stable government, but everyone has to consume far less, then you will be very well positioned if you buy or build or retrofit your own Melliadora.

    I was thinking last night about being 10 years old and having my first library card. I read all sorts of books. Some of them were written during the depths of the Depression. I remember one very well. It made the point that the home needs to be a place of production…not only consumption. A ‘good wife’ was defined as one who had a well-stocked pantry. I admit that, as a 10 year old, I was somewhat drawn to the lurid descriptions of the ‘whore of Babylon’ who could be found in the wicked big cities. We may be due for a re-run.

    Don Stewart

    • I should also note
      When David and Nicole Foss squared off against George Monbiot in a debate, (Monbiot reflecting Green New Deal type thinking and Holmgren and Foss talking Degrowth), the ‘green’ audience voted in favor of Monbiot by a significant but not overwhelming margin.

      So we are asked to place two bets:
      *If you want to be politically active, what strategy do you favor and which groups do you join or form?
      *If you care about your children and grandchildren, how do you deploy your existing capital and how do you invest your time and labor?

      There are no sure winners, but we are all going to have to place a bet.

      Don Stewart

    • Don,

      Sorry. I didn’t watch the 1.5 hour movie. I was reacting (very early am) to your words:
      “David has been working this subject for 50 years, and has thought a lot about it.”

      The discussions on this blog rarely mention population overshoot- the numbers of feet making footprints. I’ve been working on pop-enviro dynamics for around 40 years.

      I stand corrected re the video. But not about the blog avoidance of the elephant in the room. Also, I wager for charity on outcomes at longbetsDOTorg. Humans will *not* voluntarily reduce energy throughput. MPP applies to us as it does to all living systems. Our numbers WILL decline later this century, but it won’t be pretty or comfortable

    • I’m the first to admit that I’ve largely steered clear of the population issue, not because it’s sensitive but more because I don’t know what the answers, if any, might be.

      Under conventional economic thinking, ‘more people equals more workers equals more output’. But human physical labour is a truly tiny part of the energy used in the economy (a very difficult calculation, but the nearest I could get to an answer for a Western economy was ‘less than 0.7%’). Some countries, most strikingly the UK, think that growing population numbers is a good idea, presumably on the ‘more people equals more work’ calculus.

      In fact, though, the human input to the modern economy is far more about ingenuity than about physical labour.

    • The externalities from human activity impact other species and habitat. This rarely is positive for human well-being. Think declining aquifers, topsoil, fish stocks, biodiversity, pollinators, etc. The quadrupling of our numbers in one century (a geological blink) is mammoth. Each of us displaces habitat for other life forms except human parasites and things thriving on our waste. (no matter how simply we live) “Work” is a negative for all but the direct beneficiaries of it. (unless I’m missing something, which is likely…)

  12. As much as I know the accuracy of your analysis of our predicament -what comes next I cannot see clearly. How does it stop, or perhaps more correctly change? Borrowing increasingly large amounts of money has always been fantasy – to anyone who cares to see it. A strong financial crisis without the ability to paper over it seems obvious to me as well. Delusion and denial can only last so long and then what? The new reality or just reality will include most people unable to pay debts let alone borrow more to continue the debt based economy fantasy.

    I can see price increases in necessities and decreases in everything else. Or lower declines in necessities and a failure of price support for non essentials. I look around and see far too much of our economic activity surrounding non essential activity. This will leave a whole lot of people without employment which isn’t good for stability.

    I can see the political system to continue to eat it’s own tail as the (continuing) play book of false promises that make up the reelection processes in most countries fall on ears closed off by a deeper awakening to reality of “less”. I agree with you that anything that resembles a bail out of the rich to be a total de stabilizer but I’m not sure our tone deaf leaders completely understand this.

    In the process of people internalizing or realizing this “less” the flow of money must continue for people to buy and sell, get paid and make payments.
    Do I think we can get by with “less”? Yes it seems obvious that it is “possible”, especially here in the US. How this evolves without people left with little or nothing to loose getting violent I do not.
    The fully invested ‘leaders’ of the delusion and denial will point fingers as they always do at some group to take it out on. History repeats, are we collectively any smarter than yeast?

    • Perhaps because I’m also in the US, my view matches yours. Borrowing might soon be resisted by markets. Printing and ‘helicopter money’ or UBI will likely be the “medicine” attempted. We have a lot of experience kicking cans down the road. The $US looks to be in a secular decline similar to what the GBP did last century. ($5 – $1) Look at a 20 year chart of the $US Index. It seems to me to be rolling over now on its second leg of a cyclical decline.

    • David,
      The points that you raise are the very same ones that concern me. That we are entering a period of decline is obvious. Based on what resources we have available, and the number of people that these resources can support, allows us to calculate what the future can look like.
      But as you point out, it is the dynamics of how we get there that is the big question. Of course, there will be many routes to the future, but the more I think about it, I cannot see any route that avoids extreme violence, much suffering and a great many deaths.
      Looking at the UK in particular, I see the country effectively as a nation of consumers who produce nothing of value, and who have no wealth left to pay for anything.
      When the financialised risks that the country is exposed to eventually comes calling, then the UK will be exposed as being even more Bankrupt than Argentina.
      As soon as foreign money stops flowing into the UK, then how in this world is the UK ever going to pay its way ?
      With no food left on supermarket shelves, it will only be a matter of days before chaos reigns supreme. There will be so many robberies, assaults and murders that the police will not even bother to investigate.

    • The process of degrowth is, I believe, something we really do need to discuss in depth.

      Rolling failures of individual sectors are a probable consequence of de-complexifying, utilization rates are another problem, and so is interruption to supply chains.

      Another danger is that corporates might try to hang on to, or even increase, their profits at a time when the economy is already shrinking, and consumers/workers have their backs against the wall.

      The UK predicament (with or without “Brexit”, by the way) is grim. Even based on official GDP, financial exposure is more than 11x GDP, a terrible place to be with GFC II surely not too far off. Evidence of deterioration is widely visible – millions ‘just about managing’, huge numbers using food banks, even larger numbers with over-large debts and/or minimal savings, the weakening of household security through casualized labour, and a lamentable lack of leadership, in and beyond government.

  13. Concise and brutal analysis Dr Tim thank you for educating me as always..

    I see that the academic behind the “hockey stick graph” has lost his libel case (Mann v Ball in Canada) which just about proves the data was all made up. Climate changes, of course it does, it may be human, it may be solar or perhaps both. (nothing is said about solar in the MSM).

    What gets me is very well off westerners with vast material wealth protesting to governments to do something. What can they do? Ban it or tax it. Perhaps the kids should sign a pledge to: turn down their central heating, walk/cycle everywhere, never buy bottled water, and eat all their leftovers! There’s got to be an app for that (my parents who were children in WW2 lived that lifestyle). Our emergency issue is not climate change but our profligate waste of food, clothing, etc.

  14. Albert Bates on Scientists Warning
    Another warning from scientists this week with more than 10,000 signers. Includes these paragraphs:

    “Population: “[W]orld population must be stabilized—and, ideally, gradually reduced—within a framework that ensures social integrity.” Amen. Probably needs to be lower than most are ready to acknowledge, and will get there by unhappy means unless a graceful glide path is selected and followed assiduously.

    Economy: This is possibly the biggest sticking point, so let’s quote the entire warning by the scientists:

    Excessive extraction of materials and overexploitation of ecosystems, driven by economic growth, must be quickly curtailed to maintain the long-term sustainability of the biosphere. We need a carbon-free economy that explicitly addresses human dependence on the biosphere and policies that guide economic decisions accordingly. Our goals need to shift from GDP growth and the pursuit of affluence toward sustaining ecosystems and improving human well-being by prioritizing basic needs and reducing inequality”

    I bring this up because Dr. Morgan’s message about what is going to happen to us even if we ignore our climate problems comes out with very similar conclusions. When Greta Thunberg testified before the US Congress, she was attacked for failing to promise perpetual growth. Do you see the parallels between an energy approach and a climate approach? Both have the same fatal flaws in the eyes of the True Believers.

    I draw these quotations from Albert Bates post this coming weekend at his Peak Surfer blog. It will be free on Sunday morning…right now behind a pay wall.

    Albert describes the ‘sacrifice’ being asked as more daunting than either the London Blitz or the siege of Leningrad. But, one might quibble, is it a ‘sacrifice’ if it is simply physics? Nobody thinks it is a ‘sacrifice’ if they fall down and skin their knee in accordance with the law of gravity.

    Albert complains that the scientists do not present a credible way forward. And, of course, Albert and his co-author Katharine Draper have proposed an intensely carbon based economy using closely controlled burning which allows the carbon to be used in a cascade of applications with the final result being long-lived materials made from carbon. But Albert thinks that population will be about halved. This would be a very bitter pill for anyone, and especially Trump and congressional Republicans, to swallow. It was Bill Clinton who said ‘nobody every got elected by promising less’.

    Don Stewart

    • Thanks Don.

      On your last point, politicians might need to learn that, if they can no longer credibly offer ‘more’, it might be wiser to offer ‘better’.

      I rather think this is possible, as economic trends may push our scale of values towards the non-material. Do we carry on measuring our happiness by the very faulty scale of what we have, or can we shift it towards what we are?

      The population issue is a daunting one, and something that I’ve only ever touched on here.

    • Angus Campbell (a past director of U-M Institute for Social Research) early on explored psychological well-being. One of the issues underlying that research was how the US and other countries were able to transition from an agrarian to a consumer society while maintaining overall happiness. What always surprises people is how difficult that transition was, how long it took, and how many fits and starts there were. Whole academic departments and industries had to be created (e.g., advertising, marketing, business schools) in the mid 1880s. Frugality is, after all, a grounded, place-based, and relational character strength. Consumerism is un-grounded, place-less, and individualistic. It was harder to “sell” the latter than we think today (perhaps because we swim in consumerist waters and see governments as only able to be agents of industrial development).

      Campbell’s effort produced early insights on well-being and his shorthand still emerges from time to time. He suggests three states: having, being, and becoming. Having was materialistic (consumerist behavior) and about having stuff. Being was about, in today’s lingo, social engagement, influencing others, relationships, experiences, and the like. Becoming was about personal development and growth, becoming an ever better person and, importantly, an ever better citizen. This last one was a process, not an end point.

      “Becoming” may be a useful notion as we transition back to an agrarian society and have to rebuild a provisioning economy.

      I wonder if SEEDS can be used to run scenarios? Can we explore what things might look like if a country “bounced forward” to an agrarian pattern of living much earlier than circumstances will be forcing it to do so?

    • Sounds tricky, because we lack data in certain critical areas – but I’m looking into it.

      Starting with this global mix of economic activity (CIA World Factbook), how might we change it?

      agriculture: 6.4% (2017 est.)
      industry: 30% (2017 est.)
      services: 63% (2017 est.)

  15. @Dr. Morgan
    To add more irony. David Sinclair is one of the leading half-dozen researchers in the world studying longevity. He gave an interview with Dr. Rhonda Patrick, published yesterday by Rhonda behind her paywall at FoundMyFitness.

    “As we age, however, sirtuins must devote much of their energy to increasing levels of DNA repair, rendering them unable to regulate other gene activity important for longevity.

    Certain lifestyle behaviors such as exercise, intermittent fasting, and caloric restriction trigger the activity of sirtuins, restoring normal gene regulation, resetting the cell’s activity, and slowing the aging process.”

    The promise of ‘more’ is that we can all sit behind desks manipulating characters on screens, that we will have food 8 to 10 times per day, and that we will never be hungry…but also that industrial medicine will find ‘cures’ for the inevitable chronic diseases just such behavior causes. Pursuing this false promise is currently bankrupting health (or sick) care systems around the world. Yet there is no more attractive political platform than ‘health insurance for all’. I will leave you to find the parallels with the Limits To Growth model, or Tainter’s model of complexity.

    In other words humans want, and therefore politicians and corporations promise to produce, the impossible.

    My editorial: I happen to be reading a book about the Epicurians, a 2500 year old philosophy. I would characterize it as the search for homeostasis, with the most intense and stable, but finite, pleasures to be found in human relationships. Where we seem to be stuck is in seeing things as bi-polar: left vs. right; more vs. collapse; us vs. nature; we vs. them, Brexit vs. Remain; Republican vs. Democrat; food vs. starvation; people vs. environment, etc. The notion of homeostasis, which is of necessity, a very practical choosing among feasible paths, is hard for modern humans to contemplate.

    Don Stewart

  16. Dr Tim,

    In the UK, political parties are trying to outbid one another with promises of lavish spending funded by borrowing. If your analysis is correct, we need to face up to a future of perpetual austerity.
    Curbing or reversing population growth is for obvious reasons a very sensitive subject. Could we be persuaded to go along with fewer births, more deaths, and mass emigration? Would such policies tend to exacerbate our demographic problem?

    • One of the consequences of the prolonged “Brexit” shambles has been the lack of debate on economic issues.

      With a replacement for Mark Carney due to be chosen soon, the BBC, all too typically, has discussed on its website whether the next governor might be female, not what policies he or she should pursue!

      Even over “Brexit”, neither side has presented rational proposals for how the UK can either (a) thrive outside the EU, or (b) distance herself from the stagnation (at best) at the heart of the EU economy (i.e. Germany in recession, the French economy moribund, the ECB pumping in liquidity, etc.).

      In the absence of the debate that should be happening, it’s not surprising that party leaderships are entering into a public spending bidding-war – particularly pointless, it seems to me, if the election is indeed going to be determined over “Brexit” anyway.

      Nowhere in politics is there evidence of awareness of the important issues. I can’t imagine that anyone, looking at the UK, can still believe that “growth” continues. People without affordable accommodation; the millions ‘just about managing’; victims of the worsening loss of security of employment; youngsters unable to find well-paid, skilled jobs; those relying on food banks – all must despair at the lack of effective planning.

      I don’t understand why the UK seems relaxed about the rate at which the population is expanding, or why a much tighter immigration policy, based on skills, seems to be a taboo topic.

      In this context, I’m contemplating whether a SEEDS-based analysis of the UK economy might be timely here.

      (As an aside, where is the uproar against the government’s plan to record the DNA of all newborn children?)

    • HI Tim, I don’t comment much but always follow you and your suggestion to put SEEDS on to the British condition is to be welcomed. So many are ignorant here of why all this is happening to them and they have no idea what to do. I know that livings standards and services are falling apart; there is crisis in the high street, unemployment is fudged – there is much more under the carpet et c etc.

    • Good stuff, Tim, thank you. Can you try for it before the coming election on 12th Dec? – it would be great ammo for my email campaign. These politicians are living in cuckoo land and have no idea how ordinary people are suffering from the many years of low wages, limitied benefits and service cuts etc.

      Jim Quinn at The Burning Platform, where I am just completing the weekly serialisation of my book, has agreed that I can carry on with a weekly news letter: “Letter from Great Britain” along the lines of Alistair Cook and his Letter from America. My US readers would love info on the UK condition as they too are suffering economic decline over the pond.

    • I don’t see a Uk particularly relaxed about immigration – on the contrary there is deep unease which has largely been suppressed by political correctness and politeness. The people I meet are quietly seething that they have to wait longer for GP appointments etc.

      I see two attacks on ‘truth’ which to borrow a phrase from our kind host are akin to a ‘dose of strychnine’ to the Western economy. This crisis of truth has left us blinded and disorientated in an increasingly dangerous world.

      Firstly PC has diminished our ability to think and find what is real and what is false. There is the factually correct and politically correct truth favoured by the vast majority of the media and all mainstream politicians.

      It’s led to a naïve globalist world view that sneers at patriots as ‘Little Englanders’ and glosses over China torturing and murdering political opponents. Why would you want to do business with a a company, co owned by a state that runs re-education camps and routinely removes the organs of living people without anaesthetic ?

      Secondly money markets are no longer able to seek truth because huge amounts of cheap money have allowed investment in failing companies. Oil produced from shale drilling costs more to get out of the ground than the oil is worse. Not only that but more energy is needed to extract the oil that is recovered from burning it. Then there is the issue of methane emissions and the flaring of unwanted gas that isn’t economic to store.
      Unviable companies kept afloat with cheap money crowding out rivals. Would Uber be displacing black cabs in London if interest rates were higher than 0%. What a mess!

    • When I said that the UK was “relaxed” about immigration, I was referring to the authorities, over the past two decades. It’s regrettable that immigration policy isn’t debated more, just as other policy issues are debated.

      The UK seems to have reached a point where the state dictates what are and are not “acceptable” opinions. The problem with this (apart from its illiberal nature) is that the advancement of knowledge requires the maximum breadth of discussion. There need to be laws prohibiting the incitement of violence, and a law of criminal libel is necessary too, but prohibiting the expression of opinions likely to “cause offence” worries me – after all, Galileo’s opinion that the earth moved around the sun, rather than the sun moving around the earth, caused offence in his day, but we still needed to hear him.

  17. On overpopulation, if I remember correctly, in a period of massive crop failure in North Korea, the hereditary dictatorship simply threw the % they had no food for in labour camps for a few years (for alleged crimes) until a couple of million had starved to death and the numbers remaining matched available food again. So given that at least half the planet is currently governed with varying degrees of autocracy, with that trend if anything accelerating, it’s not hard to imagine more of this happening, being also cheaper than outright resource wars.

    Equally bleak is the historical record on plagues, which could answer how massive population crashes could occur, where there need not be violence. Didn’t huge percentages of cities’ populations die off within mere weeks, even with systems (like the state workers collecting corpses for burial, food distribution, etc., etc) still functional? With power cuts able to knock out so much more infrastructure today and the concentration of so many more numbers in mega-cities, it’s not inconceivable that a third of a city could die of concurrent typhoid and cholera epidemics in days. Recent responses to disasters like Katrina are not encouraging, when the most capable country on the planet (on paper) experienced chaos, looting and a woeful state response. People in total panic didn’t act civilised compared to the wholly uneducated mobs reacting to medieval plagues, pure animal survival instinct kicked in surprisingly quickly.

  18. A Prosperous Way Down
    Since we are discussing ways to re-orient our society to less energy, it may be relevant to revisit Howard and Elizabeth Odum’s book A Prosperous Way Down. Howard was an originator of the Fourth Law of Thermodynamics: the Maximum Power Principle. Still, at the end of his career, he gave advice on what he saw as an existential threat to humans.

    Mary Odum continues with the title A Prosperous Way Down in her blog:
    The current essay is about the movie Planet of the Humans, a broadside attack on ‘green energy’. You may particularly notice the attack on private automobiles. You can click through in Mary’s article to get an interview with the filmmaker.

    To round that view out a little, check the current post by Ilargi on his blog, The Automatic Earth. He develops the picture that an automobile only makes productive use of half of one percent of the potential energy in a gallon of gasoline. So if one also deducts the energy required to produce the gasoline at the pump and build the infrastructure which makes it possible to actually drive the car, automobiles are being heavily subsidized from somewhere.

    A crucial point is ‘the potential to do work’. If one uses an excavator to modify the topography of farmland to make that farmland more productive (e.g., terracing to conserve water), then most of what happens is productive work. And the gasoline or diesel is being used to do something which would require ‘pyramid scale labor’ in the absence of fossil fuels. In contrast, consider the settlement pattern across the Midwestern US during the frontier period. Railroad companies were given land in return for building the railroad tracks and stations. So the stations and small towns sprang up like beads on a string. Farmers were within a few miles of the railroad. Transportation was energy efficient, as compared to the vast decentralization which happened with trucks and cars. If we take the argument in Planet of the Humans seriously, then rebuilding the rails and small towns looks like a reasonable way to go…but it requires the remaining fossil fuels to do it…or else enormous amounts of human labor.

    The point of this is that the issues seen by the Odums decades ago have not gone away. And, as a society, we don’t seem to be much closer to resolving them. It’s hard to be optimistic.

    Don Stewart

    • Thanks for mention the Odum’s. I’ve interacted with Mary a few times the past 15 years or so. She is indefatigable and more optimistic than many who comprehend our predicament. I met her father, H.T. Odum when I gave a paper to The World Congress of the System Sciences (2000, Toronto) on Optimum Population. And I’ve posted a link here about Lotka & Odum’s development of MPP (Maximum Power Principle).

  19. Old Man Trying to Think
    Warning: Collateral Damage Ahead
    I was listening to Max and Stacey’s latest episode on the collapse of fiat and the rise of crypto and gold, and the realignment of economic interests around non-fiat currencies and the threat that would pose to US Dollar hegemony.

    So put a few points together:
    *US fiscal deficit very close to 1T per year…and this in peacetime with a ‘strong economy’
    *All advanced economies now in shrinking prosperity according to SEEDS
    *Second tier economies feeling the pinch…e.g., China, Turkey, India, Brazil, South Africa
    *Russia with an apparent achievement of Mutual Assured Destruction
    *Putin confident enough to offer to sell the MAD arms to Trump
    *Macron says NATO is brain dead, but Merkel says it’s still alive and well
    *If I understand what Max and Stacey are saying, crypto can put real transactions at the center of the world economy, without clearing through the New York Fed
    *Putin promotes compressed gas as a replacement for diesel. Authorities seem to agree that we have decades of gas left, even as oil becomes scarce and possibly more expensive. Trucks continue to run, but cars become an endangered species.

    So the realignment potential:
    *Macron kicks things off geopolitically by announcing the purchase of some MAD hardware from Russia, and the downsizing of any commitment to NATO.
    *Russia might sell the MAD equipment to both Pakistan and India, perhaps defusing that threat to humanity
    *Trump, who hates taxes, but seeing his fiscal budget headed toward the bankruptcy he knows something about, takes a hard look at military spending
    *Trump abandons ‘first strike’ and ‘global policeman’ strategy and signs up for MAD. Military budget shrinks drastically. Hillary fans commit mass hari-kari. Deep State up in smoke.
    *Governments begin to do fiscal budgets in terms of crypto and gold backed new currency. China and Russia may lead the way.
    *Governments make ‘promises to pay’ subject to a second tier currency perhaps tied to GDP or some other soft measure. An alternative to outright hyperinflation. Not ‘full faith and credit’. China makes the distinction to allow State to have good income statement while regions and government backed enterprises can suffer paper losses.
    *US stops using the Dollar as a weapon. Real income in US tumbles in response to loss of reserve currency status. Perhaps to same level as Germany.
    *Because the trucks and Caterpillar equipment continue to operate, fossil fuel use shrinks while doing minimum damage. Tough, but survivable.

    Lots of ‘wealth’ disappears, but the real economy might continue to function pretty well. As energy descent happens, economies adjust as best they can. But avoid the financial crashes characteristic of fiat currency regimes. Severe pressure on government programs which don’t actually produce anything good. Rise of realism and decline of delusion. Good intentions not good enough.

    Don Stewart

    • Slightly off topic, but I’m hearing that Michael Bloomberg is considering running in 2020. Are the Democrats utterly determined to help Mr Trump get a second term?

    • Bloomberg IMHO is a stronger candidate for the Dems. than any currently running. Sanders is a Jewish socialist. Bloomberg(Jewish) is a self-made (unlike DJT) multi-billionaire. Conservatives in the US respect him. He was tough on crime and good on infrastructure in NYC. Biden is rather lame intellectually. Bloomberg is sharp and savvy. Warren isn’t a socialist. Longshot that they could team up??

    • So when Warren decides to hit hard at monopolistic tech, or – maybe – even advocates a wealth tax – what does Mr Bloomberg do? And how does he respond when Mr T accuses him of being totally out of touch with the predicament of the middle class?

      What I guess I’m saying is that establishment insiders are yesterday’s politics.

    • I think Bloomberg said, like Buffett, that he’s for higher taxation on the wealthy. Bloomberg isn’t pro monopolies (AFAIK) Reuters and other financial info services operate in his business realm. I wonder if he could recruit Warren. She’s smart. He is likely for single payer health care, and against the recent extent of US global policeman role.

    • I’m just an interested bystander in US politics. But I seriously question the suitability of a metropolitan billionaire in the times we live in. I’ll admit (now it’s in the past) that I hoped to see Bernie Sanders get the nomination in 2016.

    • Unlike DJT, Bloomberg has a history of social concern. See from Wikipedia:

      He has joined The Giving Pledge, whereby billionaires pledge to give away at least half of their wealth.[4] To date, Bloomberg has given away $8.2 billion, including his November 2018 $1.8 billion gift to Johns Hopkins University for student aid—the largest private donation ever made to a higher education institution.[5]

      Bloomberg served as the 108th Mayor of New York City, holding office for three consecutive terms, beginning his first in 2001. A Democrat before seeking elective office, Bloomberg switched his party registration in 2001 to run for mayor as a Republican. He defeated opponent Mark Green in a close election held just weeks after the September 11 terrorist attacks. He won a second term in 2005, and left the Republican Party two years later. Bloomberg campaigned to change the city’s term limits law, and was elected to his third term in 2009 as an Independent on the Republican ballot line.

  20. About the climate change thing: it seems to me that in certain societies (“the West”) it’s become an article of faith and a marker of political affiliation. Like those iconoclasm fights in the Eastern Roman Empire. All of this seems little related to the scientific questions of whether the climate is changing, whether the change is anthropogenic, and the potential consequences of it.

    Thus, I think that discussing climate change has about the same utility overall as discussing whether veneration of icons is polytheism. Anyone agrees?

    • Two thoughts come to mind. First, there’s an enormous amount of ‘moral grandstanding’ and ‘virtue signalling’, neither of which does much practical good but makes the practitioners feel better about themselves.

      For example, two of Britain’s leading theatre companies have recently severed sponsorship links with Shell and BP. Do they think that brings a transition to renewables nearer? Have they thought about the victims of the economic collapse which would happen if we stopped using FFs tomorrow, or even in 2029? Would they, in an emergency, refuse the help of an ambulance or fire engine powered by gasoline or diesel? Or is it just PR posturing (of which we have far, far too much)?

      Second, though, the environmental and ecological threats are urgent and serious, whereas the veneration of idols is a matter of personal preference (and I’m not knocking it – how many ‘sophisticated’ Westerners venerate iPhones?), but with few practical implications for other human beings, wildlife and so on.

    • “Second, though, the environmental and ecological threats are urgent and serious”

      Mmm, but is it actually true? This is the question.

      “whereas the veneration of idols is a matter of personal preference”

      This is the official ideology of the American Empire, not Roman Empire. How can idol worshpping be a matter of personal preference when God himself has completely forbidden it and the consequences are so dire (according to the Bible)?

      So, yeah, it all boils down to the question: how do we know what is true and what isn’t it when we know so little? I’m afraid there is still nothing better then “you’ll know them by their fruits” (or “practice is the criterion of truth”, if you prefer). Time will tell…

    • The question of climate change went from a science question to a political one. And this is where the crux of the problem. As far as science goes, the question went from “does it happen ?” and “what’s causing it ?” to “how fast ?” and “how bad ?”*.

      AGW is a nasty problem for humans : the effect has a long delay to the cause and detrimental effect, and the cause is beneficial in the short term. It’s kind of the worst possible problem for humans to deal with, as we seem to be rigged to pursue what’s beneficial in the short term, and problems that will occur decades in the future are hard to intuit on. Since FF are the backbone of our energy support system, it’s really hard to solve. It’s not like the CFC issue back in the day, where only a few industries were really concerned.

      By becoming a political issue, we get all the bullcrap tied with politics : virtue signaling, tribalism, theatrics and so on. But more importantly, the scope and scale of the problem and it’s ties to our energy systems means that any effective action is going to be detrimental in term of prosperity in the short term. It’s the worse possible thing to try to sell in politics. So all we get is a lot of talk and no much action.

      So yeah, in a sense it has become a marker of political affiliation, at least in the anglo-world. But let’s make no mistake, physics does not care about political slogans, talking points nor economic theories. The only thing it cares about is the forcing in [W/m^2].

      *A note about AGW science : a telling point for me is that the skeptics have been unable to substentiate their claims with peered reviewed material over a period of more than 20 years. That is a long time to fail at producing compelling evidences. Blog posts and Op-Eds might count for politics, but as far as science goes their value is nill.

  21. Michael Bloomberg
    Suppose that we do go to a blockchain world with Social Security and Medicare being demoted from first on the list to some remainder whose funding is insecure. Then what will old people do in order to get some credit in the blockchain?

    Well…how about taking in boarders? That’s what people used to do. Many Homeowners Associations make it illegal to take in a boarder, or to rent through AirBandB. I think that Bloomberg would be amenable to attacking the restrictions under the Interstate Commerce clause in the Constitution. Bloomberg allowed very small apartments to be created in NYC.

    I think we urgently need leadership which has a practical bent. We can no longer afford the delusional.

    Don Stewart

  22. Environment vs. Humans?
    The notion that human activities are of no concern in terms of the environment are just wrong. But the environmental issues which get all the attention may be misvalued.

    For example, a medical doctor trained in immunology recently looked at the Dirty Dozen list issued by the Union of Concerned Scientists. The list identifies plant foods which carry the highest pesticide and herbicide loads. The immunologist found that the loads were not high enough to actually kill humans.

    I responded that he is looking at a tree and missing the forest. When Round-Up is sprayed on a wheat field in order to kill the wheat and allow harvest before the unsettled fall weather sets in, it kills the microbes. Whether the residues which make their way into a loaf of bread are fatal to humans is almost beside the point.

    Many of the people who pose the ‘humans vs. environment’ argument sincerely believe that a God, who has a lot of human characteristics, made humans as a special creation and continues to have a very close and personal relationship to humans. It is a much better guess that the microbes created the eukaryotes, and the eukaryotes are utterly dependent on the health of the microbes. For example, we are only able to create energy from food because a microbe took up occupancy in our human cell. Nature, in its conservative way, did not re-invent many of the wheels of life when eukaryotes came along…we continue to depend on the microbes to do what they have been doing for about 4 billion years on earth…and maybe a lot longer than that in now-dead galaxies.

    A true environmentalist recognizes that the most prevalent challenges to human life arise from our attacks on the foundations of life. While it is doubtful that humans can ever kill all the microbes, it is most certainly true that we can upset the ability to find homeostasis. Our endocannabinoid system shows clear signs of destabilization. Whether using cannabinoids from plants as a medicinal is wise is currently under study, but the evidence of dysfunction is clear.

    So climate change is real…is it the biggest screw up?…Probably not.

    Don Stewart

    • I think the response from a believer would be that, if God did create human beings, then He also created other creatures too, and to think that we have more value than them is, surely – and whether one is a believer or not – a piece of grotesque arrogance and irresponsibility.

    • Quite right Tim, I am appalled at the treatment of animals in all arenas – man’s attitude to factory farming etc is against all of the Bible’s directions: – Quote:
      “God further directed that cattle were not to be deprived of food while they worked, and animals were not to be put under an extreme burden. (Exodus 23:5; Deuteronomy 25:4) Yoking a bull and a donkey together was prohibited, preventing injury to either animal. (Deuteronomy 22:10) Clearly, the Bible teaches that animals were to be treated with propriety, respect, and compassion!”

      …….But we live in a Godless world and we must speak out against cruelty to animals.

    • The ”Union of Concerned Scientists”

      I skipped membership 47 years ago.

      You should too, dear Don.

  23. For clarity, I do currently hold the opinion that the planet is getting warmer and that the human activity is the main reason for it. I have no idea about the long term consequences (warmer climate might be an overall bad, neutral or good thing). However, I’m sceptical that it’s an urgent problem compared to other ones.

    • You don’t think the ocean is acidifying, either? CO2 hits both issues and only one has to be true to lead to collapse

  24. @Dr. Morgan
    I can certainly find political opportunities to co-operate with anyone of any religion who thinks that all of life is sacred…so long as they agree that life is sustained by eating each other. But in the US, we have a large body of people whose religion tells them ‘don’t worry, you are in God’s hands’. Which leads them to the conclusion that nothing needs to be done about global warming or resource depletion and species extinction or the active poisoning of what we call the Holobiont.

    The hypothetical believer who finds all of life to be sacred has to confront the geological evidence that 99.9 percent of all the species ever created by God are now extinct. So if humans aren’t so special after all, then????

    I used to attend, for the sake of convenience, a church that emphasized ‘the resurrection of the body’. It was definitely not polite to ask ‘does the resurrection include all the microbes without which my resurrection would be very short indeed?’ The church I was raised in as a child believed that the resurrection was a rather vague matter involving the ‘spirit’. That is a lot less argumentative. Those who look at a vague spiritual resurrection are a lot more willing to actually do something. I do, somewhat selfishly, look with some favor on those who think that wanton destruction is a sin for which some people (not me!) will roast in hell…I have written excuses from the doctor for all my sins.

    Don Stewart

  25. Of perhaps more relevance here
    What about those in the Titanic lifeboats who rowed away from the struggling people in the icy water? Were they guilty of murder…or simply practicing triage?

    And how sentimental should we be about those who ignore good advice, as more than a few of the people who went down with the Titanic did?

    The way we are going, these questions are likely to be relevant. Husbands and wives in which one partner is deeply religious on such subjects would be well-advised to think about it. How many of the relatives you hate to eat with at Thanksgiving are you willing to rescue? These kinds of questions do not lend themselves to arguments based in rationality. I do think that simply listening to the body and seeking homeostasis provides the best answers…what Nature designed us to be…or the image God made us in, as you prefer.

    Don Stewart

    • In one Titanic lifeboat, a member of the British aristocracy paid the sailors (in IOUs of which some still exist) to row away from the survivors.

  26. Re: the Democracy that most of us see eroding, see this item from a top University in the US:


    Serban says in the interview that after a faculty member retired, the remaining professors in the department were called in to a meeting to discuss a replacement.

    It was at this meeting that the dean of the art school told them that there were “too many white professors, too many heterosexual men,” and that it would be best to hire a minority or a woman, or a gay man.

    Serban, who was the director of the hiring committee, says that he was told that it could not be someone like him because he is a man that has been “married, a heterosexual man who has children.”

    The professor says that he then asked if they could choose a straight white male if the most qualified candidate happened to be so, and was promptly told that they could not. “I felt like I was living under communism again,” he said.


    • My problem with all this stuff is that, being an egalitarian, I’m opposed to all forms of discrimination, whether positive or negative,

      I’ve always believed we should aim to be colour-blind. In an interview situation, the interviewers shouldn’t see ‘a black person’ or a ‘white person’ but simply a person, to be assessed solely on his or her merits.

      For someone to be told “you didn’t get the job because you’re black” is despicable. But is “you only got the job because you’re black” any better?

    • Having experienced South Africa for some 10 years I can empathise with your views Tim – I have left -leaning Libertarian tendancies – and witnessed extreme prejudice firsthand.

      Unfortunately human beings are endowed with a tribal instinct which overides our natural cooperative social tendencies IMHO. Only education and learning to adjust attitudes will change these things and this I fear will take time, probably several generations.

      Although I do have hope for the upcoming Millenials who have been nurtured in a multi-ethnic environment. My grandchildren are a real eye-opener in this respect – they are colour-blind.

    • “I’ve always believed we should aim to be colour-blind. In an interview situation, the interviewers shouldn’t see ‘a black person’ or a ‘white person’ but simply a person, to be assessed solely on his or her merits.”
      Fully agree, Tim. Aside from any physical capabilities that a job demands, such as loading/unloading/sorting heavy boxes, or speaking coherently for teaching or selling, selection should be “blind”. Merit and skill are fairly objective, although appearance counts too. That is somewhat subjective. Blind wine tastings are great!

  27. Good article by Rana Foroohar in the Guardian about how Big tech (Apple etc) are dragging us down to the next financial crash.

    • Thanks, it looks interesting. I’m very skeptical about the valuations (and the values) of the “tech” sector. Even the name is misleading, as there’s very little “tech” there compared with, say, advanced electronics or life sciences.

  28. @houtsckool
    My view of the world is formed (in my opinion) almost entirely by science. I see humans as having a set of genes gifted to us by Evolution, and an epigenetic control layer given to us by our environment. I tend to believe that each human has some control over how that epigenetic layer works…setting me apart from pure determinists like Dave Pollard.

    However, I recognize that most people approach the world from a religious standpoint. About a dozen years ago I was trying to help a severely damaged woman who was a friend of my wife’s, and her husband. The husband was a Baptist minister. The woman desperately needed to amend her lifestyle. She had no idea how to cook a nutritious meal. So my wife invited them for dinner. I cooked. They thought it was good. The husband asked about the decidedly NOT Standard American Diet (the SAD). At that time, some experiments with gorillas in zoos had been concluded. I started on an explanation of how the gorillas fed the SAD developed all the chronic diseases of Americans, while those fed the green leaves that primates evolved to eat were healthy.

    A couple of minutes into my explanation, it occurred to me that this minister was probably a sworn enemy of any evolutionary explanation. I became flustered. He looked at me and said ‘we are not in church’. I continued. They seemed to me to understand. That was my introduction to the notion that saving his wife was more important than religious belief, but that he would go right on preaching what he preached on Sundays.

    The moral of the story is that it is good to avoid offending people needlessly, and to seek allies wherever one can find them.

    Don Stewart

    • Thanks Don. No offence. Sometimes your boatloads of text are off topic, but that is just my opinion.

      When reality sets in, i sure hope we will both be able to cook something. I think i am a hardcore realist, and it sometimes pisses me off when people keep on cirkling the bowl and never go under.

      There’s a severe problem heading our way.

  29. @houtskool
    Off topic?
    Life is about everything from nanoscale to the Big Bang. I happen to be reading Lifespan by David Sinclair. Sinclair operates one of the premier longevity labs in the world, located at Harvard. He laments that educators haven’t done a very good job of conveying what life is all about. For example, all the 2 dimensional drawings give a poverty stricken impression of what is really going on down at the nano-scale…which allows us to be alive.

    ‘Enzymatic reactions are 1 in a 1000 events, but at the nano-scale 1 in a thousand events can occur thousands of times a second, enough to sustain life”. Parenthetically, I note that it is Brownian motion that moves enzymatic reactions at the nanoscale.

    Then he moves to the subject of aging: “Yes, aging is an increase in entropy, a loss of information leading to disorder. But living things are NOT closed systems. Life can potentially last forever, as long as it can preserve critical biological information and absorb energy from somewhere else in the universe.”

    So you can see that Sinclair, one of the eminent scientists of our time, moves easily from nano-scale through information theory to the principles of thermodynamics. Does that mean that the people in his lab responsible for cleaning dirty test tubes can make the same leaps? I doubt it.

    So all of us, being finite, are both in a world which is truly amazing with connections going all sorts of ways, and also in a world where clean test tubes are essential. Where any particular blog or book or discussion group or business wants to be on that continuum ultimately boils down to the individual leading it.

    In my opinion, once the subject of Degrowth is raised, the horizon needs to expand considerably above the question of whether or not Iran really found 50 billion additional barrels of oil. Suddenly, we are in a very macro world where boundaries are not easy to draw.

    Don Stewart

  30. @Houtskool
    Sinclair, located at Harvard, is literally across the street from 3 of the premier hospitals in the US. He says that if you go to visit them, you will find them organized by type of disease. The problem is that the hospitals are thinking myopically. All the diseases are arising from a common cause. Their organization should be focused on the cause, not the symptoms.

    So this is either an example of Sinclair just being wrong, or an insightful diagnosis of what is wrong with sick-care in the US. In any event, Sinclair has taken a ‘large’ view of the system, rather than a view which would please the cardiologists or the oncologists or the obstetricians or the public health personnel.

    Don Stewart

    • Excellent link Don. I particularly liked the example of the carwash being replaced by human labour – the reason for the Gig economy – – the brutal reality behind both non-discretionary / discretionary spending and the average wage.

      You’d had thought that Klaxons would have going off in the ears of mainstream economists and our current crop of politicians.

      Perhaps they’re all wearing industrial strength ear muffs.


    • Well Tin again- just as you predicted – yet more car dealerships closing in the news today.

      I feel as though our politicians are on the Titanic.

      It won’t be untill the ship actually splits in half that they’ll realise that something might be wrong.


  31. Pingback: #158. An air of unreality Election 2019, Its the Tiger in your Tank Not the Pound in your Pocket? The Economy is an Energy System Stupid! 4 Pamphleteers by Roger Lewis ( Porthos) @GrubStreetJorno @Survation @wiki_ballot @financialeyes @DavidGolemXIV @JoeB

  32. I wonder what the accounting black hole us affecting the large haulage firm Eddie Stobart.

    They’ve had to accept a bailout at a very high interest rate.

    Obviously severe ramifications if haulage firms can’t remain solvent at current fuel price levels.

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